DAR File No. 42872

Agriculture and Food, Plant Industry

Rule R68-20

Utah Organic Standards

Notice of Proposed Rule

(Amendment)

DAR File No.: 42872
Filed: 05/02/2018 11:14:51 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of these rule changes are to change the application date for producers, handlers, processors, and certifying agencies to a time that will be more efficient and effective for the applicants and the Department of Agriculture and Food (Department) staff. There are also provisions created which allow Department staff to limit the time of application updates and to administer late fees to certifying agencies for late registration. A provision was also created to allow for exemption, in accord with the October version of the Code of Federal Regulations (CFR).

Summary of the rule or change:

This rule currently identifies an April 1 deadline for annual organic program registrations and has no language to allow for charging late fees for not getting application materials to the organic program manager in a timely manner. The changes move the deadline for annual registrations for the organic program earlier to February 1 each year for both the certifying agencies and producers, processors, and handlers who are being certified. The current time frame of the April 1 deadline is costly to agriculture producers, because March, the time right before the deadline, is when farmers are preparing their fields and planting and cattle producers are often moving animals from one allotment to another. January is a time of year that is less costly to producers, so the cost of doing the paperwork is lower then in March. Moving the deadline to February 1 also provides more time for the producers, processors, and handlers to update applications before the growing season, when producers have less time for paperwork and producers also have more time to make sure they are in compliance before certification inspections, which are conducted in the late spring through harvest. There have also been problems with producers and processors submitting incomplete or inaccurate application materials, then not updating the materials in a timely manner. This problem has led to inefficiencies in the organic program and producers not being able to be certified in the program in time for the growing season. One of the changes to the rule include a 120-day period for the applicant to make required changes to an application, but if the applicant does not effectively make the necessary changes, he has to submit a new application for the next year. A provision was also added to prohibit certifying agencies that fail to register by February 1 from certifying producers, handlers, and processors until the fee is paid. There is also a provision to assess a late fee to certifying agencies to encourage timely registration. There were also changes in 7 CFR Part 205.101 in October 2017 that change terms for exemptions, these updates to the rule require that those who are claiming those exemptions register with the Department. This will allow the Department to allow for exemptions, but still track the production, processing, and handling of organic products of exempted products. There are also nonsubstantive changes to this rule, including citations to new section numbers and updated CFR edition dates.

Statutory or constitutional authorization for this rule:

• Section 4-3-201
• Subsection 4-2-103(1)(i)
• Section 4-9-103
• Section 4-5-104
• Section 4-11-103
• Section 4-12-3
• Section 4-16-103
• Section 4-14-106
• Section 4-32-109
• Subsection 4-37-109(2)
• 7 CFR 205
• Section 4-4-102

This rule or change incorporates by reference the following material:

• Updates 7 CFR 205, National Organic Program, published by U.S. Government Printing Office, 01/01/2018

Anticipated cost or savings to:

the state budget:

By moving the deadline from April 1 to February 1, there will be improved efficiencies in the application process for the Department because producers will not be rushing through fixing mistakes in the applications and farm plans while trying to do their farm work. The average application takes four hours to review and reprocess when there are mistakes made. The Department estimates a 25% reduction in time spent on application review because the producers will make fewer mistakes caused by hurrying in initially completing the application and in fixing mistakes. Department staff will have more time to review the applications as well, without feeling hurried to complete them before conducting inspections, which will allow for better applications, which become farm plans. With better farm plans, there will be fewer violations and the program manager will need to write fewer letters of violation, which will allow him to focus on improving the program, allowing for more applicants to be certified, and less of tax payer money will be spent fixing problems. The Department estimates that the 25% decrease in application reviews and fixes will save the Department $4,225 (25% reduction of 65 applicants, 4 hours each at $65 per hour). Because of the variability of the violation rates from year to year, it is difficult to estimate the savings from writing fewer violations, so the Department has no benefits from decreased violations. Therefore, the Department estimates that the savings to the Department will be at least $4,225, which doesn?t include the benefits of being able to certify more applicants due to increased efficiency.

