Proposed Rule2022-09485
Preserving Trust Benefits Under the Packers and Stockyards Act
Primary source
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Published
May 5, 2022
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
The Agricultural Marketing Service (AMS) proposes to revise the regulations providing instructions for livestock sellers and live poultry sellers or growers who desire to preserve their interest in statutory trusts under the Packers and Stockyards Act (Act). The proposed revisions would add procedures and timeframes for a livestock seller to notify the livestock dealer and the Secretary of Agriculture that the seller has not received full payment for livestock purchased by the dealer and that the seller intends to preserve its trust interests. Additionally, under this proposed rule, livestock dealers with average annual purchases over $100,000 would be required to obtain written acknowledgement from livestock sellers that trust benefits do not pertain to credit sales and would be required to maintain records related to credit sales. The proposed revisions to the Packers and Stockyards regulations reflect recent amendments to the Act that provide for a livestock dealer trust.
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<title>Federal Register, Volume 87 Issue 87 (Thursday, May 5, 2022)</title>
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[Federal Register Volume 87, Number 87 (Thursday, May 5, 2022)]
[Proposed Rules]
[Pages 26695-26699]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-09485]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 87, No. 87 / Thursday, May 5, 2022 / Proposed
Rules
[[Page 26695]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
9 CFR Parts 201 and 203
[Doc. No. AMS-FTPP-21-0015]
RIN 0581-AE01
Preserving Trust Benefits Under the Packers and Stockyards Act
AGENCY: Agricultural Marketing Service, Department of Agriculture
(USDA).
ACTION: Proposed rule; request for comments.
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SUMMARY: The Agricultural Marketing Service (AMS) proposes to revise
the regulations providing instructions for livestock sellers and live
poultry sellers or growers who desire to preserve their interest in
statutory trusts under the Packers and Stockyards Act (Act). The
proposed revisions would add procedures and timeframes for a livestock
seller to notify the livestock dealer and the Secretary of Agriculture
that the seller has not received full payment for livestock purchased
by the dealer and that the seller intends to preserve its trust
interests. Additionally, under this proposed rule, livestock dealers
with average annual purchases over $100,000 would be required to obtain
written acknowledgement from livestock sellers that trust benefits do
not pertain to credit sales and would be required to maintain records
related to credit sales. The proposed revisions to the Packers and
Stockyards regulations reflect recent amendments to the Act that
provide for a livestock dealer trust.
DATES: Comments received by June 6, 2022 will be considered prior to
issuance of a final rule. Pursuant to the Paperwork Reduction Act
(PRA), comments on the information collection burden must be received
by July 5, 2022.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposed rule. All comments must be submitted through
the Federal e-rulemaking portal at <a href="https://www.regulations.gov">https://www.regulations.gov</a> and
should reference the document number and the date and page number of
this issue of the Federal Register. All comments submitted in response
to this proposed rule will be included in the record and will be made
available to the public. Please be advised that the identity of the
individuals or entities submitting comments will be made public on the
internet at <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
FOR FURTHER INFORMATION CONTACT: S. Brett Offutt, Chief Legal Officer/
Policy Advisor; Packers and Stockyards Division, USDA AMS Fair Trade
Practices Program; phone: 202-690-4355; or email:
<a href="/cdn-cgi/l/email-protection#1d4e335f6f78696933527b7b6869695d7c706e33686e797c337a726b"><span class="__cf_email__" data-cfemail="9fccb1ddedfaebebb1d0f9f9eaebebdffef2ecb1eaecfbfeb1f8f0e9">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: Section 763 of the Consolidated
Appropriations Act, 2021 (Pub. L. 116-260; December 27, 2020), amended
the Packers and Stockyards Act, 1921, as previously amended (7 U.S.C.
181 et seq.), by adding a new section 318 (7 U.S.C. 217b) establishing
a statutory trust for the benefit of unpaid cash sellers of livestock.
Under the new trust provisions, livestock dealers whose average
annual purchases of livestock exceed $100,000 must hold all inventories
of and receivables and proceeds from livestock purchased in cash sales
in trust for the benefit of all unpaid cash sellers of that livestock
until the cash sellers have been paid in full. Livestock sellers lose
their interest in the trust unless they notify livestock dealers and
the Secretary of Agriculture (Secretary) in writing that payment has
not been received. Such notice must be provided within 30 days of the
final date when payment was due or within 15 days of notice that a
dealer's payment instrument has been dishonored.
