Federal Register / Vol. 74, No. 129 / Wednesday, July 8, 2009 / Rules and Regulations 32391 

1To view the proposed rule and the comments 

we received, go to http://www.regulations.gov/

fdmspublic/component/main?main=DocketDetail&

d=APHIS-2006-0137. 

chain of commerce to clear the system 

and allow the honey industry time to 

reconfigure labels as appropriate. A 90- 

day period is provided for that purpose. 

The Agency has identified some 

Federal rules that may be viewed to 

duplicate or overlap with this rule. 

Under pre-existing Federal laws and 

regulations, country of origin labeling is 

required. 

Such requirements are enforced by 

the U.S. Customs and Border Protection 

(CBP) as authorized by the Tariff Act of 

1930 and CBP regulations (19 U.S.C. 

1304(a) and 19 CFR Part 134). This law 

requires that every imported item must 

be conspicuously and indelibly marked 

in English to indicate to the ‘‘ultimate 

purchaser’’ its country of origin. 

Additionally, repackers are required 

by CBP to mark containers of 

repackaged imports with the English 

name of the country of origin. In the 

event that further reprocessing or 

material is added to the article in 

another country and results in a 

‘‘substantial transformation’’ of the 

product, the other country becomes the 

country of origin within the meaning of 

CBP’s labeling requirements, 19 CFR 

134.1(b) and 134.11. 

AMS has reviewed this rule under the 

Paperwork Reduction Act, 44 U.S.C. 

3501–3520, and has determined that 

there are no additional information 

collection requirements imposed by this 

rule. 

Pursuant to 5 U.S.C. 553, it is found 

and determined upon good cause that it 

is impracticable, unnecessary, and 

contrary to the public interest to give 

preliminary notice prior to putting this 

rule into effect because: (1) This rule has 

to be implemented because of an 

amendment by the Farm Bill to the Act 

and has an effective date of October 6, 

2009; and (2) this rule provides a 60-day 

comment period and any comments 

received will be considered prior to 

finalization of this rule. 

List of Subjects in 7 CFR Part 52 

Food grades and standards, Food 

labeling, Honey, Miscellaneous 

products, Debarment of services, 

Reporting and recordkeeping 

requirements, Approved identification, 

Country of origin labeling, and 

Prohibited uses of approved 

identification. 

■ For the reasons set forth in the 

preamble, 7 CFR part 52 is amended as 

follows: 

PART 52—PROCESSED FRUITS AND 

VEGETABLES, PROCESSED 

PRODUCTS THEREOF, AND CERTAIN 

OTHER PROCESSED FOOD 

PRODUCTS 

■ 1. The authority citation for part 52 

continues to read as follows: 

Authority: 7 U.S.C. 1621–1627. 

■ 2. In part 52, § 52.54 is amended by 

adding paragraph (a)(4) to read as 

follows: 

§ 52.54 Debarment of service. 

(a) * * * 

(4) Country of origin labeling for 

packed honey. (i) The use of a label or 

advertising material on, or in 

conjunction with, packaged honey that 

bears any official certificate of quality, 

grade mark or statement, continuous 

inspection mark or statement, sampling 

mark or statement, or any combination 

of the certificates, marks, or statements 

of the Department of Agriculture is 

hereby prohibited unless there appears 

legibly and permanently in close 

proximity (such as on the same side(s) 

or surface(s)) to the certificate, mark, or 

statement, and in at least a comparable 

size, the one or more names of the one 

or more countries of origin of the lot or 

container of honey, preceded by the 

words ‘Product of’ or other words of 

similar meaning. 

(ii) A violation of the requirements of 

this section may be deemed by the 

Secretary to be sufficient cause for 

debarment from the benefits of the 

regulations governing inspection and 

certification only with respect to honey. 

Dated: June 30, 2009. 

Robert C. Keeney, 

Acting Associate Administrator, Agricultural 

Marketing Service. 

[FR Doc. E9–16029 Filed 7–7–09; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF AGRICULTURE 

Animal and Plant Health Inspection 

Service 

7 CFR Part 354 

[Docket No. APHIS–2006–0137] 

RIN 0579–AC22 

User Fees; Export Certification for 

Plants and Plant Products 

AGENCY: Animal and Plant Health 

Inspection Service, USDA. 

ACTION: Final rule. 

SUMMARY: We are amending the user fee 

regulations by adjusting the fees charged 

for export certification of plants and 

plant products. We are increasing these 

user fees for fiscal years 2010 through 

2012 to reflect the anticipated costs 

associated with providing these services 

during each year. We are also adding a 

new user fee for Federal export 

certificates for plants and plant products 

that an exporter obtains from a State or 

county cooperator in order to recover 

our costs associated with that service. 

Finally, we are making several 

nonsubstantive changes to the 

regulations for clarity. These changes 

will enable us to properly recover the 

costs of providing export certification 

services for plants and plant products. 

DATES: Effective Date: October 1, 2009. 

FOR FURTHER INFORMATION CONTACT: For 

information concerning program 

operations, contact Mr. Marcus 

McElvaine, Senior Export Specialist, 

Phytosanitary Issues Management, PPQ, 

APHIS, 4700 River Road Unit 140, 

Riverdale, MD 20737–1236; (301) 734– 

8414. For information concerning rate 

development, contact Mrs. Kris Caraher, 

User Fee Section, Financial Services 

Branch, Financial Management 

Division, MRPBS, APHIS, 4700 River 

Road Unit 55, Riverdale, MD 20737– 

1232; (301) 734–0882. 

SUPPLEMENTARY INFORMATION: 

Background 

On June 12, 2007, we published in the 

Federal Register (72 FR 32223–32230, 

Docket No. APHIS–2006–0137) a 

proposal 1 to amend the user fee 

regulations in 7 CFR 354.3 by adjusting 

the fees charged for export certification 

of plants and plant products. We 

proposed to increase these user fees for 

fiscal years (FYs) 2007 through 2012 to 

reflect the anticipated costs associated 

with providing these services during 

each year. We also proposed to add a 

new user fee for Federal export 

certificates for plants and plant products 

that an exporter obtains from a State or 

county cooperator in order to recover 

our costs associated with that service 

and to make some additional 

nonsubstantive changes to the 

regulations for greater clarity. The 

proposed changes were intended to 

enable us to properly recover the costs 

of providing export certification services 

for plants and plant products. 

We solicited comments concerning 

our proposal for 60 days ending August 

13, 2007. We received 75 comments by 

that date. They were from producers, 

exporters, research institutions, relief 

agencies, and representatives of State 


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and county governments. They are 

discussed below by topic. 

A number of commenters stated that 

the adjustments to the existing fees, 

together with the addition of the 

proposed new fee for certificates issued 

on behalf of the Animal and Plant 

Health Inspection Service (APHIS) by 

State and county cooperators, would 

increase both the paperwork burden and 

the cost of doing business for exporters 

of various products, including seeds, 

hardwood lumber, cotton, beans, 

daylilies, and rice, thus making U.S. 

exports less competitive than they are 

now. It was also stated that the 

proposed fees would adversely affect 

small entities, since many of these 

exporters are small, according to the 

Small Business Administration’s 

(SBA’s) criteria. 

We do not anticipate that the rule will 

entail any increase in the paperwork 

burden for the exporters referred to 

above, and the commenters did not 

provide details or examples to the 

contrary. Payment of the increased fees 

may increase the up-front costs of doing 

business for some entities; however, 

these entities benefit from the export 

certification services we provide, 

without which their goods would not be 

allowed into the importing countries. 

The fees are necessary in order for us to 

recover the cost of providing these 

services. Potential impacts of the fee 

adjustments on small entities, which we 

anticipate to be small, are discussed in 

the full economic analysis and in the 

summary of it presented later in this 

document. Because the costs APHIS 

incurs in providing export services vary 

according to the type or value of the 

shipment but are the same regardless of 

whether the exporter is a large or small 

entity, we cannot offer discounts to the 

latter if we are to recover our costs fully. 

