[Federal Register Volume 68, Number 105 (Monday, June 2, 2003)]
[Rules and Regulations]
[Pages 32623-32627]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-13679]



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  Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Rules 
and Regulations  

[[Page 32623]]



DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

7 CFR Part 800

RIN 0580-AA81


Fees for Official Inspection and Official Weighing Services

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

ACTION: Final rule.

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

SUMMARY: The Federal Grain Inspection Service (FGIS) of the Grain 
Inspection, Packers and Stockyards Administration (GIPSA) is increasing 
certain fees by approximately 4.1 percent; i.e., contract and 
noncontract hourly rates, certain unit rates, and the administrative 
tonnage fee increases. These fees apply only to official inspection and 
weighing services performed in the United States under the United 
States Grain Standards Act (USGSA), as amended. These increases are 
needed to cover increased operational costs resulting from the 
approximate 4.1 percent January 2003 Federal pay increase. GIPSA 
anticipates the increase in the user fees will generate approximately 
$685,000 in additional revenue.

EFFECTIVE DATE: July 2, 2003.

FOR FURTHER INFORMATION CONTACT: David 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, it has been determined that this final 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 under the 
United States Grain Standards Act (7 U.S.C. 71 et seq.) 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. Retained earnings balances are adjusted to 
reflect prior year revenue and obligations realized in the year 
reported. In Fiscal Year (FY) 2000, GIPSA's operating costs were 
$24,146,428 with revenue of $23,150,188 that resulted in a negative 
margin of $996,240 and a negative reserve balance of $938,147. In FY 
2001, GIPSA's operating costs were $25,670,126 with revenue of 
$23,977,240 that resulted in a negative margin of $1,692,886 and a 
negative reserve balance of $2,572,080. In FY 2002, GIPSA's operating 
costs were $25,898,341 with revenue of $25,317,296 that resulted in a 
negative margin of $581,045 and a negative reserve balance of 
$3,339,097. The current reserve negative balance of $3,339,097 is well 
below the desired 3-month reserve of approximately $6 million. GIPSA 
recognizes the fact that retained earnings are well below the desired 
level. This final action will not have a major impact on improving 
GIPSA's financial position. GIPSA has been reviewing the fees and will 
propose changes that will address this deficit in the near future.
    Employee salaries and benefits are major program costs that account 
for approximately 84 percent of GIPSA's total operating budget. The 
general and locality salary increase that averages 4.1 percent for 
GIPSA employees, effective January 2003, will increase GIPSA's costs by 
approximately $685,000.
    GIPSA has reviewed the financial position of the inspection and 
weighing program based on the anticipated increased salary and benefit 
costs, along with the projected FY 2003 workload of 78 million metric 
tons. Based on the review, GIPSA has concluded that an approximate 4.1 
percent salary increase will have to be recovered through increases in 
fees.
    This fee increase primarily applies to entities engaged in the 
export of grain. Under the provisions of the USGSA, grain exported from 
the United States must be officially inspected and weighed. Mandatory 
inspection and weighing services are provided by GIPSA on a fee basis 
at 33 export facilities. All of these facilities are owned and managed 
by multi-national corporations, large cooperatives, or public entities 
that do not meet the criteria for small entities established by the 
Small Business Administration.
    Some entities that request nonmandatory official inspection and 
weighing services at other than export locations could be considered 
small entities. The impact on these small businesses is similar to any 
other business; that is, an average 4.1 percent increase in the cost of 
official inspection and weighing services. This increase should not 
significantly affect any business requesting official inspection and 
weighing services. Furthermore, any of these small businesses that wish 
to avoid the fee increase may elect to do so by using an alternative 
source for inspection and weighing services. Such a decision should not 
prevent the business from marketing its products.
    There would be no additional reporting or recordkeeping 
requirements imposed by this action. 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. GIPSA has not identified any other Federal 
rules which may duplicate, overlap, or conflict with this final 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. The USGSA 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 Act. Otherwise, this

[[Page 32624]]

final rule will not preempt any State or local laws, regulations, or 
policies unless they present irreconcilable conflict with this final 
rule. There are no administrative procedures that must be exhausted 
prior to any judicial challenge to the provisions of this final rule.

