2024-31144. Section 8e Import Inspection Fee Structure

Table 1—SCI Sec. 8 e Inspection Fees for Standard 40,000 Pound Lot: Comparison of FY 2025 Fee to New Fee Structure

[Showing reduced cost for additional lots]

Number of lots	FY 2025 fee	New fee 1	Reduced cost to importer applicant
	(1)	(2)	(3)
1	$254	$254	$0.
2	$370	$297	$58.
3	$486	$355	$116.
4	$602	$413	$174.
5	$718	$471	$232.
Each additional sublot	Plus $116	Plus $58	$58 savings per additional sublot.
1  The fee for one standard lot under this rule is $254, unchanged from the FY 2025 fee, but will be expressed as the per-pound equivalent of $0.00605. ($254 inspection cost per 40,000-pound lot divided by 40,000 pounds equals $0.00635 per pound). Each additional lot will cost an additional $58, a 50% reduction from the FY 2025 incremental cost of $116.

Table 2 shows the new fee structure for alternative lot sizes under this final rule. Row 2 shows again that the 40,000-pound lot fee will remain $254. Row 3 shows that for a 50,000-pound lot, the $317.50 inspection fee will be determined by multiplying the proposed per-pound rate ($0.00635) by 50,000 pounds. Row 1 shows that for any lot weighing less than 40,000 pounds, the applicable fee will be a 2-hour minimum charge at the currently established FY 2025 hourly inspection rate of $123 ($123 multiplied by 2 equals $246). Any increase or decrease to the hourly inspection rates will be included in the annual fee structure package in subsequent years.

Table 2—SCI 8 e Inspection Fees for Alternative Lot Sizes

[Proposed inspection rate per pound]

	Alternative lot sizes	Pounds per lot	Inspection fee per lot  1 2
1	Less than full (standard) lot	(1 )	$246.00 minimum.
2	Standard Lot	40,000	$254.00.
3	Lot 25% larger than standard	50,000	$317.50.
1  For lots less than a standard lot, the fees are computed by multiplying pounds per lot by rate per pound ($0.00635) with a minimum charge equivalent to 2-hours applied at the current established FY 2025 hourly inspection rate of $123.
2  Inspection fee per lot for standard lot or larger [(2) and (3)] are computed by multiplying pounds per lot by rate per pound ($0.00635).

Final Regulatory Flexibility Analysis

Pursuant to the requirement set forth in the Regulatory Flexibility Act (RFA), AMS has considered the economic impact of this action on small entities. Accordingly, AMS provides this final regulatory flexibility analysis. 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 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 the timeliness in which inspection services are provided; and (3) improving the work environment. AMS regularly reviews its user-fee financed programs to determine if the fees are adequate.

This rule revises the regulations governing the inspection and certification for fresh fruits, vegetables, and other products by increasing certain ( print page 106233) fees charged for Section 8e import inspections on a per-pound basis. These revisions recover, as nearly as practicable, the costs of performing inspection services on imported commodities in accordance with the Agricultural Marketing Agreement Act of 1937.

Since the inspection fees to be charged under this final rule's new rate structure are proportional to size of lots, smaller businesses (importers) are not unduly or disproportionately burdened. This new fee structure, for imports subject to Section 8e grading requirements, balances cost increases (for lots larger than 40,000 pounds) with cost decreases for additional sublots. The fee for a standard 40,000-pound lot remains unchanged.

Tables 3 and 4 show the impact on the nine Section 8e commodities affected by this rule, using data from USDA's Compliance Enforcement Management System (CEMS) database, which lists the weight of each lot inspected over the three-year period FY 2021 through FY 2023. Table 3 puts the number of inspections into two categories: column 1 shows the number of lots that weighed 40,000 pounds or less, and column 2 shows the number of lots that weighed more than 40,000 pounds. Column 3 presents the sum of columns 1 and 2. The last row of column 3 shows that the total number of inspections for the three-year period was 611,475.

Table 3—8 e Commodities Imported: Number of Inspections, Categorized by Size of Lot Inspected, Using 40,000-Pound Standard Lot Size Threshold

[FY2021-FY2023 ¹ ]

	≤40,000 lbs. per lot	>40,000 lbs. per lot	Total inspections	Pct of total inspections (percent)	Cumulative percent
	1	2	3	4	5
Avocados	395,812	64,139	459,951	75.2	75.2
Onions	17,026	51,918	68,944	11.3	86.5
Grapes	35,434	5,445	40,879	6.7	93.2
Oranges	9,955	8,219	18,174	3.0	96.2
Kiwifruit	8,208	7,358	15,566	2.5	98.7
Tomatoes	3,925	33	3,958	0.6	99.3
Grapefruit	2,314	1,051	3,365	0.6	99.90
Filberts	240	109	349	0.1	99.95
Potatoes	193	96	289	0.05	100.0
9 commodities	473,107	138,368	611,475
1  Source: Compliance Enforcement Management System (CEMS) database, Market Development Division, Specialty Crops Program, Agricultural Marketing Service, USDA.

