[Federal Register Volume 65, Number 115 (Wednesday, June 14, 2000)]
[Proposed Rules]
[Pages 37298-37300]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-15013]


 ========================================================================
 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. 65, No. 115 / Wednesday, June 14, 2000 / 
Proposed Rules  

[[Page 37298]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 56 and 70

[Docket No. PY-00-002]
RIN 0581-AB89


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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

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 July 14, 2000.

ADDRESSES: Send written comments to Elizabeth S. Crosby, Acting 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-00-002 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:

Background and Proposed Changes

    The Agricultural Marketing Act (AMA) of 1946 (7 U.S.C. 1621 et 
seq.) 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, 
1999, revealed that anticipated revenue will not adequately cover 
increasing program costs. Without a fee increase, FY 2001 revenues for 
grading services are projected at $23.7 million, costs are projected at 
$24.9 million, and trust fund balances would be $11.3 million. With a 
fee increase, FY 2001 revenues are projected at $24.3 million, costs 
are projected at $24.9 million, and trust fund balances would be $11.9 
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 4.76 to 5.31 percent, depending on 
locality, became effective in January 2000 and has materially affected 
program costs. Another general and locality salary increase estimated 
at 3.7 percent is expected in January 2001. Also, from October 1999 
through September 2001, salaries and fringe benefits of federally 
licensed State employees will have increased by about 6.7 percent.
    The impact of these cost increases was determined for resident, 
nonresident, and fee services. To offset projected cost increases, the 
hourly resident and nonresident rate would be increased by 
approximately 4 percent and the fee rate would be increased by 
approximately 6 percent. The hourly rate for resident and nonresident 
service covers graders' salaries and benefits. The hourly rate for fee 
service covers graders' salaries and benefits, plus the cost of travel 
and supervision. The hourly rate for an appeal grading or review of a 
grader's decision covers the time required to perform such service. Due 
to changes in the number of Poultry Program offices and the resulting 
reduction in costs, administrative charges that cover the cost of 
supervision for resident and nonresident service would remain unchanged 
as shown in the table below.
    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.....................            28.80            29.96
Administrative charges--Poultry
 grading:
    Per pound of poultry..............           .00035           .00035
    Minimum per month.................              225              225
    Maximum per month.................            2,625            2,625
Administrative charges--Shell egg
 grading:
    Per 30-dozen case of shell eggs...             .044             .044
    Minimum per month.................              225              225
    Maximum per month.................            2,625            2,625
Administrative charges--Rabbit grading
    Based on 25% of grader's salary...

[[Page 37299]]

 
    Minimum per month.................              260              260
------------------------------------------------------------------------
               Nonresident Service (egg, poultry grading)
------------------------------------------------------------------------
Hourly charges:
    Regular hours.....................            28.00            29.96
Administrative charges:
    Based on 25% of grader's salary...
    Minimum per month.................              260              260
------------------------------------------------------------------------
          Fee and Appeal Service (egg, poultry, rabbit grading)
------------------------------------------------------------------------
Hourly charges:
    Regular hours.....................            48.40            51.32
    Weekend and holiday hours.........            55.76            59.12
------------------------------------------------------------------------

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).

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 121.201). 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 2001 revenues for grading services are 
projected at $23.7 million, costs are projected at $24.9 million, and 
trust fund balances would be $11.3 million. With a fee increase, FY 
2001 revenues are projected at $24.3 million, costs are projected at 
$24.9 million, and trust fund balances would be $11.9 million.
    This action would raise the fees charged to users of grading 
services. The AMS estimates that overall, this rule would yield an 
additional $0.5 million during FY 2001. The hourly rate for resident 
and nonresident service would increase by approximately 4 percent and 
the fee rate would increase by approximately 6 percent. The impact of 
these rate changes in a poultry plant would range from less than 0.002 
to 0.02 cents per pound of poultry handled. In a shell egg plant, the 
range would be less than 0.009 to 0.09 cents per dozen eggs handled.

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.

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: ?56.52(a)(4)--No. 0581-0128; and 
?70.77(a)(4)--No. 0581-0127.
    A thirty-day comment period is provided for interested persons to 
comment on this proposed rule. This period is appropriate in order to 
implement, as early as possible in fiscal year 2001, any fee changes 
adopted as a result of this rulemaking action.

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 $51.32 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 $59.12 per hour. 
Information on legal holidays is available from the Supervisor.

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

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

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

    4. 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

[[Page 37300]]

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 rabbits, or 
specified poultry food products are involved. The hourly charge shall 
be $51.32 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 $59.12 per hour. 
Information on legal holidays is available from the Supervisor.

    Dated: June 8, 2000.
Kathleen A. Merrigan,
Administrator, Agricultural Marketing Service.
[FR Doc. 00-15013 Filed 6-13-00; 8:45 am]
BILLING CODE 3410-02-P