local governments:

There are no anticipated costs or benefits to local governments because these rule changes do not impose any new requirements or regulations on local governments.

small businesses:

There will be a financial benefit to the producers, handlers, and processors for adjusting the application deadline to February 1. The Department estimates that the average hourly rate for organic producers, handlers, and processors to be $45 per hour during the planting and growing season (March through October) and $0 per hour for January through February. The estimated time it takes to complete and correct mistakes in the application materials is between 5 and 20 hours for the organic program. If the Department averages the time to complete and update the application materials at 12.5 hours, the cost of applying for producers, handlers, and processors is approximately $562.50 for the April application deadline, whereas it is $0 for the February application deadline. By increasing the time that the producers have to work on their applications, which become farm plans and are inspected against the CFR, the rate of compliance of the producers will increase. This will both reduce the amount of time that inspectors will be spending on the inspections and the time that the program manager spends on writing violations, which are benefits to both the producers and the Department. Currently inspectors spend an average of 4 hours inspecting an operation per year, the Department estimate that having the improved farm plan will decrease the average inspection time by 10%, which would decrease the cost of inspections by at least $32 per inspection. The Department also anticipates that the amount of time that the producers, handlers, and processors spend on the applications on the second and later years will decrease by 25%, because the time the Department staff will have to help them improve their applications/farm plans will reduce the number of problems that will be caught in future years. Therefore, the Department estimates a savings of $594.50 for producers, handlers, and processors. Currently, there are 65 applicants, so the average savings for the industry is estimated at $38,642.50. There will be a nominal fine of up to $500 assessed to the certifying agencies for submitting late registrations and the cost of not charging certification fees during the time that they are currently not being registered. Currently, there are 10 certifying agencies registered to certify in Utah. The Department anticipates that after a year of receiving the late fees, certifying agencies will no longer submit late registrations. There will also be an indirect cost to the certifying agencies that do not register in a timely manner. During the time that they are not registered, they will be prohibited from conducting certifications, thus losing business, but this will all depend on their timeliness of registration. For the producers, handlers, and processors who are not able to update their application materials within the 120-day grace period following the application deadline, there will be a loss of funds of not being certified USDA Organic for a year, until the next application date. This cost is highly variable and depends on the commodity being produced, the size of the operation, and the current year's market costs for the commodities being produced, so the Department does not have any estimated costs.

persons other than small businesses, businesses, or local governmental entities:

As the Department is not the only certifying authority in the state, these changes should have no impact on those who are not seeking certification from the Department.

Compliance costs for affected persons:

There will be a nominal fine of up to $500 assessed to the certifying agencies for submitting late registrations and the cost of not charging certification fees during the time that they are currently not being registered. Currently, there are 10 certifying agencies registered to certify in Utah. The Department anticipates that after a year of receiving the late fees, certifying agencies will no longer submit late registrations. There will also be an indirect cost to the certifying agencies that do not register in a timely manner. During the time that they are not registered, they will be prohibited from conducting certifications, thus losing business, but this will all depend on their timeliness of registration. For the producers, handlers, and processors who are not able to update their application materials within the 120-day grace period following the application deadline, there will be a loss of funds of not being certified USDA Organic for a year, until the next application date. This cost is highly variable and depends on the commodity being produced, the size of the operation, and the current year's market costs for the commodities being produced, so the Department does not have any estimated costs.

Comments by the department head on the fiscal impact the rule may have on businesses:

These changes will help both the Department and the organic businesses in the state. The changing of the date allows for the Department and businesses to make sure that they are in compliance with the CFR. The additional time in the application process should cut down on the time spent during the inspection process, which will save time and money for both the Department and the entity seeking registration.