The newly added section 318 of the Act further provides that the
dealer trust provisions apply only to cash sales, which are defined in
the statute as sales in which the seller does not expressly extend
credit to the buyer. Thus, livestock sellers have no claim against the
trust if they have extended credit to the buyer.
Currently, Sec. 203.15 of the Packers and Stockyards regulations
outlines the process by which livestock sellers and live poultry
sellers and growers preserve their interest in the packer and poultry
trusts previously established under the Act (see 9 CFR 203.15). AMS
proposes to revise Sec. 203.15, which would continue to provide for
preservation of trust benefits under the packer and poultry trusts, by
adding the process by which livestock sellers can preserve their
interests under the new livestock dealer trust. Sections 206, 207, and
318 of the Act (7 U.S.C. 196, 197, 217b) require livestock sellers and
poultry sellers or growers to notify packers, live poultry dealers, or
livestock dealers and the Secretary in writing of their intent to
preserve their trust benefits within 30 days of the final day on which
payment was due or within 15 days of receiving notice that the
packer's, live poultry dealer's, or livestock dealer's payment
instrument was dishonored. Accordingly, the revised Sec. 203.15 would
outline how sellers and growers can comply with the statutory
requirement. The written notification should state that notification is
to preserve trust benefits; identify both parties in the transaction;
and include the date of the transaction, the date notice was received
that the payment instrument was dishonored (if applicable), and the
amount of money due. Written notification may be by letter, fax, email,
or other electronic transmission, preferably filed with the Packers and
Stockyards Division of AMS. Section 203.15 of the regulations still
provides that while the written notification described above is
preferred, any written notice to the buyer and the Secretary that the
seller has not received full payment is sufficient to meet the
statutory requirement if it is given within the prescribed timeframes.
Finally, Sec. 203.15 would be revised to include the statutory
definition of a cash sale, meaning a sale in which the seller does not
expressly extend credit to the buyer.
Section 201.200 of the regulations currently prohibits packers
whose average annual livestock purchases exceed $500,000 from entering
into credit agreements with livestock sellers unless the packer obtains
written acknowledgement from the seller that the seller has no trust
rights with respect to each particular sale under a credit agreement.
Under the proposed revisions for this rule, Sec. 201.200 would also
prohibit livestock dealers whose average annual livestock purchases
exceed $100,000 from entering into credit agreements with livestock
sellers
[[Page 26696]]
unless the purchasing dealer obtains written acknowledgement from the
seller that the seller has no trust rights with respect to each
particular sale under a credit agreement. The seller's written
acknowledgment statement would further provide that the credit
agreement covers a single sale, remains in effect until a specified
date, or remains in effect until it is canceled in writing by either
party. The seller's acknowledgement would be dated and signed by the
seller. The purchasing livestock dealer would be required to maintain
records of the acknowledgement, as well as all other documents related
to the credit agreement, for as long as required by any law or by the
AMS Administrator, but for no less than two years following the
expiration of the credit agreement referred to in the acknowledgment.
Finally, the purchasing dealer would be required to provide a copy of
the acknowledgment to the seller.
Average annual livestock purchase amount may be determined by
information establishing actual yearly dealer purchases, or a dealer's
purchases as stated on its most recent annual report filed pursuant to
the requirements of 9 CFR 201.97. Average annual livestock purchase
amount may be determined for new dealers that have not operated for a
year's time and for dealers that have not filed an annual report in the
prior two years, according to their actual livestock purchases for the
current year to date, extrapolated to a yearly amount, if necessary. In
general, the proposed new requirements for livestock dealers in Sec.
201.200 are similar to the current requirements for packers who enter
into credit agreements with livestock sellers.
Regulatory Analyses
Executive Orders 12866 and 13563
AMS is issuing this proposed rule in conformance with Executive
Orders (E.O.) 12866 and 13563, which direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulations are necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects, distributive impacts, and equity).
