[Federal Register: July 22, 2005 (Volume 70, Number 140)]
[Rules and Regulations]
[Page 42254-42256]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22jy05-2]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 56 and 70
[Docket No. PY-05-001]
RIN 0581-AC44
Increase in Fees and Charges for Egg, Poultry, and Rabbit Grading
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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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 being 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: Effective September 25, 2005.
FOR FURTHER INFORMATION CONTACT: David Bowden, Jr., Chief,
Standardization Branch, (202) 720-3506.
SUPPLEMENTARY INFORMATION:
Background
The Agricultural Marketing Act (AMA) of 1946 (7 U.S.C. 1621 et
seq.) authorizes official voluntary grading and certification of eggs,
poultry, and rabbits on a user-fee basis. The AMA provides that
reasonable fees be collected from users of 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, would 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. A general and locality salary increase
for Federal employees, effective in January 2004, 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. The last increase of 3.25
to 4.3 percent, depending on locality, became effective in 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. This paragraph, which also appeared in
the proposed rule, has been updated to reflect more current
information.
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
5.8 percent and the fee rate will be increased by
[[Page 42255]]
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 will
not change.
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................................
-----------------------------------------------
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
------------------------------------------------------------------------
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 (70 FR 9883) on March 1, 2005. Comments on the
proposed rule were solicited from interested parties until March 31.
One comment was received from an egg industry association.
The association acknowledged the Agency's need to increase fees.
However, the association requested that the increase be postponed for a
period of six months. The commenter stated that an immediate increase
would be an added hardship on an already economically depressed
industry but, in a few months, industry self-help programs should be up
and running. As stated in the proposal, the Agency intended that the
fee increase be implemented as early as possible in FY 2006. The
closest available billing cycle begins on September 25, 2005.
Accordingly, this rule will be effective on that date.
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 this rule will 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 will raise the fees charged to users of grading
services. The AMS estimates that overall, this rule will yield an
additional $1,400,000 during FY 2006. The hourly rate for resident and
nonresident service will increase by approximately 5.8 percent and the
fee rate will increase by approximately 8.3 percent. The impact of
these rate changes in a poultry plant will range from about 0.0075 to
0.10 cents per pound of poultry handled. In a shell egg plant, the
range will 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,
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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, September 25, 2005, will coincide with the first billing
period in FY 2006.
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, 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 $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.
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 $0.051, 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.
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 $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.
0
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: July 19, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-14514 Filed 7-21-05; 8:45 am]
BILLING CODE 3410-02-P