34040 Federal Register / Vol. 65, No. 103 / Friday, May 26, 2000 / Rules and Regulations

have retroactive effect. This rule will

not preempt any State or local laws,

regulations, policies, unless they

present an irreconcilable conflict with

this rule. There are no administrative

procedures that must be exhausted prior

to any judicial challenge to the

provisions of this rule.

Background

The Secretary of Agriculture is

authorized by the Tobacco Inspection

Act of 1935, as amended, 7 U.S.C. 511–

511q et seq., to fix and collect fees and

charges for inspection and certification

of quota tobacco, and other services,

including administrative and

supervisory costs, at designated tobacco

auction markets in all tobacco

producing areas. The fees collected

must, as nearly as possible, cover the

Department’s costs of performing these

services.

The AMS regularly reviews programs

to determine if fees are adequate and if

costs are reasonable. This interim final

rule will increase the fees and charges

assessed by the AMS for the mandatory

inspection and certification of producer

tobacco sold at designated auction

markets throughout the tobacco

producing areas.

The AMS conducted a recent review

of the financial status of this program to

determine whether the fee is sufficient.

Revenue for the 1999 crop-year was

approximately $11,419,000. Obligations

for the period are approximately

$11,508,000. At the current fee level,

insufficient revenue would be generated

to meet the costs of the inspection

program and to replace funds that had

to be used from the program’s reserve

account. The major factors affecting

obligations are mandatory increases in

Federal salaries and benefits, travel

allowances, and other administrative

costs since 1995. An analysis of data

available to the AMS indicates that a fee

of $.0100 per pound would cover

expenses and maintain a reserve that

would meet any reasonable

contingency.

Due to an estimated 43 percent

reduction in tobacco to be inspected and

20–30 percent of tobacco being sold

through contract sales, obligations for

the 2000 crop-year are estimated at

$11,607,000 and revenues are expected

to reach only $6,843,000, for a loss of

$4,764,000 and a reduction in the

operating reserve to $4,738,000. If the

same level of service and fee structure

continues for the 2001 crop-year the

estimated loss would exceed $6,154,000

and the operating reserve would drop to

a negative $1,416,000.

Revenue depends on the amount of

tobacco sold on the designated auction

markets. Production quotas for tobacco

were reduced by 228.6 million pounds

in 1998, 330.7 million pounds in 1999,

and 318.7 million pounds in 2000. This

is a total decrease of 878 million pounds

of tobacco since 1997. Also, contract

sales of tobacco will further reduce the

amount graded by about 235 million

pounds in 2000. Based on these figures,

the current fee level will not generate

the amount of revenue sufficient to

maintain the level of inspection services

requested and maintain funds in the

program’s reserve account. An analysis

of available data indicates that a fee of

$.0100 per pound effective for the 2000

crop-year would increase revenue by

$1,277,000 and bring the operating

reserve up to $6,014,000.

Information on program income and

expenses was presented to the National

Advisory Committee for Tobacco

Inspection Services at its meeting on

February 17, 2000, in Raleigh, North

Carolina, and again on April 20, 2000,

in Washington, D.C. The National

Advisory Committee, which is made up

of 14 representatives from tobacco

producer interest groups and appointed

by the Secretary of Agriculture, was

established by law in 1981 to advise the

Secretary on the level of services needed

and the fees necessary to cover those

services. By a majority vote, the

Committee adopted a motion to

recommend to the Secretary an increase

in the fee to $.0100 per pound.

It is hereby found and determined

upon good cause that it is impracticable,

unnecessary, and contrary to the public

interest to give preliminary notice prior

to putting this rule into effect and that

good cause exists for not postponing the

effective date of this rule until 30 days

after publication in the Federal Register

because: (1) The 2000 flue-cured

marketing season will begin about July

17 and this action is needed, as soon as

possible, so as to treat all types of

tobacco on an equal basis for the 2000

crop-year; (2) the National Advisory

Committee recommended the fee

increase by a majority vote; and (3) this

interim final rule provides a 30-day

comment period, and all comments

timely received will be considered prior

to finalization of this rule.

List of Subjects in 7 CFR Part 29

Administrative practice and

procedure, Advisory committees,

Government publications, Imports,

Pesticides and pests, Reporting and

recordkeeping requirements, Tobacco.

