[Federal Register Volume 68, Number 236 (Tuesday, December 9, 2003)]
[Rules and Regulations]
[Pages 68487-68489]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-30596]



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 Rules and Regulations
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  Federal Register / Vol. 68, No. 236 / Tuesday, December 9, 2003 / 
Rules and Regulations  

[[Page 68487]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 56 and 70

[Docket No. PY-03-001]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: The Agricultural Marketing Service (AMS) is increasing the 
fees and charges for Federal voluntary egg, poultry, and rabbit 
grading. These fees and charges are 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.

EFFECTIVE DATE: January 1, 2004.

FOR FURTHER INFORMATION CONTACT: David Bowden, Jr., Chief, 
Standardization Branch, (202) 720-3506.

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.
    The AMS regularly reviews these programs to determine if fees are 
adequate and if costs are reasonable. This rule will 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 January 1, 
2003, revealed that anticipated revenue would not adequately cover 
increasing program costs. Costs in FY 2004 are projected at $29.8 
million. Without a fee increase, FY 2004 revenues are projected at 
$29.0 million and trust fund balances would be $14.6 million. With a 
fee increase, FY 2004 revenues are projected at $29.8 million and trust 
fund balances would remain at $15.2 million.
    Employee salaries and benefits account for approximately 82 percent 
of the total operating budget. The last general and locality salary 
increase for Federal employees became effective on January 1, 2003, and 
it materially affected program costs. Projected cost estimates for that 
increase were based on a salary increase of 2.6 percent, however, the 
increase was actually 4.02 to 4.87 percent, depending on locality. 
Another general and locality salary increase estimated at 2 percent is 
expected in January 2004. Also, from October 2002 through September 
2004, salaries and fringe benefits of federally-licensed State 
employees will have increased by about 3 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 will be increased by approximately 
3 percent and the fee rate will be increased by approximately 4 
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.
    As shown in the table below, only the maximum monthly 
administrative charge that covers overhead costs for resident poultry 
and shell egg grading would be increased, while other administrative 
charges would not be changed.
    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, and rabbit grading)
------------------------------------------------------------------------
Inauguration of service.......................          310          310
Hourly charges:
    Regular hours.............................        33.36        34.36
Administrative charges--Poultry grading:
    Per pound of poultry......................       .00037       .00037
     Minimum per month........................          260          260
    Maximum per month.........................        2,675        2,755
 Administrative charges--Shell egg grading:
    Per 30-dozen case of shell eggs...........         .048         .048
    Minimum per month.........................          260          260
    Maximum per month.........................        2,675        2,755
Administrative charges--Rabbit grading:
    Based on 25% of grader's salary, minimum            260          260
     per month................................
------------------------------------------------------------------------
              Nonresident Service (egg and poultry grading)
------------------------------------------------------------------------
Hourly charges:
    Regular hours.............................        33.36        34.36

[[Page 68488]]

 
 Administrative charges:
    Based on 25% of grader's salary, minimum            260          260
     per month................................
------------------------------------------------------------------------
        Fee and Appeal Service (egg, poultry, and rabbit grading)
------------------------------------------------------------------------
 Hourly charges:
    Regular hours:............................        57.68        60.00
    Weekend and holiday hours.................        66.64        69.32
------------------------------------------------------------------------

Comments

    Based on the analysis of costs to provide these services, a 
proposed rule to increase the fees for these services was published in 
the Federal Register (68 FR 37984) on June 26, 2003. Comments on the 
proposed rule were solicited from interested parties until July 28. No 
comments were received. The Agency will implement these increases, as 
proposed, to ensure the financial stability of its grading programs.

Executive Order 12866

    This action 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 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 fees are adequate and if costs are reasonable. A recent 
review determined that the existing fee schedule, effective January 1, 
2003, will not generate sufficient revenues to cover program costs 
while maintaining an adequate reserve balance in FY 2004. Costs in FY 
2004 are projected at $29.8 million. Without a fee increase, FY 2004 
revenues are projected at $29.0 million and trust fund balances would 
be $14.6 million. With a fee increase, FY 2004 revenues are projected 
at $29.8 million and trust fund balances would remain at $15.2 million.
    This action will raise the fees charged to users of grading 
services. The AMS estimates that overall, this rule will yield an 
additional $800,000 during FY 2004. The hourly rate for resident and 
nonresident service will increase by approximately 3 percent and the 
fee rate will increase by approximately 4 percent. The impact of these 
rate changes in a poultry plant will range from less than 0.0001 to 
0.025 cents per pound of poultry handled. In a shell egg plant, the 
range will be less than 0.00002 to 0.11 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: Sec.  56.52(a)(4)--No. 0581-0128; and 
Sec.  70.77(a)(4)--No. 0581-0127.
    Pursuant to 5 U.S.C. 533, it is found and determined that good 
cause exists for not postponing the effective date of this action until 
30 days after publication in the Federal Register. The revised fees 
need to be implemented on an expedited basis in order to avoid further 
financial losses in the grading program. The effective date of the fee 
increase will coincide with the billing cycle that begins on the first 
day of the first month after the date of publication in the Federal 
Register.

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.


0
For reasons set forth in the preamble, title 7, Code of Federal 
Regulations, parts 56 and 70 are amended as follows:

PART 56--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. 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 $60.00 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 $69.32 per hour. 
Information on legal holidays is available from the Supervisor.

0
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 $0.048, except that the minimum charge per 
billing period shall be $260

[[Page 68489]]

and the maximum charge shall be $2,755. 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

0
4. The authority citation for part 70 continues to read as follows:

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


0
5. 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 rabbits, or 
specified poultry food products are involved. The hourly charge shall 
be $60.00 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 $69.32 per hour. 
Information on legal holidays is available from the Supervisor.
    6. In Sec.  70.77, paragraph (a)(4) is 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 $0.00037, except that the minimum charge per billing 
period shall be $260 and the maximum charge shall be $2,755. The 
minimum charge also applies where an approved application is in effect 
and no product is handled.
* * * * *

    Dated: December 4, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-30596 Filed 12-8-03; 8:45 am]
BILLING CODE 3410-02-P