Proposed Rule2024-13371
Section 8e Import Inspection Fee Structure
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Published
June 20, 2024
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
The Agricultural Marketing Service (AMS) of the Department of Agriculture (USDA) proposes to revise the regulations governing the inspection and certification for fresh fruits, vegetables, and other products by 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. These revisions are necessary to recover, as nearly as practicable, the costs of performing inspection services on imported commodities in accordance with the Agricultural Marketing Agreement Act of 1937.
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<title>Federal Register, Volume 89 Issue 119 (Thursday, June 20, 2024)</title>
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[Federal Register Volume 89, Number 119 (Thursday, June 20, 2024)]
[Proposed Rules]
[Pages 51850-51853]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-13371]
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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.
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Federal Register / Vol. 89, No. 119 / Thursday, June 20, 2024 /
Proposed Rules
[[Page 51850]]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 51
RIN 0581-AE32
[Doc. No. AMS-SC-23-0009]
Section 8e Import Inspection Fee Structure
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: The Agricultural Marketing Service (AMS) of the Department of
Agriculture (USDA) proposes to revise the regulations governing the
inspection and certification for fresh fruits, vegetables, and other
products by 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. These revisions are
necessary to recover, as nearly as practicable, the costs of performing
inspection services on imported commodities in accordance with the
Agricultural Marketing Agreement Act of 1937.
DATES: Comments must be submitted on or before August 19, 2024.
ADDRESSES: Interested persons are invited to submit comments to the
Standardization Branch, Specialty Crops Inspection Division, Specialty
Crops Program, Agricultural Marketing Service, U.S. Department of
Agriculture, National Training and Development Center; 100 Riverside
Parkway, Suite 101; Fredericksburg, Virginia 22406; fax: (540) 361-
1199, or via the internet at: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Comments
should reference the date and page numbers of this issue of the Federal
Register. All comments submitted in response to this proposed rule will
become a part of the public record and be made available to the public,
including any personal information provided, at <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
FOR FURTHER INFORMATION CONTACT: Brian E. Griffin at the address above,
or at phone (202) 748-2155; fax (540) 361-1199; or email
<a href="/cdn-cgi/l/email-protection#c587b7aca4abeb82b7aca3a3acab85b0b6a1a4eba2aab3"><span class="__cf_email__" data-cfemail="1a5868737b74345d68737c7c73745a6f697e7b347d756c">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: This document would amend regulations at 7
CFR part 51 issued under the Agricultural Marketing Act of 1946 (7
U.S.C. 1621-1627), as amended.
Executive Orders 12866, 13563, and 14094
The USDA is issuing this proposed rule in conformance with
Executive Orders 12866, 13563, and 14094. Executive Orders 12866 and
13563 direct agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects, distributive
impacts, and equity). Executive Order 13563 emphasizes the importance
of quantifying both costs and benefits, reducing costs, harmonizing
rules, and promoting flexibility. Executive Order 14094 reaffirms,
supplements, and updates Executive Order 12866 and further directs
agencies to solicit and consider input from a wide range of affected
and interested parties through a variety of means. This rule does not
meet the criteria of a ``significant regulatory action'' under
Executive Order 12866, as supplemented by Executive Order 13563 and
updated by Executive Order 14094. Therefore, the Office of Management
and Budget (OMB) has not reviewed this rule under those orders.
Executive Order 13175
This proposed rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which
requires agencies to consider whether their rulemaking actions would
have Tribal implications.
AMS has determined that this proposed rule is unlikely to have
substantial direct effects on one or more Indian Tribes, on the
relationship between the Federal Government and Indian Tribes, or on
the distribution of power and responsibilities between the Federal
Government and Indian Tribes.
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This proposed action is not intended to have
retroactive effect. There are no administrative procedures that must be
exhausted prior to any judicial challenge to the provisions of this
rule.
Background
AMS is proposing to charge for certain Section 8e import
inspections on a per-pound basis and make additional revisions to the
fee structure of the Specialty Crop Inspection Division (Division).
Accordingly, under this proposed rule, the fees for Section 8e import
inspections for lots qualifying as a full carlot (or a whole lot) or
for lots less than a full carlot would no longer be calculated on a
per-carlot basis. Instead, those fees would be calculated on a per-
pound rate basis. The proposed per-pound rate would be calculated by
dividing the current inspection fee for a full carlot by the average
weight by pound of a full carlot (40,000 pounds) (for example: the
current inspection fee for a full carlot ($242) divided by 40,000 would
result in a per-pound rate of $0.00605). The Division proposes to use
40,000 lbs. as the appropriate measurement for calculating the per-
pound rate. AMS notes that 40,000 lbs. is generally recognized as the
standard weight of the measurement used in USDA-AMS inspection
practices when identifying a full carlot.
Additionally, AMS proposes to have two separate sublot fees: one
for Section 8e sublots and one for non-Section 8e sublots. The term
sublot is commonly used to describe additional lots of the same
product. During an inspection, a sublot is generated when the product
differs markedly, and such differences are associated with quality and/
or condition, certain brands, varieties, sizes, or container markings.
