[Federal Register Volume 64, Number 134 (Wednesday, July 14, 1999)]
[Proposed Rules]
[Pages 37886-37888]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18039]


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 Proposed Rules
                                                 Federal Register
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 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. 64, No. 134 / Wednesday, July 14, 1999 / 
Proposed Rules  

[[Page 37886]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 56 and 70

[Docket No. PY-99-004]
RIN 0581-AB54


Increase in Fees and Charges for Egg, Poultry, and Rabbit Grading

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Agricultural Marketing Service (AMS) proposes to increase 
the fees and charges for Federal voluntary egg, poultry, and rabbit 
grading. These fees and charges need to be increased to cover the 
increase in salaries of Federal employees, salary increases of State 
employees cooperatively utilized in administering the programs, and 
other increased Agency costs.

DATES: Comments must be received on or before August 13, 1999.

ADDRESSES: Send written comments to Douglas C. Bailey, Chief, 
Standardization Branch, Poultry Programs, Agricultural Marketing 
Service, U.S. Department of Agriculture, STOP 0259, room 3944-South, 
1400 Independence Avenue, SW, Washington, DC 20250-0259. Comments may 
be faxed to (202) 690-0941.
    State that your comments refer to Docket No. PY-99-004 and note the 
date and page number of this issue of the Federal Register.
    Comments received may be inspected at the above location between 
8:00 a.m. and 4:30 p.m., Eastern Time, Monday through Friday, except 
holidays.

FOR FURTHER INFORMATION CONTACT: Rex A. Barnes, Chief, Grading Branch, 
(202) 720-3271.

SUPPLEMENTARY INFORMATION:

A. Executive Order 12866

    This action has been determined to be not significant for purposes 
of Executive Order 12866 and has not been reviewed by the Office of 
Management and Budget (OMB).

B. Regulatory Flexibility

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601 et seq.), the AMS has considered 
the economic impact of this action on small entities. It is determined 
that its provisions would not have a significant economic impact on a 
substantial number of small entities.
    There are about 400 users of Poultry Programs' grading services. 
These official plants can pack eggs, poultry, and rabbits in packages 
bearing the USDA grade shield when AMS graders are present to certify 
that the products meet the grade requirements as labeled. Many of these 
users are small entities under the criteria established by the Small 
Business Administration (13 CFR 121.601). These entities are under no 
obligation to use grading services as authorized under the Agricultural 
Marketing Act of 1946.
    The AMS regularly reviews its user fee financed programs to 
determine if the fees are adequate. The most recent review determined 
that the existing fee schedule will not generate sufficient revenues to 
cover program costs while maintaining an adequate reserve balance. 
Without a fee increase, FY 2000 revenues for grading services are 
projected at $22.0 million, costs are projected at $23.4 million, and 
trust fund balances would be $9.3 million. With a fee increase, FY 2000 
revenues are projected at $23.1 million, costs are projected at $23.4 
million, and trust fund balances would be $10.5 million.
    This action would raise the fees charged to users of grading 
services. The AMS estimates that overall, this rule would yield an 
additional $1.1 million during FY 2000. The hourly resident rate for 
grading services will increase by approximately 4.2 percent, while the 
hourly rates for fee (nonresident) and appeal grading services will 
increase by approximately 8.0 percent. The costs to entities will be 
proportional to their use of service, so that costs are shared 
equitably by all users. The impact of these rate changes in a poultry 
plant would range from less than 0.003 to 0.05 cents per pound of 
poultry handled. In a shell egg plant, the range would be less than 
0.04 to 0.4 cents per dozen eggs handled.

C. Civil Justice Reform

    This action has been reviewed under Executive Order 12988, Civil 
Justice Reform. This action is not intended to have retroactive effect. 
This rule will not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule. There are no administrative procedures which must be exhausted 
prior to any judicial challenge to the provisions of this rule.

D. Paperwork Reduction

    The information collection requirements that appear in the sections 
to be amended by this action have been previously approved by OMB and 
assigned OMB Control Numbers under the Paperwork Reduction Act (44 
U.S.C. Chapter 35) as follows: Sec. 56.52(a)(4)--No. 0581-0128; and 
Sec. 70.77(a)(4)--No. 0581-0127.

