[Federal Register Volume 70, Number 39 (Tuesday, March 1, 2005)]
[Proposed Rules]
[Pages 9883-9885]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-3929]


 ========================================================================
 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. 70, No. 39 / Tuesday, March 1, 2005 / 
Proposed Rules  

[[Page 9883]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 56 and 70

[Docket No. PY-05-001]


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 March 31, 2005.


ADDRESSES: Send written comments to David Bowden, Jr., 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-05-001 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 
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.

    A recent review determined that the existing fee schedule, 
effective January 1, 2004, will not generate sufficient revenues to 
cover program costs while maintaining an adequate reserve balance in FY 
2006. Costs in FY 2006 are projected at $31.9 million. Without a fee 
increase, FY 2006 revenues are projected at $30.5 million and trust 
fund balances would be $14.5 million. With a fee increase, FY 2006 
revenues are projected at $31.9 million and trust fund balances would 
remain at $15.9 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, 2004 and 
it materially affected program costs. Projected cost estimates for that 
increase were based on a salary increase of 2.0 percent, however, the 
increase was actually 3.89 to 5.35 percent, depending on locality. A 
general and locality salary increase of 3.5 percent is scheduled for 
January 2005, and another increase estimated at 1.5 percent is expected 
in January 2006. Also, from October 2004 through September 2006, 
salaries and fringe benefits of federally-licensed State employees will 
have increased by about 6.0 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 5.8 percent and the fee rate would be increased by 
approximately 8.3 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, the minimum monthly administrative 
volume charge for resident poultry, shell egg, and rabbit grading 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.............................        34.36        36.36
Administrative charges--Poultry grading:
    Per pound of poultry......................       .00037       .00039
    Minimum per month.........................          260          260
    Maximum per month.........................        2,755        2,875
Administrative charges--Shell egg grading:
    Per 30-dozen case of shell eggs...........         .048         .051
    Minimum per month.........................          260          260
    Maximum per month.........................        2,755        2,875
Administrative charges--Rabbit grading:
    Based on 25% of grader's salary, minimum            260          260
     per month................................
-----------------------------------------------

[[Page 9884]]

 
              Nonresident Service (egg and poultry grading)
------------------------------------------------------------------------
Hourly charges:
    Regular hours.............................        34.36        36.36
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.............................        60.00        65.00
    Weekend and holiday hours.................        69.32        75.12
------------------------------------------------------------------------

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 376 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, 
2004, will not generate sufficient revenues to cover program costs 
while maintaining an adequate reserve balance in FY 2006. Costs in FY 
2006 are projected at $31.9 million. Without a fee increase, FY 2006 
revenues are projected at $30.5 million and trust fund balances would 
be $14.5 million. With a fee increase, FY 2006 revenues are projected 
at $31.9 million and trust fund balances would remain at $15.9 million.
    This action would raise the fees charged to users of grading 
services. The AMS estimates that overall, this rule would yield an 
additional $1,400,000 during FY 2006. The hourly rate for resident and 
nonresident service would increase by approximately 5.8 percent and the 
fee rate would increase by approximately 8.3 percent. The impact of 
these rate changes in a poultry plant would range from about 0.0075 to 
0.10 cents per pound of poultry handled. In a shell egg plant, the 
range would be less than 0.037 to 0.466 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.
    A 30-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 FY 2006, 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 $65.00 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 $75.12 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 $0.051, except that the minimum charge per 
billing period shall be $260 and the maximum charge shall be $2,875. 
The minimum charge also applies where an approved application is in 
effect and no product is handled.
* * * * *

[[Page 9885]]

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

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

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

    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 $65.00 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 $75.12 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 $0.00039, except that the minimum charge per billing 
period shall be $260 and the maximum charge shall be $2,875. The 
minimum charge also applies where an approved application is in effect 
and no product is handled.
* * * * *

    Dated: February 24, 2005.
Barry L. Carpenter,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-3929 Filed 2-28-05; 8:45 am]
BILLING CODE 3410-02-P