[Federal Register: February 26, 2004 (Volume 69, Number 38)]
[Rules and Regulations]
[Page 8797-8798]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26fe04-1]
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Rules and Regulations
Federal Register
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[[Page 8797]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 58
[Docket Number DA-03-03]
RIN 0581-AC32
Increase in Fees for Federal Dairy Grading and Inspection
Services
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Agricultural Marketing Service (AMS) is revising the
hourly fees charged for Federal dairy grading and inspection services
performed by the Dairy Grading Branch. Dairy grading and inspection
services are voluntary and are financed through user-fees assessed to
participants in the program. The hourly fees will be adjusted by this
action to reflect the increased costs of providing service and to
ensure that the Dairy Grading Branch operates on a financially self-
supporting basis.
EFFECTIVE DATE: April 4, 2004.
FOR FURTHER INFORMATION CONTACT: Duane R. Spomer, Associate Deputy
Administrator for Standards and Grading, USDA, AMS, Dairy Programs,
telephone (202) 720-3171 or e-mail Duane.Spomer@usda.gov.
SUPPLEMENTARY INFORMATION:
Background
The Secretary of Agriculture is authorized by the Agricultural
Marketing Act of 1946 (AMA), as amended (7 U.S.C. 1621, et seq.), to
provide voluntary Federal dairy grading and inspection services to
facilitate the orderly marketing of dairy products and to enable
consumers to obtain the quality of dairy products they desire. The AMA
also provides for the collection of reasonable fees from users of the
Federal dairy grading and inspection services that cover the cost of
providing these services. The hourly fees are established by equitably
distributing the program's projected operating costs over the estimated
hours of service--revenue hours--provided to users of the service on a
yearly basis. Program operating costs include employee salaries and
benefits--which account for nearly 80 percent of the non-travel related
operating costs--training, and administrative costs. Periodically, the
fees must be adjusted to ensure that the program remains financially
self-supporting.
AMS regularly reviews its user-fee-financed programs to determine
if the fees are adequate. The most recent review determined that the
existing fee schedule, effective January 4, 1998, would not generate
sufficient revenues to recover operating costs for current and near-
term periods while maintaining an adequate reserve balance. Costs in FY
2004 are projected at $5.95 million. Without a fee increase, FY 2004
revenues are projected at $5.71, and the trust fund balance would be
$2.09 million. With a fee increase, FY 2004 revenues are projected at
$6.14 million, and the trust fund balance would be $2.52 million.
Employee salaries and benefits account for approximately 80.0% of
the non-travel related operating budget. The majority of travel costs
are billed directly to the users of services provided by the Dairy
Grading Branch on a cost-recovery basis. Since the January 4, 1998, fee
increase, Federal salaries and location adjustments have increased
annually. The average salary has increased approximately 17.4% during
this 6-year period. As a result of these increases, annual salary and
benefit costs to the program are approximately $556 thousand more today
than in 1998. Inflation has also increased the operational and
administrative costs associated with this program, and a fee increase
is necessary to sustain the program. If the short fall is allowed to
continue, it will place the Dairy Grading Branch in an unstable
financial position that will adversely affect its ability to provide
dairy grading and inspection services.
This proposal will also generate funds to automate current business
practices of the Dairy Grading Branch that will minimize the extent of
future fee increases. Automated business practices will also enhance
customer services through improvements in office efficiency and
timeliness of providing grading and inspection services and information
to users of dairy grading and inspection services.
In view of these considerations, AMS will increase the hourly fees
associated with Federal dairy grading and inspection services. The
hourly fee for resident services provided between the hours of 6:00
a.m. and 6:00 p.m. will increase from $51.00 to $57.00 per hour. The
hourly fee for nonresident services between the hours of 6 a.m. and 6
p.m. will increase from $56.00 to $62.00 per hour. The hourly fee for
resident services provided between 6 p.m. and 6 a.m. will be $61.60 and
for nonresident services the fee will be $68.20. For services performed
in excess of 8 hours per day and for services performed on Saturday,
Sunday, and legal holidays, 1\1/2\ times the base fee would apply, and
as a result, the fee will increase from $84.00 per hour to $93.00 per
hour.
Executive Order 12866
This action has been determined to be ``not significant'' for
purposes of Executive Order 12866 and, therefore, has not been reviewed
by the Office of Management and Budget (OMB).
