[Federal Register Volume 63, Number 184 (Wednesday, September 23, 1998)]
[Rules and Regulations]
[Pages 50745-50747]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-25368]



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 Rules and Regulations
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  Federal Register / Vol. 63, No. 184 / Wednesday, September 23, 1998 / 
Rules and Regulations  

[[Page 50745]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 52

[Docket No. FV-98-327]


Processed Fruits and Vegetables

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule revises 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 
is also affected. This rule also incorporates miscellaneous changes to 
revise a citation number and revise a statement in a footnote in 
regards to sample size.

EFFECTIVE DATE: October 4, 1998.

FOR FURTHER INFORMATION CONTACT: Mr. James R. Rodeheaver, Branch Chief, 
Processed Products Branch, Fruit and Vegetable Programs, Agricultural 
Marketing Service, U.S. Department of Agriculture, PO Box 96456, Room 
0709 South Building, Washington, DC 20090-6456, Telephone (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.
    Pursuant to the requirements set forth in the RFA, the Agricultural 
Marketing Service (AMS) has considered the economic impact of this 
action on small entities. Accordingly, the required analysis is set 
forth below. The purpose of the Regulatory Flexibility Act (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.
    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.
    This final rule will 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 (3 to 7 percent) annually 
to enable the 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). 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 * * * 
''. The final rule will also incorporate miscellaneous changes to 
revise a citation number and to revise a statement in a footnote in 
regards to sample size.
    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 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 rule. PPB has not identified any 
other federal rules which may duplicate, overlap or conflict with this 
final 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. 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.
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    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

[[Page 50746]]

(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.

Final 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 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 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 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 is increasing 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.
    Unless otherwise provided for by regulation or written agreement 
between the applicant and the Administrator, the charges in the 
schedule of fees in Sec. 52.42 is $43.00/hour.
    Charges for travel and other expenses as found in Sec. 52.50 will 
be $43.00/hour.
    Charges for year-round in-plant inspection services on a contract 
basis as found in Sec. 52.51(c) will be:
    (1) For inspector assigned on a year-round basis--$35.00/hour.
    (2) For inspector assigned on less than a year-round basis--$45.00/
hour.
    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. 52.52(d) will be each inspector--$45.00/hour.
    Also, AMS revised Secs. 52.21 and 52.38 (Table II, footnote number 
2) 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 will 
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.
    A notice of proposed rulemaking was published in the Federal 
Register (63 FR 35544) on June 30, 1998, with a thirty day comment 
period. The comment period closed on July 30, 1998. Interested persons 
were invited to participate in this rulemaking proceeding by submitting 
written comments on the proposal to the Agricultural Marketing Service. 
No comments were received regarding this proposed rule.
    After consideration of all relevant matter presented, this action 
makes final the changes as proposed on June 30, 1998. The changes are 
made effective on October 4, 1998.

List of Subjects in 7 CFR Part 52

    Food grades and standards, Food labeling, Frozen foods, Fruit 
juices, Fruits, Reporting and recordkeeping requirements, 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. 52.21  [Amended]

    2. In Sec. 52.21, the word ``Sec. 52.50'' is revised to read 
``Sec. 52.49''.


Sec. 52.42  [Amended]

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


Sec. 52.50  [Amended]

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


Sec. 52.51  [Amended]

    5. 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''.
    6. In Sec. 52.38, footnote number 2 immediately following Table II 
is revised to read as follows:

[[Page 50747]]

Sec. 52.38  Sampling plans and procedures for determining lot 
compliance.

* * * * *
    \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: September 17, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-25368 Filed 9-22-98; 8:45 am]
BILLING CODE 3410-02-P