[Federal Register Volume 77, Number 169 (Thursday, August 30, 2012)]
[Rules and Regulations]
[Pages 52597-52599]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-21374]



Agricultural Marketing Service

7 CFR Part 1260

[Doc. No. AMS-LS-11-0086]

Beef Promotion and Research; Amendment to the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.


SUMMARY: This final rule expands the contracting authority of the Beef 
Promotion and Research Order (Order). The Beef Research and Information 
Act (Act) requires that the Beef Promotion Operating Committee (BPOC) 
enter into contracts with established national non-profit industry-
governed organizations including the Federation of State Beef Councils 
to implement programs of promotion, research, consumer information, and 
industry information. The Act does not define ``national non-profit 
industry governed organization,'' however, the Order states that these 
organizations must be governed by a board of directors representing the 
cattle or beef industry on a national basis and that they were active 
and ongoing prior to enactment of the Act. This final rule changes the 
date requirement in the Order so that organizations otherwise qualified 
could be eligible to contract with the BPOC for the implementation and 
conduct of Beef Checkoff programs if they have been active and ongoing 
for at least two years.

DATES: Effective August 31, 2012.

FOR FURTHER INFORMATION CONTACT: Craig Shackelford, Agricultural 
Marketing Specialist, Marketing Programs Division, on 202/720-1115, fax 
202/720-1125, or by email at [email protected].


Executive Order 12866

    The Office of Management and Budget has waived the review process 
required by Executive Order 12866 for this action.

Executive Order 12988

    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 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 

Regulatory Flexibility Act and Paperwork Reduction Act

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601-612), the Administrator of the 
Agricultural Marketing Service (AMS) has considered the economic effect 
of this action on small entities and has determined that this final 
rule will not have a significant economic impact on a substantial 
number of 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.
    In the February 2011 publication of ``Farms, Land in Farms, and 
Livestock Operations,'' the U.S. Department of Agriculture's (USDA) 
National Agricultural Statistics Service (NASS) estimates that in 2010 
the number of operations in the United States with cattle totaled 
approximately 935,000. The majority of these operations that are 
subject to the Order may be classified as small entities.
    The final rule imposes no new burden on the industry. It merely 
expands the contracting authority as established under section 
1260.168(b) within the Order to permit a greater number of 
organizations to perform work on behalf of the BPOC.

Background and Final Action

    The Order is authorized by the Act of 1985 [7 U.S.C. 2901-2918]. 
The Act was passed as part of the 1985 Farm Bill [Pub. L. 99-198]. The 
program became effective on July 18, 1986, when the Order was issued 
[51 FR 26132]. Assessments began on October 1, 1986.
    Section 5(6) of the Act provides that the BPOC, to insure 
coordination and efficient use of funds, shall enter into contracts or 
agreements for implementing any activities, which it

[[Page 52598]]

has approved to be carried out, with established national nonprofit 
industry-governed organizations including the Federation of State Beef 
Councils. This language has the effect of requiring the BPOC to 
contract with organizations, which qualify as established national non-
profit industry-governed organizations. The Act does not define 
``national non-profit industry governed organization.''
    Previously, section 1260.113 of the Order defined ``established 
national non-profit industry-governed organizations'' as organizations 
which: (a) Are non-profit organizations pursuant to sections 501(c)(3), 
(5) or (6) of the Internal Revenue Code (26 U.S.C. 501(c)(3), (5), and 
(6)); (b) are governed by a board of directors representing the cattle 
or beef industry on a national basis; and (c) were active and ongoing 
before enactment of the Act. This final rule amends section 1260.113 of 
the Order by replacing the existing language under paragraph (c), 
``were active and ongoing before the enactment of the Act'' with ``have 
been active and ongoing for at least two years.''
    In 2006, the National Cattlemen's Beef Association (NCBA) and the 
American Farm Bureau Federation (AFBF) initiated the Industry-Wide Beef 
Checkoff Taskforce (Taskforce) to review, study, and recommend 
enhancements to the Beef Checkoff program for the purpose of 
strengthening the Beef Checkoff Program for the common good of the beef 
industry. The Taskforce included producer and industry representatives 
and representatives from national organizations, while USDA took on an 
advisory role during meetings. The Taskforce issued a report in 
September 2006, which included a recommendation to eliminate section 
1260.113(c) in order to make the Beef Checkoff more inclusive. USDA 
believes that permitting a greater number of organizations to contract 
with the BPOC could bring new perspectives to the contracting process.
    In February 2008 at the Cattle Industry Annual Convention, leaders 
of the Cattlemen's Beef Board (Board) asked AMS officials if the Board 
could conduct a program review. The industry officials believed that it 
would be in the best interest of the Beef Checkoff Program to conduct a 
review of the operations to determine if there are any changes that 
need to or could be made in program operations, the Act, or Order that 
would facilitate a more effective Beef Checkoff Program. Included in 
the Board's subsequent January 2009 recommendations to AMS was a 
recommendation for a statutory amendment intended to result in an 
expansion of the contracting authority to organizations created after 
the 1986 enactment of the Act.
    Finally, a meeting was held in Minneapolis, Minnesota on September 
27, 2011, attended by many industry stakeholders and co-hosted by the 
U.S. Cattlemen's Association and the National Farmers Union as 
requested by the Secretary. The goal of the meeting was to bring more 
broad-based producer support to the Beef Checkoff program through a 
discussion of issues regarding Beef Checkoff administration and to 
provide the Secretary with recommendations that would enhance support 
for the Beef Checkoff. Many major Beef Checkoff industry stakeholders 
attended, including the American National Cattlewomen, American Veal 
Association, Livestock Marketing Association, NCBA, National Livestock 
Producers Association, and Ranchers-Cattlemen Action Legal Fund, United 
Stockgrowers of America (R-CALF). Representatives from the AMS also 
attended the meeting, as did the Chief Executive Officer and Producer 
Chairman of the Board.
    As a result of that meeting, the Secretary received a joint letter 
signed by most of the organizations in attendance. The letter requested 
that USDA amend Beef Checkoff regulations to expand the contracting 
authority as authorized under the Act and Order by permitting 
organizations that are active and ongoing for at least two years to 
contract with the BPOC.