LuAnn Adams, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Agriculture and Food
Plant Industry
350 N REDWOOD RD
SALT LAKE CITY, UT 84116-3034

Direct questions regarding this rule to:

• Melissa Ure at the above address, by phone at 801-538-4976, by FAX at , or by Internet E-mail at mure@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

07/02/2018

This rule may become effective on:

07/10/2018

Authorized by:

LuAnn Adams, Commissioner

Appendix 1: Regulatory Impact Analysis for Small and Non-Small Businesses

Fiscal Costs	FY 2018	FY 2019	FY 2020
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Person	$0	$0	$0
Total Fiscal Costs:	$0	$0	$0
Fiscal Benefits
State Government	$0	$4225	$4225
Local Government	$0	$0	$0
Small Businesses	$0	$594.50	$594.50
Non-Small Businesses	$0	$594.50	$594.50
Other Persons	$0	$0	$0
Total Fiscal Benefits:	$0	$5414	$5414
Net Fiscal Benefits:	$0	$5414	$5414

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described above. Inestimable impacts for Non-Small Businesses are described below.

 

Appendix 2: Regulatory Impact to Non-Small Businesses

The Department registers approximately 65 organic producers, handlers, and processors within the state. Approximately six of these businesses would be considered non-small businesses. There will be a financial benefit for the producers, handlers, and processors for adjusting the application deadline to February 1. The Department estimates that the average hourly rate for organic producers, handlers, and processors to be $45 per hour during the planting and growing season (March through October) and $0/hour for January through February. The estimated time it takes to complete and correct mistakes in the application materials is between 5 and 20 hours for the organic program. If the Department averages the time to complete and update the application materials at 12.5 hours, the cost of applying for producers, handlers, and processors is approximately $562.50, whereas it is $0 for the February application deadline. By increasing the time that the producers have to work on their applications, which become the farm plans which are inspected against the CFR, the rate of compliance of the producers will increase. This will both reduce the amount of time that inspectors will be spending on the inspections and the time that the program manager spends on writing violations, which are benefits to both the producers and the Department. In fact, currently inspectors spend an average of 4 hours inspecting an operation per year, the Department estimates that having the improved farm plan will decrease the average inspection time by 10%, which would decrease the cost of inspections by at least $32 per inspection. The Department also anticipates that the amount of time that the producers, handlers, and processors spend on the applications on the 2nd and later years will decrease by 25%, because the time the Department staff will have to help them improve their applications/farm plans, which will reduce the number of problems that will be caught in future years.

 

The Commissioner of the Department of Agriculture and Food, LuAnn Adams, has reviewed and approved this fiscal analysis.

 

 

R68. Agriculture and Food, Plant Industry.

R68-20. Utah Organic Standards.

R68-20-1. Authority.

Promulgated under authority of Sections [4-2-2(1)(j)]4-2-103(1)(i), [4-3-2]4-3-201, [4- 4-2]4-4-102, [4-5-17(1)]4-5-104, [4-9-2]4-9-103, [4-11-3] 4-11-103, 4-12-3, [4-14-6(5)]4-14-106, [4-16-3]4-16-103, [4-32-7(7)(a)(ii)]4-32-109, 4-37-109(2).

A. The Utah Department of Agriculture and Food (UDAF) adopts and incorporates by reference CFR, [June 7, 2006] October 1, 2017 edition, Title 7 Part 205, National Organic Program Final Rule.

1. UDAF will make available to all its applicants for certification and producers of organic products, copies of the National Organic Program Final Rule.

 

R68-20-2. Definitions and Terms.

A. For the purpose of this rule, words in the singular form shall be deemed to impart the plural and vice versa, as the case may demand.

1. "Commissioner" means the Commissioner of the Utah Department of Agriculture and Food, or the commissioner's representative.

2. "Distributor" means a handler that purchases products under its own name, usually from a shipper, processor, or another distributor. Distributors may or may not take physical possession of the merchandise. A distributor is required to be certified if that person both takes title to the organic products and substantially transforms, processes, repackages or re-labels these products.

