Multi-Year Revision of Fees for the Fresh Fruit and Vegetable Terminal Market Inspection Services, 69497-69500 [E6-20315]
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69497
Proposed Rules
Federal Register
Vol. 71, No. 231
Friday, December 1, 2006
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.
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 51
[Docket Number FV–06–308]
RIN 0581–AC63
Multi-Year Revision of Fees for the
Fresh Fruit and Vegetable Terminal
Market Inspection Services
Agricultural Marketing Service,
USDA.
ACTION: Proposed rule.
rmajette on PROD1PC67 with PROPOSALS1
AGENCY:
SUMMARY: This proposed rule would
revise the regulations governing the
inspection and certification for fresh
fruits, vegetables and other products by
increasing certain fees charged for the
inspection of these products at
destination markets for the next two
fiscal years (FY–2007 and FY–2008) by
approximately 15 percent. 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
(AMA of 1946). The fees charged to
persons required to have inspection on
imported commodities in accordance
with the Agricultural Marketing
Agreement Act of 1937 and for imported
peanuts under section 1308 of the Farm
Security and Rural Investigation Act of
2002.
DATES: Comments must be postmarked,
courier dated, or sent via the Internet on
or before January 2, 2007.
ADDRESSES: Interested persons are
invited to submit written comments
concerning this proposal. Comments are
to be sent to the U.S. Department of
Agriculture, Agricultural Marketing
Service, Fruit and Vegetable Programs,
Fresh Products Branch, 1400
Independence Ave., SW., Room 0640–S,
Washington, DC 20250–0295, faxed to
(202) 720–5136, sent via e-mail to
FPB.DocketClerk@usda.gov, or via the
Internet: https://www.regulations.gov.
Comments should make reference to the
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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 CONTACT INFORMATION: Rita
Bibbs-Booth, USDA, 1400 Independence
Ave., SW., Room 0640–S, Washington,
DC 20250–0295, or call (202) 720–0391.
SUPPLEMENTARY INFORMATION:
Executive Order 12866 and Regulatory
Flexibility Act
This rule has been determined to be
‘‘non-significant’’ for the purposes of
Executive Order 12866, and has not
been reviewed by the Office of
Management and Budget.
Also, 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 proposes
this initial 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 proposed action described herein is
being taken for several reasons,
including that additional user fee
revenues are needed to cover the costs
or: (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. The Fresh Products
Branch (FPB) 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.
FPB has reduced costs by approximately
$2 million. However, even with these
efforts, FPB’s existing fee schedule will
not generate sufficient revenue to cover
program costs while maintaining the
Agency mandated reserve balance.
Current revenue projections for FPB’s
destination market inspection work
during FY–2006 are $15.3 million with
costs projected at $20.4 million and an
end-of-year reserve balance of $12.7
million. However, this reserve balance
is due in part, to appropriated funding
received in October 2001, for
infrastructure, workplace, and
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technological improvements. FPB’s
costs of operating the destination market
program are expected to increase to
approximately $21.6 million during FY–
2007 and $22.5 million during FY–2008.
Revenues are projected to be $15.3
million for end of the fiscal year. The
reserve balance for FY–2007 and FY–
2008, will fall below the Agency’s
mandated four-month reserve level. The
reserve balance is projected to be $6.5
million for FY–2007 (3.6 months) and a
negative $584,000 for FY–2008 (¥0.3)
months).
This proposed fee increase should
result in an estimated average of $2.4
million in additional revenues per year
(effective in FY–2007, if the fees were
implemented by October 1, 2006). This
will not cover all of FPB’s costs. FPB
will need to continue to increase fees in
order to cover the program’s operating
cost and maintain the required reserve
balance. FPB believes that increasing
fees incrementally is appropriate at this
time. Additional fee increases beyond
FY–2008 will be needed to sustain the
program in the future. However, we will
continue to reduce costs, wherever
possible.
