Amendments to Quality Systems Verification Programs and Conforming Changes, 62934-62942 [2020-19655]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 85, Number 194 (Tuesday, October 6, 2020)]
[Rules and Regulations]
[Pages 62934-62942]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-19655]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 54, 56, 62, 70, 90 and 91

[Doc. No. AMS-SC-18-0062; SC18-062-1 FR]


Amendments to Quality Systems Verification Programs and 
Conforming Changes

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule revises regulations for Quality Systems 
Verification Programs (QSVP). The revisions clarify that all voluntary, 
user-fee services under this part are applicable to all commodities 
covered by the Agricultural Marketing Act of 1946 (Act), as amended. 
Further, the revisions broaden the scope of services defined in part 62 
to include all current and future AMS voluntary, user-fee audit 
verification and accreditation programs and services. Finally, the 
revisions harmonize administrative procedures governing these services 
and make conforming changes to other agency regulations.

DATES: Effective November 5, 2020.

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

SUPPLEMENTARY INFORMATION:

Executive Orders 12866, 13563 and 13771

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and

[[Page 62935]]

equity). Executive Order 13563 emphasizes the importance of quantifying 
both costs and benefits, reducing costs, harmonizing rules, and 
promoting flexibility. This rulemaking has been determined to be not 
significant for purposes of Executive Order 12866 or Executive Order 
13563. Accordingly, the Office of Management and Budget (OMB) has 
waived the review process.
    Additionally, because this final rule does 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).

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This final rule is not intended to have 
retroactive effect. The Act prohibits States or political subdivisions 
of a State from imposing any requirement that is in addition to, or 
inconsistent with, any requirement of the Act. There are no civil 
justice implications associated with this final 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 regulation will not 
have substantial and direct effects on Tribal governments and will not 
have significant Tribal implications.

Civil Rights Review

    AMS has considered the potential civil rights implications of this 
rule on minorities, women and 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 rule does not require 
affected entities to relocate or alter their operations in ways that 
could adversely affect such persons or groups. Further, this final rule 
does not deny any persons or groups the benefits of the program or 
subject any persons or groups to discrimination.

Executive Order 13132

    This final 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 final rule.

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 efficient and 
competitive marketing of agricultural products. AMS programs support a 
strategic marketing perspective that adapts product and marketing 
decisions to consumer demands, changing domestic and international 
marketing practices, and new technology. Under this directive, AMS 
provides impartial verification services that ensure agricultural 
products meet specified requirements, such as USDA grade standards, a 
feeding regime, or a production system. Services also include audit 
verification programs, laboratory approval and accreditation programs, 
and audit activities based on government-to-government agreements with 
international trading partners regarding specific foreign market 
requirements. These services are voluntary, with users paying for the 
cost of the requested service.
    Currently, AMS voluntary, user-fee audit verification and 
accreditation programs and services are collectively regulated by: 7 
CFR Part 51--FRESH FRUITS, VEGETABLES AND OTHER PRODUCTS (INSPECTION, 
CERTIFICATION, AND STANDARDS); 7 CFR Part 52--PROCESSED FRUITS AND 
VEGETABLES, PROCESSED PRODUCTS THEREOF, AND CERTAIN OTHER PROCESSED 
FOOD PRODUCTS; 7 CFR Part 56--VOLUNTARY GRADING OF SHELL EGGS; 7 CFR 
Part 58--GRADING AND INSPECTION, GENERAL SPECIFICATIONS FOR APPROVED 
PLANTS AND STANDARDS FOR GRADES OF DAIRY PRODUCTS; 7 CFR Part 62--
LIVESTOCK, MEAT, AND OTHER AGRICULTURAL COMMODITIES (QUALITY SYSTEMS 
VERIFICATION PROGRAMS); 7 CFR Part 70--VOLUNTARY GRADING OF POULTRY 
PRODUCTS AND RABBIT PRODUCTS; 7 CFR Part 75--PROVISIONS FOR INSPECTION 
AND CERTIFICATION OF QUALITY OF AGRICULTURAL AND VEGETABLE SEEDS; and 7 
CFR Chapter I, Subchapter E--COMMODITY LABORATORY TESTING PROGRAMS, 
parts 90 and 91. Each part of the CFR is applicable to a different 
group of agricultural commodities and its products. This final rule 
incorporates the commodities and program services for audit 
verification and accreditation programs currently regulated by the 
aforementioned parts of the CFR into a single regulatory reference, 7 
CFR Part 62.
    This rule expands the definition of ``product'' in 7 CFR part 62, 
which currently references livestock, meat, seed and feedstuffs, to 
include all commodities covered under the Act. Additionally, this final 
rule clarifies the scope of existing and future voluntary, fee-for-
service audit verification and accreditation programs offered by AMS 
and houses all such programs under one part.
    With these changes, AMS maintains uniformity, transparency, and 
efficiency of service delivery of the QSVP and other AMS voluntary, 
user-fee audit verification and accreditation programs. Without these 
changes, AMS would be required to maintain similar or duplicate 
programs in each commodity area that carries out comparable functions.
    This final rule implements other administrative changes. For 
example, the title of part 62, ``LIVESTOCK, MEAT, AND OTHER 
AGRICULTURAL COMMODITIES (QUALITY SYSTEMS VERIFICATION PROGRAMS)'', is 
changed to ``AGRICULTURAL MARKETING SERVICE AUDIT VERIFICATION AND 
ACCREDITATION PROGRAMS (AVAAP).'' Additional changes to the part's 
terminology reflect the broader scope of commodities and program 
services, and better coordinate administrative service provisions 
within AMS. Lastly, conforming changes to parts 54, 56, 70, 90 and 91 
remove duplicative or conflicting language and update terminology.

