[Federal Register Volume 68, Number 208 (Tuesday, October 28, 2003)]
[Rules and Regulations]
[Pages 61326-61329]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-27147]


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DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

7 CFR Part 800

RIN 0580-AA58


Review Inspection Requirements

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 amending the regulations under the United States Grain 
Standards Act (Act), as amended, to allow interested persons to specify 
the quality factor(s) that would be redetermined during a reinspection 
or appeal inspection for grade. Currently, reinspections and appeal 
inspections for grade must include a redetermination (i.e., a complete 
review or examination) of all official factors that may determine the 
grade, are reported on the original certificate, or are required to be 
shown. Requiring that all quality factors be completely reexamined 
during a reinspection or appeal inspection is not efficient, is time 
consuming, and can be costly. Furthermore, a detailed review of the 
preceding inspection service is not always needed to confirm the 
quality of the grain. This action will allow interested parties to 
specify which official factor(s) should be redetermined during the 
reinspection or appeal inspection service.

EFFECTIVE DATE: November 28, 2003.

FOR FURTHER INFORMATION CONTACT: John Giler, Chief, Policies and 
Procedures Branch, Field Management Division, at his e-mail address: 
[email protected], or telephone him at (202) 720-1748.

SUPPLEMENTARY INFORMATION:

Executive Order 12866 and Regulatory Flexibility Act

    This rule has been determined to be nonsignificant for purpose of 
Executive Order 12866 and, therefore, has not been reviewed by the 
Office of Management and Budget (OMB). In addition, pursuant to 
requirements set forth in the Regulatory Flexibility Act

[[Page 61327]]

(RFA) (5 U.S.C. 601 et seq.), GIPSA has considered the economic impact 
of this rule on small entities and has determined that its provisions 
would not have a significant economic impact on a substantial number of 
small entities.
    The rule will affect entities engaged in shipping grain to and from 
points within the United States and exporting grain from the United 
States. GIPSA estimates there are approximately 9,500 off-farm storage 
facilities and 57 export elevators in the United States that could 
receive official inspection services by GIPSA, delegated States, or 
designated agencies. Official inspection services are provided by 11 
GIPSA field offices, 2 Federal/State offices, 7 GIPSA suboffices, 7 
delegated States, and 49 designated agencies. Board appeal inspection 
services are provided by the Board of Appeals and Review. Under 
provisions of the Act, it is not mandatory for non-export grain to be 
officially inspected. Further, most users of the official inspection 
services and those entities that perform these services do not meet the 
requirements for small entities. Even though some users could be 
considered small entities, this rule relieves regulatory requirements 
and improves the efficiency of official inspection services. No 
additional cost is expected to result from this action.
    Requiring all reinspections and appeal inspections for grade to 
include a complete review of all official factors is not needed by 
applicants or other parties to transactions, or by official inspection 
personnel. Furthermore, this requirement often reduces the efficiency 
of providing official inspection services and may cause unnecessary 
delays in elevator operations. Allowing applicants to specify which 
official factor(s) are to be redetermined during the reinspection or 
appeal inspection service will improve the efficiency of the inspection 
service due to the time required to analyze all official quality 
factors.
    Prior to developing this rule change, GIPSA considered restricting 
the action to either appeal inspections or to reinspections. Our 
analysis was as follows:
    1. Restrict Action to Appeal Inspections. GIPSA inspectors, who are 
assigned to specific GIPSA field offices, are the only ones who can 
perform appeal inspections. During the period of the analysis, GIPSA 
had fourteen field offices and less than 200 full-time GIPSA inspectors 
nationwide. Most domestic inspection services are provided by official 
agencies and not by GIPSA field offices. Therefore, applicants for 
service usually opt for a reinspection, rather than requesting an 
appeal inspection. (See Table 1.) The only applicants for service that 
would benefit from this alternative are those located at the few export 
ports where GIPSA does onsite original inspection services. GIPSA 
believes that restricting the action to only appeal inspections would 
adversely impact the cost benefits and the flexibility associated with 
the rule. Table 1 illustrates this point.

                              Table 1.--Full-Grade Inspection Summary, FY 1994-2001
----------------------------------------------------------------------------------------------------------------
                                        Original inspections                     Reinspections           Appeals
             Year             --------------------------------------------------------------------------   GIPSA
                                  OAs\1\     GIPSA \2\       Total       OAs\1\   GIPSA \2\     Total      \2\
----------------------------------------------------------------------------------------------------------------
FY 1997......................    1,828,519      119.907    1,948,426      36,698      4,844      41,542  3,140
FY 1998......................    1,861,718      117,267    1,918,985      29,012      5,058      34,078  3,443
FY 1999......................    1,750,211      117,916    1,868,127      26,046      4,529      30,575  3,103
FY 2000......................    1,717,625      110,114    1,827,739      19,778      4,515      24,293  3,103
FY 2001......................    1,706,817      102,295    1,809,112      22,073      4,797      26,870  3,105
----------------------------------------------------------------------------------------------------------------
\1\ Total performed by all state and private official agencies.
\2\ Total performed by all GIPSA field offices.

