Guideline Change Involving Volume Discounts in Tariffs, 45415-45416 [E7-15814]

Download as PDF Federal Register / Vol. 72, No. 156 / Tuesday, August 14, 2007 / Notices Department of Agriculture, and the U.S. Customs and Border Protection, U.S. Department of Homeland Security. The regulation at 7 CFR 6.33(a) provides that a fee will be charged for each license issued to a person or firm by the Licensing Authority in order to reimburse the Department of Agriculture for the costs of administering the licensing system under this regulation. The regulation at 7 CFR 6.33(a) also provides that the Licensing Authority will announce the annual fee for each license and that such fee will be set out in a notice to be published in the Federal Register. Accordingly, this notice sets out the fee for the licenses to be issued for the 2008 calendar year. Notice The total cost to the Department of Agriculture of administering the licensing system for 2008 has been estimated to be $360,000, and the estimated number of licenses expected to be issued is 2,400. Of the total cost, $230,000 represents staff and supervisory costs directly related to administering the licensing system, and $130,000 represents other miscellaneous costs, including travel, postage, publications, forms, Internet software development, and ADP system contractors. Accordingly, notice is hereby given that the fee for each license issued to a person or firm for the 2008 calendar year, in accordance with 7 CFR 6.33, will be $150.00 per license. Dated: Issued at Washington, DC the 31st day of July, 2007. Ronald Lord, Licensing Authority. [FR Doc. 07–3944 Filed 8–13–07; 8:45 am] BILLING CODE 3410–10–M DEPARTMENT OF AGRICULTURE Grain Inspection, Packers and Stockyards Administration Guideline Change Involving Volume Discounts in Tariffs Grain Inspection, Packers and Stockyards Administration, USDA. ACTION: Notice. mstockstill on PROD1PC66 with NOTICES AGENCY: SUMMARY: We are announcing a change in policy to accept non-tiered volumebased rate discounts in tariffs. DATES: Effective Date: August 14, 2007. FOR FURTHER INFORMATION CONTACT: S. Brett Offutt, Director, Policy and Litigation Division, Packers and Stockyards Program, Grain Inspection, Packers and Stockyards Administration, VerDate Aug<31>2005 16:35 Aug 13, 2007 Jkt 211001 1400 Independence Ave., SW., Washington, DC 20250, (202) 720–7363, s.brett.offutt@usda.gov. SUPPLEMENTARY INFORMATION: Background The Grain Inspection, Packers and Stockyards Administration (GIPSA) enforces the Packers and Stockyards Act, 1921 (7 U.S.C. 181–229) (P&S Act). Under the P&S Act, market agencies selling on commission (market agencies) at stockyards posted by GIPSA as public livestock sales facilities operating in interstate commerce (posted stockyards) must file a tariff with GIPSA. These tariffs list the rates charged for stockyard services the market agency provides, including selling commissions (7 U.S.C. 207(a)). The use of discriminatory rates in tariffs is prohibited (7 U.S.C. 206). Neither the Packers and Stockyards Act, nor regulations promulgated thereunder, describe specifically what constitutes a discriminatory rate. Since 1978, GIPSA has investigated the reasonableness of rates only in response to specific complaints or other compelling circumstances. This general policy with regards to GIPSA investigation of rates is published at 9 CFR 203.17. Current Policy Currently, GIPSA policy permits volume-based rate discounts in tariffs, but the policy historically has considered non-tiered volume discounts to be discriminatory and therefore prohibited. Tiered discounts involve commission rate structures with lower selling commission rates per head above a specified number of head threshold, or lower selling commissions above a certain dollar threshold of gross proceeds. For example, in a tiered volume-based discount rate system, the commission would be the standard rate for the first 10 cows, then a discounted rate for the next ten, or it might be the standard rate for the first $10,000 in gross proceeds, then a discounted rate for the next $10,000 in gross proceeds. GIPSA currently requires that the discounted rate be applied only to that portion of a consignment above the specified number of head or dollar threshold, although GIPSA doesn’t set what the threshold must be. The current policy is that those animals in the same consignment group below the specified number or dollar threshold must be assessed the non-discounted rate. Allowing the application of non-tiered volume-based