Department of Agriculture, Markets & Food

First Year Report of the Weights and Measures Inspection Program

The first weights and measures law in the United States was signed by President John Adams on March 2, 1799. The technology of devices used in weighing and measuring goods and services in commerce has changed considerably over the last 212 years. But public trust in the equitable and transparent regulation of weights and measures remains the bedrock of our free enterprise system.

The purpose of the state inspection program is to ensure consumers receive accurate quantity and adequate information about commodities so they can make valid price and quantity comparisons, and be assured that they receive what they pay for. The mission of the Division of Weights and Measures is to ensure equity in the marketplace, protecting consumers and protecting honest business people from unfair or dishonest competition.

Reinstatement of the State Inspection Program

The Department of Agriculture, Markets & Food Division of Weights and Measures is responsible under RSA 438:10 for testing and inspection for accuracy of all weighing and measuring devices used in commerce. In 2009 the Department of Agriculture, Markets & Food was authorized to hire four Weights and Measures inspectors, effectively restoring the state inspection program for the first time in 20 years. During the two decades since state inspector staff had been eliminated from the department’s budget, the department had delegated its authority to inspect and place a state seal of certification on devices to licensed service technicians from the private sector. These technicians worked for firms that sell and service devices, and in some cases were employees of the companies that owned the devices used in the sale of commodities such as fuel and other goods.

Through the FY2010-2011 budget process the department successfully proposed restoration of state inspector positions in response to the growing number of consumer complaints during the high gas prices in 2008, and to eliminate the conflicts of interest inherent in the private sector arrangement. One example: a scale company owner, when confronted with evidence that his company had certified a scale that was in poor condition and could not have passed testing, told the department that “The state puts us in a terrible position by requiring us to inspect our customers.” The department’s business plan showed that the state inspection program would be self-supporting.

Due to uncertainties around the budget reductions and lay-offs occurring at the onset of FY2010, and the lengthy process of receiving waivers to fill the positions and purchase the necessary equipment to start the program, about eight months of inspection time was lost in the first year of the program’s reinstatement. Despite the delays and challenges of its first transitional year, the state weights and measures inspection program has met its budget goals, and has completed inspections of more than 48% of licensed devices in the state.

In January 2010 the Division of Weights and Measures hired two employees who were part of the state reduction-in-force program, and in February hired two additional inspectors from outside state government. Subsequently two inspectors resigned; one in May and the other in June. These two positions were filled in July and August. Training time for all new hires contributed to further delays in getting the program into full operation. Taken altogether, these delays reduced revenues for FY2010, while first-year expenses associated with equipping the inspection program were higher. Nonetheless, revenues did exceed expenditures, resulting in a modest net gain of $26,343.

The department received waivers in December 2009 to purchase a 100-gallon prover for vehicle tank meters, a 100-gallon prover for liquid propane gas, a 20-gallon prover for liquid propane, and four 30-pound weight test kits (mass standards for testing small commercial scales used in delis, grocery stores, specialty shops, farmer’s markets, etc.) at a total cost of $71,369.

Thanks to the recession, the department was able to purchase a used flatbed truck with boom crane for inspecting vehicle scales at an exceptionally favorable price of $15,000. The Department still owned the heavy weights used with the weight-test truck to test vehicle and other large-capacity scales, saving what would otherwise have been a significant additional expense.

Through the process of establishing rules for the weights and measures inspection program, and responding to a bill introduced in the senate in 2010 that would have given authority to enforce provisions of RSA 438 to private industry, the department received suggestions from some representatives of regulated businesses. One suggestion was to consolidate the device license fee and device inspection fee into one annual fee. The department thought this suggestion had merit, and that the single annual fee could be somewhat less than the sum of the two individual fees because of the cost efficiencies gained.

Consensus was reached to amend the 2010 bill, which was passed as amended, establishing RSA 438:14-a Registered Service Technician. – A registered service technician who installs, services, repairs, reconditions, tests, or calibrates a commercial weighing or measuring device shall mark said device in a manner approved by the commissioner. This mark shall authorize the device owner to use a licensed device unless rejected pursuant to RSA 438:14.

Source. 2010, 358:2, eff. Sept. 18, 2010.

Making these and other adjustments to the rules has taken time, and the process is not yet completed. Recently the department has had more negative feedback from some of the regulated industries, who now say that the single license/inspection fees should be significantly lower than the department’s proposals, which they previously had said were reasonable. Demands for a reduced fee structure appear not to recognize the costs of providing these services, or the rates previously charged to device owners by private service providers when they conducted inspections.