Regulatory Flexibility Act
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (5 U.S.C. 601, et seq.), the AMS has considered the
economic impact of this action on small entities. It has determined
that its provisions would not have a significant economic effect on a
substantial number of small entities.
AMS provides voluntary Federal dairy product grading and inspection
services to about 350 users of services provided by the Dairy Grading
Branch. Manufacturing operations participating in the voluntary plant
inspection program have their facility inspected against established
construction and sanitation requirements. Dairy products manufactured
in facilities complying with the USDA requirements are eligible to be
inspected and graded against official quality standards and
specifications established by AMS and certain contract provisions
between buyer and seller. Products inspected or graded by the Dairy
Grading Branch have certificates issued concerning the product's
quality and condition. Many
[[Page 8798]]
of these users are small entities under the criteria established by the
Small Business Administration (13 CFR 121.201). This rule will raise
the fee charged to businesses for voluntary inspection and grading
services for dairy and related products and the evaluation of food
processing equipment. Even though the fee will be raised, the increase
is approximately 10.7% for nonresident service and 11.8% for resident
service and will not significantly affect these entities. These
businesses are under no obligation to use these voluntary user-fee
based services, and any decision on their part to discontinue the use
of the services would not prevent them from marketing their products.
The AMS estimates that overall this rule would yield an additional
$522,000 annually. This action reflects certain fee increases needed to
recover the cost of inspection and grading services rendered in
accordance with the Agricultural Marketing Act.
The AMS regularly reviews its user-fee financed programs to
determine if fees are adequate and if costs are reasonable. The
existing fee schedule will not generate sufficient revenues to cover
program costs while maintaining an adequate reserve balance (four
months of costs) as called for by Agency policy. Without a fee
increase, total revenue projections--including travel revenue--for
Fiscal Year 2004 would be $5.71 million. Total costs--including travel
costs--for the same period of time are projected to increase to $5.95
million. The shortfall, if allowed to continue, would translate into a
trust fund balance of $431 thousand or 0.8 months of operating reserve
at the end of FY 2007, which is below the Agency policy requirement.
This action raises the hourly fees charged to users of Federal
dairy inspection and grading services. AMS estimates this action will
provide the Dairy Grading Branch an additional $522 thousand annually.
This will generate revenue to recover program costs, automate business
practices to minimize the extent of future fee increases, and enhance
customer services through improvements in office efficiency and
timeliness of providing grading and inspection information to users of
these services.
Civil Justice Reform
This action has been reviewed under Executive Order 12988, Civil
Justice Reform. This action is not intended to have retroactive effect.
This rule will not preempt any State or local laws, regulations, or
policies unless they present an irreconcilable conflict with this rule.
There are no administrative procedures which must be exhausted prior to
any judicial challenge to the provisions of this rule.
Paperwork Reduction Act
This action would not impose any additional reporting or
recordkeeping requirements on users of Federal dairy grading and
inspection services.
Comments and Responses
AMS published a proposed rule in the Federal Register on October 3,
2003 (68 FR 57882) to increase the fees for Federal dairy grading and
inspection services and requested comments by November 3, 2003. The
Agency did not receive comments on this proposal.
List of Subjects in 7 CFR Part 58
Dairy Products, Food grades and standards, Food labeling, Reporting
and recordkeeping requirements.
0
For the reason set forth in the preamble, 7 CFR part 58 is amended as
follows:
PART 58--GRADING AND INSPECTION, GENERAL SPECIFICATIONS FOR
APPROVED PLANTS AND STANDARDS FOR GRADES OF DAIRY PRODUCTS
0
1. The authority citation for 7 CFR part 58 continues to read as
follows:
Authority: 7 U.S.C. 1621-1627.
Subpart A--[Amended]
Sec. 58.43 [Amended]
0
2. In Sec. 58.43, ``$56.00'' is removed and ``$62.00'' is added in its
place, and ``$61.60'' is removed and ``$68.20'' is added in its place.
Sec. 58.45 [Amended]
0
3. In Sec. 58.45, ``$51.00'' is removed and ``$57.00'' is added in its
place.
Dated: February 20, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-4222 Filed 2-25-04; 8:45 am]
BILLING CODE 3410-02-P