Quality Systems Verification Programs, 17611-17616 [05-6957]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 70, Number 66 (Thursday, April 7, 2005)]
[Proposed Rules]
[Pages 17611-17616]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-6957]



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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 54 and 62

[No. LS-02-10]
RIN 0581-AC12


Quality Systems Verification Programs

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Agricultural Marketing Service (AMS) is proposing to 
establish a separate user-fee schedule for the Quality Systems 
Verification Programs (QSVP) and expand the scope of the QSVP to 
include all agricultural products and services within the 
responsibility of the Livestock and Seed (LS) Program. A new Part 62 
would be established for QSVP services. QVSP are a collection of 
voluntary, audit-based, user-fee programs authorized under the 
Agricultural Marketing Act of 1946. QSVP facilitate the global 
marketing and trade of agricultural products; provide consumers the 
opportunity to distinguish specific characteristics involved in the 
production and processing of agricultural products; and ensure that 
product consistently meets program requirements.

DATES: Written comments must be received by May 9, 2005. Comments 
regarding the information collection requirements that would result 
from this proposal must be received by June 6, 2005.

ADDRESSES: Send comments concerning this proposed rule to James L. 
Riva, Chief; USDA, AMS, LS, ARC Branch; STOP 0294, Room 2627-S, 1400 
Independence Avenue, SW., Washington, DC 20250-0248; by FAX to 202-690-
1038; or by e-mail to: ARCBranch@usda.gov. Comments may also be 
submitted electronically through https://www.regulations.gov. Comments 
should reference the date and page number of this issue of the Federal 
Register. Comments will be posted at: https://www.ams.usda.gov/lsg/
rulemaking.htm and will be made available for public inspection during 
normal business hours at the above address. Comments concerning the 
information collection should be sent to: Desk Officer for Agriculture, 
Office of Information and Regulatory Affairs, Office of Management and 
Budget, New Executive Office Building, 725 17th Street, NW., Room 725, 
Washington, DC 20503; or by e-mail to: OIRA--submissions@OMB.eop.gov.

FOR FURTHER INFORMATION CONTACT: James L. Riva, Chief, Audit, Review, 
and Compliance (ARC) Branch, telephone 202-720-1124, or e-mail 
James.Riva@usda.gov.

SUPPLEMENTARY INFORMATION:

