[Federal Register: November 6, 2007 (Volume 72, Number 214)]
[Proposed Rules]
[Page 62591-62593]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06no07-14]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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[[Page 62591]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 56 and 70
[Docket No. AMS-PY-07-0065]
RIN 0581-AC73
Multiyear Increase in Fees and Charges for Egg, Poultry, and
Rabbit Grading and Audit Services
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: The Agricultural Marketing Service (AMS) proposes to increase
the fees and charges for Federal voluntary egg, poultry, and rabbit
grading, certification, and audit services for the next two fiscal
years, FY 2008 and FY 2009. The fees and charges need to be increased
by 2.76% to 7.74% to cover the increase in salaries of Federal
employees, salary increases of State employees cooperatively utilized
in administering the programs, and other increased Agency costs. The
AMS is required to collect fees from users of these services to cover
the costs of services rendered.
DATES: Comments must be received on or before December 6, 2007.
ADDRESSES: Send written comments, in duplicate, to David Bowden, Jr.,
Chief, USDA, AMS, PY, Standards, Promotion and Technology Branch, STOP
0256, Room 3932-S, 1400 Independence Avenue, SW., Washington, DC 20250-
0256. Comments, in duplicate, also may be faxed to (202) 720-2930.
Comments also may be submitted electronically to: http://www.regulations.gov
.
Comments received will be available for public inspection at the
above location between 8 a.m. and 4:30 p.m., e.t., Monday through
Friday, except legal holidays, or can be reviewed on http://www.regulations.gov
.
All comments should reference docket number AMS-PY-07-0065 and note
the date and page number of this issue of the Federal Register.
FOR FURTHER INFORMATION CONTACT: Charles L. Johnson, Chief, Grading
Branch, (202) 720-3271.
SUPPLEMENTARY INFORMATION:
Background and Proposed Changes
The Agricultural Marketing Act of 1946 (AMA), as amended (7 U.S.C.
1621-1627), gives AMS the authority to provide services so that
agricultural products may be marketed to their best advantage, that
global marketing and trade may be facilitated, and that consumers may
be able to ascertain characteristics involved in the production and
processing of products and obtain the quality of product they desire.
The AMA also provides for the collection of fees from users of these
services that are reasonable and cover the cost of providing services.
Voluntary grading and certification of eggs, poultry, and rabbits and
verification and conformance audits, fall within this authorization.
A recent review determined that the existing fee schedule,
effective April 1, 2007, will not generate sufficient revenue to cover
program costs while maintaining an adequate trust fund reserve balance
in FY 2008 and FY 2009. Revenue, investment income and other
adjustments in FY 2006 were $36 million while expenses were $35
million, resulting in a trust fund reserve balance increase from $12.3
million to $13.3 million.\1\
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\1\ With the increase, the reserve would be $14 million. However
a six month reserve is needed for all program contingencies,
including shutdown.
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FY 2007 revenue, investment income and other adjustments are
currently projected at $35.9 million and expenses in FY 2007 are
projected at $35.8 million. This will result in a trust fund reserve
balance of $13.4 million.
Without a fee increase, FY 2008 revenue is projected to be $35
million. Expenses are projected to be $37.4 million, which would leave
a reserve of $11 million. With a fee increase, FY 2008 revenue is
projected at $37.5 million. The fee increase will result in a trust
fund reserve balance of $13.5 million.
Without a fee increase, FY 2009 revenue is projected at $34.9
million. Expenses are projected at $38.2 million, which would leave a
reserve of $7.7 million. With a fee increase, FY 2009 revenue is
projected at $38.8 million. The fee increase will result in a trust
fund reserve balance of $14 million.
Employee salaries and benefits account for approximately 85 percent
of the total operating budget. The last general and locality salary
increase for Federal employees became effective on January 1, 2007, and
it materially affected program costs. Projected cost estimates for that
increase were based on a salary increase of 1.7 percent; however, the
increase was actually 1.81 to 3.02 percent, depending on locality. The
average annual increase in salary over the past five years has been
3.71 percent and was used for the projected salary increase for January
2008 and January 2009. Also, from October 2007 through September 2009,
salaries and fringe benefits of federally-licensed State employees are
estimated to increase by about 6.0 percent.
The hourly rate for resident and non-resident service covers
graders' salaries and benefits. The current hourly rates of $39.04,
$69.68, and $80.12 for the resident and fee service cover graders'
salaries and benefits, plus the cost of travel and supervision. The
minimum monthly administrative volume charge for resident poultry,
shell egg, and rabbit grading remains at $275, because the fee analysis
determined that raising the minimum monthly administrative charge would
not generate additional reserve. For FY 2008 the non-resident fee rates
would be $74.08 for regular hours and $86.68 for weekend and holiday
hours, an increase of approximately 7 percent from the previous year.