Final Regulatory Flexibility Analysis

    The purpose of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-
612) is to fit regulatory actions to the scale of businesses subject to 
such actions so small businesses will not be unduly or 
disproportionately burdened. The U.S. Small Business Administration's 
Table of Small Business Size Standards matched to the North American 
Industry Classification System Codes identifies small business size by 
average annual receipts or by the average number of employees at a 
firm. This information can be found at 13 CFR parts 121.104, 121.106, 
and 121.201.
    AMS has determined that this action will not have a significant 
impact on a substantial number of small entities, as defined by the 
RFA, because the services are voluntary, are provided on a fee-for-
service basis, and are not

[[Page 62936]]

subject to scalability based on the business size. Nonetheless, this 
analysis is provided.
    All applicants for audit services provide information about their 
companies for processing payment invoices. Information collected from 
an applicant includes company name, business name if different from 
company name, Federal Tax Identification Number, billing address, 
contact information of the accounts payable department, and the name of 
the person filing the application. The Federal Tax Identification 
Number is required by the Federal Debt Collection Procedure Act of 1990 
(28 U.S.C. 3101 et seq.). All entities doing business with the Federal 
Government are required to provide the Federal Tax Identification 
Number before an account can be set up.
    AMS does not collect information about the size of a business that 
applies for a service. However, based on working knowledge of the USDA 
personnel assigned to provide service to these operations, AMS 
estimates the following based on the number of its employees:

Livestock and Poultry Program

    Approximately 950 livestock and poultry industry applicants 
subscribe to AMS' voluntary, fee-for-service program and will be 
subject to the requirements of this regulation. Roughly 25 percent of 
those applicants may be classified as small entities.

Dairy Program

    Approximately 550 dairy industry applicants subscribe to AMS' 
voluntary, fee-for-service program and will be subject to the 
requirements of this regulation. Roughly 10 percent of those applicants 
may be classified as small entities.

Fruit, Vegetable and Specialty Crop Program

    Approximately 4,300 fruit, vegetable, and specialty crop industry 
applicants subscribe to AMS' voluntary, fee-for-service audit 
verification and accreditation programs and will be subject to the 
requirements of this regulation. Roughly 33 percent of those applicants 
may be classified as small entities.

Laboratory Approval and Accreditation Programs

    Approximately 84 agricultural laboratory applicants subscribe to 
AMS's voluntary, fee-for-service testing and will be subject to the 
requirements of this regulation. Roughly 80 percent of those applicants 
may be classified as small entities.