Background

    On February 28, 2003, GIPSA proposed in the Federal Register (68 FR 
9589) to increase fees for official inspection and weighing services 
performed under the USGSA (7 U.S.C. 71 et seq.) by approximately 4.1 
percent. The USGSA authorizes GIPSA to provide official grain 
inspection and weighing services and to charge and collect reasonable 
fees for performing these services. The fees collected are to cover, as 
nearly as practicable, GIPSA's costs for performing these services, 
including related administrative and supervisory costs. The current 
USGSA fees were published in the Federal Register on March 21, 2002 (67 
FR 13084), and became effective on April 22, 2002.
    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. Retained earnings balances are adjusted to 
reflect prior year revenue and obligations realized in the year 
reported. In FY 2000, GIPSA's operating costs were $24,146,428 with 
revenue of $23,150,188 that resulted in a negative margin of $996,240 
and a negative reserve balance of $938,147. In FY 2001, GIPSA's 
operating costs were $25,670,126 with revenue of $23,977,240 that 
resulted in a negative margin of $1,692,886 and a negative reserve 
balance of $2,572,080. In FY 2002, GIPSA's operating costs were 
$25,898,341 with revenue of $25,317,296 that resulted in a negative 
margin of $581,045 and a negative reserve balance of $3,339,097. The 
current reserve negative balance of $3,339,097 is well below the 
desired 3-month reserve of approximately $6 million. Employee salaries 
and benefits are major program costs that account for approximately 84 
percent of GIPSA's total operating budget. The salary increase that 
became effective in January 2003 averages 4.1 percent for GIPSA 
employees. Overall, program costs are estimated to increase by 
approximately $685,000. GIPSA recognizes that retained earnings are 
well below the desired level and that this final action will not have a 
major impact on improving its financial position. As a result, GIPSA 
has been reviewing its overall fee structure. Changes that will address 
this structure will be considered in the near future and will be 
proposed as appropriate. GIPSA remains committed to providing the most 
cost-effective services possible to the grain industry while 
maintaining program quality and integrity.
    GIPSA has reviewed the financial position of the inspection and 
weighing program based on the increased salary and benefit costs, along 
with the projected FY 2003 workload of 78 million metric tons. Based on 
the review, GIPSA has concluded that an approximate 4.1 percent salary 
increase will have to be recovered through increases in fees.
    The current hourly fees are:

----------------------------------------------------------------------------------------------------------------
                                                     Monday to       Monday to       Saturday,
                                                  Friday (6 a.m.  Friday (6 p.m.    Sunday, and      Holidays
                                                    to 6 p.m.)      to 6 a.m.)       overtime
----------------------------------------------------------------------------------------------------------------
1-year contract.................................          $28.60          $31.20          $40.40          $48.60
6-month contract................................           31.60           33.40           42.80           56.00
3-month contract................................           36.00           37.20           46.60           58.00
Noncontract.....................................           41.80           44.00           53.40           65.40
----------------------------------------------------------------------------------------------------------------

    GIPSA has also identified certain unit fees, for services not 
performed at an applicant's facility, that contain direct labor costs 
and would require a fee increase. Further, GIPSA has identified those 
costs associated with salaries and benefits that are covered by the 
administrative metric tonnage fee. The 4.1 percent cost-of-living 
increase to salaries and benefits covered by the administrative tonnage 
fee results in an overall increase of an average of 4.1 percent to the 
administrative tonnage fee.

