[Federal Register: September 8, 2003 (Volume 68, Number 173)]
[Proposed Rules]
[Page 52857-52860]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08se03-14]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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[[Page 52857]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 51
[Docket Number FV-03-301]
RIN 0581-AB63
Revision of Fees for the Fresh Fruit and Vegetable Terminal
Market Inspection Services
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would revise the regulations governing the
inspection and certification for fresh fruits, vegetables and other
products by increasing by approximately 15 percent certain fees charged
for the inspection of these products at destination markets. The fees
for inspecting multiple lots of the same product during inspections
will be increased from $14.00 to $45.00, and the per package fees for
dock-side inspections will be changed from a three interval schedule,
based on weight, to a two interval schedule based on different weight
thresholds. These revisions are necessary in order to recover, as
nearly as practicable, the costs of performing inspection services at
destination markets under the Agricultural Marketing Act of 1946 (AMA
of 1946). The fees charged to persons required to have inspections on
imported commodities in accordance with the Agricultural Marketing
Agreement Act of 1937 and for imported peanuts under section 1308 of
the Farm Security and Rural Investigation Act of 2002.
DATES: Comments must be postmarked, courier dated, or sent via the
internet on or before October 8, 2003.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposal. Comments are to be sent to the U.S.
Department of Agriculture, Agricultural Marketing Service, Fruit and
Vegetable Programs, Fresh Products Branch, 1400 Independence Ave., SW.,
Room 2049-S, Washington, DC 20250-0240, faxed to (202) 720-5136, or
sent via email to FPB.DocketClerk@usda.gov. Comments should make
reference to the date and page number of this issue of the Federal
Register and will be made available for public inspection in the above
office during regular business hours.
FOR FURTHER INFORMATION CONTACT: Rita Bibbs-Booth, USDA, 1400
Independence Ave., SW., Room 2049-S, Washington, DC 20250-0240, or call
(202) 720-0391.
SUPPLEMENTARY INFORMATION:
Executive Order 12866 and Regulatory Flexibility Act
This rule has been determined to be ``non-significant'' for the
purposes of Executive Order 12866, and has not been reviewed by the
Office of Management and Budget.
Also, pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA), AMS has considered the economic impact of this
action on small entities.
The purpose of the RFA is to fit regulatory actions to the scale of
businesses subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. The proposed action
described herein is being taken for several reasons, including that
additional user fee revenues are needed to cover the costs of: (1)
Providing current program operations and services; (2) improving the
timeliness with which inspection services are provided; and (3)
improving the work environment.
AMS regularly reviews its user-fee financed programs to determine
if the fees are adequate. The Fresh Products Branch (FPB) has and will
continue to seek out cost saving opportunities and implement
appropriate changes to reduce its costs. Such actions can provide
alternatives to fee increases. However, even with these efforts, FPB's
existing fee schedule will not generate sufficient revenues to cover
program costs while maintaining the Agency mandated reserve balance.
Current revenue projections for FPB's destination market inspection
work during FY-03 are $12.0 million with costs projected at $18.3
million and an end-of-year reserve of $14.8 million. However, this
reserve balance is due to appropriated funding received in October
2001, for infrastructure, workplace, and technological improvements.
FPB's costs of operating the destination market program are expected to
increase to approximately $18.9 million during FY-04 and to
approximately $19.4 million during FY-05. The current fee structure
with the infusion of the appropriated funding is expected to fund the
terminal market inspection services until FY-2006, when FPB will fall
below the Agency's mandated four-month reserve level.
This proposed fee increase should result in an estimated $1.8
million in additional revenues per year (effective in FY 04, if the
fees are implemented by October 1, 2003). This will not cover all of
FPB's costs. FPB will need to continue to increase fees bi-yearly in
order to cover the program's operating cost and maintain the required
reserve balance. FPB believes that increasing fees incrementally is
appropriate at this time. Additional fee increases beyond FY-2004 will
be needed to sustain the program in the future.
Employee salaries and benefits are major program costs that account
for approximately 80 percent of FPB's total operating budget. A general
and locality salary increase for Federal employees, ranging from 4.02
to 4.87 percent depending on locality, effective January 2003, has
significantly increased program costs. This salary adjustment will
increase FPB's costs by over $700,000 per year. Increases in health and
life insurance premiums, along with workers compensation will also
increase program costs. Since FPB's last fee increase, many employees
have converted to or were hired under the Federal Employees Retirement
System (FERS), which has also contributed to the increase in program
costs. In addition, inflation also impacts FPB's non-salary costs.
These factors have increased FPB's costs of operating this program by
over $600,000 per year.