As we noted in the Supplementary 

Information section of the June 2007 

proposed rule, the user fees supporting 

the Export Program have not been 

adjusted since 1996, and, due to 

inflation and other factors, we have not 

been fully recovering the cost of 

providing our export services in recent 

years. Since 1996, the increase in the 

cost of administering the Export 

Program has actually outpaced the 

inflation rate. Many new overseas 

markets for U.S. agricultural 

commodities have opened up since 

then, and U.S. exports have increased 

correspondingly, both in overall 

volumes and in the variety of 

commodities being exported. Our 

workload has increased due to the 

increase in volumes of exports, and the 

need to review and evaluate new 

commodities for export and new foreign 

country phytosanitary requirements has 

made the background work required to 

issue export certificates more complex. 

Some commenters stated that the 

adjusted user fees will increase 

production costs for growers. 

The cost of obtaining a phytosanitary 

certificate to export a commodity is not 

a direct production cost. While we do 

recognize that the adjusted fees will 

raise the costs of doing business, as 

noted earlier, affected entities also 

benefit from the export services we 

provide. Moreover, we need to recover 

fully the costs of providing those 

services. Because we last raised user 

fees in 1996, we have not been fully 

recovering these costs. 

A few commenters expressed the 

concern that the increased fees could 

adversely affect the activities of hunger 

relief agencies and research institutions. 

Such institutions sometimes export 

high-value shipments but for 

noncommercial purposes. 

We do not agree with this comment. 

Under most circumstances, shippers are 

subject to the higher commercial fees if 

the value of their shipment exceeds 

$1,250. Commercial shipment is defined 

in § 354.3(a), however, as a shipment for 

gain or profit. As long as they can 

provide the proper documentation to 

demonstrate that there are no profits 

associated with their shipments, relief 

agencies and research institutions are, 

and would continue to be, subject to the 

significantly lower rates applicable to 

noncommercial shipments even if the 

value of a shipment exceeds $1,250. To 

qualify for the noncommercial rate, the 

exporter, shipper, or broker must 

present one of the following documents: 

CCC 512, Notice of Commodity 

Availability; KC 269, Notice to Deliver; 

or KC 269–A, Forwarding Notice. 

Offering additional discounts or 

exemptions for relief agencies and 

research institutions would not allow us 

to recover the costs associated with the 

export certification services that we 

provide them. 

Some commenters stated that our 

proposed fee increases were unjustified 

because many of the inspections that 

need to be performed before 

phytosanitary export certificates can be 

issued are conducted under compliance 

agreement by personnel not affiliated 

with APHIS’ Plant Protection and 

Quarantine (PPQ) program. 

Because it is still necessary for us to 

recover the costs associated with 

administering such compliance 

agreements, which we are not doing 

under the current fee structure, we will 

not be making any changes to the final 

rule as a result of these comments. 

Compliance agreements, which are 

voluntary, are intended to help 

exporters to ship their products more 

quickly. Such agreements do not 

alleviate APHIS’ costs for reviewing 

certificates and overseeing and 

administering the export program. 

A commenter suggested that 

increasing the export certification user 

fees may actually be detrimental to our 

efforts to prevent the spread of plant 

pests and diseases because exporters 

may attempt to ship their goods without 

phytosanitary certificates in order to 

avoid paying the fees. 

Export certification is a service 

provided by APHIS to enable exporters 

to ship their goods to foreign countries 

that require such certification. An 

exporter who elects to ship without a 

phytosanitary certificate that is required 

by the importing country runs the risk 

of having the consignment rejected or 

destroyed. 

Some commenters viewed our 

proposed incremental fee increases each 

fiscal year as potentially confusing and 

burdensome. It was suggested that, 

rather than raise the fees each year, we 

do so only once, setting each of them 

somewhere in the middle range of our 

projections. Thus, for example, rather 

than having our fees for commercial 

shipments rise from $99 to $106 over 

the period covered by the rulemaking, 

as we projected in the June 2007 

proposed rule, we might set the fee at 

$103 initially and not make any further 

adjustments. 

We do not agree that the incremental 

fee increases are confusing or 

burdensome. The regulations will 

clearly indicate that on set days, the fees 

will increase. Federal Register notices 

will be issued before the fees are 

increased each year to remind users of 

the upcoming adjustments. Setting the 

fees years in advance is actually 

beneficial to industry because it allows 

entities to plan and budget accordingly. 

Setting a single fee for the entire period 

covered by this rulemaking in the 

middle range of the fee scale, as 

suggested by the commenters, would 

not allow us to recover our costs fully 

in the later years. 

One commenter stated that the initial 

fee increases should be implemented 

over 2 years, rather than 1, to soften 

their impact on industry. 

We agree with this commenter that a 

2-year phase-in period will be less 

burdensome to industry than an 

immediate implementation of the full 

fees, since, under the June 2007 

proposed rule, the steepest, and thus 

potentially the most burdensome, 

proposed fee increases would have gone 

into effect in the first year of the period 

covered by the rulemaking. 


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Accordingly, under this final rule, the 

initial increases and the new 

administrative fee will be phased in 

over a 2-year period. For reasons 

discussed in greater detail below, the 

initial fee changes will go into effect at 

the beginning of FY 2010 rather than 

upon publication of this final rule. The 

fees for FY 2010 will be set at a level 

reflecting half the necessary increase, 

meaning that the fees will not cover our 

full costs during that fiscal year and that 

the remaining costs will have to be 

covered using other funds. The full fees 

will be in place at the beginning of FY 

2011, which will be the first year in 

which they will provide for full 

recovery of export program costs. 

A commenter noted that many 

exporters request multiple and often 

similar phytosanitary certificates at one 

time. Many exporters that ship on a 

regular basis batch their requests for 

phytosanitary certificates, a practice that 

makes the certification process easier 

and more economical for APHIS than 

would be the case when requests are 

submitted singly. Neither the existing 

nor the proposed fee structures 

recognize these savings, however. It was 

suggested that when requests for 

certificates are batched, thereby 

lowering APHIS’ processing costs per 

certificate, charging the same fee for 

each certificate is not justified. 

We will not be making any changes to 

the final rule in response to this 

comment, though we may reconsider 

this issue in the future. As explained in 

the preamble to the June 2007 proposed 

rule, we estimate our future costs based 

on data from prior fiscal years, and we 

calculate our user fees by dividing the 

sum of the costs of providing each 

service by the projected volumes. We 

base our fee calculations on the total 

estimated volume of certificates 

endorsed to arrive at the same fee for 

each fee category, regardless of the level 

of complexity of one certification versus 

another or the similarity of subsequent 

certifications to ones already completed. 

Adding a new certificate category and a 

correspondingly lower fee for 

certifications that are considered similar 

to ones already endorsed is not 

desirable due to our averaging approach 

to rate-setting and is contrary to our goal 

of having a simplified fee structure. 

A commenter stated that if APHIS 

commits an error that makes it 

necessary to replace an export 

certificate, the shipper or producer 

should not be liable for any additional 

fees. 

We agree with this comment. It has 

been, and will continue to be, our 

practice not to charge additional fees in 

such cases. We also would not charge 

additional fees when an error by a State 

or county cooperator that has issued a 

certificate on APHIS’ behalf necessitates 

a replacement certificate. If a certificate, 

whether issued directly by APHIS or on 

behalf of APHIS by a State or county 

cooperator, needs to be replaced for 

other reasons, e.g., as a result of a 

request by an exporter, the normal fees 

would apply. 

A commenter questioned the 

justification for the increases in our 

existing fees, stating that APHIS’ costs 

for providing export certification 

services should decrease over time, 

rather than increase as we are 

projecting, due to technological 

advances, such as full implementation 

of the Phytosanitary Certificate Issuance 

and Tracking System (PCIT). 

