Increase in Fees and Charges for Egg Products Inspection and Egg, Poultry, and Rabbit Grading; Final Rule DEPARTMENT OF AGRICULTURE

SUMMARY: The Agricultural Marketing Service (AMS) is increasing the

fees and charges for Federal voluntary egg products inspection;

voluntary egg, poultry, and rabbit grading; and overtime, holiday, and

appeal services under mandatory egg products inspection. 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: November 1, 1994.

FOR FURTHER INFORMATION CONTACT: Janice L. Lockard, Chief,

Standardization Branch, (202) 720-3506.

SUPPLEMENTARY INFORMATION: This rule has been determined not-

significant for purposes of Executive Order 12866 and has been reviewed

by the Office of Management and Budget.

This proposed rule has been reviewed under Executive Order 12778,

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 which must be exhausted

prior to any judicial challenge to the provisions of this rule.

The AMS Administrator has determined that this rule will not have a

significant economic impact on a substantial number of small entities,

as defined by the Regulatory Flexibility Act (5 U.S.C. 601 et seq.),

because (i) the fees and charges merely reflect, on a cost-per-unit-

graded/inspected basis, a minimal increase in the costs currently borne

by those entities utilizing the services and (ii) competitive effects

are offset under the major voluntary programs (resident shell egg and

poultry grading) through administrative charges based on the volume of

product handled; i.e., the cost to users increases in proportion to

increased volume.

The information collection requirements that appear in the sections

that are amended have been previously approved by the Office of

Management and Budget and assigned OMB Control Numbers under the

Paperwork Reduction Act of 1980 as follows: Sec. 56.52(a)(4)--No. 0581-

0128; Sec. 59.126 and Sec. 59.128(a)--No. 0581-0113; and

Sec. 70.77(a)(4)--No. 0581-0127.

Background

The Agricultural Marketing Act of 1946, as amended, provides for

the collection of fees approximately equal to the cost of providing

voluntary egg products inspection and voluntary egg, poultry, and

rabbit grading. Likewise, the Egg Products Inspection Act requires the

collection of fees to cover costs of overtime, holiday, and appeal

inspection services. Each fiscal year, these fees undergo a cost

analysis to determine if they are adequate to recover the cost of

providing the services.

Grading and inspection fees were last increased effective November

1, 1993. Since then, operating costs have increased, primarily due to a

salary increase for Federal employees of 3.1 percent in January 1994.

Also, the cost of life insurance, health benefits, and Medicare

increased by about 5 percent, and salaries and fringe benefits of

federally licensed State employees increased by about 3 percent.

The regular hourly rate for resident voluntary grading and

inspection service will increase about 7 percent. Resident fees cover

Federal and State salaries, fringe benefits, relief, and other service-

related costs. Administrative service charges apply to the costs of

supervision and other overhead and administrative costs and are

assessed on each case of shell eggs and each pound of poultry handled

in plants using resident grading service. In 1993, these unit rates

were established at $0.034 per case of shell eggs and $0.00029 per

pound of poultry, with a minimum of $200 and maximum of $2,000 per

monthly billing period for each official plant. The charges per case of

shell eggs and pound of poultry will increase to $0.036 and $0.00031,

respectively, with a monthly minimum charge of $215 and a maximum of

$2,150.

The hourly rate for nonresident voluntary grading and inspection

service will increase from $31.44 to $33.64. The hourly rate for such

services performed on Saturdays, Sundays, or holidays will increase

from $32.88 to $35.52. The hourly rate for voluntary appeal gradings or

inspections will increase from $26.64 to $27.36. The hourly rates for

mandatory egg products inspection services will increase from $23.80 to

$26.16 for overtime inspection and from $16.24 to $17.44 for holiday

inspection. The hourly rate will also increase from $26.64 to $27.36

for certain mandatory appeal inspections.

Administrative charges for resident voluntary rabbit grading,

resident voluntary egg products inspection, and nonresident voluntary

continuous poultry and egg grading will continue to be based on 25

percent of the grader's or inspector's total salary costs. The minimum

charge per monthly billing period for these programs will increase from

$200 to $215 per official plant.