For reasons set forth in the preamble,

7 CFR part 29 is amended as follows:

PART 29—TOBACCO INSPECTION

1. The authority citation for part 29,

subpart B continues to read as follows:

Authority: 7 U.S.C. 511m and 511r.

§ 29.123 [Amended]

2. In § 29.123, paragraph (a) is

amended by removing the words

‘‘$.0083 per pound’’ and adding the

words ‘‘$.0100 per pound’’ in their

place.

Dated: May 22, 2000.

Kathleen A. Merrigan,

Administrator, Agricultural Marketing

Service.

[FR Doc. 00–13290 Filed 5–25–00; 8:45 am]

BILLING CODE 3410–02–P

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 54

[Docket No. LS–98–12]

RIN 0581–AB83

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 certification services. The hourly

fees will be adjusted by this final rule

to reflect the increased cost of providing

service, and ensure that the Federal

meat grading and certification program

is operated on a financially selfsupporting basis as required by law.

EFFECTIVE DATE: June 26, 2000.

FOR FURTHER INFORMATION CONTACT:

Larry R. Meadows, Chief, Meat Grading

and Certification (MGC) Branch (202)

720–1246.

SUPPLEMENTARY INFORMATION:

A. Executive Order 12866

This action 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 (OMB).

B. Regulatory Flexibility

Pursuant to the requirements set forth

in the Regulatory Flexibility Act (RFA)

(5 U.S.C. 601 et seq.), the Administrator

of AMS has considered the economic

impact of this proposed action on small

entities.

AMS, through its MGC Branch,

provides voluntary Federal meat grading

Federal Register / Vol. 65, No. 103 / Friday, May 26, 2000 / Rules and Regulations 34041

and certification services to a total of

370 business of which 264 are small

entities. Small entities, which account

for approximately 38 percent of the

MGC Branch’s total revenues, are

defined as those that employ less than

500 employees. The breakdown of small

entities that AMS provides meat grading

and certification services to are as

follows: 93 meat processors, 90

livestock slaughterers, 52 facilities that

further process federally donated

products, 13 trade associations, 9

livestock feeders, 3 trucking companies,

and 4 brokers. These small entities are

under no obligation to use meat grading

and certification services provided

under the authority of the Agricultural

Marketing Act of 1946 (AMA), as

amended, 7 USC 1621 et seq.

Voluntary meat grading and

certification services facilitate the

orderly marketing of meat and meat

products and enable consumers to

obtain the quality of meat they desire.

Grading services consist of the

evaluation of carcass beef, lamb, pork,

veal, and calf for conformance with the

grades of an official U.S. Standard for

each species. Approximately 21 billion

pounds of meat is graded each year.

Certification services consist of the

evaluation of meat and meat products

for compliance with specification and

contractual requirements. Certification

services are used most often by largescale meat purchasers to ensure that the

quality and yields of the products they

purchase comply with their stated

requirements. Approximately 17 billion

pounds of meat and meat products are

certified each year.

AMS regularly reviews its user-feefinanced programs to determine if the

fees are adequate. The most recent

review determined that the existing fee

schedule would not generate sufficient

revenues to recover program costs for

current and near-term periods while

maintaining an adequate reserve

balance. Without a fee increase, the

projected operating losses for fiscal year

(FY) 2000, FY 2001, and FY 2002 will

be $1.9 million, $2.9 million, and $4.1

million respectively. Operating losses at

these levels will deplete MGC Branch’s

operating reserve and place the Branch

in an unstable financial position that

will adversely affect its ability to

provide the current level of grading and

certification services. Any reduction in

Branch services has the potential to

substantially harm small and limited

resource firms that rely on grading and

certification services to market their

products and compete in a global

marketplace.

This action will raise the fees charged

to all users of grading and certification

services. AMS estimates that overall,

this will yield an additional $175

thousand in revenue for the balance of

FY 2000. Of this $175 thousand, small

businesses would pay approximately

$66,500 or an average of $255 per

month. In FY 2001 and 2002, small

entities will pay approximately

$798,000, an average of $255 per month

or $3,058 per year. However, due to

increased program and industry

efficiencies, the FY 2000–2002 unit

costs of program services (revenue/total

pounds graded and certified) will

remain virtually unchanged at

approximately $0.0006 per pound for

each fiscal year. Accordingly, the

Administrator of AMS has determined

that this proposal would not have a

significant economic effect on a

substantial number of small business

entities.

