[Federal Register Volume 69, Number 93 (Thursday, May 13, 2004)]
[Rules and Regulations]
[Pages 26476-26490]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-10632]


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DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

7 CFR Part 800

RIN 0580-AA80


Fees for Official Inspection and Official Weighing Services

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 changing the fee schedule for official inspection and 
weighing services performed under the authority of the United States 
Grain Standards Act (USGSA), as amended. The USGSA provides the 
authority to charge and collect reasonable fees to cover the cost of 
performing official services. These fees also cover the costs 
associated with administrative and supervisory activities related to 
official services.
    After a review of the financial status of GIPSA, including a 
comparison of the costs and revenues associated with official services, 
and administrative and supervisory activities; GIPSA is changing the 
fee schedule. These changes include eliminating provisions for the 3-
month and 6-month contracts; increasing the 1-year contract hourly rate 
by approximately 20 percent and the non-contract hourly rate by 47 
percent; increasing hourly rates for services not performed at an 
applicant's facility by approximately 11.5 percent; increasing unit 
fees for additional tests provided by GIPSA; eliminating the 6-level 
administrative tonnage fee and replacing it with regional 
administrative tonnage fees; eliminating the unit fee charged to 
delegated States for export ships and replacing it with a tonnage fee; 
increasing hourly fees for special weighing services by approximately 
30 percent above the non-contract hourly rate; and establishing a $500 
usage fee per facility when the GIPSA test car is used to test track 
scales.
    These changes are needed to replenish the retained earnings 
accounts and to maintain a 3-month operating reserve. Further, 
maintaining GIPSA's financial stability will assure continued 
inspection and weighing services to the grain industry which will 
further facilitate the sound and orderly marketing of grain in domestic 
and export markets.

EFFECTIVE DATE: June 14, 2004.

FOR FURTHER INFORMATION CONTACT: David Orr, Director, Field Management 
Division, e-mail address: [email protected], telephone (202) 720-
0228.

SUPPLEMENTARY INFORMATION:

Background

    The USGSA (7 U.S.C. 71 et seq.) 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.
    GIPSA adopted its current fee structure (61 FR 43301) effective 
October 1, 1996, for services provided by GIPSA employees. This fee 
structure change was needed because advances in technology had allowed 
exporters to improve operational efficiencies, which, in turn, had 
reduced the number of GIPSA personnel required to service certain 
facilities. The fee structure was changed from primarily using hourly 
fees to recover costs to a method that uses a mix of hourly and unit 
fees for its inspection and weighing services. Direct service costs are 
recovered through hourly fees charged for employees providing the 
inspection and weighing services. Administrative costs are recovered by 
a tonnage fee applied

[[Page 26477]]

