[Federal Register Volume 64, Number 181 (Monday, September 20, 1999)]
[Proposed Rules]
[Pages 50774-50777]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-24438]


 ========================================================================
 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.
 
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 

  Federal Register / Vol. 64, No. 181 / Monday, September 20, 1999 / 
Proposed Rules  

[[Page 50774]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 51

[Docket Number FV-99-302]
RIN 0581-AB63


Fees for Destination Market Inspections of Fresh Fruits, 
Vegetables and Other Products

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would revise the regulations governing the 
inspection and certification for fresh fruits, vegetables and other 
products by increasing by approximately 14 percent for most of the fees 
charged for the inspection of these products at destination markets. 
The fees for inspecting multiple lots of the same product during 
inspections would be increased more significantly and the per package 
fees for dock-side inspections would be increased and changed from a 
three interval schedule, based on weight, to a two interval schedule 
based on different weight thresholds. 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.

DATES: Comments must be postmarked or courier dated on or before 
November 19, 1999.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments are to be sent to the Fresh Products 
Branch, Fruit and Vegetable Programs, Agricultural Marketing Service, 
U.S. Department of Agriculture, P.O. Box 96456, Room 2049-South, 
Washington, DC 20090-6456; faxed to (202) 720-5136 or sent via e-mail 
to FPB.DocketC[email protected]. 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, Assistant Chief, 
Fresh Products Branch, at the above address or call (202) 720-9771.

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 to be not significant for the 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 Fresh Products Branch (FPB) of the Fruit 
and Vegetable Programs, AMS, has and will continue to seek out cost 
saving opportunities and implement appropriate changes to reduce its 
costs. Such actions can provide alternatives to fee increases. However, 
even with these efforts, FPB's existing fee schedule will not generate 
sufficient revenues to cover program costs while maintaining an 
adequate reserve balance. Current revenue projections for FPB's 
destination market inspection work during FY 99 are $13.7 million with 
costs projected at $13.9 million and an end-of-year reserve of $2.2 
million. However, FPB's trust fund balance for this program will be 
approximately $2.4 million under the approximate $4.6 million deemed 
necessary to provide an adequate reserve balance in light of increasing 
program costs. Further, FPB's costs of operating the destination market 
program are expected to increase to approximately $14.5 million during 
FY 00 and to approximately $15.0 million during FY 01. These cost 
increases will result from inflationary increases with regard to 
current FPB operations and services (primarily salary and benefits), 
the training and equipment required to promote improved workplace 
safety, and the acquisition of additional computer-related technology.
    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 3.54 
to 4.02 percent depending on locality, effective January 1999, has 
significantly increased program costs. In addition, inflation also 
impacts FPB's non-salary costs. These factors have increased FPB's 
costs of operating this program by approximately $500,000 per year. In 
addition, a general and locality salary increase of at least 4.4 
percent is anticipated in January 2000. This salary adjustment will 
increase FPB's costs by over $600,000 per year.
    Additional revenues are also necessary in order for FPB to cover 
the costs of the additional staff, office space, and equipment 
($150,000) needed in two federal market offices that were established 
during FY 99 (e.g., Brooklyn, New York, and Oklahoma City, Oklahoma). 
Additional, revenues are also needed to cover the costs of providing 
safety orientation training to FPB's personnel and purchasing safety 
shoes for FPB's inspection personnel ($50,000). Finally, FPB needs an 
additional $200,000 per year to cover the costs of securing the 
equipment (e.g., digital imaging cameras and computers and necessary 
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 $2.5 
million in additional revenues per year (only $1.8 million during FY 00 
since any fee increase would be effective on or after January 1, 2000) 
and should enable FPB to cover its costs while building its reserves 
from the current level of $2.2 million to closer to the $4.6 million 
level by the end of FY 2001.
    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 proposed action 
described herein is being taken 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

[[Page 50775]]