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 2.87 to 5.62 percent
depending on locality, effective January
2006, has significantly increased
program costs and will continue to
increase costs at a similar rate in future
years. This salary adjustment will
increase FPB’s costs by over $700,000
per year. Increases in health and life
insurance premiums, along with
workers compensation will also increase
program costs. In addition, inflation also
impacts FPB’s non-salary costs. These
factors have increased FPB’s costs of
operating this program by over $600,000
per year.
Additional funds of approximately
$155,000 are necessary in order for FPB
to continue to cover the costs associated
with additional staff and to maintain
office space and equipment. Additional
revenues are also necessary to improve
the work environment by providing
training and purchasing needed
equipment. In addition, FPB began in
2001, developing (with appropriated
funds) the Fresh Electronic Inspection
Reporting/Resource System (FEIRS) to
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replace its manual paper and pen
inspection reporting process. FEIRS was
implemented in 2004. This system has
been put in place to enhance and
streamline FPB’s fruit and vegetable
inspection process, however additional
revenue is required to maintain FEIRS.
FPB has also begun to cover the costs
associated with the Training and
Development Center (TDC) in
Fredericksburg, VA. A portion of the
appropriated funds received in October
2001 were for infrastructure
improvements including the
development and maintenance of the
inspector Training and Development
Center. With appropriated funding now
depleted, FPB is now obligated to
support the TDC under revenues from
the terminal market user fee inspection
program.
This proposed rule should increase
user fee revenue generated under the
destination market program by
approximately 15 percent. This action is
authorized under the Agricultural
Marketing Act of 1946 (AMA of 1946)
(See 7 U.S.C. 1622(h)), which provides
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
121.201). 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
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
commodities must be issued. Import regulations
apply during those periods when domestic
marketing order regulations are in effect. Section
1308 of the Farm Security and Rural Investment Act
of 2002 (Public Law 107–171), 7 U.S.C. 7958,
required USDA among other things to develop new
peanut quality and handling standards for imported
peanuts marketing in the United States.
Currently, there are 14 commodities subject to 8e
import regulations: Avocados, dates (other than
dates for processing), filberts, grapefruit, kiwifruit,
olives (other than Spanish-style green olives),
onions, oranges, potatoes, prunes, raisins, table
grapes, tomatoes and walnuts. A current listing of
the regulated commodities can be found under 7
CFR Parts 944, 980, 996, and 999.
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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.
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 will be raised, the
increase is not excessive 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 action is not
intended to have 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.
Proposed Action
The AMA of 1946 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 of 1946 provides that
reasonable fees be collected from the
users of the services to cover, as nearly
as practicable, the cost 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
financed programs to determine if the
fees are adequate. The Fresh Products
Branch (FPB) 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.
FPB has reduced costs by approximately
$2 million. However, even with these
efforts, FPB’s existing fee schedule will
not generate sufficient revenue to cover
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Sfmt 4702
program costs while maintaining the
Agency mandated reserve balance.
Current revenue projections for FPB’s
destination market inspection work
during FY–2006 are $15.3 million with
costs projected at $20.4 million and an
end-of-year reserve balance of $12.7
million. However, this reserve balance
is due in part, to appropriated funding
received in October 2001, for
infrastructure, workplace, and
technological improvements. FPB’s
costs of operating the destination market
program are expected to increase to
approximately $21.6 million during FY–
2007 and $22.5 million during FY–2008.
Revenues are projected to be $15.3
million for end of the fiscal year. The
reserve balance for FY–2007 and FY–
2008, will fall below the Agency’s
mandated four-month reserve level. The
reserve balance is projected to be $6.5
million for FY–2007 (3.6 months) and a
negative $584,000 for FY–2008 (¥0.3)
months).