E.O. 13563 emphasizes the importance of quantifying both costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
AMS believes that the livestock industry is best served by revising
the existing regulation at 9 CFR 203.15 that addresses preserving
packer and poultry trust benefits under the Act to include provisions
related to the new livestock dealer trust. The industry is already
familiar with the notification process. AMS anticipates that additional
costs or the adoption of new practices related to compliance with the
proposed rule would be minimal. Livestock sellers can use the
instructions in this proposed rule to most efficiently file notice with
dealers and AMS of their intent to preserve trust benefits. However,
this proposed rule would also provide flexibility because the proposed
revisions allow that any written notification to dealers and the
Secretary within the prescribed timeframes that the seller has not
received full payment for livestock will meet the statutory
requirement. Furthermore, AMS believes that including the statutory
definition of ``cash sale'' in Sec. 203.15 can help sellers better
understand the conditions under which they can preserve their trust
benefits.
Regarding proposed revisions to Sec. 201.200, AMS believes that
both buyers and sellers benefit when livestock dealers with more than
$100,000 average annual purchases are required to obtain written
acknowledgment from sellers that trust benefits do not extend to
livestock purchases under credit terms, and to maintain all records
related to such sales, including the written acknowledgement. Obtaining
the written acknowledgement, as well as providing the seller with a
copy of the written agreement and maintaining pertinent records,
demonstrates that both parties understand the conditions of credit
sales as they relate to dealer trust benefits. AMS does not expect the
proposed rule to provide any environmental, public health, or safety
benefits.
This proposed rule does not meet the criteria of a significant
regulatory action under E.O. 12866 as supplemented by E.O. 13563.
Therefore, the Office of Management and Budget (OMB) has not reviewed
this rule under those orders.
Regulatory Flexibility Act
Pursuant to requirements set forth in the Regulatory Flexibility
Act (5 U.S.C. 601 et seq.), AMS has considered the economic impact of
this action on small business entities.
The proposed rule would affect dealers that purchase more than
$100,000 in cattle, hogs, sheep, goats, horses, or mules annually. It
would also affect livestock producers, other dealers, and livestock
auctions from which the dealers purchased livestock.
The Small Business Administration (SBA) defines small businesses by
their North American Industry Classification System (NAICS) codes.
Livestock dealers and livestock auctions would be classified as NAICS
code 424520--Livestock Merchant Wholesalers, which includes all
livestock dealers except dealers in horses and mules, and code 424590--
Other Farm Product Raw Material Merchant Wholesalers.\1\ For both
classifications, SBA defined a small business as one with 100 employees
or fewer.\2\
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\1\ Office of the President, OMB. ``North American Industry
Classification System United States, 2017,'' pp. 336-337. <a href="https://www.census.gov/naics/reference_files_tools/2017_NAICS_Manual.pdf">https://www.census.gov/naics/reference_files_tools/2017_NAICS_Manual.pdf</a>.
\2\ ``Table of Small Business Size Standards Matched to North
American Industry Classification System Codes,'' Small Business
Administration, effective August 19, 2019, p. 24. <a href="https://www.sba.gov/sites/default/files/2019-08/SBA%20Table%20of%20Size%20Standards_Effective%20Aug%2019%2C%202019_Rev.pdf">https://www.sba.gov/sites/default/files/2019-08/SBA%20Table%20of%20Size%20Standards_Effective%20Aug%2019%2C%202019_Rev.pdf</a>.
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Livestock dealers, including livestock auctions, are required to
register and file annual reports with AMS. In 2017 and 2018, 3,015
livestock dealers purchased more than $100,000 in livestock for their
own account or for the account of others.\3\ Livestock dealers do not
disclose the number of employees in their annual reports, but based on
its familiarity with the industry, AMS estimates at most three or four
firms had more than 100 employees. At least 99.8 percent would be small
businesses under the SBA definition.
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\3\ USDA, AMS. ``Report Pursuant to Section 12103 of the
Agriculture Improvement Act of 2018: Study to Determine the
Feasibility of Establishing a Livestock Dealer Statutory Trust.''
December 20, 2019, p. 39. <a href="https://www.ams.usda.gov/sites/default/files/media/LivestockDealerStatutoryTrustSenttoCongress.pdf">https://www.ams.usda.gov/sites/default/files/media/LivestockDealerStatutoryTrustSenttoCongress.pdf</a>.
