Proposed Amendments to Regulations Governing Voluntary Grading of Meats, Prepared Meats, Meat Products, Shell Eggs, Poultry Products, and Rabbit Products, 10998-11005 [2019-04600]

Download as PDF 10998 Proposed Rules Federal Register Vol. 84, No. 57 Monday, March 25, 2019 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. 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 Agricultural Marketing Service, USDA. ACTION: Proposed rule. AGENCY: 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 nonscheduled, 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 SUMMARY: VerDate Sep<11>2014 15:58 Mar 22, 2019 Jkt 247001 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 Julie.Hartley@ams.usda.gov. 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-forservice basis and are not subject to scalability based on the business size. Approximately 728 applicants subscribe to AMS’s voluntary, fee-forservice 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 PO 00000 Frm 00001 Fmt 4702 Sfmt 4702 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. E:\FR\FM\25MRP1.SGM 25MRP1 Federal Register / Vol. 84, No. 57 / Monday, March 25, 2019 / Proposed Rules 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 VerDate Sep<11>2014 15:58 Mar 22, 2019 Jkt 247001 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. Crossutilization continues to increase as more customers request services for more PO 00000 Frm 00002 Fmt 4702 Sfmt 4702 10999 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 asneeded basis. Services provided under part 54 currently use the terms ‘‘commitment’’ for services provided under an agreement and ‘‘noncommitment’’ 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 §§ 56.21 and 70.30 (proposed to be redesignated § 70.31) to standardize the application for service language with that found in § 54.6. In addition to language currently in § 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 § 54.6 (a). In this proposed rule, AMS proposes to further amend § 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 §§ 70.30 through 70.37 as §§ 70.29 through 70.36, respectively, and add § 70.37 Types of service. The proposed addition of § 70.37 would clarify and align the services AMS provides with § 56.28. The proposed amendments would revise §§ 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 E:\FR\FM\25MRP1.SGM 25MRP1 11000 Federal Register / Vol. 84, No. 57 / Monday, March 25, 2019 / Proposed Rules premium pay under authority of 5 U.S.C. chapter 55 and 5 CFR part 550. Proposed amendments would revise §§ 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 § 54.27(c) for scheduled and nonscheduled 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. Æ Currently: The facility is charged the commitment rate for 8 hours on the agreement. Æ 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. Æ Currently: The facility is charged the non-commitment rate for 8 hours. Æ 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 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). VerDate Sep<11>2014 15:58 Mar 22, 2019 Jkt 247001 holiday in excess of the hours stated on the agreement. The proposed amendments would revise §§ 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. Æ Currently: The facility is charged the resident regular rate for 8 hours on the agreement. Æ 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. Æ 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. Æ 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. Æ 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. Æ 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 §§ 54.27, 56.46, 56.52, 70.71, and 70.77 and include the specific rates charged to plants for scheduled and unscheduled services. PO 00000 Frm 00003 Fmt 4702 Sfmt 4702 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. Æ 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). Æ 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. Æ Currently: The facility is charged the overtime rate for all additional hours of service provided. Æ Proposed: The facility will be charged the unscheduled rate for all hours of service provided on the 2nd shift. E:\FR\FM\25MRP1.SGM 25MRP1 Federal Register / Vol. 84, No. 57 / Monday, March 25, 2019 / Proposed Rules 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. Æ Currently: The facility is charged the overtime rate for all hours of service provided by the additional grader. Æ 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 §§ 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: VerDate Sep<11>2014 15:58 Mar 22, 2019 Jkt 247001 PART 54—MEATS, PREPARED MEATS, AND MEAT PRODUCTS (GRADING, CERTIFICATION, AND STANDARDS) 1. The authority citation for 7 CFR part 54 continues to read as follows: ■ Authority: 7 U.S.C. 1621–1627. 