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 2.87 to 5.62 percent
depending on locality, effective January
2006, has significantly increased
program costs, and will continue to
increase costs at a similar rate in future
years. This salary adjustment will
increase FPB’s costs by over $700,000
per year. Increases in health and life
insurance premiums, along with
workers compensation will also increase
program costs. In addition, inflation also
impacts FPB’s non-costs. These factors
have increased FPB’s costs of operating
this program by over $600,000 per year.
Additional revenues (approximately
$155,000) are necessary in order for FPB
to continue to cover the costs associated
with additional staff and to maintain
office space and equipment. Additional
revenues are also necessary to continue
to improve the work environment by
providing training and purchasing
needed equipment. In addition, FPB
began in 2001, developing (with
appropriate funds) an automated system
known as FEIRS, to replace its manual
paper and pen inspection reporting
process. Approximately $10,000 in
additional revenue per month will be
needed to maintain the system. This
system has been put in place to enhance
FPB’s fruit and vegetable inspection
processes. FPB has also begun to cover
the costs associated with the Training
and Development Center (TDC) in
Fredericksburg, VA. A portion of the
appropriated funds received in October
2001 were for infrastructure
improvements including the
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Federal Register / Vol. 71, No. 231 / Friday, December 1, 2006 / Proposed Rules
development and maintenance of the
inspector Training and Development
Center. With appropriated funding now
depleted, FPB is now obligated to
support the TDC under revenues from
the terminal market user fee inspection
program.
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.
Unless otherwise provided for by
regulation or written agreement between
the applicant and the Administrator, the
charge in the schedule of fees as found
in § 51.38 are:
Service
Current
Quality and condition inspections of products each in quantities of 51 or more packages and unloaded from the
same land or air conveyance:
—Over a half carlot equivalent of each product ................................................................................................
—Half carlot equivalent or less of each product ................................................................................................
—For each additional lot of the same product ...................................................................................................
Condition only inspections of products each in quantities of 51 or more packages and unloaded from the same
land or air conveyance:
—Over a half carlot equivalent of each product ................................................................................................
—Half carlot equivalent or less of each product ................................................................................................
—For each additional lot of 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 .............................................................................................................................................
—For each additional lot of any of the same product .......................................................................................
—Lots in excess of carlot equivalents will be charged proportionally by the quarter carlot
Dock side inspections of an individual product unloaded directly from the same ship:
—For each package weighing less than 30 pounds ..........................................................................................
—For each package weighing 30 or more pounds ............................................................................................
—Minimum charge per individual product ..........................................................................................................
—Minimum charge for each additional lot of the same product ........................................................................
Hourly rate for inspections performed for other purposes during the grader’s regularly scheduled work week:
—Hourly rate for non-carlot equivalent inspections such as count, size, temperature, container, etc. or work
associated with inspections such as digital image services will be charged at a rate that reflects the cost
of providing the service ...................................................................................................................................
Overtime rate (per hour additional) for all inspections performed outside the grader’s regularly scheduled work
week .......................................................................................................................................................................
Holiday pay:
Hourly rate for inspections performed under 40 hour contracts during the grader’s regularly scheduled work
week ................................................................................................................................................................
Rate for billable mileage .....................................................................................................................................
2007
2008
$114.00
95.00
52.00
$131.00
109.00
60.00
$151.00
125.00
69.00
95.00
87.00
52.00
109.00
100.00
60.00
125.00
115.00
69.00
52.00
52.00
60.00
60.00
69.00
69.00
1 2.9
1 3.3
1 3.8
1 4.4
1 5.1
114.00
52.00
131.00
60.00
1 5.9
151.00
69.00
56.00
64.00
74.00
29.00
33.00
38.00
56.00
1.00
64.00
1.15
74.00
1.32
1 Cents.
A thirty-day comment period is
provided for interested persons to
comment on this proposed action. Given
the current financial status of the
program, thirty days is deemed
appropriate in order to have any fee
increase, if adopted, to be in place as
close as possible to the beginning of the
fiscal year 2007.