discounted rates to all the animals consigned in large consignments could in some circumstances result in large volume consignors paying less in total selling PO 00000 Frm 00004 Fmt 4703 Sfmt 4703 45415 commissions than small volume consignors. For example, a standard commission rate of $10 per cow for 10 cows and a non-tiered discounted rate of $9 per cow for larger sales could result in the seller of 11 cows paying less in commission ($99) than the seller of 10 cows ($100). Historically, GIPSA believed this practice to be discriminatory. The prohibition on nontiered application of volume-based rate discounts prevented a reduction in the total amount of commissions paid as the number of animals consigned increased. New Policy Representatives from livestock industry groups including the Livestock Marketing Association requested that GIPSA examine its prohibition of nontiered commission discounts. Allowing the non-tiered commission discounts to all animals consigned in large groups affords qualifying consignors significant reductions in selling cost on a per head basis. Livestock industry stakeholders have presented a number of reasons why allowing non-tiered volume discounting of commissions would benefit the industry as a whole. Primarily, the argument presented by industry groups in favor of the new policy is that non-tiered discounts are fair because they more accurately reflect the market agencies’ actual cost of the transaction. Most of the cost accrued by the market agency is per transaction, not per animal. Also, the industry groups argue that stockyards now face competition from markets that did not exist in 1921, such as satellite video and internet auctions, which are not required to file tariffs with GIPSA. Livestock industry groups believe that prohibiting non-tiered volume discounts discriminates against market agencies at posted stockyards. Stakeholders have told us that small volume consignors are not harmed when consignors of larger groups of animals receive volume-based discounts even if the discount is applied in a nontiered manner because the same volume-based discounts are available to small volume consignors whenever they have the opportunity to consign in larger volumes. An examination of tiered tariffs conducted by the GIPSA Midwest regional office found that in some cases, the threshold for obtaining the volume discount was as small as five (5) head or $3000. Market agencies stated that the effort and cost to sell a large group of animals as a unit is comparable to that for small consignments, which is why they are willing to offer a discount on a peranimal basis for volume consigners. Market agencies also stated that large E:\FR\FM\14AUN1.SGM 14AUN1 45416 Federal Register / Vol. 72, No. 156 / Tuesday, August 14, 2007 / Notices groups of livestock of uniform quality and size help attract large volume buyers to sales at posted stockyards. They posit that this increases the level of competition among all buyers benefiting both small and large consignors. Finally, market agencies operating at posted stockyards argue they are under increasing pressure to compete with market agencies selling videotaped herds of cattle by satellite telecast or over the Internet. Video and Internet cattle sales tend to attract and draw consignments of large groups of cattle away from posted stockyards. Market agencies at posted stockyards feel the non-tiered volume-base rate discounts will help them compete more effectively for large consignment business. GIPSA has examined its policy on non-tiered volume-based commission rate discounting and the arguments presented by livestock industry groups and market agencies. GIPSA has determined that it will change its policy to allow the use of non-tiered volumebased commission rate discounting methods in tariffs submitted for approval. GIPSA policy will not attempt to differentiate between levels of discounting but will rely on competition among markets and marketing systems to set rate levels that are fair to market agencies and livestock producers. However, GIPSA still will consider nontiered volume-based rate discounts to be discriminatory if a market agency does not provide the same discount to all qualifying consignors. Rate Regulation Investigations and Compliance mstockstill on PROD1PC66 with NOTICES GIPSA will continue to investigate the validity of complaints alleging discriminatory rates for stockyard services (9 CFR 203.17(c)). Under the P&S Act (7 U.S.C. 207(e)), GIPSA can suspend the use of new rates believed