[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
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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
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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:
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Service Current Proposed
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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
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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
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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
