[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