    A greater number of beef industry organizations exist now than did 
at the time the Order was issued. The Beef Checkoff Program could 
benefit from the perspectives and skills of some of these organizations 
that are ineligible solely because they were formed after the enactment 
of the Act. For several years, the beef industry has been recommending 
expanding the eligibility of organizations to contract with the BPOC in 
order to enhance the Beef Checkoff Program. Amending the Order will 
allow the BPOC to contract with organizations possessing the requisite 
experience, skills and information related to the marketing of beef and 
beef products, as is intended under the Act.


    On March 2, 2012, USDA published in the Federal Register (77 FR 
12752) for public comment a proposed rule providing for the expansion 
of the contracting authority as authorized under the Order by 
permitting organizations that are active and ongoing for at least two 
years to contract with the BPOC. Comments were due to USDA by May 1, 
    USDA received 20 timely comments associated with the proposed rule 
for expansion of the contracting authority. Ten comments were submitted 
by individual cattle ranchers or members of the general public. Ten 
comments were received from cattle industry organizations. No untimely 
comments were received and no new information was obtained that was not 
already provided in the timely comments that are considered below.
    Twelve commenters directly expressed support of the expansion of 
the contracting authority and for the provision requiring that 
otherwise qualified organizations must have been active and ongoing for 
at least 2 years.
    One commenter provided background information on how the Order came 
to have its current contracting provisions and compared this to the 
current proposal. This commenter fully supported the expansion of the 
contracting authority and the requirement that qualifying contracting 
organizations be active and ongoing for at least 2 years.
    Several commenters offered ideas and suggestions that were 
pertinent to the Program but were outside the scope of this final rule. 
One commenter suggested that farmers and ranchers who pay into the Beef 
Checkoff should be given the opportunity to vote on Beef Checkoff 
promotion programs every five years. Six commenters suggested that AMS 
should reinstate the eligibility requirement contained in its proposed 
rule dated March 14, 1986 (51 FR 8984) that such organizations must be 
governed by a board of directors composed of a majority of producers. 
Eight commenters suggested that AMS should add a new provision to the 
Order that would restrict any contracting organization from receiving 
more than a specified percentage of the Beef Checkoff annual program 
funding. Five commenters suggested that the Beef Checkoff should 
promote U.S. produced beef. One commenter suggested that AMS should 
reopen the comment period and propose a plan to make improvements to 
the administration and operation of the Program. These comments were 
all beyond the scope of this rulemaking and therefore no changes were 
incorporated into this final rule based on these comments.
    One commenter raised a number of points regarding AMS and the beef 
industry as a whole that are not pertinent to the proposal and 
therefore are not addressed.

[[Page 52599]]

List of Subjects in 7 CFR Part 1260

    Administrative practice and procedure, Advertising, Agricultural 
research, Imports, Marketing agreement, Meat and meat products, 
Reporting and recordkeeping requirements.

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


1. The authority citation for 7 CFR part 1260 continues to read as 

    Authority:  7 U.S.C. 2901-2911 and 7 U.S.C. 7401.

2. In Sec.  1260.113, paragraph (c) is revised to read as follows:

Sec.  1260.113  Established national non-profit industry-governed 

* * * * *
    (c) Have been active and ongoing for at least two years.

    Dated: August 22, 2012.
David R. Shipman,
Administrator, Agricultural Marketing Service.
[FR Doc. 2012-21374 Filed 8-29-12; 8:45 am]