Increase in Fees for Federal Dairy Grading and Inspection Services, 20351-20353 [E6-5941]
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hsrobinson on PROD1PC61 with PROPOSALS
Federal Register / Vol. 71, No. 76 / Thursday, April 20, 2006 / Proposed Rules
classing was the prevailing method of
cotton classification requested by
producers in 2005. Therefore, the 2006
producer’s user fee for classification
service is based on the 2005 base fee for
HVI classification.
The fee was calculated by applying
the formula specified in the Uniform
Cotton Classing Fees Act of 1987, as
amended by Public Law 102–237. The
2005 base fee for HVI classification
exclusive of adjustments, as provided by
the Act, was $2.37 per bale. An increase
of 3.29 percent, or 8 cents per bale, due
to the implicit price deflator of the gross
domestic product added to the $2.37
would result in a 2006 base fee of $2.45
per bale. The formula in the Act
provides for the use of the percentage
change in the implicit price deflator of
the gross national product (as indexed
for the most recent 12-month period for
which statistics are available). However,
gross national product has been
replaced by gross domestic product by
the Department of Commerce as a more
appropriate measure for the short-term
monitoring and analysis of the U.S.
economy.
The number of bales to be classed by
the United States Department of
Agriculture from the 2006 crop is
estimated at 20,268,150 bales. The 2006
base fee was decreased 15 percent based
on the estimated number of bales to be
classed (1 percent for every 100,000
bales or portion thereof above the base
of 12,500,000, limited to a maximum
decreased adjustment of 15 percent).
This percentage factor amounts to a 37
cents per bale reduction and was
subtracted from the 2006 base fee of
$2.45 per bale, resulting in a fee of $2.08
per bale.
However, with a fee of $2.08 per bale,
the projected operating reserve would
be 35.74 percent. The Act specifies that
the Secretary shall not establish a fee
which, when combined with other
sources of revenue, will result in a
projected operating reserve of more than
25 percent. Accordingly, the fee of $2.08
must be reduced by 23 cents per bale,
to $1.85 per bale, to provide an ending
accumulated operating reserve for the
fiscal year of not more than 25 percent
of the projected cost of operating the
program. This would establish the 2006
season fee at $1.85 per bale.
Accordingly, section 28.909,
paragraph (b) would reflect the
continuation of the HVI classification
fee at $1.85 per bale.
As provided for in the Uniform Cotton
Classing Fees Act of 1987, as amended,
a 5 cent per bale discount would
continue to be applied to voluntary
centralized billing and collecting agents
as specified in section 28.909 (c).
VerDate Aug<31>2005
14:56 Apr 19, 2006
Jkt 208001
Growers or their designated agents
receiving classification data would
continue to incur no additional fees if
classification data is requested only
once. The fee for each additional
retrieval of classification data in section
28.910 would remain at 5 cents per bale.
The fee in section 28.910(b) for an
owner receiving classification data from
the National database would remain at
5 cents per bale, and the minimum
charge of $5.00 for services provided per
monthly billing period would remain
the same. The provisions of section
28.910(c) concerning the fee for new
classification memoranda issued from
the National database for the business
convenience of an owner without
reclassification of the cotton will remain
the same at 15 cents per bale or a
minimum of $5.00 per sheet.
The fee for review classification in
section 28.911 would be maintained at
$1.85 per bale.
The fee for returning samples after
classification in section 28.911 would
remain at 40 cents per sample.
A 15-day comment period is provided
for public comments. This period is
appropriate because it is anticipated
that the proposed changes, if adopted,
would be made effective July 1, 2006, as
provided by the Cotton Statistics and
Estimates Act.
List of Subjects in 7 CFR Part 28
Administrative practice and
procedure, Cotton, Cotton samples,
Grades, Market news, Reporting and
recordkeeping requirements, Standards,
Staples, Testing, Warehouses.
For the reasons set forth in the
preamble, 7 CFR part 28 is proposed to
be amended as follows:
PART 28—[AMENDED]
1. The authority citation for 7 CFR
part 28, subpart D, continues to read as
follows:
Authority: 7 U.S.C. 471–476.
2. In § 28.909, paragraph (b) is revised
to read as follows:
§ 28.909
Costs.
*
*
*
*
*
(b) The cost of High Volume
Instrument (HVI) cotton classification
service to producers is $1.85 per bale.
