[Federal Register Volume 64, Number 29 (Friday, February 12, 1999)]
[Rules and Regulations]
[Pages 7057-7059]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-3338]



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 Rules and Regulations
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  Federal Register / Vol. 64, No. 29 / Friday, February 12, 1999 / 
Rules and Regulations  

[[Page 7057]]


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DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

7 CFR Part 868

RIN 0580-AA67


Fees for Rice Inspection

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

ACTION: Final rule.

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SUMMARY: The Grain Inspection, Packers and Stockyards Administration 
(GIPSA) is increasing certain fees for Federal rice inspection services 
performed under the Agricultural Marketing Act (AMA) of 1946. This fee 
increase is intended to cover, as nearly as practicable, the projected 
approximate 3.6 percent increase to Federal salaries for Federal Rice 
Inspection Services. The increase is designed to generate additional 
revenue required to recover operational costs created by cost-of-living 
increases to Federal salaries January 1, 1999.

EFFECTIVE DATE: March 1, 1999.

FOR FURTHER INFORMATION CONTACT: Sharon Vassiliades, USDA, GIPSA, ART, 
1400 Independence Avenue, SW, Stop 3649, Washington, D.C. 20250-3649; 
telephone (202) 720-1738; electronic mail or Internet 
[email protected].

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 rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This action is not intended to have a retroactive 
effect. This action will not preempt any State or local laws, 
regulations, or policies unless they present irreconcilable conflict 
with this rule. There are no administrative procedures which must be 
exhausted prior to any judicial challenge to provisions of this rule.

Regulatory Flexibility Act and Effects on Small Entities

    James R. Baker, Administrator, GIPSA, has determined that this rule 
will not have a significant economic impact on a substantial number of 
small entities as defined under the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.).
    The cost of living increase in the rice service fee is primarily 
applicable to GIPSA customers that produce, process, and market rice 
for the domestic and international markets. There are approximately 550 
such customers located primarily in the Arkansas, Louisiana, and Texas 
geographic areas. Many of these customers meet the criteria for small 
business. GIPSA has determined that this rule will have a limited 
economic impact on small entities as defined in the Regulatory 
Flexibility Act.
    Under the provisions of the Agricultural Marketing Act of 1946 (7 
U.S.C. 1621 et seq.), rice inspection services are provided upon 
customer request and GIPSA must recover from the customer the cost of 
providing such services. GIPSA will recover the January 1, 1999, 
average 3.6 percent increase in Federal salary costs by raising its 
rice service fee. The increase will affect only that portion of the 
fees associated with the hourly salaries paid to Federal employees and 
administrative personnel; overhead costs are not included in this 
increase.
    GIPSA cannot absorb the approximate 3.6 percent increase in salary 
costs with the existing deficit in retained earnings. In fiscal year 
1998, GIPSA's obligations were $3,820,820 with revenue of $4,011,446, 
resulting in a positive margin of $190,626 and retained earnings of 
negative $895,584.
    The increase in fees will not have a significant impact on either 
small or large entities. GIPSA estimates that the increased fee charged 
to its 550 customers will provide an annual increase of $155,356 in 
revenue (assuming fiscal year 1998 volume equivalents).

Information Collection and Record Keeping Requirements

    In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection and record keeping requirements 
concerning applications for official inspection services including rice 
inspections have been previously approved by the Office of Management 
and Budget under control number 0580-0013.

Background

    On November 25, 1998, GIPSA published in the Federal Register (63 
FR 65134) a proposal to increase certain fees for Federal rice 
inspection services performed under the Agricultural Marketing Act of 
1946.
    The rice inspection fees were last amended on July 3, 1996 (61 FR 
34714), with a tri-level fee increase with effective dates of August 2, 
1996, January 1, 1997, and January 1, 1998. These fees were to cover, 
as nearly as practicable, the projected operating costs, including 
related supervisory and administrative costs and to maintain an 
operating reserve for Federal rice inspection services. They presently 
appear at 7 CFR 868.91 in Tables 1 and 2. Currently, the regular 
workday contract and noncontract fees are $40.20 and $48.90, 
respectively, while the nonregular workday contract and noncontract 
fees are $56.00 and $67.90, respectively. The unit rate per 
hundredweight for export port services is currently $ .048/cwt. and the 
unit rate for total oil and free fatty acid tests is currently $39.80. 
These unit rates are also being changed.
    The increase affects only that portion of the fees associated with 
hourly salaries paid to Federal employees and administrative personnel; 
overhead recovery is not included. The fee increase generates 
additional revenue required to recover operational costs created by the 
January 1999 cost-of-living increase to Federal salaries. The average 
salary increase for GIPSA employees in calendar year 1999 is projected 
at approximately 3.6 percent. This action is being taken to ensure that 
the service fees charged by GIPSA generate adequate revenue to cover 
the additional cost created by the January 1999 Federal salary 
increase.
    The hourly fees covered by this rule generate revenue to cover the 
basic

[[Page 7058]]

salary, benefits, and leave for those employees providing direct 
service delivery and administrative salaries and benefits, as well as 
contributing to overall overhead cost recovery. GIPSA has also 
identified that part of the hourly rate that is directly attributable 
to salaries and benefits and certain unit fees for services not 
performed at an applicant's facility that contain labor costs. This 
rule increases those hourly rates and unit fees based on an approximate 
3.6 percent increase to the labor cost of each hourly rate and unit.
    The amount of revenue collected under this rule will be a direct 
result of the work volume. GIPSA estimates an annual increase of 
$155,356 in revenue (assuming fiscal year 1998 volume equivalents). If 
GIPSA foregoes this adjustment, GIPSA will incur a net loss equivalent 
to the approximate 3.6 percent Federal salary increase for every hour 
worked by an employee providing direct service delivery and 
administrative personnel.
    In fiscal year 1998, GIPSA's obligations were $3,820,820 with 
revenue of $4,011,446, resulting in a positive margin of $190,626 and 
retained earnings of negative $895,584. GIPSA cannot afford to absorb a 
$155,356 loss due to the approximate 3.6 percent increase in salary 
costs with the existing deficit in retained earnings. Additionally, 
GIPSA will continue to monitor its costs to improve operating 
efficiencies and adopt cost saving measures, where possible and 
practicable.

