Proposed Amendments to Regulations Governing Voluntary Grading of Meats, Prepared Meats, Meat Products, Shell Eggs, Poultry Products, and Rabbit Products

Published date25 March 2019
Citation84 FR 10998
Record Number2019-04600
SectionProposed rules
CourtAgricultural Marketing Service
Federal Register, Volume 84 Issue 57 (Monday, March 25, 2019)
[Federal Register Volume 84, Number 57 (Monday, March 25, 2019)]
                [Proposed Rules]
                [Pages 10998-11005]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2019-04600]
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                Proposed Rules
                 Federal Register
                ________________________________________________________________________
                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.
                ========================================================================
                Federal Register / Vol. 84, No. 57 / Monday, March 25, 2019 /
                Proposed Rules
                [[Page 10998]]
                DEPARTMENT OF AGRICULTURE
                Agricultural Marketing Service
                7 CFR Parts 54, 56, and 70
                [Doc. #AMS-LP-18-0095]
                Proposed Amendments to Regulations Governing Voluntary Grading of
                Meats, Prepared Meats, Meat Products, Shell Eggs, Poultry Products, and
                Rabbit Products
                AGENCY: Agricultural Marketing Service, USDA.
                ACTION: Proposed rule.
                -----------------------------------------------------------------------
                SUMMARY: The U.S. Department of Agriculture's (USDA) Agricultural
                Marketing Service (AMS) proposes to amend its regulations governing the
                voluntary grading and certification relating to meats, prepared meats,
                meat products, shell eggs, poultry products, and rabbit products.
                Proposed amendments include: Changing terminology to scheduled and non-
                scheduled, billing of holidays, billing excessive hours over and above
                agreement hours, and removing the administrative volume charge. The
                proposed amendments would standardize and align billing practices for
                services provided by the Livestock and Poultry Program.
                DATES: Comments must be received by May 24, 2019.
                ADDRESSES: Comments should be submitted electronically at
                www.regulations.gov. Comments may also be submitted to: Julie Hartley,
                Chief, Business Operations Branch, Quality Assessment Division (QAD);
                Livestock and Poultry Program, AMS, USDA, 1400 Independence Avenue SW;
                Room 3932-S, STOP 0258, Washington, DC 20250-0258. Comments will be
                made available for public inspection at Room 3932-S of the above
                address during regular business hours or electronically at
                www.regulations.gov. Comments received will be posted without change,
                including any personal information provided. All comments should
                reference the docket number AMS-LP-18-0095, the date of submission, and
                the page number of this issue of the Federal Register.
                FOR FURTHER INFORMATION CONTACT: Julie Hartley, Chief, Business
                Operations Branch, Quality Assessment Division; Livestock and Poultry
                Program, Agricultural Marketing Service, U.S. Department of
                Agriculture, Room 3932-S, STOP 0258, 1400 Independence Avenue SW,
                Washington, DC 20250-0258; telephone (202) 720-7316; or email to
                [email protected].
                SUPPLEMENTARY INFORMATION:
                Executive Orders 12866 and 13771
                 This proposed rule would not meet the definition of a significant
                regulatory action contained in section 3(f) of Executive Order 12866
                and is not subject to review by the Office of Management and Budget
                (OMB). Additionally, because this rule would not meet the definition of
                a significant regulatory action it does not trigger the requirements
                contained in Executive Order 13771. See OMB's Memorandum titled
                ``Interim Guidance Implementing Section 2 of the Executive Order of
                January 30, 2017, titled `Reducing Regulation and Controlling
                Regulatory Costs' '' (February 2, 2017).
                Regulatory Flexibility Act
                 Pursuant to the requirements set forth in the Regulatory
                Flexibility Act (RFA) [5 U.S.C. 601 et seq.], AMS has considered the
                economic effect of this action on small entities and has determined
                that this proposed rule would not have a significant economic impact on
                a substantial number of small business entities. The purpose of RFA is
                to fit regulatory actions to the scale of businesses subject to such
                actions in order that small businesses will not be unduly burdened.
                 AMS has determined that this rule would not have a significant
                impact on a substantial number of small entities, as defined by RFA,
                because the services are voluntary and provided on a fee-for-service
                basis and are not subject to scalability based on the business size.
                 Approximately 728 applicants subscribe to AMS's voluntary, fee-for-
                service activities that are subject to these regulations. The U.S.
                Small Business Administration's Table of Small Business Size Standards
                Matched to North American Industry Classification System Codes (NAICS)
                identifies small business size by average annual receipts or by the
                average number of employees at a firm. This information can be found in
                the Code of Federal Regulations (CFR) at 13 CFR parts 121.104, 121.106,
                and 121.201.
                 AMS requires that all applicants for service provide information
                about their company for the purpose of processing bills. Information
                collected from an applicant includes company name, address, billing
                address, and similar information. AMS started collecting information
                about the size of the business in May 2017, but it received the
                majority of applications prior to May 2017. However, based on working
                knowledge of these operations, AMS estimates that roughly 25 percent of
                current applicants may be classified as small entities because they
                meet the small business requirements of having average annual receipts
                of $750,000 for beef and poultry producers and $15,000,000 for chicken
                egg producers as set forth in 13 CFR 121's Small Business Size
                Standards by NAICS Industry table (sectors 31-33, subsector 311--food
                manufacturing). The effects of this rule are not expected to be
                disproportionately greater or lesser for small applicants than for
                larger applicants. As described above, these are voluntary, fee-for-
                service activities.
                 AMS is committed to complying with the E-Government Act of 2002 to
                promote the use of the internet and other information technologies to
                provide increased opportunities for citizen access to government
                information and services, and for other purposes.