Comments

Based on analysis of costs to provide these services, a proposed

rule to increase the fees for these services was published in the

Federal Register (59 FR 38944) on August 1, 1994. Comments on the

proposed rule were solicited from interested parties until August 31,

1994.

During the 30 day comment period, the Agency received one comment

from a national egg industry organization in opposition to the

proposal. It expressed a general concern about the ability of the egg

and egg products industry to meet and maintain the continually

increasing financial obligations of the programs now and in the years

to come. The AMA and the EPIA authorize user fees to recover the costs

of providing services. The overall fee structure has been designed to

be the most equitable and reasonable method to ensure recovery of the

costs of providing services on a nationwide basis. The timing of the

fee increases has followed increases in Federal pay costs authorized by

Congress. Accordingly, no changes will be made in the proposal.

Pursuant to 5 U.S.C. 553, it is found and determined that good

cause exists for not postponing the effective date of the action until

30 days after publication in the Federal Register, because the fees

need to be implemented on an expedited basis in order to minimize the

period of time between the effective date of the Federal pay increase

and the effective date of the fee increase. Also, the fee increase

coincides with the next available billing cycle beginning on November

1, 1994.

List of Subjects

7 CFR Parts 55 and 56

Eggs and egg products, Food grades and standards, Food labeling,

Reporting and recordkeeping requirements.

7 CFR Part 59

Eggs and egg products, Exports, Food grades and standards, Food

labeling, Imports, Polychlorinated biphenyls (PCB's), 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 55, 56, 59, and 70 is amended as follows.

PART 55--VOLUNTARY INSPECTION OF EGG PRODUCTS AND GRADING

1. The authority citation for Part 55 continues to read as follows:

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

2. Section 55.510 is amended by revising paragraphs (b), (c), and

(d) to read as follows:

Sec. 55.510 Fees and charges for services other than on a continuous

resident basis.

* * * * *

(b) Fees for product inspection and sampling for laboratory

analysis will be based on the time required to perform the services.

The hourly charge shall be $33.64 and shall include the time actually

required to perform the sampling and inspection, waiting time, travel

time, and any clerical costs involved in issuing a certificate.

(c) Services rendered on Saturdays, Sundays, or legal holidays

shall be charged for at the rate of $35.52 per hour. Information on

legal holidays is available from the Supervisor.

(d) The cost of an appeal grading, inspection, laboratory analysis,

or review of a grader's or inspector's decision shall be borne by the

appellant at an hourly rate of $27.36 for time spent performing the

appeal and travel time to and from the site of the appeal, plus any

additional expenses. If the appeal grading, inspection, laboratory

analysis, or review of a grader's or inspector's decision discloses

that a material error was made in the original determination, no fee or

expenses will be charged.

3. Section 55.560 is amended by revising paragraph (a)(3) to read

as follows:

Sec. 55.560 Charges for continuous inspection and grading service on a

resident basis.

* * * * *

(a) * * *

(3) An administrative service charge equal to 25 percent of the

grader's or inspector's total salary costs. A minimum charge of $215

will be made each billing period. The minimum charge also applies where

an approved application is in effect and no product is handled.

* * * * *

PART 56--GRADING OF SHELL EGGS AND U.S. STANDARDS, GRADES, AND

WEIGHT CLASSES FOR SHELL EGGS

4. The authority citation for Part 56 continues to read as follows:

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

5. Section 56.46 is amended by revising paragraphs (b) and (c) to

read as follows:

Sec. 56.46 On a fee basis.

* * * * *

(b) Fees for grading services will be based on the time required to

perform the services. The hourly charge shall be $33.64 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 $35.52 per hour.

Information on legal holidays is available from the Supervisor.

6. Section 56.47 is revised to read as follows:

Sec. 56.47 Fees for appeal grading or review of a grader's decision.

