[Federal Register: December 1, 2006 (Volume 71, Number 231)]
[Proposed Rules]
[Page 69497-69500]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01de06-33]
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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 69497]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 51
[Docket Number FV-06-308]
RIN 0581-AC63
Multi-Year 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 certain fees charged for the inspection of these
products at destination markets for the next two fiscal years (FY-2007
and FY-2008) by approximately 15 percent. 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 inspection 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 January 2, 2007.
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 0640-S, Washington, DC 20250-0295, faxed to (202) 720-5136, sent
via e-mail to FPB.DocketClerk@usda.gov, or via the Internet: http://www.regulations.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 CONTACT INFORMATION: 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, and has not been reviewed by the
Office of Management and Budget.
Also, pursuant to the requirement set forth in the Regulatory
Flexibility Act (RFA), AMS has considered the economic impact of this
action on small entities. Accordingly, AMS proposes this initial
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 proposed action
described herein is being taken for several reasons, including that
additional user fee revenues are needed to cover the costs or: (1)
Providing current program operations and services: (2) improving the
timeliness in 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. FPB has reduced costs by approximately
$2 million. However, even with these efforts, FPB's existing fee
schedule will not generate sufficient revenue to cover program costs
while maintaining the Agency mandated reserve balance. Current revenue
projections for FPB's destination market inspection work during FY-2006
are $15.3 million with costs projected at $20.4 million and an end-of-
year reserve balance of $12.7 million. However, this reserve balance is
due in part, 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 $21.6 million during FY-2007 and $22.5 million during FY-
2008. Revenues are projected to be $15.3 million for end of the fiscal
year. The reserve balance for FY-2007 and FY-2008, will fall below the
Agency's mandated four-month reserve level. The reserve balance is
projected to be $6.5 million for FY-2007 (3.6 months) and a negative
$584,000 for FY-2008 (-0.3) months).
This proposed fee increase should result in an estimated average of
$2.4 million in additional revenues per year (effective in FY-2007, if
the fees were implemented by October 1, 2006). This will not cover all
of FPB's costs. FPB will need to continue to increase fees 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-2008 will be needed to
sustain the program in the future. However, we will continue to reduce
costs, wherever possible.
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 2.87
to 5.62 percent depending on locality, effective January 2006, has
significantly increased program costs and will continue to increase
costs at a similar rate in future years. 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. 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) the Fresh Electronic Inspection
Reporting/Resource System (FEIRS) to
[[Page 69498]]
replace its manual paper and pen inspection reporting process. FEIRS
was implemented in 2004. This system has been put in place to enhance
and streamline FPB's fruit and vegetable inspection process, however
additional revenue is required to maintain FEIRS. FPB has also begun to
cover the costs associated with the Training and Development Center
(TDC) in Fredericksburg, VA. A portion of the appropriated funds
received in October 2001 were for infrastructure improvements including
the development and maintenance of the inspector Training and
Development Center. With appropriated funding now depleted, FPB is now
obligated to support the TDC under revenues from the terminal market
user fee inspection program.
This proposed rule should increase user fee revenue generated under
the destination market program by approximately 15 percent. 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 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 marketing 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 cost 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.
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. FPB has reduced costs by approximately
$2 million. However, even with these efforts, FPB's existing fee
schedule will not generate sufficient revenue to cover program costs
while maintaining the Agency mandated reserve balance. Current revenue
projections for FPB's destination market inspection work during FY-2006
are $15.3 million with costs projected at $20.4 million and an end-of-
year reserve balance of $12.7 million. However, this reserve balance is
due in part, 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 $21.6 million during FY-2007 and $22.5 million during FY-
2008. Revenues are projected to be $15.3 million for end of the fiscal
year. The reserve balance for FY-2007 and FY-2008, will fall below the
Agency's mandated four-month reserve level. The reserve balance is
projected to be $6.5 million for FY-2007 (3.6 months) and a negative
$584,000 for FY-2008 (-0.3) months).