Accredited Seed Programs

    Approximately 24 agricultural seed applicants subscribe to AMS' 
voluntary, fee-for-service program and will be subject to the 
requirements of this regulation. Roughly 80 percent of those applicants 
may be classified as small entities.
    It is not anticipated that this action will impose additional costs 
to applicants, regardless of size. Current applicants will not be 
required to provide any additional information to receive service. The 
effects of this rule are not expected to be disproportionately greater 
or lesser for small applicants than for larger applicants. As described 
above, these programs are voluntary, fee-for-service activities.
    AMS is committed to complying with the E-Government Act of 2002 (44 
U.S.C. 101) 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 rulemaking.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.), this final rule will not change the current information 
collection and recordkeeping requirements previously approved but will 
increase the number of respondents upon completion of the rulemaking 
process.
    USDA has considered the reporting and recordkeeping burden on 
applicants for the AMS services that will be impacted by this action. 
Currently, applicants are required to complete an application for 
service and submit additional documentation. Recordkeeping requirements 
on each applicant will remain the same, though the overall burden will 
increase due to an increase in applications received.
    Since this action expands the scope of covered commodities, which 
will increase the number of respondents, the already approved OMB 
Control Numbers 0581-0128, 0581-0283, 0581-0125 and 0581-0251 will be 
revised to reflect the increase in the reporting and recordkeeping 
burden. Therefore, AMS has submitted a Justification for Change to OMB 
to reflect burden of increase in the number of respondents affected by 
the amendments to part 62.
    As with all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies. USDA has not 
identified any relevant Federal rules that duplicate, overlap, or 
conflict with this rule.
    AMS is committed to complying with the E-Government Act 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.
    A proposed rule concerning this action was published in the Federal 
Register on February 19, 2020, (85 FR 9399). The rule was made 
available through the internet by USDA and the Office of the Federal 
Register. A 60-day comment period ending April 20, 2020, was provided 
to allow interested persons to respond to the proposal. A total of four 
comments were received.
    Two comments received questioned whether AMS would make additional 
changes to authorize third-party entities to conduct process 
verification program verifications and provide laboratory audit and 
accreditation services. Given that this rulemaking is limited in scope 
to incorporating existing and future voluntary, fee-for-service audit 
verification and accreditation programs offered by AMS into a single 
regulatory reference, 7 CFR part 62, AMS has determined that the 
comments fall outside the scope of this action.
    A third comment questioned this rule's usage of the word ``safety'' 
as it relates to ``consumption or biological levels'' of concern as 
opposed to administrative or management aspects of a production 
process. In response to the comment, AMS clarifies that QSVPs are 
voluntary, user-fee programs designed to provide impartial verification 
services that ensure agricultural products meet specified requirements, 
such as USDA grade standards, a feeding regime, or a production system. 
Services also include audit verification programs, laboratory approval 
and accreditation programs, and audit activities based on government-
to-government agreements with international trading partners regarding 
specific foreign market requirements. These services are focused, for 
the most part, on certifying that a given process adheres to a 
prescribed set of administrative and process management criteria.
    A fourth comment was received from a person seeking home refinance 
assistance. This comment also falls outside the scope of this 
rulemaking action.
    According to consideration given to all comments received as 
described

[[Page 62937]]

above, no changes will be made to the rule as proposed.
    After consideration of all relevant material presented, it is 
hereby found that this rule will tend to effectuate the declared policy 
of the Act.

List of Subjects

7 CFR Part 54

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

7 CFR Part 56

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

7 CFR Part 62

    Inspections, Marketing practices, Quality Systems Verification, 
Standards.

7 CFR Part 70

    Inspections, Marketing practices, Standards, Voluntary grading of 
poultry products and rabbit products.

7 CFR Part 90

    Agricultural commodities, Laboratories, Reporting and recordkeeping 
requirements.

7 CFR Part 91

    Administrative practice and procedure, Agricultural commodities, 
Laboratories, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, 7 CFR parts 54, 56, 62, 
70, 90 and 91 are amended as follows:

0
1. The authority citation for 7 CFR parts 54, 56, 62, 70, 90 and 91 
continues to read as follows:

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

PART 54--MEATS, PREPARED MEATS, AND MEAT PRODUCTS (GRADING, 
CERTIFICATION, AND STANDARDS)


Sec.  54.17  [Amended]

0
2. Amend Sec.  54.17 by removing and reserving paragraph (i).

PART 56--VOLUNTARY GRADING OF SHELL EGGS


Sec.  56.1   [Amended]

0
3. Amend Sec.  56.1 by removing the term ``Auditing services.''

0
4. Amend Sec.  56.46 by:
0
a. Revising paragraph (a);
0
b. Revising paragraphs (b)(1)(i) through (iii); and
0
c. Removing paragraph (d).
    The revisions 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:
    (1) Regular rate. The total AMS grading program personnel direct 
pay divided by direct hours, which is then multiplied by the next 
year's percentage of cost of living increase, plus the benefits rate, 
plus the operating rate, plus the allowance for bad debt rate. If 
applicable, travel expenses may also be added to the cost of providing 
the service.
    (2) Overtime rate. The total AMS grading program personnel direct 
pay divided by direct hours, which is then multiplied by the next 
year's percentage of cost of living increase and then multiplied by 1.5 
plus the benefits rate, plus the operating rate, plus an allowance for 
bad debt. If applicable, travel expenses may also be added to the cost 
of providing the service.
    (3) Holiday rate. The total AMS grading program personnel direct 
pay divided by direct hours, which is then multiplied by the next 
year's percentage of cost of living increase and then multiplied by 2, 
plus benefits rate, plus the operating rate, plus an allowance for bad 
debt. If applicable, travel expenses may also be added to the cost of 
providing the service.
    (b)(1) * * *
    (i) Benefits rate. The total AMS grading program direct benefits 
costs divided by the total hours (regular, overtime, and holiday) 
worked, which is then multiplied by the next calendar year's percentage 
cost of living increase. Some examples of direct benefits are health 
insurance, retirement, life insurance, and Thrift Savings Plan (TSP) 
retirement basic and matching contributions.
    (ii) Operating rate. The total AMS grading program operating costs 
divided by total hours (regular, overtime, and holiday) worked, which 
is then multiplied by the percentage of inflation.
    (iii) Allowance for bad debt rate. Total AMS grading program 
allowance for bad debt divided by total hours (regular, overtime, and 
holiday) worked.
* * * * *