2. Amend § 54.1 by revising the section heading and adding in alphabetical order a definition for ‘‘observed legal holiday’’ to read as follows: ■ § 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). * * * * * ■ 3. Revise § 54.6 to read as follows: § 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 PO 00000 Frm 00004 Fmt 4702 Sfmt 4702 11001 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. ■ 4. Amend § 54.27 by revising paragraph (c) to read as follows: § 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, E:\FR\FM\25MRP1.SGM 25MRP1 11002 Federal Register / Vol. 84, No. 57 / Monday, March 25, 2019 / Proposed Rules 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. * * * * * ■ 5. Revise § 54.28 to read as follows: § 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 6. The authority citation for 7 CFR part 56 continues to read as follows: ■ Authority: 7 U.S.C. 1621–1627. 7. Amend § 56.1 by adding in alphabetical order a definition for ‘‘observed legal holiday’’ to read as follows: ■ § 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). * * * * * ■ 8. Revise § 56.21 to read as follows: § 56.21 How application for service may be made; conditions of service. (a) Application. (1) Any person may apply for service with respect to VerDate Sep<11>2014 15:58 Mar 22, 2019 Jkt 247001 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. ■ 9. Revise § 56.28 to read as follows: § 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 PO 00000 Frm 00005 Fmt 4702 Sfmt 4702 unscheduled grading service. Shell eggs graded under unscheduled grading service are not eligible to be identified with the official grademarks shown in § 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 § 56.36 only when processed and graded under the supervision of a grader or quality assurance inspector as provided in § 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 § 56.39. ■ 10. Amend § 56.45 by revising paragraphs (a) and (b) to read as follows: § 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 §§ 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. * * * * * ■ 11. Amend § 56.46 by revising the section heading, and paragraphs (a) E:\FR\FM\25MRP1.SGM 25MRP1 Federal Register / Vol. 84, No. 57 / Monday, March 25, 2019 / Proposed Rules introductory text and (c) to read as follows: § 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. * * * * * ■ 12. Revise § 56.47 to read as follows: § 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 § 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. ■ 13. Amend § 56.52 by revising the section heading, introductory text, and paragraph (a) to read as follows: § 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 § 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 VerDate Sep<11>2014 15:58 Mar 22, 2019 Jkt 247001 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 § 56.30. The costs for completing the plant survey will be charged to the applicant on an unscheduled basis as described in § 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 § 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 PO 00000 Frm 00006 Fmt 4702 Sfmt 4702 11003 applicable hourly rates in § 56.46, plus actual travel expenses incurred by AMS. (3) A charge at the hourly rates specified in § 56.46, plus actual travel expenses incurred by AMS for intermediate surveys to firms without grading service in effect. * * * * * § 56.54 ■ [Removed and Reserved] 14. Remove and reserve § 56.54. PART 70—VOLUNTARY GRADING OF POULTRY PRODUCTS AND RABBIT PRODUCTS 15. The authority citation for part 70 continues to read as follows: ■ Authority: 7 U.S.C. 1621–1627. 16. Amend § 70.1 by adding in alphabetical order a definition for ‘‘observed legal holiday’’ to read as follows: ■ § 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). * * * * * § 70.30 ■ [Redesignated as § 70.29] 17. Redesignate § 70.30 as § 70.29. § 70.31 [Redesignated as § 70.30] 18. Redesignate § 70.31 as § 70.30 and revise it to read as follows: ■ § 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; E:\FR\FM\25MRP1.SGM 25MRP1 11004 Federal Register / Vol. 84, No. 57 / Monday, March 25, 2019 / Proposed Rules (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. §§ 70.32 through 70. 37 [Redesignated as §§ 70.31 through 70.36] 19. Redesignate §§ 70.32 through 70.37 as §§ 70.31 through 70.36, respectively. ■ 20. Add new § 70.37 to read as follows: ■ § 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 § 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 VerDate Sep<11>2014 15:58 Mar 22, 2019 Jkt 247001 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 § 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. ■ 21. Amend § 70.70 by revising paragraphs (a) and (b) to read as follows: 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. ■ 23. Revise § 70.72 to read as follows: § 70.70 § 70.76 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 §§ 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. * * * * * ■ 22. Amend § 70.71 by revising the section heading, introductory text; and paragraph (c) to read as follows: § 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 PO 00000 Frm 00007 Fmt 4702 Sfmt 4702 § 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 § 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. [Removed and Reserved] 24. Remove and reserve § 70.76. 