[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
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
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Federal Register / Vol. 63, No. 184 / Wednesday, September 23, 1998 /
Rules and Regulations
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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:
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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