*
*
*
*
*
3. In § 28.911, the last sentence of
paragraph (a) is revised to read as
follows:
§ 28.911
Review classification.
(a) * * * The fee for review
classification is $1.85 per bale.
*
*
*
*
*
PO 00000
Frm 00002
Fmt 4702
Sfmt 4702
20351
Dated: April 14, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing
Service.
[FR Doc. E6–5940 Filed 4–19–06; 8:45 am]
BILLING CODE 3410–02–P
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 58
[Docket Number DA–05–04]
RIN 0581–AC55
Increase in Fees for Federal Dairy
Grading and Inspection Services
Agricultural Marketing Service,
USDA.
ACTION: Proposed rule.
AGENCY:
SUMMARY: The Agricultural Marketing
Service (AMS) is proposing to increase,
by approximately 10 percent, the hourly
fees charged for Federal dairy grading
and inspection services. Dairy grading
and inspection services are voluntary
and are financed through user-fees
assessed to participants in the program.
These revisions are necessary in order to
recover, as nearly as practicable, the
increase in salaries of Federal
employees, the increase in Agency
costs, and to ensure that the Dairy
Grading Branch operates on a
financially self-supporting basis.
DATES: Comments must be received on
or before May 22, 2006.
ADDRESSES: Interested persons are
invited to submit written comments
concerning this proposed rule to Dana
H. Coale, Deputy Administrator, Dairy
Programs, Agricultural Marketing
Service, U.S. Department of Agriculture,
Stop 0225, room 2968—South, 1400
Independence Avenue, SW.,
Washington, DC 20250–0225.
Comments may be faxed to (202) 690–
3410. Comments should be submitted in
duplicate. Comments may also be
electronically submitted to
Dana.Coale@usda.gov or https://
www.regulations.gov. All comments
should reference docket number DA–
05–04 and note the date and page
number of this issue of the Federal
Register. All comments received will be
available for public inspection at the
above location during regular business
hours. Comments received also will be
made available over the Internet in the
rulemaking section of the AMS Web site
https://www.ams.usda.gov/rulemaking.
FOR FURTHER INFORMATION CONTACT:
Dana H. Coale, Dairy Programs (202)
720–4392.
E:\FR\FM\20APP1.SGM
20APP1
20352
Federal Register / Vol. 71, No. 76 / Thursday, April 20, 2006 / Proposed Rules
SUPPLEMENTARY INFORMATION:
hsrobinson on PROD1PC61 with PROPOSALS
Executive Orders 12866 and 12988
This proposed rule has been
determined to be ‘‘not significant’’ for
purposes of Executive Order 12866, and
therefore, has not been reviewed by the
Office of Management and Budget
(OMB).
This proposed rule has been reviewed
under Executive Order 12988, Civil
Justice Reform. This action is not
retroactive. This rule will not preempt
any State or local laws, regulations, or
policies unless they present an
irreconcilable conflict with this rule.
There are no administrative procedures
which must be exhausted prior to any
judicial challenge to the provisions of
this rule.
Regulatory Flexibility Act and
Paperwork Reduction Act
Pursuant to the requirement set forth
in the Regulatory Flexibility Act, AMS
has considered the economic impact of
this action on small entities. It has been
determined that its provisions would
not have a significant economic effect
on a substantial number of small
entities. For the purpose of the
Regulatory Flexibility Act, a dairy
products manufacturer is a ‘‘small
business’’ if it has fewer than 500
employees. If a plant is part of a larger
company operating multiple plants that
collectively exceed the 500 employee
limit, the plant will be considered a
large business even if the local plant has
fewer than 500 employees.
Under the Agricultural Marketing Act
of 1946, the Dairy Grading Branch,
AMS, provides voluntary Federal
inspection and dairy product grading
services to about 350 plants. About 210
of these users are small businesses
under the criteria established by the
Small Business Administration (13 CFR
121.201). Manufacturing plants
participating in the voluntary plant
inspection program have their facility
inspected against established USDA
‘‘General Specifications for Dairy Plants
Approved for USDA Inspection and
Grading Service’’ construction and
sanitation requirements. Dairy products
manufactured in facilities complying
with the USDA inspection requirements
are eligible to have their output graded
against official quality standards and
specifications established by AMS and
certain contract provisions between
buyer and seller. Products tested and
graded by the Dairy Grading Branch
have certificates issued describing the
product’s quality and condition.