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 2.87
to 5.62 percent depending on locality, effective January 2006, has
significantly increased program costs, and will continue to increase
costs at a similar rate in future years. 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. In addition, inflation also impacts FPB's non-
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 appropriate funds) an automated system known as
FEIRS, to replace its manual paper and pen inspection reporting
process. Approximately $10,000 in additional revenue per month will be
needed to maintain the system. This system has been put in place to
enhance FPB's fruit and vegetable inspection processes. FPB has also
begun to cover the costs associated with the Training and Development
Center (TDC) in Fredericksburg, VA. A portion of the appropriated funds
received in October 2001 were for infrastructure improvements including
the
[[Page 69499]]
development and maintenance of the inspector Training and Development
Center. With appropriated funding now depleted, FPB is now obligated to
support the TDC under revenues from the terminal market user fee
inspection program.
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. Unless otherwise provided
for by regulation or written agreement between the applicant and the
Administrator, the charge in the schedule of fees as found in Sec.
51.38 are:
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Service Current 2007 2008
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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 $114.00 $131.00 $151.00
each product.........................
--Half carlot equivalent or less of 95.00 109.00 125.00
each product.........................
--For each additional lot of the same 52.00 60.00 69.00
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 equivalent of 95.00 109.00 125.00
each product.........................
--Half carlot equivalent or less of 87.00 100.00 115.00
each product.........................
--For each additional lot of the same 52.00 60.00 69.00
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.................... 52.00 60.00 69.00
--For each additional lot of any of 52.00 60.00 69.00
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 less than \1\ 2.9 \1\ 3.3 \1\ 3.8
30 pounds............................
--For each package weighing 30 or more \1\ 4.4 \1\ 5.1 \1\ 5.9
pounds...............................
--Minimum charge per individual 114.00 131.00 151.00
product..............................
--Minimum charge for each additional 52.00 60.00 69.00
lot of the same product..............
Hourly rate for inspections performed for
other purposes during the grader's
regularly scheduled work week:
--Hourly rate for non-carlot 56.00 64.00 74.00
equivalent inspections such as count,
size, temperature, container, etc. or
work associated with inspections such
as digital image services will be
charged at a rate that reflects the
cost of providing the service........
Overtime rate (per hour additional) for 29.00 33.00 38.00
all inspections performed outside the
grader's regularly scheduled work week...
Holiday pay:
Hourly rate for inspections performed 56.00 64.00 74.00
under 40 hour contracts during the
grader's regularly scheduled work
week.................................
Rate for billable mileage............. 1.00 1.15 1.32
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\1\ Cents.
A thirty-day comment period is provided for interested persons to
comment on this proposed action. Given the current financial status of
the program, thirty days is deemed appropriate in order to have any fee
increase, if adopted, to be in place as close as possible to the
beginning of the fiscal year 2007.
List of Subjects in 7 CFR Part 51
Agricultural commodities, Food grades and standards, Fruits, Nuts,
Reporting and record keeping 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 air or land conveyance:
(i) $131 ($151) for over a half carlot equivalent of an individual
product;
(ii) $109 ($125) for a half carlot equivalent or less of an
individual product;
(iii) $60 ($69) 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) $109 ($125) for over a half carlot equivalent of an individual
product;
(ii) $100 ($115) for a half carlot equivalent or less of an
individual product;
(iii) $60 ($69) 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) $60 ($69) for each individual product:
(ii) $60 ($69) 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) 3.3 (3.8) cents per package weighing less than 30 pounds;
(ii) 5.1 (5.9) cents per package weighing 30 or more pounds;
(iii) Minimum charge of $131 ($151) per individual product;
(iv) Minimum charge of $60 ($69) for each additional lot of the
same product
(2) [Reserved]
[[Page 69500]]
(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 ``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 inspections shall be based on the time consumed by the grader in
connection with such inspections, computed at a rate of $64 ($74) per
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 $33 ($38) 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: November 27, 2006.
Lloyd C. Day,
Administrator, Agriculture Marketing Service.
[FR Doc. E6-20315 Filed 11-30-06; 8:45 am]
BILLING CODE 3410-02-P