[Federal Register Volume 65, Number 62 (Thursday, March 30, 2000)]
[Rules and Regulations]
[Pages 16787-16789]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-7879]


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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: Final rule.

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SUMMARY: The Grain Inspection, Packers and Stockyards Administration 
(GIPSA) is increasing fees by approximately 4.8 percent 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.

EFFECTIVE DATE: May 1, 2000.

FOR FURTHER INFORMATION CONTACT: Dave Orr, Director, Field Management 
Division, at his E-mail address: [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, 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 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 (FY) 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. 
In FY 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. As of December 31, 1999, GIPSA's 
FY 2000 operating costs were $1,246,614 with revenue of $1,429,461 that 
resulted in a positive margin of $182,847 and a negative reserve of 
$168,447.
    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 FY 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 costs, along with the 
projected FY 2000 workload. Based on that review, we have concluded 
that we cannot absorb the increased costs due to the FY 2000 Federal 
salary increase with the current negative reserve balance. This fee 
increase will collect an estimated $138,000 in additional revenues.
    This 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 are being increased, the increase will not be excessive (4.8 
percent) and should not significantly affect those 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 will 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 868 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 rule.

Executive Order 12988

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

Background

    On January 3, 2000, GIPSA proposed in the Federal Register (65 FR 
78) to increase fees for official rice inspection services performed 
under the AMA by approximately 4.8 percent. Under the provisions of the 
AMA 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.

[[Page 16788]]

    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 FY 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 FY 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 FY 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 FY 1999 revenue was $4,412,131 with operating costs of 
$4,105,564, that resulted in a positive margin of $306,567 and a 
negative reserve balance of $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 FY 1994 through 
FY 1999 to a negative level of $508,628. As of December 31, 1999, 
GIPSA's FY 2000 operating costs were $1,246,614 with revenue of 
$1,429,461 that resulted in a positive margin of $182,847 and a 
negative reserve of $168,447.
    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 FY's 1998 and 1999, GIPSA inspected 3.9 million metric tons of rice, 
and projections indicate that similar amounts will be inspected for FY 
2000. The Agency will continue its efforts to streamline costs 
associated with providing service to further reduce the negative 
reserve balance. However, we must recover the projected $135,000 
increase in salaries and benefits in order to accomplish this goal. 
GIPSA estimates that the fee increase will generate an additional 
$138,000 in revenue, based on the projected FY 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 contained in the fee schedule and are at levels that 
do not require any change. GIPSA is implementing 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:

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                                                                                  Brown Rice for
                             Service                                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...................................              --           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
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Comment Review

    GIPSA received no comments in response to the proposed rulemaking 
published January 3, 2000, at 65 FR 78.

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.

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.

[[Page 16789]]



                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                   $42.80          $59.60
 representative)........................
Noncontract (per hour per Service                 52.40           72.40
 representative)........................
Export Port Services (per hundredweight)            .052            .052 
 \2\....................................
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\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)..          $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
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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 in combination 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 64153-1394. 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.


    Dated: March 21, 2000.
James R. Baker,
 Administrator, Grain Inspection, Packers and Stockyards 
Administration.
[FR Doc. 00-7879 Filed 3-29-00; 8:45 am]
BILLING CODE 3410-EN-U