to grain inspected and weighed as shipments from an export facility. 
Export grain companies are paying for direct labor costs and pay a 
share of the local and national administrative costs.
    Since implementing the fees in 1996, GIPSA has adjusted hourly fees 
to correspond with annual Federal pay increases. This action is 
necessary since employee payroll costs account for approximately 84 
percent of GIPSA's total operating budget. The current USGSA fees were 
published in the Federal Register on June 2, 2003, (68 FR 32623) and 
became effective on July 2, 2003.
    GIPSA regularly reviews its programs to determine if the fees are 
adequate. Since implementing the fees in 1996, GIPSA has only 
experienced one year where the revenues exceeded the costs. Annual 
losses have been between $1 million to $1.7 million since 1996 except 
for the one positive year GIPSA revenue exceeded the costs by $88,000.
    GIPSA recognizes the need to reduce inspection and weighing costs 
as much as possible before increasing fees. Therefore, GIPSA has taken 
action through the years to minimize payroll costs. These actions 
include utilizing employee buyouts to remove high-salaried, senior 
employees from the active employment list; taking advantage of employee 
attrition to reduce total staff by not hiring to fill vacant positions; 
hiring and scheduling more part-time and intermittent employees to 
better manage staff costs during fluctuating work periods; and reducing 
the amount of paid overtime via creative scheduling processes. Although 
GIPSA has observed a 14 percent reduction in paid hours and has reduced 
overtime pay by 2 percent, this is not enough to avoid continued 
financial losses.
    GIPSA completed a review of the grain inspection and weighing 
programs and determined it was necessary to propose a change to the 
fees in order to replenish the retained earnings accounts and to 
maintain a 3-month operating reserve. On November 19, 2003, GIPSA 
proposed in the Federal Register (68 FR 65210) to amend the fees to 
recover employee costs directly related to services provided and to 
recover the costs associated with administering and supervising the 
grain inspection and weighing programs. This action would maintain 
GIPSA's financial stability to assure continued inspection and weighing 
services to the grain industry, which will further facilitate the sound 
and orderly marketing of grain in domestic and export markets.
    To minimize the impact of the proposed action, GIPSA established 
fee rates that collect sufficient revenue to immediately cover 
operating expenses, while striving to create a 3-month operating 
reserve by fiscal year (FY) 2010. These fees were designed to collect 
sufficient annual revenue through FY 2007 to achieve an average 
estimated positive $1,000,000 balance annually based on an inspection 
volume of 80 million metric tons (MMT) per year. The cost of living 
projections used in calculating future salary and benefits out to FY 
2007 were supplied by OMB as set forth in their Federal Register 
publication (68 FR 12388) on March 14, 2003. GIPSA will evaluate, every 
six months, the financial status of the grain inspection and weighing 
program to determine if it is meeting the goal of obtaining a 3-month 
operating reserve by FY 2010 and to determine if other adjustments are 
necessary. Although it has not done so in the recent past, GIPSA will 
ensure that future annual fee adjustments for Federal pay increases 
will take into account longevity pay, locality pay, and benefits. While 
GIPSA may not fully replenish its 3-month reserve until FY 2010, it is 
critical that action is taken to start to replenish it. GIPSA plans to 
gradually replenish a reserve rather than sharply increase fees in the 
short term to immediately replenish it.
    GIPSA proposed changes to the fee schedule to collect fees to 
recover the cost of services and to recover the administrative and 
supervisory costs related to these services. The proposed changes 
included (1) eliminating provisions for the 3-month and 6-month 
contracts; (2) increasing the 1-year contract hourly rate by 
approximately 20 percent and the non-contract hourly rate by 47 
percent; (3) increasing hourly rates for services not performed at an 
applicant's facility by approximately 11.5 percent; (4) increasing unit 
fees for additional tests provided by GIPSA; (5) eliminating the 6-
level administrative tonnage fee and replacing it with regional 
administrative tonnage fees; (6) eliminating the unit fee charged to 
delegated States for export ships and replacing it with a tonnage fee; 
(7) increasing hourly fees for special weighing services by 
approximately 30 percent above the non-contract hourly rate; and (8) 
establishing a $500 usage fee per facility when the GIPSA test car is 
used to test track scales.
    Contract and Hourly Rates. GIPSA has determined the hourly rates 
for services performed at export facilities by GIPSA employees do not 
cover total salary and benefits costs. Despite implementing changes to 
correspond to annual Federal pay increases totaling 30 percent over the 
years; salary and benefit costs have increased 36 percent due to 
increased employee benefit costs, longevity pay and locality pay. 
Increased employee cost (salaries and benefits) is not the only reason 
the hourly fees are not covering the costs of services at the export 
market.
    When GIPSA established the hourly rates in 1996, certain 
assumptions were made to establish those rates. Those assumptions 
included the historic volume of grain moving through the export 
facilities, the number of hours needed to load that volume of grain, 
and the anticipated non-revenue producing time experienced by our 
employees. Hourly fees, both contract rate and non-contract rate, were 
established based on these assumptions. These assumptions, however, 
have not held true over the years due to the changes in grain 
marketing.
    Grain marketing strategies and shortfalls in expected export volume 
have also had a negative effect on GIPSA's revenue. Since 1996, some 
grain exporting facilities have automated their material handling 
systems which requires fewer inspection and weighing personnel to 
provide service and makes the elevator more efficient. This improved 
efficiency has triggered a shift in locations where grain is loaded.
    Since grain marketing strategies have shifted the movement of grain 
at the export market, GIPSA needed to re-evaluate the hourly rates 
charged at these facilities. GIPSA established a 3-month and 6-month 
contract rate for facilities that had fluctuating workloads; however, 
GIPSA had only one 3-month contract and one 6-month contract during FY 
2002 and had none of these contracts in FY 2003. GIPSA has learned 
through the years of contracting that it is extremely difficult to 
accurately project an employees non-revenue producing time when 
utilizing 3-month and 6-month contracts. Therefore, GIPSA decided it is 
best to provide service with either a one-year contract or with the 
non-contract rate. Therefore, GIPSA proposed to abolish provisions for 
the 3-month and 6-month contracts.
    GIPSA conducted a detailed, port-by-port evaluation of its costs 
and revenue streams for both contract and non-contract employees. GIPSA 
found that payroll increases caused by grade increases, longevity pay, 
and locality pay have exceeded the cost-of-living increases that GIPSA 
has charged annually. Further, GIPSA found that changes in grain 
distribution have increased non-revenue periods for certain workers. 
The evaluation showed the actual level of revenue-producing time likely 
to be expected from contract

[[Page 26478]]

and non-contract workers. Based on its evaluation, GIPSA has determined 
that to adequately cover service costs and start to replenish its 
reserves, it is necessary to increase the annual contract rate by 
approximately 20 percent and to increase the non-contract hourly rate 
by approximately 47 percent.
    GIPSA also charges hourly fees for services performed at other than 
export facilities. These fees are designed to recover GIPSA employee 
salary and benefits costs along with a portion of administrative and 
supervisory costs. Again, despite fee increases to accommodate the 
annual Federal pay increases, the current fees do not sufficiently 
cover costs. Like the employee costs at export, employee service costs 
and employee administrative costs have increased due to increased 
employee benefit costs, increases in payroll caused by longevity pay, 
and increases in payroll due to locality pay. Costs not related to 
employees have also increased. These local and national administrative 
costs include rent, communications, utilities, and other administrative 
support services. Based on its evaluation, GIPSA identified the costs 
and determined these hourly rates need to increase by approximately 
11.5 percent to recover the additional costs.
    Unit Fees. In addition to hourly fees, GIPSA also charges unit fees 
for additional services. These unit fees are charged in addition to the 
hourly rate when the services are provided at an applicant's facility 
in an onsite laboratory. These unit fees are based on the cost of 
equipment and supplies needed to conduct the test. GIPSA also charges 
unit fees for services performed at other than an applicant's facility 
in a GIPSA laboratory and for some miscellaneous services. These unit 
fees are designed to recover the direct costs of the services (salary, 
equipment, and supplies) along with administrative and supervisory 
costs. GIPSA has not made any adjustments to the unit fees for services 
provided at an applicant's facility in an onsite laboratory since the 
fees were first promulgated in 1996. Due to the increased costs for 
providing services, GIPSA proposed to adjust the unit fees in section 
800.71 to reflect these costs.
    As GIPSA updates these unit fees, it also provides GIPSA a chance 
to remove obsolete services from the list. At one time, GIPSA offered 
aflatoxin tests using the thin-layer chromatography (TLC) method. GIPSA 
discontinued the use of this test in 1998 because of the hazardous 
chemical materials required to conduct the test and rapid test kits 
were available for field use which were safer and less expensive. GIPSA 
proposed to remove the method from the fee schedule since this test is 
no longer available. The unit fee for aflatoxin will recover the costs 
of the quick test kits currently used at field offices.
    Administrative Tonnage Fee. GIPSA also utilizes a 6-level tonnage 
fee designed to recover the local and national administrative and 
supervisory costs which are not covered by unit fees and hourly fees 
assessed at other than export facilities. This fee is only charged to 
facilities in the United States that have export grain inspected by 
GIPSA.
    The 6-level administrative tonnage fee is designed to reduce fees 
as the inspection volume increases. These fees have also been adjusted 
through the years to reflect the annual Federal pay raises. The 
following table illustrates how the fee levels are structured and 
indicates what was originally implemented in 1996 and what is current 
for the same levels.