We do anticipate that the further 

development and wider use of the PCIT 

will enable us to realize some cost 

savings. As we noted in the June 2007 

proposed rule, however, the fee 

adjustments are needed to enable us to 

recover the full costs of our export 

certification programs. These costs 

include ones that we may incur for the 

development of new technologies, as 

well as, among others, salaries and 

benefits, utilities, rents, and office 

equipment, and information systems 

development, all of which tend to rise 

from year to year. We review our costs 

and fees periodically, however, and will 

consider future rulemaking to reduce 

the fees if wider use of the PCIT results 

in sufficient cost savings to justify such 

a reduction. Any collections in excess of 

our costs will remain in the account to 

be used only for export phytosanitary 

services. The need for us to maintain a 

reasonable reserve in this account is 

discussed in greater detail below. 

A commenter stated that, because of 

the size and magnitude of our proposed 

fees, they should be considered a tax. 

We do not agree with this comment. 

A tax is money paid by the general 

public to support general Government 

operations. A user fee is money paid for 

a specific Government service by the 

beneficiary of that service and is 

designed to recover the costs of 

providing that service. The user fees 

covered by this rulemaking are paid by 

exporters who benefit from our export 

certification services, which enable 

them to have their goods allowed entry 

by the countries of destination. The fees, 

in turn, allow us to recover the full costs 

of providing these services. 

A commenter stated that our export 

certification user fees should be applied 

only to offset the costs of the issuance 

of the actual certificate and not to cover 

departmental charges and other program 

costs. Therefore, according to this 

commenter, the fees should be lower 

than those we are proposing. 

We do not agree with this comment. 

We have a congressional mandate to 

recover our full program costs by means 

of user fees. As explained in the 

proposed rule and noted above, these 

include direct labor and various other 

costs. 

Some commenters stated that 

information on how we calculated our 

reserve funds was lacking in the 

proposed rule, while others questioned 

the need for the reserve or viewed the 

amounts to be set aside as excessive. 

We do not agree with these 

commenters. As we noted in the June 

2007 proposed rule, a reasonable reserve 

is needed to ensure that we have 

sufficient operating funds in cases of 

fluctuations in activity volumes or 

unanticipated events that could impact 

the export certification program. After 

calculating our projected costs for the 

period covered by this rulemaking using 

prior year costs, added inflationary 

factors, and planned new costs, we then 

added in the cost of maintaining that 

reserve. We anticipate that our user fees 

will generate a reserve fund of 5 percent 

per year, an amount that will provide 

for the maintenance of up to 3 to 5 

months’ operating expenses. We intend 

to monitor the reserve balance closely 

and propose adjustments in our fees as 

necessary to bring these user fees into 

line with our actual program costs. If we 

determine that any fees are too high and 

are contributing to unreasonably high 

reserve levels, we will undertake 

rulemaking to lower the fees as quickly 

as possible through our required 

rulemaking process. Conversely, if it 

becomes necessary to increase any fees 

because reserve levels are being drawn 

too low, we will undertake rulemaking 

to increase the fees. 

A large number of commenters raised 

issues specific to the new administrative 

fee for certificates issued by State or 

county cooperators on APHIS’ behalf. 

Commenters questioned the justification 

for the new fee and stated that the 

amount was too high, having been 

calculated using erroneous data on 

volumes. Others expressed concern over 

the financial and other burdens that 

may be faced by State and county 

governments in collecting the fees from 

exporters and remitting them to APHIS, 

the mechanics of the collection and 

remittance processes, and the legal and 

constitutional authority of the States 

and counties to collect such fees on 

behalf of APHIS. 

Some commenters questioned the 

justification for this new fee on the 

grounds that most of the administrative 

costs of issuing export certificates are 


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32394 Federal Register / Vol. 74, No. 129 / Wednesday, July 8, 2009 / Rules and Regulations 

already borne by States or counties and 

that APHIS does not provide significant 

oversight of the process of issuing 

phytosanitary certificates. In the view of 

these commenters, the administrative 

costs to APHIS for the issuance of 

export certificates on its behalf by State 

and county cooperators were not of 

sufficient magnitude to justify the fee. 

The administrative fee is intended to 

cover the direct labor and 

administrative support costs incurred by 

APHIS when export certificates are 

issued on its behalf by State and county 

cooperators. Administrative support 

costs generally include the following: 

Local clerical and administrative 

activities, indirect labor hours 

(supervision of personnel and time 

spent doing work that is not directly 

connected with the service but which is 

nonetheless necessary); travel and 

transportation for personnel; supplies, 

equipment, and other necessary items; 

and training. Agency overhead is the 

pro rata share, attributable to a 

particular service of the management 

and support costs for all Agency 

activities. Included are the costs of 

providing budget and accounting 

services (tracking volumes, rate setting, 

policy etc.), management support, 

including the Administrator’s office and 

support at the regional level, personnel 

services, public information service, and 

liaison with Congress. Additional costs 

that pertain specifically to phytosanitary 

certificates issued on APHIS’ behalf by 

State and county cooperators include 

the costs APHIS incurs in training State 

and county personnel to issue the 

certificates, in maintaining the export 

requirement database (a database 

containing the shipping requirements of 

foreign countries, which serves as a 

resource for certifying officials and U.S. 

exporters), and in conducting reviews of 

the program. 

A couple of commenters suggested 

that in instances where State or county 

fees would apply in addition to the 

APHIS administrative fee, APHIS 

should collect both fees and then 

reimburse the State or county for its 

portion on a quarterly or monthly basis. 

The commenters suggested that such a 

practice would help to minimize 

confusion and duplication of effort on 

the part of exporters, who would then 

only receive one invoice per certificate 

issued. 

This functionality is now available 

within the PCIT. Additional information 

may be obtained from the PPQ program 

operations personnel listed under FOR

FURTHER INFORMATION CONTACT. 

Some commenters stated that our 

volume estimates for certificates issued 

by State and county cooperators 

appeared to be low. The proposed rule 

projected that a lower number of 

certificates would be issued by State 

and county cooperators in 2007 than the 

report by Kadix Systems, discussed in 

the June 2007 proposed rule, stated 

were actually issued in 2003. The 

commenters believed that the Kadix 

figure is a more accurate measure of the 

number of certificates issued by State 

and county cooperators than are our 

volume estimates. If the actual volumes 

are significantly higher than our 

estimates, the commenters stated, then 

the actual revenues that will accrue to 

APHIS as a result of these fees will also 

be considerably higher than what we 

projected. Therefore, we should set the 

administrative fee at a lower level. 

After considering these comments, we 

reviewed our data in order to identify 

true export certificate user fee costs and 

volumes. We used prior year accounting 

data from the Financial Foundation 

Information System and the Financial 

Data Warehouse/Brio reports, which 

track and record expenses that support 

the Phytosanitary Export Certificate user 

fee program. We then added to those 

costs any planned new source funding, 

such as new staffing costs (plus support 

costs for new staffing) and automation 

initiatives (e.g., further development of 

the PCIT and the export requirement 

database); training; and the pro rata 

share of the distributable accounts such 

as agency overhead, departmental 

charges, rent, economic assumptions, 

and a reasonable amount to be 

recovered in the reserve account. We 

then split our total costs for each fiscal 

year into each individual certification 

category. We based our projected 

volumes for certificates issued by State 

and county cooperators in FY 2007 on 

Work Accomplishment Data System 

data, which were provided by PPQ’s 

Eastern and Western regional offices. 

Our projections allowed for a general 

trade increase of 1 percent each year. 

We assumed that 87 percent of 

customers, on average, will use the PCIT 

and that 13 percent will not. We split 

the volumes based on these percentages 

and divided the total costs by the 

volumes to calculate the administrative 

fee for phytosanitary certificates issued 

by States and counties using the PCIT 

and those not using the system. 

We also determined, as a result of our 

review, that the number of State and 

county-issued Federal phytosanitary 

certificates had been underestimated 

and that, consequently, the proposed 

administrative fee was too high. We 

have therefore recalculated the 

administrative fee based on a revised 

State/county volume estimate of 

367,137. For those States and counties 

issuing phytosanitary certificates 

through the PCIT, the administrative fee 

will initially be $3 per certificate under 

the 2-year phase-in and will 

subsequently rise to $6 in FYs 2011 and 

2012. For those States and counties 

issuing paper phytosanitary certificates, 

the administrative fee will be $6 per 

certificate initially and will 

subsequently rise to $12 in FYs 2011 

and 2012. Since all phytosanitary 

certificates issued directly by APHIS 

must be issued through the PCIT, the 

two-level administrative fee applies 

only to State- and county-issued export 

certificates. 