List of Subjects in 7 CFR Part 51
Agricultural commodities, Food
grades and standards, Fruits, Nuts,
Reporting and record keeping
requirements, Trees, Vegetables.
For reasons set forth in the preamble,
7 CFR part 51 is proposed to be
amended as follows:
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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:
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§ 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) Quality and condition inspections
of products in quantities of 51 or more
packages and unloaded from the same
air or land conveyance:
(i) $131 ($151) for over a half carlot
equivalent of an individual product;
(ii) $109 ($125) for a half carlot
equivalent or less of an individual
product;
(iii) $60 ($69) for each additional lot
of the same product.
(2) Condition only inspection of
products each in quantities of 51 or
more packages and unloaded from the
same land or air conveyance:
(i) $109 ($125) for over a half carlot
equivalent of an individual product;
(ii) $100 ($115) for a half carlot
equivalent or less of an individual
product;
(iii) $60 ($69) for each additional lot
of the same product.
(3) For quality and condition
inspection and condition only
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inspection of products in quantities of
50 or less packages unloaded from the
same conveyance:
(i) $60 ($69) for each individual
product:
(ii) $60 ($69) for each additional lot of
any of the same product. Lots in excess
of carlot equivalents will be charged
proportionally by the quarter carlot.
(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) Dock-side inspections of an
individual product unloaded directly
from the same ship:
(i) 3.3 (3.8) cents per package
weighing less than 30 pounds;
(ii) 5.1 (5.9) cents per package
weighing 30 or more pounds;
(iii) Minimum charge of $131 ($151)
per individual product;
(iv) Minimum charge of $60 ($69) for
each additional lot of the same product
(2) [Reserved]
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(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 ‘‘a’’ of this section shall apply.
(d) When performing inspections for
Government agencies, or for purposes
other than those prescribed in
paragraphs (a) through (c) of this
section, including weight-only and
freezing-only inspections, fees for
inspections shall be based on the time
consumed by the grader in connection
with such inspections, computed at a
rate of $64 ($74) per 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 $33 ($38) 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: November 27, 2006.
Lloyd C. Day,
Administrator, Agriculture Marketing Service.
[FR Doc. E6–20315 Filed 11–30–06; 8:45 am]
BILLING CODE 3410–02–P
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FEDERAL RESERVE SYSTEM
12 CFR Part 205
[Regulation E; Docket No. R–1270]
Electronic Fund Transfers
Board of Governors of the
Federal Reserve System.
ACTION: Proposed rule; request for
public comment.
AGENCY:
SUMMARY: The Board is proposing to
amend Regulation E, which implements
the Electronic Fund Transfer Act, and
the official staff commentary to the
regulation, which interprets the
requirements of Regulation E. The
proposed amendments would create an
exception for certain small-dollar
transactions from the requirement that
terminal receipts be made available to
consumers at the time of the transaction.
DATES: Comments must be received on
or before January 30, 2007.
ADDRESSES: You may submit comments,
identified by Docket No. R–1270, by any
of the following methods:
• Agency Web Site: https://
www.federalreserve.gov. Follow the
instructions for submitting comments at
https://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm.
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• E-mail:
regs.comments@federalreserve.gov.
Include the docket number in the
subject line of the message.
• FAX: (202) 452–3819 or (202) 452–
3102.
• Mail: Jennifer J. Johnson, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue, NW., Washington,
DC 20551.
All public comments are available
from the Board’s Web site at https://
www.federalreserve.gov/generalinfo/
foia/ProposedRegs.cfm as submitted,
unless modified for technical reasons.
Accordingly, your comments will not be
edited to remove any identifying or
contact information. Public comments
may also be viewed electronically or in
paper form in Room MP–500 of the
Board’s Martin Building (20th and C
Streets, NW.) between 9 a.m. and 5 p.m.
on weekdays.
