[Federal Register Volume 59, Number 240 (Thursday, December 15, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-30834]


[[Page Unknown]]

[Federal Register: December 15, 1994]


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DEPARTMENT OF AGRICULTURE
7 CFR Part 1250

[Docket No. PY-94-002]
RIN 0581-AB32

 

Amendment to Egg Research and Promotion Order To Increase the 
Rate of Assessment

AGENCY: Agricultural Marketing Service.

ACTION: Final rule.

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SUMMARY: This rule amends the Egg Research and Promotion Order to 
increase the assessment rate from 5 cents to 10 cents per 30-dozen case 
of commercial eggs. The increase is authorized by amendments to the Egg 
Research and Consumer Information Act, which were enacted December 14, 
1993, and approved by egg producers voting in a referendum. This rule 
also makes a conforming amendment to regulations.

EFFECTIVE DATE: February 1, 1995.

FOR FURTHER INFORMATION CONTACT: Janice L. Lockard, 202-720-3506.

SUPPLEMENTARY INFORMATION:

Executive Orders 12866 and 12778

    This rule is exempt from Executive Order 12866 review.
    This rule has been reviewed under Executive Order 12778, Civil 
Justice Reform. It is not intended to have retroactive effect. This 
rule would not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 14 of the Act, a 
person subject to an order may file a petition with the Secretary 
stating that such order, any provisions of such order or any 
obligations imposed in connection with such order are not in accordance 
with law; and requesting a modification of the order or an exemption 
therefrom. Such person is afforded the opportunity for a hearing on the 
petition. After a hearing, the Secretary would rule on the petition. 
The Act provides that the district court of the United States in any 
district in which such person is an inhabitant, or has his principal 
place of business, has jurisdiction to review the Secretary's ruling on 
the petition, if a complaint is filed within 20 days after date of the 
entry of the ruling.

Effect on Small Entities

    The Administrator of the Agricultural Marketing Service has 
determined that this rule will not have a significant economic impact 
on a substantial number of small entities, as defined by the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.).
    The exemption level was increased by regulation from 30,000 to 
75,000 laying hens on August 1, 1994 (59 FR 38875). This action was 
authorized by amendments to the Egg Research and Consumer Information 
Act (7 U.S.C. 2711). Exempted were 253 small egg producers who 
represented 41 percent of the egg producers currently paying 
assessments, but only 4 percent of AEB's total assessment income. 
Therefore, this change in the assessment rate affects only egg 
producers owning more than 75,000 laying hens.
    There are an estimated 365 producers in this category. Previously, 
egg producers paid a mandatory assessment of 5 cents per 30-dozen case 
of eggs marketed to fund the research and promotion activities 
authorized by the Act. The 5-cent assessment is equivalent to 
approximately 0.231 percent of the wholesale price of a 1-dozen carton 
of Large eggs. An assessment rate of 10 cents per 30-dozen case is 
equivalent to approximately 0.463 percent of the wholesale price of a 
1-dozen carton of Large eggs. This is based on the Economic Research 
Service's 3-year average wholesale price for New York City Grade A 
Large cartoned eggs (1991-93) of 72 cents per dozen. AEB collected 
approximately $7.5 million annually from the 5-cent assessment, and it 
will collect approximately $14 million from the 10-cent assessment. It 
is estimated that any additional costs will be offset by the benefits 
to be derived from strengthened research and promotion programs.

Paperwork Reduction

    Information collection requirements and recordkeeping provisions 
contained in 7 CFR Part 1250 have been previously approved by the 
Office of Management and Budget and assigned OMB Control No. 0581-0093 
under the Paperwork Reduction Act of 1980.
    No additional recordkeeping requirements would be imposed as a 
result of this rule.