The reason for adopting a two-tiered 

fee structure is because there are many 

more costs associated with paper 

phytosanitary certificates than there are 

with those issued electronically through 

the PCIT. Paper phytosanitary 

certificates entail additional costs for 

printing, distributing, controlling, and 

reviewing the paper certificates, as well 

as billing, collection, recordkeeping, 

storage, and archiving. On the other 

hand, PCIT-issued phytosanitary 

certificates will be maintained in the 

automated system, with issuance, 

collection, and accounting functions all 

handled at the same time. This process 

is much more cost-effective than issuing 

paper certificates. 

Some commenters suggested that the 

new administrative fee is unjustified 

because it shifts costs from APHIS to 

States and counties. 

Collecting the new administrative fee 

and remitting it to APHIS could entail 

some new administrative and 

recordkeeping costs for State and county 

governments, especially for those that 

do not use the PCIT. We anticipate, 

however, that in most cases, these costs 

will ultimately be recovered from 

exporters—the users and beneficiaries of 

our export services—in the form of 

increased State or county user fees. 

Some representatives of State and 

county governments stated that 

collecting the administrative fee on 

APHIS’ behalf could place a significant 

financial burden on States and counties, 

the magnitude of which we 

underestimated. Some States and 

counties, according to their 

representatives, do not have adequate 

personnel or funds to collect the fees. 

While we recognize that there could 

be some additional burden on States 

and counties, States and counties can 

avoid the costs associated with 

collection activity by using the PCIT. 

The PCIT provides the States and 

counties with a more efficient and costeffective means of collecting, tracking, 

and remitting the fees than does the use 

of paper certificates. 


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Federal Register / Vol. 74, No. 129 / Wednesday, July 8, 2009 / Rules and Regulations 32395 

Some commenters indicated that 

States and counties may also lack 

mechanisms for tracking and collecting 

the administrative fee and remitting the 

revenues to APHIS. It was also stated 

that information was lacking in the 

proposed rule regarding how these 

processes will work. One commenter 

cited in particular a lack of detail on 

allowable time intervals for States or 

counties to remit fees to APHIS. 

The June 2007 proposed rule, in 

§ 354.3(g)(3)(i), indicated that the fee 

may be remitted directly to APHIS by 

the exporter through the PCIT, or, if the 

PCIT is not used, the State or county 

issuing the export certificate is 

responsible for collecting the 

administrative fee and remitting it 

monthly to APHIS at the address given. 

A commenter stated that the proposed 

rule was unclear about whether State or 

county cooperators issuing paper 

certificates would be charged by APHIS 

for blocks of certificates. 

The instructions for remittance to 

APHIS by States and counties of fees 

collected on APHIS’ behalf for paper 

certificates, contained in § 354.3(g)(3) of 

the proposed rule, did not distinguish 

between remittances for individual 

certificates and blocks of certificates. 

States or counties may issue blocks of 

paper export certificates and charge the 

exporter for them in accordance with 

their own regulations. 

A commenter suggested that we 

should either delay imposing the 

administrative fee for certificates issued 

by State and county cooperators until 

the PCIT is in wide use or we should 

use the submitted copies of Federal 

phytosanitary certificates to invoice 

shippers directly for the proposed fee. 

We do not agree with this comment. 

The PCIT has been available for over 2 

years, and its use is now mandatory for 

all APHIS-issued phytosanitary 

certificates. Over 20 percent of all 

phytosanitary certificates issued in 2007 

were issued through the PCIT. The 

advantages offered by the system should 

provide ample incentive for all States 

and counties to adopt it. 

Some commenters discussed issues of 

legal and/or constitutional authority in 

relation to the administrative fee. There 

are States and counties, it was 

suggested, that may not have the legal 

authority to collect the administrative 

fee on behalf of a Federal agency. 

Changes to State or county laws or 

regulations may be needed, in such 

cases, to allow for such collection 

activity. In addition, the States and 

counties are operating under 

memoranda of understanding with 

APHIS that do not direct them to collect 

the fees. One commenter questioned 

whether APHIS has the constitutional 

authority to mandate that a State or 

county charge a particular amount for 

an export certificate. 

We will not be making any changes to 

the final rule in response to these 

comments. States and counties would 

not have to change their laws or 

regulations if the certificate is issued 

through the PCIT and the exporter can 

pay the administrative fee directly to 

APHIS. In addition, APHIS has been 

reaching out to State and county 

governments on this issue for more than 

4 years in order to give those 

governments adequate time to prepare 

for the implementation of this new fee. 

We will continue to work with States 

and counties to help them overcome any 

legal hurdles to implementation. 

A number of commenters raised 

issues related to the effect of the 

proposed rule on specific industries. 

Among those who commented were 

representatives of producers and 

exporters of such products as table 

grapes and tree fruit, hardwood, cotton, 

seeds, grain and oilseed, and southern 

pine lumber. 

Some commenters stated that the 

industries they represented would be 

burdened more than others by the fee 

adjustments. It was suggested that 

California-based producers and 

exporters of table grapes and tree fruit 

would be particularly affected by the 

new administrative fee because those 

are the leading commodities exported 

from the State. A representative of the 

hardwood industry stated that 

hardwood exporters do not have the 

option of sending bulk shipments, 

unlike exporters of other agricultural 

commodities, due to the weight of the 

shipments and the phytosanitary 

requirements of foreign countries. The 

increase in the cost per container 

resulting from the adjusted fees, it was 

stated, would greatly increase the costs 

of doing business for hardwood 

exporters. 

We do not agree with these 

comments. It is to be expected that 

producers and exporters of commodities 

such as table grapes and tree fruit, who 

use our export services frequently, will 

account for a larger share of the fees we 

collect than those that use the services 

less frequently. Neither that industry 

nor the hardwood industry is being 

singled out, however. The fees are the 

same for all individuals and/or entities 

and are designed to enable us to recover 

the full costs of providing the export 

certification services that both the table 

grapes and tree fruit and the hardwood 

industry use and from which they both 

benefit. 

It was stated that export certification 

fees for cotton should not be raised. 

Commenters who took this position 

believed that the cotton industry’s selfinspection programs justify keeping the 

fees as they are. It was also suggested 

that APHIS now has only a limited role 

in the certification procedure for cotton 

exports. The current compliance 

agreement between the industry and 

APHIS has transferred a significant 

amount of the workload and the costs 

from the agency to the industry. These 

transfers of workload and costs, 

according to the commenters, should be 

considered by APHIS in setting the fees. 

As noted earlier in this document, 

voluntary compliance agreements do 

not eliminate the labor and other costs 

APHIS incurs in reviewing certificates 

and overseeing and administering the 

export program. We still need to recover 

those costs, whether or not a 

compliance agreement is in effect. 

A commenter stated that the costs we 

incur for certification programs for 

cotton exports could be adequately 

managed if APHIS would direct the 

current export certification user fees 

collected from the cotton industry to 

develop the PCIT further. 

We are currently working on 

improving and expanding the 

capabilities of the PCIT so that it can be 

of greater benefit to all users. 

Commenters representing the seed 

industry stated that entities that are 

involved in the National Seed Health 

System or that use the PCIT should pay 

lower fees than other entities because 

both those programs help increase 

efficiency and cut costs for APHIS. 

It is true that the National Seed Health 

System and the PCIT help increase 

efficiency and cut costs. We will 

consider this comment and may address 

the issue again in future rulemaking. 

Representatives of the grain and 

oilseed industries stated that the export 

user fee adjustments should not apply to 

their commodities because most of the 

costs of the sampling, examination, and 

documentation needed to complete 

phytosanitary certification are provided 

for under separate user fees paid to 

USDA’s Grain Inspection, Packers and 

Stockyards Administration (GIPSA). 

