Amendments to Quality Systems Verification Programs and Conforming Changes, 78057-78062 [2016-25690]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 81, Number 215 (Monday, November 7, 2016)]
[Proposed Rules]
[Pages 78057-78062]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25690]


========================================================================
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. 81, No. 215 / Monday, November 7, 2016 / 
Proposed Rules

[[Page 78057]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 56, 62, and 70

[Doc. # AMS-LPS-15-0057]


Amendments to Quality Systems Verification Programs and 
Conforming Changes

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Agricultural Marketing Service (AMS) proposes to amend its 
regulations to better reflect the current needs of Quality Systems 
Verification Program (QSVP) activities and to implement changes created 
by the merger of the AMS Livestock and Seed Program and the AMS Poultry 
Programs. These proposed changes include amending the Livestock, Meat, 
and Other Agricultural Commodities QSVP to expand the commodities under 
the QSVP to include those authorized under the Agricultural Marketing 
Act of 1946 (hereafter referred to as ``the Act''), remove reference to 
``Livestock, Meat, and Other Commodities'' in the title, more clearly 
identify and define the types of programs and services offered under 
QSVP, and make other technical and administrative changes. 
Simultaneously, AMS proposes to make conforming changes to the 
regulations pertaining to the Voluntary Grading of Shell Eggs and 
Voluntary Grading of Poultry Products and Rabbit Products to remove 
references to audit activities.

DATES: Comments must be received by January 6, 2017. Pursuant to the 
Paperwork Reduction Act, comments on the information collection burden 
that would result from this rulemaking must be received by January 6, 
2017.

ADDRESSES: Comments should be submitted 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-LPS-15-0057, the date of submission, 
and the page number of this issue of the Federal Register. Comments may 
also be submitted to: Jeffrey Waite, Branch Chief, Auditing Services 
Branch, Quality Assessment Division; Livestock, Poultry, and Seed 
Program, Agricultural Marketing Service, U.S. Department of 
Agriculture; Room 3932S, STOP 0258, 1400 Independence Avenue SW.; 
Washington, DC 20250-0258. Comments will be made available for public 
inspection at the above address during regular business hours or 
electronically at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Jeffrey Waite, Branch Chief, Auditing 
Services Branch, Quality Assessment Division; Livestock, Poultry, and 
Seed Program, Agricultural Marketing Service, U.S. Department of 
Agriculture; Room 3932S, STOP 0258, 1400 Independence Avenue SW; 
Washington, DC 20250-0258; telephone (202) 720-4411; or email to 
jeffrey.waite@ams.usda.gov.

SUPPLEMENTARY INFORMATION: 

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
This rulemaking has been determined to be not significant for purposes 
of Executive Order 12866 or Executive Order 13563. Accordingly, the 
Office of Management and Budget (OMB) has waived the review process.

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 
would not have significant Tribal implications.

Regulatory Flexibility Act

    AMS has determined that this proposed rule will not have a 
significant impact on a substantial number of small entities, as 
defined by the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), 
because the services are voluntary and provided on a fee-for-service 
basis and are not subject to scalability based on the business size. 
The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions so small businesses will not be 
unduly or disproportionately burdened. As such, these changes will not 
impose a significant impact on applicants requesting service under the 
program.
    Currently, approximately 950 applicants subscribe to AMS' 
voluntary, fee-for-services that are subject to the requirements of 
this regulation. The U.S. Small Business Administration's Table of 
Small Business Size Standards matched to the North American Industry 
Classification System Codes 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 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 does not collect information 
about the size of the business. However, based on working knowledge of 
these operations, AMS estimates that roughly 25 percent of current 
applicants may be classified as small entities. It is not anticipated 
that this action would impose additional costs to applicants, 
regardless of size. Current applicants will not be required to provide 
any additional information to receive service. The effects of this 
proposed rule are not expected to be disproportionately greater or less 
for small applicants than for larger applications. 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.

