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

SUMMARY: The Agricultural Marketing Service is increasing the fees

charged for services provided under the dairy grading program. This

rule will yield an estimated $308,000 of additional user fee revenue in

FY 1994. The program is a voluntary, user-fee funded program conducted

under the authority of the Agricultural Marketing Act of 1946, as

amended.

EFFECTIVE DATE: February 9, 1994.

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: The Department is issuing this final rule in

conformance with Executive Order 12866.

This final rule has been reviewed in accordance with the Regulatory

Flexibility Act, 5 U.S.C. 601 et seq., and the Administrator,

Agricultural Marketing Service, has determined that it will not have a

significant economic impact on a substantial number of small entities.

The changes will not significantly affect the cost per unit for grading

and inspection services. The Agricultural Marketing Service estimates

that this rule will yield an additional $308,000 in user fee revenue

during FY 1994. The Agency does not believe the increases will affect

competition. Furthermore, the dairy grading program is a voluntary

program.

In addition, this final rule has been reviewed under Executive

Order 12778, 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 challenges to this rule or the application of its

provisions.

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

the cost of maintaining the program.

Since the costs of the grading program are covered by user fees, it

is essential that fees be increased to cover the cost of maintaining a

financially self-supporting program. The last fee increase under this

program became effective on January 26, 1992. Since that time, Congress

increased the salaries of Federal employees by 3.7 percent as of

January 10, 1993. Also, there have been normal increases in other

operating costs. In addition, recent congressional action will result

in additional salary increases of varying amounts in 1994. Although the

program's operating reserves were adequate to cover the January 10,

1993, salary increase, this will not be the case for 1994 salary

increases, and a fee increase is needed.

The grading program fees also need to be increased to cover the

costs related to the development of dairy product standards and other

activities now performed by the Dairy Division's Standardization

Branch. In the recent FY 1994 appropriations bill, Congress

appropriated money for the development of standards by the Agricultural

Marketing Service but at the same time stipulated that the program

costs be recovered through user fees, with the fees being turned over

to the U. S. Treasury. Since the dairy standardization program is an

essential part of the dairy grading program, it is appropriate that the

standardization program costs be recovered through the fees charged the

users of the grading program.

The projected cost of the dairy standardization program for FY 1994

is $435,000. To lessen the initial impact of transferring this cost to

the users of the grading program, only about 2/3 of this cost would be

recovered, with the remainder being covered by the grading program's

operating reserves. Further fee increases about a year later presumably

would be needed to cover the remaining portion of the standards costs.

On October 26, 1993, the Agricultural Marketing Service published

in the Federal Register (58 FR 57567) for public comment a document

proposing a $2.60 increase in the hourly fees for both the resident and

nonresident programs, except for a $3.00 increase for nonresident

services between the hours of 6 p.m. and 6 a.m. The only comments

received were from the States of Oklahoma and Idaho, which opposed the

fee increases. State officials stated that the inspection and grading

program is being run in an inefficient manner and that steps should be

taken to reduce program costs.

Program officials are continually seeking ways to operate the

program more efficiently and to reduce operating costs. Examples of

actions taken in recent years include the closing of 3 of 4 field

offices and a reduction in headquarters staff. Also, program officials

are currently working with the various States to address their concerns

regarding program costs. At the same time, it is essential that the

fees be increased now to cover current operating costs.

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

26, 1993 (58 FR 57567). Therefore, the provisions of this final rule

are known to interested parties. Accordingly, the program fees are

being increased as set forth below.

Program Changes Adopted in the Final Rule

This document makes the following changes in the regulations

implementing the dairy inspection and grading program:

1. Increases the hourly fee for nonresident services from $44.60 to

$47.20 for services performed between 6 a.m. and 6 p.m. and from $49.00

to $52.00 for services performed between 6 p.m. and 6 a.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

$39.60 to $42.20.

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

Diary 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--[AMENDED]

Subpart A--Regulations Governing the Inspection and Grading

Services of Manufactured or Processed Dairy Products

1. The authority citation for part 58 is revised to read as

follows:

Authority: 7 U.S.C. 1621-1627, unless otherwise noted.

2. Section 58.43 is revised to read as follows:

Sec. 58.43 Fees for inspection, grading, and sampling.

Except as otherwise provided in Sec. 58.43 and Secs. 58.38 through

58.46, charges shall be made for inspection, grading, and sampling

service at the hourly rate of $47.20 for service performed between 6

a.m. and 6 p.m., and $52.00 for service performed between 6 p.m. and 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 and

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 service.

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 $42.20 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: February 2, 1994.

Lon Hatamiya,

Administrator.

[FR Doc. 94-2961 Filed 2-8-94; 8:45 am]

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