Comment Review

    GIPSA received a comment from two grain trade associations in 
response to the proposed rulemaking published February 28, 2003, in the 
Federal Register at (68 FR 9589). The trade associations stated that 
they consist of 1,000 grain, feed, processing, and grain-related 
companies, 70 percent of which are small entities. The commentors did 
not support the proposed rule. A summary of the comments and GIPSA's 
response is as follows:
    The commentors opposed the fee increase and suggested that the 
Agency scale back the amount of the increase substantially; that the 
true cost of living has not increased nearly as much as the proposed 
fee increase nor is the proposed fee increase in line with the economic 
realities in the private sector. The commentors further stated that 
over the past few years, the Agency implemented a series of fee 
increases to recoup costs and stave off more significant difficulties. 
However, despite these infusions of cash, the Agency's financial 
condition continues to deteriorate. In addition, the fee increases have 
become problematic for many users, particularly those engaged in export 
trade. They urged GIPSA to develop a multi-year budget for the next 
three to five years that would forecast anticipated changes in agency 
fees for official services, based upon: (1) OMB's projected Federal 
personnel and non-pay cost increases through 2008 as published in the 
March 14, 2003, Federal Register; (2) anticipated revenue to replenish 
each Trust Fund account, along with implemented cost controls, to 
achieve the Agency's stated objective of a three-month operating 
reserve in each account; and (3) projected changes in the method of 
assessing fees, e.g., local, GIPSA specific, and national tonnage fees.
    Finally, the commentors stated that the multi-year budget for the 
next three to five years should describe management efforts to control 
costs and improve operating efficiencies, along with a critical 
evaluation of each program funded by user fees to determine which 
should be continued, scaled back, or terminated.
    GIPSA offers the following response: Federal pay increases 
represent a significant part of FGIS user fee costs. GIPSA, over the 
past several years, proposed and finalized fee increases, on an annual 
basis, to reflect the costs of

[[Page 32625]]

Federal pay increases. It is common practice for user fee programs in 
the Department to adjust their user fees to reflect these increases. 
Adjusting fees in this manner is consistent with the provisions of the 
United States Grain Standards Act and is reasonable, given the current 
state of reserve balances for FGIS programs. However, over the past 
several years, GIPSA has been discussing with the grain industry a 
number of changes to the fee schedules, including restructuring them, 
to better address the financial condition of the agency. Such 
discussions have included, to one extent or another, the 
recommendations offered by the trade associations in their comments or 
other alternatives. While GIPSA continues to purse this process, it is 
important that the agency finalize the proposed fees as soon as 
possible to cover the costs of the 2003 Federal pay increase on the 
FGIS user fee program.

Final Action

    Accordingly, GIPSA is increasing, by approximately 4.1 percent, 
certain hourly rates, certain unit rates, and the administrative 
tonnage fee in 7 CFR 800.71, Table 1--Fees for Official Services 
Performed at an Applicant's Facility in an Onsite FGIS Laboratory; 
Table 2--Services Performed at Other Than an Applicant's Facility in an 
FGIS Laboratory; and Table 3--Miscellaneous Services.

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 800.71 is amended by revising Schedule A in paragraph (a) 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\
                [(1) Inspection and Weighing Services Hourly Rates (per service representative)]
----------------------------------------------------------------------------------------------------------------
                                                     Monday to       Monday to       Saturday,
                                                  Friday (6 a.m.  Friday (6 p.m.    Sunday, and      Holidays
                                                    to 6 p.m.)      to 6 a.m.)     overtime \2\
----------------------------------------------------------------------------------------------------------------
1-year contract.................................          $29.80          $32.60          $42.00          $50.60
6-month contract................................           33.00           34.80           44.60           58.40
3-month contract................................           37.00           38.80           48.60           60.40
Noncontract.....................................           43.60           45.80           55.60           68.00
----------------------------------------------------------------------------------------------------------------


