97-33005. Grading and Inspection, General Specifications for Approved Plants and Standards for Grades of Dairy Products: Revision of User Fees  

  • [Federal Register Volume 62, Number 243 (Thursday, December 18, 1997)]
    [Rules and Regulations]
    [Pages 66257-66258]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 97-33005]
    
    
    
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    Federal Register / Vol. 62, No. 243 / Thursday, December 18, 1997 / 
    Rules and Regulations
    
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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: Revision of User 
    Fees
    
    AGENCY: Agricultural Marketing Service, USDA.
    
    ACTION: Final rule.
    
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    SUMMARY: The Agricultural Marketing Service (AMS) is increasing the 
    fees charged for services provided under the dairy inspection and 
    grading program. This rule will yield an estimated $343,000 during 
    1998. The program is a voluntary, user fee program conducted under the 
    authority of the Agricultural Marketing Act of 1946, as amended. This 
    action increases the hourly rate to $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 fees represent an increase of four dollars per hour.
        The fees are being increased to cover the costs of recent 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 nonpay operating costs.
    
    EFFECTIVE DATE: January 4, 1998.
    
    FOR FURTHER INFORMATION CONTACT: Lynn G. Boerger, USDA/AMS/Dairy 
    Programs, Dairy Grading Branch, Room 2750--South Building, P.O. Box 
    96456, Washington, D.C. 20090-6456, (202) 720-9381.
    
    SUPPLEMENTARY INFORMATION: This 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 final 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), 5 U.S.C. 601 et seq., the 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 fees will be raised, the increase is 
    approximately 8 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 should not prevent them from marketing their products. The AMS 
    estimates that overall this rule will yield an additional $343,000 
    during 1998. The rule reflects certain fee increases needed to recover 
    the cost of inspection and grading services rendered in accordance with 
    the Agricultural Marketing Act of 1946.
        The 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 program 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 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 four months.
        Since the costs of the grading program are covered entirely by user 
    fees, it is 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, the salaries of
    
    [[Page 66258]]
    
    Federal employees increased by 3 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 3 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.
        On October 16, 1997, the AMS published in the Federal Register (62 
    FR 53760), a proposed rule for public comment. Only one comment was 
    received. A U.S. Senator forwarded a constituent comment from a dairy 
    product manufacturer to the Department for its review. That commenter 
    opposed the proposed fee increase as harmful to the dairy industry.
        The commenter was of the view that the proposed fee increase 
    coupled with the most recent increase made effective on January 5, 1997 
    (61 FR 68997), is far out of line with the general economic conditions 
    in the United States. The commenter went on to conclude that 
    manufacturers who must have USDA inspection to sell their products 
    domestically or internationally would bear the brunt of the fee 
    increase. The commenter discussed passing the fee increase on to 
    customers but stated that it would be unable to pass though the 
    increases to its customers. The commenter further stated that it would 
    not accept price increases from its suppliers unless it was an absolute 
    last resort. As stated previously, 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 service to cover, as nearly as practicable, the cost of maintaining 
    the program. The fees, as proposed in this rulemaking, are consistent 
    with the provisions of the 1946 Act. The Agency conducts continuing fee 
    analyses and has instituted annual fee increases, when necessary, to 
    recover salary and other routine costs. The programs' financial 
    situation described herein requires implementation of the fee increase. 
    Even so, every effort has been and will continue to be made to operate 
    the program as efficiently as possible and to seek cost-cutting 
    measures that are consistent with the Agency's mission under this 
    program.
        With regard to the commenters passing increases forward or 
    backward, such actions are subject to agreement between buyers and 
    sellers as is any provision between the parties to require inspection. 
    This program is a voluntary program under the 1946 Act. Even though the 
    fees will be revised, the increase is approximately 8 percent and will 
    not significantly affect the industry. Accordingly, consistent with the 
    provisions of the Agricultural Marketing Act of 1946, the fees as 
    proposed are made final in this rule.
        Pursuant to 5 U.S.C. 553, it is hereby found that good cause exists 
    for not delaying the effective date of this action until 30 days after 
    publication of this final rule in the Federal Register. A revenue 
    shortfall warrants putting the higher rates into effect as quickly as 
    possible. The increase in fees is essential for effective management 
    and operation of the program and to satisfy the intent of the 
    Agricultural Marketing Act of 1946. A proposed rule setting forth 
    proposed fee increases was published in the Federal Register on October 
    16, 1997 (62 FR 53760).
        Accordingly, the program fees are being increased as set forth 
    below.
    
    Program Changes Adopted in the Final Rule
    
        This rule document makes the following changes in the regulations 
    implementing the dairy inspection and grading program:
        1. Increases 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. Increases 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.
    
    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, 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
    
        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 between 6:00 a.m. and 6:00 
    p.m. and $61.60 for service performed between 6:00 p.m. and 6:00 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: December 12, 1997.
    Enrique E. Figueroa,
    Acting Administrator, Agricultural Marketing Service.
    [FR Doc. 97-33005 Filed 12-17-97; 8:45 am]
    BILLING CODE 3410-02-P
    
    
    

Document Information

Effective Date:
1/4/1998
Published:
12/18/1997
Department:
Agricultural Marketing Service
Entry Type:
Rule
Action:
Final rule.
Document Number:
97-33005
Dates:
January 4, 1998.
Pages:
66257-66258 (2 pages)
Docket Numbers:
DA-97-13
RINs:
0581-AB50: Dairy Products; Grading and Inspection, Fee Increase
RIN Links:
https://www.federalregister.gov/regulations/0581-AB50/dairy-products-grading-and-inspection-fee-increase
PDF File:
97-33005.pdf
CFR: (2)
7 CFR 58.43
7 CFR 58.45