                 USDA has not identified any relevant Federal rules that duplicate,
                overlap, or conflict with this proposed rule.
                Executive Order 13175
                 This action has been reviewed in accordance with the requirements
                of Executive Order 13175, Consultation and Coordination with Indian
                Tribal Governments. The review reveals that this proposed regulation
                would not have substantial and direct effects on Tribal governments and
                will not have significant Tribal implications.
                Executive Order 12988
                 This proposed rule has been reviewed under Executive Order 12988,
                Civil Justice Reform. This proposed rule is not intended to have
                retroactive effect.
                [[Page 10999]]
                The Act prohibits states or political subdivisions of a state to impose
                any requirement that is in addition to, or inconsistent with, any
                requirement of the Act. There are no civil justice implications
                associated with this rule.
                Civil Rights Review
                 AMS has considered the potential civil rights implications of this
                rule on minorities, women, or persons with disabilities to ensure that
                no person or group shall be discriminated against on the basis of race,
                color, national origin, gender, religion, age, disability, sexual
                orientation, marital or family status, political beliefs, parental
                status, or protected genetic information. This proposed rule would not
                require affected entities to relocate or alter their operations in ways
                that could adversely affect such persons or groups. Further, this
                proposed rule would not deny any persons or groups the benefits of the
                program or subject any persons or groups to discrimination.
                Executive Order 13132
                 This proposed rule has been reviewed under Executive Order 13132,
                Federalism. This Order directs agencies to construe, in regulations and
                otherwise, a Federal statute to preempt state law only when the statute
                contains an express preemption provision. There are no federalism
                implications associated with this proposed rule.
                Paperwork Reduction Act
                 In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
                chapter 35), this proposed rule would not change the information
                collection and recordkeeping requirements previously approved and will
                not impose additional reporting or recordkeeping burdens on users of
                these voluntary services.
                 The information collection and recordkeeping requirements of these
                parts have been approved by OMB under 44 U.S.C. chapter 35 and have
                been assigned OMB Control Number 0581-0128.
                 In September 2014, three separate OMB collections--OMB 0581-0127,
                OMB 0581-0124, and OMB 0581-0128--were merged, such that the current
                OMB 0581-0128 pertains to Regulations for Voluntary Grading,
                Certification, and Standards and includes 7 CFR parts 54, 56, and 70.
                Background and Revisions
                 The Agricultural Marketing Act of 1946, as amended (7 U.S.C. 1621-
                1627), hereinafter referred to as the ``Act,'' directs and authorizes
                the Secretary of Agriculture to facilitate the competitive and
                efficient marketing of agricultural products. AMS programs support a
                strategic marketing perspective that adapts product and marketing
                decisions to consumer demands, ensures quality, promotes a competitive
                and efficient domestic and international marketplace, and incorporates
                new technology. These services include AMS's grading program, which
                verifies that product meets USDA grade standards. At the request of the
                buyer or seller, products are officially graded by USDA allowing
                product application of the grademark or USDA shield. The grademark or
                USDA shield indicates that USDA has officially graded the product and
                it has met all the requirements of the designated quality standard. In
                addition, AMS provides direct certification of products, that meet end-
                user specifications, in the facilities that manufacture them.
                Specifications can be for commodities purchased by USDA for nutrition
                assistance programs, or to a third-party requirement. Product
                characteristics such as manner of cut, color, and other attributes can
                be directly examined by an AMS employee to determine if a specification
                has been met, and the product can be stamped and marketed as ``USDA
                Certified'' or ``USDA Accepted as Specified.'' This service ensures
                purchasers receive products that comply with their unique specification
                requirements. Grading and certification services are voluntary, with
                users paying for the cost of the requested service.
                 In 2013, AMS merged the Livestock and Seed Program and Poultry
                Programs to create the Livestock, Poultry, and Seed (LPS) Program.
                Prior to the merger, both Programs administered parallel grading and
                certification services to their respective industries with services
                provided on a fee-for-service bases. Following the merger, the LPS
                Program created the Quality Assessment Division (QAD) to oversee
                grading and certification services carried out by the Grading and
                Verification Division of the former Livestock and Seed Program and the
                Grading Branch of the former Poultry Programs. The QAD continues to
                bill customers with the billing rules specified in the regulations
                governing the grading of various commodities: 7 CFR 54--Meats, Prepared
                Meats and Meat Products (Grading, Certification, and Standards); 7 CFR
                56--Voluntary Grading of Shell Eggs; and 7 CFR 70--Voluntary Grading of
                Poultry Products and Rabbit Products.
                 To improve efficiency and reduce costs, QAD graders are cross-
                utilized between the commodities. Cross-utilization continues to
                increase as more customers request services for more than one
                commodity. Billing according to two sets of rules (one set of rules for
                part 54 and one set of rules for parts 56 and 70) is inefficient and
                causes customer confusion. The proposed amendments would standardize
                the billing rules, remove customer confusion, and increase efficiency
                in billing administration by allowing QAD to bill a customer for
                multiple services and products with one set of rules.
                Standardize Language
                 Proposed amendments would standardize language for providing
                service under an agreement or on an as-needed basis. Services provided
                under part 54 currently use the terms ``commitment'' for services
                provided under an agreement and ``non-commitment'' for services
                provided on an as-needed basis. Services provided under parts 56 and 70
                currently use the terms ``resident'' for services provided under an
                agreement and ``non-resident'' for services provided on an as-needed
                basis. The proposed language for all parts would be ``scheduled'' for
                services provided under an agreement and ``unscheduled'' for services
                provided on an as-needed basis.
