[Federal Register Volume 68, Number 75 (Friday, April 18, 2003)]
[Rules and Regulations]
[Pages 19137-19139]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-9630]



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  Federal Register / Vol. 68, No. 75 / Friday, April 18, 2003 / Rules 
and Regulations  

[[Page 19137]]



DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

7 CFR Part 800

[Docket Number FGIS 2003-003]
RIN 0580-AA76


Exceptions to Geographic Areas for Official Agencies Under the 
USGSA

AGENCY: Grain Inspection, Packers and Stockyards Administration 
(GIPSA), USDA.

ACTION: Final rule.

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

SUMMARY: This rule revises regulations issued under the United States 
Grain Standards Act (USGSA) to establish criteria to allow more than 
one designated official agency to inspect or weigh grain within a 
single geographic area. The rule will enhance the orderly marketing of 
grain by providing segments of the grain industry with more cost-
effective and responsive official grain inspection and weighing 
services without undermining the integrity of the official system.

EFFECTIVE DATE: May 19, 2003.

FOR FURTHER INFORMATION CONTACT: Neil Porter, Director, Compliance 
Division at (202) 720-8262.

SUPPLEMENTARY INFORMATION: 

Executive Order 12866, Executive Order 12988, 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.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This action is not intended to have a retroactive 
effect. The U.S. Grain Standards Act (USGSA) (7 U.S.C. 71 et seq.) 
provides in Sec.  87g that no subdivision may require or impose any 
requirements or restrictions concerning the inspection, weighing, or 
description of grain under the USGSA. Otherwise, this rule would 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.
    Also, pursuant to the requirements set forth in the Regulatory 
Flexibility Act, the Administrator of Grain Inspection, Packers and 
Stockyards Administration (GIPSA) has determined that this rule will 
not have a significant economic impact on a substantial number of small 
entities as defined pursuant to the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.).
    GIPSA conducted a 6-year voluntary pilot program. The pilot program 
permitted more than one official agency to operate in the same 
geographic area. There are 58 official agencies (15 States and 43 
private agencies) designated under the USGSA. Thirty-six agencies (7 
States and 29 private agencies) or 61 percent participated in the pilot 
program. All 43 private agencies are classified as business services, 
and all are ``small business entities'' under the guidelines of the 
Small Business Administration (SBA). The SBA does not classify States 
as small or large business entities. Volumes were down for state 
agencies. Of the 43 private agencies, 29 or 67 percent participated in 
the pilot program. Fourteen of the 29 saw an increase in service 
requests and 15 saw a decrease in service requests due to the greater 
flexibility provided by the pilot program. All increases and decreases 
in service requests represented inspections of railcars or barges. A 5-
year average of official railcar and barge inspections is about 850,000 
railcars per year, and about 28,000 barges per year. Less than 2 
percent of the total number of railcars and less than 3 percent of the 
total number of barges were inspected under the pilot program by 
designated official agencies.
    The customers (grain elevators) of the official agencies that 
requested service under the pilot program represented a mix of both 
large and small entities as defined for the grain industry by the SBA. 
GIPSA expects that this would remain the case. Approximately 70 percent 
of the 128 grain elevators that participated in the pilot program were 
small entities under the SBA guidelines, and accounted for 82 percent 
of the service volume for railcars. The 128 elevators that participated 
in the pilot program represent less than two percent of the estimated 
9,695 off-farm storage facilities in the United States that could 
receive official inspection services.
    Fifty-six percent of the volume of railcar inspection services 
during the pilot program was performed at grain elevators that had not 
used official services for more than a year. GIPSA believes that the 
pilot program has enhanced the orderly marketing of grain by providing 
grain elevators with improved services without undermining the 
integrity of the USGSA and the official system. At the same time, there 
has been no significant economic impact on small entity official 
agencies or grain elevators.
    In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection and recordkeeping requirements 
in part 800 have been previously approved by the Office of Management 
and Budget under control number 0580-0013. There would be no additional 
reporting or recordkeeping requirements imposed by this action. The 
request to GIPSA for approval can be done by telephone. GIPSA has not 
identified any other Federal rules which may duplicate, overlap, or 
conflict with this rule.

Background

    In 1976, the USGSA specified exclusive geographic boundaries for 
each designated entity performing official inspections. In later years, 
some grain firms reported delays in getting service due to the distance 
from the inspection laboratories serving them. Others had difficulty 
getting service during harvest or other peak demand periods. In April 
1993, the General Accounting Office released a study, entitled ``Grain 
Inspection Industry Views on the Decline in Official Inspections and 
Inspection Costs,'' which questioned maintaining exclusivity of 
boundaries.
    On November 1, 1995, GIPSA, under the authority of the 1993 
Amendments to the USGSA, initiated a pilot program to study the effect 
of permitting more than one designated agency to inspect or weigh grain 
in a single geographic area. GIPSA concluded, based on information

[[Page 19138]]

gathered from the pilot program, that less restrictive geographic 
service area requirements on designated official agencies would improve 
the quality of service provided to the American grain industry and 
facilitate the marketing of grain without undermining the integrity of 
the USGSA and the official system. Legislative authority was requested 
to permit more than one designated official agency to provide official 
services within a single geographic area.
    Congress amended the USGSA in 2000 to give the Department 
discretion, under certain circumstances, to allow more than one 
designated official agency to provide official inspection services 
within a single geographic area. GIPSA is implementing this authority 
by revising the regulations under the USGSA. Under certain 
circumstances, more than one designated official agency can provide 
official inspection services within a single geographic area. This 
provides segments of the grain industry with more cost-effective and 
responsive official grain inspection and weighing services.

