[Federal Register Volume 59, Number 99 (Tuesday, May 24, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12588]
[[Page Unknown]]
[Federal Register: May 24, 1994]
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DEPARTMENT OF AGRICULTURE
Packers and Stockyards Administration
9 CFR Part 201
RIN 0590-AA08
Regulations and Statements of General Policy Issued Under the
Packers and Stockyards Act: Definitions, Industry Rules, Schedules of
Rates and Charges, Proceeds of Sales, Accounts and Records, Trade
Practices, Stockyards Services, Brand Inspection, and Buyers Expenses
AGENCY: Packers and Stockyards Administration, Agriculture.
ACTION: Proposed rule.
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SUMMARY: The Agency is currently reviewing all regulations and
statements of general policy issued under the provisions of the Packers
and Stockyards (P&S) Act. Review of 20 regulations and statements of
general policy, which have been identified as Group 1, has been
completed. As a result of the review, this document proposes to remove
2 regulations, amend 1 trade practice regulation, and retain 14
regulations and 3 statements of general policy in their present form.
DATES: Comments must be submitted on or before July 25, 1994.
ADDRESSES: Comments may be mailed to the Administrator, Packers and
Stockyards Administration, room 3039, South Building, U. S. Department
of Agriculture, Washington, D.C. 20250-2800. Comments received may be
inspected during normal business hours in the Office of the
Administrator.
FOR FURTHER INFORMATION CONTACT: Tommy Morris, Acting Director,
Livestock Marketing Division (202) 720-6951, or Kenneth Stricklin,
Director, Packer and Poultry Division (202) 720-7363.
SUPPLEMENTARY INFORMATION: Advance Notice of Proposed Rulemaking was
published in the Federal Register (57 FR 42515) on September 15, 1992.
Comments were solicited, at that time, concerning the relevance and
importance of each regulation and statement of general policy to
today's livestock, meat, and poultry industries, and which sections
should be retained, modified or removed. To complete the review
process, the rules covered by the Advance Notice of Proposed Rulemaking
have been divided into three groups and this document relates to those
rules identified as Group l.
In response to the request for comments in the Advance Notice of
Proposed Rulemaking, the Agency received a total of 1,419 comments
relating to the rules in Group 1. Comments were received from 1,307
individuals not identified as producers or as members of any
organization, 78 individuals identified as livestock producers, 15
livestock producer and trade associations, 8 animal welfare groups, 3
individuals representing livestock marketing interests, 3 attorneys, 1
association of veterinarians, 1 bank, 2 law enforcement associations,
and 1 State Department of Agriculture.
No comments were received regarding Sec. 201.5, which pertains to
Agency procedures on posting a stockyard, or Sec. 201.6, concerning
Agency deposting procedures. Both of these regulations involve internal
procedures taken by the Agency in posting and deposting stockyards and
are merely expository of the explicit statutory requirements and not
necessary for carrying out the P&S Act. Neither provision affects
members of the public. Therefore, this document proposes to remove
Secs. 201.5 and 201.6. Removal of these sections will not change the
current posting and deposting procedures.
Two commenters recommended modifications to Sec. 201.61(a). That
subsection prohibits market agencies selling on commission from
entering into arrangements with dealers and other buyers that would
lessen their loyalty to their consignors or impair their selling
services. In addition, the subsection specifically prohibits a market
agency selling on commission from providing clearing services for an
independent dealer purchasing livestock from consignments made to that
market agency. Both commenters, a trade association and an agricultural
cooperative, recommended deleting the specific prohibition in
Sec. 201.61(a) against a market agency selling on commission providing
clearing services to an independent dealer who purchases livestock from
the selling agency's consignments.
P&SA agrees with the recommendations. The purpose of Sec. 201.61(a)
is to protect the integrity of the relationship between the consignor
and the consignee market agency. Retention of the general prohibition
against arrangements tending to undermine the loyalty of the market
agency or to impair the quality of selling services achieves this
purpose without the necessity of specifically prohibiting the
furnishing of clearing services by a market agency selling on
commission. P&SA has determined that the loyalty of the market agency
is not likely to be impaired by the mere furnishing of clearing
services to buyers, and so proposes to amend Sec. 201.61(a) by
modifying the last sentence of the subsection to permit market agencies
selling on commission to provide clearing services to independent
dealers that purchase livestock from consignments to such market
agencies selling on commission, provided that full disclosure of the
clearing arrangement is noted on the accounting to the consignor. Full
disclosure of the clearing arrangement will protect livestock
consignors without unnecessarily restricting purchases from
consignments and will allow market agencies selling on commission
greater flexibility in representing the interests of livestock sellers.
Finally, in view of amendments to Sec. 201.56(b), published in the
Federal Register on October 13, 1993, at 58 FR 52884, the proposed
modifications to subsection (a) are logically consistent and
appropriate.
