`[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 [www.gpo.gov]
[FR Doc No: 2024-31144]



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 Rules and Regulations
                                                 Federal Register
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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: https://www.regulations.gov.

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]
----------------------------------------------------------------------------------------------------------------
                                                                                             Reduced cost to
            Number of lots                   FY 2025 fee              New fee \1\           importer applicant
----------------------------------------------------------------------------------------------------------------
                                                 (1)                      (2)                      (3)
----------------------------------------------------------------------------------------------------------------
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.
----------------------------------------------------------------------------------------------------------------
\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\]
----------------------------------------------------------------------------------------------------------------
                                                                                   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  ..............  ..............
----------------------------------------------------------------------------------------------------------------
\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`