AMS continually reviews its cost
structure to assure it is operating
efficiently while maintaining the
VerDate Aug<31>2005
14:56 Apr 19, 2006
Jkt 208001
resources necessary to meet industry’s
demand for services. Periodically, fees
must be adjusted to ensure that the
program remains financially selfsupporting. To reduce costs, the Dairy
Grading Branch has continued to
automate its business practices. Progress
to date has been significant and has
resulted in savings equal to two staff
years to the program. Further
enhancements in automated business
practices will continue to improve the
efficiency and timeliness of providing
inspection and grading services and
information to users of these services.
Employee salaries and benefits
account for nearly 73 percent of the
operating costs of the Dairy Grading
Branch. Since the last fee increase in
2004 (69 FR 8797), annual salary
increases and locality adjustments have
resulted in an increase in employee
salaries of 8.3 percent. As a result,
annual salary and benefit costs to the
program for 2006 are approximately
$240,000 more. Inflation raised nonsalary costs approximately 6.0 percent
through 2005, and it is expected that
non-salary operating expenses will
increase an additional 3.0 percent in
2006. Current revenue projections using
Dairy Grading Branch’s current fee
schedule will not provide income
sufficient to cover these escalating
program operation costs and maintain
reserves (4 months of costs) according to
AMS policy (AMS Directive 408.1).
Since projected revenues will not
cover program costs while maintaining
an adequate reserve, the Dairy Grading
Branch will be put in an unstable
financial position that will adversely
affect the ability to provide dairy
inspection and grading services.
Without a fee increase, total revenue
projections for Fiscal Year (FY) 2006 are
$4.980 million. Total costs for the same
period of time are projected to be $5.778
million. The shortfall, if allowed to
continue, will reduce the trust fund
balance to $1.578 million or 3.3 months
of operating reserve at the end of FY
2006 which is below Agency policy.
With the proposed fee increase effective
April 1, 2006, FY 2006 revenues are
projected at $5.227 million.
AMS estimates these fee increases
will provide the Dairy Grading Branch
an additional $504,000 annually to
recover program costs and to provide for
continued automation of business
practices.
This rule will raise the fees charged
to businesses for voluntary plant
inspections, grading services for dairy
and related products, and the evaluation
of food processing equipment. However,
the impact on all businesses, including
small entities is very similar. Even
PO 00000
Frm 00003
Fmt 4702
Sfmt 4702
though fees will be increased
approximately 9.7% for non-resident
services and 10.5% for continuous
resident services, these fee increases
should not significantly affect these
entities. These businesses are under no
obligation to use these voluntary userfee based services and any decision on
their part to discontinue the use of the
services would not prevent them from
marketing their products.
A review of reporting requirements
was completed under the Paperwork
Reduction Act of 1995 (44 U.S.C.
Chapter 35). It was determined that this
rule would have no impact on reporting,
recordkeeping, or other compliance
requirements for entities currently using
voluntary Federal dairy inspection and
grading services because they would
remain identical to the current
requirements.
This notice does not require
additional information collection that
requires clearance by OMB. The primary
sources of data used to complete the
forms are routinely used in most
business transactions. Forms require
only a minimal amount of information
which can be supplied without data
processing equipment or a trained
statistical staff. Thus, the information
collection and reporting burden is
relatively small. Requiring the same
information from all participating dairy
plants does not significantly
disadvantage any plant that is smaller
than the industry average.
Proposed Action
The Secretary of Agriculture is
authorized by the Agricultural
Marketing Act of 1946 (AMA), as
amended (7 U.S.C. 1621, et seq.), to
provide voluntary Federal dairy
inspection and grading services to
facilitate the orderly marketing of dairy
products and to enable consumers to
obtain the quality of dairy products they
desire. The AMA also provides for the
collection of reasonable fees from users
of the Federal dairy inspection and
grading services to cover the cost of
providing these services. The hourly
fees are established by distributing the
program’s projected operating costs over
the estimated service-revenue hours
provided to users. AMS continually
reviews its cost structure to assure it is
operating efficiently while maintaining
the resources necessary to meet
industry’s demand for services.
Periodically, fees must be adjusted to
ensure that the program remains
financially self-supporting.