FOR FURTHER INFORMATION CONTACT: Ky
Tran-Trong or David A. Stein, Counsels,
or Vivian W. Wong, Attorney, Division
of Consumer and Community Affairs,
Board of Governors of the Federal
Reserve System, Washington, DC 20551,
at (202) 452–2412 or (202) 452–3667.
For users of Telecommunications
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Device for the Deaf (TDD) only, contact
(202) 263–4869.
SUPPLEMENTARY INFORMATION:
I. Statutory Background
The Electronic Fund Transfer Act (15
U.S.C. 1693 et seq.) (EFTA or Act),
enacted in 1978, provides a basic
framework establishing the rights,
liabilities, and responsibilities of
participants in electronic fund transfer
(EFT) systems. The EFTA is
implemented by the Board’s Regulation
E (12 CFR part 205). Examples of the
types of transfers covered by the Act
and regulation include transfers
initiated through an automated teller
machine (ATM), point-of-sale (POS)
terminal, automated clearinghouse
(ACH), telephone bill-payment plan, or
remote banking service. The Act and
regulation provide for the disclosure of
terms and conditions of an EFT service;
documentation of EFTs by means of
terminal receipts and periodic account
activity statements; limitations on
consumer liability for unauthorized
transfers; procedures for error
resolution; and certain rights related to
preauthorized EFTs. Further, the Act
and regulation also restrict the
unsolicited issuance of ATM cards and
other access devices.
The official staff commentary (12 CFR
part 205 (Supp. I)) interprets the
requirements of Regulation E to
facilitate compliance and provides
protection from liability under Sections
915 and 916 of the EFTA for financial
institutions and other persons subject to
the Act. 15 U.S.C. 1693m(d)(1). The
commentary is updated periodically to
address significant questions that arise.
II. Background
Historically, consumers have tended
to use cash to make small-dollar
purchases, for example, to buy food or
beverages from a vending machine or to
pay for a subway fare.1 Data from the
payment card associations indicates,
however, that in certain market
segments, consumers are increasingly
using credit and debit cards in place of
cash, even for small-dollar
transactions.2 This shift in consumer
1 According to one industry estimate, consumers
spent more than $1 trillion on transactions less than
$5 in 2003, with an average payment of $3.72. See
TowerGroup, ‘‘Making Sense from Cents: Trends in
the Rebirth of Electronic Micropayments’’ (July
2004).
2 See ‘‘More and More Consumers Use Visa to
Make Small Purchases,’’ Visa Press Release (August
24, 2006) (reporting double digit growth in the use
of payment cards in the first six months of 2006
compared to the same period in 2005); ‘‘MasterCard
PayPass Increases Customer Loyalty and Moves
Payments Away From Cash,’’ Master Card Press
Release (July 18, 2006). See also TowerGroup,
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[Federal Register Volume 71, Number 231 (Friday, December 1, 2006)]
[Proposed Rules]
[Pages 69497-69500]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-20315]
========================================================================
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.
========================================================================
Federal Register / Vol. 71, No. 231 / Friday, December 1, 2006 /
Proposed Rules
[[Page 69497]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 51
[Docket Number FV-06-308]
RIN 0581-AC63
Multi-Year Revision of Fees for the Fresh Fruit and Vegetable
Terminal Market Inspection Services
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 certain fees charged for the inspection of these
products at destination markets for the next two fiscal years (FY-2007
and FY-2008) by approximately 15 percent. 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 (AMA of 1946). The fees charged to persons
required to have inspection on imported commodities in accordance with
the Agricultural Marketing Agreement Act of 1937 and for imported
peanuts under section 1308 of the Farm Security and Rural Investigation
Act of 2002.
DATES: Comments must be postmarked, courier dated, or sent via the
Internet on or before January 2, 2007.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposal. Comments are to be sent to the U.S.