3. "Food (and food products)" means material, usually of plant or animal origin, containing or consisting of essential body nutrients, as carbohydrates, fats, proteins, vitamins, and minerals, that is taken in and assimilated by an organism to maintain life and growth. Food products include all agricultural and horticultural products of the soil, apiary and apiary products, poultry and poultry products, livestock and livestock products, dairy products and aquaculture products.

4. "Registration" means an agreement or contract that grants a certified operator the right to use a certificate or certification mark in accordance with organic standards and certification requirements.

5. "Utah Department of Agriculture and Food Organic Seal" means the seal to be displayed on packaging of certified organic foods and food products intended for retail sale, indicating compliance with provisions of this rules.

 

R68-20-3. Compliance.

A. Violations of the State Organic Program will be handled in compliance to Section [4-2-12]4-2-302.

 

R68-20-4. Fees for Organic Certification.

Fees for Organic Certification Services.

A. Fees shall be in accordance with the fee schedule in the annual appropriations act passed by the Legislature and signed by the Governor. The person, firm, corporation or other organization requesting registration as a producer, handler, processor or certification agency or requesting inspection or laboratory services shall pay such fees. All fees are payable to the Utah Department of Agriculture and Food.

B. Registration of producers, handlers, processors or combinations thereof. Applications for registration may be obtained from the Utah Department of Agriculture and Food and submitted with the annual fees. Annual registration is required for all producers, handlers, processors or combinations thereof and shall have applications submitted and be paid by [April 1]February 1 of each year. New applicant shall have 120 days to complete their initial application and have it accepted by the Department or the applicant shall reapply.

C. Registration of [Certification]Certifying [a]Agencies . Applications for registration may be obtained from the Utah Department of Agriculture and Food and submitted with the annual fees. Annual registration is required for all [certification]certifying agencies and shall be paid by [April 1]February 1 each year. Failure to pay by this date will result in late fees and a prohibition from conducting business in the State of Utah.

D. Gross sales fees. Payment of annual gross sales fees shall accompany the annual registration application and fees and shall be based on the previous year's gross sales of state certified producers and processors.

E. Any producers, handlers, processors or combinations thereof that conduct business under exemption listed in CFR, October 1, 2017 edition, Title 7 Part 205.101 within the State of Utah shall register annually with the Utah Department of Agriculture Organic Program before conducting business.

 

R68-20-5. UDAF Seal.

Use of the UDAF Organic Seal

A. The UDAF seal may be used only for raw or processed agricultural products in paragraphs (a), (b), (e)(1), and (e)(2) of CFR 205.301.

B. The UDAF seal must replicate the form and design and must be printed legibly and conspicuously.

1. On a white background with a double black circle the words, Utah Department of Agriculture and Food, within the borders of the circles. At the bottom of the circle a teal green horizontal line.

2. Within the inner circle a black outline of the State of Utah, and inscribed in italics in a teal green color, slanting upward from left to right, the word "Certified Organic".

3. A copy of the seal is available at the Department of Agriculture and Food, 350 North Redwood Road, PO Box 146500, Salt Lake City, Utah 84114-6500.

 

KEY: inspections

Date of Enactment or Last Substantive Amendment: [ February 28, 2007 ] 2018

Notice of Continuation: December 30, 2014

Authorizing, and Implemented or Interpreted Law: [ 4-2-2(1)(j) ] 4-2-103(1)(i) ; [ 4-3-2 ] 4-3-201 ; [ 4- 4-2 ] 4-4-102 ; [ 4-5-17(1) ] 4-5-104 ; [ 4-9-2 ] 4-9-103 ; [ 4-11-3 ] 4-11-103 ; 4-12-3; [ 4-14-6(5) ] 4-14-106 ; [ 4-16-3 ] 4-16-103 ; [ 4-32-7(7)(a)(ii) ] 4-32-109; 4-37-109(2)