Additional funds of approximately $155,000 are necessary in order
for FPB to continue to cover the costs associated with additional staff
and to maintain office space and equipment. Additional revenues are
also necessary to improve the work environment by providing training
and purchasing needed equipment. In addition, FPB began in 2001,
developing (with appropriated funds) an automated system recently named
the Fresh Electronic Inspection Reporting/Resource System (FEIRS) to
replace its manual paper and pen
[[Page 52858]]
inspection reporting process. Approximately $200,000 in additional
funds are needed to complete the development and deployment of FEIRS,
and it will take approximately $10,000 per month to maintain the
system. This system has been put in place to enhance FPB's fruit and
vegetable inspection processes.
This proposed rule should increase user fee revenue generated under
the destination market program by approximately $1.8 million or 15
percent. While most of the fees will increase by approximately 15
percent, the fee for inspections of multiple lots of the same product
during inspections, commonly referred to as ``sublots,'' would be
increased from $14 to $45 because FPB's current fee does not nearly
cover the costs of performing these inspections (between 30 to 35
percent of the destination market inspections conducted by FPB involve
sublots). In addition, the per package rates for dock-side inspections
would be increased and changed from a three interval schedule (based on
package weight) to a two interval schedule (based on different weight
thresholds). The two interval schedule would be simpler to administer
and more appropriate given current packaging trends. This action is
authorized under the Agricultural Marketing Act of 1946 (AMA of 1946)
(See 7 U.S.C. 1622(h)), which provides that the Secretary of
Agriculture may assess and collect ``such fees as will be reasonable
and as nearly as may be to cover the costs of services rendered * * *''
There are more than 2,000 users of FPB's destination market grading
services (including applicants who must meet import requirements \1\--
inspections which amount to under 2.5 percent of all lot inspections
performed). A small portion of these users are small entities under the
criteria established by the Small Business Administration (13 CFR
121.201). There would be no additional reporting, recordkeeping, or
other compliance requirements imposed upon small entities as a result
of this proposed rule. In compliance with the Paperwork Reduction Act
of 1995 (44 U.S.C. Chapter 35), the information collection and
recordkeeping requirements in Part 51 have been approved previously by
OMB and assigned OMB No. 0581-0125. FPB has not identified any other
Federal rules which may duplicate, overlap or conflict with this
proposed rule.
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\1\ Section 8e of the Agricultural Marketing Agreement Act of
1937, as amended (7 U.S.C. 601-674), requires that whenever the
Secretary of Agriculture issues grade, size, quality or maturity
regulations under domestic marketing orders for certain commodities,
the same or comparable regulations on imports of those commodities
must be issued. Import regulations apply during those periods when
domestic marketing order regulations are in effect. Section 1308 of
the Farm Security and Rural Investment Act of 2002 (Pub. L. 107-
171), 7 U.S.C. 7958, required USDA among other things to develop new
peanut quality and handling standards for imported peanuts marketed
in the United States.
Currently, there are 14 commodities subject to 8e import
regulations: avocados, dates (other than dates for processing),
filberts, grapefruit, kiwifruit, olives (other than Spanish-style
green olives), onions, oranges, potatoes, prunes, raisins, table
grapes, tomatoes and walnuts. A current listing of the regulated
commodities can be found under 7 CFR Parts 944, 980, 996, and 999.
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The destination market grading services are voluntary (except when
required for imported commodities) and the fees charged to users of
these services vary with usage. However, the impact on all businesses,
including small entities, is very similar. Further, even though fees
will be raised, the increase is not excessive and should not
significantly affect these entities. Finally, except for those persons
who are required to obtain inspections, most of these businesses are
typically under no obligation to use these inspection services, and,
therefore, any decision on their part to discontinue the use of the
services should not prevent them from marketing their products.
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This action is not intended to have retroactive
effect. 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.
Proposed Action
The AMA of 1946 authorizes official inspection, grading, and
certification, on a user-fee basis, of fresh fruits, vegetables and
other products such as raw nuts, Christmas trees and flowers. The AMA
of 1946 provides that reasonable fees be collected from the users of
the services to cover, as nearly as practicable, the costs of the
services rendered. This proposed rule would amend the schedule for fees
and charges for inspection services rendered to the fresh fruit and
vegetable industry to reflect the costs necessary to operate the
program.