0
5. Revise part 62 to read as follows:

PART 62--AGRICULTURAL MARKETING SERVICE AUDIT VERIFICATION AND 
ACCREDITATION PROGRAMS (AVAAP)

Sec.
Subpart A--Definitions
62.000 Meaning of terms.
Subpart B--Administration
62.100 Administrator.
Subpart C--Audit and Accreditation Services
62.200 Services.
Subpart D--Administrative Provisions
62.201 Availability of service.
62.202 How to apply for service.
62.203 How to withdraw service.
62.204 Authority to request service.
62.205 [Reserved]
62.206 Access to program documents and activities.
62.207 Official assessment.
62.208 Publication of assessment status.
62.209 [Reserved]
62.210 Denial, suspension, cancellation or rejection of service.
62.211 Appeals.
62.212 [Reserved]
62.213 Official identification.
62.214 Voluntary participation.
Subpart E--Fees
62.300 Fees and other costs of service.
62.301 Payment of fees and other charges.
Subpart F--OMB control number
62.400 OMB control number assigned pursuant to the Paperwork 
Reduction Act.

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

Subpart A--Definitions


Sec.  62.000   Meaning of terms.

    Words used in this subpart in the singular form shall be deemed to 
impart the plural, and vice versa, as the case may demand. For the 
purposes of such regulations, unless the context otherwise requires, 
the following terms shall be construed, respectively, to mean:
    Accreditation. The action or process of officially recognizing an 
entity as being qualified to perform a specific activity(ies).
    Act. The Agricultural Marketing Act of 1946, as amended (AMA) (7 
U.S.C. 1621-1627).
    Administrator. The Administrator of the Agricultural Marketing 
Service, or any officer or employee of AMS to whom authority has 
heretofore been delegated or to whom authority may hereafter be 
delegated, to act in the Administrator's stead.
    Agricultural Marketing Service. The Agricultural Marketing Service 
(AMS) of the U.S. Department of Agriculture.
    Applicant. Any individual, commodity board, trade association, 
marketing order or agreement administrative body and its program 
signatories, or business with a financial interest in audit 
verification and

[[Page 62938]]

accreditation services who has applied for service under this part.
    Assessment. A systematic review of the adequacy and implementation 
of a documented program or system.
    Audit. A systematic, independent, and documented process for 
obtaining evidence and evaluating it objectively to determine the 
extent to which criteria are fulfilled.
    Auditor. Person authorized by AMS to conduct official audits or 
assessments.
    Conformance. The condition or fact of an applicant meeting the 
requirements of a standard, contract, specification, or other 
documented service requirements.
    Export certificate. An official paper or electronic document issued 
as part of an export certification program, which describes and attests 
to attributes of consignments of commodities or food destined for 
international trade.
    Nonconformance. The condition or fact of an applicant not meeting 
the requirements of a standard, contract, specification, or other 
documented service program requirements.
    Official mark of conformance. Any form of mark or other 
identification used under the regulations to show the conformance of 
products with applicable service requirements, or to maintain the 
identity of products for which service is provided under the 
regulations.
    Products. All agricultural commodities and services within the 
scope of Agricultural Marketing Act of 1946. This includes the 
processes involving the production, handling, processing, packaging, 
and transportation of these products, agricultural product data 
storage, and product traceability and identification.
    Program. Any and all individual auditing or accrediting procedures, 
systems, or instructions developed and administered under the services 
authorized under Sec.  62.200.
    Service. The AMS auditing and accreditation functions authorized 
under the Act and the provisions of this part.
    Service documentation. All requirements, guidelines, manuals, 
forms, and supporting documentation needed to effectuate the 
administration and operation of services authorized under this part.
    USDA. The U.S. Department of Agriculture.

Subpart B--Administration


Sec.  62.100   Administrator.

    The Administrator is charged with the administration of official 
assessments conducted according to the regulations in this part and 
approved program procedures.

Subpart C--Audit and Accreditation Services


Sec.  62.200   Services.

