Rule2024-31144
Section 8e Import Inspection Fee Structure
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Published
December 30, 2024
Effective
January 29, 2025
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
The Agricultural Marketing Service (AMS) of the Department of Agriculture (USDA) is revising 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 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 249 (Monday, December 30, 2024)</title>
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[Federal Register Volume 89, Number 249 (Monday, December 30, 2024)]
[Rules and Regulations]
[Pages 106231-106234]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-31144]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 /
Rules and Regulations
[[Page 106231]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 51
[Doc. No. AMS-SC-23-0009]
RIN 0581-AE32
Section 8e Import Inspection Fee Structure
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Agricultural Marketing Service (AMS) of the Department of
Agriculture (USDA) is revising 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 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: Effective January 29, 2025.
FOR FURTHER INFORMATION CONTACT: 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>.
SUPPLEMENTARY INFORMATION: This document amends 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 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 final rule
falls within a category of regulatory actions that the Office of
Management and Budget (OMB) has exempted from review under Executive
Order 12866.
Executive Order 13175
This 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 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 rule has been reviewed under Executive Order 12988, ``Civil
Justice Reform.'' This 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
On June 20, 2024, a proposed rulemaking was published in the
Federal Register (89 FR 51850) providing a 60-day comment period for
interested parties to comment on proposed changes to Section 8e import
inspection charges and revisions to the fee structure of the Specialty
Crop Inspection Division (Division). One comment in support of the
proposal was received. 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 those discussions was a positive perception of the fee
changes as proposed. AMS is adopting the proposed rulemaking with no
changes. Through this final rule, AMS will charge for certain Section
8e import inspections on a per-pound basis and implement additional
revisions to the fee structure of the Division.
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. Under this
final 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 will no longer be calculated on a per-carlot basis.
Instead, those fees will be calculated on a per-pound rate basis. The
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.
The per-pound rate will 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 ($254) divided by 40,000 will result in a per-pound
rate of $0.00635). The Division will use 40,000 lbs. as the appropriate
measurement for calculating the per-pound rate. AMS notes that 40,000
pounds is generally recognized as the standard weight of the
measurement used in USDA-AMS inspection practices when identifying a
full carlot.
Additionally, AMS will have two separate sublot (or additional lot
of the same product) fees: one for Section 8e sublots and one for non-
Section 8e sublots. For example, under this rule, the fee for a Section
8e sublot is reduced
[[Page 106232]]
by 50 percent, from the current $116 per sublot fee (the FY 2025 rate)
to $58 per sublot. All non-8e inspection fees remain unchanged by this
rule. The per-pound rate for a full carlot or for lots less than a full
carlot, and the 8e sublot fee, are subject to the annual updated
Specialty Crops Program's inspections fee schedule.
Under this rule, for all Section 8e import inspections, AMS will
apply the current lot separation and sampling rates at 7 CFR 51.2(d)(1)
through (3). To calculate inspection fees for a full carlot, AMS will
multiply the current per-pound rate, using the 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 will multiply the current per-pound rate, using the 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. As shown in Table 1, applicants importing typical
40,000-pound loads comprising one lot will see no change in inspection
fees under this new rule. Table 2 shows that larger size loads, which
typically require increased sampling and inspection, will see a
proportional increase in fees under this new rule. However, loads
currently subject to additional sublot fees will see a significant
decrease in fees per sublot under this new rule. The fee calculation
changes under this final rule 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 2025 fees. Any increase or decrease to Section 8e fees will
be included in the annual fee structure package in subsequent years.
Columns 1 and 2 of Table 1 compare the currently scheduled FY 2025
fee structure to the new fee structure for a standard 40,000-pound lot.
As shown in row 1, column 1, the currently scheduled FY 2025 fee
structure for one lot is $254. Row 1, column 2 shows that under the new
fee structure, the fee for one lot will remain at $254 but will be
expressed at the per pound rate of $0.00635 (multiplied by 40,000
pounds).
