[Federal Register Volume 62, Number 138 (Friday, July 18, 1997)]
[Proposed Rules]
[Pages 38488-38489]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-18943]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 62, No. 138 / Friday, July 18, 1997 / 
Proposed Rules  

[[Page 38488]]


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DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

7 CFR Part 800

RIN 0580-AA56


Fees for Official Inspection and Official Weighing Services

AGENCY: Grain Inspection, Packers and Stockyards Administration, USDA.

ACTION: Proposed rule.

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SUMMARY: The Grain Inspection, Packers and Stockyards Administration 
(GIPSA) is proposing a 12.5 percent increase in the administrative 
service fee for official inspection and weighing services performed in 
the United States under the United States Grain Standards Act (USGSA), 
as amended. The fee adjustment is necessary to cover indirect field 
office and headquarters operational costs and to maintain a 3-month 
operational reserve. GIPSA is also proposing to delete from the fee 
schedule the unit fees for submitted samples and factor only analysis 
performed online at an applicant's facility.

DATES: Written comments must be submitted on or before August 18, 1997.

ADDRESSES: Written comments must be submitted to George Wollam, USDA, 
GIPSA, ART, Stop 3649, Washington, DC 20250-3649, or FAX them to (202) 
720-4628. All comments received will be made available for public 
inspection during regular business hours in Room 0623, South Building, 
USDA, 1400 Independence Avenue, SW, Washington, DC 20250-3649 (7 CFR 
1.27 (b)). Comments may also be sent by electronic mail or Internet to: 
[email protected].

FOR FURTHER INFORMATION CONTACT: George Wollam at the above address or 
telephone (202) 720-0292.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be nonsignificant for the purpose 
of Executive Order 12866 and, therefore, has not been reviewed by the 
Office of Management and Budget.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This action is not intended to have a retroactive 
effect. The USGSA provides in section 87g that no subdivision may 
require or impose any requirements or restrictions concerning the 
inspection, weighing, or description of grain under the Act. Otherwise, 
this proposed rule will not preempt any State or local laws, 
regulations, or policies unless they present irreconcilable conflict 
with this proposed rule. There are no administrative procedures which 
must be exhausted prior to any judicial challenge to provisions of this 
proposed rule.

Effects on Small Entities

    James R. Baker, Administrator, GIPSA, has determined that this 
proposed rule will not have a significant economic impact on a 
substantial number of small entities as defined in the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.). Most users of the official 
inspection and weighing services do not meet the requirements for small 
entities. FGIS is required by statute to make services available and to 
recover costs of providing such services, as nearly as practicable.
    The proposed fee revision applies to entities engaged in the export 
of grain. Under provisions of the USGSA, most grain exported from U.S. 
export port locations must be officially inspected and weighed. 
Mandatory inspection and weighing services are provided by FGIS on a 
fee basis at 37 export facilities. All of the export facilities are 
owned and managed by multi-national corporations, large cooperatives, 
or public entities that do not meet the criteria for small entities as 
defined under the Regulatory Flexibility Act and the regulations issued 
thereunder. A 3-percent increase in hourly and certain unit fees went 
into effect June 15, 1997, and will recover the increased operational 
costs caused by mandated cost-of-living increases to Federal salaries. 
That increase is anticipated to generate $218,100 in additional 
revenue, bringing to $22.21 million the projected total revenue for 
fiscal year 1997. This proposed 12.5 percent increase in the 
administrative fee (which was not addressed in an earlier June 15, 
1997, increase) is designed to generate sufficient revenue to cover 
indirect costs associated with field office and headquarters operations 
and to maintain the retained earnings at a 3-month operating reserve 
for the inspection and weighing program. Additional revenue estimated 
for fiscal year 1998 is projected to be $440,000 at an 85.6 million 
metric ton level. The 12.5 percent increase will not have a significant 
economic impact on small entities.

Information Collection and Recordkeeping Requirements

    In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the previously approved information collection and 
recordkeeping requirements have been approved by the Office of 
Management and Budget under control number 0580-0013.

Background

    The USGSA requires GIPSA to charge and collect reasonable fees for 
performing official inspection and weighing services. The fees are to 
cover, as nearly as practicable, FGIS's costs for performing these 
services, including related administrative and supervisory costs.
    Effective October 1, 1996, GIPSA changed the methodology it uses 
for fees charged for its inspection and weighing services. The current 
fee structure for these services consists of three basic components: 
(1) An hourly rate charged to recover the direct labor costs of 
providing service; (2) a unit test or service rate; and (3) a per 
metric ton administrative charge to recover the indirect costs, such as 
salaries and benefits for office management and support staff and rent, 
incurred both at field offices and headquarters. Fees charged in the 
first two components of the structure were increased by approximately 3 
percent effective June 15, 1997 (62 FR 31701, June 11, 1997, corrected 
at 62 FR 34342, June 25, 1997), to cover increased costs due to 
mandated Federal cost-of-living increases. At that time, GIPSA noted

[[Page 38489]]

that a further adjustment of fees, including an adjustment to the 
administrative fee to recover the indirect costs of field offices and 
headquarters and to replenish the operating reserve, would be addressed 
in future rulemaking.
    The current USGSA administrative fee was published in the August 
22, 1996, Federal Register (61 FR 43301) and became effective on 
October 1, 1996. The per metric ton administrative charge recovers the 
indirect costs and administrative costs of FGIS field offices and 
headquarters such as the salaries and benefits for office management 
and support staff, Departmental charges, Animal and Plant Health 
Inspection Service and Agricultural Marketing Service charges, 
management of computers and software, utilities, and rent. The 3-
percent increase that became effective June 15, 1997, was intended to 
recover only increases to the salaries of service personnel responsible 
for inspection and weighing of grain. The administrative fee is 
assessed on all outbound grain inspected and/or weighed at an 
applicant's facility.
    Six levels of fees exist, ranging from 1 metric ton or less to over 
7,000,001 metric tons, with fees decreasing as the number of metric 
tons inspected increases. The charge is assessed in addition to the 
hourly rate. At the beginning of each fiscal year (October 1), all 
applicants pay the same per metric-ton-fee. Once a level has been 
reached, the fee for additional metric tons is reduced until the 
maximum volume is reached.

