Voluntary Grading of Meats, Prepared Meats, Meat Products, Shell Eggs, Poultry Products, and Rabbit Products, 49637-49644 [2019-20123]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 84, Number 184 (Monday, September 23, 2019)]
[Rules and Regulations]
[Pages 49637-49644]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20123]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 54, 56, and 70

[Doc. #AMS-LP-18-0095]


Voluntary Grading of Meats, Prepared Meats, Meat Products, Shell 
Eggs, Poultry Products, and Rabbit Products

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The U.S. Department of Agriculture's (USDA) Agricultural 
Marketing Service (AMS) is amending its regulations governing the 
voluntary grading and certification relating to meats, prepared meats, 
meat products, shell eggs, poultry products, and rabbit products. 
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. Amendments will 
standardize and align billing practices for services provided by the 
Livestock and Poultry Program.

DATES: This rule is effective October 1, 2019.

FOR FURTHER INFORMATION CONTACT: Julie Hartley, Chief, Business 
Operations Branch, Quality Assessment Division; Livestock and Poultry 
Program, Agricultural Marketing Service, U.S. Department of 
Agriculture; Room 3932-S, STOP 0258, 1400 Independence Avenue SW, 
Washington, DC 20250-0258; telephone (202) 720-7316; or email to 
[email protected].

SUPPLEMENTARY INFORMATION:

Executive Orders 12866 and 13771

    This action does 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 it will 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 will 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 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

[[Page 49638]]

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 part 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 action.

Congressional Review Act

    Pursuant to the Congressional Review Act [5 U.S.C. 801 et seq.], 
the Office of Information and Regulatory Affairs designated this rule 
as not a major rule, as defined by 5 U.S.C. 804(2).

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 regulation will not 
have substantial and direct effects on Tribal governments and will not 
have significant Tribal implications.

Executive Order 12988

    This action has been reviewed under Executive Order 12988, Civil 
Justice Reform and is not intended to have retroactive effect. The Act 
prohibits states or political subdivisions of a state to impose any 
requirement that is in addition to, or inconsistent with, any 
requirement of the Act. There are no civil justice implications 
associated with this 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 action will not require 
affected entities to relocate or alter their operations in ways that 
could adversely affect such persons or groups. Further, this action 
will not deny any persons or groups the benefits of the program or 
subject any persons or groups to discrimination.

Executive Order 13132

    This action 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 action.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
chapter 35), this action will 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 part 54--Meats, 
Prepared Meats and Meat Products (Grading, Certification, and 
Standards); 7 CFR part 56--Voluntary Grading of Shell Eggs; and 7 CFR 
part 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. These amendments will standardize the 
billing rules, remove customer confusion, and increase efficiency in 
billing administration allowing QAD to bill a customer for multiple 
services and products with one set of rules.

Standardize Language

    Amendments will standardize language for providing service under an

[[Page 49639]]

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 previously used the 
terms ``resident'' for services provided under an agreement and ``non-
resident'' for services provided on an as-needed basis. Amended 
language for all parts will be ``scheduled'' for services provided 
under an agreement and ``unscheduled'' for services provided on an as-
needed basis.
    AMS will amend Sec. Sec.  56.21 and 70.30 (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 final rule in the Federal Register on September 16, 
2019 (84 FR 48551), to amend 7 CFR part 54, AMS-LP-16-0080. The 
amendments in AMS-LP-16-0080 would add items 5 and 6 to Sec.  54.6(a). 
AMS will 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. 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.
    In addition to amendments in the proposed rule for Amendments to 
the Regulations Governing Voluntary Grading of Meats, Prepared Meats, 
Meat Products, Shell Eggs, Poultry Products, and Rabbit Products 
published in the Federal Register (84 FR 10998) on March 25, 2019, item 
Sec.  54.6(c) Termination of Service has been added to the regulatory 
language. This item was unintentionally omitted in the proposed rule 
and was previously Sec.  54.6(c)(3), in the final rule published in the 
Federal Register to amend 7 CFR part 54, AMS-LP-16-0080.
    AMS will 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 addition of Sec.  70.37 will clarify and align the 
services AMS provides with Sec.  56.28.
    The amendments will 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