To reduce costs, the Dairy Grading
Branch has continued to automate its
business practices. Progress to date has
been significant and has resulted in
E:\FR\FM\20APP1.SGM
20APP1
hsrobinson on PROD1PC61 with PROPOSALS
Federal Register / Vol. 71, No. 76 / Thursday, April 20, 2006 / Proposed Rules
savings equal to two staff years to the
program. Further enhancements in
automated business practices will
continue to improve the efficiency and
timeliness of providing inspection and
grading services and information to
users of these services.
Employee salaries and benefits
account for nearly 73 percent of the
operating costs of the Dairy Grading
Branch. Since the last fee increase in
2004 (69CFR8797), annual salary
increases and locality adjustments have
resulted in an increase in employee
salaries of 8.3 percent. As a result,
annual salary and benefit costs to the
program for 2006 are approximately
$240,000 more. Inflation raised nonsalary costs approximately 6.0 percent
through 2005, and it is expected that
non-salary operating expenses will
increase an additional 3.0 percent in
2006. Current revenue projections using
Dairy Grading Branch’s current fee
schedule will not provide income
sufficient to cover these escalating
program operation costs and maintain
reserves (4 months of costs) according to
AMS policy (AMS Directive 408.1).
Since projected revenues will not
cover program costs while maintaining
an adequate reserve, the Dairy Grading
Branch will be put in an unstable
financial position that will adversely
affect the ability to provide dairy
inspection and grading services.
Without a fee increase, total revenue
projections for FY 2006 are $4.980
million. Total costs for the same period
of time are projected to be $5.778
million. The shortfall, if allowed to
continue, will reduce the trust fund
balance to $1.578 million or 3.3 months
of operating reserve at the end of FY
2006 which is below Agency policy.
With the proposed fee increase effective
April 1, 2006, FY 2006 revenues are
projected at $5.227 million.
In view of the above considerations,
AMS proposes to increase the hourly
fees associated with Federal dairy
grading and inspection services.
Currently the fees are $57.00 per hour
for continuous resident services and
$62.00 per hour for non-resident
services. The proposed increases would
result in fees of $63.00 per hour for
continuous resident services and $68.00
per hour for non-resident services
between the hours of 6 a.m. and 6 p.m.
The proposed fees represent increases of
$6.00 per hour (10.5 percent) for
continuous resident and $6.00 per hour
(9.7 percent) for non-resident services.
The fee for non-resident services
between the hours of 6 p.m. and 6 a.m.
would be $74.80 per hour. For services
performed in excess of 8 hours per day
and for services performed on Saturday,
VerDate Aug<31>2005
14:56 Apr 19, 2006
Jkt 208001
Sunday, and legal holidays, 11⁄2 times
the base fees would apply and result in
increases to $94.50 per hour for resident
grading and to $102.00 per hour for nonresident grading services.
AMS estimates these fee increases
will provide the Dairy Grading Branch
an additional $504,000 annually to
recover program costs including
providing for continued automation of
business practices.
A 30-day comment period is provided
for interested persons to comment on
this proposed rule. This period is
appropriate in order to implement, as
early as possible in FY 2006, any fee
changes adopted as a result of this
rulemaking action.
List of Subjects in 7 CFR Part 58
Dairy Products, Food grades and
standards, Food labeling, Reporting and
recordkeeping requirements.
For the reason 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 7 CFR
part 58 continues to read as follows:
Authority: 7 U.S.C. 1621–1627.
§ 58.43
[Amended]
2. In § 58.43, ‘‘$62.00’’ is removed and
‘‘$68.00’’ is added in its place, and
‘‘$68.20’’ is removed and ‘‘$74.80’’ is
added in its place.
§ 58.45
[Amended]
3. In § 58.45 ‘‘$57.00’’ is removed and
‘‘$63.00’’ is added in its place.
Dated: April 14, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing
Service.
[FR Doc. E6–5941 Filed 4–19–06; 8:45 am]
BILLING CODE 3410–02–P
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1290
[Docket No. FV06–1290–1 PR]
RIN 0581–AC59
Specialty Crop Block Grant Program;
Notice of Request for Approval of a
New Information Collection
AGENCY:
Agricultural Marketing Service,
USDA.
PO 00000
Frm 00004
Proposed rule with request for
comments.
