[Federal Register: December 16, 2003 (Volume 68, Number 241)]
[Rules and Regulations]
[Page 69941-69944]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16de03-1]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
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[[Page 69941]]
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: Final rule.
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SUMMARY: This rule revises 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.
EFFECTIVE DATE: January 15, 2004.
FOR FURTHER INFORMATION CONTACT: Rita Bibbs-Booth, USDA, 1400
Independence Ave., SW., Room 0640-S, Washington, DC 20250-0295, 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. Therefore, it 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. Accordingly, AMS has proposed this final
regulatory flexibility analysis.
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 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 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 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 rule should increase user fee revenue generated under the
destination
[[Page 69942]]
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
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 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 (Public Law 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, kiwi fruit, 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 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.
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 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 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, 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
[[Page 69943]]
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 to increase the fees for destination market inspection
services. The following table compares current fees and charges with
the 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 equivalent of $86.00....................................... $99.00
each product.
--Half carlot equivalent or less of $72.00....................................... $83.00
each product.
--For each additional lot of the $14.00....................................... $45.00
same product[hairsp]*.
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 equivalent of $72.00....................................... $83.00
each product.
--Half carlot equivalent or less of $66.00....................................... $76.00
each product.
--For each additional lot of the $14.00....................................... $45.00
same product[hairsp]*.
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 of any of $14.00....................................... $45.00
the same product[hairsp]*.
--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 N/A less 1.1 cent..................................... N/A
than 15 pounds.
--For each package weighing less 2.2 cents.................................... 2.5 cents.
than 30 pounds (previously 15-29
pounds).
--For each package weighing 30 or 3.3 cents.................................... 3.8 cents.
more pounds.
--Minimum charge per individual $86.00....................................... $99.00
product.
--Minimum charge for each additional $14.00....................................... $45.00
lot of the same product.
Hourly rate for inspections performed $43.00....................................... $49.00
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 rate (per $21.50....................................... $25.00
hour additional) for all inspections
performed outside the grader's
regularly scheduled work week.
Hourly rate for inspections performed $40.00....................................... $49.00
under 40 hour contracts during the
grader's regularly scheduled work
week[hairsp]*.
Rate for billable mileage............... $1.00........................................ $1.00
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A notice of proposed rulemaking was published in the Federal
Register on September 8, 2003 (7 CFR part 51). The workplan for the
proposed FPB fee increase was classified as non-significant and
approved by OMB on June 10, 2003. The comment period ended on October
8, 2003, and FPB received two comments during this period.
The first comment was received from the Washington State Potato
Commission (WSPC) opposed raising inspection fees at this time. WSPC
asked ``is it necessary to raise salaries'' and the answer is yes.
General and locality salary increases for Federal employees are
mandated by Federal law. WSPC also recommended that FPB use its reserve
funds. FPB is indeed utilizing its reserve fund to sustain the Federal
market inspection program. However, if fees are not increased, the
reserve fund would become depleted. The market inspection program
reserve level is set by the Agency. A fee increase is necessary in
order to prevent falling below the mandated four-month reserve level in
FY-2007.
The second comment received from the California Grape and Tree
Fruit League (CGTFL) did not oppose the proposed fee increase. CGTFL
recommended that FPB make every effort to minimize costs and maximize
the efficiency of the program, to maintain training programs for
inspections and oversight, to make more inspection data available to
the industry, and to seek input from the produce industry. FPB has been
and remains committed to such recommendations. Further, FPB has and
will continue to seek out cost saving opportunities within the program.
Accordingly, in light of the continuing need to maintain the inspection
program on a financially sound basis, the Agency has decided to proceed
with the fee increase as set forth in the proposal.
List of Subjects in 7 CFR Part 51
Agricultural commodities, Food grades and standards, Fruits, Nuts,
Reporting and recordkeeping requirements, Trees, Vegetables.
0
For the reasons set forth in the preamble, 7 CFR part 51 is amended as
follows:
[[Page 69944]]
PART 51--[AMENDED]
0
1. The authority citation for 7 CFR part 51 continues to read as
follows:
Authority: 7 U.S.C. 1621-1627.
0
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.
(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: December 9, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-30999 Filed 12-15-03; 8:45 am]
BILLING CODE 3410-02-P