Column 1 (rows 2 through 5) shows that without the new fee
structure, the inspection fee for each additional 40,000-pound
increases by $116. Column 2 shows that with the new fee, the
incremental cost per additional lot will be cut in half to $58. 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 2025 Fee to New Fee
Structure
[Showing reduced cost for additional lots]
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Reduced cost to
Number of lots FY 2025 fee New fee \1\ importer applicant
----------------------------------------------------------------------------------------------------------------
(1) (2) (3)
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1.................................... $254................... $254................... $0.
2.................................... $370................... $297................... $58.
3.................................... $486................... $355................... $116.
4.................................... $602................... $413................... $174.
5.................................... $718................... $471................... $232.
Each additional sublot............... Plus $116.............. Plus $58............... $58 savings per
additional sublot.
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\1\ The fee for one standard lot under this rule is $254, unchanged from the FY 2025 fee, but will be expressed
as the per-pound equivalent of $0.00605. ($254 inspection cost per 40,000-pound lot divided by 40,000 pounds
equals $0.00635 per pound). Each additional lot will cost an additional $58, a 50% reduction from the FY 2025
incremental cost of $116.
Table 2 shows the new fee structure for alternative lot sizes under
this final rule. Row 2 shows again that the 40,000-pound lot fee will
remain $254. Row 3 shows that for a 50,000-pound lot, the $317.50
inspection fee will be determined by multiplying the proposed per-pound
rate ($0.00635) by 50,000 pounds. Row 1 shows that for any lot weighing
less than 40,000 pounds, the applicable fee will be a 2-hour minimum
charge at the currently established FY 2025 hourly inspection rate of
$123 ($123 multiplied by 2 equals $246). Any increase or decrease to
the hourly inspection rates will be included in the annual fee
structure package in subsequent years.
Table 2--SCI 8e Inspection Fees for Alternative Lot Sizes
[Proposed inspection rate per pound]
------------------------------------------------------------------------
Alternative lot Inspection fee per
sizes Pounds per lot lot 1 2
------------------------------------------------------------------------
1...... Less than full (\1\)............... $246.00 minimum.
(standard) lot.
2...... Standard Lot........ 40,000.............. $254.00.
3...... Lot 25% larger than 50,000.............. $317.50.
standard.
------------------------------------------------------------------------
\1\ For lots less than a standard lot, the fees are computed by
multiplying pounds per lot by rate per pound ($0.00635) with a minimum
charge equivalent to 2-hours applied at the current established FY
2025 hourly inspection rate of $123.
\2\ Inspection fee per lot for standard lot or larger [(2) and (3)] are
computed by multiplying pounds per lot by rate per pound ($0.00635).
Final Regulatory Flexibility Analysis
Pursuant to the requirement set forth in the Regulatory Flexibility
Act (RFA), AMS has considered the economic impact of this action on
small entities. Accordingly, AMS provides this final regulatory
flexibility analysis. The purpose of the RFA is to fit regulatory
actions to the scale of businesses subject to such actions in order
that small businesses will not be unduly or disproportionately
burdened.
The action described herein is being taken for several reasons,
including that additional user fee revenues are needed to cover the
costs of (1) providing current program operations and services; (2)
improving the timeliness in which inspection services are provided; and
(3) improving the work environment. AMS regularly reviews its user-fee
financed programs to determine if the fees are adequate.
This rule revises the regulations governing the inspection and
certification for fresh fruits, vegetables, and other products by
increasing certain
[[Page 106233]]
fees charged for Section 8e import inspections on a per-pound basis.
These revisions recover, as nearly as practicable, the costs of
performing inspection services on imported commodities in accordance
with the Agricultural Marketing Agreement Act of 1937.
Since the inspection fees to be charged under this final rule's new
rate structure are proportional to size of lots, smaller businesses
(importers) are not unduly or disproportionately burdened. This new fee
structure, for imports subject to Section 8e grading requirements,
balances cost increases (for lots larger than 40,000 pounds) with cost
decreases for additional sublots. The fee for a standard 40,000-pound
lot remains unchanged.