to be unlawful. With or without complaints received, GIPSA may conduct an investigation and provide an opportunity for a hearing on a rate tariff set for stockyard services and if a rate is deemed in violation of the P&S Act (7 U.S.C. 205, 206, 207), GIPSA can establish a different rate and order the market agency to cease using the rate (7 U.S.C. 211). Effective Date This notice becomes final upon publication in the Federal Register. VerDate Aug<31>2005 16:35 Aug 13, 2007 Jkt 211001 Authority: 7 U.S.C. 203, 205, 206, 207, 211, 228. meeting date because of internal processing delays. James E. Link, Administrator, Grain Inspection, Packers and Stockyards Administration. [FR Doc. E7–15814 Filed 8–13–07; 8:45 am] Dated in Washington, DC, August 9, 2007. Ivy Davis, Acting Chief, Regional Programs Coordination Unit. [FR Doc. E7–15915 Filed 8–13–07; 8:45 am] BILLING CODE 3410–KD–P BILLING CODE 6335–02–P COMMISSION ON CIVIL RIGHTS Agenda and Notice of Public Meeting of the Georgia Advisory Committee Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission), and the Federal Advisory Committee Act (FACA), that a planning meeting with briefing of the Georgia Advisory Committee to the Commission will convene at 9 a.m. and adjourn at 12 p.m. on Wednesday, August 29, 2007, at the Sam Nunn Federal Center Building, 61 Forsyth Street, SW., Conference Room Center, Conference Room A, Atlanta, GA, 30303. The purpose of this meeting is to review the Committee’s school desegregation report and receive a briefing on fair housing issues in the state. Members of the public are entitled to submit written comments; the comments must be received in the regional office by September 14, 2007. The address is: Southern Regional Office, Sam Nunn Federal Center Building, 61 Forsyth Street, SW., Suite 18T40, Atlanta, GA., 30303. Persons wishing to e-mail their comments, or to present their comments verbally at the meeting, or who desire additional information should contact Peter Minarik, Ph.D., Regional Director, (404) 562–7000, or by e-mail: pminarik@usccr.gov. Hearing-impaired persons who will attend the meeting and require the services of a sign language interpreter should contact the Regional Office at least ten (10) working days before the scheduled date of the meeting. Records generated from this meeting may be inspected and reproduced at the Southern Regional Office, as they become available, both before and after the meeting. Persons interested in the work of this advisory committee are advised to go to the Commission’s Web site, https://www.usccr.gov, or to contact the Southern Regional Office at the above e-mail or street address. The meeting will be conducted pursuant to the provisions of the rules and regulations of the Commission and FACA. It was not possible to publish this notice 15 days in advance of the PO 00000 Frm 00005 Fmt 4703 Sfmt 4703 DEPARTMENT OF COMMERCE International Trade Administration U.S. Travel and Tourism Advisory Board: Meeting of the U.S. Travel and Tourism Advisory Board International Trade Administration, U.S. Department of Commerce. AGENCY: ACTION: Notice of an open meeting. SUMMARY: The U.S. Travel and Tourism Advisory Board (Board) will hold a meeting to discuss topics related to the travel and tourism industry. The Board was established on October 1, 2003, and reconstituted October 1, 2005, to advise the Secretary of Commerce on matters relating to the travel and tourism industry. September 5, 2007. Time: 10:30 a.m. to 12 p.m. (EDT). DATES: Department of Commerce, 1401 Constitution Avenue, NW., Room 4830, Washington, DC, 20230. Because of building security, all non-government attendees must pre-register. This program will be physically accessible to people with disabilities. Seating is limited and will be on a first come, first served basis. Requests for sign language interpretation, other auxiliary aids, or pre-registration, should be submitted no later than August 29, 2007, to J. Marc Chittum, U.S. Travel and Tourism Advisory Board, Room 4043, 1401 Constitution Avenue, NW., Washington, DC 20230, telephone 202–482–4501, Marc.Chittum@mail.doc.gov. ADDRESSES: J. Marc Chittum, U.S. Travel and Tourism Advisory Board, Room 4043, 1401 Constitution Avenue, NW., Washington, DC 20230, telephone: 202–482–4501, e-mail: Marc.Chittum@mail.doc.gov. FOR FURTHER INFORMATION CONTACT: Dated: August 7, 2007. J. Marc Chittum, Executive Secretary, U.S. Travel and Tourism Advisory Board. [FR Doc. 07–3947 Filed 8–13–07; 4:54 pm] BILLING CODE 3510–DR–P E:\FR\FM\14AUN1.SGM 14AUN1