Background and Discussion

    The Agricultural Marketing Act of 1946 (AMA), as amended, (7 U.S.C. 
1621, et seq.), gives AMS the authority to provide services so that 
agricultural products may be marketed to their best advantage, that 
trade may be facilitated, and that consumers may be able to ascertain 
characteristics involved in the production and processing of products 
and obtain the quality of product they desire. AMA also provides for 
the collection of fees from users of these services that are reasonable 
and cover the cost of providing services.
    The QSVP were developed in 1995 and have since grown to include 
several value-added marketing programs. The QSVP have grown steadily 
over the past few years, with auditors conducting 385 assessments in FY 
2001, 562 assessments in FY 2002, and 715 assessments in 2003, and 915 
assessments in 2004. Presently, 14 full-time auditors conduct 
assessments for the LS Program.
    QSVP are voluntary, audit-based, user-fee funded programs developed 
and conducted at the request of industry and others as a cost-effective 
alternative to conventional product certification. QSVP use 
International Organization for Standardization's (ISO) Guidelines and 
standards as a format for evaluating program documentation to ensure 
consistent assessment practices and promote international recognition 
of assessment results.
    Currently, QSVP user-fees are based on the approved hourly rate 
established for meat grading and certification services provided by the 
Meat Grading and Certification (MGC) Branch pursuant to 7 CFR part 54. 
Following the initial program development period, LS Program management 
conducted a detailed cost analysis of QSVP services and determined that 
the existing hourly rate established for meat grading and certification 
services did not sufficiently cover the cost of providing QSVP 
services. Due to the complexity of planning, performing and 
interpreting the results of assessments, auditor positions are 
classified at the GS-11/12 pay grade, in contrast to the GS-5/7/9 pay 
grade classifications of most MGC Branch full-time positions.
    Upon considering all QSVP operational expenses, the LS Program 
determined that the actual cost of QSVP services, excluding travel 
costs, to be $108 per hour. LS Program management considered employee 
salaries and benefits; Agency and LS Program overhead; total revenue 
hours available to the ARC Branch; and included other anticipated costs 
such as, federally mandated pay raises through FY 2005, rent, 
communications, utilities, contractual services, supplies, and 
equipment in their analysis.
    The LS Program considered alternatives to creating a separate user-
fee for QSVP services, but found that none were sufficient. Maintaining 
the same user-fee for QSVP services currently used for conventional 
meat grading and certification services would not sufficiently cover 
the cost of providing QSVP services. Another option was to terminate 
all QSVP services, which would adversely affect producers, businesses, 
and consumers who desire QSVP services and those entities with already-
established programs.
    The QSVP were administered through the LS Program's MGC Branch 
pursuant to 7 CFR part 54 using the user-fee schedule established for 
meat grading and certification services. In 2001, the administration of 
QSVP was moved by the LS Program to the Audit, Review, and Compliance 
(ARC) Branch. This proposed rule would establish a separate user-fee of 
$108 per hour for QSVP services under a new part 62. Additionally, this 
proposed rule would expand the scope of QSVP services to include all 
agricultural products or services within the responsibility of the LS 
Program, such as livestock, meat, meat products, seed, feedstuffs, as 
well as processes involving the production of these products, 
agricultural product data storage, product traceability and 
identification. Currently, Part 54 only provides for services dealing 
with meat and meat products. A new Part 62 would be established for 
QSVP services.

Executive Order 12866

    This proposed rule 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).

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect and 
would not preempt or supersede any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict. There are no 
administrative procedures that must be exhausted prior to any

[[Page 17612]]

judicial challenge to the provisions of this rule.

Regulatory Flexibility Act

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA)(5 U.S.C. 601 et seq.), the Agricultural Marketing 
Service (AMS) has considered the economic effect of this action on 
small entities and has determined that this proposed rule will not have 
a significant economic impact on a substantial number of small 
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, through the LS Program's ARC Branch, provides voluntary 
assessment services to approximately 415 businesses, including 152 
livestock slaughterers, 72 meat processors, 46 livestock producers 
feeders, 135 organic certifying companies, 4 trade associations, and 4 
State and Federal entities. Seventy-five percent (i.e., 346) of these 
businesses are classified as small entities and generate approximately 
65 percent of the ARC Branch's revenue. The Small Business 
Administration (SBA) (13 CFR 121.201) defines small agricultural 
producers as those having annual receipts of less than $750,000; small 
agricultural service firms as those whose annual receipts are less than 
$5 million; and small meat packers as those that have less than 500 
employees. No entity, small or large, is obligated to use voluntary 
QSVP services provided under the authority of AMA.
    AMS regularly reviews its user-fee-financed programs to determine 
if the fees are adequate to cover the cost of the services provided. 
The most recent review determined that the existing hourly rate that 
the ARC Branch charges for QSVP services would not generate sufficient 
revenues to recover operating costs for current and near-term periods 
while maintaining a 4-month operating reserve of $275,000. In FY 2004, 
the ARC Branch incurred a $330,000 operating loss; and without a fee 
increase, FY 2004 operating losses are projected to reach $421,000. 
These combined losses will deplete the ARC Branch's operating reserve 
and place the ARC Branch in an unstable financial position that will 
adversely affect its ability to provide QSVP services.
    While the ARC Branch has utilized existing automated information 
management systems for data collection, retrieval, dissemination, 
applicant billing, and disbursement of employee entitlements, the ARC 
Branch has continued to lose revenue due to the cost of providing QSVP 
services utilizing auditors classified at the GS-11/12 pay grade while 
charging a user-fee that is based on a lower GS-5/7/9 pay grade 
classification.
    The ARC Branch operating costs increased as a result of higher 
salaries associated with higher grade employees; congressionally 
mandated salary increases for all Federal Government employees in 2004 
and 2005; ongoing information system technology upgrades necessary to 
remain compatible with customer and Agency systems; inflation of non-
salary operating expenses; and office maintenance expenses.
    AMS estimates that this proposed action will provide the ARC Branch 
with an additional $420,000 for FY 2005. Of this $420,000, small 
businesses would pay an average of $878 more per year per applicant or 
a total of $273,000 of the total increase. This proposed fee increase 
coupled with a projected increase in revenue hours would increase total 
revenues by $420,000 per year and offset FY 2004 operating losses of 
$330,000. Currently, without a fee increase, the ARC Branch is 
projected to lose $420,000 in FY 2005. The proposed increase will 
create a 4-month operating reserve of $275,000, as required by the 
Agency.
    The proposed Part 62 includes sections on definitions; sections 
related to providing services, including availability and how to apply 
for services; and suspension, denial, or cancellation of service and 
other sections relating to fees. These sections are similar to, or the 
same as, provisions that currently apply to Quality Systems 
Verification Programs.