                       Administrative Tonnage Fees
------------------------------------------------------------------------
                                          1996 Fees ($   Current fees ($
           Metric ton ranges            per metric ton)  per metric ton)
------------------------------------------------------------------------
1-1,000,000...........................            0.090           0.1199
1,000,001-1,500,000...................            0.082           0.1094
1,500,001-2,000,000...................            0.042           0.0591
2,000,001-5,000,000...................            0.032           0.0437
5,000,001-7,000,000...................            0.017           0.0239
7,000,001 +...........................            0.002           0.0109
------------------------------------------------------------------------

    When GIPSA introduced the 6-level tonnage fee in 1996, the World 
Agricultural Outlook Board projected grain exports to increase 2.5 
percent annually, and reach 131 MMT by 2001. With this in mind, GIPSA 
decided to use 85 MMT as the target level for setting fees. This would 
be the breakeven point. GIPSA could expect to recover costs if billable 
tonnage were 85 MMT or more. Conversely, costs would exceed the 
revenues if billable tonnage were less than 85 MMT. Since 1996, GIPSA 
had only one year where the billable tonnage reached the 85 MMT mark at 
85.2 MMT. Although GIPSA recovered the costs that year, the other years 
had losses between $1 million and $1.7 million. The decision to use 85 
MMT as the breakeven basis for the administrative tonnage fee has 
contributed to the revenue shortfall.
    Other changes in market practices further reduced revenue 
collected. Exports handled by the New Orleans Field Office facilities 
increased from 72 percent of the total tons serviced by GIPSA in FY 
1996 to 79 percent in FY 2003. During the same period, the League City 
Field Office export tonnage decreased from 13 to 12 percent and the 
Portland Field Office volume declined from 10 to 7 percent. In 
addition, the Baltimore Field Office was closed due to no volume in FY 
2002. These market shifts resulted in less revenue being collected per 
metric ton than originally predicted since the shift in New Orleans 
resulted in more tons loaded at a lower per-ton cost due to the 6-level 
fee structure. Export volume increased and the revenue per ton 
decreased.
    GIPSA's analysis of the financial information for the 6-level 
administrative tonnage fee shows the revenues from it are not 
recovering the costs. To better recover field office administrative and 
supervisory costs in today's export grain marketing environment, GIPSA 
analyzed three potential changes to the current administrative tonnage 
fee: Alternative 1: specific field office tonnage fees; Alternative 2: 
a flat rate national administrative tonnage fee; and Alternative 3: 
increasing the current 6-level tonnage fee by 27 percent. The analysis 
used actual FY 2002 costs, revenue, and volume of export grain 
inspected by GIPSA.
    The specific field office tonnage fee (Alternative 1) was designed 
to recover local overhead costs and a part of the national 
administrative costs. Local administrative costs were divided by the 
tonnage observed by that field office to determine the cost per ton 
needed by the field office to cover expenses.

[[Page 26479]]