Department of Agriculture, Agricultural Marketing Service, Fruit and
Vegetable Programs, Fresh Products Branch, 1400 Independence Ave., SW.,
Room 0640-S, Washington, DC 20250-0295, faxed to (202) 720-5136, sent
via e-mail to FPB.DocketClerk@usda.gov, or via the Internet: https://
www.regulations.gov. 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 CONTACT INFORMATION: Rita Bibbs-Booth, USDA, 1400
Independence Ave., SW., Room 0640-S, Washington, DC 20250-0295, or call
(202) 720-0391.
SUPPLEMENTARY INFORMATION:
Executive Order 12866 and Regulatory Flexibility Act
This rule has been determined to be ``non-significant'' for the
purposes of Executive Order 12866, and has not been reviewed by the
Office of Management and Budget.
Also, 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 proposes this initial
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 proposed action
described herein is being taken for several reasons, including that
additional user fee revenues are needed to cover the costs or: (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. The Fresh Products Branch (FPB) 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. FPB has reduced costs by approximately
$2 million. However, even with these efforts, FPB's existing fee
schedule will not generate sufficient revenue to cover program costs
while maintaining the Agency mandated reserve balance. Current revenue
projections for FPB's destination market inspection work during FY-2006
are $15.3 million with costs projected at $20.4 million and an end-of-
year reserve balance of $12.7 million. However, this reserve balance is
due in part, to appropriated funding received in October 2001, for
infrastructure, workplace, and technological improvements. FPB's costs
of operating the destination market program are expected to increase to
approximately $21.6 million during FY-2007 and $22.5 million during FY-
2008. Revenues are projected to be $15.3 million for end of the fiscal
year. The reserve balance for FY-2007 and FY-2008, will fall below the
Agency's mandated four-month reserve level. The reserve balance is
projected to be $6.5 million for FY-2007 (3.6 months) and a negative
$584,000 for FY-2008 (-0.3) months).
This proposed fee increase should result in an estimated average of
$2.4 million in additional revenues per year (effective in FY-2007, if
the fees were implemented by October 1, 2006). This will not cover all
of FPB's costs. FPB will need to continue to increase fees in order to
cover the program's operating cost and maintain the required reserve
balance. FPB believes that increasing fees incrementally is appropriate
at this time. Additional fee increases beyond FY-2008 will be needed to
sustain the program in the future. However, we will continue to reduce
costs, wherever possible.
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 2.87
to 5.62 percent depending on locality, effective January 2006, has
significantly increased program costs and will continue to increase
costs at a similar rate in future years. This salary adjustment will
increase FPB's costs by over $700,000 per year. Increases in health and
life insurance premiums, along with workers compensation will also
increase program costs. In addition, inflation also impacts FPB's non-
salary costs. These factors have increased FPB's costs of operating
this program by over $600,000 per year.
Additional funds of approximately $155,000 are necessary in order
for FPB to continue to cover the costs associated with additional staff
and to maintain office space and equipment. Additional revenues are
also necessary to improve the work environment by providing training
and purchasing needed equipment. In addition, FPB began in 2001,
developing (with appropriated funds) the Fresh Electronic Inspection
Reporting/Resource System (FEIRS) to
[[Page 69498]]
replace its manual paper and pen inspection reporting process. FEIRS
was implemented in 2004. This system has been put in place to enhance
and streamline FPB's fruit and vegetable inspection process, however
additional revenue is required to maintain FEIRS. FPB has also begun to
cover the costs associated with the Training and Development Center
(TDC) in Fredericksburg, VA. A portion of the appropriated funds
received in October 2001 were for infrastructure improvements including
the development and maintenance of the inspector Training and
Development Center. With appropriated funding now depleted, FPB is now
obligated to support the TDC under revenues from the terminal market
user fee inspection program.
