[Federal Register Volume 63, Number 125 (Tuesday, June 30, 1998)]
[Proposed Rules]
[Pages 35544-35546]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-17297]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 52

[FV-98-327]


Processed Fruits and Vegetables

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would revise the regulations governing 
inspection and certification for processed fruits, vegetables, and 
processed products made from them by increasing by approximately three 
to seven percent fees charged for the inspection services. These 
revisions are necessary in order to recover, as nearly as practicable, 
the costs of performing inspection services 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 Act of 1937 would also be affected. This rule would also 
incorporate miscellaneous changes to revise a citation number and 
revise a statement in a footnote in regards to sample size.

DATES: Comments must be postmarked or courier dated on or before July 
30, 1998.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments must be sent in duplicate to the 
Office of the Branch Chief, Processed Products Branch, Fruit and 
Vegetable Programs, Agricultural Marketing Service, U.S. Department of 
Agriculture, P.O. Box 96456, Room 0709 South Building, Washington, DC 
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: Mr. James R. Rodeheaver at the above 
address or call (202) 720-4693.

SUPPLEMENTARY INFORMATION:

Executive Order 12866 and Regulatory Flexibility Act

    This rule has been determined not significant for 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), the Agricultural Marketing 
Service (AMS) has considered the economic impact of this action on 
small entities. Accordingly, the required analyses are set forth below.
    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 lot, and year round and less than year 
round inspection program costs while maintaining an adequate reserve 
balance (four months of costs) as called for by Agency policy (AMS 
Directive 408.1). Current revenue projection for work in regards to 
these inspection programs during FY 1998 is $11.7 million with costs 
projected at $13.1 million and an end-of-year reserve balance of $3.9 
million. The PPB trust fund reserve balance for these programs will be 
approximately $0.5 million under the four-month level of approximately 
$4.4 million, which is called for by Agency policy. Further, PPB's cost 
of operating the user fee financed programs are expected to increase to 
approximately $13.5 million during FY 1999 and to approximately $13.9 
million in FY 2000. These cost increases will result from inflationary 
increases with regard to current PPB operations and services.
    The Processed Products Branch (PPB) estimates that without a fee 
increase the trust fund reserve as called for by Agency policy (four-
months) will significantly decrease, that will result in an operating 
reserve balance of approximately $3.0 million in FY 1999 and $2.6 
million in FY 2000. This relates to only 2.9 months and 2.3 months of 
operating reserve for the respective years.
    Employee salaries and benefits are major program costs that account 
for approximately 85 percent of the total operating budget. A general 
and locality salary increase for Federal employees, ranging from 2.30 
to 7.11 percent depending on locality, effective January 1997, 
significantly increased program costs. Another locality salary increase 
ranging from 2.30 to 7.27 percent depending on locality, effective 
January 1998, also increased program costs. These increases have 
increased PPB's cost of operating these programs by $400,000 per year.
    The proposed fee increase of approximately 3 to 7 percent, should 
result in an estimated $500,000 in additional revenue per year and 
should enable PPB to cover its costs and re-establish program reserves 
(current operating reserves are being maintained 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 objective of the 
proposed rule is to increase user fee revenue generated under the lot 
inspection program, and the year round and less than year round 
inspection programs by approximately $500,000 annually. This action is 
authorized under the 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 1239 users of PPB's lot, and less than year 
round and year round inspection services (including applicants who must 
meet

[[Page 35545]]

import requirements,\1\ inspections which amount to under 2 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. PPB 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. 601-604), 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.
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    Currently, there are 4 processed commodities subject to 8e import 
regulations: canned ripe olives, dates, prunes, and processed raisins. 
A current listing of the regulated commodities can be found under 7 CFR 
parts 944 and 999.
    Inasmuch as the inspection 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 (three to seven percent) and 
should not significantly affect these entities. Finally, except for 
those applicants who are required to obtain inspections, most of these 
businesses are typically under no obligation to use these inspection 
services, and therefore, any decision to discontinue the use of the 
services should not prevent them from marketing their products.