National administrative costs were divided by the total export tons 
serviced by GIPSA at all field offices to determine the cost per ton 
needed to recover administrative costs at headquarters. The sum of the 
two per ton costs (local and national) was used to establish a specific 
field office tonnage fee. GIPSA determined the use of specific field 
office tonnage fees resulted in each field office collecting sufficient 
revenue to cover local administrative costs as well as headquarters 
administrative costs.
    A flat rate national administrative tonnage fee (Alternative 2) was 
designed to recover total administrative costs but not necessarily each 
field office collecting revenues to recover the local costs. This 
tonnage fee was calculated by dividing GIPSA's total administrative 
costs (field offices and headquarters) by the total tons of U.S. export 
grain serviced by GIPSA. GIPSA determined the flat rate national 
administrative tonnage fee would collect the revenues to recover the 
total administrative costs but only the New Orleans Field Office 
received revenue to recover the field office administrative costs. All 
other field offices did not recover their local administrative costs.
    GIPSA determined if increasing the current 6-level tonnage fee was 
to become a viable option, those fees would have to be increased by 27 
percent (Alternative 3). Although all the field offices collected 
revenues to recover the total administrative costs of GIPSA; not all 
field offices collected revenue to offset their individual office 
costs. GIPSA is also concerned that shifting market trends may make the 
6-level tonnage fee unreliable since the revenues are dependent on the 
volume of grain handled by each facility.
    After considering these alternatives, GIPSA proposed adopting the 
specific field office administrative tonnage fee structure (Alternative 
1). Under this fee structure, local export facilities financially 
support their field office administrative costs and every ton of grain 
exported from field office service areas is assessed an identical fee 
to cover headquarters costs. This will ensure that headquarters costs 
are collected regardless of where the grain is exported. This proposed 
tonnage fee also puts each field office in an independent financial 
position and encourages customers to work directly with each field 
office to continue the implementation of grain handling efficiencies 
while raising the awareness of local administrative and supervisory 
costs. This action should foster the further development and 
implementation of grain handling efficiencies by grain companies to 
reduce the cost of GIPSA services. Also, this process makes 
administrative and supervisory costs more transparent to the industry.
    GIPSA developed the new administrative tonnage fees by projecting 
GIPSA costs to the FY 2007 level and assuming GIPSA billable tonnage 
will be 80 MMT. GIPSA determined the field office tonnage rates would 
be $0.167 per ton for elevators serviced by the League City Field 
Office, $0.067 per ton for elevators serviced by the New Orleans Field 
Office, $0.136 per ton for elevators serviced by the Portland Field 
Office, and $0.184 for elevators serviced by the Toledo Field Office.
    When GIPSA implemented the administrative tonnage fees, it also 
provided for a monthly payment of administrative fees to level out the 
payments over the year based on the expected tonnage handled by a 
facility. This provision, located in section 800.73(e) of the 
regulations, was used to level out the tonnage rates over a year 
instead of paying in incremental levels. GIPSA reviewed the need to 
preserve this regulation and determined it was no longer needed. 
Proposing specific field office tonnage rates that will not change due 
to increased volume does not require a monthly payment program to level 
the costs. Further, the provision for the monthly payment process has 
not been used by industry. Therefore, GIPSA proposed to remove this 
provision from the regulations.
    Delegated State Ship Fees. GIPSA also oversees the activities of 
delegated States and designated agencies that provide official services 
on behalf of GIPSA. To support this activity, GIPSA also charges a 
supervision fee to the agencies to recover this cost. The current fees 
for the supervision of inspection and weighing services performed by 
the agencies were published in the Federal Register on September 23, 
1985, (50 FR 28303), and became effective on October 1, 1985. GIPSA 
currently assesses a $49.20 fee for every ship inspected by a delegated 
State. This fee is then passed on to the exporter by the delegated 
State.
    As GIPSA evaluated the administrative and supervisory fees needed 
to cover field office and national administrative and supervisory 
costs, GIPSA also considered the contribution of revenue collected from 
official agencies to cover the costs of administration and supervision 
of their programs. GIPSA initiated this review by determining the total 
administrative and supervisory costs of overseeing the official 
agencies ($2,330,343) and the total number of metric tons inspected by 
official agencies in both the domestic and export markets (150,650,608 
metric tons) to determine the overall cost per ton needed to cover 
these administrative and supervisory costs. This resulted in a need to 
collect $0.016 per metric ton.
    In FY 2002, delegated States inspected 19,049,018 metric tons of 
grain (655 ships) and GIPSA collected $32,226 in revenues from the 
$49.20 per ship fee. This makes the current ship fee equivalent to 
$0.00169 per metric ton. This is short of the $0.016 per metric ton 
GIPSA calculated as needed to recover costs. Since the current ship fee 
is contributing very little to recover the costs of administration and 
supervision of the delegation and designation program, GIPSA proposed 
to change this fee from a unit fee to a tonnage fee. The tonnage fee 
would be set at $0.016 per ton since this is what GIPSA calculated as 
the amount needed to recover costs.
    GIPSA proposed to change the fees shown in 7 CFR 800.71, Schedule 
C-Fees for FGIS Supervision of Official Inspection and Weighing 
Services Performed by Delegated States and/or Designated Agencies in 
the United States by removing the $49.20 unit fee for ships and 
replacing it with the $0.016 per ton fee which GIPSA determined is 
needed to help recover the cost of administration and supervision of 
the official agency program.
    Special Weighing Services. GIPSA also provides special weighing 
services to the grain industry and other industries requiring accurate 
weights. These services include scale testing and certification, 
evaluations of weighing and material handling systems used to automate 
weighing functions, National Type Evaluation Program scale evaluations, 
mass standards calibration and reverification services, and special 
weighing projects. GIPSA provides these services through scale 
specialists located at certain field offices and in headquarters.
    Scale specialists are highly specialized individuals who are 
trained in scale operation and the operation of test equipment. Scale 
specialists are in a different job classification and grade level than 
inspectors or weighers because of their unique responsibility. 
Consequently, they are classified at a higher grade level. On average, 
scale specialist costs are 30 percent higher than the cost of 
agricultural commodity graders. Therefore, GIPSA needs to set the 
hourly fee for special weighing services at a level approximately 30 
percent higher than the fee established for non-contract services.

[[Page 26480]]