It is true that exporters of these 

commodities pay separate user fees to 

GIPSA and that GIPSA performs the 

majority of the work required to 

complete phytosanitary certification. At 

the present time, however, we do not 

have the ability to isolate the costs that 

remain for APHIS after GIPSA’s work is 

performed and cannot exempt any 

specific industries or businesses from 

our user fee adjustments. Although we 

have attempted to minimize the cost of 


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our services, thereby keeping APHIS 

user fees at the lowest possible level, 

allowing such exemptions could result 

in shortfalls and service cutbacks. 

However, we will take these comments 

under consideration and reassess our 

fees as needed. 

A commenter advocated eliminating 

phytosanitary inspections for southern 

pine lumber, and adopting the same 

policy as we use with heat treatment 

certificates for lumber destined for 

European Union countries. Such inspections are performed to 

meet the requirements of the importing 

countries rather than those of APHIS. 

APHIS is not able to drop or change 

these inspection requirements 

unilaterally. Some commenters asserted that the 

June 2007 proposed rule did not provide 

enough information on how we 

calculated our projected costs and fees. 

One commenter stated that not enough 

information was presented in the 

proposed rule to determine which of 12 

new cost categories cited by the Kadix 

report were included in determining our 

base costs. Another commenter cited a 

lack of information on costs attributable 

to new staffing and information 

technology initiatives. It was suggested 

that users might be more receptive to 

new or increased user fees if they could 

a see more detailed breakdown of our 

costs. 

We do not agree with this comment. 

The SUPPLEMENTARY INFORMATION

section of the June 2007 proposed rule 

contained an extensive discussion of 

our user fee accounting procedures. 

This discussion included an 

explanation of the types of program 

costs we incur and our procedures for 

identifying prior year costs and 

projecting future costs. We also 

included a table that contained 

estimated costs, broken down by 

category, for FY 2007. A commenter stated that the process 

of developing the June 2007 proposed 

rule was flawed. Industry input was 

lacking, according to this commenter, 

and the process as a whole should have 

been more transparent. We have followed our standard 

rulemaking process, including allowing 

stakeholders an opportunity to comment 

on our proposed changes. This final rule 

reflects our consideration of 

stakeholders’ comments. 

Miscellaneous 

The June 2007 proposed rule 

contained projected export certification 

user fees for FYs 2007 through 2012. 

Because FY 2009 is more than half 

complete, this final rule contains 

projected fees for the period from FY 

2010 through FY 2012. We considered 

beginning the phase-in of the new fees 

prior to October 1, 2009, which marks 

the beginning of FY 2010, and then 

raising the fees to the full amount on 

that date. We decided against that 

alternative, however, because it would 

have entailed two fee increases within 

a relatively short time period. We 

estimate the opportunity loss of 

beginning the phase-in of the new fees 

on October 1, 2009, as opposed to 

earlier, to be less than 2.9 percent of the 

program’s operational value, an amount 

we do not consider significant enough 

to warrant the possible confusion that 

increasing the fees twice within a short 

period of time could cause. The tables 

in § 354.3(g) in this final rule have been 

revised accordingly, as have our 

revenue projections in the economic 

summary below and in the full 

economic analysis. Additionally, in this final rule, 

§ 354.3(h), which lists circumstances 

under which APHIS will issue refunds 

of, or credits for, user fees to shippers 

who pay for blocks of export certificates 

to cover commercial shipments, is 

removed and reserved. As noted above, 

we are now using the PCIT whenever 

we issue export certificates directly to 

shippers and thus are no longer issuing 

blocks of paper certificates. Therefore, for the reasons given in the 

proposed rule and in this document, we 

are adopting the proposed rule as a final 

rule, with the changes discussed in this 

document. 

Executive Order 12866 and Regulatory 

Flexibility Act 

This rule has been reviewed under 

Executive Order 12866. The rule has 

been determined to be significant for the 

purposes of Executive Order 12866 and, 

therefore, has been reviewed by the 

Office of Management and Budget. We have prepared an economic 

analysis for this rule. The economic 

analysis provides a cost-benefit analysis, 

as required by Executive Order 12866, 

and a final regulatory flexibility analysis 

that examines the potential economic 

effects of this rule on small entities, as 

required by the Regulatory Flexibility 

Act. The economic analysis is 

summarized below. Copies of the full 

analysis are available on the 

Regulations.gov Web site (see footnote 1 

in this document for a link to 

Regulations.gov) or by contacting the 

people listed under FOR FURTHER

INFORMATION CONTACT. Under this rule, the user fee for the 

certification of commercial or re-export 

shipments will increase from $50 to $77 

in FY 2010. With additional yearly 

adjustments, the fee will increase to 

$104 in FY 2011 and $106 in FY 2012. 

This rule will also increase the user fee 

for low-value commercial or re-export 

shipments (valued at less than $1,250) 

and noncommercial shipments, from 

$23 to $42 in FY 2010, and through 

yearly increases, to $60 in FY 2011 and 

$61 in FY 2012. The user fee for a 

replacement certificate will increase 

from $7 to $11 in FY 2010 and then to 

$15 in subsequent years. In addition, 

this rule will establish an administrative 

user fee for each certificate issued on 

behalf of APHIS by a U.S. State or 

county. This fee for FY 2010 will be set 

at $3 when a certificate is issued 

through the PCIT and at $6 for a paper 

certificate. These fees will rise to $6 and 

$12, respectively, the following year. 

The changes set forth in this rule are 

intended to recover the full costs of 

providing our export certification 

services, which are currently being 

provided for less than their actual costs. 

As noted earlier, our export user fees 

have not been adjusted since 1996. The 

volume of exports of agricultural 

commodities has been growing since 

then. More and more foreign countries 

are requiring phytosanitary certification 

for the products they import, and their 

phytosanitary requirements are 

becoming increasingly numerous and 

complex. All of these factors contribute 

to increasing the costs to APHIS of 

providing these services. If APHIS were 

to continue to collect user fees using the 

rates in effect prior to this rulemaking, 

over the time period covered by this 

rule, total collections would be 

approximately $25 million, which is 

nearly $33 million below the level of the 

projected costs of the program over that 

timeframe. This difference represents 

the shortfall in cost recovery that would 

occur absent the fee changes. 

The export certification services 

covered in this rule are provided to 

exporters of plants and plant products. 

These exporters include those entities 

shipping plants and plant products to 

foreign destinations for commercial as 

well as noncommercial purposes. These 

exporters will be affected by this rule. 

In addition, State and county 

governments providing export 

certification services will be affected. 

A wide variety of commodities are 

potentially eligible for certification 

under the APHIS export certification 

program. Eligibility requirements vary 

by commodity and, in some cases, by 

the degree of processing or treatment 

needed. Eligible commodities generally 

include live plants, fresh and some 

dried fruits, vegetables and nuts, 

unroasted coffee, cereal grains, milling 

products, oil seeds, raw sugar, tobacco, 

wood, and cotton. We cannot place a 

specific value on the commodities that 

have been certified for export. However, 


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in 2007, exports of the covered 

commodity categories were valued at 

nearly $57 billion. In addition, products 

in these commodity categories valued at 

nearly $2 billion were re-exported in 

2007. 

The user fee increases in this rule 

should increase collections in each year 

covered. The increased revenues will go 

to cover the projected costs of 

administering the program and to build 

a reserve to ensure that we have 

sufficient operating funds in cases of 

program cessation or fluctuations in 

activity volumes. The initial fee 

increases cover cost increases that have 

occurred since the last revision of these 

fees, in addition to some of the cost 

increases expected to occur in FY 2010. 

In FY 2012, the new fees for commercial 

and re-export certification could 

generate $9.2 million in additional 

revenue; the new fees for 

noncommercial and low-value 

commercial and re-export certification 

could generate $333,000 in additional 

revenue; the new fee for replacing any 

certificate could generate $58,000 in 

additional revenue; and the new fee for 

administering State- and county-issued 

certificates could generate an additional 

$2.6 million in revenue. 