Background and Proposed Changes

    The Agricultural Marketing Act (AMA) of 1946 authorizes official 
voluntary grading and certification on a user-fee basis of eggs, 
poultry, and rabbits. The AMA provides that reasonable fees be 
collected from users of the program services to cover, as nearly as 
practicable, the costs of services rendered.
    The AMS regularly reviews these programs to determine if fees are 
adequate and if costs are reasonable. This action would amend the 
schedule for fees and charges for grading services rendered to the egg, 
poultry, and rabbit industries to reflect the costs currently 
associated with them.
    A recent review of the current fee schedule, effective October 1, 
1998, revealed that anticipated revenue will not adequately cover 
increasing program costs. Without a fee increase, FY 2000 revenues for 
grading services are projected at $22.0 million, costs are projected at 
$23.4 million, and trust fund balances would be $9.3 million. With a 
fee increase, FY 2000 revenues are projected at $23.1 million, costs 
are projected at $23.4 million, and trust fund balances would be $10.5 
million.
    Employee salaries and benefits account for approximately 81 percent 
of the total operating budget. A general and locality salary increase 
for Federal employees, ranging from 3.54 to 4.02 percent, depending on 
locality, became effective in January 1999 and has

[[Page 37887]]

materially affected program costs. Another general and locality salary 
increase estimated at 4.4 percent is expected in January 2000. Also, 
from October 1998 through September 2000, salaries and fringe benefits 
of federally licensed State employees will have increased by about 6 
percent.
    The impact of these cost increases was separately determined for 
resident grading service and fee grading service. To offset projected 
cost increases for resident grading service, the resident hourly rate 
would be increased by approximately 4.2 percent. This hourly rate 
covers graders' salaries and benefits. Administrative volume charges 
that cover the cost of supervision for this service would also be 
increased as shown in the table below. To offset projected cost 
increases for fee and appeal grading services, those rates would be 
increased by approximately 8.0 percent. The rate for fee service covers 
graders' salaries and benefits, and the cost of travel and supervision. 
The rate for an appeal grading or review of a grader's decision covers 
the time required to perform such service. Appeal gradings are only 
done occasionally and account for less than $5,000 revenue annually.
    The following table compares current fees and charges with proposed 
fees and charges for egg, poultry, and rabbit grading as found in 7 CFR 
parts 56 and 70:

------------------------------------------------------------------------
                 Service                      Current        Proposed
------------------------------------------------------------------------
Resident Service (egg, poultry, rabbit
 grading):
    Inauguration of service.............             310             310
    Hourly charges--Regular hours.......           27.64           28.80
    Administrative charges--Poultry               .00034          .00035
     grading Per pound of poultry.......
        Minimum per month...............             225             225
        Maximum per month...............           2,500           2,625
    Administrative charges--Shell egg               .040            .044
     grading Per 30-dozen case of shell
     eggs...............................
        Minimum per month...............             225             225
        Maximum per month...............           2,500           2,625
    Administrative charges--Rabbit                   250             260
     grading; Based on 25 % of grader's
     salary, minimum per month..........
Nonresident Service (egg, poultry
 grading):
    Hourly charges--Regular hours.......           27.64           28.80
    Administrative charges--Based on 25%             250             260
     of grader's salary, Minimum per
     month..............................
Fee and Appeal Service (egg, poultry,
 rabbit grading):
    Hourly charges--Regular hours.......           44.80           48.40
        Weekend and holiday hours.......           51.60           55.76
------------------------------------------------------------------------

List of Subjects

7 CFR Part 56

    Eggs and egg products, Food grades and standards, Food labeling, 
Reporting and recordkeeping requirements.

7 CFR Part 70

    Food grades and standards, Food labeling, Poultry and poultry 
products, Rabbits and rabbit products, Reporting and recordkeeping 
requirements.
    For reasons set forth in the preamble, it is proposed that Title 7, 
Code of Federal Regulations, parts 56 and 70 be amended as follows:

PART 56--GRADING OF SHELL EGGS

    1. The authority citation for part 56 continues to read as follows:

    Authority: 7 U.S.C. 1621-1627.
    2. Section 56.46 is revised to read as follows:


Sec. 56.46  On a fee basis.