                 AMS proposes to amend Sec. Sec. 56.21 and 70.30 (proposed to be
                redesignated Sec. 70.31) to standardize the application for service
                language with that found in Sec. 54.6. In addition to language
                currently in Sec. 54.6, AMS published a proposed rule in the Federal
                Register on February 5, 2019 to amend 7 CFR part 54, AMS-LP-16-0080.
                The proposed amendments in AMS-LP-16-0080 would add items 5 and 6 to
                Sec. 54.6 (a). In this proposed rule, AMS proposes to further amend
                Sec. 54.6(a) by adding a subparagraph after item 6 stating that the
                applicant agrees to comply with the terms and conditions of the
                regulations. Proposed standardized language includes the application
                requirements, items that must be included in the application, and the
                applicant's agreement to comply with the terms and conditions of the
                regulations.
                 AMS proposes to redesignate Sec. Sec. 70.30 through 70.37 as
                Sec. Sec. 70.29 through 70.36, respectively, and add Sec. 70.37 Types
                of service. The proposed addition of Sec. 70.37 would clarify and
                align the services AMS provides with Sec. 56.28.
                 The proposed amendments would revise Sec. Sec. 54.28, 56.45, and
                70.70 by updating the sections with current language and instructions
                for payment of services.
                Billing of Holidays
                 Proposed amendments would align holiday billing rules for all
                services with established policies for employee
                [[Page 11000]]
                premium pay under authority of 5 U.S.C. chapter 55 and 5 CFR part 550.
                Proposed amendments would revise Sec. Sec. 54.1, 56.1, and 70.1 by
                adding the definition of Observed Legal Holidays. The proposed addition
                of Observed Legal Holidays would establish the ``in lieu of holiday''
                for a holiday that falls on a Saturday or Sunday. Proposed amendments
                would also charge the holiday rate for hours worked on observed legal
                holidays.
                 Currently, services covered under part 54 are billed the holiday
                rate only on the actual holiday when worked, and if the actual holiday
                is not worked, no charge is applied. Additionally, holidays that fall
                on Saturday or Sunday but are observed on a Friday or Monday are billed
                at the commitment rate, not the holiday rate.
                 The proposed amendments would revise Sec. 54.27(c) for scheduled
                and non-scheduled bases to state the holiday hourly rate would be
                charged for hours worked on observed legal holidays. The impact
                analysis for services provided under this part would be less than a
                $50,000 increase in costs to the meat industry.
                 The following scenarios demonstrate how billing for hours worked on
                observed legal holidays would change under the proposed amendments:
                Scenario #1
                 A facility has a commitment agreement for 8 hours of service.
                Service is provided for 4 hours on a Friday, which is the observed
                legal holiday for an actual holiday that falls on Saturday.
                 [cir] Currently: The facility is charged the commitment rate for 8
                hours on the agreement.
                 [cir] Proposed: The facility is charged the holiday rate for the 4
                hours worked.
                Scenario #2
                 A facility requests 8 hours of service (non-commitment) on a
                Friday, which is the observed legal holiday for an actual holiday that
                falls on Saturday.
                 [cir] Currently: The facility is charged the non-commitment rate
                for 8 hours.
                 [cir] Proposed: The facility is charged the non-commitment holiday
                rate for 8 hours.
                 Currently, services covered under parts 56 and 70 are billed the
                regular rate on the holiday even if the holiday is not worked, the
                holiday rate when service is provided on the grader's scheduled
                holiday,\1\ and the overtime rate when service is provided on a holiday
                in excess of the hours stated on the agreement.
                ---------------------------------------------------------------------------
                 \1\ If the grader's scheduled day off falls on a legal holiday,
                the grader's holiday moves to the preceding or following day (thus
                becoming his or her scheduled holiday).
                ---------------------------------------------------------------------------
                 The proposed amendments would revise Sec. Sec. 56.46, 56.52,
                70.71, and 70.77 to state that the holiday hourly rate would be charged
                for hours worked on observed legal holidays. The impact for services
                provided under these parts would be minimal and to the benefit of the
                applicant in most cases. Impact analysis shows an average cost savings
                of $2,200 annually per applicant.
                 The following scenarios demonstrate how billing for hours worked on
                observed legal holidays would change under the proposed amendments:
                Scenario #1
                --A facility has a resident agreement for providing service Monday-
                Friday, 8 hours each day. The actual holiday is a Monday and no service
                provided.
                 [cir] Currently: The facility is charged the resident regular rate
                for 8 hours on the agreement.
                 [cir] Proposed: The facility will not be charged.
                Scenario #2
                --A facility has a resident agreement for providing service Monday-
                Friday, 8 hours each day. Service is provided on Monday, which is the
                observed legal holiday for an actual holiday that falls on Sunday.
                 [cir] Currently: The facility is charged the resident regular rate
                for 8 hours on the agreement. The facility is charged the holiday rate
                if the grader claims it is his/her actual or in lieu of holiday worked.
                 [cir] Proposed: The facility will only be charged the holiday rate.
                Scenario #3
                --A facility has a resident agreement for providing service Monday-
                Friday, 8 hours each day. Service is provided for 10 hours on Monday,
                which is the observed legal holiday for an actual holiday that falls on
                Sunday.
                 [cir] Currently: The facility is charged the resident regular rate
                for 8 hours on the agreement. The facility is charged the holiday rate
                if the grader claims it is his/her actual or in lieu of holiday worked,
                plus the overtime rate for 2 hours.
                 [cir] Proposed: The facility will be charged the holiday rate for
                10 hours.
                 AMS proposes to further clarify and align rates charged for
                services. Proposed amendments would update Sec. Sec. 54.27, 56.46,
                56.52, 70.71, and 70.77 and include the specific rates charged to
                plants for scheduled and unscheduled services.