A review of the following regulations and statements of general
policy has been completed and the Agency proposes to retain each in its
present form:
Sec.
201.1 Meaning of words.
201.2 Terms defined.
201.3 Authority.
201.4 Bylaws, rules and regulations, and requirements of exchanges,
associations, or other organizations; applicability, establishment.
201.17 Requirements for filing tariffs.
201.39 Payment to be made to consignor or shipper by market
agencies; exceptions.
201.44 Market agencies to render prompt accounting for purchases on
order.
201.45 Market agencies to make records available for inspection by
owners, consignors and purchasers.
201.81 Suspended registrants.
201.82 Care and promptness in weighing and handling livestock and
live poultry.
201.86 Brand inspection: Application for authorization,
registration and filing of schedules, reciprocal arrangements, and
maintenance of identity of consignments.
201.94 Information as to business; furnishing of by packers, live
poultry dealers, stockyards owners, market agencies, and dealers.
201.95 Inspection of business records and facilities.
201.96 Unauthorized disclosure of business information prohibited.
203.5 Statement with respect to market agencies paying the expenses
of livestock buyers.
203.12 Statement with respect to providing services and facilities
at stockyards on a reasonable and nondiscriminatory basis.
203.17 Statement of general policy with respect to rates and
charges at posted stockyards.
In the process of reviewing these regulations, it was determined
that they were necessary to the efficient and effective enforcement of
the P&S Act and to the orderly conduct of the marketing system. The
absence of any of the regulations would be detrimental to the industry
and could result in increased litigation.
Comments received pursuant to the Advance Notice of Proposed
Rulemaking concerning Secs. 201.17, 201.45, 201.81, 201.95 and 203.17
were generally in support of retaining each in its present form. No
comments were received concerning Secs. 201.1, 201.3, 201.39, 201.44,
and 203.12.
Two comments were received concerning modification of Sec. 201.2.
This regulation defines certain unique terms used in the P&S Act and
regulations. Both comments came from livestock producer associations
and recommended that video and other forms of electronic marketing be
defined. All forms of electronic marketing generally operate as market
agencies selling on commission and are subject to all requirements of
the P&S Act and regulations relating to such entities. Therefore, it
has been determined that further definition is unnecessary at this
time.
One thousand three hundred and thirty-three (1,333) comments were
received concerning Sec. 201.82. This regulation requires reasonable
care and prompt handling of livestock and live poultry to prevent
excessive shrink, injury, death or other avoidable loss. Comments were
received from 1,306 individuals not identified as producers or as
members of any organization, 8 animal welfare groups, 11 livestock
producer and trade associations, 5 livestock producers, 1 individual
representing livestock marketing interests, 1 association of
veterinarians and 1 State Department of Agriculture. More than 1,300
comments recommended amending this regulation to prohibit the sale of
downed animals at stockyards, 26 proposed amending it to require
stockyards to humanely euthanize downed animals, 1 recommended that the
Agency issue a policy statement with guidelines on care and handling of
livestock, 12 supported this regulation in its present form, 1 opposed
placing regulation of care and handling of downed livestock under
Agency authority and another recommended that the regulation be amended
to clarify that its purpose is to prevent economic loss to livestock
sellers and not to further animal welfare interests. Ten other comments
generally supported broader authority over the care and handling of
livestock.
The Agency has considered all of the comments concerning
Sec. 201.82 and determined that concerns about the care and handling of
livestock at stockyards can be addressed more effectively in a separate
rulemaking. Therefore, this document proposes to retain Sec. 201.82 in
its present form. The Agency will propose an additional rule, which is
currently being drafted, concerning the care and handling of livestock
to be published in a separate docket.
Eighty-five comments were received concerning Sec. 201.86. This
regulation sets forth procedures for authorizations to charge and
collect fees for inspection of brands. Comments were received from 73
livestock producers, 4 livestock producer associations, 3 attorneys, 2
individuals not identified as members of any organization, 2 law
enforcement associations, and 1 bank. Eighty-four comments supported
the regulation in its present form. One comment expressed concern that
Section 317 of the P&S Act (7 U.S.C. 217a) limits collection of brand
inspection fees at stockyards to livestock originating within the State
and recommended Sec. 201.86 be amended to allow inspection of all
livestock sold within the State be done in accordance with the State
law where the livestock are sold.
This document proposes to retain Sec. 201.86 in its present form
because neither the P&S Act nor Sec. 201.86 of the regulations
authorize or restrict the inspection of brands. Section 201.86 provides
the mechanism for collecting fees authorized by the P&S Act for
inspecting brands at stockyards. Restrictions on the collection of fees
are imposed by the statute and not the regulation and it is not
permissible to change by regulation that which is prohibited by
statute.
