DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 51
RIN 0581-AE32
[Doc. No. AMS-SC-23-0009]
Section 8e Import Inspection Fee Structure
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
SUMMARY: The Agricultural Marketing Service (AMS) of the Department of
Agriculture (USDA) proposes to revise the regulations governing the inspection and
certification for fresh fruits, vegetables, and other products by amending certain fees
charged for Section 8e import inspections from a per-carlot basis to a per-pound basis,
reducing the fee for each additional sublot by 50 percent, and establishing a new fee
calculation for lots less than a carlot. These revisions are necessary to recover, as nearly
as practicable, the costs of performing inspection services on imported commodities in
accordance with the Agricultural Marketing Agreement Act of 1937.
DATES: Comments must be submitted on or before [INSERT DATE 60 DAYS AFTER
DATE OF PUBLICATION IN THE FEDERAL REGISTER].
ADDRESSES: Interested persons are invited to submit comments to the Standardization
Branch, Specialty Crops Inspection Division, Specialty Crops Program, Agricultural
Marketing Service, U.S. Department of Agriculture, National Training and Development
Center; 100 Riverside Parkway, Suite 101; Fredericksburg, Virginia 22406; fax: (540)
361-1199, or via the Internet at: https://www.regulations.gov. Comments should
reference the date and page numbers of this issue of the Federal Register. All comments
submitted in response to this proposed rule will become a part of the public record and be
made available to the public, including any personal information provided, at

https://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Brian E. Griffin at the address above,
or at phone (202) 748-2155; fax (540) 361-1199; or email Brian.Griffin@usda.gov.
SUPPLEMENTARY INFORMATION:
This document would amend regulations at 7 CFR part 51 issued under the
Agricultural Marketing Act of 1946 (7 U.S.C. 1621-1627), as amended.
Executive Orders 12866, 13563, and 14094
The USDA is issuing this proposed rule in conformance with Executive Orders
12866, 13563, and 14094. Executive Orders 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if regulation is necessary, to
select regulatory approaches that maximize net benefits (including potential economic,
environmental, public health and safety effects, distributive impacts, and equity).
Executive Order 13563 emphasizes the importance of quantifying both costs and benefits,
reducing costs, harmonizing rules, and promoting flexibility. Executive Order 14094
reaffirms, supplements, and updates Executive Order 12866 and further directs agencies
to solicit and consider input from a wide range of affected and interested parties through
a variety of means. This rule does not meet the criteria of a “significant regulatory
action” under Executive Order 12866, as supplemented by Executive Order 13563 and
updated by Executive Order 14094. Therefore, the Office of Management and Budget
(OMB) has not reviewed this rule under those orders.
Executive Order 13175
This proposed rule has been reviewed under Executive Order 13175 –
Consultation and Coordination with Indian Tribal Governments, which requires agencies
to consider whether their rulemaking actions would have Tribal implications.
AMS has determined that this proposed rule is unlikely to have substantial direct
effects on one or more Indian Tribes, on the relationship between the Federal

Government and Indian Tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian Tribes.
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988, Civil Justice
Reform. This proposed action is not intended to have retroactive effect. There are no
administrative procedures that must be exhausted prior to any judicial challenge to the
provisions of this rule.
Background
AMS is proposing to charge for certain Section 8e import inspections on a perpound basis and make additional revisions to the fee structure of the Specialty Crop
Inspection Division (Division). Accordingly, under this proposed rule, the fees for
Section 8e import inspections for lots qualifying as a full carlot (or a whole lot) or for lots
less than a full carlot would no longer be calculated on a per-carlot basis. Instead, those
fees would be calculated on a per-pound rate basis. The proposed per-pound rate would
be calculated by dividing the current inspection fee for a full carlot by the average weight
by pound of a full carlot (40,000 pounds) (for example: the current inspection fee for a
full carlot ($242) divided by 40,000 would result in a per-pound rate of $0.00605). The
Division proposes to use 40,000 lbs. as the appropriate measurement for calculating the
per-pound rate. AMS notes that 40,000 lbs. is generally recognized as the standard
weight of the measurement used in USDA-AMS inspection practices when identifying a
full carlot.
Additionally, AMS proposes to have two separate sublot fees: one for Section 8e
sublots and one for non-Section 8e sublots. The term sublot is commonly used to
describe additional lots of the same product. During an inspection, a sublot is generated
when the product differs markedly, and such differences are associated with quality
and/or condition, certain brands, varieties, sizes, or container markings. For an example,

