[Federal Register Volume 59, Number 56 (Wednesday, March 23, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-6544] [[Page Unknown]] [Federal Register: March 23, 1994] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 54 [No. LS-93-006] RIN 0581-AB07 Changes in Fees for Federal Meat Grading and Certification Services AGENCY: Agricultural Marketing Service, USDA. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: The Agricultural Marketing Service (AMS) is revising the hourly fee rates for voluntary Federal meat grading and acceptance services. The hourly fees will be adjusted to incorporate new program costs and ensure that the Federal meat grading program is operated on a financially self-supporting basis as required by law. The new program costs are the result of a congressional budget action which requires the Agency to recover the costs of livestock and meat standardization activities. EFFECTIVE DATE: March 23, 1994. FOR FURTHER INFORMATION CONTACT: Larry R. Meadows, Chief, Meat Grading and Certification Branch, 202/720-1246. SUPPLEMENTARY INFORMATION: Executive Order 12778 This final rule has been reviewed under Executive Order 12778, Civil Justice Reform. This final rule is not intended to have preemptive effect with respect to any State or local laws, regulations, or policies that do not conflict with this final rule. This final rule is not intended to have retroactive effect. There are no administrative procedures which must be exhausted prior to any judicial challenge to this final rule or the application of its provisions. Regulatory Impact Analysis This rule has been determined to be not significant for purposes of Executive Order 12866 and therefore has not been reviewed by OMB. Effect on Small Entities This final rule was reviewed under the Regulatory Flexibility Act (RFA) (Pub. L. 96-354, 5 U.S.C. 601 et seq.). The changes to the hourly fees are necessary to recover directly related costs of livestock and meat standardization activities. The per-hour increase translates to a $.000031 increase in the per-pound unit cost of meat grading and certification services. However, the unit cost for providing meat grading and certification services to all applicants--including the cost to fund directly related livestock and meat standardization activities--has been reduced by cost-reduction actions in both the program and the meat industry to approximately $.0009 per pound. Accordingly, the Administrator of AMS has determined that this final rule will not have a significant economic impact on a substantial number of small entities as defined by the RFA. Paperwork Reduction Act The provisions of the Paperwork Reduction Act do not apply to this rulemaking as it does not require the collection of any information or data. Background The Secretary of Agriculture is authorized under the Agricultural Marketing Act (AMA) of 1946, as amended, 7 U.S.C. 1621 et seq., to provide voluntary Federal meat grading and acceptance services to facilitate the orderly marketing of meat and meat products and to enable consumers to obtain the quality of meat they desire. The AMA also provides for the collection of fees from users of Federal meat grading and acceptance services, which is approximately equal to the costs of providing these services. Program operating costs for fiscal year (FY) 1993 and previous years have included graders' salaries, fringe benefits, supervision, travel, training, and administrative costs. When the program incurs increases in operating costs which are beyond its control, such cost increases must be recovered through increases in the fee rate charged to users of meat grading and acceptance services so that the program can remain financially self- supporting. The recent appropriations bill HR 2493, requires collection of fees for standardization activities for FY 1994 and subsequent years as established by regulation pursuant to law (31 U.S.C. 9701). Standardization programs and activities include, but are not limited to, the development, maintenance, and demonstration of the official U.S. standards for carcass grades, live animal grades, and wool and mohair grades and specifications for livestock, meat, and meat products. The congressional action places the obligation of funding standardization programs and activities on those individuals or groups that benefit from such programs or activities. For the livestock and meat industry, those portions of the total costs for standardization activities which support the meat grading and acceptance services or otherwise provide a service to the meatpackers and processors will be recovered through increases in fees charged to users of meat grading and acceptance services. Prior to FY 1994, the total cost to operate the livestock and meat standardization program was funded entirely by congressionally-appropriated funds. However, as a result of the new congressional mandate, all funds appropriated for standardization programs and activities must be reimbursed to the U.S. Treasury beginning with FY 1994 and for each FY thereafter. Based upon an analysis of standardization programs, activities, and related staffing levels, the