Comment Review

    GIPSA received 3 comments during the 60-day comment period. One was 
from a private laboratory wanting an opportunity to do business as an 
official grain inspection agency. GIPSA infers from the private 
laboratory's comment that they are interested in becoming an official 
designated agency for the purpose of conducting domestic inspections 
pursuant to the USGSA. The commenter may apply for such designation, 
and must meet the statutory criteria under section 7f(1)(a) of the 
USGSA. The commenter may obtain further information by accessing 
GIPSA's Web site at: http://www.usda.gov/gipsa, or by calling GIPSA at 
(202) 720-8525.
    One comment was from a professional association of official grain 
inspection and weighing agencies, and one was from a grain trade 
association, stating membership of 1,000 grain, feed, processing, and 
grain-related companies, approximately 70 percent of which are small 
entities. All three supported GIPSA's proposal, however, the trade 
association supports the proposal with the following comment: ``We 
oppose including the phrase `due to reasons other than seasonal 
shipping fluctuations' in proposed Sec.  800.117(b)(2), Nonuse of 
Service, because it robs industry of its ability to effectively use the 
strict 3-month non-use of service under the Agency's Open Season pilot 
program * * * to encourage the assigned designated official agency to 
provide more cost effective and responsive service or possibly lose 
business to a competing official agency.''
    GIPSA is clarifying the new section 800.117(b)(2) to more 
accurately describe its intent. GIPSA has revised the criteria for 
``Nonuse of Service'' to read, ``* * * due to reasons other than 
seasonal ice making waterways unnavigable.'' The inclusion of the 
phrase ``due to reasons other than seasonal ice making waterways 
unnavigable'' allows GIPSA to accomplish the intent of the nonuse 
exception program, but reduces the possibility that some official 
agencies will be at an advantage over others because of climatic 
conditions. GIPSA continually works to provide for cost-effective and 
responsive official inspection and weighing service, while implementing 
the USGSA requirements to provide for uniform official inspection and 
weighing, and carrying out assigned regulatory and service 
responsibilities.

Final Action

    GIPSA revises the following: 7 CFR 800.81, 800.99, 800.116, 
800.117, 800.118, 800.185, and 800.196 to implement changes in the 
USGSA. The changes allow sampling for official sample-lots, and 
weighing of sacked grain outside the geographical boundaries assigned 
to the designated official agency. Program criteria for nonuse of 
service, timely service, and barge probing is provided. Requests for 
original services allow qualified applicants to use another agency to 
provide service. Official personnel may operate outside of the area of 
responsibility assigned to them. The action allows exceptions to the 
designated areas of responsibility. The sections regarding 
certification are combined for a more logical sequence.

List of Subjects in 7 CFR Part 800

    Administrative practice and procedure, Grain.

0
For the reasons set out in the preamble, 7 CFR part 800 is amended as 
follows:

PART 800--GENERAL REGULATIONS

0
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.).


0
2. Section 800.81 is amended by revising paragraphs (a)(1) and (d) and 
the information collection parenthetical to read as follows:


Sec.  800.81  Sample requirements; general.

    (a) Samples for official sample-lot inspection service--(1) 
Original official sample-lot inspection service. For original sample-
lot inspection purposes, an official sample shall be obtained by 
official personnel; representative of the grain in the lot; and 
protected from manipulation, substitution, and improper or careless 
handling.
* * * * *
    (d) Restriction on sampling. Official personnel shall not perform 
an original inspection or a reinspection service on an official sample 
or a warehouseman's sample unless the grain from which the sample was 
obtained was located within the area of responsibility assigned to the 
agency or field office at the time of sampling, except as provided for 
in Sec.  800.117, or on a case-by-case basis as determined by the 
Administrator.
* * * * *

(Approved by the Office of Management and Budget under control number 
0580-0013)


0
3. Section 800.99 is amended by revising paragraph (d) to read as 
follows:


Sec.  800.99  Checkweighing sacked grain.

* * * * *
    (d) Restriction on weighing. No agency shall weigh any lot of 
sacked grain unless at the time of obtaining the official weight sample 
the grain from which the sample was obtained was located within the 
area of responsibility assigned to the agency, except as otherwise 
provided for in Sec.  800.117, or on a case-by-case basis as determined 
by the Administrator.
* * * * *

0
4. Section 800.116 is revised to read as follows:


Sec.  800.116  How to request original services.