    GIPSA also owns and operates five railroad test cars that are used 
to test and calibrate railroad master scales and commercial track 
scales. The National Bureau of Standards (NBS) master scale testing 
program transferred to GIPSA in 1980 under an agreement between NBS, 
the Association of American Railroads (AAR), and then, the Federal 
Grain Inspection Service. Under this agreement, GIPSA is responsible 
for maintaining the master scale in Chicago and annual testing and 
calibration of other railroad master scales located throughout the 
United States.
    GIPSA's railroad track scale testing program is funded by the 
service agreement with AAR and by revenues collected from non-AAR 
customers. The railroad track scale testing program costs have exceeded 
revenue for the last several years by approximately $25,000 per year. 
This is due to hourly fees not fully recovering the cost of the service 
representative and an increase in the cost of maintaining the aging 
test cars and other equipment used in the program. Consequently, the 
total funding and revenue are not meeting the cost of the program.
    Although the test cars GIPSA uses in this program are properly 
maintained to provide an accurate service, more frequent repair 
services are needed due to the age of the test cars. This is increasing 
the cost of the program. Eventually, GIPSA will need to replace test 
cars in order to continue providing this valuable service to the 
railroad industry. GIPSA had solicited bids to build a new car; 
however, the initial bid cost was in excess of $200,000 and GIPSA did 
not have the funds to cover that cost. To collect the funds needed to 
maintain and replace test cars, GIPSA proposed to implement a user fee 
of $500 per facility when the test car is used to test commercial track 
scales. Implementing a specific fee for the use of the test cars will 
assure that only those companies that use the test cars are 
contributing towards the expenses directly related to the test cars. 
These expenses include both the maintenance of the test cars and costs 
associated with the replacement of the test cars.
    GIPSA has determined that applying a $500 service fee to the 50 
locations serviced by GIPSA for using the GIPSA test car, in addition 
to the hourly fee for the service representative, should raise 
sufficient funds to recover the annual loses of $25,000. GIPSA, by 
recovering this annual financial loss, will be able to maintain the 
test cars in good repair and initiate retained earnings to contribute 
towards the purchase of new test cars in the future. GIPSA will not 
apply the $500 usage fee to the AAR scales tested under the agreement 
since AAR's costs are covered through the service agreement.
    In summary, GIPSA is authorized by the USGSA to charge and collect 
reasonable fees for performing official inspection and weighing 
services. The fees are to cover, as nearly as practicable, GIPSA's 
costs for performing inspection and weighing services, including 
related administrative and supervisory costs. GIPSA has determined the 
current fees are not recovering these costs despite efforts to reduce 
these costs over the years.
    Accordingly, on November 19, 2003, GIPSA published in the Federal 
Register (68 FR 65210) a proposal to change the fee schedule. The 
proposed changes included (1) eliminating provisions for the 3-month 
and 6-month contracts; (2) increasing the 1-year contract hourly rate 
by approximately 20 percent and the non-contract hourly rate by 47 
percent; (3) increasing hourly rates for services not performed at an 
applicant's facility by approximately 11.5 percent; (4) increasing unit 
fees for additional tests provided by GIPSA; (5) eliminating the 6-
level administrative tonnage fee and replacing it with regional 
administrative tonnage fees; (6) eliminating the unit fee charged to 
delegated States for export ships and replacing it with a tonnage fee; 
(7) increasing hourly fees for special weighing services by 
approximately 30 percent above the non-contract hourly rate; and (8) 
establishing a $500 usage fee per facility when the GIPSA test car is 
used to test track scales.
    The changes should generate additional average annual revenues as 
noted in the following table.

------------------------------------------------------------------------
                                                              Projected
                                      FY 02      Projected      annual
     Changes to fee schedule         revenue       annual      revenue
                                                  revenue      increase
------------------------------------------------------------------------
Eliminating 3-month and 6-month        $31,063           $0    $(31,063)
 contracts.......................
Increasing 1-year contract and      16,220,331   18,515,129   2,294,798
 non-contract hourly rates.......
Increasing hourly rates not at          13,886       16,928       3,042
 facility........................
Increasing unit fees for testing       677,854      930,110     252,256
 services........................
Substituting regional tonnage fee    4,845,464    6,905,679   2,060,215
 for 6-level administrative fee..
Substituting tonnage fee for unit       32,226      304,784     272,558
 fees on delegated State ship
 inspections.....................
Increasing hourly fees for             426,195      519,552      93,357
 special weighing services.......
Establishing test car usage fee..            0       25,000      25,000
                                  --------------
    Totals.......................   22,247,019   27,217,182   4,970,163
------------------------------------------------------------------------

    The changes are needed to restore the retained earnings accounts 
and to maintain a 3-month operating reserve. GIPSA has projected that 
the changes to the fee schedule should gradually replenish the retained 
earnings account and the 3-month operating reserve. The following table 
illustrates how gradually restoring the fund is projected over time.

----------------------------------------------------------------------------------------------------------------
                                     Projected Financial Position for GIPSA
-----------------------------------------------------------------------------------------------------------------
                                                FY 03         FY 04         FY 05         FY 06         FY 07
----------------------------------------------------------------------------------------------------------------
Shortfall in Retained Earnings............    $1,945,000    $1,573,000    $-$926,000   -$2,705,000   -$3,740,000
3-Month Operating Reserve.................     6,475,000     6,680,000     6,853,000     7,034,000     7,219,000
                                           ---------------
    Total Need............................     8,420,000     8,253,000     5,927,000     4,329,000     3,479,000
----------------------------------------------------------------------------------------------------------------


[[Page 26481]]

    GIPSA will evaluate the financial status of the grain inspection 
and weighing program every six months to determine if it is meeting the 
goal of obtaining a 3-month operating reserve by FY 2010. Using the 
projected information in the above table, GIPSA will assess if the 
revenue collection trend is comparable to the financial objectives of 
the table. GIPSA will consider further adjusting the fees if it becomes 
apparent that GIPSA's goal to restore the retained earnings accounts 
and to obtain a 3-month operating reserve is not achievable by FY 2010. 
Although it has not done so in the recent past, GIPSA will ensure that 
future annual fee adjustments for Federal pay increases will take into 
account longevity pay, locality pay, and benefits.
    Maintaining GIPSA's financial stability will assure continued 
inspection and weighing services to the grain industry which will 
further facilitate the sound and orderly marketing of grain in domestic 
and export markets.