This proposed rule should increase user fee revenue generated under
the destination market program by approximately 15 percent. This action
is authorized under the Agricultural Marketing Act of 1946 (AMA of
1946) (See 7 U.S.C. 1622(h)), which provides 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
121.201). 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 commodities must be issued. Import
regulations apply during those periods when domestic marketing order
regulations are in effect. Section 1308 of the Farm Security and
Rural Investment Act of 2002 (Public Law 107-171), 7 U.S.C. 7958,
required USDA among other things to develop new peanut quality and
handling standards for imported peanuts marketing in the United
States.
Currently, there are 14 commodities subject to 8e import
regulations: Avocados, dates (other than dates for processing),
filberts, grapefruit, kiwifruit, olives (other than Spanish-style
green olives), onions, oranges, potatoes, prunes, raisins, table
grapes, tomatoes and walnuts. A current listing of the regulated
commodities can be found under 7 CFR Parts 944, 980, 996, and 999.
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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
will be raised, the increase is not excessive 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 action is not intended to have 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.
Proposed Action
The AMA of 1946 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
of 1946 provides that reasonable fees be collected from the users of
the services to cover, as nearly as practicable, the cost 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 financed programs to determine
if the fees are adequate. The Fresh Products Branch (FPB) 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. FPB has reduced costs by approximately
$2 million. However, even with these efforts, FPB's existing fee
schedule will not generate sufficient revenue to cover program costs
while maintaining the Agency mandated reserve balance. Current revenue
projections for FPB's destination market inspection work during FY-2006
are $15.3 million with costs projected at $20.4 million and an end-of-
year reserve balance of $12.7 million. However, this reserve balance is
due in part, to appropriated funding received in October 2001, for
infrastructure, workplace, and technological improvements. FPB's costs
of operating the destination market program are expected to increase to
approximately $21.6 million during FY-2007 and $22.5 million during FY-
2008. Revenues are projected to be $15.3 million for end of the fiscal
year. The reserve balance for FY-2007 and FY-2008, will fall below the
Agency's mandated four-month reserve level. The reserve balance is
projected to be $6.5 million for FY-2007 (3.6 months) and a negative
$584,000 for FY-2008 (-0.3) months).
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 2.87
to 5.62 percent depending on locality, effective January 2006, has
significantly increased program costs, and will continue to increase
costs at a similar rate in future years. This salary adjustment will
increase FPB's costs by over $700,000 per year. Increases in health and
life insurance premiums, along with workers compensation will also
increase program costs. In addition, inflation also impacts FPB's non-
costs. These factors have increased FPB's costs of operating this
program by over $600,000 per year.
Additional revenues (approximately $155,000) are necessary in order
for FPB to continue to cover the costs associated with additional staff
and to maintain office space and equipment. Additional revenues are
also necessary to continue to improve the work environment by providing
training and purchasing needed equipment. In addition, FPB began in
2001, developing (with appropriate funds) an automated system known as
FEIRS, to replace its manual paper and pen inspection reporting
process. Approximately $10,000 in additional revenue per month will be
needed to maintain the system. This system has been put in place to
enhance FPB's fruit and vegetable inspection processes. FPB has also
begun to cover the costs associated with the Training and Development
Center (TDC) in Fredericksburg, VA. A portion of the appropriated funds
received in October 2001 were for infrastructure improvements including
the
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development and maintenance of the inspector Training and Development
Center. With appropriated funding now depleted, FPB is now obligated to
support the TDC under revenues from the terminal market user fee
inspection program.
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. Unless otherwise provided
for by regulation or written agreement between the applicant and the
Administrator, the charge in the schedule of fees as found in Sec.
51.38 are:
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Service Current 2007 2008
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Quality and condition inspections of
products each in quantities of 51 or more
packages and unloaded from the same land
or air conveyance:
--Over a half carlot equivalent of $114.00 $131.00 $151.00
each product.........................
--Half carlot equivalent or less of 95.00 109.00 125.00
each product.........................
--For each additional lot of the same 52.00 60.00 69.00
product..............................