Agencies

[Federal Register Volume 72, Number 156 (Tuesday, August 14, 2007)]
[Notices]
[Pages 45415-45416]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-15814]


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DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration


Guideline Change Involving Volume Discounts in Tariffs

AGENCY: Grain Inspection, Packers and Stockyards Administration, USDA.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: We are announcing a change in policy to accept non-tiered 
volume-based rate discounts in tariffs.

DATES: Effective Date: August 14, 2007.

FOR FURTHER INFORMATION CONTACT: S. Brett Offutt, Director, Policy and 
Litigation Division, Packers and Stockyards Program, Grain Inspection, 
Packers and Stockyards Administration, 1400 Independence Ave., SW., 
Washington, DC 20250, (202) 720-7363, s.brett.offutt@usda.gov.

SUPPLEMENTARY INFORMATION: 

Background

    The Grain Inspection, Packers and Stockyards Administration (GIPSA) 
enforces the Packers and Stockyards Act, 1921 (7 U.S.C. 181-229) (P&S 
Act). Under the P&S Act, market agencies selling on commission (market 
agencies) at stockyards posted by GIPSA as public livestock sales 
facilities operating in interstate commerce (posted stockyards) must 
file a tariff with GIPSA. These tariffs list the rates charged for 
stockyard services the market agency provides, including selling 
commissions (7 U.S.C. 207(a)). The use of discriminatory rates in 
tariffs is prohibited (7 U.S.C. 206). Neither the Packers and 
Stockyards Act, nor regulations promulgated thereunder, describe 
specifically what constitutes a discriminatory rate. Since 1978, GIPSA 
has investigated the reasonableness of rates only in response to 
specific complaints or other compelling circumstances. This general 
policy with regards to GIPSA investigation of rates is published at 9 
CFR 203.17.

Current Policy

    Currently, GIPSA policy permits volume-based rate discounts in 
tariffs, but the policy historically has considered non-tiered volume 
discounts to be discriminatory and therefore prohibited. Tiered 
discounts involve commission rate structures with lower selling 
commission rates per head above a specified number of head threshold, 
or lower selling commissions above a certain dollar threshold of gross 
proceeds. For example, in a tiered volume-based discount rate system, 
the commission would be the standard rate for the first 10 cows, then a 
discounted rate for the next ten, or it might be the standard rate for 
the first $10,000 in gross proceeds, then a discounted rate for the 
next $10,000 in gross proceeds. GIPSA currently requires that the 
discounted rate be applied only to that portion of a consignment above 
the specified number of head or dollar threshold, although GIPSA 
doesn't set what the threshold must be. The current policy is that 
those animals in the same consignment group below the specified number 
or dollar threshold must be assessed the non-discounted rate. Allowing 
the application of non-tiered volume-based discounted rates to all the 
animals consigned in large consignments could in some circumstances 
result in large volume consignors paying less in total selling 
commissions than small volume consignors. For example, a standard 
commission rate of $10 per cow for 10 cows and a non-tiered discounted 
rate of $9 per cow for larger sales could result in the seller of 11 
cows paying less in commission ($99) than the seller of 10 cows ($100). 
Historically, GIPSA believed this practice to be discriminatory. The 
prohibition on non-tiered application of volume-based rate discounts 
prevented a reduction in the total amount of commissions paid as the 
number of animals consigned increased.

