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AMS Finalizes Proposal To Simplify Process For Setting Fees For Voluntary Dairy Programs


Final Rule Provides Set Of Standardized Formulas By Which Fees Are Calculated; Fees Will Be Announced By June 1 Of Each Year

USDA’s Agricultural Marketing Service (AMS) on Thursday published a final rule that amends its regulations to provide for a set of standardized formulas by which fees for its voluntary dairy and other user fee programs are calculated.

Under the final rule, the fees will be calculated using formulas to account for all costs incurred by AMS in providing these services. Each year, fees will be announced in a notice in the Federal Register by June 1 and take effect at the start of the fiscal year, crop year, or as required by specific laws.

Approximately 70 percent of AMS’ operational budget is derived from fees assessed for services provided to agricultural industries. Changes in fee-for-service rates may result from fluctuating customer needs, increases in employee salary and benefit expenses, inflationary impact on non-labor operating expenses and fixed costs, and/or uncollected revenue (bad debt).

Prior to this action, each AMS program individually proposed a fee change when a revenue shortfall was anticipated for a specific program or activity. As a result, these changes did not appear in a single unified fee schedule. Lack of certainty as to when annual fees would be announced may affect fiscal planning for the users of the services, especially if fees are changed in the middle of a contract or harvest season, AMS noted.

In addition, because of the separate and repetitive use of the agency rulemaking process, programs experienced delays in recovering the full cost of the services they provided.

As a result, a number of AMS programs amended their regulations to provide for multi-year annual fee changes that were established by a single rulemaking action.

While this enabled the agency to collect revenue based on a revised fee each year, estimates used to set the projected annual rates did not always result in the agency collecting revenues sufficient to cover its costs.

Instead, in some instances, the agency recovered partial costs.

In order to provide both transparency and predictability to the industries served and to allow the agency to effectively plan for staffing, investments in infrastructure, and other resources, AMS is amending its regulations to provide for a set of standardized formulas by which fees are calculated.

This process will use formulas established to determine fees for AMS’s grading, inspection, certification, auditing, and laboratory services that cover expected costs while maintaining a reasonable reserve. AMS programs are required to sustain a ..Send more more information