under this proposed rule, the fee for a Section 8e sublot would be reduced by 50 percent,
from the current $110 per sublot fee (the FY 2024 rate) to $55 per sublot. All non-8e
inspection fees would remain unchanged by this proposed rule. The proposed per-pound
rate for a full carlot or for lots less than a full carlot, and the 8e sublot fee, would be
subject to the annual updated Specialty Crops Program’s inspections fee schedule.
Under this proposed rule, for all Section 8e import inspections, AMS would apply
the current lot separation and sampling rates at 7 CFR 51.2(d)(1-3). To calculate
inspection fees for a full carlot, AMS would multiply the current per-pound rate, using
the proposed calculation as noted above, by the total weight of the full carlot, plus any
applicable sublot fees. To calculate the inspection fee for lots less than a carlot, AMS
would multiply the current per-pound rate, using the proposed per-pound rate calculation
as noted above, by the total weight of the lot, with a minimum charge equivalent to 2hours computed at the current established hourly rate, whichever is greater, plus any
sublot fee(s) as applicable.
Currently, fees for all terminal market inspections, including Section 8e import
inspections, are charged on a carlot basis (7 CFR 51.37). The current single carlot fee
structure charges per conveyance and does not account for sampling and inspection time
required for today’s larger conveyances transporting larger volumes. The proposed perpound fee structure will better ensure full recovery of inspection cost by AMS while
mitigating the financial impact on applicants of additional sublot fees.
As shown in Table 1, applicants importing typical 40,000-pound loads comprising
one lot will see no change in inspection fees under this proposed rule. Table 2 shows that
larger size loads, which typically require increased sampling and inspection, will see a
proportional increase in fees under this proposed rule. However, loads currently subject
to additional sublot fees will see a significant decrease in fees per sublot under this
proposed rule. The proposed fee calculation change will more accurately assess fees on

inspected volume, better aligning the Division’s ability to ensure cost recovery while
significantly reducing additional sublot fees charged to applicants. The following
comparison of the Section 8e fee structure is based on FY 2024 fees. Any increase or
decrease to Section 8e fees would be included in the annual fee structure package in
subsequent years.
Columns 1 and 2 of Table 1 compare the currently scheduled FY 2024 fee
structure to the proposed new fee structure for a standard 40,000-pound lot. As shown in
row 1, column 1, the currently scheduled FY 2024 fee structure for one lot is $242. Row
1, column 2 shows that under the proposed new fee structure, the fee for one lot would be
unchanged at $242 but would be expressed at the per pound rate of $0.00605 (multiplied
by 40,000 pounds).
Column 1 (rows 2 through 5) shows that without the proposed new fee structure,
the inspection fee for each additional 40,000-pound increases by $110. Column 2 shows
that with the proposed new fee, the incremental cost per additional lot would be cut in
half to $55. Column 3 shows the cost savings for additional lots.
Table 1. SCI Sec. 8e Inspection Fees for Standard 40,000 Pound Lot: Comparison of
FY 2024 Fee to Proposed New Fee, Showing Reduced Cost for Additional Lots
FY 2024
Proposed
Number of lots
Reduced Cost to Importer Applicant
Fee 1/
New Fee 2/
(2)
(3)
(1)
1
$242
$0
$242
2
$297
$55
$352
3
$352
$110
$462
4
$407
$165
$572
5
$462
$220
$682
Each additional
Plus
Plus $55
$55 savings per additional sublot
sublot
$110
1/ If the proposal in this rule does not go into effect, the FY 2024 inspection fee would be $242 for one
40,000-pound lot plus $110 for each additional lot. For FY 2023, the cost was $225 for the first 40,000pound lot and $103 for each additional lot.
2/ The proposed fee for one standard lot under this rule would be $242, unchanged from the FY 2024
fee, but would be expressed as the per-pound equivalent of $0.00605. ($242 inspection cost per 40,000pound lot divided by 40,000 pounds equals $0.00605 per pound). Each additional lot would cost an
additional $55, a 50% reduction from the FY 2024 incremental cost of $110 that would be in place
without this rule change.