    2. Restrict Action to Reinspections. Licensed inspectors employed 
by State or private official agencies perform most reinspections. GIPSA 
only performs reinspections at certain export port locations. GIPSA 
believes that if the action were limited to reinspections, more 
applicants for service could potentially benefit than limiting the 
action to appeal inspections. Some applicants, however, might be placed 
at a competitive disadvantage because their sales contracts require 
them to request appeal inspections on some or all original inspection 
services. Additionally, about ten percent of all reinspections are 
appealed. If the grading procedures for appeals are different from the 
preceding reinspection, the review inspection process is not similar 
for all levels of the review inspection process.
    The review inspection process should provide all applicants the 
same opportunity for inspection services. Reinspection services and 
appeal inspection services should be similar in scope and effect. For 
this reason, GIPSA decided to make the regulatory change that would 
favorably affect both the reinspection process and the appeal 
inspection process.
    The cost savings of the proposed action on the grain industry could 
be very positive. Although it is impossible to estimate an exact dollar 
savings, the time spent waiting for inspection results could be reduced 
by at least 50 percent and could, in certain circumstances, exceed 90 
percent. Since grain elevators often ``idle'' their load-out operations 
until the results of a reinspection or appeal are known, domestic 
shippers could save several hundred dollars in operation and demurrage 
costs on an average 100-car unit train. The savings for exporters could 
reach $10,000 for some vessels. For example: If elevator X has a fixed 
operating cost of $500 an hour and it takes an average of 30 minutes to 
perform a reinspection or appeal inspection, then each reinspection or 
appeal will cost the elevator an additional $250 in down time. If the 
time required to perform the reinspection or appeal is reduced to 15 
minutes, the elevator saves $125 per inspection due to the more 
efficient inspection service. These savings could be multiplied if the 
time saved on performing the reinspections or appeals allows the 
elevator to avoid or limit demurrage (i.e., a fee assessed to the 
elevator for failing to complete the loading of a unit train or ship 
within a specified period). Currently, the demurrage for railcars can 
range up to $50 per day per car. The demurrage on export vessels can 
reach $10,000 a day.
    The potential revenue impact of the action on GIPSA and official 
agencies should not be significant. In the long run, this proposed rule 
may encourage slightly more reinspection and appeal inspection services 
because of the increased efficiencies associated with the proposal. 
However, GIPSA does not believe that its net revenue will

[[Page 61328]]

significantly change. GIPSA routinely review the agency's revenue and 
cost of service as part of its ongoing fee review process. If 
inspection services and revenue from those services change 
significantly, GIPSA may determine a change in fees is needed and would 
do so as part of a fee proposal.

Executive Order 12988 and 12898

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have a retroactive effect. 
This rule will not preempt any state or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule. There are no administration procedures that must be exhausted 
prior to any judicial challenge to the provision of this rule.
    Pursuant to Executive Order 12898, ``Federal Actions to Address 
Environmental Justice in Minority Populations and Low Income 
Populations,'' GIPSA has considered potential civil rights implications 
of this rule on minorities, women, or persons with disabilities to 
ensure that no person or group will be discriminated against on the 
basis of race, color, sex, national origin, religion, age, disability, 
or marital or familial status. The final rule will apply in the same 
manner to all persons and groups whose activities are regulated, 
regardless of race, gender, national origin, or disability. This rule 
will have no effect on protected populations.

Information Collection and Recordkeeping Requirements

    In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.), the information collection and recordkeeping 
requirements in part 800 have been previously approved by OMB and 
assigned OMB No. 0580-0013.

Background

    On August 21, 2002, GIPSA proposed in the Federal Register (67 FR 
54133) to revise the regulations under the United States Grain 
Standards Act (Act), as amended, to allow interested persons to specify 
the quality factor(s) that would be redetermined during a reinspection 
or appeal inspection for grade. This proposal required comments to be 
received on or before October 21, 2002. On October 23, 2002, GIPSA 
published in the Federal Register (67 FR 65048) a notice to extend the 
comment period to November 21, 2002.
    GIPSA had proposed this action because requiring that all quality 
factors be completely reexamined during a reinspection or appeal 
inspection is not efficient, is time consuming, and can be costly. 
Further, a detailed review of the preceding inspection service is not 
always needed to confirm the quality of the grain. GIPSA proposed that 
applicants for service should be allowed to specify the factor(s) that 
are to be redetermined as part of a reinspection or an appeal 
inspection service because it provides a more effective and more 
efficient inspection service and better meets the industry's needs. 
However, reinspections for grade, appeal and Board appeal inspections 
for grade may include a review of any pertinent factor(s), as deemed 
necessary by official personnel. This would assure the issuance of an 
accurate grade. GIPSA also solicited comments regarding the need to 
show a statement on the certificate that would identify which factors 
were determined during the review inspection(s) and which were 
determined on a preceding inspection. GIPSA did not propose to include 
a required statement as part of the proposal.