Paperwork Reduction Act

    This proposed rule contains submission and recordkeeping 
requirements subject to public comment and review by the Office of 
Management and Budget (OMB) under the Paperwork Reduction Act of 1995 
(PRA) (44 U.S.C. Chapter 35).
    OMB Number: 0581-0124.
    Expiration Date: October 31, 2006.
    Type of Request: Revision of currently approved collection.
    Abstract: The QSVP are voluntary, audit-based programs developed at 
the request of the livestock industry and other interested parties as a 
cost-effective alternative to conventional product certification. This 
proposed rule would permit the LS Program to carry out independent 
assessments of applicant's programs for any agricultural product or 
service within the scope of the LS Program. This action is necessary to 
provide continued, seamless, and efficient distribution of highly 
differentiated agricultural products and services to customers who 
require production and marketing process assessments by an authorized 
government entity. The information collection and recordkeeping 
requirements in this proposed rule are essential to maintaining these 
voluntary programs. Only authorized representatives of the USDA, 
including AMS, LS Program, ARC Branch staff use the collected 
information in the performance of their official duties.
    The AMA, as amended, authorizes the USDA to provide services that 
facilitate the marketing of agricultural products. Currently, the LS 
Program provides QSVP services for livestock, meat, and meat products, 
pursuant to 7 CFR part 54. This proposed rule would define QSVP 
services to include other agricultural products within the scope of the 
LS Program in a new part, part 62 to Title 7 of the Code of Federal 
Regulations.
    Applicants may request QSVP services through submission of the 
currently approved form LS-313 to the ARC Branch. This existing form 
requires the minimum information necessary to effectively carry out the 
requirements of the proposed rule including: firm name, address, 
telephone number, and other information necessary to identify the 
applicant, and other pertinent information necessary to determine if 
the firm is eligible to apply and receive QSVP services. Applicants are 
required to complete the form only when initially applying for QSVP 
service. There is no annual requirement for resubmission. The form can 
be supplied without data processing equipment or outside technical 
expertise. AMS estimates the one-time burden for submission of Form LS-
313 to average 0.200 hours (12 minutes) per applicant at $20.00 per 
hour. The total one-time burden if 50 applicants applied under this 
proposed rule is estimated to be $200.00.
    Applicants may obtain form LS-313 by (1) Contacting James L. Riva, 
Chief; USDA, AMS, LS, ARC Branch; STOP 0294, Room 2627-S; 1400 
Independence Ave., SW., Washington, DC 20250-0294; (2) downloading a 
printable version at the ARC Branch Web site: https://www.ams.usda.gov/
lsg/arc/audit.htm; or (3) accessing a Web-based version at the AMS 
Electronic Forms Web site: https://151.121.3.189/EManager/new.htm.
    Applicants may submit form LS-313 by (1) mail to: James L. Riva, 
Chief; USDA, AMS, LS, ARC Branch; STOP 0294, Room 2627-S, 1400 
Independence Avenue, SW., Washington, DC 20250-0248; (2) FAX to: (202) 
690-1038; or e-mail to: ARCBranch@usda.gov.