                Billing Excessive Hours Over and Above Agreement Hours
                 AMS proposes to align billing rates for services provided over and
                above agreement hours and following a reasonable amount of billed
                overtime. Currently services under part 54 are charged the non-
                commitment rate while services provided under parts 56 and 70 are
                charged the resident overtime rate for hours in excess of their
                agreement. AMS proposes to align all services and use the unscheduled
                rate (the current non-commitment or fee rate) when services are
                provided over and above their agreement and following a reasonable
                amount of billed overtime. This amendment would affect only services
                provided under parts 56 and 70 and cause a higher rate to be charged to
                applicants who request additional staffing outside of the scheduled
                shifts for which AMS agreed to provide service. Impact analysis shows
                an average cost increase of $3,700 annually for applicants that request
                additional graders.
                 The following scenarios demonstrate how billing for additional
                staffing outside the agreed-upon scheduled shifts would change under
                the proposed amendments:
                Scenario #1
                --A facility has an agreement for providing service Monday-Friday, 8
                hours each day. The facility uses service for 10 hours on Monday,
                Wednesday, and Friday and requests service to be provided for 6 hours
                on Saturday.
                 [cir] Currently: The facility is charged the overtime rate for 12
                hours (service provided Monday, Wednesday, and Friday for 2 hours each
                day above the agreement, plus 6 hours on Saturday).
                 [cir] Proposed: The facility will be charged the overtime rate for
                6 hours (service provided Monday, Wednesday, and Friday for 2 hours
                each day above the agreement) and the unscheduled rate for 6 hours of
                service provided on Saturday.
                Scenario #2
                --A facility has an agreement for providing service Monday-Friday, 8
                hours each day, 1st shift. The facility requests additional service to
                be provided for Monday-Friday, 8 hours each day on 2nd shift for four
                weeks.
                 [cir] Currently: The facility is charged the overtime rate for all
                additional hours of service provided.
                 [cir] Proposed: The facility will be charged the unscheduled rate
                for all hours of service provided on the 2nd shift.
                [[Page 11001]]
                Scenario #3
                --A facility has an agreement for providing service Monday-Friday, 8
                hours each day. Through the holidays, the facility requests an
                additional grader to provide service for Monday-Friday, 8 hours each
                day.
                 [cir] Currently: The facility is charged the overtime rate for all
                hours of service provided by the additional grader.
                 [cir] Proposed: The facility will be charged the unscheduled rate
                for all hours of service provided by the additional grader.
                Remove Administrative Volume Charge
                 Poultry and shell egg services provided under parts 56 and 70 are
                billed an administrative volume charge in addition to the hourly rates
                assessed for providing service. This charge was established to cover
                overhead costs associated with grading and certification services. In
                2014, AMS incorporated new formulas for establishing yearly fee rates
                into all grading regulations; these new formulas do not include the
                administrative volume charge, nor do they allow for an increase to the
                administrative rate. The administrative volume charge was last
                increased in 2009, and it does not adequately cover overhead costs
                associated with these voluntary services. The proposed amendments would
                remove the administrative volume charge altogether from Sec. Sec.
                56.52(a)(4) and 70.77(a)(4) and (5) and would allow QAD to charge
                hourly rates that encompass all costs for providing service. This
                amendment would affect only services provided under parts 56 and 70.
                QAD estimates that plants with a single or double shift scheduled (40
                or 80 hours) would see a minor cost savings of $7,500 annually from the
                removal of the administrative charge and the creation of the new hourly
                rates, while plants with four shifts scheduled (160 hours) will see an
                increase of $32,000 annually.
                List of Subjects
                7 CFR Part 54
                 Voluntary standards, Meat, Meat products, Meat grading.
                7 CFR Part 56
                 Voluntary standards, Eggs, Egg products, Shell egg grading, Shell
                egg inspections.
                7 CFR Part 70
                 Voluntary standards, Poultry, Poultry products, Rabbit, Poultry
                grading, Rabbit grading.
                 For the reasons set forth in the preamble, AMS proposes to amend 7
                CFR parts 54, 56, and 70 as follows:
                PART 54--MEATS, PREPARED MEATS, AND MEAT PRODUCTS (GRADING,
                CERTIFICATION, AND STANDARDS)
                0
                1. The authority citation for 7 CFR part 54 continues to read as
                follows:
                 Authority: 7 U.S.C. 1621-1627.
                0
                2. Amend Sec. 54.1 by revising the section heading and adding in
                alphabetical order a definition for ``observed legal holiday'' to read
                as follows:
                Sec. 54.1 Meaning of words and terms defined.
                * * * * *
                 Observed legal holiday. When a holiday falls on a weekend--Saturday
                or Sunday--the holiday usually is observed on Monday (if the holiday
                falls on Sunday) or Friday (if the holiday falls on Saturday).
                * * * * *
                0
                 3. Revise Sec. 54.6 to read as follows:
                Sec. 54.6 How to obtain service.
                 (a) Application. (1) Any person may apply for service with respect
                to products in which he or she has a financial interest by completing
                the required application for service. In any case in which the service
                is intended to be furnished at an establishment not operated by the
                applicant, the application must be approved by the operator of such
                establishment and such approval shall constitute an authorization for
                any employee of the Department to enter the establishment for the
                purpose of performing his or her functions under the regulations. The
                application must include:
                 (i) Name and address of the establishment at which service is
                desired;
                 (ii) Name and mailing address of the applicant;
                 (iii) Financial interest of the applicant in the products, except
                where application is made by a representative of a Government agency in
                the representative's official capacity;
                 (iv) Signature of the applicant (or the signature and title of the
                applicant's representative);
                 (v) Indication of the legal status of the applicant as an
                individual, partnership, corporation, or other form of legal entity;
                and
                 (vi) The legal designation of the applicant's business as a small
                or large business, as defined by the U.S. Small Business
                Administration's North American Industry Classification System (NAICS)
                Codes.