ACTION:
SUMMARY: The Agricultural Marketing
Service (AMS) is proposing regulations
to administer the Specialty Crop Block
Grant Program (SCBGP) to enhance the
competitiveness of specialty crops. This
proposed rule is intended to establish
eligibility and application requirements,
the review and approval process, and
grant administration procedures for the
SCBGP.
The SCBGP would be implemented
under section 101 of the Specialty Crops
Competitiveness Act of 2004 (7 U.S.C.
1621 note). This rule also announces the
Agricultural Marketing Service’s
intention to request approval by the
Office of Management and Budget
(OMB) of the new information
collection requirements necessary to
implement the SCBGP.
DATES: Comments received by May 22,
2006, will be considered prior to
issuance of a final rule. Pursuant to the
Paperwork Reduction Act, comments on
the information collection burden that
would result from this proposal must be
received by June 19, 2006.
ADDRESSES: Interested persons are
invited to submit written comments
concerning this action. Comments must
be sent to the Docket Clerk, Fruit and
Vegetable Programs, AMS, USDA, 1400
Independence Avenue, SW., Stop 0243,
Washington, DC 20250–0243; Fax: (202)
690–0102; E-mail:
scblockgrants@usda.gov; or Internet:
https://www.regulations.gov. Comments
concerning the information collection
requirements should be sent to the
Office of Information and Regulatory
Affairs, OMB: Attention: Desk Officer
for AMS, Washington, DC 20503. Please
state that your comments refer to Docket
No. FV06–1290–1 PR. Comments
concerning the information
requirements also should be sent to the
Docket Clerk at the above address.
Comments shall reference docket
number FV06–1290–1 PR and the date
and page number of this issue of the
Federal Register and will be available
for public inspection in the Office of the
Docket Clerk during regular business
hours, or can be viewed at: https://
www.ams.usda.gov/fv/scbgp.html.
FOR FURTHER INFORMATION CONTACT:
Trista Etzig, Fruit and Vegetable
Programs, AMS, USDA, 1400
Independence Avenue, SW., Stop 0243,
Washington, DC 20250–0243;
Telephone: (202) 690–4942; Fax: (202)
690–0102; or E-mail:
trista.etzig@usda.gov.
SUPPLEMENTARY INFORMATION:
Fmt 4702
Sfmt 4702
20353
E:\FR\FM\20APP1.SGM
20APP1
]]>Agencies
[Federal Register Volume 71, Number 76 (Thursday, April 20, 2006)]
[Proposed Rules]
[Pages 20351-20353]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-5941]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 58
[Docket Number DA-05-04]
RIN 0581-AC55
Increase in Fees for Federal Dairy Grading and Inspection
Services
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Agricultural Marketing Service (AMS) is proposing to
increase, by approximately 10 percent, the hourly fees charged for
Federal dairy grading and inspection services. Dairy grading and
inspection services are voluntary and are financed through user-fees
assessed to participants in the program. These revisions are necessary
in order to recover, as nearly as practicable, the increase in salaries
of Federal employees, the increase in Agency costs, and to ensure that
the Dairy Grading Branch operates on a financially self-supporting
basis.
DATES: Comments must be received on or before May 22, 2006.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposed rule to Dana H. Coale, Deputy Administrator,
Dairy Programs, Agricultural Marketing Service, U.S. Department of
Agriculture, Stop 0225, room 2968--South, 1400 Independence Avenue,
SW., Washington, DC 20250-0225. Comments may be faxed to (202) 690-
3410. Comments should be submitted in duplicate. Comments may also be
electronically submitted to Dana.Coale@usda.gov or https://
www.regulations.gov. All comments should reference docket number DA-05-
04 and note the date and page number of this issue of the Federal
Register. All comments received will be available for public inspection
at the above location during regular business hours. Comments received
also will be made available over the Internet in the rulemaking section
of the AMS Web site https://www.ams.usda.gov/rulemaking.
FOR FURTHER INFORMATION CONTACT: Dana H. Coale, Dairy Programs (202)
720-4392.
[[Page 20352]]
SUPPLEMENTARY INFORMATION:
Executive Orders 12866 and 12988
This proposed rule has been determined to be ``not significant''
for purposes of Executive Order 12866, and therefore, has not been
reviewed by the Office of Management and Budget (OMB).
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This action is not retroactive. This rule will
not preempt any State or local laws, regulations, or policies unless
they present an irreconcilable conflict with this rule. There are no
administrative procedures which must be exhausted prior to any judicial
challenge to the provisions of this rule.