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    Under this proposed rule, applicants would be required to submit a 
cover letter and a complete copy of the applicant's program 
documentation when a request for service is made. This is a one-time 
requirement per service request. The PRA also requires the agency to 
measure the recordkeeping burden. The proposed rule would also require 
applicants to retain records and documents necessary to support the 
requested service for the period of at least one calendar year 
following the year the record was created and long enough to assess 
conformance of the product though the applicant's quality management 
system. Additionally, applicants must ensure that such records and 
documents are readily available and easily accessible. The 
recordkeeping burden is the amount of time needed to prepare, store, 
and maintain documents.
    Based on its experience with QSVP, AMS understands that applicants 
develop and maintain complete documentation of their programs as a 
normal business practice. AMS believes the cost burden associated with 
submission of complete program documentation to be limited to the time 
needed for the applicant to review the documentation for completeness 
and accuracy. AMS estimates this time to average 24 hours per applicant 
at $20.00 per hour for a total one-time burden per applicant of 
$480.00. The total one-time burden if 50 applicants applied under this 
proposed rule is estimated to be $24,000.
    Based on its experience, AMS believes that the documents and 
records required to be retained are normally retained by applicants as 
part of their normal business practices. However, if record keepers 
were compensated for their time, AMS estimates that the time required 
for each applicant to retain these records and documents in a manner 
required in the proposed rule to average 6 hours per year at $20.00 per 
hour for a total annual burden of $120.00 per applicant. Assuming that 
50 applicants were retained under this proposed rule, the total annual 
burden is estimated to be $6,000.
    (1) Application for Service form LS-313.
    Estimate of Burden: The proposal to expand the scope of the QSVP to 
include all agricultural products and services within the 
responsibility of the LS Program will increase the approved burden by 
1210 hours. Using the currently approved form LS-313, the public 
reporting burden for this proposed collection of information is 
estimated to average 0.20 hours (12 minutes) per response.
    Respondents: Livestock, meat industry, and other businesses that 
produce, process, or handle agricultural products or services.
    Estimated Number of Respondents: 50.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Number of Responses: 50.
    Estimated Total Annual Burden on Respondents: 10.00 hours.
    Estimated Total Cost: $200.00.
    (2) Review and Submission of Program Documentation.
    Estimate of Burden: Public reporting burden for this proposed 
collection of information is estimated to average 24 hours per 
respondent.
    Respondents: Livestock, meat industry, and other businesses that 
produce, process or handle agricultural products or services.
    Estimated Number of Respondents: 50.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Number of Responses: 50.
    Estimated Total Annual Burden on Respondents: 1200 hours.
    Estimated Total Cost: $24,000.
    Comments are invited on: (1) Whether the collection of information 
is necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility; (2) the 
accuracy of the agency's burden estimate of the collection of 
information including the validity of the methodology and assumptions 
used; (3) ways to enhance the quality, utility, and clarity of the 
information to be collected; and (4) ways to minimize the burden of the 
collection of information on those who are to respond, including 
through the use of appropriate automated, electronic, mechanical, or 
other technological collection techniques or other forms of information 
technology.
    Comments should reference OMB No. 0581-0124, the QSVP, and be sent 
to (1) Desk Officer for Agriculture, Office of Information and 
Regulatory Affairs, Office of Management and Budget, New Executive 
Office Building, 725 17th Street, NW., Room 725, Washington, DC 20503; 
or by e-mail to: OIRA--submissions@OMB.eop.gov and (2) James L. Riva, 
Chief; USDA, AMS, LS, ARC Branch; STOP 0294, Room 2627-S, 1400 
Independence Avenue, SW., Washington, DC 20250-0248; or FAX (202) 690-
1038; or e-mail ARCBranch@usda.gov. A comment to OMB is best assured of 
having its full effect if OMB receives it within 30 days of publication 
of this proposed rule.
    All comments will be posted on the Internet at https://
www.ams.usda.gov/lsg/rulemaking.htm and will be made available for 
public inspection in the above offices during regular business hours.
    A 30-day comment period is provided for interested persons to 
comment on this proposed rule. This comment period is deemed 
appropriate in order to implement this rule, if adopted, as soon as 
possible so that program costs are covered by revenue.
    All responses to this proposed rule will be summarized and included 
in the request for OMB approval. All comments will become a matter of 
public record.