                 (2) In making application, the applicant agrees to comply with the
                terms and conditions of the regulations (including, but not being
                limited to, such instructions governing grading of products as may be
                issued from time to time by the Administrator). No member of or
                Delegate to Congress or Resident Commissioner shall be admitted to any
                benefit that may arise from such service unless derived through service
                rendered a corporation for its general benefit. Any change in such
                status, at any time while service is being received, shall be promptly
                reported by the person receiving the service to the grading office
                designated by the Director or Chief to process such requests.
                 (b) Notice of eligibility for service. The applicant will be
                notified whether the application is approved or denied.
                0
                4. Amend Sec. 54.27 by revising paragraph (c) to read as follows:
                Sec. 54.27 Fees and other charges for service.
                * * * * *
                 (c) Fees for service--(1) On a scheduled basis. Minimum fees for
                service performed under a scheduled agreement or an agreement by
                memorandum will be based on 8 hours per day, Monday through Friday,
                excluding observed Federal legal holidays occurring Monday through
                Friday on which no grading and certification services are performed.
                The Agency reserves the right to use any grader assigned to the plant
                under a scheduled agreement to perform service for other applicants and
                no charge will be assessed to the scheduled applicant for the number of
                hours charged to the other applicant. Charges to plants are as follows:
                 (i) The regular hourly rate will be charged for hours worked in
                accordance with the approved tour of duty on the application for
                service between the hours of 6 a.m. and 6 p.m.
                 (ii) The overtime rate will be charged for hours worked in excess
                of the approved tour of duty on the application for service.
                 (iii) The holiday hourly rate will be charged for hours worked on
                observed legal holidays.
                 (iv) The night differential rate (for regular or overtime hours)
                will be charged for hours worked between 6 p.m. and 6 a.m.
                 (v) The Sunday differential rate (for regular or overtime hours)
                will be charged for hours worked on a Sunday.
                 (2) On an unscheduled basis. Minimum fees for service performed
                under an unscheduled basis agreement will be based on the time required
                to render the service, calculated to the nearest 15-minute period,
                including official grader's travel and certificate,
                [[Page 11002]]
                memorandum, and/or report preparation time performed in connection with
                the performance of service. A minimum charge of one-half hour shall be
                made for service pursuant to each request notwithstanding that the time
                required to perform service may be less than 30 minutes. Charges to
                plants are as follows:
                 (i) The regular hourly rate will be charged for the first 8 hours
                worked per grader per day for all days except observed legal holidays.
                 (ii) The overtime rate will be charged for hours worked in excess
                of 8 hours per grader per day for all days except observed legal
                holidays.
                 (iii) The holiday hourly rate will be charged for hours worked on
                observed legal holidays.
                * * * * *
                0
                5. Revise Sec. 54.28 to read as follows:
                Sec. 54.28 Payment of fees and other charges.
                 Fees and other charges for service must be paid in accordance with
                the following provisions unless otherwise provided in the cooperative
                agreement under which the service is furnished. Upon receipt of billing
                for fees and other charges for service, the applicant will remit by
                check, electronic funds transfer, draft, or money order made payable to
                the National Finance Center. Payment for the service must be made in
                accordance with directions on the billing statement, and such fees and
                charges must be paid in advance if required by the official grader or
                other authorized official.
                PART 56--VOLUNTARY GRADING OF SHELL EGGS
                0
                6. The authority citation for 7 CFR part 56 continues to read as
                follows:
                 Authority: 7 U.S.C. 1621-1627.
                0
                7. Amend Sec. 56.1 by adding in alphabetical order a definition for
                ``observed legal holiday'' to read as follows:
                Sec. 56.1 Meaning of words and terms defined.
                * * * * *
                 Observed legal holiday. When a holiday falls on a weekend--Saturday
                or Sunday--the holiday usually is observed on Monday (if the holiday
                falls on Sunday) or Friday (if the holiday falls on Saturday).
                * * * * *
                0
                8. Revise Sec. 56.21 to read as follows:
                Sec. 56.21 How application for service may be made; conditions of
                service.
                 (a) Application. (1) Any person may apply for service with respect
                to products in which he or she has a financial interest by completing
                the required application for service. In any case in which the service
                is intended to be furnished at an establishment not operated by the
                applicant, the application must be approved by the operator of such
                establishment and such approval shall constitute an authorization for
                any employee of the Department to enter the establishment for the
                purpose of performing his or her functions under the regulations. The
                application must include:
                 (i) Name and address of the establishment at which service is
                desired;
                 (ii) Name and mailing address of the applicant;
                 (iii) Financial interest of the applicant in the products, except
                where application is made by a representative of a Government agency in
                the representative's official capacity;
                 (iv) Signature of the applicant (or the signature and title of the
                applicant's representative);
                 (v) Indication of the legal status of the applicant as an
                individual, partnership, corporation, or other form of legal entity;
                and
                 (vi) The legal designation of the applicant's business as a small
                or large business, as defined by the U.S. Small Business
                Administration's North American Industry Classification System (NAICS)
                Codes.