Regulatory Flexibility Act and Paperwork Reduction Act
Pursuant to the requirement set forth in the Regulatory Flexibility
Act, AMS has considered the economic impact of this action on small
entities. It has been determined that its provisions would not have a
significant economic effect on a substantial number of small entities.
For the purpose of the Regulatory Flexibility Act, a dairy products
manufacturer is a ``small business'' if it has fewer than 500
employees. If a plant is part of a larger company operating multiple
plants that collectively exceed the 500 employee limit, the plant will
be considered a large business even if the local plant has fewer than
500 employees.
Under the Agricultural Marketing Act of 1946, the Dairy Grading
Branch, AMS, provides voluntary Federal inspection and dairy product
grading services to about 350 plants. About 210 of these users are
small businesses under the criteria established by the Small Business
Administration (13 CFR 121.201). Manufacturing plants participating in
the voluntary plant inspection program have their facility inspected
against established USDA ``General Specifications for Dairy Plants
Approved for USDA Inspection and Grading Service'' construction and
sanitation requirements. Dairy products manufactured in facilities
complying with the USDA inspection requirements are eligible to have
their output graded against official quality standards and
specifications established by AMS and certain contract provisions
between buyer and seller. Products tested and graded by the Dairy
Grading Branch have certificates issued describing the product's
quality and condition.
AMS continually reviews its cost structure to assure it is
operating efficiently while maintaining the resources necessary to meet
industry's demand for services. Periodically, fees must be adjusted to
ensure that the program remains financially self-supporting. To reduce
costs, the Dairy Grading Branch has continued to automate its business
practices. Progress to date has been significant and has resulted in
savings equal to two staff years to the program. Further enhancements
in automated business practices will continue to improve the efficiency
and timeliness of providing inspection and grading services and
information to users of these services.
Employee salaries and benefits account for nearly 73 percent of the
operating costs of the Dairy Grading Branch. Since the last fee
increase in 2004 (69 FR 8797), annual salary increases and locality
adjustments have resulted in an increase in employee salaries of 8.3
percent. As a result, annual salary and benefit costs to the program
for 2006 are approximately $240,000 more. Inflation raised non-salary
costs approximately 6.0 percent through 2005, and it is expected that
non-salary operating expenses will increase an additional 3.0 percent
in 2006. Current revenue projections using Dairy Grading Branch's
current fee schedule will not provide income sufficient to cover these
escalating program operation costs and maintain reserves (4 months of
costs) according to AMS policy (AMS Directive 408.1).
Since projected revenues will not cover program costs while
maintaining an adequate reserve, the Dairy Grading Branch will be put
in an unstable financial position that will adversely affect the
ability to provide dairy inspection and grading services. Without a fee
increase, total revenue projections for Fiscal Year (FY) 2006 are
$4.980 million. Total costs for the same period of time are projected
to be $5.778 million. The shortfall, if allowed to continue, will
reduce the trust fund balance to $1.578 million or 3.3 months of
operating reserve at the end of FY 2006 which is below Agency policy.
With the proposed fee increase effective April 1, 2006, FY 2006
revenues are projected at $5.227 million.
AMS estimates these fee increases will provide the Dairy Grading
Branch an additional $504,000 annually to recover program costs and to
provide for continued automation of business practices.
This rule will raise the fees charged to businesses for voluntary
plant inspections, grading services for dairy and related products, and
the evaluation of food processing equipment. However, the impact on all
businesses, including small entities is very similar. Even though fees
will be increased approximately 9.7% for non-resident services and
10.5% for continuous resident services, these fee increases should not
significantly affect these entities. These businesses are under no
obligation to use these voluntary user-fee based services and any
decision on their part to discontinue the use of the services would not
prevent them from marketing their products.
A review of reporting requirements was completed under the
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). It was
determined that this rule would have no impact on reporting,
recordkeeping, or other compliance requirements for entities currently
using voluntary Federal dairy inspection and grading services because
they would remain identical to the current requirements.
This notice does not require additional information collection that
requires clearance by OMB. The primary sources of data used to complete
the forms are routinely used in most business transactions. Forms
require only a minimal amount of information which can be supplied
without data processing equipment or a trained statistical staff. Thus,
the information collection and reporting burden is relatively small.
Requiring the same information from all participating dairy plants does
not significantly disadvantage any plant that is smaller than the
industry average.