The Agricultural Marketing Service (AMS) regularly reviews its
user-fee programs to determine if the fees are adequate. While the
Fresh Products Branch (FPB) of the Fruit and Vegetable Programs, AMS,
continues to search for opportunities to reduce its costs, the existing
fee schedule will not generate sufficient revenues to cover program
costs while maintaining the Agency mandated reserve balance. Current
revenue projections for destination market inspection work during FY-03
are $12.0 million with costs projected at $18.3 million and an end-of-
year reserve of $14.8 million. However, this reserve balance is due to
appropriated funding received from Congress in October of 2001. These
funds were established to build up the terminal market inspection
reserve fund and for infrastructure improvements including development
and maintenance of the inspector training center, workplace and
technological improvements, including digital imaging and automation of
the inspection process. However, by FY-07, without increasing fees,
FPB's trust fund balance for this program will be below the agency
mandated four-months of operating reserve (approximately $4.6 million)
deemed necessary to provide an adequate reserve balance in light of
increasing program costs. Further, FPB's costs of operating the
destination market program are expected to increase to approximately
$18.9 million during FY-04 and to approximately $19.4 million during FY
05. These cost increases (which are outlined below) will result from
inflationary increases with regard to current FPB operations and
services (primarily salaries and benefits), increased inspection
demands, and the acquisition and maintenance of computer technology
(i.e., FEIRS).
This proposed rule should increase user fee revenue generated under
the destination market program by approximately $1.8 million or 15
percent per year. While most of the fees will increase by approximately
15 percent, the fee for inspections of multiple lots of the same
product during inspections, commonly referred to as ``sublots,'' would
be increased from $14 to $45 because FPB's current fee does not nearly
cover the costs of performing these inspections (between 30 to 35
percent of the destination market inspections conducted by FPB involve
sublots). In addition, the per package rates for dock-side inspections
would be increased and changed from a three interval schedule (based on
package weight) to a two interval schedule (based on different weight
thresholds). The two interval schedule would be simpler to administer
and more appropriate given current packaging trends.
Employee salaries and benefits are major program costs that account
for approximately 80 percent of FPB's total operating budget. A general
and locality salary increase for Federal employees,
[[Page 52859]]
ranging from 4.02 to 4.87 percent depending on locality, effective
January 2003, has significantly increased program costs. This salary
adjustment will increase FPB's costs by over $700,000 per year.
Increases in health and life insurance premiums, along with workers
compensation will also increase program costs. Since FPB's last fee
increase, many employees have converted to or were hired under the
Federal Employees Retirement System (FERS), which has also contributed
to the increase in program costs. In addition, inflation also impacts
FPB's non-salary costs. These factors have increased FPB's costs of
operating this program by over $600,000 per year.
Additional revenues (approximately $155,000) are necessary in order
for FPB to continue to cover the costs associated with additional staff
and to maintain office space and equipment. Additional revenues are
also necessary to continue to improve the work environment by providing
training and purchasing needed equipment. In addition, FPB began in
2001, developing (with appropriated funds) an automated system recently
named the Fresh Electronic Inspection Reporting/Resource System (FEIRS)
to replace its manual paper and pen inspection reporting process.
Approximately $200,000 in additional revenue is needed to complete the
development and deployment of FEIRS, and it will take approximately
$10,000 per month to maintain the system. This system has been put in
place to enhance FPB's fruit and vegetable inspection processes.
Based on the aforementioned analysis of this program's increasing
costs, AMS proposes to increase the fees for destination market
inspection services. The following table compares current fees and
charges with the proposed fees and charges for fresh fruit and
vegetable inspection as found in 7 CFR 51.38. This table also reflects
the change to the per package fees for dock-side inspections that are
currently on a three interval schedule based on weight, to a two
interval schedule based on different weight thresholds. Unless
otherwise provided for by regulation or written agreement between the
applicant and the Administrator, the charges in the schedule of fees as
found in Sec. 51.38 are:
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Service Current Proposed
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Quality and condition
inspections of products each
in quantities of 51 or more
packages and unloaded from the
same land or air conveyance:
--Over a half carlot $86.00............. $99.00
equivalent of each product.
--Half carlot equivalent or $72.00............. $83.00
less of each product.
--For each additional lot $14.00............. $45.00
of the same product*.
Condition only inspections of
products each in quantities of
51 or more packages and
unloaded from the same land or
air conveyance:
--Over a half carlot $72.00............. $83.00
equivalent of each product.
--Half carlot equivalent or $66.00............. $76.00
less of each product.
--For each additional lot $14.00............. $45.00
of the same product*.
Quality and condition and
condition only inspections of
products each in quantities of
50 or less packages unloaded
from the same land or air
conveyance:
--For each product......... $43.00............. $45.00
--For each additional lot $14.00............. $45.00
of any of the same
product*.
--Lots in excess of carlot
equivalents will be
charged proportionally by
the quarter carlot.
Dock side inspections of an
individual product unloaded
directly from the same ship:
--For each package weighing 1.1 cent........... N/A
less than 15 pounds.
--For each package weighing 2.2 cents.......... 2.5 cents
less than 30 pounds
(previously 15-29 pounds).
--For each package weighing 3.3 cents.......... 3.8 cents
30 or more pounds.
--Minimum charge per $86.00............. $99.00
individual product.
--Minimum charge for each $14.00............. $45.00
additional lot of the same
product.