(2) Additional Tests (cost per test, assessed in addition to
 the hourly rate) \3\
    (i) Aflatoxin (other than Thin Layer Chromatography).....      $8.50
    (ii) Aflatoxin (Thin Layer Chromatography method)........      20.00
    (iii) Corn oil, protein, and starch (one or any                 1.50
     combination)............................................
    (iv) Soybean protein and oil (one or both)...............       1.50
    (v) Wheat protein (per test).............................       1.50
    (vi) Sunflower oil (per test)............................       1.50
    (vii) Vomitoxin (qualitative)............................      12.50
    (viii) Vomitoxin (quantitative)..........................      18.50
    (ix) Waxy corn (per test)................................       1.50
    (x) Fees for other tests not listed above will be based
     on the lowest noncontract hourly rate
    (xi) Other services:
        (a) Class Y Weighing (per carrier):
            (1) Truck/container..............................        .30
            (2) Railcar......................................       1.25
            (3) Barge........................................       2.50
(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)
    (i) All outbound carriers (per-metric-ton) \4\;
        (a) 1-1,000,000......................................    $0.1199
        (b) 1,000,001-1,500,000..............................     0.1094
        (c) 1,500,001-2,000,000..............................     0.0591
        (d) 2,000,001-5,000,000..............................     0.0437
        (e) 5,000,001-7,000,000..............................     0.0239
        (f) 7,000,001+.......................................    0.0109
------------------------------------------------------------------------
\1\ Fees apply to original inspection and weighing, reinspection, and
  appeal inspection service and 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).
\2\ Overtime rates will be assessed for all hours in excess of 8
  consecutive hours that result from an applicant scheduling or
  requesting service beyond 8 hours, or if requests for additional
  shifts exceed existing staffing.
\3\ Appeal and reinspection services will be assessed the same fee as
  the original inspection service.
\4\ The administrative fee is assessed on an accumulated basis beginning
  at the start of the Service's fiscal year (October 1 each year).


Table 2.--Services Performed at Other Than an Applicant's Facility in an
                         FGIS Laboratory \1\ \2\
------------------------------------------------------------------------
 
------------------------------------------------------------------------
(1) Original Inspection and Weighing (Class X) Services:
    (i) Sampling only (use hourly rates from Table 1)
    (ii) Stationary lots (sampling, grade/factor, &
     checkloading):
        (a) Truck/trailer/container (per carrier)............     $19.80

[[Page 32626]]

 
        (b) Railcar (per carrier)............................      29.50
        (c) Barge (per carrier)..............................     187.50
        (d) Sacked grain (per hour per service representative       0.02
         plus an administrative fee per hundredweight) (CWT).
    (iii) Lots sampled online during loading (sampling charge
     under (i) above, plus):
        (a) Truck/trailer container (per carrier)............       9.95
        (b) Railcar (per carrier)............................      19.25
        (c) Barge (per carrier)..............................     110.00
        (d) Sacked grain (per hour per service representative       0.02
         plus an administrative fee per hundredweight) (CWT).
    (iv) Other services:
        (a) Submitted sample (per sample--grade and factor)..      11.80
        (b) Warehouseman inspection (per sample).............      20.00
        (c) Factor only (per factor--maximum 2 factors)......       5.30
        (d) Checkloading/condition examination (use hourly          0.02
         rates from Table 1, plus an administrative fee per
         hundredweight if not previously assessed) (CWT).....
        (e) Reinspection (grade and factor only. Sampling          13.00
         service additional, item (i) above).................
        (f) Class X Weighing (per hour per service                 57.40
         representative).....................................
    (v) Additional tests (excludes sampling):
        (a) Aflatoxin (per test--other than TLC method)......      29.80
        (b) Aflatoxin (per test--TLC method).................     113.00
        (c) Corn oil, protein, and starch (one or any               9.00
         combination)........................................
        (d) Soybean protein and oil (one or both)............       9.00
        (e) Wheat protein (per test).........................       9.00
        (f) Sunflower oil (per test).........................       9.00
        (g) Vomitoxin (qualitative)..........................      31.00
        (h) Vomitoxin (quantitative).........................      38.50
        (i) Waxy corn (per test).............................      10.30
        (j) Canola (per test--00 dip test)...................      10.30
        (k) Pesticide Residue Testing: \3\
            (1) Routine Compounds (per sample)...............     216.00
            (2) Special Compounds (per service                    114.00
             representative).................................
        (l) Fees for other tests not listed above will be      .........
         based on the lowest noncontract hourly rate from
         Table 1.............................................
(2) Appeal inspection and review of weighing service \4\
    (i) Board Appeals and Appeals (grade and factor)
        (a) Factor only (per factor--max 2 factors)..........      82.00
        (b) Sampling service for Appeals additional (hourly        43.00
         rates from Table 1)
    (ii) Additional tests (assessed in addition to all other
     applicable fees)
        (a) Aflatoxin (per test, other than TLC).............      30.00
        (b) Aflatoxin (TLC)..................................     120.00
        (c) Corn oil, protein, and starch (one or any              17.20
         combination)........................................
        (d) Soybean protein and oil (one or both)............      17.20
        (e) Wheat protein (per test).........................      17.20
        (f) Sunflower oil (per test).........................      17.20
        (g) Vomitoxin (per test--qualitative)................      41.00
        (h) Vomitoxin (per test--quantitative)...............      46.00
        (i) Vomitoxin (per test--HPLC Board Appeal)..........     140.00
        (j) Pesticide Residue Testing \3\
            (1) Routine Compounds (per sample)...............     216.00
            (2) Special Compounds (per service                    114.00
             representative).................................
        (k) Fees for other tests not listed above will be
         based on the lowest noncontract hourly rate from
         Table 1.............................................
    (iii) Review of weighing (per hour per service                 82.60
     representative).........................................
(3) Stowage examination (service-on-request) \3\
    (i) Ship (per stowage space) (Minimum $255.00 per ship)..      51.00
    (ii) Subsequent ship examinations (same as original)
     (Minimum $153.00 per ship)
    (iii) Barge (per examination)............................      41.00
    (iv) All other carriers (per examination)................     16.00
------------------------------------------------------------------------
\1\ Fees apply to original inspection and weighing, reinspection, and
  appeal inspection service and 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).
\2\ An additional charge will be assessed when the revenue from the
  services in Schedule A, Table 2, does not cover what would have been
  collected at the applicable hourly rate as provided in Sec.
  800.72(b).
\3\ If performed outside of normal business, 1\1/2\ times the applicable
  unit fee will be charged.
\4\ If, at the request of the Service, a file sample is located and
  forwarded by the Agency for an official agency, the Agency may, upon
  request, be reimbursed at the rate of $2.65 per sample by the Service.


