Section 8e Import Inspection Fee Structure

DEPARTMENT OF AGRICULTURE <SUBAGY>Agricultural Marketing Service</SUBAGY> <CFR>7 CFR Part 51</CFR> <RIN>RIN 0581-AE32</RIN> <DEPDOC>[Doc. No. AMS-SC-23-0009]</DEPDOC> <SUBJECT>Section 8e Import Inspection Fee Structure</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Agricultural Marketing Service, USDA. <HD SOURCE="HED">ACTION:</HD> Proposed rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> 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. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Comments must be submitted on or before August 19, 2024. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> 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: <E T="03">https://www.regulations.gov.</E> Comments should reference the date and page numbers of this issue of the <E T="04">Federal Register</E> . 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 <E T="03">https://www.regulations.gov.</E> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Brian E. Griffin at the address above, or at phone (202) 748-2155; fax (540) 361-1199; or email <E T="03">Brian.Griffin@usda.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> 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. <HD SOURCE="HD1">Executive Orders 12866, 13563, and 14094</HD> 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. <HD SOURCE="HD1">Executive Order 13175</HD> 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. <HD SOURCE="HD1">Executive Order 12988</HD> 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. <HD SOURCE="HD1">Background</HD> 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. 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. <GPOTABLE COLS="4" OPTS="L2,i1" CDEF="s50,r25,r25,r50"> <TTITLE> Table 1—SCI Sec. 8 <E T="01">e</E> Inspection Fees for Standard 40,000 Pound Lot: Comparison of FY 2024 Fee to Proposed New Fee, Showing Reduced Cost for Additional Lots </TTITLE> <CHED H="1">Number of lots</CHED> <ENT>$0.</ENT> </ROW> <ROW> <ENT I="01">2</ENT> <ENT>$352</ENT> <ENT>$297</ENT> <ENT>$55.</ENT> </ROW> <ROW> <ENT I="01">3</ENT> <ENT>$462</ENT> <ENT>$352</ENT> <ENT>$110.</ENT> </ROW> <ROW> <ENT I="01">4</ENT> <ENT>$572</ENT> <ENT>$407</ENT> <ENT>$165.</ENT> </ROW> <ROW> <ENT I="01">5</ENT> <ENT>$682</ENT> <ENT>$462</ENT> <ENT>$220.</ENT> </ROW> <ROW> <ENT I="01">Each additional sublot</ENT> <ENT>Plus $110</ENT> <EN ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 23k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━