Proposed Action
The Secretary of Agriculture is authorized by the Agricultural
Marketing Act of 1946 (AMA), as amended (7 U.S.C. 1621, et seq.), to
provide voluntary Federal dairy inspection and grading services to
facilitate the orderly marketing of dairy products and to enable
consumers to obtain the quality of dairy products they desire. The AMA
also provides for the collection of reasonable fees from users of the
Federal dairy inspection and grading services to cover the cost of
providing these services. The hourly fees are established by
distributing the program's projected operating costs over the estimated
service-revenue hours provided to users. AMS continually reviews its
cost structure to assure it is operating efficiently while maintaining
the resources necessary to meet industry's demand for services.
Periodically, fees must be adjusted to ensure that the program remains
financially self-supporting.
To reduce costs, the Dairy Grading Branch has continued to automate
its business practices. Progress to date has been significant and has
resulted in
[[Page 20353]]
savings equal to two staff years to the program. Further enhancements
in automated business practices will continue to improve the efficiency
and timeliness of providing inspection and grading services and
information to users of these services.
Employee salaries and benefits account for nearly 73 percent of the
operating costs of the Dairy Grading Branch. Since the last fee
increase in 2004 (69CFR8797), annual salary increases and locality
adjustments have resulted in an increase in employee salaries of 8.3
percent. As a result, annual salary and benefit costs to the program
for 2006 are approximately $240,000 more. Inflation raised non-salary
costs approximately 6.0 percent through 2005, and it is expected that
non-salary operating expenses will increase an additional 3.0 percent
in 2006. Current revenue projections using Dairy Grading Branch's
current fee schedule will not provide income sufficient to cover these
escalating program operation costs and maintain reserves (4 months of
costs) according to AMS policy (AMS Directive 408.1).
Since projected revenues will not cover program costs while
maintaining an adequate reserve, the Dairy Grading Branch will be put
in an unstable financial position that will adversely affect the
ability to provide dairy inspection and grading services. Without a fee
increase, total revenue projections for FY 2006 are $4.980 million.
Total costs for the same period of time are projected to be $5.778
million. The shortfall, if allowed to continue, will reduce the trust
fund balance to $1.578 million or 3.3 months of operating reserve at
the end of FY 2006 which is below Agency policy. With the proposed fee
increase effective April 1, 2006, FY 2006 revenues are projected at
$5.227 million.
In view of the above considerations, AMS proposes to increase the
hourly fees associated with Federal dairy grading and inspection
services. Currently the fees are $57.00 per hour for continuous
resident services and $62.00 per hour for non-resident services. The
proposed increases would result in fees of $63.00 per hour for
continuous resident services and $68.00 per hour for non-resident
services between the hours of 6 a.m. and 6 p.m. The proposed fees
represent increases of $6.00 per hour (10.5 percent) for continuous
resident and $6.00 per hour (9.7 percent) for non-resident services.
The fee for non-resident services between the hours of 6 p.m. and 6
a.m. would be $74.80 per hour. For services performed in excess of 8
hours per day and for services performed on Saturday, Sunday, and legal
holidays, 1\1/2\ times the base fees would apply and result in
increases to $94.50 per hour for resident grading and to $102.00 per
hour for non-resident grading services.
AMS estimates these fee increases will provide the Dairy Grading
Branch an additional $504,000 annually to recover program costs
including providing for continued automation of business practices.
A 30-day comment period is provided for interested persons to
comment on this proposed rule. This period is appropriate in order to
implement, as early as possible in FY 2006, any fee changes adopted as
a result of this rulemaking action.
List of Subjects in 7 CFR Part 58
Dairy Products, Food grades and standards, Food labeling, Reporting
and recordkeeping requirements.
For the reason 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 7 CFR part 58 continues to read as
follows:
Authority: 7 U.S.C. 1621-1627.
Sec. 58.43 [Amended]
2. In Sec. 58.43, ``$62.00'' is removed and ``$68.00'' is added in
its place, and ``$68.20'' is removed and ``$74.80'' is added in its
place.
Sec. 58.45 [Amended]
3. In Sec. 58.45 ``$57.00'' is removed and ``$63.00'' is added in
its place.
Dated: April 14, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E6-5941 Filed 4-19-06; 8:45 am]
BILLING CODE 3410-02-P