the timeliness with which inspection services are provided; (3) 
creating a safer working environment; and (4) acquiring technological 
advancements (e.g., digital imaging cameras and computers and necessary 
information systems upgrades) aimed at expanding FPB's services and 
making them more efficient in the future. This proposed rule should 
increase user fee revenue generated under the destination market 
program by approximately $2.5 million or approximately 18 percent per 
year. While most of the fees would increase by approximately 14 
percent, the fee for inspections of multiple lots of the same product 
during inspections, commonly referred to as ``sublots,'' would be 
increased from $14-$32 because FPB's current fee does not nearly cover 
the costs of performing these inspections (between 20-25 percent of the 
destination market inspections conducted by FPB involve sublots). In 
addition, the per package rates for dock-side inspections would be 
increased and changed from a three interval schedule (based on package 
weight) to a two interval schedule (based on different weight 
thresholds). The two interval schedule would be simpler to administer 
and more appropriate given current packaging trends. 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 would be no additional reporting, recordkeeping, or 
other compliance requirements imposed upon small entities as a result 
of this proposed rule. In compliance with the Paperwork Reduction Act 
of 1995 (44 U.S.C. Chapter 35), the information collection and 
recordkeeping requirements in Part 51 have been approved previously by 
OMB and assigned OMB No. 0581-0125. FPB 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. 601-674), 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 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).
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    The destination market grading services are voluntary (except when 
required for imported commodities) and the fees charged to users of 
these services vary with usage. However, the impact on all businesses, 
including small entities, is very similar. Further, even though fees 
would be raised, the increase would not be excessive (approximately 
fourteen percent for the most common fees) 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 proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This proposed action is not intended to have 
retroactive effect. This proposed 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 proposed 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 would 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. Current revenue projections for destination 
market inspection work during FY 99 are $13.7 million with costs 
projected at $13.9 million and an end-of-year reserve of $2.2 million. 
However, FPB's trust fund balance for this program will be 
approximately $2.4 million under the approximate $4.6 million deemed 
necessary to provide an adequate reserve balance in light of increasing 
program costs. Further, FPB's costs of operating the destination market 
program are expected to increase to approximately $14.5 million during 
FY 00 and to approximately $15.0 million during FY 01. These cost 
increases (which are outlined below) will result from inflationary 
increases with regard to current FPB operations and services (primarily 
salary and benefits), the training and equipment required to promote 
improved workplace saftey, and the acquisition of additional computer 
and related technology.
    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 3.54 
to 4.02 percent depending on locality, effective January 1999, 
significantly increased program costs. In addition, inflation also 
impacts FPB's non-salary costs. These factors have increased FPB's 
costs of operating this program by approximately $500,000 per year. In 
addition, a general and locality salary increase of at least 4.4 
percent is anticipated in January 2000. This salary adjustment will 
increase FPB's costs by over $600,000 per year.
    Additional revenues are also necessary in order for FPB to cover 
the costs of the additional staff, office space, and equipment 
($150,000) needed in two federal market offices that were established 
during FY 99 (e.g., Brooklyn, New York, and Oklahoma City, Oklahoma). 
Additional, revenues are also needed to cover the costs of providing 
safety orientation training to FPB's personnel and purchasing safety 
shoes for FPB's inspection personnel ($50,000). Finally, FPB needs an 
additional $200,000 per year to cover the costs of securing the 
equipment (e.g., digital imaging cameras and computers and information 
systems upgrades) needed to expand FPB's

[[Page 50776]]

services and to make existing services more efficient in the future.
    This proposed fee increase should result in an estimated $2.5 
million in additional revenues per year (only $1.8 million during FY 00 
since any fee increase would be effective on or after January 1, 2000) 
and should enable FPB to cover its costs while building its reserves 
from the current level of $2.2 million to closer to the $4.6 million 
level by the end of FY 2001.
    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 the proposed fees and charges for fresh fruit and 
vegetable inspection as found in 7 CFR 51.38. This table also reflects 
the proposed change to the per package fees for dock-side inspections 
that are currently on a three interval schedule based on weight, to a 
two interval schedule based on different weight thresholds. 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:

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                Service                                Current                             Proposed
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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   $86................................  $98.
     each product.
    --Half carlot equivalent or less of  $72................................  $82.
     each product.
    --For each additional lot of the     $14................................  $32.
     same product.
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   $72................................  $82.
     each product.
    --Half carlot equivalent or less of  $66................................  $75.
     each product.
    --For each additional lot of the     $14................................  $32.
     same product.
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......  $305...............................  $348.
    --For each additional product......  $43................................  $49.
    --For each additional lot of any of  $14................................  $32.
     the same 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.................  $43................................  $49.
    --For each additional lot of any of  $14................................  $32.
     the same product.
Dock-side inspections of an individual
 product unloaded directly from the
 same ship:
    --For each package weighing less     1.1 cents..........................  NA.
     than 15 pounds.
    --For each package weighing 15 to    2.2 cents..........................  NA.
     29 pounds.
    --For each package weighing 30 or    3.3 cents..........................  NA.
     more pounds.
    --For each package weighing less     NA.................................  2.5 cents.
     than 26 pounds.
    --For each package weighing 26 or    NA.................................  3.5 cents.
     more pounds.
    --For each additional lot of any of  $14................................  $32.
     the same product.
    --Minimum charge per individual      $86................................  $98.
     product.
Inspections performed for other          $43 per hour.......................  $49 per hour.
 purposes during the grader's regularly
 scheduled work week.
Overtime or holiday premium rate (per    $21.50 per hour....................  $24.50 per hour.
 hour additional) for all inspections
 performed outside the grader's
 regularly scheduled work week.
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List of Subjects in 7 CFR Part 51

    Agricultural commodities, Food grades and standards, Fruits, Nuts, 
Reporting and recordkeeping 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 51.38 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) $98 for over a half carlot equivalent of an individual product.
    (B) $82 for a half carlot equivalent or less of an individual 
product.
    (C) $32 for each additional lot of the same product.
    (ii) Condition only inspection of 1 to 4 products unloaded from the 
same conveyance:
    (A) $82 for over a half carlot equivalent of an individual product.
    (B) $75 for a half carlot equivalent or less of an individual 
product.
    (C) $32 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) $348 for the first 5 products.
    (B) $49 for each additional product.
    (C) $32 for each additional lot of any of the same product.
    (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) $49 for each individual product.
    (ii) $32 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) 2.5 cents per package weighing less than 26 pounds; and
    (ii) 3.5 cents per package weighing 26 or more pounds.
    (2) $32 for each additional lot of any of the same product.
    (3) A minimum charge of $98 for each product inspected.

[[Page 50777]]

    (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 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 $49 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 $24.50 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: September 15, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 99-24438 Filed 9-17-99; 8:45 am]
BILLING CODE 3410-02-P