To the extent that the changes in user 

fees impact exporters’ operational costs, 

any entity that utilizes APHIS’ export 

certification services subject to user fees 

will be impacted. The degree to which 

any entity may be affected depends on 

its market power (the ability to which 

costs can be either absorbed or passed 

on to buyers). While the lack of 

information on profit margins and 

operational expenses of the affected 

entities and the supply responsiveness 

of the affected industries prevents the 

precise prediction of the scale of 

impacts, some conclusions on overall 

impacts to domestic and international 

commerce can be drawn. 

The percentage increases in user fees 

will be large. In all cases, the increases 

will at least double the existing user fees 

by FY 2012. About one-half of the 

increases will occur in FY 2010. If the 

increase in user fees cannot be passed 

on, the profit margins of some entities 

may decline as user fees are increased. 

However, these fees have not been 

updated since 1996, and there are now 

considerable differences between the 

true costs of providing export 

certification services and the user fees 

APHIS has been charging. When a user 

fee does not cover all associated costs, 

those costs are shifted away from those 

receiving and benefiting from the 

service and onto APHIS, and thus, 

ultimately, to the taxpayer. 

As noted above, this rule will increase 

the user fee for commercial export and 

re-export certification from $50 to $77 

in FY 2010. Subsequent increases will 

raise the fee to $106 by FY 2012. These 

changes could generate additional 

annual collections of $9.2 million in FY 

2012. To put these numbers in 

perspective, this fee category is 

projected to generate total collections of 

$17.3 million in FY 2012. This equates 

to less than 0.03 percent of the $58 

billion in eligible commodities that 

were exported or re-exported in 2007. 

Exporters of plants and plant products 

are the domestic entities most affected 

by this rule. Exporters of plants and 

plant products are part of the wholesale 

trade sector of the U.S. economy. These 

entities either sell goods on their own 

account (export merchants) or arrange 

for the sale of goods owned by others 

(export agents and brokers). While the 

increase in the commercial export and 

re-export certification fee is large in 

percentage terms, it is very small 

relative to the revenues generated by 

exporters of plants and plant products. 

This is evident from the average firm 

revenues for some of the main 

industries that will be affected by the 

rule. By this measure the impact of the 

fee increases on entities should be 

limited. Exporters of wood fall under 

the North American Industry 

Classification System (NAICS) code 

423310, ‘‘Lumber, plywood, millwork, 

and wood panel merchant wholesalers.’’ 

The average firm in this category had 

sales of $11.6 million in 2002. Exporters 

of fruits and vegetables fall under 

NAICS code 424480, ‘‘Fresh fruit and 

vegetable merchant wholesalers.’’ The 

average firm in this category had sales 

of $10 million in 2002. Exporters of 

grains, such as corn, wheat, oats, barley, 

and unpolished rice, dry beans, and 

soybeans fall under NAICS code 

424510, ‘‘Grain and field bean merchant 

wholesalers.’’ The average firm in this 

category had sales of $28 million in 

2002. Exporters of leaf tobacco are 

covered under NAICS code 4245902, 

‘‘Leaf tobacco merchant wholesalers.’’ 

The average firm in this category had 

sales of $8.1 million in 2002. Exporters 

of cotton are under NAICS code 

4245904, ‘‘Cotton merchant 

wholesalers.’’ The average firm in this 

category had sales of $35.3 million in 

2002. Exporters of plant seeds and plant 

bulbs are under NAICS code 424910, 

‘‘Farm supplies merchant wholesalers.’’ 

The average firm in this category had 

sales of $11 million. Exporters of 

flowers and nursery stock are under 

NAICS code 424930, ‘‘Flower, nursery 

stock, and florists’ supplies merchant 

wholesalers.’’ The average firm in this 

category had sales of $2.4 million in 

2002. Exporters of various other farm 

product raw materials, such as 

Christmas trees, fall under NAICS code 

4249904, ‘‘Other nondurable goods 

merchant wholesalers.’’ The average 

firm in this category had sales of $2.2 

million in 2002. 

The total impact of the fee increases 

on an exporter will be directly 

proportional to their participation in 

international trade. The greater the 

number of internationally shipped 

consignments in need of certification, 

the more export certification fees will be 

incurred to facilitate that movement. 

Consignments presented for export 

certification range widely in value and 

shipment size, even within the same 

general commodity classification. 

Therefore, the impact of the fee 

increases on specific commodity exports 

cannot be usefully generalized. The 

impact will vary depending on the size 

and value of the consignment. An 

exporter seeking certification for a 

consignment that comprises an entire 

loaded container ship will be less 

impacted than one seeking certification 

for a single shipping container of the 

same commodity. With a higher-valued 

commodity, the fee increase will be 

smaller relative to the value of the 

consignment than it will be for a lowervalued commodity of the same size 

shipment. 

This fee will increase by a total of 108 

percent over the covered period, but the 

total dollar value of the fee increase, 

$56, represents a small fraction of the 

value of many consignments. To put the 

fee increase in perspective, a few 

commodity examples based on single 

container consignments are presented 

below. In order to present consistent 

examples, we assume that a shipment 

presented for certification is represented 

by the capacity of a single shipping 

container. It should be noted that in 

many cases this will give a significant 

overestimate of the impact of the fee 

changes on a given shipment as many 

agricultural products are shipped in 

bulk consignments. Bulk carriers have 

capacities of 10 to 1,000 or more times 

that of a single shipping container. 

Certification fees incurred and their 

significance as part of the overall costs 

of exporting may be reduced by 

consolidating formerly multiple 

consignments into single consignments 

for certification. 

A 40′ by 9′6′′ shipping container has 

a capacity of about 26,040 kilograms 

(kg) or 76.6 cubic meters (m3). In 2006, 

the average value of corn shipments 

from the U.S. was $0.12 per kg. 

Therefore, a 26,040 kg shipment of corn 


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would have been valued at $3,222. The 

total fee increase over the entire time 

period covered in this rule represents 

1.7 percent of this value. In 2006, the 

average value of wheat exports from the 

United States was $0.18 per kg. Thus, a 

26,040 kg shipment would have been 

valued at $4,707. The total fee increase 

over the entire time period covered in 

this rule represents 1.2 percent of this 

value. The average value of fresh grapes 

exported from the United States in 2006 

was $1.79 per kg. Therefore, a halfcontainer, or 13,020 kg, shipment of 

grapes (the value is calculated in this 

manner due to the packaging 

requirements for transporting fresh 

grapes), would have been valued at 

$23,241. The total fee increase over the 

entire time period covered in this rule 

represents 0.2 percent of this value. In 

2006, the average value of logs exported 

from the United States was $150.16 per 

m3. Therefore, a 76.6 m3 shipment of 

logs would have been valued at $11,502. 

The total fee increase over the time 

period covered in this rule represents 

0.5 percent of this value. The average 

value of railroad crossties exported from 

the United States in 2006 was $93.83 

per m3. Thus, a 76.6 m3 shipment of 

crossties would have been valued at of 

$7,187. The total fee increase over the 

time period covered in this rule 

represents 0.8 percent of this value. The 

average value of sawn lumber exported 

from the United States in 2006 was 

$421.29 per m3. Therefore, a 76.6 m3

shipment of sawn lumber would have 

been valued at $32,271. The total fee 

increase over the time period covered in 

this rule represents 0.17 percent of this 

value. 

If a commercial export or re-export 

shipment is valued at less than $1,250, 

the fee for certification will increase in 

FY 2010 from $23 to $42. The new fee 

will represent at least 3.3 percent of the 

value of the shipment. The impact of the 

fee increase may be mitigated to the 

degree that multiple low-value 

shipments can be consolidated into 

single shipments for certification. 

This rule will increase the user fee for 

noncommercial export and re-export 

certification from $23 to $42 in FY 2010, 

to $60 in FY 2011, and to $61 by FY 

2012. Combined with the changes for 

low-value commercial shipments 

(valued at less than $1,250), these 

changes could generate additional 

annual collections of about $333,000 in 

FY 2012. These fees will increase by a 

total of 161 percent. However, it is 

estimated that only about 8,500 of these 

certificates are issued annually. 