Executive Order 12988

    The rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have a retroactive effect 
and 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 
for processed fruits, vegetables, and processed products made from 
them. 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 
for inspection services rendered to the processed fruit and vegetable 
industry to reflect the costs necessary to operate the program and 
incorporates miscellaneous changes to revise a citation number and to 
revise a statement in a footnote in regards to sample size.
    AMS regularly reviews its user fee programs to determine if the 
fees are adequate. While PPB continues to search for opportunities to 
reduce its costs, the existing fee schedule will not generate 
sufficient revenues to cover lot, and less than year round and year 
round inspection program costs while maintaining an adequate reserve 
balance (four months of costs) as called for by Agency policy (AMS 
Directive 408.1). The current revenue projection for work in regards to 
these inspection programs during FY 1998 is $11.7 million with cost 
projected at $13.1 million and an end-of-year reserve of $3.9 million. 
This will result in a decrease of PPB's trust fund balance of 
approximately $0.5 million under the four-month level ($4.4 million) 
called for by Agency policy. Further, PPB's cost of operating these 
inspection programs is expected to increase to approximately $13.5 
million during FY 1999 and to approximately $13.9 million in FY 2000, 
resulting in a decrease of the trust fund balance to approximately $3.0 
in FY 1999, and to approximately $2.6 million in FY 2000. These cost 
increases will result from inflationary increases with regard to 
current PPB operations and services.
    Employee salaries and benefits are major program costs that account 
for approximately 85 percent of the total operating budget. A general 
and locality salary increase for Federal employees, ranging from 2.30 
to 7.11 percent depending on locality, effective January 1997, 
significantly increased program costs. Another general and locality 
salary increase ranging from 2.30 to 7.27 percent depending on 
locality, effective January 1998, also increased program costs. These 
increases will increase PPB's costs of operating these inspection 
programs by approximately $400,000 per year. Therefore, the salary 
increases necessitate additional funding under the program. This 
proposed fee increase of approximately 3 to 7 percent should result in 
an estimated additional revenue of $500,000 per year, and should enable 
PPB to cover the costs of doing business and re-establish program 
reserves (current operating reserves are at a level below that provided 
for by Agency policy). In order to reach and maintain a four-month 
reserve, a further increase in fees may be likely in future years.
    Based on the aforementioned analysis of increasing program costs, 
AMS proposes to increase the fees relating to lot inspection service 
and the fees for less than year round and year round inspection 
services. For inspection services charged under Sec. 52.42, overtime 
and holiday work would continue to be charged as provided in that 
section. For inspection services charged on a contract basis under 
Sec. 52.51 overtime work would also continue to be charged as provided 
in that section. The following fee schedule compares current fees and 
charges with proposed fees and charges for processed fruit and 
vegetable inspection as found in 7 CFR 52.42-52.51. 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. 52.42 are:

Current $41.00/hr.
Proposed $43.00/hr.

    Charges for travel and other expenses as found in Sec. 52.50 are:

Current: $41.00/hr.
Proposed: $43.00/hr.
    Charges for year-round in-plant inspection services on a contract 
basis as found in Sec. 52.51(c) are:
    (1) For inspector assigned on a year-round basis:

Current: $34.00/hr.
Proposed: $35.00/hr.

    (2) For inspector assigned on less than a year-round basis: Each 
inspector:

Current: $42.00/hr.
Proposed: $45.00/hr.

    Charges for less than year-round in-plant inspection services (four 
or more consecutive 40 hour weeks) on a contract basis as found in 
Sec. 52.51(d) are:

    (1) Each inspector:

Current: $42.00/hr.
Proposed: $45.00/hr.

    Also, AMS revises Secs. 52.21 and 52.38 (Table II, footnote number 
2), of 7 CFR part 52 to make editorial changes.
    In Sec. 52.21, Sec. 52.50 is referenced as providing information 
regarding the purchase of additional copies of certificates. This 
should be revised to read Sec. 52.49.
    In Sec. 52.38, Table II, footnote number 2, the statement that 
describes the sample size for Group 3 containers that weigh over 10 
pounds is omitted. Table II, footnote number 2 is revised to include 
the sample size for Group 3 containers that are over 10 pounds.

List of Subjects in 7 CFR Part 52

    Food grades and standards, Food labeling, Frozen foods, Fruit 
juices,

[[Page 35546]]

Fruits, Reporting and recordkeeping requirements, and Vegetables.

    For the reasons set forth in the preamble, 7 CFR part 52 is amended 
to read as follows:

PART 52--[AMENDED]

    1. The authority citation for part 52 continues to read as follows:

    Authority: 7 U.S.C. 1621-1627.


Sec. 52.42  [Amended]

    2. In Sec. 52.42, the figure ``$41.00'' is revised to read 
``$43.00''.


Sec. 52.50  [Amended]

    3. In Sec. 52.50, the figure ``$41.00'' is revised to read 
``$43.00''.


Sec. 52.51  [Amended]

    4. In Sec. 52.51, paragraph (c)(1), the figure ``$34.00'' is 
revised to read ``$35.00'', in paragraph (c)(2), the figure ``$42.00'' 
is revised to read ``$45.00'', and in paragraph (d)(1), the figure 
``$42.00'' is revised to read ``$45.00''.


Sec. 52.21  [Amended]

    5. In Sec. 52.21, the words ``Sec. 52.50'' is revised to read 
``Sec. 52.49''.


Sec. 52.38  [Amended]

    6. In Sec. 52.38, Table II, footnote number 2 is revised to read as 
follows:

    \2\ When a standard sample size is not specified in the U.S. 
grade standards, the sample units for the various container size 
groups are as follows: Groups 1 and 2--1 container and its entire 
contents. Group 3 containers up to 10 pounds--1 container and its 
entire contents. Group 3 containers over 10 pounds--approximately 
three pounds of product. When determined by the inspector that a 3-
pound sample unit is inadequate, a larger sample unit or 1 or more 
containers and their entire contents may be substituted for 1 or 
more sample units of 3 pounds.

    Dated: June 24, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-17297 Filed 6-29-98; 8:45 am]
BILLING CODE 3410-02-P