Tables 3 and 4 show the impact on the nine Section 8e commodities
affected by this rule, using data from USDA's Compliance Enforcement
Management System (CEMS) database, which lists the weight of each lot
inspected over the three-year period FY 2021 through FY 2023. Table 3
puts the number of inspections into two categories: column 1 shows the
number of lots that weighed 40,000 pounds or less, and column 2 shows
the number of lots that weighed more than 40,000 pounds. Column 3
presents the sum of columns 1 and 2. The last row of column 3 shows
that the total number of inspections for the three-year period was
611,475.
Table 3--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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Pct of total
<=40,000 lbs. >40,000 lbs. Total inspections Cumulative
per lot per lot inspections (percent) percent
----------------------------------------------------------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
Avocados........................ 395,812 64,139 459,951 75.2 75.2
Onions.......................... 17,026 51,918 68,944 11.3 86.5
Grapes.......................... 35,434 5,445 40,879 6.7 93.2
Oranges......................... 9,955 8,219 18,174 3.0 96.2
Kiwifruit....................... 8,208 7,358 15,566 2.5 98.7
Tomatoes........................ 3,925 33 3,958 0.6 99.3
Grapefruit...................... 2,314 1,051 3,365 0.6 99.90
Filberts........................ 240 109 349 0.1 99.95
Potatoes........................ 193 96 289 0.05 100.0
9 commodities................... 473,107 138,368 611,475 .............. ..............
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\1\ Source: Compliance Enforcement Management System (CEMS) database, Market Development Division, Specialty
Crops Program, Agricultural Marketing Service, USDA.
Table 4--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
----------------------------------------------------------------------------------------------------------------
Table 4 shows that for all nine commodities combined, 77 percent of
the inspections would have had equal or lower fees if charged with the
new fee structure. Twenty-three percent of the lots would have been
subject to higher fees. Looking at individual years (not shown), the
percentage of inspections representing lots weighing 40,000 pounds or
less for FY 2021, FY 2022 and FY 2023 was 73, 75, and 80 percent,
respectively. Therefore, for a large majority of annual inspections,
the cost per individual inspection would have been the same or lower
than with the previous fee system in place.
The impacts of the revised fee structure vary significantly by
commodity. Table 4 shows that for six of the nine commodities, at least
two thirds of the lots inspected would have had equal or lower fees
(i.e., lots weighing 40,000 pounds or less--avocadoes, grapes,
tomatoes, grapefruit, filberts, potatoes) under the revised fee
structure. One commodity, onions, would have had the opposite result,
with 25 percent of lots seeing lower fees, and 75 percent higher. This
variation would be offset by the onion industry's prevalence of
additional sublots in inspections. See Table 1, ``SCI Sec. 8e
Inspection Fees for Standard 40,000 Pound Lot: Comparison of FY 2025
Fee to New Fee Structure, Showing Reduced Cost for Additional Lots.''
For oranges and kiwifruit, the results were about even; slightly more
than 50 percent of the lots weighed equal to or less than 40,000 pounds
and, therefore, would have been subject to lower fees.
[[Page 106234]]
This analysis assumes that each lot is sampled and inspected
independently. This may overstate the extent of higher fees because
under the new fee structure the cost declines for each additional
sublot, as shown in Table 1. To the extent that the lots for which fees
were charged in the CEMS database are actually sublots associated with
an inspected lot from a particular importer, the value in Table 4,
column (2) (i.e., for lots more than 40,000 pounds) overstates the
percentage of lots that would have been subject to a higher fee.
It is also important to note that certain commodities represented
larger proportions of the lots inspected, as shown in columns (4) and
(5) of Table 3. Just over 75 percent of the inspected lots were for
avocadoes. Adding the next four commodities in terms of the magnitude
of total inspections (onions, grapes, oranges, and kiwifruit) raises
the cumulative percentage up to nearly 99 percent. Four commodities
(tomatoes, grapefruit, filbert, and potatoes) represented about 1.3
percent of the total number of lots inspected.