List of Subjects

7 CFR Part 54

    Meats, Prepared meats, and Meat products.

7 CFR Part 62

    Food grades and standards, Food labeling, Meat and meat products.

    For the reasons set forth in the preamble, it is proposed that 
chapter 1 of title 7 of the Code of Federal Regulations be revised by 
amending part 54 and adding part 62 to read as follows:

PART 54--[AMENDED]

    1. The authority citation for part 54 continues to read as follows:

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


Sec.  54.4  [Amended]

    2. In Sec.  54.4, paragraph (5) is removed.
    3. Part 62 is added to read as follows:

PART 62--LIVESTOCK, MEAT, AND OTHER AGRICULTURAL COMMODITIES 
(QUALITY SYSTEMS VERIFICATION PROGRAMS)

Subpart A--Quality Systems Verification Programs

Definitions

Sec.
62.000 Meaning of terms.

Administration

62.100 Administrator.

Service

62.200 Services.
62.201 Availability of service.
62.202 How to apply for service.
62.203 How to withdraw service.
62.204 Authority to request service.
62.205 Conflict of interest.
62.206 Access to program documents and activities.
62.207 Official assessment.
62.208 Publication of QSVP assessment status.
62.209 Reassessment.

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62.210 Denial, suspension, or cancellation of service.
62.211 Appeals.
62.212 Official assessment reports.
62.213 Official identification.

Charges for Service

62.300 Fees and other costs for service.
62.301 Payment of fees and other charges.

Miscellaneous

OMB Control Number

62.400 OMB control number assigned pursuant to the Paperwork 
Reduction Act.
Subpart B--[Reserved]

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

Subpart A--Quality Systems Verification Programs

Definitions


Sec.  62.000  Meaning of terms.