Table 2 shows the proposed new fee structure for alternative lot sizes. Row 2
shows again that the 40,000-pound lot fee would be unchanged at $242. Row 3 shows
that for a 50,000-pound lot, the $302.50 inspection fee would be determined by
multiplying the proposed per-pound rate ($0.00605) by 50,000 pounds. Row 1 shows
that for any lot weighing less than 40,000 pounds, the applicable fee would be a 2-hour
minimum charge at the currently established FY 2024 hourly inspection rate of $116
($116 times 2 equals $232).

Table 2. SCI Sec. 8e Inspection Fees for Alternative Lot Sizes, Proposed Inspection
Rate Per Pound
Inspection fee per lot 1/
Alternative lot sizes
Pounds per lot
2/
(1) Less than full (standard) lot
1/
$232.00 minimum
(2) Standard Lot
40,000
$242.00
(3) Lot 25% larger than standard
50,000
$302.50
1/ For lots less than a standard lot, the fees are computed by multiplying pounds per lot by rate per
pound ($0.00605) with a minimum charge equivalent to 2-hours applied at the current established FY
2024 hourly inspection rate of $116.
2/ Inspection fee per lot for standard lot or larger [(2) and (3)] are computed by multiplying pounds per
lot by rate per pound ($0.00605)

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 these
discussions was a positive perception of the fee changes as proposed.
A 60-day comment period is provided for interested persons to submit comments
on this proposed rule. A 60-day comment period is deemed appropriate because any
change in fee calculations, if adopted, should be in place as soon as possible to move the
program towards an adequate reserve and financial stability.
Initial 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 initial 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 proposed 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 proposed rule would revise the regulations governing the inspection and
certification for fresh fruits, vegetables, and other products by increasing certain fees
charged for Section 8e import inspections on a per-pound basis. These revisions are
necessary to recover, as nearly as practicable, the costs of performing inspection services
on imported commodities in accordance with the Agricultural Marketing Agreement Act
of 1937.
Since the inspection fees to be charged under the proposed new rate structure are
proportional to size of lots, smaller businesses (importers) would not be unduly or
disproportionately burdened. This proposed 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 would remain unchanged.
Tables 3 and 4 show the estimated impacts on the nine Section 8e commodities
affected by this proposed 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. SCI Sec. 8e Commodities Imported: Number of Inspections, Categorized by
Size of Lot Inspected, Using 40,000-Pound Standard Lot Size Threshold, FY2021 FY2023 1/
<=40,000
>40,000
Total
Pct of Total Cumulative
lbs. per
lbs. per
Inspections Inspections
Percent
lot
lot
(2)
(3)
(4)
(5)
(1)
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. SCI Sec. 8e Commodities Imported: Percent of Inspections, Categorized by
Size of Lot Inspected, Using 40,000-Pound Standard Lot Size Threshold, FY2021 FY2023
AVOCADOS
ONIONS
GRAPES
ORANGES
KIWIFRUIT
TOMATOES
GRAPEFRUIT
FILBERTS
POTATOES
9 commodities

<=40,000 lbs. per lot

>40,000 lbs. per lot

86%
25%
87%
55%
53%
99%
69%
69%
67%
77%

14%
75%
13%
45%
47%
1%
31%
31%
33%
23%

Table 4 shows that for all nine commodities combined, 77 percent of the
inspections would have had equal or lower fees charged if the new fee structure had been

in place. 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 fee system
currently in place.
The impacts of the proposed 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 proposed 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 8e
Inspection Fees for Standard 40,000 Pound Lot: Comparison of FY 2024 Fee to Proposed
New Fee, 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.
This analysis assumes that each lot is sampled and inspected independently. This
may overstate the extent of higher fees because under the proposed 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 2024 and future
years.
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 proposes
to amend 7 CFR part 51 as follows:
Part 51 – FRESH FRUITS, VEGETABLES, AND OTHER PRODUCTS
(INSPECTION, CERTIFICATION, AND STANDARDS)
1. The authority citation for part 51 continues to read as follows:
Authority: 7 U.S.C. 1621 – 1627.
2. Revise § 51.37 to read as follows:
§ 51.37 Charges for fees, rates, and expenses.
For each carlot of product inspected, a fee or rate determined in accordance with
§§ 51.38, 51.39, and 51.40, and expenses determined in accordance with § 51.41, shall be
paid by the applicant.
3. Redesignate §§ 51.39 through 51.62 as §§ 51.40 through 51.63, respectively.
4. Add new § 51.39 to read as follows:

§ 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. 2024-13371 Filed: 6/18/2024 8:45 am; Publication Date: 6/20/2024]