This rule will increase the user fee for 

replacing any export certificate from $7 

to $11 in FY 2010 and to $15 in FYs 

2011 and 2012. These changes could 

generate additional annual collections 

of about $58,000. While this increase is 

a doubling of the fee, its impact should 

be small, as there are fewer than 8,000 

certificates replaced annually. 

The Regulatory Flexibility Act 

requires that agencies specifically 

consider the economic impact of their 

rules on small entities. As we have 

previously noted, exporters of plants 

and plant products are the domestic 

entities most affected by this rule and 

are part of the wholesale trade sector of 

the U.S. economy. The overwhelming 

majority of U.S. wholesalers of plants 

and plant products (ranging from 96 to 

99 percent for the various NAICS 

categories discussed above) fall under 

the SBA’s definition of small entities. 

The total impact of the changes 

contained in this rule should be small 

for these entities. The fee changes 

represent a tiny fraction of the value of 

the shipments of plants and plant 

products. Exports and re-exports of 

eligible commodities were valued at 

more than $58 billion in 2007, as noted 

previously. By contrast, the total 

increase in annual collections from user 

fees in this rule will be about $12 

million by FY 2012. 

While the increases in the fees are 

large in percentage terms, they are small 

relative to the revenues generated by 

wholesalers of plants and plant 

products. This is evident from the 

average revenues of firms with fewer 

than 100 employees in some of the main 

industries that will be affected by the 

rule. By this measure, the impact of the 

fee increases on entities should be 

limited. About 58 percent of lumber 

wholesalers (NAICS 423310) had 

between 5 and 100 employees in 2002. 

Average annual sales by these firms 

were $9.8 million. About 37 percent had 

between 5 and 20 employees and 

average annual sales of about $5 

million. About 95 percent of fresh fruit 

and vegetable wholesalers (NAICS 

424480) had fewer than 100 employees 

in 2002. Average annual sales by these 

firms were $7.1 million. About 74 

percent had fewer than 20 employees 

and average annual sales of about $4 

million. About 98 percent of grain and 

field bean wholesalers (NAICS 424510) 

had fewer than 100 employees in 2002. 

Average annual sales by these firms 

were $11.9 million. About 82 percent 

had fewer than 20 employees and 

average annual sales of $6.5 million. 

About 85 percent of leaf tobacco 

wholesalers (NAICS 4245902) had fewer 

than 10 employees in 2002. Average 

annual sales by these firms were $3.1 

million. About 80 percent of cotton 

wholesalers (NAICS 4245904) had fewer 

than 10 employees in 2002. Average 

annual sales by these firms were $10.2 

million. About 69 percent of farm 

supplies wholesalers (NAICS 424910) 

had fewer than 10 employees in 2002. 

Average annual sales by these firms 

were $1.7 million. Average annual sales 

of flowers and florist supplies 

wholesalers (NAICS 424930) were $2.7 

million in 2002. About 83 percent of 

other nondurable goods wholesalers 

(NAICS 4249904) had fewer than 10 

employees in 2002. Average annual 

sales by these firms were $976,000. 

Another 6 percent of these firms had 

from 20 to 99 employees. Average 

annual sales by these firms in 2002 were 

$11 million. 

This rule will impose an 

administrative user fee for each 

certificate issued on behalf of APHIS by 

a State or county. This fee will be set at 

$3 when a certificate is issued through 

the PCIT in FY 2010 and at $6 in FYs 

2011 and 2012. The fee for a paper 

certificate will be $6 in FY 2010 and $12 

thereafter. States and counties issue a 

significant percentage of the 

phytosanitary certificates written. 

APHIS’ activities support the State and 

county operations, as well as 

nationwide export certification 

functions. Because we have not been 

charging a user fee for such certificates, 

we have not been recovering our costs 

for printing, distributing, and tracking 

the paper certificates that we provide to 

the States and counties to issue on our 

behalf or our associated overhead costs. 

The users who obtain export 

certification from a State or county only 

pay for the State or county’s costs to 

deliver the certificate, and nothing to 

support the program at the Federal 

level. 

These new administrative fees could 

generate additional annual collections 

of $2.6 million in FYs 2011 and 2102. 

States and counties that do not use the 

PCIT are likely to incur administrative 

and recordkeeping costs in collecting 

the administrative fees associated with 

paper certificates and remitting them to 

APHIS. To the extent that a State or 

county increases the fees it charges to 

incorporate the administrative fee and 

passes the cost on to exporters, it will 

shift the burden of the fee to the user. 

However, the additional costs to States 

and counties should be low because, in 

most cases, mechanisms are already in 

place for collecting export certification 

fees. In addition, the PCIT is available 

for use by States and counties to issue 

certificates, thus enabling them to avoid 

the administrative and recordkeeping 

costs referred to above. 

Any fee charged for export 

certification services performed by a 


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State or county is determined by the 

individual State or county performing 

the service. Thirty-five States have 

charges for issuing certificates. Twelve 

States have fee structures that duplicate 

APHIS’ fee structure. Currently, States 

and counties charge from $0 to $212 for 

a commercial certificate, with the 

average charge about $28; and from $0 

to $50 for a noncommercial certificate, 

with the average charge about $19. 

States and counties currently charge 

from $0 to $75, with the average charge 

about $16, to replace a commercial 

certificate, and from $0 to $50, with an 

average of about $15, to replace a 

noncommercial certificate. These fees 

could change following the 

implementation of this rule to 

incorporate the Federal administrative 

fee. 

About 70 percent of certificates issued 

in California in 2003 were written in 

eight counties, six of which have rate 

structures currently higher than those of 

APHIS. Only 10 States and 2 California 

counties do not have current legislative 

authority to charge for certificates. 

These 10 States and 2 counties account 

for approximately one-tenth of the 

certificates issued by States and 

counties in a given year. 

In assessing the need for this rule, we 

considered alternatives to the chosen 

course of action. These alternatives are 

discussed below. 

One alternative to this rule would 

have been to leave the regulations 

unchanged. In this case, the fees would 

remain unchanged. However, these fees 

were last updated in 1996 and no longer 

recover the full cost of providing 

certification services. Routine increases 

in the cost of doing business, such as 

inflation, replacing equipment, and 

maintaining databases, have occurred 

since the last update, and volumes have 

increased as well. If APHIS were to 

continue to collect user fees at the 

current rates in FY 2010 through FY 

2012, total collections would be about 

$33 million short of projected program 

costs over that period. Therefore, this 

alternative was rejected. 

Another alternative to this rule would 

have been not to add an administrative 

user fee for each certificate issued on 

behalf of APHIS by a U.S. State or 

county official. However, APHIS’ 

activities support the State and county 

operations, as well as the national 

export certification program. The costs 

to APHIS that are associated with Stateand county-issued certificates have not 

been recovered up to now. The users 

who obtain export certification from a 

State or county only pay for the State or 

county’s costs, and nothing to support 

the program at the national level. 

Therefore, this alternative was not 

pursued. 

Executive Order 12372 

This program/activity is listed in the 

Catalog of Federal Domestic Assistance 

under No. 10.025 and is subject to 

Executive Order 12372, which requires 

intergovernmental consultation with 

State and local officials. (See 7 CFR part 

3015, subpart V.) 

Executive Order 12988 

This final rule has been reviewed 

under Executive Order 12988, Civil 

Justice Reform. This rule: (1) Preempts 

all State and local laws and regulations 

that are inconsistent with this rule; (2) 

has no retroactive effect; and (3) does 

not require administrative proceedings 

before parties may file suit in court 

challenging this rule. 

Paperwork Reduction Act 

This final rule contains no 

information collection or recordkeeping 

requirements under the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501 

et seq.). 

List of Subjects in 7 CFR Part 354 

Animal diseases, Exports, 

Government employees, Imports, Plant 

diseases and pests, Quarantine, 

Reporting and recordkeeping 

requirements, Travel and transportation 

expenses. 

