[Federal Register Volume 62, Number 200 (Thursday, October 16, 1997)]
[Proposed Rules]
[Pages 53760-53761]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-27324]
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Proposed Rules
Federal Register
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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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Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 /
Proposed Rules
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 58
[DA-97-13]
RIN 0581-AB50
Grading and Inspection, General Specifications for Approved
Plants and Standards for Grades of Dairy Products; Proposed Increase in
Fees
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: The Agricultural Marketing Service proposes to increase the
fees charged for services provided under the dairy inspection and
grading program. The program is a voluntary, user-fee program conducted
under the authority of the Agricultural Marketing Act of 1946, as
amended. The proposed increases would result in a fee of $51.00 per
hour for continuous resident services and $56.00 per hour for
nonresident services between the hours of 6:00 a.m. and 6:00 p.m. The
fee for nonresident services between the hours of 6:00 p.m. and 6:00
a.m. would be $61.60 per hour. These proposed fees represent an
increase of four dollars per hour. The fees are being increased to
cover the costs of anticipated salary increases and locality
adjustments, the costs necessary to maintain adequate levels of service
during changing production and purchasing patterns within the dairy
industry, the continued full funding for standardization activities,
and other operating costs.
DATES: Comments should be mailed by November 17, 1997.
ADDRESSES: Comments should be mailed to: Richard McKee, Office of the
Director, USDA/AMS/Dairy Division, Room 2968-S, P.O. Box 96456,
Washington, DC 20090-6456. Comments received will be available for
public inspection at this location during regular business hours.
FOR FURTHER INFORMATION CONTACT: Lynn G. Boerger, USDA/AMS/Dairy
Division, Dairy Grading Branch, Room 2750-South Building, P.O. Box
96456, Washington, DC 20090-6456, (202) 720-9381.
SUPPLEMENTARY INFORMATION: This proposed rule has been determined to be
not significant for purposes of Executive Order 12866 and has not been
reviewed by the Office of Management and Budget.
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This rule is not intended to have preemptive
effect with respect to any State or local laws, regulations, or
policies. This rule is not intended to have retroactive effect. There
are no administrative procedures which must be exhausted prior to any
judicial challenge to this rule or the application of its provisions.
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has
considered the economic impact of this action on small entities.
There are more than 600 users of Dairy Grading Branch's inspection
and grading services. Many of these users are small entities under the
criteria established by the Small Business Administration (13 CFR
121.601). This rule will raise the fee charged to businesses for
voluntary inspection services and grading services for dairy and
related products. Even though the fee will be raised, the increase is
approximately 8.0 percent and will not significantly affect these
entities. These businesses are under no obligation to use these
services, and any decision on their part to discontinue the use of the
services would not prevent them from marketing their products. The
Agricultural Marketing Service (AMS) estimates that overall this rule
will yield an additional $343,000 during 1998. The proposed rule
reflects certain fee increases needed to recover the cost of inspection
and grading services rendered in accordance with the Agricultural
Marketing Act (AMA) of 1946.
AMS regularly reviews its user-fee financed programs to determine
if the fees are adequate. The existing fee schedule will not generate
sufficient revenues to cover programs costs while maintaining an
adequate reserve balance (four months of costs) as called for by Agency
policy (AMS Directive 408.1). Without a fee increase, revenue
projections for FY 1998 would remain constant at $4.695 million. Costs
are projected to increase to $5.628 million. The shortfall, if allowed
to continue, would translate into an approximate 1.6 month operating
reserve at the end of FY 1998, which is less than Agency policy
requires.
The Agricultural Marketing Service (AMS) has determined that this
action will not have a significant impact on a substantial number of
small entities, as defined in the Regulatory Flexibility Act (5 U.S.C.
601).
The Agricultural Marketing Act of 1946, as amended, authorizes the
Secretary of Agriculture to provide Federal dairy grading and
inspection services that facilitate marketing and help consumers obtain
the quality of dairy products they desire. The Act provides that
reasonable fees be collected from the users of the services to cover,
as nearly as practicable, the cost of maintaining the program.
FY 1997 revenue was projected to be $4.733 million and costs to be
$5.240 million. The shortfall during the year reduced the operating
reserve from 5.6 months at the beginning of the year to 3.8 months at
the end of August, and is projected to further reduce the operating
reserve to approximately 1.6 months at the end of FY 1998. With this
proposed increase, assuming a slightly increased workload, revenue for
FY 1998 is projected to be $5.540 million with costs totaling $5.628
million. Of these costs, the general salary increase represents
$110,000 per year and is scheduled to be effective in January, 1998.