    Words used in this Subpart in the singular form shall be deemed to 
impart the plural, and vice versa, as the case may demand. For the 
purposes of such regulations, unless the context otherwise requires, 
the following terms shall be construed, respectively, to mean:
    Administrator. The Administrator of the Agricultural Marketing 
Service (AMS), or any officer or employee of AMS to whom authority has 
heretofore been delegated or to whom authority may hereafter be 
delegated, to act in the Administrator's stead.
    Agricultural Marketing Service. The Agricultural Marketing Service 
of the U.S. Department of Agriculture.
    Applicant. Any individual or business with financial interest in 
QSVP services who has applied for service under this Part.
    Assessment. A systematic review of the adequacy of program or 
system documentation, or the review of the completeness of 
implementation of a documented program or system.
    Auditor. Person authorized by the Livestock and Seed Program to 
conduct official assessments.
    Branch. The Audit, Review, and Compliance Branch of the Livestock 
and Seed Program.
    Chief. The Chief of the ARC Branch, or any officer or employee of 
the Branch to whom authority has heretofore been delegated, or to whom 
authority may hereafter be delegated, to act in the Chief's stead.
    Conformance. A user's quality manual and supporting documentation.
    Deputy Administrator. The Deputy Administrator of the Livestock and 
Seed Program, or any officer or employee of the Livestock and Seed 
Program to whom authority has heretofore been delegated, or to whom 
authority may hereafter be delegated, to act in the Deputy 
Administrator's stead.
    Financially interested person. Any individual, partnership, 
corporation, other legal entity, or Government agency having a 
financial interest in the involved product or service.
    Livestock. Bovine, ovine, porcine, caprine, bison or class of 
Osteichthyes.
    Official mark. Official mark or other official identification means 
any form of mark or other identification, used under the regulations to 
show the conformance of products with applicable program requirements, 
or to maintain the identity of products for which service is provided 
under the regulations.
    Official memoranda or assessment reports. Official memorandum means 
any assessment report of initial or final record of findings made by an 
authorized person of services performed pursuant to the regulations.
    Products. Includes all agricultural commodities and services within 
the scope of the Livestock and Seed Program This includes livestock, 
meat, meat products, seed, feedstuffs, as well as processes involving 
the production of these products, agricultural product data storage, 
product traceability and identification.
    QSVP Procedures. Audit rules and guidelines set forth by the 
Agricultural Marketing Service regarding the development, 
documentation, and implementation of QSVP.
    Quality Manual. A collection of documents that describe the 
applicant's quality management system, as it applies to the requested 
service.
    Quality Systems Verification Programs (QSVP). A collection of 
voluntary, audit-based, user-fee programs that allow applicants to have 
program documentation and program processes assessed by AMS auditor(s) 
and other USDA officials under this Part.
    Regulations. The regulations in this Part.
    USDA. The U.S. Department of Agriculture.

Administration


Sec.  62.100  Administrator.

    The LS Program Deputy Administrator is charged with the 
administration of official assessments conducted according to the 
regulations in this Part and approved LS Program QSVP procedures.

Service


Sec.  62.200  Services.

    QSVP, under this regulation, provide applicants, the ability to 
have USDA assess documented processes or systems.
    (a) Assessment services provided under the regulations shall 
consist of:
    (1) A review of the adequacy of an applicant's quality manual 
against LS Program QSVP procedures, internationally recognized 
guidelines, or other requirements as approved by the LS Program;
    (2) An onsite assessment of the applicant's program to ensure 
implementation of provisions within the quality manual and the 
applicant's conformance with applicable program requirements and LS 
Program QSVP procedures; and
    (3) A reassessment of the applicant's program to ensure continued 
implementation of provisions within the quality manual and the 
applicant's conformance with program requirements and applicable LS 
Program QSVP procedures;
    (b) Developmental assistance in the form of training to explain LS 
Program QSVP procedures is available upon request.


Sec.  62.201  Availability of service.

    QSVP services under these regulations are available to 
international and domestic government agencies, private agricultural 
businesses and any finically interested person.


Sec.  62.202  How to apply for service.

    Applicants may apply for QSVP services by submitting the following 
information to the ARC Branch headquarters office at USDA, AMS, LSP, 
ARC Branch, 1400 Independence Avenue, SW., STOP 0294, Room 2627-S, 
Washington, DC, 20250-0294; by fax to: (202) 690-1038, or e-mail to: 
ARCBranch@usda.gov.
    (a) The original completed form LS-313, Application for Service;
    (b) A letter requesting QSVP services; and
    (c) A complete copy of the applicant's program documentation, as 
described in the LS Program QSVP procedures.


Sec.  62.203  How to withdraw service.

    Service may be withdrawn by the applicant at any time; provided 
that, the applicant notifies the ARC Branch in writing of his/her 
desire to withdraw the application for service and pays any expenses 
the Department has incurred in connection with such application.


Sec.  62.204  Authority to request service.

    Any person requesting service may be required to prove his/her 
financial interest in the product or service at the discretion of the 
Deputy Administrator.

[[Page 17615]]

Sec.  62.205  Conflict of interest.

    No USDA official shall review any program documentation or 
determine conformance of any documented process or system in which the 
USDA official has financial holdings.


