Section 8e Import Inspection Fee Structure

<RULE> DEPARTMENT OF AGRICULTURE <SUBAGY>Agricultural Marketing Service</SUBAGY> <CFR>7 CFR Part 51</CFR> <DEPDOC>[Doc. No. AMS-SC-23-0009]</DEPDOC> <RIN>RIN 0581-AE32</RIN> <SUBJECT>Section 8e Import Inspection Fee Structure</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Agricultural Marketing Service, USDA. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> 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. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Effective January 29, 2025. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> 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> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> 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. <HD SOURCE="HD1">Executive Orders 12866, 13563, and 14094</HD> 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. <HD SOURCE="HD1">Executive Order 13175</HD> 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. <HD SOURCE="HD1">Executive Order 12988</HD> 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. <HD SOURCE="HD1">Background</HD> On June 20, 2024, a proposed rulemaking was published in the <E T="04">Federal Register</E> (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 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. <GPOTABLE COLS="4" OPTS="L2,nj,p7,7/8,i1" CDEF="s50,r50,r50,r50"> <TTITLE> Table 1—SCI Sec. 8 <E T="01">e</E> Inspection Fees for Standard 40,000 Pound Lot: Comparison of FY 2025 Fee to New Fee Structure </TTITLE> [Showing reduced cost for additional lots] <CHED H="1">Number of lots</CHED> <CHED H="1">FY 2025 fee</CHED> <CHED H="1"> New fee  <SU>1</SU> </CHED> <CHED H="1">Reduced cost to importer applicant</CHED> <ROW RUL="s"> <ENT I="22"/> <ENT O="oi0">(1)</ENT> <ENT O="oi0">(2)</ENT> <ENT O="oi0">(3)</ENT> </ROW> <ROW> <ENT I="01">1</ENT> <ENT>$254</ENT> <ENT>$254</ENT> <ENT>$0.</ENT> </ROW> <ROW> <ENT I="01">2</ENT> <ENT>$370</ENT> <ENT>$297</ENT> <ENT>$58.</ENT> </ROW> <ROW> <ENT I="01">3</ENT> <ENT>$486</ENT> <ENT>$355</ENT> <ENT>$116.</ENT> </ROW> <ROW> <ENT I="01">4</ENT> <ENT>$602</ENT> <ENT>$413</ENT> <ENT>$174.</ENT> </ROW> <ROW> <ENT I="01">5</ENT> <ENT>$718</ENT> <ENT>$471</ENT> <ENT>$232.</ENT> </ROW> <ROW> <ENT I="01">Each additional sublot</ENT> <ENT>Plus $116</ENT> <ENT>Plus $58</ENT> <ENT>$58 savings per additiona ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 26k characters. 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