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Proposed Rule

Withdrawal of Proposed Rule for Fee Increase for Destination Market Inspections of Fresh Fruits, Vegetables and Other Products

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Information about this document as published in the Federal Register.

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Agricultural Marketing Service (AMS), USDA.


Proposed rule: withdrawal.


AMS is withdrawing a proposed rule published in the Federal Register on September 20, 1999 (64 FR 50774). The proposed rule would have revised the regulations governing the inspection and certification for fresh fruits, vegetables and other products by increasing by approximately 14 percent most of the fees charged for the inspection of these products at destination markets. The fees for inspecting multiple lots of the same product during inspections would have increased more significantly and the per package fees for dock-side inspections would have increased and changed from a three interval schedule, based on weight, to a two interval schedule based on different weight thresholds. These revisions were necessary in order to recover, as nearly as practicable, the costs of performing inspection services at destination markets under the Agricultural Marketing Act of 1946 (AMA of 1946). The fees charged to persons required to have inspections on imported commodities in accordance with the Agricultural Marketing Agreement Act of 1937 and for imported peanuts under the Agricultural Act of 1949 also would have been affected.


The proposed rule is withdrawn as of July 28, 2000.


Supporting information used in developing the proposed rule, including comments received during the period for public comment on the proposed rule, are available for public inspection and copy at the Fresh Products Branch Docket File at USDA, AMS, FVP, Fresh Products Branch, Room 2049 South, USDA Stop 0240, 1400 Independence Ave., SW, Washington, DC 20250-0240. For access to the Docket materials, call (202) 720-5870 between 9 a.m. and 3:30 p.m. for an appointment. A reasonable fee may be charged for copying.

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Rob Huttenlocker, USDA Stop 0240, 1400 Independence Ave., SW, Washington, DC 20250-0240, or by calling (202) 720-5870.

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The AMA of 1946 authorizes official inspection, grading and certification, on a user-fee basis, of fresh fruits, vegetables and other products such as raw nuts, Christmas trees and flowers. The AMA of 1946 provides that reasonable fees be collected from the users of the services to cover, as nearly as practicable, the costs of the services rendered. The proposed rule would have amended the schedule for fees and charges for inspection services rendered to the fresh fruit and vegetable industry to reflect the costs necessary to operate the program.

The Agricultural Marketing Service (AMS) regularly reviews its user-fee programs to determine if the fees are adequate. While the Fresh Products Branch (FPB) of the Fruit and Vegetable Programs, AMS, continues to search for opportunities to reduce its costs, the existing fee schedule would not have generated sufficient revenues to cover program costs while maintaining an adequate reserve balance. Current revenue projections for destination market inspection work during FY 99 are $13.7 million with costs projected at $13.9 million and an end-of-year reserve of $2.2 million. However, FPB's trust fund balance for this program will be approximately $2.4 million under the approximate $4.6 million deemed necessary to provide an adequate reserve balance in light of increasing program costs. Further, FPB's costs of operating the destination market program are expected to increase to approximately $14.5 million during FY 00 and to approximately $15.0 million during FY 01. These cost increases will result from inflationary increases with regard to current FPB operations and services (primarily salaries and benefits), the training and equipment required to promote improved workplace safety, and the acquisition of additional computer and related technology.

Employee salaries and benefits are major program costs that account for approximately 80 percent of FPB's total operating budget. A general and locality salary increase for Federal employees, ranging from 3.54 to 4.02 percent depending on locality, effective January 1999, significantly increased program costs. In addition, inflation also impacts FPB's non-salary costs. These factors have increased FPB's costs of operating this program by approximately $500,000 per year. In addition, a general and locality salary increase of 4.8 percent was effective in January 2000. This salary adjustment will increase FPB's costs by over $600,000 per year.

Additional revenues also were necessary in order for FPB to cover the costs of the additional staff, office space, and equipment needed in two federal market offices that were established during FY 99 (e.g., Brooklyn, New York, and Oklahoma City, Oklahoma). Additional revenues also were needed to cover the costs of providing safety orientation training to FPB's personnel and purchasing safety shoes for FPB's inspection personnel. Finally, FPB needed additional funds to cover the costs of securing the equipment (e.g., digital imaging cameras and computers and information systems upgrades) needed to expand FPB's services and to make existing services more efficient in the future.

Congress recently passed and, on June 20, 2000, the President signed legislation (H.R. 2559) (Public Law 106-224), authorizing appropriated funds that will make it possible for FPB to build the Terminal Market Inspection Program's reserve fund by $29 million. Congress and the President also approved an additional $11.55 million in appropriated funds that will make it possible for FPB to implement infrastructure and system improvements. These funds are appropriated for fiscal year 2001. Since Public Law 106-224 addresses the funds needed by AMS, FPB program, it is unnecessary to continue this rulemaking. Therefore, AMS withdraws the proposed rule.

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Authority: 7 U.S.C. 1621-1627.

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Dated: July 21, 2000.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

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[FR Doc. 00-18964 Filed 7-26-00; 8:45 am]