Comment Review

    GIPSA received one comment during the 60-day comment period. The 
commenter, a grain trade association representing grain, feed, and 
processing companies, opposed the fee increase, stating that the agency 
is simply passing on increased costs to users of the rice inspection 
program without first relying on cost saving measures and improved 
efficiencies to offset the anticipated increase in salaries for Federal 
employees. The comment went on to say that the agency should look at 
current activities to determine where programs can be streamlined, 
staffing can be reduced or be made more efficient, and services can be 
automated as the primary method to control costs and re-build the 3-
month operating reserve in the trust fund account.
    GIPSA is required by the AMA to recover its costs for providing 
rice inspection services by establishing reasonable fees to cover their 
estimated costs. The 3.6 percent increase is consistent with the 
provisions of the AMA concerning the establishment of fees. Absorbing 
the average 3.6 percent salary increase is impractical considering the 
extremely low retained earnings of negative $895,584. Further, GIPSA 
has conducted numerous cost saving measures in the past few years, 
early retirements, field office consolidations, and reduction in travel 
and training. GIPSA will continue to monitor its costs to improve 
operating efficiencies and adopt cost saving measures, where possible 
and practicable.

Final Action

    Section 203 of the AMA (7 U.S.C. 1622) provides for the 
establishment and collection of fees that are reasonable and, as nearly 
as practicable, cover the costs of the services rendered. These fees 
cover the GIPSA costs, including administrative and supervisory costs, 
for the performance of official services, including personnel 
compensation, personnel benefits, travel, rent, communications, 
utilities, contractual services, supplies, and equipment.
    It is found that good cause exists for not postponing the effective 
date of this rule until 30 days after publication in the Federal 
Register (5 U.S.C. 553) because: (1) Given the current level of the 
operating reserve, the fee increase should be implemented as soon as 
possible, and (2) the effective date coincides with the beginning of a 
billing cycle.
    In Section 868.91, Tables 1 and 2 are revised to provide for the 
increases in rice inspection fees.

List of Subjects in 7 CFR Part 868

    Administrative practice and procedure, Agricultural commodities.

    For reasons set out in the preamble, 7 CFR Part 868 is amended as 
follows:

PART 868 --GENERAL REGULATIONS AND STANDARDS FOR CERTAIN 
AGRICULTURAL COMMODITIES

    1. The authority citation for part 868 continues to read as 
follows:

    Authority: Secs. 202-208, 60 Stat. 1087, as amended (7 U.S.C. 
1621 et seq.).

    2. Section 868.91 is revised to read as follows:


Sec. 868.91  Fees for certain Federal rice inspection services.

    The fees shown in Tables 1 and 2 apply to Federal Rice Inspection 
Services.

                Table 1.--Hourly Rates/Unit Rate Per CWT
               [Fees for Federal Rice Inspection Services]
------------------------------------------------------------------------
                                              Regular       Nonregular
                                              workday         workday
               Service \1\                   (Monday-        (Sunday-
                                             Saturday)       holiday)
------------------------------------------------------------------------
Contract (per hour per Service
 representative)........................          $40.80          $56.80
Noncontract (per hour per Service
 representative) \2\....................           50.00           69.00
Export Port Services \2\................            0.05           0.05
------------------------------------------------------------------------
\1\ Original and appeal inspection services include: Sampling, grading,
  weighing, and other services requested by the applicant when performed
  at the applicant's facility.
\2\ Services performed at export port locations on lots at rest.


                                              TABLE 2.--Unit Rates
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                                                                                  Brown rice for
                           Service 1,3                              Rough rice      processing      Milled rice
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Inspection for quality (per lot, sublot, or sample inspection)..          $32.90          $28.40          $20.20
Factor analysis for any single factor (per factor):
    (a) Milling yield (per sample)..............................           25.50           25.50
    (b) All other factors (per factor)..........................           12.10           12.10           12.10
Total oil and free fatty acid interpretive line samples: \2\....                           40.00           40.00
    (a) Milling degree (per set)................................                                           85.10

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    (b) Parboiled light (per sample)............................                                           21.30
    Extra copies of certificates (per copy).....................            3.00            3.00           3.00
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\1\ Fees apply to determinations (original or appeals) for kind, class, grade, factor analysis, equal to type,
  milling yield, or any other quality designation as defined in the U.S. Standards for Rice or applicable
  instructions, whether performed singly or combined at other than at the applicant's facility.
\2\ Interpretive line samples may be purchased from the U.S. Department of Agriculture, GIPSA, FGIS, Technical
  Services Division, 10383 North Executive Hills Boulevard, Kansas City, Missouri 68030. Interpretive line
  samples also are available for examination at selected FGIS field offices. A list of field offices may be
  obtained from the Director, Field Management Division, USDA, GIPSA, FGIS, 1400 Independence Avenue, SW, STOP
  3630, Washington, DC 20250-3630. The interpretive line samples illustrate the lower limit for milling degrees
  only and the color limit for the factor ``Parboiled Light'' rice.
\3\ Fees for other services not referenced in Table 2 will be based on the noncontract hourly rate listed in
  Section 868.90, Table 1.

James R. Baker,
Administrator.
[FR Doc. 99-3338 Filed 2-11-99; 8:45 am]
BILLING CODE 3410-EN-P