Hourly rate for inspections $43.00............. $49.00
performed for other purposes
during the grader's regularly
scheduled work week.
--Hourly rate for other
work performed during the
graders regular scheduled
work week will be charged
at a reasonable rate.
Overtime or holiday premium $21.50............. $25.00
rate (per hour additional) for
all inspections performed
outside the grader's regularly
scheduled work week.
Hourly rate for inspections $40.00............. $49.00
performed under 40 hour
contracts during the grader's
regularly scheduled work week*.
Rate for billable mileage...... $1.00.............. $1.00
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A thirty day comment period is provided for interested persons to
comment on this proposed action. Thirty days is deemed appropriate
because it is preferable to have any fee increase, if adopted, to be in
place as close as possible to the beginning of the fiscal year,
October, 1, 2003.
List of Subjects in 7 CFR Part 51
Agricultural commodities, Food grades and standards, Fruits, Nuts,
Reporting and recordkeeping requirements, Trees, Vegetables.
For reasons set forth in the preamble, 7 CFR Part 51 is proposed to
be amended as follows:
PART 51--[AMENDED]
1. The authority citation for 7 CFR part 51 continues to read as
follows:
Authority: 7 U.S.C. 1621-1627.
2. Section 51.38 is revised to read as follows:
Sec. 51.38 Basis for fees and rates.
(a) When performing inspections of product unloaded directly from
land or air transportation, the charges shall be determined on the
following basis:
(1) Quality and condition inspections of products in quantities of
51 or more packages and unloaded from the same land or air conveyance:
(i) $99 for over a half carlot equivalent of an individual product;
(ii) $83 for a half carlot equivalent or less of an individual
product;
(iii) $45 for each additional lot of the same product.
(2) Condition only inspection of products each in quantities of 51
or more packages and unloaded from the same land or air conveyance:
(i) $83 for over a half carlot equivalent of an individual product;
(ii) $76 for a half carlot equivalent or less of an individual
product;
(iii) $45 for each additional lot of the same product.
[[Page 52860]]
(3) For quality and condition inspection and condition only
inspection of products in quantities of 50 or less packages unloaded
from the same conveyance:
(i) $45 for each individual product;
(ii) $45 for each additional lot of any of the same product. Lots
in excess of carlot equivalents will be charged proportionally by the
quarter carlot
(b) When performing inspections of palletized products unloaded
directly from sea transportation or when palletized product is first
offered for inspection before being transported from the dock-side
facility, charges shall be determined on the following basis:
(1) Dock side inspections of an individual product unloaded
directly from the same ship:
(i) 2.5 cents per package weighing less than 30 pounds;
(ii) 3.8 cents per package weighing 30 or more pounds;
(iii) Minimum charge of $99 per individual product;
(iv) Minimum charge of $45 for each additional lot of the same
product.
(2) [Reserved]
(c) When performing inspections of products from sea containers
unloaded directly from sea transportation or when palletized products
unloaded directly from sea transportation are not offered for
inspection at dock-side, the carlot fees in paragraph (a) of this
section shall apply.
(d) When performing inspections for Government agencies, or for
purposes other than those prescribed in paragraphs (a) through (c) of
this section, including weight-only and freezing-only inspections, fees
for inspection shall be based on the time consumed by the grader in
connection with such inspections, computed at a rate of $49 an hour:
Provided, That:
(1) Charges for time shall be rounded to the nearest half hour;
(2) The minimum fee shall be two hours for weight-only inspections,
and one-half hour for other inspections;
(3) When weight certification is provided in addition to quality
and/or condition inspection, a one-hour charge shall be added to the
carlot fee;
(4) When inspections are performed to certify product compliance
for Defense Personnel Support Centers, the daily or weekly charge shall
be determined by multiplying the total hours consumed to conduct
inspections by the hourly rate. The daily or weekly charge shall be
prorated among applicants by multiplying the daily or weekly charge by
the percentage of product passed and/or failed for each applicant
during that day or week. Waiting time and overtime charges shall be
charged directly to the applicant responsible for their incurrence.
(e) When performing inspections at the request of the applicant
during periods which are outside the grader's regularly scheduled work
week, a charge for overtime or holiday work shall be made at the rate
of $25.00 per hour or portion thereof in addition to the carlot
equivalent fee, package charge, or hourly charge specified in this
subpart. Overtime or holiday charges for time shall be rounded to the
nearest half hour.
(f) When an inspection is delayed because product is not available
or readily accessible, a charge for waiting time shall be made at the
prevailing hourly rate in addition to the carlot equivalent fee,
package charge, or hourly charge specified in this subpart. Waiting
time shall be rounded to the nearest half hour.
Dated: September 2, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-22682 Filed 9-5-03; 8:45 am]
BILLING CODE 3410-02-P