Condition only inspections of products
each in quantities of 51 or more packages
and unloaded from the same land or air
conveyance:
--Over a half carlot equivalent of 95.00 109.00 125.00
each product.........................
--Half carlot equivalent or less of 87.00 100.00 115.00
each product.........................
--For each additional lot of the same 52.00 60.00 69.00
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.................... 52.00 60.00 69.00
--For each additional lot of any of 52.00 60.00 69.00
the same product.....................
--Lots in excess of carlot equivalents
will be charged proportionally by the
quarter carlot
Dock side inspections of an individual
product unloaded directly from the same
ship:
--For each package weighing less than \1\ 2.9 \1\ 3.3 \1\ 3.8
30 pounds............................
--For each package weighing 30 or more \1\ 4.4 \1\ 5.1 \1\ 5.9
pounds...............................
--Minimum charge per individual 114.00 131.00 151.00
product..............................
--Minimum charge for each additional 52.00 60.00 69.00
lot of the same product..............
Hourly rate for inspections performed for
other purposes during the grader's
regularly scheduled work week:
--Hourly rate for non-carlot 56.00 64.00 74.00
equivalent inspections such as count,
size, temperature, container, etc. or
work associated with inspections such
as digital image services will be
charged at a rate that reflects the
cost of providing the service........
Overtime rate (per hour additional) for 29.00 33.00 38.00
all inspections performed outside the
grader's regularly scheduled work week...
Holiday pay:
Hourly rate for inspections performed 56.00 64.00 74.00
under 40 hour contracts during the
grader's regularly scheduled work
week.................................
Rate for billable mileage............. 1.00 1.15 1.32
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\1\ Cents.
A thirty-day comment period is provided for interested persons to
comment on this proposed action. Given the current financial status of
the program, thirty days is deemed appropriate in order to have any fee
increase, if adopted, to be in place as close as possible to the
beginning of the fiscal year 2007.
List of Subjects in 7 CFR Part 51
Agricultural commodities, Food grades and standards, Fruits, Nuts,
Reporting and record keeping 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) Quality and condition inspections of products in quantities of
51 or more packages and unloaded from the same air or land conveyance:
(i) $131 ($151) for over a half carlot equivalent of an individual
product;
(ii) $109 ($125) for a half carlot equivalent or less of an
individual product;
(iii) $60 ($69) for each additional lot of the same product.
(2) Condition only inspection of products each in quantities of 51
or more packages and unloaded from the same land or air conveyance:
(i) $109 ($125) for over a half carlot equivalent of an individual
product;
(ii) $100 ($115) for a half carlot equivalent or less of an
individual product;
(iii) $60 ($69) for each additional lot of the same product.
(3) For quality and condition inspection and condition only
inspection of products in quantities of 50 or less packages unloaded
from the same conveyance:
(i) $60 ($69) for each individual product:
(ii) $60 ($69) for each additional lot of any of the same product.
Lots in excess of carlot equivalents will be charged proportionally by
the quarter carlot.
(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) Dock-side inspections of an individual product unloaded
directly from the same ship:
(i) 3.3 (3.8) cents per package weighing less than 30 pounds;
(ii) 5.1 (5.9) cents per package weighing 30 or more pounds;
(iii) Minimum charge of $131 ($151) per individual product;
(iv) Minimum charge of $60 ($69) for each additional lot of the
same product
(2) [Reserved]
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(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 ``a'' of this section shall
apply.
(d) When performing inspections for Government agencies, or for
purposes other than those prescribed in paragraphs (a) through (c) of
this section, including weight-only and freezing-only inspections, fees
for inspections shall be based on the time consumed by the grader in
connection with such inspections, computed at a rate of $64 ($74) per
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 $33 ($38) 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: November 27, 2006.
Lloyd C. Day,
Administrator, Agriculture Marketing Service.
[FR Doc. E6-20315 Filed 11-30-06; 8:45 am]
BILLING CODE 3410-02-P