New Policy

    Representatives from livestock industry groups including the 
Livestock Marketing Association requested that GIPSA examine its 
prohibition of non-tiered commission discounts. Allowing the non-tiered 
commission discounts to all animals consigned in large groups affords 
qualifying consignors significant reductions in selling cost on a per 
head basis. Livestock industry stakeholders have presented a number of 
reasons why allowing non-tiered volume discounting of commissions would 
benefit the industry as a whole. Primarily, the argument presented by 
industry groups in favor of the new policy is that non-tiered discounts 
are fair because they more accurately reflect the market agencies' 
actual cost of the transaction. Most of the cost accrued by the market 
agency is per transaction, not per animal. Also, the industry groups 
argue that stockyards now face competition from markets that did not 
exist in 1921, such as satellite video and internet auctions, which are 
not required to file tariffs with GIPSA. Livestock industry groups 
believe that prohibiting non-tiered volume discounts discriminates 
against market agencies at posted stockyards.
    Stakeholders have told us that small volume consignors are not 
harmed when consignors of larger groups of animals receive volume-based 
discounts even if the discount is applied in a non-tiered manner 
because the same volume-based discounts are available to small volume 
consignors whenever they have the opportunity to consign in larger 
volumes. An examination of tiered tariffs conducted by the GIPSA 
Midwest regional office found that in some cases, the threshold for 
obtaining the volume discount was as small as five (5) head or $3000. 
Market agencies stated that the effort and cost to sell a large group 
of animals as a unit is comparable to that for small consignments, 
which is why they are willing to offer a discount on a per-animal basis 
for volume consigners. Market agencies also stated that large

[[Page 45416]]

groups of livestock of uniform quality and size help attract large 
volume buyers to sales at posted stockyards. They posit that this 
increases the level of competition among all buyers benefiting both 
small and large consignors. Finally, market agencies operating at 
posted stockyards argue they are under increasing pressure to compete 
with market agencies selling videotaped herds of cattle by satellite 
telecast or over the Internet. Video and Internet cattle sales tend to 
attract and draw consignments of large groups of cattle away from 
posted stockyards. Market agencies at posted stockyards feel the non-
tiered volume-base rate discounts will help them compete more 
effectively for large consignment business.
    GIPSA has examined its policy on non-tiered volume-based commission 
rate discounting and the arguments presented by livestock industry 
groups and market agencies. GIPSA has determined that it will change 
its policy to allow the use of non-tiered volume-based commission rate 
discounting methods in tariffs submitted for approval. GIPSA policy 
will not attempt to differentiate between levels of discounting but 
will rely on competition among markets and marketing systems to set 
rate levels that are fair to market agencies and livestock producers. 
However, GIPSA still will consider non-tiered volume-based rate 
discounts to be discriminatory if a market agency does not provide the 
same discount to all qualifying consignors.

Rate Regulation Investigations and Compliance

    GIPSA will continue to investigate the validity of complaints 
alleging discriminatory rates for stockyard services (9 CFR 203.17(c)). 
Under the P&S Act (7 U.S.C. 207(e)), GIPSA can suspend the use of new 
rates believed to be unlawful. With or without complaints received, 
GIPSA may conduct an investigation and provide an opportunity for a 
hearing on a rate tariff set for stockyard services and if a rate is 
deemed in violation of the P&S Act (7 U.S.C. 205, 206, 207), GIPSA can 
establish a different rate and order the market agency to cease using 
the rate (7 U.S.C. 211).

Effective Date

    This notice becomes final upon publication in the Federal Register.

    Authority: 7 U.S.C. 203, 205, 206, 207, 211, 228.

James E. Link,
Administrator, Grain Inspection, Packers and Stockyards Administration.
 [FR Doc. E7-15814 Filed 8-13-07; 8:45 am]
BILLING CODE 3410-KD-P

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