[Federal Register Volume 62, Number 242 (Wednesday, December 17, 1997)]
[Proposed Rules]
[Pages 66033-66036]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32813]
========================================================================
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.
========================================================================
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 /
Proposed Rules
[[Page 66033]]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 51
[Docket Number FV-97-302]
RIN 0581-AB51
Fees for Destination Market Inspections of Fresh Fruits,
Vegetables and Other Products
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would revise the regulations governing the
inspection and certification for fresh fruits, vegetables and other
products by increasing by approximately 10 percent the fees charged for
the inspection of these products at destination markets. 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. 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 the Agricultural Act of 1949 would also be
affected. This rule would also revise the regulations with regard to
the disposition of inspection certificates to require that one copy of
the certificate be delivered or mailed to the shipper of the inspected
product.
DATES: Comments must be postmarked or courier dated on or before
February 17, 1998.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposal. Comments must be sent to the Program Support
Section, Fresh Products Branch, Fruit and Vegetable Programs,
Agricultural Marketing Service, U.S. Department of Agriculture, P.O.
Box 96456, Room 2049 South Building, Washington, D.C. 20090-6456.
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: Rob Huttenlocker at the above address
or call (202) 720-0297.
SUPPLEMENTARY INFORMATION:
Executive Order 12866 and Regulatory Flexibility Act
This rule has been reviewed by the Office of Management and Budget
and has been determined not significant for purposes of Executive Order
12866.
Also, pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has
considered the economic impact of this action on small entities.
AMS regularly reviews its user-fee financed programs to determine
if the fees are adequate. The existing fee schedule will not generate
sufficient revenues to cover program costs while maintaining an
adequate reserve balance (four months of costs) as called for by Agency
policy (AMS Directive 408.1). Current revenue projections for
destination market inspection work during FY 97 are $12.0 million with
costs projected at $11.9 million and an end-of-year reserve of $3.0
million. However, the Fresh Products Branch's (FPB) trust fund balance
for this program will be approximately $1.0 million under the four-
month level of approximately $4.0 million. Further, FPB's costs of
operating the destination market program are expected to increase to
approximately $12.9 million during FY 98 and to approximately $13.2
million in FY 99. These cost increases will result from both
inflationary increases with regard to current FPB operations and
services and the need to improve or expand current services.
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 2.30
to 4.66 percent depending on locality, effective January 1997,
significantly increased program costs. Another general and locality
salary increase is expected to become effective in January 1998. In
addition, inflation also impacts upon FPB's non-salary costs. These
increases will increase FPB's costs of operating this program by
approximately $300,000 per year.
Additional revenues are also needed to enable FPB to cover the
costs of improving program integrity by mailing copies of all
destination market certificates to the shippers of the products
inspected. FPB estimates that it will cost $200,000 per year for the
postage, envelopes and additional staff time to send the approximately
275,000 inspection certificates it issues annually. Additional revenues
are also necessary in order that FPB may cover the costs of securing
the additional staff ($200,000) needed to increase the timeliness of
service delivery in several destination markets which are currently in
need of additional staffing (e.g., Dallas, Texas). Finally, FPB needs
an additional $200,000 per year for three to four years to cover the
costs of securing the equipment (e.g., digital imaging cameras and
computers, inspector notebook computers and Agency-mandated information
systems upgrades) needed to expand FPB's services and to make existing
services more efficient in the future.
This proposed fee increase should result in an estimated $1.2
million in additional revenues per year (only $600,000 during FY 98
since any fee increase would be effective on April 1, 1998) and should
enable FPB to cover its costs while maintaining current program
reserves (at a level below that provided for by Agency policy).
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 considered 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
program integrity by mailing copies of all destination market
certificates to the shippers of the products inspected (the basis for
the proposed change in regulation with regard to the disposition of
inspection certificates to include that one copy be delivered or mailed
to the shipper of the inspected product); (3) improving the timeliness
with which inspection services are provided; and (4) acquiring
technological advancements (e.g., digital imaging cameras and
computers, inspector notebook
[[Page 66034]]
computers and Agency-mandated information systems upgrades) aimed at
expanding FPB's services and making them more efficient in the future.
The objective of this proposed rule is to increase user fee revenue
generated under the destination market program by approximately $1.2
million or approximately 10 percent per year. This action is authorized
under the Agricultural Marketing Act (AMA) of 1946 (see 7 U.S.C.