25. Amend § 70.77 by revising the section heading, introductory text; and paragraph (a) to read as follows: ■ ■ § 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 § 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 § 70.34. The costs for completing the plant survey will be borne by the applicant on an unscheduled basis as described in § 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 E:\FR\FM\25MRP1.SGM 25MRP1 Federal Register / Vol. 84, No. 57 / Monday, March 25, 2019 / Proposed Rules 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 § 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 § 70.71 plus actual travel expenses incurred by AMS. (3) A charge at the hourly rates specified in § 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 VerDate Sep<11>2014 15:58 Mar 22, 2019 Jkt 247001 DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [REG–135671–17] RIN 1545–BO44 Partnership Transactions Involving Equity Interests of a Partner Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking. AGENCY: This document contains proposed regulations to amend final regulations that prevent a corporate partner from avoiding corporate-level gain through transactions with a partnership involving equity interests of the partner or certain related entities. These regulations affect partnerships and their partners. DATES: Comments and requests for a public hearing must be received by June 24, 2019. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG–135671–17), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG–135671– 17), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, DC 20224, or sent electronically, via the Federal eRulemaking Portal at http:// www.regulations.gov (IRS REG–135671– 17). FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Kevin I. Babitz, (202) 317–6852, or Mary Brewer, (202) 317–6975; concerning submission of comments or to request a public hearing, Regina L. Johnson at (202) 317–6901. SUPPLEMENTARY INFORMATION: SUMMARY: Background and Explanation of Provisions This notice of proposed rulemaking contains amendments to the Income Tax Regulations (26 CFR part 1) under section 337(d) of the Internal Revenue Code (Code) set forth in § 1.337(d)–3 (final regulations) that prevent a corporate partner from using a partnership to avoid recognition of corporate-level gain. The final regulations largely adopted proposed regulations (REG–149518–03) published in the Federal Register (80 FR 33451) on June 12, 2015 (2015 regulations) with minor, nonsubstantive clarifying changes in response to requests for PO 00000 Frm 00008 Fmt 4702 Sfmt 4702 11005 further certainty in the single comment letter received on the proposed regulations. See the Explanation of Provisions section of the preamble to TD 9833 (83 FR 26580 (June 8, 2018)) for a detailed discussion of each of the specific points raised in the comment letter received on the 2015 regulations. The rules set forth in this notice of proposed rulemaking contain substantive modifications to the final regulations relating to the definition of Stock of the Corporate Partner. Accordingly, the Treasury Department and the IRS determined it appropriate to publish these modifications in the form of new proposed regulations to afford the public the opportunity to submit additional comments. 1. Stock of the Corporate Partner: Attribution The final regulations apply to certain partnerships that hold stock of a Corporate Partner. For this purpose, a Corporate Partner is defined as a person that holds or acquires an interest in a partnership and that is classified as a corporation for federal income tax purposes. The final regulations define Stock of the Corporate Partner expansively to include stock and other equity interests, including warrants, other options, and similar interests, either in the Corporate Partner or in a corporation (referred to in this Background and Explanation of Provisions section as a Controlling Corporation) that controls the Corporate Partner within the meaning of section 304(c), except that section 318(a)(1) and (3) would not apply. Stock of the Corporate Partner also includes an interest in any entity to the extent that the value of the interest is attributable to Stock of the Corporate Partner. The final regulations adopted a definition of Stock of the Corporate Partner that was modified as compared to the definition in the regulations that the Treasury Department and the IRS proposed on December 15, 1992 (PS– 91–90, REG–208989–90, 1993–1 CB 919) (1992 proposed regulations). The final regulations broadened the definition of Stock of the Corporate Partner with respect to the relationship needed for a Controlling Corporation to be treated as controlling the Corporate Partner (using a modified section 304(c) standard instead of section 1504(a)) but also narrowed the definition, generally excluding sister corporations and subsidiary corporations of the Corporate Partner from being treated as Controlling Corporations. More specifically, the final regulations define Stock of a Corporate Partner by including stock and other E:\FR\FM\25MRP1.SGM 25MRP1

Agencies

[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]


========================================================================
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 
Julie.Hartley@ams.usda.gov.

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