Agency has determined that for 1994 the projected costs to operate the livestock and meat standardization program is $885,000, of which $610,500 are attributable to the meatpacking and processing industries. Accordingly, this amount must be recovered through the fees charged to users of meat grading and acceptance services. The remaining portions of the standardization costs not attributable to the meat grading and acceptance services or otherwise not identifiable as providing a service to the meatpacking and processing industry (i.e., wool and mohair standards, a portion of the live standards) will be (1) Reimbursed by direct transfers of funds from those programs whose services are supported or dependent on those standards; or (2) terminated if the costs incurred cannot be recovered. The amount to be reimbursed through the meat grading and acceptance user fees includes (1) The costs for the development and maintenance of carcass standards; (2) a portion of the costs for live animal standards; (3) a portion of the costs for the development and maintenance of specifications; and (4) related administrative and management overhead costs. The Agency recognizes the impact of any user-fee increase on the meat industry. This increase in the user fees implemented by this rule is due to the congressional budget action that requires the Agency to recover the costs of funding standardization programs and activities. Accordingly, the Agency has taken action to minimize the amount of the increase in the hourly fee rate necessary to recover the costs for standardization programs and activities which support the meat grading, acceptance, or related services provided to the meatpacking and processing industry. These actions include projected cost reductions in the review and evaluation functions and in employee training and development related to conduct of the meat grading and acceptance services. Additionally, the Agency will continue to review standardization programs and activities which support the meat grading, acceptance, or related services provided to the meatpacking and processing industry to effect further cost reductions wherever possible. Comments On December 9, 1993, the Agency published in the Federal Register (58 FR 64669) an interim final rule increasing the fees for Federal meat grading and certification services. On January 13, 1994, the Agency published in the Federal Register (59 FR 1890) a correction to make the interim rule effective on December 9, 1993. This rule was implemented on an interim basis without prior proposal because increased revenues were needed to cover the increased cost of providing service. The interim rule was published with request for comments as a means of providing full public participation in the rulemaking process. Comments were requested by February 7, 1994. During the 60-day comment period the Agency received no letters responsive to the interim final rule. In view of the foregoing considerations, the Agency will increase the base hourly rate for commitment applicants for voluntary Federal meat grading and acceptance services from $35.20 to $36.60. A commitment applicant is a user of the service who agrees, by commitment or agreement memorandum, to the use of meat grading and acceptance services for 8 consecutive hours per day, Monday through Friday, between the hours of 6 a.m. and 6 p.m., excluding legal holidays. The base hourly rate for noncommitment applicants for voluntary Federal meat grading and acceptance services will increase from $37.60 to $39.00, and will be charged to applicants who utilize the service for 8 hours or less per day, Monday through Friday, between the hours of 6 a.m. and 6 p.m., excluding legal holidays. The premium hourly rate for all applicants will be increased from $43.20 to $44.60, and will be charged to users of the service for the hours worked in excess of 8 hours per day between the hours of 6 a.m. and 6 p.m., and for hours worked from 6 p.m. to 6 a.m., Monday through Friday, and for any time worked on Saturday and Sunday, except on legal holidays. The holiday rate for all applicants will be increased from $70.40 to $73.20, and will be charged to users of the service for all hours worked on legal holidays. Pursuant to 5 U.S.C. 553, it is hereby found that good cause exists for not delaying the effective action until 30 days after publication of this final rule in the Federal Register. Therefore, this final rule will be effective on March 23, 1994. List of Subjects in 7 CFR Part 54 Food grades and standards, Food labeling, Meat and meat products. For the reasons set forth in the preamble, 7 CFR part 54 is amended as follows: PART 54--MEATS, PREPARED MEATS, AND MEAT PRODUCTS (GRADING, CERTIFICATION, AND STANDARDS) 1. The authority citation for part 54 continues to read as follows: Authority: 7 U.S.C. 1622 and 1624. 2. Accordingly, the interim rule amending 7 CFR part 54 which was published at 58 FR 64669 on December 9, 1993, is adopted as a final rule without change. Dated: March 15, 1994. Lon Hatamiya, Administrator, Agricultural Marketing Service. [FR Doc. 94-6544 Filed 3-22-94; 8:45 am] BILLING CODE 3410-02-P
