Via Messenger

Mr. Charles W. Parrott
Acting Chief, PACA Branch
Agricultural Marketing Service
U.S. Department of Agriculture
Room 2095 South Building
Washington, DC 20090-6456

Re:     Proposed Rule on PACA License and Complaint Filing Fees (65 Fed. Reg. 7462 (Feb. 15, 2000)); Docket No. FV99-362

Dear Mr. Parrott:

     The Food Marketing Institute (FMI) is pleased to respond to the U.S. Department of Agriculture's (USDA's) Agricultural Marketing Service's (AMS's) request for comments on the agency's proposed rule relating to license and complaint filing fees under the Perishable Agricultural Commodities Act (PACA). 65 Fed. Reg. 7462 (Feb. 15, 2000). Specifically, AMS intends to implement the PACA Amendments of 1995, P.L. 104-48, 109 Stat. 427 (1995), (PACA Amendments), which grant USDA the authority to increase fees through rulemaking. The PACA Amendments also phased out the license fee requirement for retailers and grocery wholesalers.

AMS's proposal implements the PACA Amendments; therefore, we support the proposal. We recommend, however, that AMS modify the final rule to include an explicit statement that retailers and grocery wholesalers will not be charged renewal fees as such fees are specifically prohibited by the PACA Amendments.

     FMI is a non-profit association that conducts programs in research, education, industry relations and public affairs on behalf of its 1,500 members and their subsidiaries. Our membership includes food retailers and wholesalers, as well as their customers, in the United States and around the world. FMI's domestic member companies operate approximately 21,000 retail food stores with a combined annual sales volume of $220 billion, which accounts for more than half of all grocery sales in the United States. FMI's retail membership is composed of large multi-store chains, small regional firms, and independent supermarkets. Our international membership includes 200 members from 60 countries.

     

A.     PACA Amendments and License Fees

     Individuals and businesses subject to PACA must be licensed and pay an annual fee. 7 U.S.C. § 499c(a). The PACA Amendments modify the statutory license fee requirements in several important respects.

     Specifically, fees that retailers and grocery wholesalers were previously required to pay were phased out during a three year period ending in 1998. 7 U.S.C. § 499c(b)(4). New retailers and grocery wholesalers must pay a $100 administrative fee upon making an initial application for a license under this section. 7 U.S.C. § 499c(b)(3). Retailers and grocery wholesalers are not required to pay any fee for renewal of the license in subsequent years. 7 U.S.C. § 499c(b)(3). Additionally, the PACA Amendments increased the license fees for applicants other than retailers and grocery wholesalers and authorized AMS to further increase fees in the future if certain economic criteria were met. 7 U.S.C. § 499c(b)(2).

B.     AMS Regulations Should Be Clarified To State that Retailers and Grocery Wholesalers Will Not Be Required To Pay Renewal Fees

     The regulations proposed by AMS implement the aforementioned provisions of the PACA Amendments. Specifically, the proposed regulations require retailers and grocery wholesalers who make an initial application for license to pay a $100 administrative processing fee. Proposed § 46.6(a). To ensure that the intent of the PACA Amendments is clearly carried out, we recommend that AMS add the sentence indicated below in italics to the proposed regulation:

(a)     Retailers and grocery wholesalers making an initial application for license shall pay a $100 administrative processing fee. A retailer or grocery wholesaler paying a fee under this paragraph shall not be required to pay any fee for renewal of the license for subsequent years.

The requested amendment simply incorporates the complete system set forth in the statute.

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We appreciate the opportunity to provide AMS with our comments on this matter. If we may be of assistance, please do not hesitate to contact us.

      Sincerely yours,

      Tim Hammonds
      President and CEO