[Federal Register: June 7, 2004 (Volume 69, Number 109)]
[Rules and Regulations]
[Page 31731-31733]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07jn04-5]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1280
[No. LS-02-05]
Lamb Promotion, Research, and Information Program: Rules and
Regulations
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (Department) is adopting, as a
final rule, without change, rules and regulations to implement the Lamb
Promotion, Research, and Information Order (Order). The Order provides
for the establishment of a national and industry-funded lamb promotion,
research, and information program pursuant to the Commodity Promotion,
Research, and Information Act of 1996 (Act). This final rule will
implement Order provisions concerning the collection and remittance of
assessments, procedures for obtaining a refund, reporting, and books
and records.
EFFECTIVE DATE: July 7, 2004.
FOR FURTHER INFORMATION CONTACT: Kenneth R. Payne, Chief; Marketing
Programs Branch, Room 2638-S; Livestock and Seed Program; Agricultural
Marketing Service (AMS), USDA; STOP 0251; 1400 Independence Avenue,
SW., Washington, DC 20250-0251. Telephone number 202/720-1115, or by
electronic mail at Kenneth.Payne@usda.gov.
SUPPLEMENTARY INFORMATION: Prior documents in this proceeding:
Invitation to submit proposals--November 23, 1999 (64 FR 65665) and
January 12, 2000 (65 FR 1825); proposed Lamb Promotion, Research, and
Information Order--September 21, 2001 (66 FR 48764); and final Lamb
Promotion, Research, and Information Order--April 11, 2002 (67 FR
17848).
Executive Order 12866
The Office of Management and Budget (OMB) has waived the review
process required by Executive Order (E.O.) 12866 for this action.
Executive Order 12988
This rule has been reviewed under E.O. 12988, Civil Justice Reform.
This rule is not intended to have a retroactive effect. Section 524 of
the Act provides that the Act shall not affect or preempt any other
Federal or State law authorizing promotion or research relating to an
agricultural commodity.
Under section 519 of the Act, a person subject to the Order may
file a petition with the Department stating that the Order, any
provision of the Order, or any obligation imposed in connection with
the Order, is not established in accordance with the law, and request a
modification of the Order or an exemption from the Order. Any petition
filed challenging the Order, any provision of the Order, or any
obligation imposed in connection with the Order, shall be filed within
2 years after the effective date of the Order, provision, or obligation
subject to challenge in the petition. The petitioner will have the
opportunity for a hearing on the petition. Thereafter, the Department
will issue a ruling on the petition. The Act provides that the district
court of the United States for any district in which the petitioner
resides or conducts business shall have the jurisdiction to review a
final ruling on the petition, if the petitioner files a complaint for
that purpose not later than 20 days after the date of the entry of the
Department's final ruling. Service of process in a proceeding may be
made on the Department by delivering a copy of the complaint to the
Department. If the court determines that the ruling is not in
accordance with the law, the court shall remand the matter to the
Department with direction to make such ruling as the court determining
to be in accordance with the law or to take such further action as, in
the opinion of the court the law requires. The pendency of a petition
filed or an action commenced shall not operate as a stay of any action
authorized by section 520 of the Act to be taken to enforce, including
any rule, order, or penalty in effect.
Regulatory Flexibility Act and Paperwork Reduction Act
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601 et seq.), AMS has considered the economic
effect of this final action 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.
There are approximately 51,800 producers, 15,000 seedstock
producers, 100 feeders, 571 first handlers, and 15 exporters of lamb
who will be subject to the program. Most of the lamb producers,
seedstock producers, feeders, and exporters would be classified as
small businesses under the criteria established by the Small Business
Administration (SBA) (13 CFR 121.201). Most first handlers would not be
classified as small businesses. SBA defines small agricultural service
firms as those whose annual receipts are less than $5 million and small
agricultural producers are defined as those having annual receipts of
less than $750,000. This number and size data remains the same as it
appeared in the earlier analyses for the Order. Further, for purposes
of this discussion and the prior Order analyses, there are
approximately 3,318 market agencies, which include commission
merchants, auction markets, brokers, or livestock markets in the
business of receiving lambs for sale or commission. Most market
agencies would be classified under SBA criteria as small businesses.
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Also, under the program, there are approximately 20 national, State, or
regional associations or organizations that are made up of and
represent producers, feeders, seedstock producers, exporters, and first
handlers.
The Act authorizes generic programs of promotion, research, and
information for agricultural commodities. Congress found that it is in
the national public interest and vital to the welfare of the
agricultural economy of the United States to maintain and expand
existing markets and develop new markets and uses for agricultural
commodities through industry-funded, Government-supervised, generic
commodity promotion, research, and information programs.
The Order will develop and finance an effective and coordinated
program of promotion, research, and information to maintain and expand
the markets for lamb and lamb products. For the purposes of this
program, the term ``lamb'' as defined in the Order means, ``any ovine
animal of any age, including ewes and rams.'' A proposed Order was
published in the Federal Register on September 21, 2001 (66 FR 48764).
