[Federal Register Volume 65, Number 1 (Monday, January 3, 2000)]
[Proposed Rules]
[Pages 78-81]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-33931]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

7 CFR Part 868

RIN 0580-AA70


Fees for Rice Inspection

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

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Grain Inspection, Packers and Stockyards Administration 
(GIPSA) is proposing an approximate 4.8 percent fee increase for all 
hourly rates and certain unit rates. The fees apply to Federal Rice 
Inspection performed under the Agricultural Marketing Act (AMA) of 
1946. These increases are needed to cover increased operational costs 
resulting from the mandated January 2000 Federal pay increase.

DATES: Written comments must be submitted on or before March 3, 2000.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Written comments must be submitted to Sharon 
Vassiliades, GIPSA, USDA, 1400 Independence Avenue, SW, Room 0623, 
Washington, DC 20250-3649, or faxed to (202) 720-4628. Comments may 
also be sent by electronic mail or Internet to: 
[email protected]. All comments should make reference to the 
date and page number of this issue of the Federal Register and will be 
available for public inspection in the above office during regular 
business hours (7 CFR 1.27(b)).

FOR FURTHER INFORMATION CONTACT: David Orr, Director, Field Management 
Division, at his Email address: D[email protected] or telephone him 
at (202) 720-0228.

SUPPLEMENTARY INFORMATION:

Executive Order 12866, Regulatory Flexibility Act, and the 
Paperwork Reduction Act

    This rule has been determined to be nonsignificant for the purpose 
of Executive Order 12866 and, therefore,

[[Page 79]]

has not been reviewed by the Office of Management and Budget.
    Also, pursuant to the requirements set forth in the Regulatory 
Flexibility Act, 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.).
    GIPSA regularly reviews its user-fee-financed programs to determine 
if the fees are adequate. GIPSA has and will continue to seek out cost 
saving opportunities and implement appropriate changes to reduce costs. 
Such actions can provide alternatives to fee increases. However, even 
with these efforts, GIPSA's existing fee schedule will not generate 
sufficient revenues to cover program costs while maintaining an 
adequate reserve balance. In fiscal year 1998, GIPSA's operating costs 
were $3,820,820 with revenue of $4,011,446, resulting in a positive 
margin of $190,626 and a negative reserve balance of $895,584. As of 
September 30, 1999, GIPSA's operating costs were $4,105,564 with 
revenue of $4,412,131 that resulted in a positive margin of $306,567 
and a negative reserve balance of $508,628.
    Employee salaries and benefits are major program costs that account 
for approximately 84 percent of GIPSA's total operating budget. A 
general and locality salary increase that averages 4.8 percent for 
GIPSA employees, effective January 2000, will increase program costs. 
This salary adjustment will increase GIPSA's costs by approximately 
$135,000, based on the projected fiscal year 2000 work volume of 3.9 
million metric tons.
    We have reviewed the financial position of our rice inspection 
program based on the increased salary and benefit cost along with the 
projected fiscal year 2000 workload. Based on that review, we have 
concluded that we cannot absorb the increased costs due to salary 
increase with the current negative reserve balance. The proposed fee 
increase will collect an estimated $138,000 in additional revenues.
    The proposed fee increase primarily applies 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 States of Arkansas, Louisiana, and Texas. Many of these 
customers meet the criteria for small entities established by the Small 
Business Administration criteria for small businesses. Even though the 
fees would be raised, the increase would not be excessive (4.8 percent) 
and should not significantly affect these entities. Those entities are 
under no obligation to use our service and, therefore, any decision on 
their part to discontinue the use of our service should not prevent 
them from marketing their products.
    There would be no additional reporting or record keeping 
requirements imposed by this action. In compliance with the Paperwork 
Reduction Act of 1995 (44 U.S.C. Chapter 35), the information 
collection and record keeping requirements in Part 800 have been 
previously approved by the Office of Management and Budget under 
control number 0580-0013. GIPSA has not identified any other Federal 
rules which may duplicate, overlap, or conflict with this proposed 
rule.

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 that 
must be exhausted prior to any judicial challenge to the provisions of 
this proposed rule.