The Department of Agriculture, Markets & Food begins the current year fully equipped and carrying out its mission of ensuring that goods and services sold by weight, measure or number are sold fairly and accurately, in accordance with the laws of the state of New Hampshire. Net revenues are projected to be on target for FY11.

The Consequences of Weakening State Weights and Measures Inspection

In 2011 Senate Bill 157-FN was introduced, “relative to the division of weights and measures and fees for licensing weighing devices and the definition of service technician.” This bill would give private service technicians statutory authority to place State of New Hampshire seals on devices. This would effectively give one group of businesses regulatory authority over other businesses—or even give businesses authority to inspect and certify their own devices used in selling their products and services to the public. SB157 would codify a system of weights and measures regulation rife with inherent conflicts of interest. The bill would also set device license fees by statute, at significantly lower rates than current fees. This would mean the department could not make its budgeted FY11 revenue target, and that the fees would not cover the cost of the licensing program.

Elimination of the state inspection program (returning to private service industry and business self-inspections) would have additional consequences for the state. Businesses in rural and North Country areas of the state will pay more for inspections performed by private service technicians than for State inspections performed by Division Inspectors. The credibility of the Department will be at risk each time a conflict or the perception of a conflict of interest arises when businesses regulate each other, or when they self-regulate.

Establishing procedures and policies to try to ensure consistency, honesty, and technical competence of private technician inspections would be a real challenge, and would require state inspection staff to monitor and ensure fairness and performance standards are met. Challenges would include promoting uniformity of inspections and testing procedures between all service technicians from different companies that provide the same services or different services.

The department should require yearly documentation from industry that technicians are provided with proper training, and the department would need to develop data bases to make sure service technicians’ training requirements are kept current. The department would have to assign Weights and Measure Inspectors as training instructors to provide training and testing to certify service technicians to properly conduct inspections. The department would have to develop a program to audit or perform follow-up inspections to confirm that service technicians conduct inspections properly.

The department would need to decide if service technicians would be permitted to advise the device owners/users of the laws and rules concerning proper use of their devices. Device owners who are cited for violations could use entrapment as their defense, saying that they were told it was ok not to comply, or that they were misinformed by technicians.

Verification of private technician performance during the certification and sealing of devices will be virtually impossible unless an inspector is on site while the inspection and sealing process takes place. The verification process will therefore be ineffective in discerning compliance and will generate a large amount of duplication in the inspection and sealing of devices. The regulatory function of holding service technicians accountable while inspecting and sealing devices will be labor-intensive, and would take staff and time needed to perform other important enforcement activities such as package inspection, monitoring direct sales, price verification and following up on complaints. The House Finance Committee proposal to cut all weights and measures inspectors positions would make verification of private technician accountability impossible.

State inspectors inspect for all aspects of the state’s laws and rules governing how scales and meters are used in commerce. Examples include ensuring that customers can read the scale or meter, that tare weights are properly accounted for so that customers are charged correctly, and that weight and price information are provided in accordance with New Hampshire law. Private technicians simply perform technical inspection of devices, and are not trained or qualified to enforce weights and measures laws.

First Year Results

In its first transitional year, despite the delays and challenges, the state weights and measures inspection program has met its budget goals, and completed inspections of more than 48% of licensed devices in the state. This significantly strengthened business and consumer protection was achieved with no cost to New Hampshire taxpayers, as inspection fees covered the costs of the program. New Hampshire citizens and customers can be assured that the Seal of the State of New Hampshire on a gas pump or scale means that the device was inspected by an independent and well trained inspector from the Department of Agriculture, Markets & Food.

The inspection staff has found an overall failure rate of 8% in tested devices. Nearly 11% of fuel meters failed, while 5% of all scales tested failed. However, larger capacity and vehicle scales tested have posted significantly higher rates of failure. Smaller numbers of these scales have been tested because the department was not able to put the truck into service until the fall of 2010. Of the 78 vehicle scales tested, 28 failed—a rate of 36%. More than half of the 17 larger capacity (5,000-20,000 pounds) scales did not pass testing, at a failure rate of 59%. Because prior to the purchase of the weight truck with crane the department lacked the equipment required to test these larger scales, there has been no state inspection of these scales in many years. Please see a detailed breakdown of test results at the end of this report.