    Amendments will align holiday billing rules for all services with 
established policies for employee premium pay under authority of 5 
U.S.C. chapter 55 and 5 CFR part 550. Amendments will revise Sec. Sec.  
54.1, 56.1, and 70.1 by adding the definition of observed legal 
holidays. The addition of observed legal holidays will establish the 
``in lieu of holiday'' for a holiday that falls on a Saturday or 
Sunday. Amendments will also charge the holiday rate for hours worked 
on observed legal holidays.
    Previously, services covered under part 54 were billed the holiday 
rate only on the actual holiday when worked, and if the actual holiday 
was not worked, no charge was applied. Additionally, holidays that fall 
on Saturday or Sunday but were observed on a Friday or Monday were 
billed at the commitment rate, not the holiday rate.
    The amendments will 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 will change under the 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] Previously: The facility is charged the commitment rate for 8 
hours on the agreement.
    [cir] Amended to: 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] Previously: The facility is charged the non-commitment rate 
for 8 hours.
    [cir] Amended to: The facility is charged the non-commitment 
holiday rate for 8 hours.
    Previously, services covered under parts 56 and 70 were billed the 
regular rate on the holiday even if the holiday was not worked, the 
holiday rate when service was provided on the grader's scheduled 
holiday,\1\ and the overtime rate when service was provided on a 
holiday in excess of the hours stated on the agreement.
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    \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).
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    The amendments revise Sec. Sec.  56.46, 56.52, 70.71, and 70.77 to 
state that the holiday hourly rate will 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 are changing under the 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] Previously: The facility is charged the resident regular rate 
for 8 hours on the agreement.
    [cir] Amended to: 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] Previously: 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] Amended to: 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] Previously: 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] Amended to: The facility will be charged the holiday rate for 
10 hours.
    AMS will further clarify and align rates charged for services. 
Amendments 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 will align billing rates for services provided over and above 
agreement hours and following a reasonable amount of billed overtime.

[[Page 49640]]

Previously, services under part 54 were charged the non-commitment 
rate, while services provided under parts 56 and 70 were charged the 
resident overtime rate for hours in excess of their agreement. AMS will 
align all services and use the unscheduled rate (the previous non-
commitment or fee rate) when services are provided over and above their 
agreement and following a reasonable amount of billed overtime. This 
amendment affects only services provided under parts 56 and 70 and 
causes 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 will change under the 
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] Previously: The facility was 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] Amended to: 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 4 
weeks.
    [cir] Previously: The facility was charged the overtime rate for 
all additional hours of service provided.
    [cir] Amended to: The facility will be charged the unscheduled rate 
for all hours of service provided on the 2nd shift.
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] Previously: The facility was charged the overtime rate for 
all hours of service provided by the additional grader.
    [cir] Amended to: 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 were 
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 amendments will remove 
the administrative volume charge altogether from Sec. Sec.  56.52(a)(4) 
and 70.77(a)(4) and (5) and allow QAD to charge hourly rates that 
encompass all costs for providing service. This amendment affects only 
services provided under parts 56 and 70. QAD estimates that plants with 
a single or double shift scheduled (40 or 80 hours) will 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.

Summary of Comments

    A proposed rule to amend the Regulations Governing Voluntary 
Grading of Meats, Prepared Meats, Meat Products, Shell Eggs, Poultry 
Products, and Rabbit Products was published in the Federal Register (84 
FR 10998) on March 25, 2019. Comments on the proposed rule were 
solicited from interested parties until May 24, 2019. AMS received four 
comments; two from industry organizations, one from a State Department 
of Agriculture, and one comment from an individual.
    One commenter from an industry organization favored aligning 
administrative amendments and removing the administrative volume 
charge, providing this action is completed before the October 1, 2019, 
fee increase is effective. This industry organization commenter also 
requested, in the event the agency moves forward, the agency phase in a 
fee increase and work with state agencies providing service under a 
cooperative agreement. Two commenters, one from an industry 
organization and one from a State Department of Agriculture opposed 
moving forward with this action, citing fees charged by state agencies 
providing service under a cooperative agreement. Requirements of 
cooperative agreements are outside the scope of the regulations, though 
AMS is discussing cooperative agreements with State Departments of 
Agriculture. A fourth commenter was an individual that raised issues 
that were outside the scope of the regulation.
    After reviewing the comments, AMS has determined that no changes to 
the proposed language are warranted.

List of Subjects

7 CFR Part 54

    Meat, Meat grading, Meat products, Voluntary standards.

7 CFR Part 56

    Eggs, Egg products, Shell egg grading, Shell egg inspections, 
Voluntary standards.

7 CFR Part 70

    Poultry, Poultry grading, Poultry products, Rabbit, Rabbit grading, 
Voluntary standards.

    For the reasons set forth in the preamble, 7 CFR parts 54, 56, and 
70 is amended 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 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

[[Page 49641]]

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 in this part. 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 in this part (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.
    (c) Termination of service. If an applicant who terminates 
scheduled grading service requests service again within a 2-year period 
from the date of the initial termination, the applicant will be 
responsible for all relocation costs associated with the grader 
assigned to fulfill the new service agreement. If more than one 
applicant is involved, expenses will be prorated according to each 
applicant's committed portion of the official grader's services.

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, 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 in 
this part. 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

[[Page 49642]]

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 in this part (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 through 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) 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

[[Page 49643]]

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 and Amended]

0
18. Redesignate Sec.  70.31 as Sec.  70.30 and revise newly 
redesignated Sec.  70.30 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 in this part. 
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;
    (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 in this part (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

[[Page 49644]]

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 through 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 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: September 12, 2019.
Bruce Summers,
Administrator.
[FR Doc. 2019-20123 Filed 9-20-19; 8:45 am]
BILLING CODE 3410-02-P