Beginning in January 2009, the non-resident fee rates would be $77.28
for regular hours and $93.24 for weekend and holiday hours, an increase
of approximately 6 percent from the previous year.
Current rates for auditing services are $82.16 and $102.84. In FY
2008 they would be $87.56 for regular hours and $112.00 for weekend and
holiday hours, an increase of approximately 8 percent from the previous
year. Beginning in January 2009, the audit rates would be $89.20 for
regular hours and $116.08 for weekend and holiday hours, an increase of
approximately 3 percent.
Elimination of the inauguration charge of $310, when an application
for service has been received, is also proposed. By restructuring the
inauguration charge, expenses incurred
[[Page 62592]]
for plant surveys and billed to applicants will reflect a more accurate
accounting for the services rendered. Since a plant survey still would
be required, the fee for the survey would be borne by the applicant at
rates set forth for shell eggs in Sec. 56.46 (a)-(c) and for poultry
and rabbits in Sec. 70.71 (a)-(c), plus any travel and additional
expenses.
The following table compares current and proposed fees. The fee
rate would be increased by approximately 7.0 percent. The hourly rate
for resident and nonresident service covers graders' salaries and
benefits.
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Service Current Proposed 2008 Proposed 2009
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Resident Service (egg, poultry, and rabbit grading)
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Inauguration of service......................................... 310 0 0
Hourly charges:
Regular hours............................................... 39.04 40.88 42.68
Administrative charges--Poultry grading:
Per pound of poultry........................................ .00043 .00045 .00047
Minimum per month........................................... 275 275 275
Maximum per month........................................... 3,075 3,150 3,225
Administrative charges--Shell egg grading:
Per 30-dozen case of shell eggs............................. .053 .055 .058
Minimum per month........................................... 275 275 275
Maximum per month........................................... 3,075 3,150 3,225
Administrative charges--Rabbit grading:
Based on 25% of grader's salary, minimum per month.......... 275 275 275
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Non-resident Service (egg, poultry, and rabbit grading)
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Hourly charges:
Regular hours............................................... 39.04 40.88 42.68
Administrative charges:
Based on 25% of grader's salary, minimum per month.......... 275 275 275
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Nonresident Fee and Appeal Service (egg, poultry, and rabbit grading)
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Hourly charges:
Regular hours............................................... 69.68 74.08 77.28
Weekend and holiday hours................................... 80.12 86.68 93.24
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Audit Fee (Plant Systems, Animal Welfare, QSVP)
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Hourly charges:
Regular hours............................................... 82.16 87.56 89.20
Weekend and holiday hours................................... 102.84 112.00 116.08
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Executive Order 12866
This proposed rule 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 (RFA) (5 U.S.C. 601-674), the AMS has considered the
economic impact of this action on small entities. It is determined that
its provisions would not have a significant economic impact on a
substantial number of small entities.
There are about 390 users of Poultry Programs' services. These
official plants can pack eggs, poultry, and rabbits in packages bearing
the USDA grade shield when AMS graders are present to certify that the
products meet the grade requirements as labeled. Many of these users
are small entities under the criteria established by the Small Business
Administration (13 CFR 121.201). These entities are under no obligation
to use program services as authorized under the Agricultural Marketing
Act of 1946.
The AMS regularly reviews its user fee financed programs to
determine if fees are adequate and if costs are reasonable. A recent
review determined that the existing fee schedule, effective April 1,
2007, will not generate sufficient revenue to cover program costs while
maintaining an adequate reserve balance in FY 2008 and FY 2009.
Expenses in FY 2008 are projected at $37.4 million. Without a fee
increase, FY 2008 revenue is projected at $35 million. With a fee
increase, FY 2008 revenues are projected at $37.5 million.
Expenses in FY 2009 are projected at $38.2 million. Without a fee
increase, FY 2009 revenues are projected at $34.9 million. With a fee
increase, FY 2009 revenues are projected at $38.8 million.
This action would raise the fees charged to users of grading and
auditing services. The AMS estimates that, overall, this rule would
yield an about $2.4 million during FY 2008 and $3.9 million for FY
2009. The hourly rate for resident and nonresident service would
increase by approximately 4.71 percent in FY 2008 and 4.4 percent in FY
2009. The fee rate would increase by approximately 7 percent in FY 2008
and approximately 6 percent in FY 2009. The audit fee would increase by
approximately 8 percent in FY 2008 and approximately 3 percent in FY
2009. The impact of these rate changes in a poultry plant would range
from about $0.000078 to $0.000952 per pound of poultry handled in FY
2008 and $0.000085 to $0.001068 in FY 2009. In a shell egg plant, the
range would be $0.000273 to $0.003499 per dozen eggs handled in FY 2008
and $0.000410 to $0.004870 per dozen eggs handled in FY 2009.