This fee increase, only the second

since November 1993, is necessary to

offset increased program operating costs

resulting from: (1) The congressionallymandated, governmentwide salary

increases for 1998, 1999, and 2000; (2)

inflation of nonsalary operating costs;

(3) accumulated increases in CONUS

per diem rates; (4) increased costs of

servicing less than full-time applicants;

and (5) costs associated with updating

the MGC Branch’s automated

information management system to

ensure compliance with year 2000

operating requirements.

Since 1993, in an ongoing effort to

control operating costs, the MGC Branch

has closed 3 field offices, reduced midlevel supervisory staff by over 50

percent, and reduced the number of

support staff by 38 percent. At the same

time, the MGC Branch has become more

reliant on automated information

management systems for data collection,

retrieval, and dissemination, account

billing, and disbursement of employee

entitlements. The reduction in field

offices, supervisory staff, support

personnel, and the increased reliance on

automated systems has enabled the

MGC Branch to absorb a substantial

portion of the increased operating costs

and minimize increases in user-fees

over the past 7 years.

Despite the MGC Branch’s vigilant

cost reduction efforts since 1993, the

operating expenses projected for FY

2000 and beyond can only be balanced

by adjusting the hourly fee rate charged

to users of meat grading and

certification services. Any further

reduction in personnel, services, or

management infrastructure beyond

those already implemented would have

a detrimental effect on the program’s

ability to provide meat grading and

certification services and ensure the

accurate and uniform application of

such services. The hourly rate increase

is necessary to recover the costs of

providing voluntary Federal meat

grading and certification services and

for the program to continue serving all

segments of the industry.

C. Civil Justice Reform

This action has been reviewed under

Executive Order 12988, Civil Justice

Reform. This action is not intended to

have retroactive effect. This rule will

not pre-empt 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.

D. Paperwork Reduction Act

This action will not impose any

additional reporting or recordkeeping

requirements on either small or large

meat slaughters, processors, and other

applicants who use Federal meat

grading and certification services.

Comments

On January 20, 2000, (65 FR 3155) in

the Federal Register, the Agency

published the proposed rule to increase

the fees for Federal Meat Grading and

Certification services and requested

comments by March 20, 2000. The

Agency received two comments. The

first respondent requested that AMS

work more closely with industry to

identify alternatives to current grading

and certification operations and

procedures to stem future rate increases.

The respondent went on to identify the

following as possible areas the Industry

and AMS could work cooperatively to

achieve cost savings or stem future userfee increases: (1) Incorporating

technological advances; (2) identifying

appropriate quality control or process

verification activities that could be

shifted to the Industry; and, (3)

identifying plant operation alternatives.

AMS is continually seeking ways to

reduce costs to the industry and

increase operational efficiency. This fee

increase, combined with the previous

increase in 1998, equates to an average

annual increase of 3.3 percent since

1993. However, during this same time

the amount of product graded and

certified has dramatically increased by

over 9 billion pounds per year in

comparison to the total graded and

certified in FY 1993. This amounts to a

48 percent per hour increase in

efficiency. The increased efficiencies

offset the increase in fee rates to leave

the overall cost per pound to the

industry unchanged at $0.0006 per

34042 Federal Register / Vol. 65, No. 103 / Friday, May 26, 2000 / Rules and Regulations

pound. As requested by the respondent,

the Agency is currently and will

continue seeking ways to increase

efficiency and reduce the total cost of

grading and certification services to the

industry. In fact, AMS is actively

involved in each of the areas identified

by the respondent for potential cost

savings. For example, AMS is

cooperating with an industry research

project to test video-imaging technology

for grading and certification

applications. Additionally, AMS is

expanding the role of statistical process

control as a basis of program verification

activities in many carcass and meat

marketing programs.

The second respondent questioned

the need for revising the fee rates and

emphasized the effect of the user fees on

small entities. Small entities generate 38

percent of the Agency’s meat grading

and certification hourly revenues. The

Agency is keenly aware of how fee

increases impact small entities. In the

more than 70 years meat grading and

certification services have been

available, the Agency has always

ensured that every alternative to a fee

increase has been considered. This fee

increase, only the second since

November 1993, is necessary to offset

increased program operating costs

resulting from: (1) The congressionallymandated, governmentwide salary

increases for 1998, 1999, and 2000; (2)

inflation of nonsalary operating costs;

(3) accumulated increases in CONUS

per diem rates; (4) increased costs of

servicing less than full-time applicants;

and, (5) costs associated with updating

the MGC Branch’s automated

information management system to

ensure compliance with year 2000

operating requirements. Despite the

MGC Branch’s cost reduction efforts and

increased efficiency, the operating

expenses projected for FY2000 and

beyond can only be balanced by

adjusting the hourly fee rate charged to

users of voluntary meat grading and

certification services. Any further

reduction in personnel, services, or

management infrastructure beyond

those already in place would have a

detrimental effect on the program’s

ability to provide meat grading and

certification services and ensure the

accurate application of such services.