Sec.  62.206  Access to program documents and activities.

    (a) The applicant shall make its products and program documentation 
available and easily accessible for assessment, with respect to the 
requested service. Auditors and other USDA officials responsible for 
maintaining uniformity and accuracy of service under the regulations 
shall have access to all parts of facilities covered by approved 
applications for service under the regulations, during normal business 
hours or during periods of production, for the purpose of evaluating 
products or processes. This includes products in facilities which have 
been or are to be examined for program conformance or which bear any 
official marks of conformance. This further includes any facilities or 
operation that is part of an approved program.
    (b) Documentation and records relating to an applicant's program 
must be retained for at least one calendar year following the calendar 
year during which the record was created.


Sec.  62.207  Official assessment.

    Official assessment of an applicant's program shall include:
    (a) Documentation assessment. Auditors and other USDA officials 
shall review the applicant's program documentation and issue finding of 
the review to the applicant.
    (b) Program assessment. Auditors and USDA officials shall conduct 
an onsite assessment of the applicant's program to ensure provisions of 
the applicant's program documentation have been implemented and conform 
to LS Program QSVP procedures.
    (c) Program Determination. Applicant's determined to meet or not 
meet LS Program QSVP procedures or the applicant's program requirements 
shall be notified of their program's approval or disapproval.
    (d) Corrective and/or preventative actions. Applicants may be 
required to implement corrective and/or preventative actions upon 
completion of assessment. After implementation of corrective and/or 
preventative actions, the applicant may request another assessment.


Sec.  62.208  Publication of QSVP assessment status.

    Approved programs shall be posted for public reference on the ARC 
Branch Web site: https://www.ams.usda.gov/lsg/arc/audit.htm. Such 
postings shall include:
    (a) Program name and contact information,
    (b) Products or services covered under the scope of approval,
    (c) Effective dates of approval, and
    (d) Control numbers of official assessments, as appropriate, and
    (e) Any other information deemed necessary by the Branch Chief.


Sec.  62.209  Reassessment.

    Approved programs are subject to periodic reassessments to ensure 
ongoing conformance with the LS Program QSVP procedures covered under 
the scope of approval. The frequency of reassessments shall be based on 
the LS Program QSVP procedures, or as determined by the Deputy 
Administrator.


Sec.  62.210  Denial, suspension, or cancellation of service.

    (a) QSVP services may be denied if an applicant fails to meet its 
program requirements, or conform to LS Program QSVP procedures, such 
as:
    (1) Adequately address any program requirement resulting in a major 
non-conformance or an accumulation of minor non-conformances that 
result in the assignment of a major non-conformance for the program.
    (2) Demonstrate capability to meet any program requirement 
resulting in a major non-conformance.
    (3) Present truthful and accurate information to any auditor or 
other USDA official; or
    (4) Allow access to facilities and records within the scope of the 
program.
    (b) QSVP services may be suspended if the applicant fails to meet 
its program requirements, or conform to LS Program QSVP procedures; 
such as failure to:
    (1) Adequately address any program requirement resulting in a major 
non-conformance;
    (2) Demonstrate capability to meet any program requirement 
resulting in a major non-conformance;
    (3) Follow and maintain it's approved program or QSVP procedures;
    (4) Provide corrective actions and correction as applicable in the 
timeframe specified;
    (5) Submit significant changes to and seek approval from the Chief 
prior to implementation of significant changes to an approved program;
    (6) Allow access to facilities and records within the scope of the 
approved program;
    (7) Accurately represent the eligibility of agricultural products 
or services distributed under an approved program;
    (8) Remit payment for QSVP services;
    (9) Abstain from any fraudulent or deceptive practice in connection 
with any application or request for service under the rule; or
    (10) Allow any auditor or other USDA official to perform their 
duties under the regulations of this Part.
    (c) QSVP services maybe be cancelled, an application may be 
rejected, or program assessment may be terminated if the Deputy 
Administrator or his designee determines that a nonconformance has 
remained uncorrected beyond a reasonable amount of time.


