Original Notice.

     Preproposal statement of inquiry was filed as WSR 05-04-077.

     Title of Rule and Other Identifying Information: The Washington State Department of Agriculture's (WSDA) fruit and vegetable inspection program is proposing to amend chapter 16-390 WAC, WSDA Fruit and vegetable inspection districts, inspection fees and other charges.

     Hearing Location(s): WSU Tree Fruit Research and Extension Center (street parking only), 1100 North Western Avenue, Wenatchee, WA, on April 26, 2005, at 1:00 p.m.; and at the WSDA Yakima Office, Second Floor Conference Room, 21 North First Avenue, Yakima, WA, on April 27, 2005, at 11:00 a.m.

     Date of Intended Adoption: May 26, 2005.

     Submit Written Comments to: George Huffman, P.O. Box 42560, Olympia, WA 98504-2560, e-mail ghuffman@agr.wa.gov, fax (360) 902-2092, by close of business on April 27, 2005.

     Assistance for Persons with Disabilities: Contact Virginia Walsh by April 19, 2005, TTY (360) 902-1996 or (360) 902-1996.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The proposed amendments to chapter 16-390 WAC, WSDA Fruit and vegetable inspection districts, inspection fees and other charges, will increase the following fees in excess of the Office of Financial Management fiscal growth rate factor:

•	All cwt. fees.
•	The minimum charge for a certificate of compliance (WAC 16-390-150 (4)(a)).
•	The field or orchard per acre inspection fee (WAC 16-390-220(1)).

     The department is also proposing a volume discount for apples and pears that are inspected and certified on-line for domestic shipment, controlled atmosphere certification, etc.

     Note: The department's current hourly rates (regular and overtime), phytosanitary certification, minimum certification and customer assisted inspection program (CAIP) fees will not change. The fruit and vegetable inspection program is supported entirely by fees generated by the services it provides. RCW 15.17.150 gives the WSDA director the authority to adopt rules establishing fees necessary "to recover the costs of providing inspection and/or certification or other requested services." The proposed fee increases are necessary to offset the increases in the fruit and vegetable inspection program operating expenses caused by inflation.

     Statutory Authority for Adoption: Chapter 15.17 RCW, Standards of grades and packs, chapter 34.05 RCW, Administrative Procedure Act, and section 309(2), chapter 25, Laws of 2003 1st sp.s.

     Statute Being Implemented: Chapter 15.17 RCW, Standards of grades and packs.

     Rule is not necessitated by federal law, federal or state court decision.

     Name of Proponent: Washington State Department of Agriculture, governmental.

     Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Jim Quigley, Olympia, (360) 902-1833.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. RCW 19.85.030 (1)(a) requires an agency to prepare a small business economic impact statement (SBEIS) for proposed rules that impose more than a minor cost on the businesses in an industry. The department mailed an economic impact survey to each of the three hundred and ninety fruit and vegetable growers, shippers and packers on the fruit and vegetable inspection program customer list. Sixty-seven entities responded to the survey (17.2%). The total additional cost of compliance imposed by the proposed rule amendments as reported by the respondents was $423,813.00.

     RCW 19.85.040(1) requires that an agency determine whether the proposed rule will have a disproportionate impact on small businesses by comparing the cost of compliance for small business with the cost of compliance for the 10% of businesses that are the largest businesses required to comply. The statute suggests that the agency's cost analysis be based upon one or more of the following methods:

     (a) Cost per employee;

     (b) Cost per hour of labor; or

     (c) Cost per one hundred dollars of sales.

     Due to the nature of the industry, the department has used the "one hundred dollars of sales" method and has found that the average cost imposed on small businesses per hundred dollars of sales is $00.091 (.091%). The average cost imposed on the 10% of the largest businesses in the industry that are required to comply is $00.037 (.037%). Based upon the survey results, the department has concluded that the proposed increase in fruit and vegetable program fees does not impose a "more than minor" cost on the regulated community and a formal SBEIS is not required.

     A cost-benefit analysis is not required under RCW 34.05.328. The WSDA is not a listed agency under RCW 34.05.328 (5)(a)(i).

March 23, 2005

Robert W. Gore

Assistant Director

OTS-7954.1

AMENDATORY SECTION(Amending WSR 04-11-078, filed 5/18/04, effective 6/18/04)

WAC 16-390-020   What are the fees for grade and condition certificates for fruit?   WSDA fees for grade and condition certificates for all fruits are:

     (1) A minimum charge of sixteen dollars.

     (2) The fees for federal-state or state grade and condition certificates of all fresh market apples, pears, and soft fruits in containers (wrapped, place pack, face and fill), bags, master containers, consumer packages, or loose in bulk cartons, boxes, crates, bins, or bags are listed in the following table:

Type of Fruit	Fees per CWT or Fraction Thereof
Apples on-line for domestic shipping, CA, etc.	$((0.155)) 0.17
Apples for export	$0.17
Apricots, cherries, nectarines ((and)), peaches, plums, prunes, other soft fruits, grapes and berries	$((0.21)) 0.23
Pears	$((0.12)) 0.17
((Plums, prunes, other soft fruits, grapes and berries)) Pears for export	$((0.16)) 0.17

     (((3) The fees for state grade and condition certification of all fresh market apples, and pears that are in containers (wrapped, place pack, face and fill), bags, master containers, consumer packages, or loose in bulk cartons, boxes, crates, bins, or bags are listed in the following table:

Type of Fruit	Fees per CWT or Fraction Thereof
Apples	$0.145
Pears	$0.11))

     (3) The department will give a volume discount for apples and pears that are inspected and certified on-line for domestic shipment, controlled atmosphere certification, etc. Packing of up to 4800 cwt per eight-hour shift, the normal inspection fee will be assessed, and every cwt of product above 4800 cwt for that same shift will be charged at $0.12 cwt. Platform inspection fees will still apply (WAC 16-390-200).

     (4) The department charges a fee of ((two)) three dollars ((and fifty cents)) per ton net weight (or fraction thereof) for all apples, pears, stone fruits, berries, and grapes in bulk or in containers that are inspected for processing.

     (5) The department charges a fee of thirty-two dollars per hour, with a minimum certificate charge of sixteen dollars, when an inspection is requested only to verify the product, conveyance, markings, or other factors not related to quality.

[Statutory Authority: Chapters 15.17, 34.05 RCW, and 2003 1st sp.s. c 25. 04-11-078, § 16-390-020, filed 5/18/04, effective 6/18/04.]