This analysis shows that the fee impacts vary by commodity, with
smaller fees per inspected lot expected for eight of the nine
commodities, suggesting that for a large majority of annual inspections
the cost per individual inspection would be the same or lower than with
the fee system that would otherwise be in place in FY 2025 and future
years.
Comments
AMS received one comment from the Texas International Produce
Association (TIPA) in full support of implementing this rule, noting
the changes not only help prevent increased food prices but also
reflects a modernization of the fresh produce industry.
USDA has determined that this rule is consistent with and will
effectuate the purpose of the Agricultural Marketing Act of 1946.
Therefore, AMS is amending certain fees charged for Section 8e import
inspections from a per-carlot basis to a per-pound basis, reducing the
fee for each additional sublot by 50 percent, and establishing a new
fee calculation for lots less than a carlot.
List of Subjects in 7 CFR Part 51
Agricultural commodities, Food grades and standards, Fruits, Nuts,
Reporting and recordkeeping requirements, Vegetables.
For reasons set forth in the preamble, the Agricultural Marketing
Service amends 7 CFR part 51 as follows:
PART 51--FRESH FRUITS, VEGETABLES, AND OTHER PRODUCTS (INSPECTION,
CERTIFICATION, AND STANDARDS)
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.
Sec. Sec. 51.39 through 51.62 [Redesignated as Sec. Sec. 51.40
through 51.63]
0
3. Redesignate Sec. Sec. 51.39 through 51.62 as Sec. Sec. 51.40
through 51.63 as follows:
------------------------------------------------------------------------
Old section New section
------------------------------------------------------------------------
Schedule of Fees and Charges at Destination Markets (undesignated center
heading)
------------------------------------------------------------------------
Sec. 51.37 (unchanged).................. Sec. 51.37 (unchanged).
Sec. 51.38 (unchanged).................. Sec. 51.38 (unchanged).
Sec. 51.39.............................. Sec. 51.40.
Sec. 51.40.............................. Sec. 51.41.
Sec. 51.41.............................. Sec. 51.42.
Sec. 51.42.............................. Sec. 51.43.
Sec. 51.43.............................. Sec. 51.44.
Sec. 51.44.............................. Sec. 51.45.
------------------------------------------------------------------------
Schedule of Fees and Charges at Shipping Point Areas (undesignated
center heading)
------------------------------------------------------------------------
Sec. 51.45.............................. Sec. 51.46.
------------------------------------------------------------------------
Miscellaneous (undesignated center heading)
------------------------------------------------------------------------
Sec. 51.46.............................. Sec. 51.47.
Sec. 51.47.............................. Sec. 51.48.
Sec. 51.48.............................. Sec. 51.49.
Sec. 51.49.............................. Sec. 51.50.
Sec. 51.50.............................. Sec. 51.51.
Sec. 51.51.............................. Sec. 51.52.
Sec. 51.52.............................. Sec. 51.53.
------------------------------------------------------------------------
Requirements for Plants Operating Under Continuous Inspection on a
Contract Basis (undesignated center heading)
------------------------------------------------------------------------
Sec. 51.53.............................. Sec. 51.54.
Sec. 51.54.............................. Sec. 51.55.
Sec. 51.55.............................. Sec. 51.56.
Sec. 51.56.............................. Sec. 51.57.
Sec. 51.57.............................. Sec. 51.58.
Sec. 51.58.............................. Sec. 51.59.
Sec. 51.59.............................. Sec. 51.60.
Sec. 51.60.............................. Sec. 51.61.
Sec. 51.61.............................. Sec. 51.62.
Sec. 51.62.............................. Sec. 51.63.
------------------------------------------------------------------------
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. 2024-31144 Filed 12-27-24; 8:45 am]
BILLING CODE P
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