[Federal Register Volume 59, Number 117 (Monday, June 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14886]
Federal Register / Vol. 59, No. 117 / Monday, June 20, 1994 /
[[Page Unknown]]
[Federal Register: June 20, 1994]
VOL. 59, NO. 117
Monday, June 20, 1994
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 51
RIN # 0581-AB03
[Docket Number FV-93-302]
Fresh Fruits, Vegetables and Other Products (Inspection,
Certification, and Standards)
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule revises the regulations governing inspection
and certification for fresh fruits, vegetables and other products
(other products are: raw nuts, Christmas trees and evergreens, flowers
and flower bulbs, and onion sets) by adjusting the fees charged for the
inspection of these products at destination markets and by clarifying
other charge-related regulations. The fee increases are necessary to
offset the costs of developing and maintaining U.S. grade standards for
fresh fruits, vegetables and other products and to recover the costs of
providing Federal inspection service for these products at destination
markets as authorized by the Agricultural Marketing Act (AMA) of 1946.
Regulations regarding fees for inspection of small lots (fifty packages
or less) are added to provide a fee commensurate with the level of
effort typically required to conduct such inspections. Finally,
regulations regarding charges for waiting time are added and conditions
governing the applicability of dock-side inspection fees are clarified.
EFFECTIVE DATE: June 27, 1994.
FOR FURTHER INFORMATION CONTACT: Mr. Douglas C. Bailey, Fresh Products
Branch, Fruit and Vegetable Division, Agricultural Marketing Service,
U.S. Department of Agriculture, P.O. Box 96456, Room 2056 South
Building, Washington, DC 20090-6456, telephone (202) 720-5870.
SUPPLEMENTARY INFORMATION: This rule has been determined not
significant for purposes of Executive Order 12866, and has been
reviewed by the Office of Management and Budget.
This final rule has been reviewed under Executive Order 12778,
Civil Justice Reform. It is not intended to have a retroactive effect.
This 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 rule.
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (5 U.S.C. 601 et. seq.), the Administrator of the
Agricultural Marketing Service (AMS) has certified that this action
will not have a significant economic impact on a substantial number of
small entities. This final rule for the revision of the Regulations
governing inspection, certification and standards for fresh fruits,
vegetables and other products will not impose substantial direct
economic cost, recordkeeping, or personnel workload changes on small
entities, and will not alter the market share or competitive position
of these entities relative to large businesses.
The regulations were last revised in November 1992. This final rule
reflects fee increases needed to offset the cost of developing and
maintaining U.S. grade standards for fresh fruits and vegetables
previously funded through an appropriation and to recover the costs of
Federal fruit and vegetable inspection service at destination markets
rendered in accordance with the AMA of 1946.
In the Agriculture Appropriations Bill for fiscal year 1994,
Congress directed AMS to establish a user fee program, pursuant to 31
U.S.C. 9701, to recover the cost of developing, reviewing, and
maintaining agricultural commodity standards that describe product
quality attributes. This rule amends fees and charges applied to users
at destination markets to recover the portion of the cost for fresh
fruit and vegetable standardization that is applicable to these users.
The AMA authorizes voluntary 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 user of the program
services to cover as nearly as practicable the costs of services
rendered. The program seeks to maintain an unobligated balance that is
at least equal to 4 months of operating expense. The unobligated
balance for the Federal inspection service at destination markets at
the end of fiscal year 1993 was 1.1 months of operating expense.
Approximately $240,000 in increases are expected in the cost the
service pays for General Services Administration office rent and
Federal Telecommunications Service, and a $120,000 increase is expected
for the cost of implementing a locality-based pay system in January
1994. The service is implementing cost-cutting actions during fiscal
year 1994 that will save approximately $350,000 in destination market
costs each fiscal year beginning in fiscal year 1995. These cost-
cutting actions will offset most of the expected increases in service
costs; however, further action is necessary to meet all rising costs
and for the program's unobligated balance to grow to the 4 month level
necessary to provide contingency funding. This final rule amends the
schedule for fees and charges for services rendered to the fresh fruit
and vegetable industry at destination markets to reflect the costs
currently associated with the program.
A notice of proposed rulemaking was published in the Federal
Register (59 FR 8871-8873) on February 24, 1994 with a thirty day
comment period. The comment period closed on March 28, 1994. Interested
persons were invited to participate in this rulemaking proceeding by
submitting written comments on the proposal to the Agricultural
Marketing Service.
Four written comments were received from field inspection
personnel. Two of these comments noted the need to provide guidance on
whether product shipped in a bulk bin is to be considered a single
package when determining fees under Sec. 51.38. AMS will issue
inspection instructions that state the net weight of product in bulk
bins is to be divided by the net weight of the common package for that
product to determine the number of packages represented by a bulk bin.
The third comment noted that the charge for additional lots reported on
an inspection certificate fails to recover the full cost of sampling
product inspected in accordance with Florida citrus standards. Florida
citrus standards specify a number of samples to be examined for each
reported lot that is higher than the number of samples typically used
for other standards. AMS believes that a separate charge for additional
lots reported for products inspected in accordance with the Florida
citrus standards would be confusing and should not be imposed.