Further, any reduction in Branch

services has the potential to

substantially (and disproportionally)

harm small and limited resource firms

that rely on grading and certification

services to market their products and

compete in a global marketplace.

Background

The Secretary of Agriculture is

authorized by the AMA, 1946 as

amended, 7 U.S.C. 1621 et seq., to

provide voluntary Federal meat grading

and certification 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 the

Federal meat grading and certification

services that are approximately equal to

the cost of providing these services. The

hourly fees for service are established by

equitably distributing the projected

annual program operating costs over the

estimated hours of service—revenue

hours—provided to users of the service.

Program operating costs include salaries

and fringe benefits of meat graders,

supervision, travel, training, and all

administrative costs of operating the

program. Employee salaries and benefits

account for approximately 80 percent of

the total budget. Revenue hours include

base hours, premium hours, and service

performed on Federal legal holidays. As

program operating costs continue to

rise, the hourly fees must be adjusted to

enable the program to remain

financially self-supporting as required

by law.

In view of these considerations, the

Agency will increase the base hourly

rate commitment applicants pay for

voluntary Federal meat grading and

certification services from $39.80 to $45.

A commitment applicant is a user of

meat grading and certification services

who agrees to pay for five continuous 8

hour days, Monday through Friday

between the hours of 6 a.m. and 6 p.m.,

excluding legal holidays. The base

hourly rate for noncommitment

applicants will increase from $42.20 to

$52. A noncommitment applicant is a

user of meat grading and certification

services for eight consecutive hours or

less per day between the hours of 6 a.m.

and 6 p.m., excluding legal holidays.

The hourly rate for premium hours will

increase from $47.80 to $57, and will be

charged to users of the service for hours

worked in excess of 8 hours per day for

each assigned official grader and for

work performed before 6 a.m. and after

6 p.m., Monday through Friday, and any

time on Saturday or Sunday, except on

Federal legal holidays. The holiday rate

for all applicants will increase from

$79.60 to $90, and will be charged to

users of the service for all hours worked

on legal holidays.

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. 1621–1627.

§ 54.27 [Amended]

2. In § 54.27, paragraph (a), ‘‘$42.20’’

is removed and ‘‘$52’’ is added in its

place, ‘‘$47.80’’ is removed and ‘‘$57’’ is

added in its place, ‘‘$79.60’’ is removed

and ‘‘$90’’ is added in its place, and

paragraph (b), ‘‘$39.80’’ is removed and

‘‘$45’’ is added in its place, ‘‘$47.80’’ is

removed and ‘‘$57’’ is added in its

place, ‘‘$79.60’’ is removed and ‘‘$90’’ is

added in its place.

Dated: May 22, 2000.

Barry L. Carpenter,

Deputy Administrator, Livestock and Seed

Program.

[FR Doc. 00–13240 Filed 5–25–00; 8:45 am]

BILLING CODE 3410–02–P

DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1728

Specifications and Drawings for

Underground Electric Distribution

AGENCY: Rural Utilities Service, USDA.

ACTION: Final rule.

SUMMARY: The Rural Utilities Service

(RUS) is revising its regulations on

Specifications and Drawings for

Underground Electric Distribution, RUS

Bulletin 50–6. This bulletin is currently

incorporated by reference in RUS

regulations and, will continue to be

incorporated by reference. This revision

is necessary to provide RUS electric

borrowers with the latest specifications

for constructing their rural underground

electric distribution systems using stateof-art materials, equipment, and

construction methods. RUS is

renumbering and reformating the

revised bulletin in accordance with the

agency’s new publications and

directives system.

DATES: Effective Date: June 26, 2000.

Incorporation by Reference: IBR

approved by the Director, Office of the

Federal Register, June 26, 2000.

FOR FURTHER INFORMATION CONTACT: Mr.

Trung V. Hiu, Electrical Engineer,

Distribution Branch, Electric Staff