Changes in Fees for Federal Meat Grading and Certification Services

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.

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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