    (a) General. Except as otherwise provided for in Sec.  800.117, 
requests for original services shall be filed with an agency or field 
office authorized to operate in the area in which the original service 
is to be performed. All requests shall include the information 
specified in Sec.  800.46. Verbal requests shall be confirmed in 
writing when requested by official personnel, as specified in Sec.  
800.46. Copies of request forms may be obtained from the agency or 
field office upon request. If the information specified by Sec.  800.46 
is not available at the time the request is filed, official personnel 
may, at their discretion, withhold service pending receipt of the 
required information. An official certificate shall not be issued 
unless the information as required by Sec.  800.46 has been submitted, 
or official personnel determine that sufficient information

[[Page 19139]]

has been made available so as to perform the requested service. A 
record that sufficient information was made available must be included 
in the record of the official service.
    (b) Request requirements. Except as provided for in Sec.  800.117, 
requests for original services, other than submitted sample 
inspections, must be made to the agency or field office responsible for 
the area in which the service will be provided. Requests for submitted 
sample inspections may be made with any agency, or any field office 
that provides original inspection service. Requests for inspection or 
Class X weighing of grain during loading, unloading, or handling must 
be received in advance of loading so official personnel can be present. 
All requests will be considered filed when official personnel receive 
the request. A record shall be maintained for all requests. All 
requests for service that is to be performed outside normal business 
hours must be received by 2 p.m. the preceding day.


(Approved by Office of Management and Budget under control number 0580-
0013)


0
5. Section 800.117 is revised to read as follows:


Sec.  800.117  Who shall perform original services.

    (a) General. Original services shall be performed by the agency or 
field office assigned the area in which the service will be provided, 
except as provided in paragraph (b) of this section.
    (b) Exceptions for official agencies to provide service--(1) Timely 
service. If the assigned official agency cannot provide service within 
6 hours of a request, the service may be provided by another official 
agency upon approval from the Service.
    (2) Nonuse of service. If the assigned official agency has not 
provided official services to an applicant for 90 consecutive days, due 
to reasons other than seasonal ice making waterways unnavigable, 
service may be provided by another official agency upon approval from 
the Service.
    (3) Barge probe service. Any official agency may provide probe 
sampling and inspection service for barge-lots of grain with no 
restrictions due to geographical locations.
    (c) Interim service at other than export port locations. If the 
assigned official agency is not available on a regular basis to provide 
original services, and no official agency within a reasonable proximity 
is willing to provide such services on an interim basis, the services 
shall be provided by authorized employees of the Secretary, or other 
persons licensed by the Secretary, until the services can be provided 
on a regular basis by an official agency, as provided in Sec.  800.196.

0
6. Section 800.118 is revised to read as follows:


Sec.  800.118  Certification.

    Official certificates shall be issued according to Sec.  800.160. 
Upon request, a combination inspection and Class X weighing certificate 
may be issued when both services are performed in a reasonably 
continuous operation at the same location by the same agency or field 
office. An official certificate shall not be issued unless the 
information as required by Sec.  800.46 has been submitted, or official 
personnel determine that sufficient information has been made available 
so as to perform the requested service. A record that sufficient 
information was made available must be included in the record of the 
official service.


(Approved by Office of Management and Budget under Control Number 0580-
0013)


0
7. Section 800.185 is amended by revising paragraph (d) and the 
informational parenthetical to read as follows:


Sec.  800.185  Duties of official personnel and warehouse samplers.

* * * * *
    (d) Scope of operations. Official personnel and warehouse samplers 
shall operate only within the scope of their license or authorization 
and except as otherwise provided in Sec.  800.117, operate only within 
the area of responsibility assigned to the official agency, field 
office, or contractor which employs them. Official personnel and 
warehouse samplers may perform official inspection or weighing services 
in a different area of responsibility with the specific consent of the 
Service.
* * * * *

(Approved by the Office of Management and Budget under control number 
0580-0013)


0
8. Section 800.196 is amended by revising paragraph (f)(1) and the 
information collection parenthetical to read as follows:


Sec.  800.196  Designations.

* * * * *
    (f) Area of responsibility--(1) General. Each agency shall be 
assigned an area of responsibility by the Service. Each area shall be 
identified by geographical boundaries and, in the case of a State or 
local government, shall not exceed the jurisdictional boundaries of the 
State or the local government, unless otherwise approved by the 
Service. The area of responsibility may not include any export 
elevators at export port locations or any portion of an area of 
responsibility assigned to another agency that is performing the same 
functions, except as otherwise provided in Sec.  800.117. A designated 
agency may perform official services at locations outside its assigned 
area of responsibility only after obtaining approval from the Service, 
or in accordance with provisions set forth in Sec.  800.117.
* * * * *
(Approved by the Office of Management and Budget under control number 
0580-0013).

    Dated: April 15, 2003.
Donna Reifschneider,
Administrator.
[FR Doc. 03-9630 Filed 4-17-03; 8:45 am]
BILLING CODE 3410-EN-P