The comment period ended on November 20, 2001. The final Order was
published in the Federal Register on April 11, 2002 (67 FR 17848).
Collection of assessments began on July 1, 2002.
The April 11, 2002, publication included a regulatory flexibility
analysis concerning the provisions of the final Order. That analysis
took into account Order provisions concerning the collection and
remittance of assessments, refunds, reports, and books and records.
This rule will implement Order provisions concerning these
requirements.
In this final rule, the section on assessments contains provisions
on sharing proceeds of sale, market agencies, failure to collect,
death, bankruptcy, receivership or incapacity to act, remittance of
assessments, and non-producer status for certain transactions. The
section on refunds includes provisions concerning the procedure for
obtaining a refund and application form, submission of refund
application to the Department, proof of payment of assessments, and
payment of refunds. In addition, this final rule details provisions
regarding reporting and maintenance of books and records and it
establishes a reporting period.
With the exception of the form, Statement of Certification of Non-
Producer Status (LS-78), the interim final rule and this final rule did
not increase the burden on the industry from that previously imposed by
the Order. The information collection burden in connection with this
form is minimal. The public reporting burden for this collection of
information is estimated to average .03 hours per response for an
estimate 3,318 respondents. The information collection requirements in
the interim final rule were previously approved under OMB control
number 0581-0203. That OMB control number has been merged into OMB
control number 0581-0198.
Background
The Act (7 U.S.C. 7411-7425) authorizes the Department to establish
generic programs of promotion, research, and information for
agricultural commodities designed to strengthen an industry's position
in the marketplace and to maintain and expand existing domestic and
foreign markets and uses for agricultural commodities. Pursuant to the
Act, a proposed Order was published in the Federal Register on
September 21, 2001 (66 FR 48764). The final Order was published in the
Federal Register on April 11, 2002 (67 FR 17848). Collection of
assessments began on July 1, 2002. This program will be funded by
assessments on domestic lamb producers, lamb feeders, exporters, and
seedstock producers, in the amount of one-half cent ($.005) per pound
when live lambs are sold. For purposes of this program, the term
``lamb'' as defined in the Order means, ``any ovine animal of any age,
including ewes and rams.''
First handlers, which means the packer or other person who buys or
takes possession of lambs from a producer or feeder for slaughter,
including custom slaughter, will be assessed an additional $.30 cents
per head purchased for slaughter or slaughtered by such first handler
pursuant to a custom slaughter arrangement. Each person who processes
or causes to be processed lamb or lamb products of that person's own
production and markets the processed products will be assessed one-half
cent ($.005) per pound on the live weight at the time of slaughter and
will be required to pay an additional assessment of $.30 per head.
Exporters who directly export lambs of their own production will be
assessed in the amount of one-half cent ($.005) per pound of live lambs
exported. Assessment rates may be adjusted in accordance with
applicable provisions of the Act and the Order.
The Order also requires persons to collect and remit assessments to
the Lamb Promotion, Research, and Information Board (Board). Each
producer, feeder, or seedstock producer is obligated to pay that
portion of the assessments that is equivalent to that producer's,
feeder's, or seedstock producer's proportionate share and shall
transfer the assessment to the subsequent purchaser, if applicable, and
ultimately to the first handler or exporter who will remit the total
assessments to the Board. Any person who processes or causes to be
processed lamb or lamb products of the person's own production and
markets the processed products will be required to pay an additional
assessment and remit the total assessment to the Board. Each first
handler who buys or takes possession of lambs from a producer or feeder
for slaughter will be required to pay an additional assessment and
remit the total assessment to the Board. Any person who exports live
lambs will be required to collect and remit the total assessment to the
Board at the time of export. Any exporter who directly exports lambs of
their own production will pay an assessment to the Board. Additionally,
a person who is a market agency; i.e., commission merchant, auction
market, or broker in the business of receiving such lamb or lamb
products for sale on commission for or on behalf of a producer, feeder,
or seedstock producer, will be required to collect an assessment and
shall transfer the collected assessment on to the subsequent
purchaser(s). Ultimately, the first handler or exporter will remit the
total assessment to the Board.
The Order imposes certain recordkeeping and reporting requirements
on persons subject to the Order. First handlers and exporters will
collect and remit the assessments on lamb and lamb products to the
Board. Their responsibilities will include accurate recordkeeping and
accounting of the number of lambs purchased, total weight in pounds,
the names of the producers, seedstock producers, and feeders, the
purchase date, the amount of assessments remitted, and the dates the
assessments were paid. The required reporting forms require the minimum
information necessary to effectively carry out the requirements of the
program, and to fulfill the intent of the Act. Such records and reports
shall be retained for at least 2 years beyond the fiscal year of their
applicability. Presently, most of these requirements are likely being
conducted as a normal business practice. There will be a minimal burden
on persons who are market agencies. It is not anticipated that they
will be required to submit records of their transactions involving lamb
purchases and the required assessment collection to the Board.