    Services shall be based upon the authorities under the Act and 
applicable standards prescribed by USDA, the laws of the State where 
the particular product was produced, specifications of any governmental 
agency, voluntary audit program requirements in effect under federal 
marketing orders and/or agreements, written buyer and seller contract 
specifications, service documentation, or any written specification by 
an applicant. Services are administered through voluntary, fee-for-
service, audit-based programs by AMS auditor(s) and other USDA 
officials under this part. Services authorized under this part, and 
programs administered under such, shall include:
    (a) Quality Systems Verification Programs. Quality Systems 
Verification Programs (QSVP) assess an applicant's business (quality) 
management system of program documentation and program processes 
regarding quality of products. Such programs include, but are not 
limited to:
    (1) Food Safety Management Systems. A formalized system of 
documents, processes, procedures, and responsibilities for preventing 
foodborne illnesses.
    (i) Good Agricultural Practices (GAP). A formalized system of 
documents, processes, and procedures used by primary producers to 
minimize the risk of contamination during the production, harvesting, 
and handling of crops.
    (ii) GroupGAP. A quality management system approach to GAP 
certification undertaken by a group of producers.
    (iii) Good Manufacturing Practices. A formalized system of 
documents, processes, and procedures used to ensure that products are 
consistently produced and controlled according to quality standards and 
regulatory requirements.
    (2) Export Certification Program. A formalized system of documents, 
processes, and procedures used to validate that a given product meets 
the specific requirements of a foreign country, in addition to 
applicable Federal requirements.
    (3) USDA Process Verified Program (PVP). A comprehensive quality 
management system verification program whereby applicants establish 
their own standards to describe products or processes.
    (4) USDA Quality Assessment Program. A quality management system 
verification service that is designed to aid in the marketing of 
products that have undergone specific processes and is limited in scope 
to those specific items associated with the product or process.
    (i) Export Verification Programs. A formalized system of documents, 
processes and procedures used to validate specific requirements of a 
foreign country are being met, in addition to applicable Federal 
requirements.
    (ii) [Reserved].
    (5) USDA Accredited Seed Program. A specialized quality management 
system verification service for the seed industry that offers 
applicants a way to market their product using industry-recognized 
processes, rules, and standards.
    (b) Audit Verification Programs. Audit verification programs assess 
an applicant's documentation of its business management system with 
regard to the production or handling of products. Such programs 
include, but are not limited to:
    (1) Food Defense Verification Program. A service that evaluates 
operators of food establishments that maintain documented and 
operational food defense measures to minimize the risk of tampering or 
other malicious criminal actions against the food under their control.
    (2) Domestic Origin Verification. A service that evaluates a farm's 
and/or a facility's ability to maintain processes, procedures, and 
records to demonstrate products are grown in the United States of 
America, its territories, or possessions.
    (3) Plant System Audit. A service that evaluates the ability of 
operators of food establishments to implement a sanitation program and/
or requirement outlined in good manufacturing practices regulations.
    (4) Audits performed for other government agencies. A service that 
provides quality-based audit services to, and performs audits for, 
other government agencies, such as the Department of Defense or the 
U.S. Aid Agency for International Development, under the Economy Act 
(31 U.S.C. 1535).
    (5) Export Audit Programs. An audit intended to ensure that 
information submitted for an export certificate request is complete, 
accurate, and in compliance with the export certification program. In 
some cases, these requirements may include compliance with country-
specific attestations or product requirements.
    (6) Child Nutrition Labeling Program. An audit intended to ensure 
manufacturers properly apply and document effective procedures to

[[Page 62939]]

monitor and control the production of their Child Nutrition products.
    (c) Accreditation Programs. Accreditation programs include 
voluntary, user-fee accreditation services performed by a USDA 
evaluator or accreditation body to conduct assessments of applicant 
programs, services, facilities or equipment, and their ability to 
achieve planned results. Such programs include, but are not limited to:
    (1) USDA ISO Guide 17065 Program. A service that assesses 
certification bodies to determine conformance to the International 
Organization for Standardization (ISO) Guide 17065. These assessments 
are available to U.S. and international certification bodies operating 
a third-party certification system that perform conformity assessment 
activities.
    (2) Laboratory Approval Programs. Laboratories are approved, or 
accredited, to perform testing services in support of domestic and 
international trade. At the request of industry, other Federal 
Agencies, or foreign governments, USDA administers programs to verify 
that the analysis of food and agricultural products meets country and 
customer-specific requirements and that the testing of marketed 
products is conducted by qualified and approved laboratories.

Subpart D--Administrative Provisions


Sec.  62.201   Availability of service.

    Services under this part are available to applicants, including 
international and domestic government agencies, private agricultural 
businesses, and any financially interested person.


Sec.  62.202   How to apply for service.

    Applicants may apply for services authorized under this part by 
contacting the Administrator's office and requesting specific service 
or program information at USDA, AMS, 1400 Independence Avenue SW, Room 
3069-S, Washington, DC 20250-0294; by fax to: (202) 720-5115, or email 
to: [email protected]. Applicants may also visit: https://www.ams.usda.gov.