The cost of an appeal grading or review of a grader's decision

shall be borne by the appellant at an hourly rate of $27.36 for the

time spent in performing the appeal and travel time to and from the

site of the appeal, plus any additional expenses. If the appeal grading

or review of a grader's decision discloses that a material error was

made in the original determination, no fee or expenses will be charged.

7. Section 56.52 is amended by revising paragraph (a)(4) to read as

follows:

Sec. 56.52 Continuous grading performed on a 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 $0.036, except that the minimum charge per

billing period shall be $215 and the maximum charge shall be $2,150.

The minimum charge also applies where an approved application is in

effect and no product is handled.

* * * * *

8. Section 56.54 is amended by revising paragraph (a)(2) 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 $215 will be made each

billing period. The minimum charge also applies where an approved

application is in effect and no product is handled.

* * * * *

PART 59--INSPECTION OF EGGS AND EGG PRODUCTS (EGG PRODUCTS

INSPECTION ACT)

9. The authority citation for Part 59 continues to read as follows:

Authority: 21 U.S.C. 1031-1056.

10. Section 59.126 is revised to read as follows:

Sec. 59.126 Overtime inspection service.

When operations in an official plant require the services of

inspection personnel beyond their regularly assigned tour of duty on

any day or on a day outside the established schedule, such services are

considered as overtime work. The official plant shall give reasonable

advance notice to the inspector of any overtime service necessary and

shall pay the Service for such overtime at an hourly rate of $26.16 to

cover the cost thereof.

11. Section 59.128 is amended by revising paragraph (a) to read as

follows:

Sec. 59.128 Holiday inspection service.

(a) When an official plant requires inspection service on a holiday

or a day designated in lieu of a holiday, such service is considered

holiday work. The official plant shall, in advance of such holiday

work, request the inspector in charge to furnish inspection service

during such period and shall pay the Service therefore at an hourly

rate of $17.44 to cover the cost thereof.

* * * * *

12. Section 59.370 is amended by revising paragraph (b) to read as

follows:

Sec. 59.370 Cost of appeals.

* * * * *

(b) The costs of an appeal shall be borne by the appellant at an

hourly rate of $27.36, including travel time and expenses if the appeal

was frivolous, including but not being limited to the following: The

appeal inspection discloses that no material error was made in the

original inspection, the condition of the product has undergone a

material change since the original inspection, the original lot has

changed in some manner, or the Act or these regulations have not been

complied with.

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

AND U.S. CLASSES, STANDARDS, AND GRADES

13. The authority citation for Part 70 continues to read as

follows:

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

14. Section 70.71 is amended by revising paragraphs (b) and (c) to

read as follows:

Sec. 70.71 On a fee basis.

* * * * *

(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 $33.64 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 $35.52 per hour.

Information on legal holidays is available from the Supervisor.

15. Section 70.72 is revised to read as follows:

Sec. 70.72 Fees for appeal grading, laboratory analysis, or

examination or review of a grader's decision.

The costs of an appeal grading, laboratory analysis, or examination

or review of a grader's decision will be borne by the appellant at an

hourly rate of $27.36 for the time spent in performing the appeal and

travel time to and from the site of the appeal, plus any additional

expenses. If the appeal grading, laboratory analysis, or examination or

review of a grader's decision discloses that a material error was made

in the original determination, no fee or expenses will be charged.

16. Section 70.76 is amended by revising paragraph (a)(2) 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 $215 will be made each

billing period. The minimum charge also applies where an approved

application is in effect and no product is handled.

* * * * *

17. Section 70.77 is amended by revising paragraphs (a)(4) and

(a)(5) 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 $0.00031, except that the minimum charge per billing

period shall be $215 and the maximum charge shall be $2,150. 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 $215

will be made each billing period. The minimum charge also applies where

an approved application is in effect and no product is handled.

* * * * *

Dated: October 11, 1994.

Lon Hatamiya,

Administrator.

[FR Doc. 94-25664 Filed 10-17-94; 8:45 am]

BILLING CODE 3410-02-P