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Producers selling livestock would be classified as NAICS codes:
12111--Beef Cattle Ranching and Farming, 112210--Hog and Pig Farming,
112410--Sheep Farming, 112420--Goat Farming, and 112920--Horses and
Other Equine Production. For each producer classification, SBA defined
a small business as one with $1 million or less in annual receipts.\4\
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\4\ ``Table of Small Business Size Standards Matched to North
American Industry Classification System Codes,'' Small Business
Administration, effective August 19, 2019, pp. 2-3.
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The 2017 Census of Agriculture categorizes cattle producers, hog
producers, sheep and lamb producers, and horse and mule producers by
the size of their operation. The Census of Agriculture tables
categorize producers' sales by number of head not the value of their
receipts, but data from the tables enable AMS to make a rough estimate
of the number of producers that would qualify as small businesses as
defined by SBA.
Census of Agriculture tables indicate that 711,827 farms reported
sales of cattle or calves in 2017, of which
[[Page 26697]]
704,776 (99 percent) produced fewer than 1,000 head, averaged less than
$1 million in sales, and would be small businesses.\5\ Of the 64,871
hog farms reporting sales, the 57,084 farms (88 percent) that produced
fewer than 5,000 head would qualify as small businesses.\6\ Of the
101,387 farms producing sheep and lambs, 101,280 (99.9 percent) would
qualify as small businesses.\7\ The Census of Agriculture reported
74,227 farms that sold horses. Of those, 74,065 (99.8 percent) sold
fewer than 50 horses, averaged less than $1 million in sales, and would
be considered small businesses. All the 10,435 farms that sold donkeys
or mules were small businesses.\8\ The Census did not have sales
information for goat producers.
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\5\ USDA, National Agricultural Statistics Service (NASS).
``2017 Census of Agriculture: United States Summary and State Data''
Volume 1. April 2019, p. 23. <a href="https://www.nass.usda.gov/Publications/AgCensus/2017/Full_Report/Volume_1,_Chapter_1_US/usv1.pdf">https://www.nass.usda.gov/Publications/AgCensus/2017/Full_Report/Volume_1,_Chapter_1_US/usv1.pdf</a>.
\6\ Ibid., p. 24.
\7\ Ibid., p. 25.
\8\ Ibid., p. 26.
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More than 99 percent of the cattle, sheep and lamb, horse, and mule
producers were small businesses. Hog production was more concentrated,
with only 88 percent qualifying as small businesses. As group, these
livestock producers were about 98.5 percent small businesses.
The proposed rule has two new provisions that affect small
businesses: (1) The rule outlines how sellers can comply with the
statutory requirement of providing written notification to dealers and
to the Secretary if they wish to preserve their rights to the dealer
trust, and (2) the rule requires dealers to obtain written
acknowledgement from the seller that the seller waives their rights to
the trust with respect to each particular sale under a credit
agreement.
The costs of filing a trust claim would only apply to livestock
sellers. There are few requirements. The cost would be the value of the
time required to write and send the notification. AMS expects writing
and sending the notification would require no more than a half hour of
a manager's time. The U.S. Bureau of Labor Statistics estimated the
average hourly wage for farmers, ranchers, and other agricultural
managers to be $36.93.\9\ If it takes one half hour to file the claim,
filing the claim would cost $18.47.
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\9\ Department of Labor (USDOL), Bureau of Labor Statistics
(BLS). Occupational Employment Statistics. ``Occupational Employment
and Wages, May 2020. 11-9013 Farmers, Ranchers, and Other
Agricultural Managers.'' <a href="https://www.bls.gov/oes/current/oes119013.htm#nat">https://www.bls.gov/oes/current/oes119013.htm#nat</a>.
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In a review of dealer bond claims filed with AMS from October 2013
through June 2019, AMS found claims against 82 dealers from 184
claimants.\10\ If sellers file trust claims at a similar rate as they
have filed bond claims in the past, AMS could expect 14.5 incidents in
which one or more sellers makes a valid claim against a dealer's trust
each year, with an average of 2.25 claimants for each trust incident,
or 33 claimants per year. At a cost of $18.47 for each claim, AMS
expects annual costs to the industry to be $609.51. Since nearly all
livestock producers and livestock dealers who might sell livestock to
other dealers are small business entities, AMS expects that nearly all
of the claimants would be small businesses.
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\10\ USDA, AMS. ``Report Pursuant to Section 12103 of the
Agriculture Improvement Act of 2018: Study to Determine the
Feasibility of Establishing a Livestock Dealer Statutory Trust.''