                 (2) In making application, the applicant agrees to comply with the
                terms and conditions of the regulations (including, but not being
                limited to, such instructions governing grading of products as may be
                issued from time to time by the Administrator). No member of or
                Delegate to Congress or Resident Commissioner shall be admitted to any
                benefit that may arise from such service unless derived through service
                rendered a corporation for its general benefit. Any change in such
                status, at any time while service is being received, shall be promptly
                reported by the person receiving the service to the grading office
                designated by the Director or Chief to process such requests.
                 (b) Notice of eligibility for service. The applicant will be
                notified whether the application is approved or denied.
                0
                9. Revise Sec. 56.28 to read as follows:
                Sec. 56.28 Types of service.
                 (a) Noncontinuous grading service. Service is performed on an
                unscheduled basis, with no scheduled tour of duty, and when an
                applicant requests grading of a particular lot of shell eggs. Charges
                or fees are based on the time, travel, and expenses needed to perform
                the work. This service may be referred to as unscheduled grading
                service. Shell eggs graded under unscheduled grading service are not
                eligible to be identified with the official grademarks shown in Sec.
                56.36.
                 (b) Continuous grading service on a scheduled basis. Service on a
                scheduled basis has a scheduled tour of duty and is performed when an
                applicant requests that a USDA licensed grader be stationed in the
                applicant's processing plant and grade shell eggs in accordance with
                U.S. Standards. The applicant agrees to comply with the facility,
                operating, and sanitary requirements of scheduled service. Minimum fees
                for service performed under a scheduled agreement will be based on the
                hours of the regular tour of duty. Shell eggs graded under scheduled
                grading service are eligible to be identified with the official
                grademarks shown in Sec. 56.36 only when processed and graded under
                the supervision of a grader or quality assurance inspector as provided
                in Sec. 56.39.
                 (c) Temporary grading service. Service is performed when an
                applicant requests an official plant number with service provided on an
                unscheduled basis. The applicant must meet all facility, operating, and
                sanitary requirements of continuous service. Charges or fees are based
                on the time and expenses needed to perform the work. Shell eggs graded
                under temporary grading service are eligible to be identified with the
                official grademarks only when they are processed and graded under the
                supervision of a grader or quality assurance inspector as provided in
                Sec. 56.39.
                0
                10. Amend Sec. 56.45 by revising paragraphs (a) and (b) to read as
                follows:
                Sec. 56.45 Payment of fees and charges.
                 (a) Fees and charges for any grading service must be paid by the
                interested party making the application for such grading service, in
                accordance with the applicable provisions of this section and
                Sec. Sec. 56.46 to 56.53, inclusive.
                 (b) Fees and charges for any grading service shall, unless
                otherwise required pursuant to paragraph (c) of this section, be paid
                by check, electronic funds transfer, draft, or money order made payable
                to the National Finance Center. Payment for the service must be made in
                accordance with directions on the billing statement, and such fees and
                charges must be paid in advance if required by the official grader or
                other authorized official.
                * * * * *
                0
                11. Amend Sec. 56.46 by revising the section heading, and paragraphs
                (a)
                [[Page 11003]]
                introductory text and (c) to read as follows:
                Sec. 56.46 Charges for service on an unscheduled 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 an unscheduled basis shall be based on the applicable formulas
                specified in this section. For each calendar year or crop year, AMS
                will calculate the rate for grading services, per hour per program
                employee using the following formulas:
                * * * * *
                 (c) Fees for unscheduled grading services will be based on the time
                required to perform the services. The hourly charges shall include the
                time actually required to perform the grading, waiting time, travel
                time, and any clerical costs involved in issuing a certificate. Charges
                to plants are as follows:
                 (1) The regular hourly rate shall be charged for the first 8 hours
                worked per grader per day for all days except observed legal holidays.
                 (2) The overtime rate shall be charged for hours worked in excess
                of 8 hours per grader per day for all days except observed legal
                holidays.
                 (3) The holiday hourly rate will be charged for hours worked on
                observed legal holidays.
                * * * * *
                0
                12. Revise Sec. 56.47 to read as follows:
                Sec. 56.47 Fees for appeal grading or review of a grader's decision.
                 The costs of an appeal grading or review of a grader's decision
                shall be borne by the appellant on an unscheduled basis at rates set
                forth in Sec. 56.46, plus any travel and 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.
                0
                13. Amend Sec. 56.52 by revising the section heading, introductory
                text, and paragraph (a) to read as follows:
                Sec. 56.52 Charges for services on a scheduled basis.
                 Fees to be charged and collected for any grading service, other
                than for an appeal grading, on a scheduled grading basis, will be
                determined based on the formulas in this part. The fees to be charged
                for any appeal grading shall be as provided in Sec. 56.47.
                 (a) Charges. The charges for the grading of shell eggs shall be
                paid by the applicant for the service and shall include items listed in
                this section as are applicable. Payment for the full cost of the
                grading service rendered to the applicant shall be made by the
                applicant to the National Finance Center. Such full costs shall
                comprise such of the items listed in this section as are due and
                included in the bill or bills covering the period or periods during
                which the grading service was rendered. Bills are payable upon receipt.
                 (1) When a signed application for service has been received, the
                State supervisor or his designee will complete a plant survey pursuant
                to Sec. 56.30. The costs for completing the plant survey will be
                charged to the applicant on an unscheduled basis as described in Sec.
                56.46. No charges will be assessed when the application is required
                because of a change in name or ownership. If service is not installed
                within 6 months from the date the application is filed, or if service
                is inactive due to an approved request for removal of a grader or
                graders(s) for a period of 6 months, the application will be considered
                terminated. A new application may be filed at any time. In addition,
                there will be a charge of $300 if the application is terminated at the
                request of the applicant for reasons other than for a change in
                location within 12 months from the date of the inauguration of service.