Comment Review

    GIPSA received five comments in response to the proposed rulemaking 
published November 19, 2003, in the Federal Register (68 FR 65210). 
Three grain industry associations prepared a joint response to the 
proposal while the other comments received were from two grain 
companies exporting grain from the State of Washington, a comment from 
the State of Washington Department of Agriculture, and an individual 
commentor.
    The joint comment from the three grain trade associations opposed 
the hourly fee increases for contract and non-contract services and 
hourly fees for services not performed at an applicant's facility. 
Their comments indicated GIPSA should not rely on fee increases to 
offset rising costs. Rather, GIPSA must continue to pursue cost 
cutting, increase productivity, and reconfigure its work force to 
mitigate price increases. An additional comment was received from an 
individual opposing the proposal. The comment asserted that the USDA 
budget was too high and the Department should cut costs.
    As stated in the background, GIPSA has taken action over the years 
to minimize payroll costs. This is a significant area of focus for 
GIPSA since we know payroll costs account for approximately 84 percent 
of GIPSA's total operating budget. GIPSA, however, is also bound by 
Federal personnel rules and cannot change employee salaries and 
benefits. Consequently, GIPSA has implemented management and inspection 
scheduling actions to minimize these costs over time while operating 
within the Federal personnel rules. GIPSA will continue to explore ways 
to reduce costs. However, it is necessary to make fee adjustments now 
to recover revenue to offset both current and projected costs.
    The joint comment from the three grain associations also expressed 
opposition to the proposed $0.016 per metric ton delegated State ship 
fee. Their opposition was based on their conclusion that the delegated 
State ship fee would be doubled when official inspections and weighing 
services are performed on a vessel. This would result in a total $0.032 
per metric ton for these ships.
    The ship fees in Schedule C, Tables 1 and 2 are listed as separate 
fees for inspection and weighing. However, when a ship is inspected and 
weighed at the same time, only one fee is assessed per ship. This was 
the intent of footnote 3 in these tables. To further clarify this 
application of the fee, GIPSA will amend the footnote to make it clear 
that only one fee is assessed per ship when both inspection and 
weighing services are provided at the same time.
    The opposing comment also questioned why the delegated State 
service fee for ships was different than the tonnage fee for GIPSA 
services. GIPSA operates two independent programs within the official 
inspection and weighing system. One program is the original inspection 
and weighing services provided by GIPSA employees. The other program is 
the supervision and administration of official inspection and weighing 
services provided by delegated States and designated agencies.
    GIPSA's regional tonnage fees for ships are intended to recover 
costs directly associated with the administration and supervision of 
GIPSA services. It includes local administrative costs as well as a 
portion to cover headquarters administrative costs. The local 
administrative cost portion of the fee is determined by dividing the 
local costs by the amount of tons inspected and/or weighed by the 
office. The national or headquarters cost portion of the fee is 
determined by taking the total headquarters cost to manage the program 
and dividing it by the amount of tons inspected and/or weighed by GIPSA 
nationally.
    The fee for ships inspected and or weighed by delegated States is 
calculated in a similar way. All headquarters costs to manage the 
program are divided by the total tons inspected and/or weighed by the 
delegated States and designated agencies. Since the fees for 
supervision and administration of delegated States and designated 
agencies are a national fee, the local costs are also divided by the 
total tons.
    The comments received from the two grain companies exporting grain 
from Washington and from the State of Washington opposed payment of the 
delegated State ship fee based on the cooperative agreement signed 
between the State of Washington and GIPSA.
    Section 800.71 of the regulations provides that the fees shown in 
Schedule C apply to official inspection and weighing services performed 
by delegated States and designated agencies in the United States, 
except for those State agencies that are delegated additional 
responsibilities by GIPSA. These States, currently Washington and 
California, are assessed annual charges as stated in the State's 
Delegation of Authority document.
    GIPSA has a long-standing agreement with these States whereby each 
State pays direct compensation to GIPSA for local costs along with a 
portion to cover headquarters administrative costs. Although Washington 
and California are excluded from the Schedule C fees due to the 
agreements between GIPSA and the States, the other delegated States are 
not excluded. Therefore, GIPSA will proceed with the $0.016 per metric 
ton fee for ships serviced by delegated States.

Executive Orders 12866 and 12988

    This rule has been determined to be significant for the purposes of 
Executive Order 12866 and, therefore, has been reviewed by the Office 
of Management and Budget (OMB). GIPSA prepared a Regulatory Impact 
Assessment (RIA) consisting of a statement of the need for the proposed 
action, an examination of alternative approaches, and an analysis of 
the benefits and costs.
    Need for Action. The USGSA requires GIPSA to charge and collect 
reasonable fees for performing official inspection and weighing 
services. The fees are to cover, as nearly as practicable, GIPSA's 
costs for performing inspection and weighing services, including 
related administrative and supervisory costs.
    GIPSA changed the inspection and weighing fees in 1996 (61 FR 
43301) from using predominately hourly fees to the current method of 
using a mixture of hourly fees, unit fees, and tonnage fees. Hourly 
fees are designed to recover the salary and benefit costs for those 
employees (pool) that perform work at an export grain elevator. Unit 
fees are designed to recover the costs of tests along with 
administrative and