Sec.  62.203   How to withdraw application for service.

    An application for service may be withdrawn, all or in part, by the 
applicant at any time; Provided, That the applicant notifies the USDA 
service office in writing of its desire to withdraw the application for 
service and pays any expenses USDA has incurred in connection with such 
application.


Sec.  62.204   Authority to request service.

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


Sec.  62.205   [Reserved]


Sec.  62.206   Access to program documents and activities.

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


Sec.  62.207   Official assessment.

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


Sec.  62.208   Publication of assessment status.

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


Sec.  62.209   [Reserved]


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

    (a) Denial of services. Services authorized under this part may be 
denied if an applicant fails to meet or conform to a program's 
requirements including, but not limited to, a failure to:
    (1) Adequately address any program requirement resulting in a 
nonconformance for the program.
    (2) Demonstrate capability to meet any program requirement, thereby 
resulting in a major nonconformance.
    (3) Present truthful and accurate information to any auditor or 
other USDA official; or
    (4) Allow any auditor or other USDA official access to facilities 
and records within the scope of the program.
    (b) Suspension of services. Services may be suspended if the 
applicant fails to meet or conform to a program's requirements 
including, but not limited to, a failure to:
    (1) Adequately address any program's requirement, thereby resulting 
in a major nonconformance;
    (2) Demonstrate capability to meet any program requirement, thereby 
resulting in a major nonconformance;
    (3) Follow and maintain its approved program or procedures;
    (4) Provide corrections and take corrective actions as applicable 
in the timeframe specified;
    (5) Submit significant changes to an approved program and seek 
approval from USDA prior to implementation of the significant changes 
to the program;
    (6) Allow any auditor or other USDA official access to facilities 
and records within the scope of the approved program;
    (7) Accurately represent the eligibility of agricultural products 
or services distributed under an approved program;
    (8) Remit payment for services;
    (9) Abstain from any fraudulent or deceptive practice in connection 
with any application or request for service; or
    (10) Allow any auditor or other USDA official to perform his or her 
duties under the provisions of this part or program requirements 
established under

[[Page 62940]]

one of the authorized services of this part.
    (c) Cancellation of services. Services may be cancelled, an 
application may be rejected, or program assessment may be terminated if 
the Administrator or his/her designee determines that a nonconformance 
has remained uncorrected beyond a reasonable amount of time.
    (d) Rejection of services. Services may be rejected when it appears 
that to perform audit and accreditation services would not be in the 
best interests of the USDA. The applicant shall be promptly notified of 
the reason for such rejection.


Sec.  62.211   Appeals.

    (a) Appeals of adverse decisions. Appeals of adverse decisions 
under this part may be made in writing to the AMS Administrator, Rm. 
3069-S, 1400 Independence Avenue SW, Washington, DC 20250-0249 or to 
the director of the applicable service office. Appeals must be made 
within the timeframe specified by each program or within 30 calendar 
days of receipt of an adverse decision, whichever is sooner.
    (b) Procedure for Appeals. Actions under this subparagraph 
concerning appeals of adverse decisions to the Administrator shall be 
conducted in accordance with the Rules of Practice Governing Formal 
Adjudicatory Proceedings Instituted by the Secretary Under Various 
Statutes set forth at 7 CFR 1.130 through 1.151 and the Administrative 
Procedures Governing Withdrawal of Inspection and Grading Services in 7 
CFR part 50. The procedure for appeals is specified by each program 
and/or by an overarching USDA AMS administrative procedure.


Sec.  62.212   [Reserved]


Sec.  62.213   Official identification.

    Some programs offered under this subpart allow for the use of 
official identification or marks of conformance. A program's specific 
documented procedure will indicate whether official marks of 
conformance apply.
    (a) Products or services produced under a program authorized under 
this part may use an official identification mark of approval for that 
program, such as the ``USDA Process Verified'' statement and the ``USDA 
Process Verified'' shield. Use of program official identification must 
be in accordance with program requirements.
    (b) Use of a program's official identification mark must be 
approved in writing by USDA prior to use by an applicant.
    (c) USDA Process Verified Program shield. Products or services 
produced under an approved USDA PVP may use the ``USDA Process 
Verified'' statement and the ``USDA Process Verified Program'' shield 
(Figure 1 to paragraph (c)), so long as each is used in direct 
association with a clear description of the process verified points 
approved by USDA.
[GRAPHIC] [TIFF OMITTED] TR06OC20.001

    (1) The USDA Process Verified shield must replicate the form and 
design of the example in Figure 1 and must be printed legibly and 
conspicuously:
    (i) On a white background with a gold trimmed shield, with the term 
``USDA'' in white overlaying a blue upper third of the shield, the term 
``PROCESS'' in black overlaying a white middle third of the shield, and 
term ``VERIFIED'' in white overlaying a red lower third of the shield; 
or
    (ii) On a white or transparent background with a black trimmed 
shield, with the term ``USDA'' in white overlaying a black upper third 
of the shield, the term ``PROCESS'' in black overlaying a white middle 
third of the shield, and the term ``VERIFIED'' in white overlaying a 
black lower third of the shield.