[[Page 78058]]

    USDA has not identified any relevant federal rules that duplicate, 
overlap, or conflict with this rulemaking.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), this proposed rule will not change the information 
collection and recordkeeping requirements previously approved, and will 
not impose additional reporting or recordkeeping burden on users of 
these voluntary services; however, the overall reporting and 
recordkeeping burden would increase due to the anticipated increase in 
number of respondents.
    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 0581-0128.
    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, 62, and 
70.
    In the past fiscal year, AMS' Livestock, Poultry, and Seed Program 
(LPS) has received approximately 50 inquiries related to the 
verification of non-genetically engineered products. Of these 
inquiries, 72 percent identified with industries outside the scope of 
LPS commodities, including the manufacture of dairy, fruits, 
vegetables, grains, wood products, and food and feed supplements; 8 
percent identified with current industries serviced by LPS (meat and 
poultry manufacturing or processing, laboratories, feed manufactures); 
and 20 percent were identified as a service provider or an association 
not directly related to a service category. AMS does not expect the 
last group to submit an application for service; thus, the group was 
not included as a potential applicant.
    USDA has considered the reporting and recordkeeping burden on 
applicants under this program. Currently, applicants are required to 
complete an application for service and submit documentation. 
Recordkeeping requirements would remain the same, though the overall 
burden is expected to increase due to an increase in applications. As 
previously stated, of approximately 50 inquiries for an existing 
service received by LPS, approximately three-fourths of these inquiries 
represented new commodities, which could potentially increase the 
overall reporting and recordkeeping burden. Accordingly, if the 
proposed rule is adopted, and if two-thirds of the inquirers seek 
service, then LPS estimates the number of respondents will increase by 
25, thereby increasing the overall reporting and recordkeeping burden 
by 602.50 hours, from 1205.80 hours to 1808.30 hours annually.
    Since this action proposes to expand the scope of covered 
commodities, which is expected to increase the number of respondents, 
the already approved OMB 0158-0128 must be revised to reflect the 
increased reporting and recordkeeping burden. Therefore, AMS will 
submit a Justification for Change to OMB for approval to increase these 
burden hours to OMB number 0158-0128.
    A 60-day comment period is provided to allow interested persons an 
opportunity to respond to this proposal. All written comments received 
will be considered before a final determination is made on this matter.

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. 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 proposed rule.

Civil Rights Review

    AMS has considered the potential civil rights implications of this 
proposed 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 does not require affected entities to relocate or alter 
their operations in ways that could adversely affect such persons or 
groups. Further, this proposed rule will 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.

Background and Proposed Revisions

    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, changing 
domestic and international marketing practices, and new technology. AMS 
provides impartial verification services that ensure agricultural 
products meet specified requirements. These services include AMS' 
grading program, which verifies that product meets USDA grade 
standards. In addition, AMS provides direct certification of products 
in the facilities that manufacture them. 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.'' These services are voluntary, with users 
paying for the cost of the requested service.
    Over time, industry began to request AMS verification of factors 
that were not apparent through an examination of the livestock or 
products at a processing facility. Industry desired the ability to 
market factors related to raising of the livestock, such as feeding 
regimen, in relation to the resulting products, and to do so with 
assurance to their customers.
    To accommodate these requests for verification, AMS began 
conducting audits of livestock production facilities as a part of its 
third-party verification services. Ultimately, in 2001, AMS developed 
the QSVP, a suite of audit-based programs that can provide confidence 
that process points, such as livestock feeding regimen, are being 
adhered to at the farm or ranch before the livestock are processed and 
enter commerce as a meat product with an associated marketing claim.
    The USDA Process Verified Program (PVP) is one program under QSVP. 
PVP provides producers and marketers of livestock, seed products, and 
poultry products a way to assure customers of their ability to provide 
consistent quality products by having written production and 
manufacturing processes confirmed through independent, third-party 
audits. Under PVP, companies outline their own specific requirements, 
and AMS ensures adherence to those processes via routine audits. This 
is in contrast to other QSVP services offered by AMS, such as the 
Quality Systems Assessment Program (QSA), which have program

[[Page 78059]]