December 20, 2019, p. 70.
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The cost of obtaining a written waiver acknowledgement from the
seller would only apply to livestock dealers. AMS provides sample
wording for the acknowledgment and expects that obtaining written
acknowledgment from the seller would take no more than a half hour of a
dealer's time, or $18.47 for each acknowledgement.
AMS has no data on the number of dealers that purchase livestock
with credit agreements, or the number of trust waiver acknowledgements
dealers obtain from sellers and maintain. AMS's experience has been
that the number of sellers acknowledging they waive their trust rights
is relatively small. Sellers are reluctant to extend credit because
they would be required to give up their rights to file trust claims or
they have not had the financial resources to extend credit. With packer
trusts, packers typically have not created separate trust waiver
acknowledgements for each transaction. Instead, the waiver
acknowledgments tend to cover a number of transactions over a period of
time, limiting the number of written trust waivers required.
Regarding dealer trusts, AMS expects that relatively few sellers
would enter into credit agreements requiring trust waiver
acknowledgments. However, if a dealer must obtain waiver
acknowledgments according to proposed Sec. 201.200, AMS expects that
the dealer would limit the number of waiver acknowledgments by having a
single waiver acknowledgment cover a number of transactions over a
period of time. AMS estimates that at most, ten percent (302) of the
3,015 dealers that average annual purchases of more than $100,000 in
livestock would have credit agreements that require trust waiver
acknowledgements. Dealers that purchase livestock with credit
agreements may also purchase other livestock through cash sales, for
which they are not required to obtain trust waiver acknowledgements
from sellers. AMS estimates that each dealer that purchases livestock
with credit and obtains trust waivers from sellers will only do so with
an average of five customers in a year. That amounts to a total cost of
$27,890 for all of the expected trust waivers (302 dealers x 5 waivers/
dealer x $18.47/waiver).
The costs would not be spread uniformly across dealers. Dealers
that do not enter into credit agreements would have no costs. Only the
estimated ten percent of dealers that purchase livestock under a credit
agreement with the seller would need trust waiver acknowledgments. The
cost would average $92 for each dealer that purchases livestock with a
credit agreement, which is about 0.1 percent of the minimum amount
($100,000) of average annual livestock purchases that makes a dealer
responsible for obtaining waiver acknowledgments from credit sellers.
Costs would likely be correlated with the size of the dealer: Smaller
dealers that purchase livestock on credit from fewer sellers would have
fewer trust waiver acknowledgements.
AMS expects total marginal costs for the two provisions to be
$28,599. Small businesses would be responsible for nearly all of the
costs. In 2017 and 2018, livestock dealers that purchased more than
$100,000 in a year purchased a yearly total of $27.065 billion in
livestock.\11\ Compared to the amount of business that livestock
dealers conduct, an annual cost of $28,599 is 0.00011 percent of total
dealer livestock purchases. Accordingly, AMS has determined that this
action would not have a significant negative economic impact on a
substantial number of these small business entities.
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\11\ USDA, AMS. ``Report Pursuant to Section 12103 of the
Agriculture Improvement Act of 2018: Study to Determine the
Feasibility of Establishing a Livestock Dealer Statutory Trust.''
December 20, 2019, p. 33.
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Paperwork Reduction Act
In accordance with the PRA (44 U.S.C. Chapter 35), the information
requirements under the regulations have been approved previously by OMB
and assigned OMB No. 0581-0308. Changes are necessary in those
requirements as a result of this proposed rule.
Title: Preserving Trust Benefits Under the Packers and Stockyards
Act.
OMB Number: 0581-NEW.
Expiration Date of Approval: 3 years from approval.
[[Page 26698]]
Type of Request: Intent to seek approval to conduct a new
information collection.
Abstract: The Packers and Stockyards Act, 1921 (Act) (7 U.S.C. 181
et seq.), was recently amended by the addition of section 318 (7 U.S.C.
217b), establishing a statutory trust for the benefit of unpaid cash
sellers of livestock. Under the amended Act, livestock dealers whose
average annual purchases of livestock exceed $100,000 must hold all
inventories of and receivables and proceeds from livestock purchased in
cash sales in trust for the benefit of all unpaid cash sellers of that
livestock until the cash sellers have been paid in full.