Employee salaries and benefits are major program costs and account for
approximately 70 percent of the total operating budget. Program travel
costs (of which approximately 80 percent are reimbursed by the
industry), general contract obligations and Agency overhead account for
another 24 percent of the budget. Changing workloads are analyzed on a
regular basis in order to maximize grading assignment efficiency and to
minimize grader and supervisory costs. Future increases would be
proposed as necessary in following years to cover any annual increases
in program costs and to maintain the capital reserve at 4 months.
Since the costs of the grading program are covered entirely by user
fees, it is
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essential that fees be increased when necessary to cover the cost of
maintaining a financially self-supporting program. The last fee
increase under this program became effective on January 5, 1997. On the
same effective date, Congress increased the salaries of Federal
employees by 3.0 percent which included locality pay. Also, there have
been normal increases in other nonpay operating costs that include
utilities, office space, and reimbursable travel. In addition, recent
congressional action will result in additional salary increases of
appoximately 3.0 percent in 1998. Although the program's operating
reserves were adequate to cover the January 5, 1997, salary increase,
this will not be the case for 1998 salary increases, and a fee increase
is needed.
The grading program fees need to be increased to cover the costs
associated with maintaining adequate levels of service during shifting
production patterns within the dairy industry. The industry changes
include plant consolidations, geographical shifts of dairy production
areas, and changes in the types of dairy products being manufactured
and offered for inspection and grading services. To minimize the
necessary fee increase, the Department has initiated cost-reduction
efforts which include the reduction of staff and program overhead.
Proposed Changes
This rule proposes the following changes in the regulations
implementing the dairy inspection and grading program:
1. Increase the hourly fee for nonresident services from $52.00 to
$56.00 for services performed between 6:00 a.m. and 6:00 p.m. The
nonresident hourly rate is charged to users who request an inspector or
grader for particular dates and amounts of time to perform specific
grading and inspection activities. These users of nonresident services
are charged for the amount of time required to perform the task and
undertake related travel plus travel costs.
2. Increase the hourly fee for continuous resident services from
$47.00 to $51.00. The resident hourly rate is charged to those who are
using grading and inspection services performed by an inspector or
grader assigned to a plant on a continuous, year-round resident basis.
Timing of Fee Increase
It is contemplated that the proposed fee increases would be
implemented on an expedited basis in order to minimize the period of
revenue shortfall. Accordingly, it is anticipated that the fee
increases, if adopted, would become effective upon publication, or very
soon after publication, of the final rule in the Federal Register. An
approximate effective date would be January 4, 1998.
Also, a thirty day comment period is deemed appropriate in view of
the need to implement any fee increases as early as possible in FY
1998.
All written submissions made pursuant to this notice will be made
available for public inspection in the Dairy Division during regular
business hours.
List of Subjects in 7 CFR Part 58
Dairy products, Food grades and standards, Food labeling, Reporting
and recordkeeping requirements.
For the reasons set forth in the preamble, it is proposed that 7
CFR Part 58 be amended as follows:
PART 58--GRADING AND INSPECTION, GENERAL SPECIFICATIONS FOR
APPROVED PLANTS AND STANDARDS FOR GRADES OF DAIRY PRODUCTS
1. The authority citation for Part 58 continues to read as follows:
Authority: 7 U.S.C. 1621-1627.
Subpart A--[Amended]
2. In subpart A, Sec. 58.43 is revised to read as follows:
Sec. 58.43 Fees for inspection, grading, and sampling.
Except as otherwise provided in Secs. 58.38 through 58.46, charges
shall be made for inspection, grading, and sampling service at the
hourly rate of $56.00 for service performed 6 a.m., for the time
required to perform the service calculated to the nearest 15-minute
period, including the time required for preparation of certificates and
reports and the travel time of the inspector or grader in connection
with the performance of the service. A minimum charge of one-half hour
shall be made for service pursuant to each request or certificate
issued.
3. Section 58.45 is revised to read as follows:
Sec. 58.45 Fees for continuous resident services.
Irrespective of the fees and charges provided in Secs. 58.39 and
58.43, charges for the inspector(s) and grader(s) assigned to a
continuous resident program shall be made at the rate of $51.00 per
hour for services performed during the assigned tour of duty. Charges
for service performed in excess of the assigned tour of duty shall be
made at a rate of 1\1/2\ times the rate stated in this section.
Dated: October 8, 1997.
Lon Hatamiya,
Administrator, Agricultural Marketing Service.
[FR Doc. 97-27324 Filed 10-15-97; 8:45 am]
BILLING CODE 3410-02-P
