[Federal Register Volume 68, Number 210 (Thursday, October 30, 2003)]
[Rules and Regulations]
[Pages 61733-61734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-27412]



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 Rules and Regulations
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  Federal Register / Vol. 68, No. 210 / Thursday, October 30, 2003 / 
Rules and Regulations  

[[Page 61733]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 52


Processed Fruits and Vegetables

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule revises the regulations governing inspection 
and certification for processed fruits, vegetables, and processed 
products made from them by a fee increase ranging from 8 to 11 percent 
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 and to 
ensure the program's financial stability. Also affected are the fees 
charged to persons required to have inspections on imported commodities 
in accordance with the Agricultural Marketing Act of 1937.

EFFECTIVE DATE: October 31, 2003.

FOR FURTHER INFORMATION CONTACT: Mr. Terry B. Bane at the above 
address, call (202) 720-4693, or e-mail [email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866 and Regulatory Flexibility Act

    This rule has been determined to be not significant for purposes of 
Executive Order 12866 and, therefore, has not been reviewed by the 
Office of Management and Budget. Also, pursuant to the requirements of 
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 Agency has and will continue to seek out 
cost savings opportunities and implement appropriate changes to reduce 
its costs. Such actions can provide alternatives to fee increases. The 
fee schedule was last revised on November 19, 2000 (63 FR 66485). 
However, even with cost control efforts, the existing fee schedule will 
not generate sufficient revenues to cover the lot, year round, and less 
than year round processed fruit and vegetable inspection program costs 
and sustain an adequate reserve balance (4 months of costs) as called 
for by Agency policy (AMS Directive 408.1).
    AMS projects that program costs will increase to approximately 
$14.4 million in FY 2004 and $14.9 million in FY 2005, primarily from 
increases in employee salaries and benefits. An estimated 3.4 percent 
pay increase for employees effective January 2004 and January 2005 will 
increase program costs approximately $375,000 in FY 2004 and 
approximately $390,000 in FY 2005. Without a fee increase, the FY 2004 
and FY 2005 end-of-year reserve balances will decline from $4.3 million 
to $3.6 million (3.0 months reserve), and $2.4 million (1.9 months 
reserve), respectively. The required 4 month level should be 
approximately $5.0 million. The final fee increase ranging from 8 to 11 
percent will increase revenue by $1.3 million per year and will enable 
AMS to replenish program reserves to a 4 month level, approximately 
$5.0 million, for both FYs 2004 and 2005.
    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. This action will increase 
user fee revenue generated under the lot inspection program and the 
year round and less than year round inspection programs by 
approximately $1.3 million annually. This action is authorized under 
the AMA of 1946 [see 7 U.S.C. 1622(h)] which provides that the 
Secretary of Agriculture 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 1,250 users of PPB's lot, year round, and less 
than 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 121.201). There will be no additional reporting, 
recordkeeping, or other compliance requirements imposed upon small 
entities as a result of this rule. AMS 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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    The impact on all businesses, including small entities, is very 
similar. Further, even though fees will be increased, the amount of the 
increase is small (ranging from 8 to 11 percent), and should not 
significantly affect these entities. Finally, except for those 
applicants who are required to obtain inspections in connection with 
certain imports these businesses are under no obligation to use these 
inspection services.

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

    A proposed rule was published in the Federal Register at 68 FR 
46504 on August 6, 2003, providing interested persons with a thirty-day 
period to comment. No comments were received.
    The AMA authorizes official inspection, grading, and certification 
for processed fruits, vegetables, and processed products made from 
them. The AMA provides that the Secretary collect reasonable fees from 
the users of the services to cover, as nearly as

[[Page 61734]]

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.
    AMS regularly reviews its user fee programs to determine if the 
fees are adequate. While AMS continues to pursue opportunities to 
reduce its costs, the existing fee schedule will not generate 
sufficient revenues to cover lot, year round, and less than year round 
inspection program costs while maintaining an adequate reserve balance.
    Based on the Agency's analysis of increasing program costs, AMS 
will increase the fees relating to lot, year round, and less than year 
round inspection services.
    AMS projects that program costs will increase to approximately 
$14.4 million in FY 2004 and $14.9 million in FY 2005, primarily from 
increases in employee salaries and benefits. An estimated 3.4 percent 
pay increase for employees effective January 2004 and January 2005 will 
increase program costs approximately $375,000 in FY 2004 and 
approximately $390,000 in FY 2005. Without a fee increase, the FY 2004 
and FY 2005 end-of-year reserve balances will decline from $4.3 million 
to $3.6 million (3.0 months reserve), and $2.4 million (1.9 months 
reserve), respectively. The required 4 month level should be 
approximately $5.0 million. The final fee increase ranging from 8 to 11 
percent will increase revenue by $1.3 million per year and will enable 
AMS to replenish program reserves to a 4 month level, approximately 
$5.0 million, for both FYs 2004 and 2005.
    For inspection services charged under Sec.  52.42, overtime and 
holiday work will continue to be charged as provided in that section.
    For inspection services charged on a contract basis under Sec.  
52.51 overtime work will also continue to be charged as provided in 
that section. The following fee schedule compares current fees and 
charges with final fees and charges for processed fruit and vegetable 
inspection as found in 7 CFR Sec. Sec.  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                               Final
------------------------------------------------------------------------
             $47.00/hr.                           $52.00/hr.
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    Charges for travel and other expenses as found in Sec.  52.50 are:

------------------------------------------------------------------------
              Current                               Final
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             $47.00/hr.                           $52.00/hr.
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    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                               Final
------------------------------------------------------------------------
             $36.00/hr.                           $39.00/hr.
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    (2) For inspector assigned on less than a year-round basis: Each 
inspector:

------------------------------------------------------------------------
              Current                               Final
------------------------------------------------------------------------
             $48.00/hr.                           $52.00/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                               Final
------------------------------------------------------------------------
             $48.00/hr.                           $52.00/hr.
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    It is preferable to have the fee increase to be in place at the 
beginning of the fiscal year, October 1, 2003, which is also the 
beginning of a billing cycle. Further, a thirty day comment period was 
provided for interested persons to comment on this proposed action. No 
comments were received regarding this proposed rule.

List of Subjects in 7 CFR Part 52

    Food grades and standards, Food labeling, Frozen foods, Fruit 
juices, Fruits, Reporting and recordkeeping requirements, and 
Vegetables.

0
For the reasons set forth in the preamble, 7 CFR part 52 is amended as 
follows:

PART 52--[AMENDED]

    Pursuant to 5 U.S.C. 553, it is found and determined that good 
cause exists for not postponing the effective date of this action until 
30 days after publication in the Federal Register.

0
1. The authority citation for part 52 continues to read as follows:

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


Sec.  52.42  [Amended]

0
2. In Sec.  52.42, the figure ``$47.00'' is revised to read ``$52.00''.


Sec.  52.50  [Amended]

0
3. In Sec.  52.50, the figure ``$47.00'' is revised to read ``$52.00''.


Sec.  52.51  [Amended]

0
4. In Sec.  52.51, paragraph (c)(1), the figure ``$36.00'' is revised 
to read ``$39.00'', in paragraph (c)(2), the figure ``$48.00'' is 
revised to read ``$52.00'', and in paragraph (d)(1), the figure 
``$48.00'' is revised to read ``$52.00''.

    Dated: October 27, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-27412 Filed 10-29-03; 8:45 am]
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