requirements outlined by AMS or a party other than the producers or 
marketer. For example, most of AMS' QSVP audit activities fall under 
the category of Export Verification activities, which are based on 
government-to-government agreements with international trading partners 
regarding specific foreign market requirements.
    Several factors triggered AMS' review of the regulations describing 
QSVP activities. First, an organizational merger in 2013 combined the 
Livestock and Seed Program and Poultry Programs to create the 
Livestock, Poultry, and Seed (LPS) Program within AMS. Prior to the 
merger, both Programs administered parallel QSVP services to their 
respective industries. These activities were carried out under 7 CFR 
part 62 for livestock, meat, and related commodities and under 7 CFR 
part 56 and 7 CFR part 70 for shell eggs and poultry industries, 
respectively.
    Currently, all QSVP services are delivered by the same management 
unit and operate by the same procedures (e.g., application process and 
audit process), and audits are in large measure conducted by the same 
personnel. Therefore, AMS proposes to remove any references to audit 
and verification activities contained in 7 CFR parts 56 and 70 and 
incorporate the commodities currently covered in those parts (i.e., 
shell eggs and poultry) into 7 CFR part 62.
    Because 7 CFR part 62 accurately describes the process by which 
these services are provided, AMS is proposing to amend the definition 
of products describing the commodities covered under voluntary QSVP 
services to include products authorized by the Act. Rather than 
limiting the product type to an individual program within AMS, AMS 
believes it is more appropriate to expand the definition of products to 
efficiently manage the QSVP, including the PVP. AMS seeks to maintain 
uniformity, transparency, and efficiency of service delivery of the 
QSVP, including the PVP. Without expanding the definition of products, 
AMS would be required to establish and maintain duplicate programs in 
each commodity area that would essentially carry out the same functions 
in regard to delivering the QSVP, including the PVP.
    Other changes proposed are administrative in nature. For example, 
because AMS is proposing to expand the scope of commodities that 
companies can voluntary have verified by AMS under a QSVP, AMS is also 
proposing to amend the title of the regulations to remove limiting 
references to ``livestock and meat.'' Additionally, the USDA Office of 
the Inspector General (OIG) completed an audit in 2015 of the PVP and 
recommended that AMS take additional steps to unify the program, as it 
was delivered under the same heading.
    Additional administrative changes are necessary to reflect the 
current terminology and organizational structure of AMS. These 
amendments include changing the name of the Program to reflect the 
merger of the Livestock and Seed Program and Poultry Programs into the 
Livestock, Poultry, and Seed Program. Subsequently, LPS' Quality 
Assessment Division was created to oversee the Audit Services Branch, 
Grading Services Branch, and Standardization Branch. The Audit Services 
Branch replaced the Audit, Review, and Compliance Branch of the 
Livestock and Seed Program and incorporated auditing services that were 
part of the Grading Branch of Poultry Programs. Certain managerial 
titles were also updated with the merger: a Director was established, 
along with an Audit Services Branch Chief.

List of Subjects

7 CFR Part 56

    Grading of shell eggs, Inspections, Marketing practices, Standards.

7 CFR Part 62

    Inspections, Marketing practices, Quality Systems Verification, 
Standards.

7 CFR Part 70

    Inspections, Marketing practices, Standards, Voluntary Grading of 
Poultry Products and Rabbit Products.

    For the reasons set forth in the preamble, AMS proposes to amend 7 
CFR parts 56, 62, and 70 as follows:

PART 56--VOLUNTARY GRADING OF SHELL EGGS

0
1. The authority citation for 7 CFR part 56 continues to read as 
follows:

    Authority:  7 U.S.C. 1621-1627.
0
2. Amend Sec.  56.1 by:
0
a. Removing the paragraph containing the term and definition for 
Auditing services;
0
b. Adding in alphabetical order definitions for Branch and Chief;
0
c. Removing the definition for Chief of the Grading Branch;
0
d. Adding in alphabetical order a definition for Division; and
0
 e. Revising the definitions of Official standards, United States 
Standards for Quality of Individual Shell Eggs, and United States 
Standards, Grades, and Weight Classes for Shell Eggs (AMS 56).
    The additions and revisions read as follows:


Sec.  56.1  Meaning of words and terms defined.

* * * * *
    Branch means the Grading Services Branch for the Quality 
Assessment Division.
* * * * *
    Chief means the Chief of the Grading Services Branch for the 
Quality Assessment Division.
* * * * *
    Division means the Quality Assessment Division of the Livestock, 
Poultry, and Seed Program.
* * * * *
    Official standards means the official U.S. standards grades, and 
weight classes for shell eggs maintained by and available from the 
Livestock, Poultry, and Seed Program.
* * * * *
    United States Standards for Quality of Individual Shell Eggs 
means the official U.S. Standards, Grades, and Weight Classes for 
Shell Eggs (AMS 56) that are maintained by and available from the 
Livestock, Poultry, and Seed Program.
* * * * *
    United States Standards, Grades, and Weight Classes for Shell 
Eggs (AMS 56) means the official U.S. standards, grades, and weight 
classes for shell eggs that are maintained by and available from the 
Livestock, Poultry, and Seed Program.
* * * * *


Sec.  56.28  [Amended]

0
3. Amend Sec.  56.28 by removing paragraph (d).
0
4. Amend Sec.  56.46 by revising paragraph (a), revising paragraphs 
(b)(1)(i) through (iii), and removing paragraph (d).
    The revisions read as follows:


Sec.  56.46  On a fee basis.