[[Page 26482]]

supervisory costs. Tonnage fees are designed to recover local and 
national administrative and supervisory costs.
    GIPSA implemented the new fees expecting exports to increase. 
Export volume is a critical condition since GIPSA determined a minimum 
of 85 MMT of billable tonnage was needed to break even. Since 
implementing the fees in 1996, GIPSA has only experienced one year 
where the revenues exceeded the costs. That year the billable tonnage 
reached 85 MMT. The other years had billable tonnage below the 85 MMT 
target and costs exceeded the revenues in those years due to the 
changes in grain marketing. Annual losses have been between $1 million 
to $1.7 million since 1996; except for the one positive year GIPSA 
revenue exceeded the costs by $88,000.
    The continued financial deficits prompted GIPSA to initiate a 
detailed analysis of the user fees and operating costs to determine why 
revenues were not supporting the costs and to determine what action was 
needed. At the same time, it must be recognized that the U.S. grain 
market is very dynamic and constantly changing which makes it difficult 
to precisely predict and project long-term market trends. 
Transportation costs, grain handling costs, global pricing, 
environmental conditions, crop quality conditions, phytosanitary 
issues, and crop production are some of the issues that influence the 
changing grain market.
    Since implementing the fees in 1996, GIPSA has adjusted hourly fees 
to correspond with annual Federal pay increases. This action is 
necessary since employee payroll costs account for approximately 84 
percent of GIPSA's total operating budget. Although these fee 
adjustments were made through the years, GIPSA costs continue to exceed 
its revenues.
    GIPSA recognizes the need to reduce inspection and weighing costs 
as much as possible before increasing fees. Therefore, GIPSA has taken 
action through the years to minimize payroll costs. These actions 
include utilizing employee buyouts to remove high-salaried, senior 
employees from the active employment list; taking advantage of employee 
attrition to reduce total staff by not hiring to fill vacant positions; 
hiring and scheduling more part-time and intermittent employees to 
better manage staff costs during fluctuating work periods; and reducing 
the amount of paid overtime via creative scheduling processes. Although 
GIPSA has observed a 14 percent reduction in paid hours and has reduced 
overtime pay by 2 percent, this is not enough to avoid continued 
financial losses.
    GIPSA's financial review detected where the program losses were 
occurring. GIPSA has determined the hourly fees for services performed 
at the export elevator are not recovering the full cost of the pool. 
The base salary and benefits for the pool have increased beyond the 
annual Federal pay increase adjustments. Locality pay was not factored 
into the yearly cost-of-living increases nor was longevity pay 
increases. When the current fee was first established in 1996, the base 
contract hourly fee was based on a GS-9, step 5 pay level which was the 
average pay level for the pool. Today the average pool pay level is a 
GS-9, step 8. This equates to an average additional annual salary cost 
of $3,500 per GS-9 inspector. Locality pay may also increase this cost 
by an additional 9 percent to 18 percent depending on the geographic 
location of the employee.
    Benefits paid to employees have also increased. In FY 1996, 
employee benefit costs averaged 19 percent. Since that time, overall 
benefit costs have increased 6 percent and now average 25 percent. Many 
factors have lead to this increase. Health and life insurance premiums 
have increased along with Office of Worker's Compensation Program 
(OWCP) costs. GIPSA pays all OWCP costs since the government is self 
insured. Since FY 1996, some employees have converted to the new 
Federal Employees Retirement System (FERS) and all new employees are in 
FERS. The FERS is patterned after a typical retirement system used by 
non-Federal companies in that the employer must pay into social 
security and matches contributions into a 401(k) plan.
    Grain marketing strategies and export volume have also had a 
negative effect on GIPSA's revenue. Since FY 1996, some grain exporting 
facilities have automated their material handling systems which 
requires fewer inspection and weighing personnel to provide service and 
makes the elevator more efficient. This improved efficiency has 
triggered a shift in locations where export grain is loaded. For 
example, the New Orleans Field Office facilities increased their export 
capacity from 72 percent of the total tons serviced by GIPSA in FY 1996 
to 78.6 percent in FY 2002. During the same timeframe, the League City 
Field Office export tonnage decreased from 13 to 12 percent and the 
Portland Field Office volume declined from 10 to 7 percent. These 
market shifts resulted in less revenue being collected per metric ton 
than originally planned because of the 6-level administrative tonnage 
fee. The New Orleans Field Office exports average revenue was $0.048 
per ton in 2002 while League City average revenue was $0.090 per ton 
and Portland's average revenue was $0.098 per ton. GIPSA estimates this 
shift in grain movements resulted in a revenue loss of approximately 
$660,000. Further, billable tonnage is not reaching the 85 MMT targeted 
in the 1996 fee schedules as the break even point. Therefore, revenue 
predictions based on billable tonnage were higher than what was 
actually billed.
    GIPSA has evaluated the administrative tonnage fee and determined 
it is not recovering its share of local and national administrative and 
supervisory costs because of increased employee costs not related to 
annual pay increases, shifting grain exports to lower revenue per ton 
markets, and exports not reaching the 85 MMT mark to break even. Local 
and national costs such as rent, communications, utilities, and other 
administrative support services have also increased since 1996. 
Adjustments to the fees during the years have not compensated for these 
cost increases.
    As GIPSA reviewed its financial status, it also concluded that unit 
fees are not recovering the cost of providing the service, supervision 
fees charged to delegated States for ships are not sufficient compared 
to the quantity of grain that is inspected and weighed, and the track 
scale testing program is not producing the revenue needed to maintain 
the testing program.
    GIPSA charges unit fees for additional services provided at an 
applicant's facility in an onsite GIPSA laboratory. These unit fees are 
charged in addition to the hourly rate. These unit fees are designed to 
recover the costs of the equipment and supplies needed to provide the 
service. GIPSA has not made any adjustments to these unit fees since 
they were first promulgated in 1996.
    Currently, GIPSA assesses $49.20 per ship to delegated States for 
providing official inspection and weighing services. This fee is 
collected to recover administrative and supervision costs of the 
official agencies. GIPSA has determined the delegated States should be 
contributing $0.016 per ton towards administrative and supervisory 
costs. However, the $49.20 per ship fee is only recovering an amount 
equivalent to $0.00169 per ton.
    GIPSA also provides special weighing services to the industry. 
These services include scale testing and certification, evaluations of 
weighing and material handling systems, National Type