Under the new statutory trust provisions, livestock sellers lose
their interest in the trust unless they notify livestock dealers and
the Secretary of Agriculture (Secretary) in writing that payment has
not been received. Such notice must be provided within 30 days of the
final date when payment was due or within 15 days of notice that a
dealer's payment instrument has been dishonored. The statute further
provides that trust provisions apply only to cash sales, which are
defined in the statute as sales in which the seller does not expressly
extend credit to the buyer. Thus, livestock sellers have no claim
against the trust if they have extended credit to the buyer.
AMS seeks approval for a new information collection related to the
livestock dealer trust to implement new regulatory requirements.
Livestock dealers who purchase livestock under credit terms and whose
average annual purchases of livestock exceed $100,000 must obtain
written acknowledgements from sellers that trust benefits do not
pertain to credit sales. Dealers must provide copies of the
acknowledgements to sellers and must retain the acknowledgements for
two years after the expiration of the subject credit agreements.
Additionally, a livestock seller who has not received payment in full
for cash livestock sales must notify both the dealer and the Secretary
of Agriculture in writing and within specified timeframes that the
seller has not received full payment and intends to preserve their
interest in the dealer trust. Providing such notice to the Secretary
will enable USDA to initiate enforcement investigations and further
actions as necessary.
Authority:
<bullet> In accordance with the Paperwork Reduction Act of 1995 (44
U.S.C. Chapter 35) and
<bullet> The Packers and Stockyards Act, 1921 (7 U.S.C. 181 et
seq.), as amended.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 15 to 30 minutes.
Respondents: Livestock dealers and sellers.
Estimated Number of Potential Respondents: 335.
Estimated Total Potential Annual Responses: 1,845.
Maximum Estimated Total Annual Burden on All Respondents: 847
hours.
Comments are invited on: (1) Whether the proposed collection of
information is necessary for the proper performance of the functions of
the agency, including whether the information will have practical
utility; (2) the accuracy of the agency's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used; (3) ways to enhance the quality,
utility, and clarity of the information to be collected; and (4) ways
to minimize the burden of the collection of information on those who
are to respond, including the use of appropriate automated, electronic,
mechanical, or other technological collection techniques or other forms
of information technology. Comments may be sent to the following
address:
<bullet> Internet: <a href="http://www.regulations.gov">www.regulations.gov</a>.
All written comments should be identified with the docket number
AMS-FTPP-21-0015 and should reference the date and this issue of the
Federal Register. All comments will be posted on the internet and
available for viewing at <a href="http://www.regulations.gov">www.regulations.gov</a>.
All responses to this notice will be summarized and included in the
request for OMB approval. All comments will become a matter of public
record.
Upon approval by OMB, this information collection would be merged
with the information collection currently approved for the Packers and
Stockyards Division--OMB No. 0581-0308.
Reports and forms are periodically reviewed to reduce information
requirements and duplication by industry and public sector agencies.
Should additional changes become necessary, they would be submitted to
OMB for approval.
Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of Information and Regulatory Affairs designated this
proposed rule as not a major rule as defined by 5 U.S.C. 804(2).
E-Government Act
USDA is committed to complying with the E-Government Act (44 U.S.C.
3601 et seq.) by promoting the use of the internet and other
information technologies to provide increased opportunities for citizen
access to Government information and services, and for other purposes.
Executive Order 13175
This proposed rule has been reviewed under E.O. 13175--Consultation
and Coordination with Indian Tribal Governments, which requires
agencies to consider whether their rulemaking actions would have tribal
implications. AMS has determined that this proposed rule is unlikely to
have substantial direct effects on one or more Indian tribes, on the
relationship between the Federal Government and Indian tribes, or on
the distribution of power and responsibilities between the Federal
Government and Indian tribes.
Executive Order 12988
This proposed rule has been reviewed under E.O. 12988, Civil
Justice Reform. It is not intended to have retroactive effect. There
are no administrative procedures that must be exhausted prior to
judicial challenge to the provisions of this proposed rule.
A 30-day comment period is provided to allow interested persons to
respond to this proposal. Comments are due June 6, 2022. All comments
submitted by the deadline will be considered before finalizing this
proposed rule.
Additional regulations pertaining to the new livestock dealer trust
will be considered in a separate rulemaking action.