Background and Proposed Changes

    On December 14, 1993, the Egg Research and Consumer Information Act 
(7 U.S.C. 2711) was amended (Pub. L. 103-188) to increase the maximum 
rate of assessment, raise the exemption level, and provide for research 
project funding.
    Under the amended section 8 of the Act, the maximum rate of 
assessment was raised from 10 cents to 20 cents per case of commercial 
eggs. The actual assessment rate is prescribed by the Egg Research and 
Promotion Order and is currently 5 cents per case.
    The Act amendments allowed AEB to recommend an increase in the 
assessment rate to the Secretary, provided the recommendation was based 
on a scientific study, marketing analysis, or other evidence 
demonstrating a need for the increase. At the March 17, 1994, Board 
meeting, AEB members voted to recommend that the assessment rate be 
increased from 5 cents to 10 cents per 30-dozen case of commercial 
eggs, and that such study be presented to the Secretary with a request 
that a referendum be held on the increase.
    Subsequently, a proposed rule to increase the assessment rate in 
the Order was published in the Federal Register on June 17, 1994 (59 FR 
31174). Comments were solicited from interested persons through August 
16, 1994. Two comments were received; one from a major egg producer 
organization in support and one from an egg producer in opposition to 
the increase. Comments were addressed in a proposed rule and notice of 
referendum published in the Federal Register on September 13, 1994 (59 
FR 46936).
    In accordance with the procedures for the conduct of referenda (7 
CFR 1250.200 et seq.), a referendum was held September 26-October 14, 
1994, to determine whether producers favored the increase to 10 cents 
per case as proposed.
    Section 9 of the Act requires approval by eligible egg producers 
engaged in commercial egg production during the representative period 
and at the time of voting. The representative period for the conduct of 
the referendum was determined to be May 1, 1994, through July 31, 1994.
    During the week of September 19, 1994, ballot packages were mailed 
to 382 eligible commercial egg producers on record with the American 
Egg Board as owning more than 75,000 laying hens. An additional seven 
ballots were mailed in response to phone requests. The referendum was 
widely publicized through USDA's news service, the trade press, 
industry organizations, and the national referendum task force. Of the 
total number of ballots mailed, 62 percent were returned.
    For the Order amendment to be approved, it had to be favored by at 
least two-thirds of the producers voting in this referendum or by a 
majority of the producers voting if such majority represented not less 
than two-thirds of the commercial eggs produced by all voters.
    Of the producers voting, 66.4 percent favored the increased 
assessment. Producers voting affirmatively represented 70.9 percent of 
the May-July 1994 egg production of all those voting. Therefore, the 
favorable vote, through volume of production, exceeded the statutory 
requirement for passage.

List of Subjects in 7 CFR Part 1250

    Administrative practice and procedure, Advertising, Agricultural 
research, Eggs and egg products, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, Title 7, CFR Part 1250 
is amended as follows:

PART 1250--EGG RESEARCH AND PROMOTION

    1. The authority citation of Part 1250 is revised to read as 
follows:

    Authority: 7 U.S.C. 2701-2718.

    2. Section 1250.347 is revised to read as follows:


Sec. 1250.347  Assessments.

    Each handler designated in Sec. 1250.349 and pursuant to 
regulations issued by the Board shall collect from each producer, 
except for those producers specifically exempted in Sec. 1250.348, and 
shall pay to the Board at such times and in such manner as prescribed 
by regulations issued by the Board an assessment at a rate not to 
exceed 10 cents per 30-dozen case of eggs, or the equivalent thereof, 
for such expenses and expenditures, including provisions for a 
reasonable reserve and those administrative costs incurred by the 
Department of Agriculture after this subpart is effective, as the 
Secretary finds are reasonable and likely to be incurred by the Board 
and the Secretary under this subpart, except that no more than one such 
assessment shall be made on any case of eggs.
    3. In section 1250.514, the first sentence is revised to read as 
follows:


Sec. 1250.514  Levy of assessments.

    An assessment rate of 10 cents per case of commercial eggs is 
levied on each case of commercial eggs handled for the account of each 
producer. * * *

    Dated: December 9, 1994.
Patricia Jensen,
Acting Assistant Secretary, Marketing and Regulatory Programs.
[FR Doc. 94-30834 Filed 12-13-94; 8:45 am]
BILLING CODE 3410-02-U