    (a) Unless otherwise provided in this part, the fees to be charged 
and collected for any service performed, in accordance with this part, 
on a fee basis shall be based on the applicable rates specified in this 
section.
    (b) Fees for grading services will be based on the time required to 
perform the services. The hourly charge shall be $48.40 and shall 
include the time actually required to perform the grading, waiting 
time, travel time, and any clerical costs involved in issuing a 
certificate.
    (c) Grading services rendered on Saturdays, Sundays, or legal 
holidays shall be charged for at the rate of $55.76 per hour. 
Information on legal holidays is available from the Supervisor.
    3. In Sec. 56.52, paragraph (a)(4) is revised to read as follows:


Sec. 56.52  Continuous grading performed on resident basis.

* * * * *
    (a) * * *
    (4) An administrative service charge based upon the aggregate 
number of 30-dozen cases of all shell eggs handled in the plant per 
billing period multiplied by $0.044, except that the minimum charge per 
billing period shall be $225 and the maximum charge shall be $2,625. 
The minimum charge also applies where an approved application is in 
effect and no product is handled.
* * * * *
    4. In Sec. 56.54, paragraph (a)(2) is revised to read as follows:


Sec. 56.54  Charges for continuous grading performed on a nonresident 
basis.

* * * * *
    (a) * * *
    (2) An administrative service charge equal to 25 percent of the 
grader's total salary costs. A minimum charge of $260 will be made each 
billing period. The minimum charge also applies where an approved 
application is in effect and no product is handled.

PART 70--VOLUNTARY GRADING OF POULTRY PRODUCTS AND RABBIT PRODUCTS

    5. The authority citation for part 70 continues to read as follows:

    Authority: 7 U.S.C. 1621-1627.

    6. Section 70.71 is revised to read as follows:


Sec. 70.71  On a fee basis.

    (a) Unless otherwise provided in this part, the fees to be charged 
and collected for any service performed, in accordance with this part, 
on a fee basis shall be based on the applicable rates specified in this 
section.
    (b) Fees for grading services will be based on the time required to 
perform such services for class, quality, quantity (weight test), or 
condition, whether ready-to-cook poultry, ready-to-cook

[[Page 37888]]

rabbits, or specified poultry food products are involved. The hourly 
charge shall be $48.40 and shall include the time actually required to 
perform the work, waiting time, travel time, and any clerical costs 
involved in issuing a certificate.
    (c) Grading services rendered on Saturdays, Sundays, or legal 
holidays shall be charged for at the rate of $55.76 per hour. 
Information on legal holidays is available from the Supervisor.
    7. In Sec. 70.76, paragraph (a)(2) is revised to read as follows:


Sec. 70.76  Charges for continuous poultry grading performed on a 
nonresident basis.

* * * * *
    (a) * * *
    (2) An administrative service charge equal to 25 percent of the 
grader's total salary costs. A minimum charge of $260 will be made each 
billing period. The minimum charge also applies where an approved 
application is in effect and no product is handled.
* * * * *
    8. In Sec. 70.77, paragraphs (a)(4) and (a)(5) are revised to read 
as follows:


Sec. 70.77  Charges for continuous poultry or rabbit grading performed 
on a resident basis.

* * * * *
    (a) * * *
    (4) For poultry grading: An administrative service charge based 
upon the aggregate weight of the total volume of all live and ready-to-
cook poultry handled in the plant per billing period computed in 
accordance with the following: Total pounds per billing period 
multiplied by $0.00035, except that the minimum charge per billing 
period shall be $225 and the maximum charge shall be $2,625. The 
minimum charge also applies where an approved application is in effect 
and no product is handled.
    (5) For rabbit grading: An administrative service charge equal to 
25 percent of the grader's total salary costs. A minimum charge of $260 
will be made each billing period. The minimum charge also applies where 
an approved application is in effect and no product is handled.
* * * * *
    Dated: July 9, 1999.
Enrique E. Figueroa,
Administrator, Agricultural Marketing Service.
[FR Doc. 99-18039 Filed 7-13-99; 8:45 am]
BILLING CODE 3410-34-P