Sec.  62.214   Voluntary participation.

    Applying for services, or enrollment in any service program, is 
voluntary. Once an applicant receives a service or is accepted into a 
program, compliance with that service or program's terms is mandatory 
unless the applicant withdraws its application as provided in Sec.  
62.203 or participation is denied, suspended, cancelled, or rejected 
subject to the terms of Sec.  62.210.

Subpart E--Fees


Sec.  62.300   Fees and other costs of service.

    (a) For each calendar year, AMS will calculate the rate for 
services per hour per program employee using the following formulas:
    (1) Regular rate. The total AMS service program personnel direct 
pay divided by direct hours, which is then multiplied by the next 
year's percentage of cost of living increase, plus the benefits rate, 
plus the operating rate, plus the allowance for bad debt rate. If 
applicable, travel expenses may also be added to the cost of providing 
the service.
    (2) Overtime rate. The total AMS service program personnel direct 
pay divided by direct hours, which is then multiplied by the next 
year's percentage of cost of living increase and then multiplied by 1.5 
plus the benefits rate, plus the operating rate, plus an allowance for 
bad debt. If applicable, travel expenses may also be added to the cost 
of providing the service.
    (3) Holiday rate. The total AMS service program personnel direct 
pay divided by direct hours, which is then multiplied by the next 
year's percentage of cost of living increase and then multiplied by 2, 
plus the benefits rate, plus the operating rate, plus an allowance for 
bad debt. If applicable,

[[Page 62941]]

travel expenses may also be added to the cost of providing the service.
    (b)(1) For each calendar year, based on previous fiscal year/
historical actual costs, AMS will calculate the benefits rate, 
operating rate, and allowance for bad debt rate components of the 
regular, overtime, and holiday rates as follows:
    (i) Benefits rate. The total AMS service program direct benefits 
costs divided by the total hours (regular, overtime, and holiday) 
worked, which is then multiplied by the next calendar year's percentage 
cost of living increase. Some examples of direct benefits are health 
insurance, retirement, life insurance, and Thrift Savings Plan (TSP) 
retirement basic and matching contributions.
    (ii) Operating rate. The total AMS service program operating costs 
divided by total hours (regular, overtime, and holiday) worked, which 
is then multiplied by the percentage of inflation.
    (iii) Allowance for bad debt rate. Total AMS service program 
allowance for bad debt divided by total hours (regular, overtime, and 
holiday) worked.
    (2) The calendar year cost of living expenses and percentage of 
inflation factors used in the formulas in this section are based on 
OMB's most recent Presidential Economic Assumptions.
    (c) Applicants are responsible for paying actual travel costs 
incurred to provide services, including but not limited to: Mileage 
charges for use of privately owned vehicles, rental vehicles and gas, 
parking, tolls, and public transportation costs such as airfare, train, 
and taxi service.
    (d) The applicant is responsible for paying per diem costs incurred 
to provide services away from the auditor's or USDA official's official 
duty station(s). Per diem costs shall be calculated in accordance with 
existing travel regulations (41 CFR, subtitle F--Federal Travel 
Regulation System, chapter 301).
    (e) When costs other than those costs specified in paragraphs (a) 
through (c) of this section are involved in providing the services, the 
applicant shall be responsible for these costs. The amount of these 
costs shall be determined administratively by AMS. However, the 
applicant will be notified of these costs before the service is 
rendered.


Sec.  62.301   Payment of fees and other charges.

    Fees and other charges for services shall be paid in accordance 
with each service or program's policy(ies) and documentation. The 
applicant shall remit payment by the date indicated on the invoice. 
Payment may be made by automated clearing house transactions; credit 
card, debit card, or direct debit via Pay.gov or PayPal; electronic 
funds transfer; check; or money order. Remittance must be to USDA, AMS 
and include the customer number (i.e., account number) from the 
invoice. Check or money orders must be mailed to the remit address 
indicated on the invoice. Wire transfers are exclusive to foreign 
customers. Fees and charges shall be paid in advance if required by the 
service or program's authorized USDA official. Failure to pay fees can 
result in denial, suspension, or cancellation of service.