1622(h)) which states 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
121.601). There will be no additional reporting, recordkeeping, or
other compliance requirements imposed upon small entities as a result
of this proposed rule. FPB has not identified any other Federal rules
which may duplicate, overlap or conflict with this proposed rule.
---------------------------------------------------------------------------
\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 only during those periods
when domestic marketing order regulations are in effect.
Currently, there are 15 commodities subject to 8e import
regulations: avocados, dates (other than dates for processing),
filberts, grapefruit, kiwifruit, limes, olives (other than Spanish-
style green olives), onions, oranges, Irish potatoes, prunes,
raisins, table grapes, tomatoes and walnuts. A current listing of
the regulated commodities can be found under 7 CFR Parts 944, 980
and 999. Section 999.600 establishes minimum quality,
identification, certification and safeguard requirements for foreign
produced farmers stock, shelled and cleaned in-shell peanuts
presented for importation into the United States. Import
requirements applicable to peanuts may be found under subparagraph
(f)(2) of section 108B of the Agricultural Act of 1949 (7 U.S.C.
1445c-3), as amended November 28, 1990, and August 10, 1993, and
section 155 of the Federal Agriculture Improvement and Reform Act of
1996 (7 U.S.C. 7271).
---------------------------------------------------------------------------
Inasmuch as the destination market grading services are voluntary
(except when required for imported commodities), and since the fees
charged to users of these services vary with usage, the impact on all
businesses, including small entities, is very similar. Further, even
though fees will be raised, the increase is small (approximately ten
percent) 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.
Proposed Action
The AMA 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 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 will 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 programs to determine if the
fees are adequate. While FPB continues to search for opportunities to
reduce its costs, the existing fee schedule will not generate
sufficient revenues to cover program costs while maintaining an
adequate reserve balance (four months of costs) as called for by Agency
policy (AMS Directive 408.1). Current revenue projections for
destination market inspection work during FY 97 are $12.0 million with
costs projected at $11.9 million and an end-of-year reserve of $3.0
million. However, FPB's trust fund balance for this program will be
approximately $1.0 million under the four-month level of approximately
$4.0 million. Further, FPB's costs of operating the destination market
program are expected to increase to approximately $12.9 million during
FY 98 and to approximately $13.2 million in FY 99. These cost increases
(which are outlined below) will result from both inflationary increases
with regard to current FPB operations and services and the need to
improve or expand current services.
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 2.30
to 4.66 percent depending on locality, effective January 1997,
significantly increased program costs. Another general and locality
salary increase is expected to become effective in January 1998. In
addition, inflation also impacts upon FPB's non-salary costs. These
increases will increase FPB's costs of operating this program by
approximately $300,000 per year.
Additional revenues are also needed to enable FPB to cover the
costs of improving program integrity by mailing copies of all
destination market certificates to the shippers of the products
inspected. This is an essential step in FPB's ongoing effort to improve
the integrity of the inspection process. This action will assist in
preventing industry participants from using falsified inspection
certificates to alter the terms of sales between shippers and
receivers. In accordance with this effort, the regulations with regard
to the disposition of inspection certificates in 7 CFR 51.21 are
proposed to be revised to require that one copy of the certificate be
provided to the shipper of the inspected product. FPB estimates that it
will cost $200,000 per year for the postage, envelopes and additional
staff time to send the approximately 275,000 inspection certificates it
issues annually.
Additional revenues are also necessary in order that FPB may cover
the costs of securing the additional staff ($200,000) needed to
increase the timeliness of service delivery in several destination
markets which are currently in need of additional staffing (e.g.,
Dallas, Texas). This action responds to industry feedback to FPB's FY
1996 Customer Service Survey which emphasized the importance of
timeliness far more than cost containment.
Finally, FPB needs an additional $200,000 per year for three to
four years to cover the costs of securing the equipment (e.g., digital
imaging cameras and computers, inspector notebook computers and Agency-
mandated information systems upgrades) needed to expand FPB's services
and to make existing services more efficient in the future.
This proposed fee increase should result in an estimated $1.2
million in additional revenues per year (only $600,000 during FY 98
since any fee
[[Page 66035]]
increase would be effective on April 1, 1998) and should enable FPB to
cover its costs while maintaining current program reserves. In order to
reach a four month reserve, further increases in fees will be likely in
future years.
