[Federal Register Volume 59, Number 117 (Monday, June 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14886]


  Federal Register / Vol. 59, No. 117 / Monday, June 20, 1994 /
  
[[Page Unknown]]

[Federal Register: June 20, 1994]


                                                   VOL. 59, NO. 117

                                              Monday, June 20, 1994

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 51

RIN # 0581-AB03
[Docket Number FV-93-302]

 

Fresh Fruits, Vegetables and Other Products (Inspection, 
Certification, and Standards)

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule revises the regulations governing inspection 
and certification for fresh fruits, vegetables and other products 
(other products are: raw nuts, Christmas trees and evergreens, flowers 
and flower bulbs, and onion sets) by adjusting the fees charged for the 
inspection of these products at destination markets and by clarifying 
other charge-related regulations. The fee increases are necessary to 
offset the costs of developing and maintaining U.S. grade standards for 
fresh fruits, vegetables and other products and to recover the costs of 
providing Federal inspection service for these products at destination 
markets as authorized by the Agricultural Marketing Act (AMA) of 1946. 
Regulations regarding fees for inspection of small lots (fifty packages 
or less) are added to provide a fee commensurate with the level of 
effort typically required to conduct such inspections. Finally, 
regulations regarding charges for waiting time are added and conditions 
governing the applicability of dock-side inspection fees are clarified.
EFFECTIVE DATE: June 27, 1994.

FOR FURTHER INFORMATION CONTACT: Mr. Douglas C. Bailey, Fresh Products 
Branch, Fruit and Vegetable Division, Agricultural Marketing Service, 
U.S. Department of Agriculture, P.O. Box 96456, Room 2056 South 
Building, Washington, DC 20090-6456, telephone (202) 720-5870.

SUPPLEMENTARY INFORMATION: This rule has been determined not 
significant for purposes of Executive Order 12866, and has been 
reviewed by the Office of Management and Budget.
    This final rule has been reviewed under Executive Order 12778, 
Civil Justice Reform. It is not intended to have a 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.
    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (5 U.S.C. 601 et. seq.), the Administrator of the 
Agricultural Marketing Service (AMS) has certified that this action 
will not have a significant economic impact on a substantial number of 
small entities. This final rule for the revision of the Regulations 
governing inspection, certification and standards for fresh fruits, 
vegetables and other products will not impose substantial direct 
economic cost, recordkeeping, or personnel workload changes on small 
entities, and will not alter the market share or competitive position 
of these entities relative to large businesses.
    The regulations were last revised in November 1992. This final rule 
reflects fee increases needed to offset the cost of developing and 
maintaining U.S. grade standards for fresh fruits and vegetables 
previously funded through an appropriation and to recover the costs of 
Federal fruit and vegetable inspection service at destination markets 
rendered in accordance with the AMA of 1946.
    In the Agriculture Appropriations Bill for fiscal year 1994, 
Congress directed AMS to establish a user fee program, pursuant to 31 
U.S.C. 9701, to recover the cost of developing, reviewing, and 
maintaining agricultural commodity standards that describe product 
quality attributes. This rule amends fees and charges applied to users 
at destination markets to recover the portion of the cost for fresh 
fruit and vegetable standardization that is applicable to these users.
    The AMA authorizes voluntary 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 
provides that reasonable fees be collected from the user of the program 
services to cover as nearly as practicable the costs of services 
rendered. The program seeks to maintain an unobligated balance that is 
at least equal to 4 months of operating expense. The unobligated 
balance for the Federal inspection service at destination markets at 
the end of fiscal year 1993 was 1.1 months of operating expense. 
Approximately $240,000 in increases are expected in the cost the 
service pays for General Services Administration office rent and 
Federal Telecommunications Service, and a $120,000 increase is expected 
for the cost of implementing a locality-based pay system in January 
1994. The service is implementing cost-cutting actions during fiscal 
year 1994 that will save approximately $350,000 in destination market 
costs each fiscal year beginning in fiscal year 1995. These cost-
cutting actions will offset most of the expected increases in service 
costs; however, further action is necessary to meet all rising costs 
and for the program's unobligated balance to grow to the 4 month level 
necessary to provide contingency funding. This final rule amends the 
schedule for fees and charges for services rendered to the fresh fruit 
and vegetable industry at destination markets to reflect the costs 
currently associated with the program.
    A notice of proposed rulemaking was published in the Federal 
Register (59 FR 8871-8873) on February 24, 1994 with a thirty day 
comment period. The comment period closed on March 28, 1994. Interested 
persons were invited to participate in this rulemaking proceeding by 
submitting written comments on the proposal to the Agricultural 
Marketing Service.
    Four written comments were received from field inspection 
personnel. Two of these comments noted the need to provide guidance on 
whether product shipped in a bulk bin is to be considered a single 
package when determining fees under Sec. 51.38. AMS will issue 
inspection instructions that state the net weight of product in bulk 
bins is to be divided by the net weight of the common package for that 
product to determine the number of packages represented by a bulk bin. 
The third comment noted that the charge for additional lots reported on 
an inspection certificate fails to recover the full cost of sampling 
product inspected in accordance with Florida citrus standards. Florida 
citrus standards specify a number of samples to be examined for each 
reported lot that is higher than the number of samples typically used 
for other standards. AMS believes that a separate charge for additional 
lots reported for products inspected in accordance with the Florida 
citrus standards would be confusing and should not be imposed.
    The fourth comment suggested eliminating the proposed $264 flat 
rate for inspections of 5 or more products unloaded from land or air 
transportation, and substituting carlot fees for the first four 
products, and a $37 fee for each additional product. This suggestion 
would increase fees for quality and condition inspections another $6 to 
$33 beyond the increase currently proposed. For this reason, AMS is not 
adopting this suggestion.
    The fourth comment also suggested the implementation of a charge 
for additional lots reported on an inspection certificate for product 
inspected at dock-side in place of the proposed fee increase in the 
dock-side package rates. The commenter noted that requests from 
applicants for dock-side inspections vary significantly not only in the 
number of packages but also in the number of lots to be separately 
sampled and reported on an inspection certificate. By implementing a 
charge for additional lots when performing dock-side inspections, as 
AMS currently does for inspections of product from land or air 
conveyances, the commenter believed that dock-side fees charged to each 
applicant would more accurately reflect AMS's cost of performing the 
requested inspection. The total revenue to be generated from charges 
for additional lots would be approximately equal to the total revenue 
that would have been generated from the proposed increase in package 
rates. Because this suggestion allows AMS fees at dock-side to more 
equitably reflect the cost of providing the requested service, and 
because the suggestion would not raise fees beyond the level initially 
proposed, this suggestion has been adopted in the final rule.
    Two written comments were received from the industry. Industry 
commenters, both wholesale fruit and vegetable receivers, opposed the 
fee increase as they believe the current fee levels should be 
sufficient to fund the service. However, AMS projects that, without a 
fee increase, the program will exhaust its unobligated balance and 
become insolvent early in Fiscal Year 1996. One commenter further 
believes that the lack of a competing inspection service may cause the 
program to operate inefficiently. While this inspection service is the 
only authorized inspection service under the AMA, nonetheless, the 
service is not relying solely on fee increases to defray rising costs. 
Currently, the program is phasing out a third of its permanent billing 
and collection staff and releasing office space in 11 cities to save an 
estimated $250,000 annually. Moreover, the service is planning to 
reorganize its management structure to eliminate one of three 
management layers to save users of destination market services over 
$100,000 annually.
    In light of the continuing need to maintain this AMS grading 
program on a financially sound basis, the Agency has decided to proceed 
with the fee increase as set forth in the proposal, with one 
modification regarding dock-side fees in accordance with a comment 
received.
    When product is inspected at dock-side, the number of different 
lots (i.e. varieties, sizes, brands) present in the product, along with 
the number of total packages, determines the time required to sample 
and report inspection results. Therefore, in lieu of increasing the 
package fees as had been proposed, AMS is implementing a $12 fee for 
each additional lot reported on an inspection certificate for product 
inspected at dock-side. This is the same fee that is currently charged 
for each additional lot reported on an inspection certificate for 
product unloaded from land or air transportation. Revenue from the 
additional lot fee is expected to be equivalent to that of the 
previously proposed package fee increase. By implementing the 
additional lot fee for dock-side inspections, charges for these 
inspections will more fairly reflect AMS's cost of providing the 
requested service, so that inspections of products with few varieties, 
sizes, or brands reported separately on the inspection certificate will 
be charged at a lower fee than inspections of products with the same 
total number of packages but with comparatively more varieties, sizes, 
or brands reported separately on the inspection certificate.
    Pursuant to 5 U.S.C. 553, it is found and determined that good 
cause exists for not postponing the effective date of this action until 
30 days after publication in the Federal Register because the fiscal 
year 1994 reserve balance of the program's trust fund is projected to 
be less than one month's operating reserve which is well below the 
four-month level necessary to ensure the program's fiscal viability.