Table 4—8 e Commodities Imported: Percent of Inspections, Categorized by Size of Lot Inspected, Using 40,000-Pound Standard Lot Size Threshold

[FY2021-FY2023]

	≤40,000 lbs. per lot (%)	>40,000 lbs. per lot (%)
Avocados	86	14
Onions	25	75
Grapes	87	13
Oranges	55	45
Kiwifruit	53	47
Tomatoes	99	1
Grapefruit	69	31
Filberts	69	31
Potatoes	67	33
9 commodities	77	23

Table 4 shows that for all nine commodities combined, 77 percent of the inspections would have had equal or lower fees if charged with the new fee structure. Twenty-three percent of the lots would have been subject to higher fees. Looking at individual years (not shown), the percentage of inspections representing lots weighing 40,000 pounds or less for FY 2021, FY 2022 and FY 2023 was 73, 75, and 80 percent, respectively. Therefore, for a large majority of annual inspections, the cost per individual inspection would have been the same or lower than with the previous fee system in place.

The impacts of the revised fee structure vary significantly by commodity. Table 4 shows that for six of the nine commodities, at least two thirds of the lots inspected would have had equal or lower fees ( i.e., lots weighing 40,000 pounds or less—avocadoes, grapes, tomatoes, grapefruit, filberts, potatoes) under the revised fee structure. One commodity, onions, would have had the opposite result, with 25 percent of lots seeing lower fees, and 75 percent higher. This variation would be offset by the onion industry's prevalence of additional sublots in inspections. See Table 1, “SCI Sec. 8e Inspection Fees for Standard 40,000 Pound Lot: Comparison of FY 2025 Fee to New Fee Structure, Showing Reduced Cost for Additional Lots.” For oranges and kiwifruit, the results were about even; slightly more than 50 percent of the lots weighed equal to or less than 40,000 pounds and, therefore, would have been subject to lower fees. ( print page 106234)

This analysis assumes that each lot is sampled and inspected independently. This may overstate the extent of higher fees because under the new fee structure the cost declines for each additional sublot, as shown in Table 1. To the extent that the lots for which fees were charged in the CEMS database are actually sublots associated with an inspected lot from a particular importer, the value in Table 4, column (2) ( i.e., for lots more than 40,000 pounds) overstates the percentage of lots that would have been subject to a higher fee.

It is also important to note that certain commodities represented larger proportions of the lots inspected, as shown in columns (4) and (5) of Table 3. Just over 75 percent of the inspected lots were for avocadoes. Adding the next four commodities in terms of the magnitude of total inspections (onions, grapes, oranges, and kiwifruit) raises the cumulative percentage up to nearly 99 percent. Four commodities (tomatoes, grapefruit, filbert, and potatoes) represented about 1.3 percent of the total number of lots inspected.

This analysis shows that the fee impacts vary by commodity, with smaller fees per inspected lot expected for eight of the nine commodities, suggesting that for a large majority of annual inspections the cost per individual inspection would be the same or lower than with the fee system that would otherwise be in place in FY 2025 and future years.

Comments

AMS received one comment from the Texas International Produce Association (TIPA) in full support of implementing this rule, noting the changes not only help prevent increased food prices but also reflects a modernization of the fresh produce industry.

USDA has determined that this rule is consistent with and will effectuate the purpose of the Agricultural Marketing Act of 1946. Therefore, AMS is amending certain fees charged for Section 8e import inspections from a per-carlot basis to a per-pound basis, reducing the fee for each additional sublot by 50 percent, and establishing a new fee calculation for lots less than a carlot.

List of Subjects in 7 CFR Part 51

• Agricultural commodities
• Food grades and standards
• Fruits
• Nuts
• Reporting and recordkeeping requirements
• Vegetables

For reasons set forth in the preamble, the Agricultural Marketing Service amends 7 CFR part 51 as follows:

PART 51—FRESH FRUITS, VEGETABLES, AND OTHER PRODUCTS (INSPECTION, CERTIFICATION, AND STANDARDS)

1. The authority citation for part 51 continues to read as follows:

Authority: 7 U.S.C. 1621—1627.

2. Revise § 51.37 to read as follows:

§ 51.37

Charges for fees, rates, and expenses.

For each carlot of product inspected, a fee or rate determined in accordance with §§ 51.38, 51.39, and 51.40, and expenses determined in accordance with § 51.41, shall be paid by the applicant.

§§ 51.39 through 51.62

[Redesignated as §§ 51.40 through 51.63]

3. Redesignate §§ 51.39 through 51.62 as §§ 51.40 through 51.63 as follows:

Old section	New section
Schedule of Fees and Charges at Destination Markets (undesignated center heading)
§ 51.37 (unchanged)	§ 51.37 (unchanged).
§ 51.38 (unchanged)	§ 51.38 (unchanged).
§ 51.39	§ 51.40.
§ 51.40	§ 51.41.
§ 51.41	§ 51.42.
§ 51.42	§ 51.43.
§ 51.43	§ 51.44.
§ 51.44	§ 51.45.
Schedule of Fees and Charges at Shipping Point Areas (undesignated center heading)
§ 51.45	§ 51.46.
Miscellaneous (undesignated center heading)
§ 51.46	§ 51.47.
§ 51.47	§ 51.48.
§ 51.48	§ 51.49.
§ 51.49	§ 51.50.
§ 51.50	§ 51.51.
§ 51.51	§ 51.52.
§ 51.52	§ 51.53.
Requirements for Plants Operating Under Continuous Inspection on a Contract Basis (undesignated center heading)
§ 51.53	§ 51.54.
§ 51.54	§ 51.55.
§ 51.55	§ 51.56.
§ 51.56	§ 51.57.
§ 51.57	§ 51.58.
§ 51.58	§ 51.59.
§ 51.59	§ 51.60.
§ 51.60	§ 51.61.
§ 51.61	§ 51.62.
§ 51.62	§ 51.63.