For an example, under this proposed rule, the fee for a Section 8e
sublot would be reduced by 50 percent, from the current $110 per sublot
fee (the FY 2024 rate) to $55 per sublot. All non-8e inspection fees
would remain unchanged by this proposed rule. The proposed per-pound
rate for a full carlot or for lots less than a full carlot, and the 8e
sublot fee, would be subject to the annual updated Specialty Crops
Program's inspections fee schedule.
[[Page 51851]]
Under this proposed rule, for all Section 8e import inspections,
AMS would apply the current lot separation and sampling rates at 7 CFR
51.2(d)(1-3). To calculate inspection fees for a full carlot, AMS would
multiply the current per-pound rate, using the proposed calculation as
noted above, by the total weight of the full carlot, plus any
applicable sublot fees. To calculate the inspection fee for lots less
than a carlot, AMS would multiply the current per-pound rate, using the
proposed per-pound rate calculation as noted above, by the total weight
of the lot, with a minimum charge equivalent to 2-hours computed at the
current established hourly rate, whichever is greater, plus any sublot
fee(s) as applicable.
Currently, fees for all terminal market inspections, including
Section 8e import inspections, are charged on a carlot basis (7 CFR
51.37). The current single carlot fee structure charges per conveyance
and does not account for sampling and inspection time required for
today's larger conveyances transporting larger volumes. The proposed
per-pound fee structure will better ensure full recovery of inspection
cost by AMS while mitigating the financial impact on applicants of
additional sublot fees.
As shown in Table 1, applicants importing typical 40,000-pound
loads comprising one lot will see no change in inspection fees under
this proposed rule. Table 2 shows that larger size loads, which
typically require increased sampling and inspection, will see a
proportional increase in fees under this proposed rule. However, loads
currently subject to additional sublot fees will see a significant
decrease in fees per sublot under this proposed rule. The proposed fee
calculation change will more accurately assess fees on inspected
volume, better aligning the Division's ability to ensure cost recovery
while significantly reducing additional sublot fees charged to
applicants. The following comparison of the Section 8e fee structure is
based on FY 2024 fees. Any increase or decrease to Section 8e fees
would be included in the annual fee structure package in subsequent
years.
Columns 1 and 2 of Table 1 compare the currently scheduled FY 2024
fee structure to the proposed new fee structure for a standard 40,000-
pound lot. As shown in row 1, column 1, the currently scheduled FY 2024
fee structure for one lot is $242. Row 1, column 2 shows that under the
proposed new fee structure, the fee for one lot would be unchanged at
$242 but would be expressed at the per pound rate of $0.00605
(multiplied by 40,000 pounds).
Column 1 (rows 2 through 5) shows that without the proposed new fee
structure, the inspection fee for each additional 40,000-pound
increases by $110. Column 2 shows that with the proposed new fee, the
incremental cost per additional lot would be cut in half to $55. Column
3 shows the cost savings for additional lots.
Table 1--SCI Sec. 8e Inspection Fees for Standard 40,000 Pound Lot: Comparison of FY 2024 Fee to Proposed New
Fee, Showing Reduced Cost for Additional Lots
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Reduced cost to
Number of lots FY 2024 fee \1\ Proposed new fee \2\ importer applicant
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(1) (2) (3)
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1.................................... $242................... $242................... $0.
2.................................... $352................... $297................... $55.
3.................................... $462................... $352................... $110.
4.................................... $572................... $407................... $165.
5.................................... $682................... $462................... $220.
Each additional sublot............... Plus $110.............. Plus $55............... $55 savings per
additional sublot.
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\1\ If the proposal in this rule does not go into effect, the FY 2024 inspection fee would be $242 for one
40,000-pound lot plus $110 for each additional lot. For FY 2023, the cost was $225 for the first 40,000-pound
lot and $103 for each additional lot.
\2\ The proposed fee for one standard lot under this rule would be $242, unchanged from the FY 2024 fee, but
would be expressed as the per-pound equivalent of $0.00605. ($242 inspection cost per 40,000-pound lot divided
by 40,000 pounds equals $0.00605 per pound). Each additional lot would cost an additional $55, a 50% reduction
from the FY 2024 incremental cost of $110 that would be in place without this rule change.
Table 2 shows the proposed new fee structure for alternative lot
sizes. Row 2 shows again that the 40,000-pound lot fee would be
unchanged at $242. Row 3 shows that for a 50,000-pound lot, the $302.50
inspection fee would be determined by multiplying the proposed per-
pound rate ($0.00605) by 50,000 pounds. Row 1 shows that for any lot
weighing less than 40,000 pounds, the applicable fee would be a 2-hour
minimum charge at the currently established FY 2024 hourly inspection
rate of $116 ($116 times 2 equals $232).
Table 2--SCI Sec. 8e Inspection Fees for Alternative Lot Sizes, Proposed
Inspection Rate per Pound
------------------------------------------------------------------------
Alternative lot Inspection fee
sizes Pounds per lot per lot \1\ \2\
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(1)............ Less than full (\1\) $232.00 minimum.