Comment Review

    GIPSA received 7 comments regarding the proposed action. All 
comments supported the action. Two comments were from associations 
involved with graded commodities inspected under the authority of the 
Agricultural Marketing Act of 1946 (7 U.S.C. 1621 et seq.). Although 
their comments supported the proposed change; they asked that GIPSA 
extend this action to include their graded products (rice and pulses). 
Rice and pulse inspection is provided under the provisions of the 
regulations contained in 7 CFR part 868. Since the proposed action 
involved a change to 7 CFR part 800 and did not address the regulatory 
provisions of part 868, GIPSA cannot effect a change as part of this 
action. However, GIPSA will consider such action as part of a separate 
rulemaking, if deemed appropriate.
    GIPSA also received a combined comment from two trade associations 
that generally supported the proposed revisions with an exception. 
Their comment expressed a concern that there were no clarifying 
guidelines published to implement this change which may result in 
differing interpretations and applications among official agencies and 
GIPSA field offices. They urged GIPSA to simultaneously publish with 
the final rule clarifying instructions to official personnel specifying 
the conditions under which a review of other pertinent factors (factors 
not requested by the applicant for service), as deemed necessary by 
official personnel.
    In discussing the merits of the proposed rulemaking action, GIPSA 
noted that while various industry groups had indicated that requiring 
all factors to be completely reviewed on reinspections and appeal 
inspections is usually unnecessary and costly, others indicated that 
the regulation must not allow official personnel to overlook 
questionable factor results just because the applicant for inspection 
did not request that certain factors be redetermined during the course 
of a review inspection. We noted that both of the views had merit and 
that all official inspections must be accurate. We pointed out that 
reinspections for grade, appeal and Board appeal inspections for grade 
could include a review of any pertinent factor(s), as deemed necessary 
by official personnel. If there was an indication that a factor or 
factors may have been misgraded or overlooked, then the factors in 
question would be redetermined. The current policy for review 
inspections addresses this issue. GIPSA will distribute a program 
notice to announce the final action and reaffirm the policy.
    GIPSA received only one comment regarding the proposal not to use a 
statement on an official inspection certificate that identifies which 
factors were reinspected. The comment supported GIPSA's view to not 
include this type of statement on the inspection certificate.

Final Action

    Accordingly, GIPSA is revising the regulatory text in 7 CFR 800.125 
to allow requests for reinspections to be limited to one or more grade 
or condition factors, and is revising the regulatory text in 7 CFR 
800.135 to allow requests for appeal inspections to be limited to one 
or more grade or condition factors.

List of Subjects in 7 CFR Part 800

    Administrative practice and procedure, Grains.

PART 800--GENERAL PROVISIONS

0
For the reasons set out in the preamble, 7 CFR part 800 is amended as 
follows:
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 800.125 (b) is revised to read as follows:


Sec.  800.125  Who may request reinspection services or review of 
weighing services.

* * * * *
    (b) Kind and scope of request. A reinspection or review of weighing 
service is limited to the kind and scope of the original service. If 
the request

[[Page 61329]]

specifies a different kind or scope, the request shall be dismissed but 
may be resubmitted as a request for original services: Provided, 
however, that an applicant for service may request a reinspection of a 
specific factor(s), official grade and factors, or official criteria. 
In addition, reinspections for grade may include a review of any 
pertinent factor(s), as deemed necessary by official personnel. 
Official criteria are considered separately from official grade or 
official factors when determining the kind and scope. When requested, a 
reinspection for official grade or official factors and official 
criteria may be handled separately even though both sets of results are 
reported on the same certificate. Moreover, a reinspection or review of 
weighing may be requested on either the inspection or Class X weighing 
results when both results are reported on a combination inspection and 
Class X weight certificate.

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

0
3. Section 800.135 (b) is revised to read as follows:


Sec.  800.135  Who may request appeal inspection services.

* * * * *
    (b) Kind and scope of request. An appeal inspection service is 
limited to the kind and scope of the original or reinspection service; 
or, in the case of a Board Appeal inspection service, the kind and 
scope of the appeal inspection service. If the request specifies a 
different kind or scope, the request shall be dismissed but may be 
resubmitted as a request for original services: Provided, however, that 
an applicant for service may request an appeal or Board Appeal 
inspection of a specific factor(s), official grade and factors, or 
official criteria. In addition, appeal and Board Appeal inspections for 
grade may include a review of any pertinent factor(s), as deemed 
necessary by official personnel. Official criteria are considered 
separately from official grade or official factors when determining 
kind and scope. When requested, an appeal inspection for grade, or 
official factors, and official criteria may be handled separately even 
though both results are reported on the same certificate. Moreover, an 
appeal inspection may be requested on the inspection results when both 
inspection and Class X weighing results are reported on a combination 
inspection and Class X weight certificate.

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

Donna Reifschneider,
Administrator.
[FR Doc. 03-27147 Filed 10-27-03; 8:45 am]
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