List of Subjects
9 CFR Part 201
Confidential business information, Reporting and recordkeeping
requirements, Stockyards, Surety bonds, Trade practices.
9 CFR Part 203
Reporting and recordkeeping requirements, Stockyards.
For the reasons set forth in the preamble, AMS proposes to amend 9
CFR chapter II as follows:
PART 201--ADMINISTERING THE PACKERS AND STOCKYARDS ACT
0
1. The authority citation for 9 CFR part 201 continues to read as
follows:
Authority: 7 U.S.C. 181-229c.
0
2. Amend Sec. 201.200 by:
0
a. Revising the section heading;
0
b. Redesignating paragraphs (b) and (c) as paragraphs (c) and (d),
respectively;
0
c. Adding new paragraph (b);
0
d. Revising newly redesignated paragraph (c); and
[[Page 26699]]
0
e. Removing the parenthetical authority at the end of the section.
The revisions and addition read as follows:
Sec. 201.200 Sale of livestock on credit.
* * * * *
(b) No dealer whose average annual purchases of livestock exceed
$100,000 shall purchase livestock on credit unless:
(1) Before purchasing livestock on credit, the dealer obtains from
the seller a written acknowledgement that includes the information
described in this paragraph (b)(1).
(i) The following statement:
On this date I am entering into a written agreement for the sale of
livestock on credit to__, a dealer, and I understand that in doing so I
will have no rights under the trust provisions of section 318 of the
Packers and Stockyards Act, 1921, as amended (7 U.S.C. 217b), with
respect to any such credit sale.
(ii) A statement about whether the credit sales agreement covers a
single sale; covers multiple sales and remains in effect through a
certain date and states the date; or remains in effect until canceled
in writing by either party.
(iii) The date the seller signed the agreement.
(iv) The seller's signature.
(2) The dealer retains the written acknowledgment, together with
all other documents, if any, setting forth the terms of credit sales on
which the purchaser and seller have agreed, and the dealer retains a
copy thereof, in their records for such time as is required by any law,
or by written notice served on the dealer by the Administrator, but not
less than two calendar years from the date of expiration of the written
agreement referred to in the acknowledgment.
(3) The dealer provides a copy of the acknowledgment to the seller.
(c) Purchasing livestock for which payment is to be made by a draft
which is not a check shall constitute purchasing such livestock on
credit within the meaning of paragraphs (a) and (b) of this section.
(See also Sec. 201.43(b)(1).)
* * * * *
PART 203--STATEMENTS OF GENERAL POLICY UNDER THE PACKERS AND
STOCKYARDS ACT
0
3. The authority for 9 CFR part 203 continues to read as follows:
Authority: 7 CFR 2.22 and 2.81.
0
4. Revise Sec. 203.15 to read as follows:
Sec. 203.15 Trust benefits under sections 206, 207, and 318 of the
Packers and Stockyards Act.
(a) Within the times specified under sections 206(b), 207(d), and
318(b) of the Act, any livestock seller, live poultry seller or grower,
to preserve their interest in the statutory trust, must give written
notice to the appropriate packer, live poultry dealer, or livestock
dealer and file such notice with the Secretary within the prescribed
time by letter, fax, email, or other electronic transmission. The
written notice should provide:
(1) Notification to preserve trust benefits:
(2) Identification of packer, live poultry dealer, or livestock
dealer;
(3) Identification of seller or poultry grower;
(4) Date of the transaction;
(5) Date of seller's or poultry grower's receipt of notice that
payment instrument has been dishonored (if applicable); and
(6) Amount of money due; and to make certain that a copy of such
letter, fax, email, or other electronic transmission is filed with a
PSD regional office or with the PSD headquarters office within the
prescribed time.
(b) While the information in paragraphs (a)(1) through (6) of this
section is desirable, any written notice which informs the packer, live
poultry dealer, or livestock dealer, and the Secretary that the packer,
live poultry dealer, or livestock dealer has failed to pay is
sufficient to meet the statutory requirement in paragraph (a) of this
section if it is given within the prescribed time.
(c) For purposes of administering statutory trusts under the Act, a
cash sale means a sale in which the seller does not expressly extend
credit to the buyer.
(Approved by the Office of Management and Budget under control number
0581-0308)
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2022-09485 Filed 5-4-22; 8:45 am]
BILLING CODE P
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</html>Indexed from Federal Register on May 5, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.