(standard) lot.
(2)............ Standard Lot...... 40,000 $242.00.
(3)............ Lot 25% larger 50,000 $302.50.
than standard.
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\1\ For lots less than a standard lot, the fees are computed by
multiplying pounds per lot by rate per pound ($0.00605) with a minimum
charge equivalent to 2-hours applied at the current established FY
2024 hourly inspection rate of $116.
\2\ Inspection fee per lot for standard lot or larger [(2) and (3)] are
computed by multiplying pounds per lot by rate per pound ($0.00605).
Prior to developing proposed revisions to the Section 8e fee
structure, AMS engaged in discussions with State partners including
Association of Fruit and Vegetable Inspection and Standardization
Agencies (AFVISA) members and the Texas Cooperative Inspection Program
(TCIP), as well as industry stakeholders. The outcome of
[[Page 51852]]
these discussions was a positive perception of the fee changes as
proposed.
A 60-day comment period is provided for interested persons to
submit comments on this proposed rule. A 60-day comment period is
deemed appropriate because any change in fee calculations, if adopted,
should be in place as soon as possible to move the program towards an
adequate reserve and financial stability.
Initial 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 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 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 proposed rule would revise the regulations governing the
inspection and certification for fresh fruits, vegetables, and other
products by increasing certain fees charged for Section 8e import
inspections on a per-pound basis. These revisions are necessary to
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 the proposed new rate
structure are proportional to size of lots, smaller businesses
(importers) would not be unduly or disproportionately burdened. This
proposed 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 would remain unchanged.
Tables 3 and 4 show the estimated impacts on the nine Section 8e
commodities affected by this proposed 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--SCI Sec. 8e Commodities Imported: Number of Inspections, Categorized by Size of Lot Inspected, Using
40,000-Pound Standard Lot Size Threshold, FY2021-FY2023 \1\
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<=40,000 lbs. >40,000 lbs. Total Pct of total Cumulative
per lot per lot inspections inspections percent
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(1) (2) (3) (4) (5)
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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
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9 commodities................. 473,107 138,368 611,475 .............. ..............
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\1\ Source: Compliance Enforcement Management System (CEMS) database, Market Development Division, Specialty
Crops Program, Agricultural Marketing Service, USDA.
Table 4--SCI Sec. 8e 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
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Table 4 shows that for all nine commodities combined, 77 percent of
the inspections would have had equal or lower fees charged if the new
fee structure had been in place. Twenty-three percent of the lots would
have
[[Page 51853]]
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 fee system currently in place.
The impacts of the proposed 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
proposed 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 8e
Inspection Fees for Standard 40,000 Pound Lot: Comparison of FY 2024
Fee to Proposed New Fee, 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.
This analysis assumes that each lot is sampled and inspected
independently. This may overstate the extent of higher fees because
under the proposed 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 2024 and future
years.
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 proposes to amend 7 CFR part 51 as follows:
PART 51--FRESH FRUITS, VEGETABLES, AND OTHER PRODUCTS (INSPECTION,
CERTIFICATION, AND STANDARDS)
0
1. The authority citation for part 51 continues to read as follows:
Authority: 7 U.S.C. 1621-1627.
0
2. Revise Sec. 51.37 to read as follows:
Sec. 51.37 Charges for fees, rates, and expenses.
For each carlot of product inspected, a fee or rate determined in
accordance with Sec. Sec. 51.38, 51.39, and 51.40, and expenses
determined in accordance with Sec. 51.41, shall be paid by the
applicant.
0
3. Redesignate Sec. Sec. 51.39 through 51.62 as Sec. Sec. 51.40
through 51.63, respectively.
0
4. Add new Sec. 51.39 to read as follows:
Sec. 51.39 Charges for fees and rates for 8e import inspection.
(a) 8e import inspection fees charged on a per-pound basis--(1)
Establishing the per-pound inspection rate. To compute the per-pound
inspection rate, divide the current per-lot inspection fee for a full
carlot (whole lot) by 40,000 (the generally accepted weight by pound of
a full carlot).
(2) Applying the per-pound rate. The per-pound inspection rate
shall be applied to the following lot sizes as follows:
(i) For a full carlot, multiply the per-pound rate by the total
weight of the full carlot plus any applicable fees for additional lots
of the same product as described in paragraph (b) of this section.
(ii) For lots less than a full carlot, multiply the per-pound rate
by the total weight of the lot with a minimum fee equivalent to a 2-
hour charge computed at the current established hourly rate, whichever
is greater, plus any applicable fees for additional lots of the same
product as described in paragraph (b) of this section.
(b) 8e import inspection fees charged on additional lots of the
same product. To compute the inspection fee for additional lots of the
same product, multiply each additional lot by one-half of the current
non-8e additional lot of the same product inspection fee.
Erin Morris.
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2024-13371 Filed 6-18-24; 8:45 am]
BILLING CODE P
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