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 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 charges in the schedule of fees as found in
Sec. 51.38 are:
----------------------------------------------------------------------------------------------------------------
Service Current Proposed
----------------------------------------------------------------------------------------------------------------
Quality and condition inspections of one to
four products each in quantities of 51 or more
packages and unloaded from the same land or
air conveyance:
Over a half carlot equivalent of each $78.............................. $86.
product.
Half carlot equivalent or less of each 65............................... 72.
product.
For each additional lot of the same product 13............................... 14.
Condition only inspections of one to four
products each in quantities of 51 or more
packages and unloaded from the same land or
air conveyance:
Over a half carlot equivalent of each 65............................... 72.
product.
Half carlot equivalent or less of each 60............................... 66.
product.
For each additional lot of the same product 13............................... 14.
Quality and condition and condition only
inspections of five or more products each in
quantities of 51 or more packages and unloaded
from the same land or air conveyance:
For the first five products................ 277.............................. 305.
For each additional product................ 39............................... 43.
For each additional lot of any of the same 13............................... 14.
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........................... 39............................... 43.
For each additional lot of any of the same 13............................... 14.
product.
Dock-side inspections of an individual product
unloaded directly from the same ship:
For each package weighing less than 15 1 cent........................... 1.1 cents.
pounds.
For each package weighing 15 to 29 pounds.. 2 cents.......................... 2.2 cents.
For each package weighing 30 or more pounds 3 cents.......................... 3.3 cents.
For each additional lot of any of the same 13............................... 14.
product.
Minimum charge per individual product...... 78............................... 86.
Inspections performed for other purposes 39 per hour...................... 43 per hour.
(except for contract work) during the grader's
regularly scheduled work week.
Overtime or holiday premium rate (per hour 19.50 per hour................... 21.50 per hour.
additional) for all inspections performed
outside the grader's regularly scheduled work
week.
----------------------------------------------------------------------------------------------------------------
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 51.21 is revised to read as follows:
Sec. 51.21 Disposition of inspection certificates.
The original certificate, and not to exceed four copies (if
requested by applicant prior to issuance), shall be delivered or mailed
promptly to the applicant or to a person designated by him. One copy
shall be delivered or mailed to the shipper of the inspected product.
One copy shall be filed in the office of the inspector when the
inspection is made by a Federal Government employee, otherwise, it
shall be filed in the appropriate office of the cooperating Federal-
State Inspection Agency. Unless otherwise directed by the
Administrator, two copies of each official certificate issued on
products received in destination markets shall be forwarded to the
Administrator to be kept on file in Washington and no copies of
official certificates issued at shipping point need be so forwarded. In
the case of any product covered by a marketing agreement and/or order
effective pursuant to the Agricultural Marketing Agreement Act of 1937,
as amended (7 U.S.C. 601 et seq.), at least one copy of each
certificate covering the inspection of such product shall, on request,
be delivered to the administrative agency established thereunder,
subject to such terms and conditions as the Administrator may
prescribe. Copies may be furnished to other interested parties as
outlined in Sec. 51.41.
3. 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) 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) $86 for over a half carlot equivalent of an individual product.
(B) $72 for a half carlot equivalent or less of an individual
product.
(C) $14 for each additional lot of the same product.
(ii) Condition only inspection of 1 to 4 products unloaded from the
same conveyance:
(A) $72 for over a half carlot equivalent of an individual product.
(B) $66 for a half carlot equivalent or less of an individual
product.
(C) $14 for each additional lot of the same product.
(iii) Quality and condition inspection and/or condition only
inspection of 5 or more products unloaded from the same conveyance:
(A) $305 for the first 5 products.
(B) $43 for each additional product.
(C) $14 for each additional lot of any of the same product.
[[Page 66036]]
(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) $43 for each individual product.
(ii) $14 for each additional lot of any of the same 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) 1.1 cent per package weighing less than 15 pounds;
(ii) 2.2 cents per package weighing 15 to 29 pounds; and,
(iii) 3.3 cents per package weighing 30 or more pounds.
(2) $14 for each additional lot of any of the same product.
(3) A minimum charge of $86 for each product inspected.
(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 dockside, 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 $43 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; and
(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 $21.50 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: December 11, 1997
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 97-32813 Filed 12-16-97; 8:45 am]
BILLING CODE 3410-02-P