■ Accordingly, we are amending 7 CFR 

part 354 as follows: 

PART 354—OVERTIME SERVICES 

RELATING TO IMPORTS AND 

EXPORTS; AND USER FEES 

■ 1. The authority citation for part 354 

continues to read as follows: 

Authority: 7 U.S.C. 7701–7772, 7781–7786, 

and 8301–8317; 21 U.S.C. 136 and 136a; 49 

U.S.C. 80503; 7 CFR 2.22, 2.80, and 371.3. 

■ 2. Section 354.3 is amended as 

follows: 

■ a. In paragraph (a), by removing the 

definitions of export certificate for 

processed plant products, phytosanitary 

certificate, and phytosanitary certificate 

for reexport, and adding a new 

definition of certificate, in alphabetical 

order, to read as set forth below. 

■ b. In paragraph (g), by removing 

paragraphs (g)(2) and (g)(5); by 

redesignating paragraphs (g)(3) and 

(g)(4) as (g)(4) and (g)(5), respectively; 

and by revising paragraph (g)(1) and 

adding new paragraphs (g)(2) and (g)(3) 

to read as set forth below. 

■ c. By removing and reserving 

paragraph (h). 

§ 354.3 User fees for certain international 

services. 

(a) * * * 

* * * * * 

Certificate. Any certificate issued by 

or on behalf of APHIS describing the 

condition of a shipment of plants or 

plant products for export, including but 

not limited to Phytosanitary Certificate 

(PPQ Form 577), Export Certificate for 

Processed Plant Products (PPQ Form 

578), and Phytosanitary Certificate for 

Reexport (PPQ Form 579). 

* * * * * 

(g) * * * 

(1) For each certificate issued by 

APHIS personnel, the recipient must 

pay the applicable AQI user fee at the 

time and place the certificate is issued. 

(2) When the work necessary for the 

issuance of a certificate is performed by 

APHIS personnel on a Sunday or 

holiday, or at any other time outside the 

regular tour of duty of the APHIS 

personnel issuing the certificate, in 

addition to the applicable user fee, the 

recipient must pay the applicable 

overtime rate in accordance with 

§ 354.1. 

(3)(i) Each exporter who receives a 

certificate issued on behalf of APHIS by 

a designated State or county inspector 

must pay an administrative user fee, as 

shown in the following table. The 

administrative fee can be remitted by 

the exporter directly to APHIS through 

the Phytosanitary Certificate Issuance 

and Tracking System (PCIT), provided 

that the exporter has a PCIT account and 

submits the application for the export 

certificate through the PCIT. If the PCIT 

is not used, the State or county issuing 

the certificate is responsible for 

collecting the fee and remitting it 

monthly to the U.S. Bank, United States 

Department of Agriculture, APHIS, AQI, 

P.O. Box 979043, St. Louis, MO 63197– 

9000. 


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32400 Federal Register / Vol. 74, No. 129 / Wednesday, July 8, 2009 / Rules and Regulations 

Effective dates 

Amount per 

shipment 

PCIT 

used 

PCIT not 

used 

October 1, 2009, through September 30, 2010 ...................................................................................................................... $3 $6 

October 1, 2010, through September 30, 2011 ...................................................................................................................... 6 12 

Beginning October 1, 2011 ...................................................................................................................................................... 6 12 

(ii) The AQI user fees for an export or 

reexport certificate for a commercial 

shipment are shown in the following 

table. 

Effective dates 

Amount 

per 

shipment 

October 1, 2009, through September 30, 2010 ........................ $77 

October 1, 2010, through September 30, 2011 ........................ 104 

Beginning October 1, 2011 .......... 106 

(iii) The AQI user fees for an export 

or reexport certificate for a low-value 

commercial shipment are shown in the 

following table. A commercial shipment 

is a low-value commercial shipment if 

the items being shipped are identical to 

those identified on the certificate; the 

shipment is accompanied by an invoice 

which states that the items being 

shipped are worth less than $1,250; and 

the shipper requests that the user fee 

charged be based on the low value of the 

shipment. 

Effective dates 

Amount 

per 

shipment 

October 1, 2009, through September 30, 2010 ........................ $42 

October 1, 2010, through September 30, 2011 ........................ 60 

Beginning October 1, 2011 .......... 61 

(iv) The AQI user fees for an export 

or reexport certificate for a 

noncommercial shipment are shown in 

the following table. 

Effective dates 

Amount 

per 

shipment 

October 1, 2009, through September 30, 2010 ........................ $42 

October 1, 2010, through September 30, 2011 ........................ 60 

Beginning October 1, 2011 .......... 61 

(v) The AQI user fees for replacing 

any certificate are shown in the 

following table. 

Effective dates 

Amount 

per 

certificate 

October 1, 2009, through September 30, 2010 ........................ $11 

October 1, 2010, through September 30, 2011 ........................ 15 

Beginning October 1, 2011 .......... 15 

* * * * * 

Done in Washington, DC, this 30th day of 

June 2009. 

Cindy Smith, 

Acting Under Secretary for Marketing and 

Regulatory Programs. 

[FR Doc. E9–16146 Filed 7–7–09; 8:45 am] 

BILLING CODE 3410–34–P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 1205 

[Doc. #AMS–CN–09–0015; CN–09–002] 

Cotton Board Rules and Regulations: 

Adjusting Supplemental Assessment 

on Imports (2009 Amendments) 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Final rule. 

SUMMARY: The Agricultural Marketing 

Service (AMS) is amending the Cotton 

Board Rules and Regulations by 

increasing the value assigned to 

imported cotton for calculating 

supplemental assessments collected for 

use by the Cotton Research and 

Promotion Program. An amendment is 

required to adjust the assessments 

collected on imported cotton and the 

cotton content of imported products to 

be the same as those paid on 

domestically produced cotton. In 

addition, AMS is adding and changing 

Harmonized Tariff Schedule (HTS) 

statistical reporting numbers that were 

amended since the last assessment 

adjustment. 

DATES: Effective Date: August 7, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Shethir M. Riva, Chief, Research and 

Promotion Staff, Cotton and Tobacco 

Programs, AMS, USDA, Stop 0224, 1400 

Independence Ave., SW., Room 2639–S, 

Washington, DC 20250–0224, telephone 

(202) 720–6603, facsimile (202) 690– 

1718, or e-mail at 

Shethir.Riva@usda.gov. 

SUPPLEMENTARY INFORMATION: 

Executive Order 12866 

The Office of Management and Budget 

has waived the review process required 

by Executive Order 12866 for this 

action. 

Executive Order 12988 

This rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. It is not intended to have 

retroactive effect. This rule would not 

preempt any State or local laws, 

regulations, or policies, unless they 

present an irreconcilable conflict with 

this rule. 

The Cotton Research and Promotion 

Act (7 U.S.C. 2101–2118) (‘‘Act’’) 

provides that administrative 

proceedings must be exhausted before 

parties may file suit in court. Under 

Section 12 of the Act, any person 

subject to an order may file with the 

Secretary a petition stating that the 

order, any provision of the plan, or any 

obligation imposed in connection with 

the order is not in accordance with law 

and requesting a modification of the 

order or to be exempted therefrom. Such 

person is afforded the opportunity for a 

hearing on the petition. After the 

hearing, the Secretary would rule on the 

petition. The Act provides that the 

District Court of the United States in 

any district in which the person is an 

inhabitant, or has his principal place of 

business, has jurisdiction to review the 

Secretary’s ruling, provided a complaint 

is filed within 20 days from the date of 

the entry of ruling. 

Background 

The Cotton Research and Promotion 

Act Amendments of 1990 enacted by 

Congress under Subtitle G of Title XIX 

of the Food, Agriculture, Conservation, 

and Trade Act of 1990 (Pub. L. 101–624) 

on November 28, 1990, contained two 

provisions that authorized changes in 

the funding procedures for the Cotton 

Research and Promotion Program. 

These provisions are: (1) The 

assessment of imported cotton and 


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