[Federal Register Volume 68, Number 92 (Tuesday, May 13, 2003)]
[Rules and Regulations]
[Pages 25484-25485]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-11889]


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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 56

[Docket No. PY-02-007]
RIN 0581-AC24


Requirements for the USDA ``Produced From'' Grademark for Shell 
Eggs

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: The Agricultural Marketing Service (AMS) is clarifying the 
requirements for using the ``Produced From'' grademark for shell eggs. 
Use of this grademark began in April 1998. Since then, questions have 
arisen regarding the regulatory language. This amendment clarifies the 
language of the ``Produced From'' grademark

[[Page 25485]]

requirements by removing the reference to continuous supervision. This 
action is to ensure the integrity of the USDA quality consumer 
grademark.

EFFECTIVE DATE: June 12, 2003.

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

SUPPLEMENTARY INFORMATION:

Background

    AMS administers a voluntary grading program for shell eggs under 
the Agricultural Marketing Act of 1946, as amended (7 U.S.C. 1621 et 
seq.). Any interested person, commercial firm, or government agency 
that applies for service must comply with the terms and conditions of 
the regulations and must pay for the services rendered. AMS graders 
monitor processing operations and verify the grade and size of eggs 
packed into packages bearing the USDA grademark.
    Current regulations allow for the use of several different 
grademarks to identify consumer-pack USDA graded shell eggs or products 
prepared from them. The regulations also include the eligibility 
requirements for eggs to be identified with an official grademark. One 
requirement is that only eggs produced under the continuous supervision 
of a grader may be identified as U.S. Consumer Grade AA or A.
    A ``Produced From'' grademark was added to the regulations, 
effective April 20, 1998 (63 FR 13329, March 19, 1998). As currently 
written, the regulations state that ``the ``Produced From'' grademark 
``may be used to identify products for which there are no official U.S. 
grade standards (e.g., pasteurized shell eggs), provided that these 
products are approved by the Agency and are prepared from U.S. Consumer 
Grade AA or A shell eggs under the continuous supervision of a 
grader.''
    The intent of the regulations was to ensure that the eggs used to 
produce the products were U.S. Consumer Grade AA or A. However, the 
regulations could also be interpreted to mean that the products 
produced from the U.S. Consumer Grade AA or A shell eggs must be 
produced under continuous supervision. However, this was not the 
Department's intent nor is it a requirement.
    The Agency determined that the reference to both U.S. Consumer AA 
and A and to continuous supervision was redundant and confusing. 
Therefore, to clarify the regulatory language, the reference to 
continuous supervision is removed.

Proposed Rule and Comments

    The proposed rule was published in the Federal Register January 9, 
2003 (68 FR 1169). The comment period ended March 10.
    Two comments were received, each from a group of students taking 
the same course in an accelerated university business curriculum. Both 
groups discussed research they conducted among vendors, consumers, and 
local agricultural interests about shell egg grading. Both groups 
supported the proposed amendment.

Executive Order 12866

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

Regulatory Flexibility

    Pursuant to 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 rule on small entities and has determined that its 
provisions would not have a significant economic impact on a 
substantial number of small entities.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. The Small Business 
Administration defines small entities that produce and process chicken 
eggs as those whose annual receipts are less than $9,000,000 (13 CFR 
121.201). Approximately 625,000 egg laying hens are needed to produce 
enough eggs to gross $9,000,000.
    Currently, the Agricultural Marketing Act of 1946, as amended (7 
U.S.C. 1621 et seq.) authorizes a voluntary grading program for shell 
eggs. Shell egg processors that apply for service must pay for the 
services rendered. These user fees are proportional to the volume of 
shell eggs graded, so that costs are shared by all users. Plants in 
which these grading services are performed are called official plants. 
Shell egg processors who do not use USDA's grading service may not use 
the USDA grade shield. There are about 625 shell egg processors 
registered with the Department that have 3,000 or more laying hens. Of 
these, 175 are official plants that use USDA's grading service and 
would be subject to this proposed rule. Of these 175 official plants, 
57 meet the small business definition.
    This rule will benefit large and small processors in the industry. 
It is intended to clarify a regulatory provision which has caused some 
confusion and involves no additional costs.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. It 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 that must be exhausted 
prior to any judicial challenge to the provisions of this rule.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.), OMB has approved the information collection and 
recordkeeping requirements included in this rule, and there are no new 
requirements. The assigned OMB control number is 0581-0128.

List of Subjects in 7 CFR Part 56

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

0
For reasons set forth in the preamble, 7 CFR part 56 is amended as 
follows:

PART 56--VOLUNTARY GRADING OF SHELL EGGS

0
1. The authority citation for part 56 continues to read as follows:

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


0
2. In Sec.  56.36, paragraph (a)(3) is amended by adding a period after 
the word ``eggs'' the second time it appears in the paragraph and by 
removing the words ``under the continuous supervision of a grader.''

    Dated: May 7, 2003.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 03-11889 Filed 5-12-03; 8:45 am]
BILLING CODE 3410-02-P