                  Table 3.--Miscellaneous Services \1\
------------------------------------------------------------------------
 
------------------------------------------------------------------------
(1) Grain grading seminars (per hour per service                  $57.40
 representative) \2\.........................................
(2) Certification of diverter-type mechanical samplers (per        57.40
 hour per service representative) \2\........................
(3) Special weighing services (per hour per service
 representative) \2\
    (i) Scale testing and certification......................      57.40
    (ii) Evaluation of weighing and material handling systems      57.40
    (iii) NTEP Prototype evaluation (other than Railroad           57.40
     Track Scales)...........................................
    (iv) NTEP Prototype evaluation of Railroad Track Scales        57.40
     (plus usage fee per day for test car)...................     110.00

[[Page 32627]]

 
    (v) Mass standards calibration and reverification........      57.40
    (vi) Special projects....................................      57.40
(4) Foreign travel (per day per service representative)......     510.00
(5) Online customized data EGIS service:.....................
    (i) One data file per week for 1 year....................     500.00
    (ii) One data file per month for 1 year..................     300.00
(6) Samples provided to interested parties (per sample)......       2.65
(7) Divided-lot certificates (per certificate)...............       1.50
(8) Extra copies of certificates (per certificate)...........       1.50
(9) Faxing (per page)........................................       1.50
(10) Special mailing (actual cost)...........................
(11) Preparing certificates onsite or during other than
 normal business hours (use hourly rates from Table 1) ......
------------------------------------------------------------------------
\1\ Any requested service that is not listed will be performed at $57.40
  per hour.
\2\ Regular business hours-Monday through Friday-service provided at
  other than regular hours charged at the applicable overtime hourly
  rate.


    Dated: May 28, 2003.
Donna Reifschneider,
Administrator, Grain Inspection, Packers and Stockyards Administration.
[FR Doc. 03-13679 Filed 5-30-03; 8:45 am]
BILLING CODE 3410-EN-P