Sec.  62.211  Appeals.

    Appeals of adverse decisions under this Part, may be made in 
writing to the Livestock and Seed Program Deputy Administrator at STOP 
0249, Room 2092--South, 1400 Independence Avenue, SW., Washington, DC 
20250-0249. Appeals must be made within 30 days of receipt of adverse 
decision.
    (a) Procedure for Appeals. Actions under this subparagraph 
concerning decision of appeals of the Deputy Administrator shall be 
conducted in accordance with the Rule of Practice Governing Formal 
Adjudicatory Proceedings Instituted by the Secretary Under Various 
Statutes set forth at 7 CFR 1.130 through 1.151 and the Supplemental 
Rules of Practice in 7 CFR Part 50.
    (b) [Reserved]


Sec.  62.212  Official assessment reports.

    Official QSVP assessment reports shall be generated by the auditor 
at the conclusion of each assessment and a copy shall be provided to 
the applicant.


Sec.  62.213  Official identification.

    The following, as shown in figure 1, constitutes official 
identification to show product or services produced under an approved 
USDA, Process Verified Program (PVP):
[GRAPHIC] [TIFF OMITTED] TP07AP05.004

    (a) Products or services produced under an approved USDA, PVP may 
use the ``USDA Process Verified'' statement and the ``USDA Process 
Verified'' shield, so long as, both the statement

[[Page 17616]]

and shield are used in direct association with a clear description of 
the process verified points that have been approved by the Branch.
    (b) Use of the ``USDA Process Verified'' statement and the ``USDA 
Process Verified'' shield shall be approved in writing by Chief prior 
to use by an applicant.

Charges for Service


Sec.  62.300  Fees and other costs for service.

    Fees and other charges will be levied based on the following 
provisions:
    (a) Fees for service. Fees for QSVP services shall be based on the 
time required to provide service calculated to the nearest quarter hour 
period, including, but not limited to, official assessment time, travel 
time, and time required to prepare assessment reports. The hourly fee 
rate shall be $108 per hour.
    (b) Transportation costs. Applicants are responsible for paying 
actual travel costs incurred to provide QSVP services including but not 
limited to: mileage charges for use of privately owned vehicles, rental 
vehicles and gas, parking, tolls, and public transportation costs such 
as airfare, train, and taxi service.
    (c) Per diem costs. The applicant is responsible for paying per 
diem costs incurred to provide QSVP services away from the auditor's or 
USDA officials' official duty station(s). Per diem costs shall be 
calculated in accordance with existing travel regulations (41 CFR, 
subtitle F--Federal Travel Regulation System, chapter 301).
    (d) Other costs. When costs, other than those costs specified in 
paragraphs (a), (b), and (c) of this section, are involved in providing 
the QSVP services, the applicant shall be responsible for these costs. 
The amount of these costs shall be determined administratively by the 
Chief. However, the applicant will be notified of these costs before 
the service is rendered.


Sec.  62.301  Payment of fees and other charges.

    Fees and other charges for QSVP services shall be paid in 
accordance with the following provisions. Upon receipt of billing for 
fees and other charges, the applicant shall remit payment within 10 
business days by check, electronic funds transfer, draft, or money 
order made payable to USDA, AMS, in accordance with directions on the 
billing. Fees and charges shall be paid in advance if required by the 
auditor or other authorized USDA official.

Miscellaneous

OMB Control Number


Sec.  62.400  OMB control number assigned pursuant to the Paperwork 
Reduction Act.

    The information collection and recordkeeping requirements of this 
Part have been approved by OMB under 44 U.S.C. Chapter 35 and have been 
assigned OMB Control Number 0581-0124.

Subpart B--[Reserved]

    Dated: April 4, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-6957 Filed 4-6-05; 8:45 am]
BILLING CODE 3410-02-P