                 (2) Charges for the cost of each grader assigned to a plant will be
                calculated as described in Sec. 56.46. Minimum fees for service
                performed under a scheduled agreement shall be based on the hours of
                the regular tour of duty. The Agency reserves the right to use any
                grader assigned to the plant under a scheduled agreement to perform
                service for other applicants except that no charge will be assessed to
                the scheduled applicant for the number of hours charged to the other
                applicant. Charges to plants are as follows:
                 (i) The regular hourly rate shall be charged for hours worked in
                accordance with the approved tour of duty on the application for
                service between the hours of 6 a.m. and 6 p.m.
                 (ii) The overtime rate shall be charged for hours worked in excess
                of the approved tour of duty on the application for service.
                 (iii) The holiday hourly rate will be charged for hours worked on
                observed legal holidays.
                 (iv) The night differential rate (for regular or overtime hours)
                will be charged for hours worked between 6 p.m. and 6 a.m.
                 (v) The Sunday differential rate (for regular or overtime hours)
                will be charged for hours worked on a Sunday.
                 (vi) For all hours of work performed in a plant without an approved
                tour of duty, the charge will be one of the applicable hourly rates in
                Sec. 56.46, plus actual travel expenses incurred by AMS.
                 (3) A charge at the hourly rates specified in Sec. 56.46, plus
                actual travel expenses incurred by AMS for intermediate surveys to
                firms without grading service in effect.
                * * * * *
                Sec. 56.54 [Removed and Reserved]
                0
                14. Remove and reserve Sec. 56.54.
                PART 70--VOLUNTARY GRADING OF POULTRY PRODUCTS AND RABBIT PRODUCTS
                0
                15. The authority citation for part 70 continues to read as follows:
                 Authority: 7 U.S.C. 1621-1627.
                0
                16. Amend Sec. 70.1 by adding in alphabetical order a definition for
                ``observed legal holiday'' to read as follows:
                Sec. 70.1 Definitions.
                * * * * *
                 Observed legal holiday. When a holiday falls on a weekend--Saturday
                or Sunday--the holiday usually is observed on Monday (if the holiday
                falls on Sunday) or Friday (if the holiday falls on Saturday).
                * * * * *
                Sec. 70.30 [Redesignated as Sec. 70.29]
                0
                17. Redesignate Sec. 70.30 as Sec. 70.29.
                Sec. 70.31 [Redesignated as Sec. 70.30]
                0
                18. Redesignate Sec. 70.31 as Sec. 70.30 and revise it to read as
                follows:
                Sec. 70.30 How application for service may be made; conditions of
                service.
                 (a) Application. (1) Any person may apply for service with respect
                to products in which he or she has a financial interest by completing
                the required application for service. In any case in which the service
                is intended to be furnished at an establishment not operated by the
                applicant, the application must be approved by the operator of such
                establishment and such approval constitutes an authorization for any
                employee of the Department to enter the establishment for the purpose
                of performing his or her functions under the regulations. The
                application shall include:
                 (i) Name and address of the establishment at which service is
                desired;
                 (ii) Name and mailing address of the applicant;
                 (iii) Financial interest of the applicant in the products, except
                where application is made by a representative of a Government agency in
                the representative's official capacity;
                [[Page 11004]]
                 (iv) Signature of the applicant (or the signature and title of the
                applicant's representative);
                 (v) Indication of the legal status of the applicant as an
                individual, partnership, corporation, or other form of legal entity;
                and
                 (vi) The legal designation of the applicant's business as a small
                or large business, as defined by the U.S. Small Business
                Administration's North American Industry Classification System (NAICS)
                Codes.
                 (2) In making application, the applicant agrees to comply with the
                terms and conditions of the regulations (including, but not being
                limited to, such instructions governing grading of products as may be
                issued from time to time by the Administrator). No member of or
                Delegate to Congress or Resident Commissioner shall be admitted to any
                benefit that may arise from such service unless derived through service
                rendered a corporation for its general benefit. Any change in such
                status, at any time while service is being received, shall be promptly
                reported by the person receiving the service to the grading office
                designated by the Director or Chief to process such requests.
                 (b) Notice of eligibility for service. The applicant will be
                notified whether the application is approved or denied.
                Sec. Sec. 70.32 through 70. 37 [Redesignated as Sec. Sec. 70.31
                through 70.36]
                0
                19. Redesignate Sec. Sec. 70.32 through 70.37 as Sec. Sec. 70.31
                through 70.36, respectively.
                0
                20. Add new Sec. 70.37 to read as follows:
                Sec. 70.37 Types of Service.
                 (a) Noncontinuous grading service. Service is performed on an
                unscheduled basis, with no scheduled tour of duty, and when an
                applicant requests grading of a particular lot of poultry or rabbit
                product. Charges or fees are based on the time, travel, and expenses
                needed to perform the work. This service may be referred to as
                unscheduled grading service. Poultry and rabbit products graded under
                unscheduled grading service are not eligible to be identified with the
                official grademarks shown in Sec. 70.51.
                 (b) Continuous grading service on a scheduled basis. Service on a
                scheduled basis has a scheduled tour of duty and is performed when an
                applicant requests that a USDA licensed grader be stationed in the
                applicant's plant or warehouse and grade poultry and rabbit products in
                accordance with U.S. Standards. The applicant agrees to comply with the
                facility, operating, and sanitary requirements of scheduled service.
                Minimum fees for service performed under a scheduled agreement shall be
                based on the hours of the regular tour of duty. Poultry and rabbit
                products graded under scheduled grading service are eligible to be
                identified with the official grademarks shown in Sec. 70.51 only when
                processed and graded under the supervision of a grader.