List of Subjects in 7 CFR Part 51

    Agricultural commodities, Food grades and standards, Fruits, Nuts, 
Reporting and recordkeeping requirements, Vegetables.

    For the reasons set forth in the preamble, 7 CFR Part 51 is amended 
as follows:

PART 51--[AMENDED]

    1. The authority citation for 7 CFR part 51 is revised to read as 
follows:

    Authority: 7 U.S.C. 1622, 1624.

    2. Sec. 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, charges shall be determined on the 
following basis:
    (1) For products in quantities of 51 or more packages:
    (i) Quality and condition inspection of 1 to 4 products unloaded 
from the same conveyance:
    (A) $74 for over a half carlot equivalent of an individual product.
    (B) $62 for a half carlot equivalent or less of an individual 
product.
    (C) $12 for each additional lot identified on an inspection 
certificate for the same product.
    (ii) Condition only inspection of 1 to 4 products unloaded from the 
same conveyance:
    (A) $62 for over a half carlot equivalent of an individual product.
    (B) $57 for a half carlot equivalent or less of an individual 
product.
    (C) $12 for each additional lot identified on an inspection 
certificate for the same product.
    (iii) Quality and condition inspection and/or condition only 
inspection of 5 or more products unloaded from the same conveyance:
    (A) $264 for the first 5 products.
    (B) $37 for each additional product.
    (C) $12 for each additional lot identified on an inspection 
certificate for any of the products.
    (2) For quality and condition inspection and/or condition only 
inspection of products in quantities of 50 or less packages unloaded 
from the same conveyance:
    (i) $37 for each individual product.
    (ii) $12 for each additional lot identified on an inspection 
certificate for any product.
    (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) For each package inspected according to the following rates:
    (i) 1 cent per package weighing less than 15 pounds;
    (ii) 2 cents per package weighing 15 to 29 pounds; and
    (iii) 3 cents per package weighing 30 or more pounds.
    (2) $12 for each additional lot identified on an inspection 
certificate for the same product.
    (3) A minimum charge of $74 for each product inspected.
    (c) When performing inspections of products in 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 Sec. 51.38(a) shall apply.
    (d) When performing inspections for Government agencies, or for 
purposes other than those prescribed in the preceding paragraphs, 
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 $37.00 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 $18.50 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: June 9, 1994.
Lon Hatamiya,
Administrator.
[FR Doc. 94-14886 Filed 6-17-94; 8:45 am]
BILLING CODE 3410-02-P