Recommendations

It is the department’s recommendation that the weights and measures inspection program should continue to perform the department’s responsibilities under RSA 438, and renew efforts to work with regulated businesses to assist with educating retail staff and other operators of weighing and measuring devices about the laws and rules of the state, and the proper use of devices. To strengthen the program and better serve the needs of the regulated businesses, the department should continue to work to improve communication with service companies and businesses that own devices. The department should seek ways to enhance convenience and provide education for regulated businesses and consumers. The program’s rules should be reviewed to clear up any confusing or conflicting areas. The department should pursue action on the suggestion by representatives of some of the regulated businesses that the department’s license fee and inspection fee should be combined into one fee. This combined fee could be somewhat reduced from the sum of the two fees, as there would be a reduction in paperwork and mailing costs. Paperwork would also be reduced for device owners.

In the future the legislature has the option of extending the weights and measures inspection program to price scanners, which would strengthen consumer protection. The Vermont Agency of Agriculture conducts such investigations in response to consumer complaints, and has recently found store scanners registering pricing errors on 5% to 13% or more of items scanned.

EXPENSE TYPE	AMOUNT	MISC
Current Expense	$1,327	Includes: uniforms, forms, business cards, etc
Equipment	$58,628	Test kits, provers, etc
Travel	$8,614	Includes vehicle maintenance
Salary & Benefits	$50,707	4 Inspectors
TOTAL FY 10 expenditures	$119,276

EXPENSE TYPE	AMOUNT	MISC
Current Expense	$1,902
Equipment	$15,000	Flatbed truck for truck scale testing
Travel	$5,982	Through 12/31/10
Memberships	$300	NCWM
Salary & Benefits	$104,168	Through 12/30/10
TOTAL FY 11 expenditures	$127,352

REVENUE RECEIVED #406873	AMOUNT
FY 10 INSPECTION FEES	$136,005
FY 11 INSPECTION FEES – as of 12/30/10	$108,755
TOTAL REVENUE – PROGRAM	$244,760

SUMMARY NET GAIN/LOSS:
FY 10 REVENUE RECEIVED	$136,005
Less FY 10 EXPENDITURES	($119,276)
NET GAIN - FY 10	$16,729
FY 11 REVENUE RECEIVED	$108,755
Less FY 11 EXPENDITURES	($127,352)
NET LOSS – FY 11	($18,597)
PROGRAM TOTALS – COMBINED FY’S
REVENUE	$244,760
Less EXPENDITURES	($246,628)
NET LOSS	($1,868)

First Year Results of State Weights and Measures Inspection Program

· In the first year of the inspection program, the Division of Weights and Measures inspected 9,835 devices, or over 48% of the approximately 20,400 licensed devices in the state.

· Devices inspected included 5,459 fuel meters, and 4,145 scales of all capacities, from under 100 pounds to 2,000 pounds and up.

· Eight percent (815) of the total 9,835 inspected devices were rejected.

· Nearly 11% of fuel meters failed.

· Five percent of all tested scales failed. However, as noted on page 4, larger capacity and vehicle scales failed at significantly higher rates. Of the 78 vehicle scales tested, 28 failed—36%. More than half the 17 larger capacity (5,000-20,000 pounds) scales did not pass testing, a failure rate of 59%.

· The reasons for the rejections of the different device types break down as follows.

Fuel Dispensers:

Out of Tolerance – 381

Repeatability – 35

Creeping – 27

Defective Equipment – 100

Security Seals – 21

Advancing before delivery – 31

Total Rejected = 595

Scales:

Customer indications not visible – 6

Scale not suitable – 1

Out of Tolerance – 134

Failed shift test – 13

No security seals – 25

Won’t Zero – 5

Not Legal For Trade – 16

Scale division too large – 1

Customer indicator not working – 1

Defective – 6

Sensitivity test – 1

Total Rejected = 209

Vehicle Scales:

Inspected vehicle 78 scales out of 236 and 28 failed (36% failure rate)

Inspected 17 out of 248 scales (5,000# to 20,000#) and 10 failed (59% failure rate)

(These are scales the department could not inspect prior to acquiring the weight truck.)

Violations:

Total of 37 cases in 2010

26 were handled administratively (8 cases of fuel dispensers and 18 cases pertaining to scales)

11 criminal cases prosecuted through the courts