Subpart F--OMB Control Number


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

    The information collection and recordkeeping requirements of this 
part have been approved by OMB under 44 U.S.C. Chapter 35 and have been 
assigned OMB Control Numbers: 0581-0125, 0581-0128, 0581-0251, and 
0581-0283.

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


Sec.  70.1   [Amended]

0
6. Amend Sec.  70.1 by removing the definition of ``Auditing 
services.''


Sec.  70.4   [Amended]

0
7. Amend Sec.  70.4 by removing paragraph (c).

0
8. Revise Sec.  70.71 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.
    (a) For each calendar year, AMS will calculate the rate for grading 
services, per hour per program employee using the following formulas:
    (1) Regular rate. The total AMS grading program personnel direct 
pay divided by direct hours, which is then multiplied by the next 
year's percentage of cost of living increase, plus the benefits rate, 
plus the operating rate, plus the allowance for bad debt rate. If 
applicable, travel expenses may also be added to the cost of providing 
the service.
    (2) Overtime rate. The total AMS grading program personnel direct 
pay divided by direct hours, which is then multiplied by the next 
year's percentage of cost of living increase and then multiplied by 
1.5, plus the benefits rate, plus the operating rate, plus an allowance 
for bad debt. If applicable, travel expenses may also be added to the 
cost of providing the service.
    (3) Holiday rate. The total AMS grading program personnel direct 
pay divided by direct hours, which is then multiplied by the next 
year's percentage of cost of living increase and then multiplied by 2, 
plus the benefits rate, plus the operating rate, plus an allowance for 
bad debt. If applicable, travel expenses may also be added to the cost 
of providing the service.
    (b)(1) For each calendar year, based on previous fiscal year/
historical actual costs, AMS will calculate the benefits rate, 
operating rate, and allowance for bad debt rate components of the 
regular, overtime and holiday rates as follows:
    (i) Benefits rate. The total AMS grading program direct benefits 
costs divided by the total hours (regular, overtime, and holiday) 
worked, which is then multiplied by the next calendar year's percentage 
cost of living increase. Some examples of direct benefits are health 
insurance, retirement, life insurance, and Thrift Savings Plan (TSP) 
retirement basic and matching contributions.
    (ii) Operating rate. AMS' grading program total operating costs 
divided by total hours (regular, overtime, and holiday) worked, which 
is then multiplied by the percentage of inflation.
    (iii) Allowance for bad debt rate. Total AMS grading program 
allowance for bad debt divided by total hours (regular, overtime, and 
holiday) worked.
    (2) The calendar year cost of living expenses and percentage of 
inflation factors used in the formulas in this section are based on 
OMB's most recent Presidential Economic Assumptions.
    (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.

[[Page 62942]]

PART 90--[Removed and Reserved]

0
9. Remove and reserve part 90.

PART 91--SERVICES AND GENERAL INFORMATION

0
10. Revise Sec.  91.1 to read as follows:


Sec.  91.1   General.

    This part consolidates the procedural and administrative rules of 
the Science and Technology Program of the Agricultural Marketing 
Service for conducting the analytical testing and laboratory audit 
verification and accreditation services. It also contains the fees and 
charges applicable to such services.

0
11. Amend Sec.  91.2 by revising the definition of applicant to read as 
follows:


Sec.  91.2   Definitions.

* * * * *
    Applicant. Any individual or business requesting services provided 
by the Science and Technology (S&T) programs.
* * * * *

0
12. Amend Sec.  91.4 by revising paragraph (c) to read as follows:


Sec.  91.4   Kinds of services.

* * * * *
    (c) Agricultural Marketing Service Audit Verification and 
Accreditation Programs as described in 7 CFR 62.200.
* * * * *

0
13. Amend Sec.  91.5 by:
0
a. Removing and reserving paragraph (a)(6); and
0
b. Revising paragraph (a)(8).
    The revision to read as follows:


Sec.  91.5   Where services are offered.

    (a) * * *
    (8) Laboratory Approval Service. The Laboratory Approval Service 
(LAS) provides technical, scientific, and quality assurance support 
services to Agency programs, other agencies within the USDA, and 
private entities. In addition, the LAS provides audit verification and 
approval or accreditation services, including laboratory approval and 
accreditation programs of Federal and State government laboratories and 
private/commercial laboratories in support of domestic and 
international trade. The programs administered by LAS verify analyses 
of food and agricultural products showing that said food and products 
meet country or customer-specific requirements and that the testing of 
marketed products is conducted by qualified and approved laboratories. 
The LAS is located and can be reached by mail at: USDA, AMS, S&T, 
Laboratory Approval Service, 1400 Independence Ave. SW, South Building, 
Mail Stop 0272, Washington, DC 20250-0272.
* * * * *

Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-19655 Filed 10-5-20; 8:45 am]
BILLING CODE P