Three comments concerning Sec. 201.94 were received from livestock
producer associations. This regulation requires those persons subject
to the P&S Act, upon proper request and within a reasonable time, to
provide business information to authorized representatives of the
Secretary, in writing or otherwise and under oath. Two comments
recommended the regulation be amended to require that businesses over a
certain size be required to provide to the Agency certain contract and
other business information. One comment supported the regulation in its
present form. The Agency has concluded that the current requirements of
Sec. 201.94, coupled with the provisions of the P&S Act, are adequate
to provide sufficient access, at this time, to business information of
larger firms.
Three comments were received concerning Sec. 201.96. This
regulation provides assurances to persons under investigation that
their business records will be treated confidentially and employees of
the United States cannot make unauthorized disclosures of those
records. Comments were received from a livestock producer association,
a trade association, and an individual representing livestock marketing
interests. Two comments recommended amending this regulation to provide
for a penalty. One comment supported the regulation in its present
form. Section 10 of the Federal Trade Commission Act, which has been
made a part of the P&S Act by incorporation (7 U.S.C. 222), provides
penalties for unauthorized disclosures. In addition, P&SA considers the
criminal penalties provided by the Trade Secrets Act, 18 U.S.C. 205,
adequate deterrent to the unauthorized disclosure of business records
and, therefore, no changes are proposed.
Three comments were received concerning Sec. 203.5. This statement
of general policy informs market agencies selling on commission that
P&SA regards the payment of business expenses of buyers attending their
livestock sales as violative of the P&S Act. Comments were received
from a livestock producer association, a trade association, and an
individual representing livestock marketing interests. Two comments
recommended that practices addressed in this statement be prohibited
only when they result in anticompetitive behavior. One comment
supported the statement in its present form. P&SA believes that this
statement reflects the correct formulation of its policy toward such
activities and the legal effect of that policy and that, therefore, no
changes are appropriate.
The proposed change in Sec. 201.61 does not impose or change any
recordkeeping or information collection requirements. Existing
requirements in this regulation have been previously approved by OMB
under control number 0590-0001.
As provided by the Regulatory Flexibility Act, it is hereby
certified that this proposed amended rule will not have a significant
economic impact on a substantial number of small entities and a
statement explaining the reasons for the certification is set forth in
the following paragraph and is being provided to the Chief Counsel for
Advocacy of the Small Business Administration.
While this proposed amended rule impacts small entities, it will
not have a significant economic impact on any entity, large or small.
The primary effect of this rule is to remove restrictions on purchases
by dealers from consignments of a market agency that provides clearing
services to that dealer.
This rule has been determined to be not significant for purposes of
E.O. 12866 and therefore has not been reviewed by OMB.
This amendment does not impose any new paperwork requirement and
does not have Federalism implications under the criteria of E.O. 12612.
This proposed amendment has been reviewed under E.O. 12778, Civil
Justice Reform, and is not intended to have retroactive effect. This
amendment will not preempt State or local laws, regulations, or
policies unless they present an irreconcilable conflict with this
amendment. Prior to judicial challenge of the amendment to rule, a
party must first be found by the Secretary to be in violation of the
P&S Act and in violation of the accompanying regulation. Second, the
party must appeal that finding and the validity of the regulation to
the Secretary in the course of the administrative proceeding. Only
after taking these steps, may the party challenge the regulation in a
court of competent jurisdiction.
List of Subjects in 9 CFR Part 201
Accounts and records, Brand inspection, Buyers expenses,
Definitions, Industry rules, Jurisdiction, Purchases from consignment,
Proceeds of sale, Rates and charges, Stockyard services, Tariffs, Trade
practices.
Done at Washington, DC this 17th day of May 1994.
Calvin W. Watkins,
Acting Administrator, Packers and Stockyards Administration.
For the reasons set forth in the preamble, the Packers and
Stockyards Administration proposes to amend 9 CFR part 201 as follows:
1. The authority citation for part 201 continues to read as
follows:
Authority: 7 U.S.C. 204, 228; 7 CFR 2.17(e), 2.56.
2. Remove Sec. 201.5.
3. Remove Sec. 201.6.
4. Revise Sec. 201.61(a) to read as follows:
Sec. 201.61 Market agencies selling or purchasing livestock on
commission; relationships with dealers.
(a) Market agencies selling on commission. No market agency selling
consigned livestock shall enter into any agreement, relationship or
association with dealers or other buyers which has a tendency to lessen
the loyalty of the market agency to its consignors or impair the
quality of the market agency's selling services. No market agency
selling livestock on commission shall provide clearing services for any
independent dealer who purchases livestock from consignment to such
market agency without disclosing, on the account of sale to the
consignor, the name of the buyer and the nature of the financial
relationship between the buyer and the market agency.
* * * * *
(Approved by the Office of Management and Budget under control
number 0590-0001.)
[FR Doc. 94-12588 Filed 5-23-94; 8:45 am]
BILLING CODE 3410-KD-P