    (a) Unless otherwise provided in this part, the fees to be charged 
and collected for any service performed, in accordance with this part, 
on a fee basis shall be based on the applicable 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:
    (1) Regular rate. The total AMS grading personnel direct pay 
divided by direct hours, which is then multiplied by the next year's 
percentage of cost of living increase, plus the benefits rate, plus the 
operating rate, plus the allowance for bad debt rate. If applicable, 
travel expenses may also be added to the cost of providing the service.
    (2) Overtime rate. The total AMS grading personnel direct pay 
divided by direct hours, which is then multiplied by the next year's 
percentage of cost of living increase and then multiplied by 1.5 plus 
the benefits rate, plus the

[[Page 78060]]

operating rate, plus an allowance for bad debt. If applicable, travel 
expenses may also be added to the cost of providing the service.
    (3) Holiday rate. The total AMS grading personnel direct pay 
divided by direct hours which is then multiplied by the next year's 
percentage of cost of living increase and then multiplied by 2, plus 
benefits rate, plus the operating rate, plus an allowance for bad debt. 
If applicable, travel expenses may also be added to the cost of 
providing the service.
    (b)(1) * * *
    (i) Benefits rate. The total AMS grading direct benefits costs 
divided by the total hours (regular, overtime, and holiday) worked, 
which is then multiplied by the next calendar year's percentage cost of 
living increase. Some examples of direct benefits are health insurance, 
retirement, life insurance, and Thrift Savings Plan (TSP) retirement 
basic and matching contributions.
    (ii) Operating rate. The total AMS grading operating costs divided 
by total hours (regular, overtime, and holiday) worked, which is then 
multiplied by the percentage of inflation.
    (iii) Allowance for bad debt rate. Total AMS grading allowance for 
bad debt divided by total hours (regular, overtime, and holiday) 
worked.
* * * * *
0
5. Amend Sec.  56.61 by revising paragraph (b) to read as follows:


Sec.  56.61  Where to file an appeal.

* * * * *
    (b) All other appeal requests. Any interested party who is not 
satisfied with the determination of the class, quality, quantity, or 
condition of product which has left the official plant where it was 
graded or which was graded other than in an official plant may request 
an appeal grading by filing such request with the regional director in 
the area where the product is located or with the Chief.
0
6. Amend Sec.  56.64 by revising paragraph (c) to read as follows:


Sec.  56.64  Who shall perform the appeal.

* * * * *
    (c) Whenever practical, an appeal grading shall be conducted 
jointly by two graders. The assignment of the grader(s) who will make 
the appeal grading requested under Sec.  56.61(b) shall be made by the 
regional director or the Chief.

PART 62--QUALITY SYSTEMS VERIFICATION PROGRAMS

0
7. The authority citation for 7 CFR part 62 continues to read as 
follows:

    Authority:  7 U.S.C. 1621-1627.
0
8. Amend part 62 by revising the heading to read as set forth above and 
revising all references to ``Livestock and Seed Program'' to read 
``Livestock, Poultry, and Seed Program,'' and revise all references to 
``LS Program'' to read ``LPS Program'' wherever they occur.

Subpart A--Quality Systems Verification Programs

0
9. Amend part 62 by revising the heading to Subpart A to read as set 
forth above.
0
10. Amend Sec.  62.000 by:
0
a. Removing the definitions for Branch and Chief;
0
b. Revising the definition of Conformance;
0
c. Adding in alphabetical order definitions for Division and Division 
Director;
0
d. Removing the definition of Livestock; and
0
e. Revising the definitions for Products, QSVP Procedures, and Quality 
Systems Verification Programs (QSVP).
    The revisions and additions read as follows:


Sec.  62.000  Meaning of terms.

* * * * *
    Conformance. The fulfillment of criteria or a requirement.
* * * * *
    Division. The Quality Assessment Division (QAD) of the 
Livestock, Poultry, and Seed Program.
    Division Director. The Director of QAD, or any officer or 
employee of the Livestock, Poultry, and Seed Program to whom 
authority has been delegated, or to whom authority may be delegated, 
to act in the Director's stead.
* * * * *
    Products. All agricultural commodities and services within the 
scope of the Agricultural Marketing Act of 1946, et seq.
    QSVP Procedures. The requirements and guidelines set forth by 
the Agricultural Marketing Service regarding the development, 
documentation, and implementation of QSVP.
* * * * *
    Quality System Verification Programs (QSVP). A collection of 
voluntary, audit-based, user-fee programs that allow applicants to 
have program documentation and program processes assessed by an AMS 
auditor.
* * * * *


Sec.  62.200  [Amended]

0
11. Amend Sec.  62.200 by removing paragraph (b).
0
12. Revise Sec.  62.202 to read as follows:


Sec.  62.202  How to apply for service.