         Comparison of Current and Proposed Administrative Fees         
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                                                       Current  Proposed
                     Metric tons                        fees      fees  
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1-1,000,000.........................................    $0.090   $0.1013
1,000,001-1,500,000.................................      .082     .0923
1,500,001-2,000,000.................................      .042     .0473
2,000,001-5,000,000.................................      .032     .0360
5,000,001-7,000,000.................................      .017     .0192
7,000,001+..........................................      .002     .0023
------------------------------------------------------------------------

    GIPSA is now proposing a 12.5 percent increase in the 
administrative fee. This increase is designed to generate additional 
revenue to cover the indirect costs associated with field office and 
headquarters operations and maintain the retained earnings at a 3-month 
operating reserve for the inspection and weighing program.
    GIPSA estimates collecting $22.2 million in revenue for fiscal year 
1997 under the current fee schedule. This is $1 million less than the 
$23.2 million estimated cost of operations for fiscal year 1997. 
Similar losses have occurred for the past 3 years, with $753,000 in 
fiscal year 1994; $630,000 in fiscal year 1995; and $1,273,000 in 
fiscal year 1996. These losses resulted in a retained earning balance 
of only $922,000 at the beginning of fiscal year 1997, significantly 
below a desired 3-month operating reserve of $6 million.
    Indirect costs for the inspection and weighing program are 
estimated at $4.68 million, or 20 percent of the total $23.2 obligation 
for the program. Because of a down-turn in metric tons exported, the 
current administrative fee will generate only an estimated $3.5 million 
for fiscal year 1997, resulting in an estimated loss of $1.18 million.
    The administrative fee must be increased to ensure sufficient 
revenue is collected to recover indirect costs for an average export 
volume year. This will permit any excess revenue collected during high 
volume years, such as 89.9 million metric tons in FY 1996, to offset 
low volume years such as this year estimated at 76 million metric tons.
    The current administrative fee generates an estimated $4.09 million 
at the 5-year average export volume of 85.6 million metric tons. The 
proposed fee increase of 12.5 percent will generate an estimated $4.53 
million at the 85.6 million metric ton level, or increase actual 
revenue by $440,000 or 10.75 percent.
    It is further proposed that fees for submitted samples and factor 
only analysis performed online at an applicant's facility (7 CFR 
800.71, Table 1 (3)(ii)) be deleted because these services are covered 
under the hourly rate and should not be charged as a separate test.

Proposed Action

    The Agency proposes, effective October 1, 1997, to apply a 12.5 
percent increase to Administrative Fees in 7 CFR 800.71, Table 1 (3), 
and to delete fees for Additional Service (assessed in addition to all 
other fees) in Table 1 (3)(ii).

List of Subjects in 7 CFR Part 800

    Administrative practice and procedure, Grain.

    For the reasons set out in the preamble, 7 CFR part 800 is proposed 
to be amended as follows:

PART 800--GENERAL REGULATIONS

    1. The authority citation for Part 800 continues to read as 
follows:

    Authority: Pub. L. 94-582, 90 Stat. 2867, as amended (7 U.S.C. 
71 et seq.)

    2. Section 800.71 paragraph (a), Schedule A, is amended by revising 
Table 1 (3) to read as follows:


Sec. 800.71  Fees assessed by the Service.

    (a) * * *

     Schedule A.--Fees for Official Inspection and Weighing Services    
                     Performed in the United States                     
    Table 1.--Fees For Official Services Performed at an Applicant's    
                Facility in an Onsite FGIS Laboratory \1\               
------------------------------------------------------------------------
                                                                        
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                              * * * * * * *                             
(3) Administrative Fee (assessed in addition to all other applicable    
 fees, only one administrative fee will be assessed when inspection and 
 weighing services are performed on the same carrier).                  
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(i) All outbound carriers (per-metric-ton): \4\                         
  (a) 1--1,000,000...........................................    $0.1013
  (b) 1,000,001--1,500,000...................................     0.0923
  (c) 1,500,001--2,000,000...................................     0.0473
  (d) 2,000,001--5,000,000...................................     0.0360
  (e) 5,000,001--7,000,000...................................     0.0192
  (f) 7,000,001--............................................    0.0023 
------------------------------------------------------------------------
\1\ Fees for original inspection and weighing, reinspection, and appeal 
  inspection service include, but are not limited to, sampling, grading,
  weighing, prior to loading stowage examinations, and certifying       
  results performed within 25 miles of an employee's assigned duty      
  station. Travel and related expenses will be charged for service      
  outside 25 miles as found in Sec.  800.72 (a).                        
                                                                        
*        *        *        *        *                                   
\4\ The administrative fee is assessed on an accumulated basis beginning
  at the start of the Service's fiscal year (October 1 each year).      

* * * * * * *
    Dated: July 14, 1997.
James R. Baker,
Administrator.
[FR Doc. 97-18943 Filed 7-17-97; 8:45 am]
BILLING CODE 3410-EN-P