[[Page 62593]]
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
The information collection requirements that appear in the sections
to be amended by this action have been previously approved by OMB and
assigned OMB Control Numbers under the Paperwork Reduction Act (44
U.S.C. Chapter 35) as follows: Sec. 56.52(a)(4)--No. 0581-0128; and
Sec. 70.77(a)(4)--No. 0581-0127.
A 30-day comment period is provided for interested persons to
comment on this proposed rule. Given the current financial status of
this program, this comment period is deemed appropriate in order to
implement, as early as possible in FY 2008, any fee changes adopted as
a result of this rulemaking action.
List of Subjects
7 CFR Part 56
Eggs and egg products, Food grades and standards, Food labeling,
Reporting and recordkeeping requirements.
7 CFR Part 70
Food grades and standards, Food labeling, Poultry and poultry
products, Rabbits and rabbit products, Reporting and recordkeeping
requirements.
For reasons set forth in the preamble, it is proposed that Title 7,
Code of Federal Regulations, parts 56 and 70 be amended as follows:
PART 56--GRADING OF SHELL EGGS
1. The authority citation for part 56 continues to read as follows:
Authority: 7 U.S.C. 1621-1627.
Sec. 56.46 [Amended]
2. Section 56.46 is amended by:
A. Removing in paragraph (b), ``$69.68'' and adding ``$74.08,
beginning January 27, 2008, and $77.28 on or after January 25, 2009,''
in its place.
B. Removing in paragraph (c), ``$80.12 per hour'' and adding
``$86.68 per hour, beginning January 27, 2008 and $93.24 per hour on or
after January 25, 2009,'' in its place.
C. Removing in paragraph (d), ``$82.16'' and adding ``$87.56
beginning January 27, 2008, and $89.20 on or after January 25, 2009,''
in its place.
D. Removing in paragraph (e), ``$102.84 per hour'' and adding
``$112.00 per hour beginning January 27, 2008 and $116.08 per hour on
or after January 25, 2009,'' in its place.
3. Section 56.52 is amended by:
A. Removing the first sentence of paragraph (a)(1), and adding
three sentences to read as set forth below; and
B. Removing in paragraph (a)(4), ``$0.053'' and adding ``$0.055
beginning January 27, 2008, and $0.058 on or after January 25, 2009,''
in its place, and removing ``$3,075'' and adding ``$3,150 beginning
January 27, 2008, and $3,225 on or after January 25, 2009,'' in its
place.
Sec. 56.52 Charges for continuous grading performed on a resident
basis.
* * * * *
(1) When a signed application for service has been received, the
State supervisor or the supervisor's assistant shall complete a plant
survey pursuant to Sec. 56.30. The costs for completing the plant
survey shall be borne by the applicant on a fee basis at rates set
forth in Sec. 56.46 (a) through (c), plus any travel and additional
expenses. No charges will be assessed when the application is required
because of a change in name or ownership. * * *
* * * * *
PART 70--VOLUNTARY GRADING OF POULTRY PRODUCTS AND RABBIT PRODUCTS
4. The authority citation for part 70 continues to read as follows:
Authority: 7 U.S.C. 1621-1627.
Sec. 70.71 [Amended]
5. Section 70.71 is amended by:
A. Removing in paragraph (b) ``$69.68'' and adding ``$74.08
beginning January 27, 2008, and $77.28 on or after January 25, 2009,''
in its place.
B. Removing in paragraph (c) ``$80.12 per hour'' and adding
``$86.68 per hour beginning January 27, 2008, and $93.24 per hour on or
after January 25, 2009,'' in its place.
C. Removing in paragraph (d), ``$82.16'' and adding ``$87.56
beginning January 27, 2008, and $89.20 on or after January 25, 2009,''
in its place.
D. Removing in paragraph (e), ``$102.84 per hour'' and adding
``$112.00 per hour beginning January 27, 2008, and $116.08 per hour on
or after January 25, 2009,'' in its place.
6. Section 70.77 is amended by:
A. Removing the first sentence of paragraph (a)(1), and adding
three sentences to read as set forth below; and
B. Removing in paragraph (a)(4), ``$0.00043'' and adding ``$0.00045
beginning January 27, 2008 and $0.00047 on or after January 25, 2009,''
in its place, and removing ``$3,075'' and adding ``$3,150 beginning
January 27, 2008, and $3,225 on or after January 25, 2009,'' in its
place.
Sec. 70.77 Charges for continuous poultry or rabbit grading performed
on a resident basis.
* * * * *
(1) When a signed application for service has been received, the
State supervisor or the supervisor's assistant shall complete a plant
survey pursuant to Sec. 70.34. The costs for completing the plant
survey shall be borne by the applicant on a fee basis at rates set
forth in Sec. 70.71(a) through (c), plus any travel and additional
expenses. No charges will be assessed when the application is required
because of a change in name or ownership. * * *
* * * * *
Dated: October 18, 2007
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 07-5571 Filed 11-2-07; 11:54 am]
BILLING CODE 3410-02-P