    Applicants may apply for QSVP services by submitting the following 
information to the QAD office by email to QAD.Auditservice@ams.usda.gov 
or by mail to: USDA, AMS, LPS, QAD, 1400 Independence Avenue SW., STOP 
0258, Washington, DC 20250-0258.
    (a) A completed LPS-109, Application for Service;
    (b) A letter requesting QSVP services; and
    (c) A complete copy of the applicant's program documentation, as 
described in the QSVP procedures.
0
13. Revise Sec.  62.203 to read as follows:


Sec.  62.203  How to withdraw service.

    Service may be withdrawn by the applicant at any time, provided 
that the applicant notifies QAD 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.
0
14. Amend Sec.  62.207 by revising paragraphs (b) and (c) to read as 
follows:


Sec.  62.207  Official assessment.

* * * * *
    (b) Program assessment. Auditors and USDA officials shall conduct 
an on-site assessment of the applicant's program to ensure provisions 
of the applicant's program documentation have been implemented and 
conform to QSVP procedures.
    (c) Program determination. Applicants determined to meet or not 
meet QSVP procedures or the applicant's program requirements shall be 
notified of their program's approval or disapproval.
* * * * *
0
15. Amend Sec.  62.208 by revising the introductory text and paragraphs 
(a), (b), and (e) to read as follows:


Sec.  62.208  Publication of QSVP assessment status.

    Approved programs shall be posted for public reference on the 
agency Web site. Such postings shall include:
    (a) Applicant name and contact information; and
    (b) Products, services, process points, or standards included in 
the scope of approval.
* * * * *
    (e) Any other information deemed necessary by the Director.
0
16. Revise Sec.  62.209 to read as follows:


Sec.  62.209  Reassessment.

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

[[Page 78061]]

0
17. Amend Sec.  62.210 by revising paragraph (b) introductory text, 
(b)(5), and (c) to read as follows:


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

* * * * *
    (b) QSVP services may be suspended if the applicant fails to 
maintain its program requirements, or conform to LPS Program QSVP 
procedures; such as failure to:
* * * * *
    (5) Submit significant changes to an approved program and seek 
approval from the Program Manager or Program Review Committee, as 
appropriate, prior to implementation of significant changes to an 
approved program;
* * * * *
    (c) QSVP services may be cancelled, an application may be rejected, 
or program assessment may be terminated if the Director or his designee 
determines that a nonconformance has remained uncorrected beyond a 
reasonable amount of time.
0
18. In Sec.  62.211, revise the introductory text and paragraph (a) to 
read as follows:


Sec.  62.211  Appeals.

    Appeals of adverse decisions under this part, may be made in 
writing to the Director at 1400 Independence Avenue SW.; Room 3932-S, 
STOP 0258; Washington, DC 20250-0201. Appeals must be made within 30 
days of receipt of adverse decision.
    (a) Procedure for appeals. Actions under this paragraph concerning 
decision of appeals of the Director shall be conducted in accordance 
with the Rules 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.
* * * * *
0
19. Revise Sec.  62.213 to read as follows:


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] TP07NO16.002

    (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 each is used in direct association with a 
clear description of the process verified points approved by the 
Division.
    (b) The USDA Process Verified shield must replicate the form and 
design of the example in Figure 1 and must be printed legibly and 
conspicuously:
    (1) On a white background with a gold trimmed shield, with the term 
``USDA'' in white overlaying a blue upper third of the shield, the term 
``PROCESS'' in black overlaying a white middle third of the shield, and 
term ``VERIFIED'' in white overlaying a red lower third of the shield.
    (2) On a white or transparent background with a black trimmed 
shield, with the term ``USDA'' in white overlaying a black upper third 
of the shield, the term ``PROCESS'' in black overlaying a white middle 
third of the shield, and the term ``VERIFIED'' in white overlaying a 
black lower third of the shield.
    (c) Use of the ``USDA Process Verified'' statement and the ``USDA 
Process Verified'' shield shall be approved in writing by the Director 
prior to use by an applicant.
0
20. Amend Sec.  62.300 by revising paragraph (e) to read as follows:


Sec.  62.300  Fees and other costs of service.