Information on such transactions can be
[[Page 31733]]
obtained through an audit of the market agencies' records. Such records
are already being maintained as a normal business practice. This will
include such records or documents that evidence payment of an
assessment pursuant to the requirements in Sec. 1280.225(b). In
addition, market agencies must certify, as required by regulations
prescribed by the Department, that the provisions of Sec. 1280.217(b)
have been met. This final rule includes these regulations.
Comments
On June 7, 2002, the Department published in the Federal Register
(67 FR 39249) an interim final rule with request for comments. The
comment period ended August 6, 2002.
The Department received 10 comments in a timely manner. In
addition, five late comments were received. The late comments generally
reflected the substance of comments timely received. Comments were
received from producers, auction market operators, general farm and
sheep organizations, and an association representing marketing agents.
The changes suggested by the commenters are discussed below.
One commenter suggested that remitters should be allowed to remit
the assessment and appropriate paperwork via the Internet. Currently,
the Board does not have the ability to accept the transfer of funds or
required forms via the Internet. The Board may choose to explore this
option after an analysis of the current collection procedures.
Accordingly, this suggestion is not adopted.
One commenter urged the Department to embark on an educational
campaign aimed at the marketing agencies so there is a better
understanding of what is required of them and to recommend procedures
that can be used to meet those requirements. The Department agrees that
a continuing educational program is warranted. Since the Board was
seated in November 2002, Board representatives have attended annual
meetings of several industry groups in order to better inform industry
representatives about the program. Additionally, Board representatives
have visited individual marketing agencies (i.e., auction markets) to
better educate them regarding their responsibilities for collecting the
assessment, passing the assessment on to the subsequent buyer, and
remitting the assessment to the Board. The Board has made these types
of outreach activities a staple of their client communications program.
Accordingly, no change is needed as a result of this comment.
Some commenters recommended that the Department suspend the program
until the Board is in place to allow sale and auction markets time to
become fully educated and compliant with the Federal checkoff
procedures. An extensive educational and outreach program was conducted
beginning at least 2 years before the implementation of the program
with the creation of the Exploration Team. In addition, in July 2002,
the Department distributed informational packets to nearly 1,000
auction markets explaining the program. Further, the Board has been in
place since November 2002. Accordingly, this suggestion is not adopted.
One commenter suggested that auction markets should not be required
to complete a Non-Producer Status Form (LS-78). Auction markets
generally facilitate the transaction between the seller and buyer and,
usually, do not take ownership of the lambs. Under the Lamb Checkoff
Program, auction markets are not required to complete the form unless
they are seeking non-producer status. The Non-Producer Status form is
intended for those market agents that are subject to Sec. 1280.217 of
the Order. Form LS-78 is intended to be completed only by those persons
who buy and resell lambs within 10 days from the date of purchase on
which the market agency acquired ownership. If an auction market buys
animals in the company's name (taking title to the lambs) and resells
them within 10 days from the date of purchase, they would be required
to complete the form.
The Department received several comments regarding issues that were
previously subject to public comment in connection with implementation
of the Order and not part of the rules and regulations that are the
subject of this rulemaking. The following comments were received: two
commenters suggested that those persons who remit a small amount of
assessment should be afforded the opportunity to remit the assessment
when the amount reaches a certain dollar amount or be allowed to remit
less often than required by the interim final rule; several commenters
recommended assessing animals on a per head basis; one commenter
suggested that ewes should be exempt from the assessment; several
commenters suggested that the assessments should be collected and
remitted at each transaction similar to other commodity checkoff
programs; one commenter suggested that the Board should include one or
two representatives from an association or organization representing
livestock markets that sell sheep; and one commenter suggested that
auction markets remit the assessment directly to the Board.
On September 21, 2001, the proposed Order was published in the
Federal Register with a request for public comment. The final Order was
published and became effective on April 12, 2002. The interim final
rule was published in the Federal Register on June 7, 2002, with a
request for public comment. The comment period ended on August 6, 2002.
The purpose of this final rule is to implement provisions of the Order
provisions concerning the collection and remittance of assessments,
procedures for obtaining a refund, reporting, and books and records.
The aforementioned comments were not within the scope of this final
rule and would require a change to the Order and further rulemaking.
Accordingly, these suggestions are not adopted in this action.
Accordingly, after consideration of all comments, the interim final
rule, as published in the Federal Register (67 FR 39249, June 7, 2002)
is finalized without change.
List of Subjects in 7 CFR Part 1280
Administrative practice and procedure, Advertising, Consumer
Information, Marketing agreements, Lamb and lamb products, Reporting
and record keeping requirements.
PART 1280--LAMB PROMOTION, RESEARCH, AND INFORMATION
0
Accordingly, the interim final rule amending 7 CFR part 1280 which was
published at 67 FR 39249 on June 7, 2002, is adopted as a final rule
without change.
Dated: June 2, 2004
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-12786 Filed 6-4-04; 8:45 am]
BILLING CODE 3410-02-P