Proposed Action

    Under the provisions of the Agricultural Marketing Act of 1946 (7 
U.S.C. 1621, et seq.), rice inspection services are provided upon 
request and GIPSA must collect a fee from the customer to cover the 
cost of providing such services. Section 203(h) of the AMA (7 U.S.C. 
1622(h)) 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 administrative and 
supervisory costs for the performance of official services, including 
personnel compensation, personnel benefits, travel, rent, 
communications, utilities, contractual services, supplies, and 
equipment.
    The rice inspection fees were last amended on February 12, 1999, 
and became effective March 1, 1999 (64 FR 7057). These fees were to 
cover, as nearly as practicable, the level of operating costs as 
projected for fiscal year 1999. They presently appear at 7 CFR 868.91 
in Tables 1 and 2.
    GIPSA continually monitors its cost, revenue, and operating reserve 
levels to ensure that there are sufficient resources for operations. 
During fiscal year 1998, GIPSA implemented cost-saving measures in an 
effort to provide more cost effective services. The purpose of these 
measures was to reduce operating costs in order to reduce the negative 
retained earnings in this program. The cost containment measures 
included employee buyouts and better cross utilization of personnel 
between programs.
    In fiscal year 1998, the program generated revenue of $4,011,446 
with operating costs of $3,820,820, resulting in a positive margin of 
$190,626. Even though we generated a positive margin for the year, we 
continued to operate with a negative reserve balance of $895,584. The 
rice program's fiscal year 1999 revenue was $4,412,131 with operating 
costs of $4,105,564. In fiscal year 1999, we operated with a positive 
margin of $306,567 and reduced our reserve balance to a negative 
$508,628. The rice inspection program has been slowly recovering from a 
long-standing deficit. Through a series of small fee increases and cost 
cutting measures, GIPSA has reduced the level of the negative reserve 
balance from $939,147 in fiscal year 1994 to its current level of 
negative $508,628.
    However, employee salaries and benefits are major program costs 
that account for approximately 84 percent of GIPSA's total operating 
budget. A general and locality salary increase that averages 4.8 
percent for GIPSA employees, effective January 2000, will increase 
program costs. This salary adjustment will increase GIPSA's costs by 
approximately $135,000. GIPSA cannot absorb this increase in salary 
costs with a deficit in the reserve balance and, at the same time, 
continue our efforts to reduce costs to eliminate the existing deficit. 
In fiscal years 1998 and 1999, GIPSA inspected 3.9 million metric tons 
of rice, and projections indicate that similar amounts will be 
inspected for fiscal year 2000. With no projected increase in the 
number of rice inspections, we anticipate operating costs to remain 
fairly constant except for the projected $135,000 increase in salaries 
and benefits. GIPSA estimates that the fee increase will generate an 
additional $138,000 in revenue, based on the projected fiscal year 2000 
work volume of 3.9 million metric tons.
    The costs associated with salaries and benefits are recovered by 
the hourly rates for personnel performing direct service. Other 
associated costs, including non-salary related overhead, are collected 
through other fees

[[Page 80]]

contained in the fee schedule and are at levels that would not require 
any change. These fees would not be changed under this proposal. As 
such, GIPSA is proposing a 4.8 percent increase to the hourly rates and 
certain unit rates in 7 CFR Part 868.91, Table 1--Hourly Rates/Unit 
Rate Per CWT and Table 2--Unit Rates. Currently, the regular workday 
contract and noncontract fees are $40.80 and $50.00, respectively, 
while the nonregular workday contract and noncontract fees are $56.80 
and $69.00, respectively. The unit rate per hundredweight for export 
port services is currently $.05 per hundredweight. The other current 
unit rates are:

----------------------------------------------------------------------------------------------------------------
                                                                                  Brown rice for
                             Service                                Rough rice      processing      Milled rice
----------------------------------------------------------------------------------------------------------------
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...................................  ..............           40.00           40.00
Interpretive line samples:
    (a) Milling degree (per set)................................  ..............  ..............           85.10
    (b) Parboiled light (per sample)............................  ..............  ..............           21.30
Extra copies of certificates (per copy).........................            3.00            3.00            3.00
----------------------------------------------------------------------------------------------------------------

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 proposed to 
be 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 workday       Nonregular workday
                            Service \1\                               (Monday-Saturday)       (Sunday-Holiday)
----------------------------------------------------------------------------------------------------------------
Contract (per hour per Service representative)                                    $42.80                 $59.60
Noncontract (per hour per Service representative).................                 52.40                  72.40
Export Port Services \2\ (per hundredweight)......................                   .052                   .052
----------------------------------------------------------------------------------------------------------------
\1\ Original and appeal inspection services included: 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
----------------------------------------------------------------------------------------------------------------
                                                                                  Brown rice for
                         Service\1\ \3\                             Rough rice      processing      Milled rice
----------------------------------------------------------------------------------------------------------------
Inspection for quality (per lot, sublot, or sample inspection)..          $34.50          $29.80          $21.20
Factor analysis for any single factor (per factor):
  (a) Milling yield (per sample)................................           26.75           26.75  ..............
  (b) All other factors (per factor)............................           12.70           12.70           12.70
Total oil and free fatty acid...................................  ..............           42.00           42.00
Interpretive line samples.\2\
  (a) Milling degree (per set)..................................  ..............  ..............           89.20
  (b) Parboiled light (per sample)..............................  ..............  ..............           22.35
Extra copies of certificates (per copy).........................            3.00            3.00            3.00
----------------------------------------------------------------------------------------------------------------
\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
  Sec.  868.90, Table 1.


[[Page 81]]

    Dated: December 20, 1999.
David R. Shipman,
Acting Administrator, Grain Inspector, Packers and Stockyards 
Administration.
[FR Doc. 99-33931 Filed 12-30-99; 8:45 am]
BILLING CODE 3410-EN-U