* * * * *
    (e) Other costs. When costs, other than those costs specified in 
paragraphs (a) through (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 
Division. However, the applicant will be notified of these costs before 
the service is rendered.
0
21. Revise Sec.  62.400 to read as follows:


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 0581-0128.

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

0
22. The authority citation for part 70 continues to read as follows:

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

0
23. Amend Sec.  70.1 by:
0
a. Removing the definition for Auditing services;
0
 b. Adding in alphabetical order definitions for Branch and Chief;
0
c. Removing the definition of Chief of the Grading Branch; and
0
d. Adding in alphabetical order a definition for Division.
    The additions read as follows:


Sec.  70.1  Definitions.

* * * * *
    Branch means the Grading Services Branch for the Quality 
Assessment Division.
* * * * *
    Chief means the Chief of the Grading Services Branch for the 
Quality Assessment Division.
    Division means the Quality Assessment Division of the Livestock, 
Poultry, and Seed Program, AMS.
* * * * *


Sec.  70.4  [Amended]

0
24. Amend Sec.  70.4 by removing paragraph (c).
0
25. Amend Sec.  70.6 by revising paragraph (a) to read as follows:


Sec.  70.6  OMB control number.

    (a) Purpose. The collecting of information requirements in this 
part has been approved by the Office of Management and Budget (OMB) and 
assigned OMB control number 0581-0128.
* * * * *
0
26. Amend Sec.  70.71 by revising the introductory text and paragraphs 
(a) and (b)(1)(i) through (iii) and by removing paragraph (d).
    The revisions read as follows:


Sec.  70.71  On a fee basis.

* * * * *
    (a) For each calendar year, AMS will calculate the rate for grading 
services, per hour per program employee using the following formulas:
    (1) Regular rate. The total AMS grading personnel direct pay 
divided by direct hours, which is then multiplied by the next year's 
percentage of cost of living increase, plus the benefits rate, plus the 
operating rate, plus the allowance for bad debt rate. If applicable, 
travel expenses may also be

[[Page 78062]]

added to the cost of providing the service.
    (2) Overtime rate. The total AMS grading personnel direct pay 
divided by direct hours, which is then multiplied by the next year's 
percentage of cost of living increase and then multiplied by 1.5 plus 
the benefits rate, plus the operating rate, plus an allowance for bad 
debt. If applicable, travel expenses may also be added to the cost of 
providing the service.
    (3) Holiday rate. The total AMS grading personnel direct pay 
divided by direct hours, which is then multiplied by the next year's 
percentage of cost of living increase and then multiplied by 2, plus 
benefits rate, plus the operating rate, plus an allowance for bad debt. 
If applicable, travel expenses may also be added to the cost of 
providing the service.
    (b)(1) * * *
    (i) Benefits rate. The total AMS grading direct benefits costs 
divided by the total hours (regular, overtime, and holiday) worked, 
which is then multiplied by the next calendar year's percentage cost of 
living increase. Some examples of direct benefits are health insurance, 
retirement, life insurance, and Thrift Savings Plan (TSP) retirement 
basic and matching contributions.
    (ii) Operating rate. AMS' grading total operating costs divided by 
total hours (regular, overtime, and holiday) worked, which is then 
multiplied by the percentage of inflation.
    (iii) Allowance for bad debt rate. Total AMS grading allowance for 
bad debt divided by total hours (regular, overtime, and holiday) 
worked.
* * * * *
0
27. Amend Sec.  70.101 by revising paragraph (b) to read as follows:


Sec.  70.101  Where to file an appeal.

* * * * *
    (b) All other appeal requests. Any interested party who is not 
satisfied with the determination of the class, quality, quantity, or 
condition of product which has left the official plant where it was 
graded, or which was graded other than in an official plant, may 
request an appeal grading by filing such request with the regional 
director in the area where the product is located or with the Chief.
0
28. Amend Sec.  70.104 by revising paragraph (c) to read as follows:


Sec.  70.104  Who shall perform the appeal.

* * * * *
    (c) Whenever practical, an appeal grading shall be conducted 
jointly by two graders. The assignment of the grader(s) who will make 
the appeal grading requested under Sec.  70.101(b) shall be made by the 
regional director or the Chief.

    Dated: October 19, 2016.
Elanor Starmer,
Administrator, Agricultural Marketing Service.
[FR Doc. 2016-25690 Filed 11-4-16; 8:45 am]
 BILLING CODE 3410-02-P