The fourth comment suggested eliminating the proposed $264 flat
rate for inspections of 5 or more products unloaded from land or air
transportation, and substituting carlot fees for the first four
products, and a $37 fee for each additional product. This suggestion
would increase fees for quality and condition inspections another $6 to
$33 beyond the increase currently proposed. For this reason, AMS is not
adopting this suggestion.
The fourth comment also suggested the implementation of a charge
for additional lots reported on an inspection certificate for product
inspected at dock-side in place of the proposed fee increase in the
dock-side package rates. The commenter noted that requests from
applicants for dock-side inspections vary significantly not only in the
number of packages but also in the number of lots to be separately
sampled and reported on an inspection certificate. By implementing a
charge for additional lots when performing dock-side inspections, as
AMS currently does for inspections of product from land or air
conveyances, the commenter believed that dock-side fees charged to each
applicant would more accurately reflect AMS's cost of performing the
requested inspection. The total revenue to be generated from charges
for additional lots would be approximately equal to the total revenue
that would have been generated from the proposed increase in package
rates. Because this suggestion allows AMS fees at dock-side to more
equitably reflect the cost of providing the requested service, and
because the suggestion would not raise fees beyond the level initially
proposed, this suggestion has been adopted in the final rule.
Two written comments were received from the industry. Industry
commenters, both wholesale fruit and vegetable receivers, opposed the
fee increase as they believe the current fee levels should be
sufficient to fund the service. However, AMS projects that, without a
fee increase, the program will exhaust its unobligated balance and
become insolvent early in Fiscal Year 1996. One commenter further
believes that the lack of a competing inspection service may cause the
program to operate inefficiently. While this inspection service is the
only authorized inspection service under the AMA, nonetheless, the
service is not relying solely on fee increases to defray rising costs.
Currently, the program is phasing out a third of its permanent billing
and collection staff and releasing office space in 11 cities to save an
estimated $250,000 annually. Moreover, the service is planning to
reorganize its management structure to eliminate one of three
management layers to save users of destination market services over
$100,000 annually.
In light of the continuing need to maintain this AMS grading
program on a financially sound basis, the Agency has decided to proceed
with the fee increase as set forth in the proposal, with one
modification regarding dock-side fees in accordance with a comment
received.
When product is inspected at dock-side, the number of different
lots (i.e. varieties, sizes, brands) present in the product, along with
the number of total packages, determines the time required to sample
and report inspection results. Therefore, in lieu of increasing the
package fees as had been proposed, AMS is implementing a $12 fee for
each additional lot reported on an inspection certificate for product
inspected at dock-side. This is the same fee that is currently charged
for each additional lot reported on an inspection certificate for
product unloaded from land or air transportation. Revenue from the
additional lot fee is expected to be equivalent to that of the
previously proposed package fee increase. By implementing the
additional lot fee for dock-side inspections, charges for these
inspections will more fairly reflect AMS's cost of providing the
requested service, so that inspections of products with few varieties,
sizes, or brands reported separately on the inspection certificate will
be charged at a lower fee than inspections of products with the same
total number of packages but with comparatively more varieties, sizes,
or brands reported separately on the inspection certificate.
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 because the fiscal
year 1994 reserve balance of the program's trust fund is projected to
be less than one month's operating reserve which is well below the
four-month level necessary to ensure the program's fiscal viability.
List of Subjects in 7 CFR Part 51
Agricultural commodities, Food grades and standards, Fruits, Nuts,
Reporting and recordkeeping requirements, Vegetables.
For the reasons set forth in the preamble, 7 CFR Part 51 is amended
as follows:
PART 51--[AMENDED]
1. The authority citation for 7 CFR part 51 is revised to read as
follows:
Authority: 7 U.S.C. 1622, 1624.
2. Sec. 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, 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) $74 for over a half carlot equivalent of an individual product.
(B) $62 for a half carlot equivalent or less of an individual
product.
(C) $12 for each additional lot identified on an inspection
certificate for the same product.
(ii) Condition only inspection of 1 to 4 products unloaded from the
same conveyance:
(A) $62 for over a half carlot equivalent of an individual product.
(B) $57 for a half carlot equivalent or less of an individual
product.
(C) $12 for each additional lot identified on an inspection
certificate for the same product.
(iii) Quality and condition inspection and/or condition only
inspection of 5 or more products unloaded from the same conveyance:
(A) $264 for the first 5 products.
(B) $37 for each additional product.
(C) $12 for each additional lot identified on an inspection
certificate for any of the products.
(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) $37 for each individual product.
(ii) $12 for each additional lot identified on an inspection
certificate for any 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) 1 cent per package weighing less than 15 pounds;
(ii) 2 cents per package weighing 15 to 29 pounds; and
(iii) 3 cents per package weighing 30 or more pounds.
(2) $12 for each additional lot identified on an inspection
certificate for the same product.
(3) A minimum charge of $74 for each product inspected.
(c) When performing inspections of products in 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 $37.00 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;
(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 $18.50 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: June 9, 1994.
Lon Hatamiya,
Administrator.
[FR Doc. 94-14886 Filed 6-17-94; 8:45 am]
BILLING CODE 3410-02-P