                 (c) Temporary grading service. Service is performed when an
                applicant requests an official plant number with service provided on an
                unscheduled basis. The applicant must meet facility, operating, and
                sanitary requirements of continuous service. Charges or fees are based
                on the time and expenses needed to perform the work. Poultry and rabbit
                products graded under temporary grading service are eligible to be
                identified with the official grademarks only when they are processed
                and graded under the supervision of a grader.
                0
                21. Amend Sec. 70.70 by revising paragraphs (a) and (b) to read as
                follows:
                Sec. 70.70 Payment of fees and charges.
                 (a) Fees and charges for any grading service shall be paid by the
                interested party making the application for such grading service, in
                accordance with the applicable provisions of this section and
                Sec. Sec. 70.71 to 70.78, inclusive.
                 (b) Fees and charges for any grading service shall, unless
                otherwise required pursuant to paragraph (c) of this section, be paid
                by check, electronic funds transfer, draft, or money order made payable
                to the National Finance Center. Payment for the service must be made in
                accordance with directions on the billing statement, and such fees and
                charges must be paid in advance if required by the official grader or
                other authorized official.
                * * * * *
                0
                22. Amend Sec. 70.71 by revising the section heading, introductory
                text; and paragraph (c) to read as follows:
                Sec. 70.71 Charges for services on an unscheduled basis.
                 Unless otherwise provided in this part, the fees to be charged and
                collected for any service performed, in accordance with this part, on
                an unscheduled basis shall be based on the applicable formulas
                specified in this section.
                * * * * *
                 (c) Fees for unscheduled grading services will be based on the time
                required to perform the services. The hourly charges will include the
                time actually required to perform the grading, waiting time, travel
                time, and any clerical costs involved in issuing a certificate. Charges
                to plants are as follows:
                 (1) The regular hourly rate will be charged for the first 8 hours
                worked per grader per day for all days except observed legal holidays.
                 (2) The overtime rate will be charged for hours worked in excess of
                8 hours per grader per day for all days except observed legal holidays.
                 (3) The holiday hourly rate will be charged for hours worked on
                observed legal holidays.
                0
                23. Revise Sec. 70.72 to read as follows:
                Sec. 70.72 Fees for appeal grading or review of a grader's decision.
                 The costs of an appeal grading or review of a grader's decision,
                shall be borne by the appellant on an unscheduled basis at rates set
                forth in Sec. 70.71, plus any travel and 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.
                Sec. 70.76 [Removed and Reserved]
                0
                24. Remove and reserve Sec. 70.76.
                0
                25. Amend Sec. 70.77 by revising the section heading, introductory
                text; and paragraph (a) to read as follows:
                Sec. 70.77 Charges for services on a scheduled basis.
                 Fees to be charged and collected for any grading service, other
                than for an appeal grading, on a scheduled grading basis, will be
                determined based on the formulas in this part. The fees to be charged
                for any appeal grading will be as provided in Sec. 70.71.
                 (a) Charges. The charges for the grading of poultry and rabbits and
                edible products thereof must be paid by the applicant for the service
                and will include items listed in this section as are applicable.
                Payment for the full cost of the grading service rendered to the
                applicant shall be made by the applicant to the National Finance
                Center. Such full costs shall comprise such of the items listed in this
                section as are due and included in the bill or bills covering the
                period or periods during which the grading service was rendered. Bills
                are payable upon receipt.
                 (1) When a signed application for service has been received, the
                State supervisor or his designee will complete a plant survey pursuant
                to Sec. 70.34. The costs for completing the plant survey will be borne
                by the applicant on an unscheduled basis as described in Sec. 70.71.
                No charges will be assessed when the application is required because of
                a change in name or ownership. If service is not installed
                [[Page 11005]]
                within 6 months from the date the application is filed, or if service
                is inactive due to an approved request for removal of a grader or
                graders for a period of 6 months, the application will be considered
                terminated. A new application may be filed at any time. In addition,
                there will be a charge of $300 if the application is terminated at the
                request of the applicant for reasons other than for a change in
                location within 12 months from the date of the inauguration of service.
                 (2) Charges for the cost of each grader assigned to a plant will be
                calculated as described in Sec. 70.71. Minimum fees for service
                performed under a scheduled agreement will be based on the hours of the
                regular tour of duty. The Agency reserves the right to use any grader
                assigned to the plant under a scheduled agreement to perform service
                for other applicants and no charge will be assessed to the scheduled
                applicant for the number of hours charged to the other applicant.
                Charges to plants are as follows:
                 (i) The regular hourly rate will be charged for hours worked in
                accordance with the approved tour of duty on the application for
                service between the hours of 6 a.m. and 6 p.m.
                 (ii) The overtime rate will be charged for hours worked in excess
                of the approved tour of duty on the application for service.
                 (iii) The holiday hourly rate will be charged for hours worked on
                observed legal holidays.
                 (iv) The night differential rate (for regular or overtime hours)
                will be charged for hours worked between 6 p.m. and 6 a.m.
                 (v) The Sunday differential rate (for regular or overtime hours)
                will be charged for hours worked on a Sunday.
                 (vi) For all hours of work performed in a plant without an approved
                tour of duty, the charge will be one of the applicable hourly rates in
                Sec. 70.71 plus actual travel expenses incurred by AMS.
                 (3) A charge at the hourly rates specified in Sec. 70.71, plus
                actual travel expenses incurred by AMS for intermediate surveys to
                firms without grading service in effect.
                * * * * *
                 Dated: March 8, 2019,
                Bruce Summers,
                Administrator.
                [FR Doc. 2019-04600 Filed 3-22-19; 8:45 am]
                 BILLING CODE 3410-02-P
                

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