[[Page 26483]]

Evaluation Program scale evaluations, mass standards calibration and 
reverification services, and special weighing projects. GIPSA provides 
these services through scale specialists located at certain field 
offices and in headquarters. Scale specialists are in a different job 
classification and grade level than inspectors or weighers because of 
their unique responsibility. Consequently, they are classified at a 
higher grade level. On average, scale specialist costs are 30 percent 
higher than the cost of agricultural commodity graders. Therefore, 
GIPSA needs to set the hourly fee for special weighing services at a 
level approximately 30 percent higher than the fee established for non-
contract services.
    The track scale testing program also uses special weighing 
equipment (test cars) to test track scales. These cars require 
maintenance and need to be replaced in the future. To assist in 
recovering the costs associated with these railcars, GIPSA would charge 
a $500 unit fee each time the car is used at a facility.
    GIPSA has concluded that despite efforts to reduce the cost of 
services, including administrative and supervisory activities, the 
revenues collected from the current user fees are less than the costs 
associated with these services. Consequently, GIPSA must re-evaluate 
the design and application of user fees to recover the costs of 
providing service in order to place the agency in a sound financial 
status. GIPSA is statutorily required to charge fees to cover the cost 
of service. To do this, GIPSA has projected the potential costs out to 
FY 2007 and plans to replenish the operating reserve fund back to its 
3-month level by FY 2010. The cost of living projections used in 
calculating future salary and benefits were supplied by OMB as 
published in the Federal Register (68 FR 12388) on March 14, 2003. 
Additionally, GIPSA is also adjusting the projected billable tonnage to 
set full cost recovery from 85 MMT to 80 MMT. GIPSA believes that this 
revised projection is necessary because annual billable tonnage has 
averaged near 80 MMT from 1996 to 2002. The 80 MMT does not include 
export grain shipments serviced by delegated States, land carrier 
exports to Mexico and Canada serviced by designated agencies, small 
shipments exported under the 15,000 metric ton exemption program, or 
other export shipments not requiring Federal services.
    GIPSA has determined that this action is needed to recover the 
costs of providing services and to maintain a professional workforce to 
inspect and weigh grain for the grain industry. In doing so, GIPSA will 
continue to facilitate the orderly marketing of grain in the domestic 
and export markets.
    Alternatives. Various methods were considered by which the 
objectives of the rule could be accomplished. GIPSA thoroughly 
evaluated the method of structuring fees prior to the implementation of 
the last major fee schedule revision in 1996. GIPSA determined at that 
time that the combination of hourly fees and unit fees provided 
customers with the information they need to determine the costs of 
specific inspection and weighing services because the fees are more 
specific.
    The design and implementation of the administrative tonnage fee to 
recover local and national administrative and supervisory costs is 
another important component of this proposal. GIPSA evaluated and 
compared three different alternatives for charging administrative 
tonnage fees: Alternative 1: establishing an administrative tonnage fee 
specific to each field office, Alternative 2: establishing a fixed rate 
national administrative tonnage fee, or Alternative 3: increasing the 
current 6-level administrative tonnage rates by 27 percent.
    GIPSA analyzed the various alternatives in relation to each field 
office area because each field office is unique when considering the 
number of employees, the number and types of elevators serviced, and 
the volume of grain exported from that area. FY 2002 information for 
each field office was used to analyze and compare the expected revenues 
for the various alternatives because the information is the most 
current and is indicative of recent marketing trends. This information 
was used to detail the cost recovery by each field office.
    Table 1 indicates the 5 GIPSA export field offices (the Baltimore 
office was closed in November 2002), the number of elevators in each 
field office area, the number of metric tons inspected, the amount of 
revenue collected from the tonnage fee for each field office, the field 
office administrative cost related to tonnage revenue, the headquarters 
administrative cost related to tonnage revenue, the amount of both the 
field office and headquarters administrative cost, and the amount each 
field office was deficient. Table 1 demonstrates that some offices did 
not cover their individual administrative and supervisory costs (i.e., 
Baltimore, Portland, and Toledo) and all failed to cover the total 
administrative and supervisory costs of the combined field office and 
headquarters cost as a result of the employee cost increases and the 
changes in grain marketing.

                                      Table 1.--Actual Administrative Metric Tonnage Fees and Costs (FY 2002 Data)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   F/O portion
                                                                              FY 2002    FY 2002 ton     Field       of H.Q.    Total F/O &   Amt. short
                          Field office                           No. elev.      tons       revenue       Office    admin. cost   H.Q admin.    for cost
                                                                             inspected                admin. cost      \1\          cost       recovery
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baltimore......................................................          3     $876,586     $110,952     $120,717      $38,394     $159,112    $(48,160)
League City....................................................          7   10,071,370      905,972      880,749      441,126    1,321,875    (415,904)
New Orleans....................................................         13   64,622,607    3,126,212      778,759    2,830,470    3,609,229    (483,017)
Portland.......................................................          3    4,142,092      406,895      416,166      181,424      597,589    (190,695)
Toledo.........................................................          6    2,555,750      295,433      353,006      111,942      464,948    (169,514)
                                                                ------------
    Total......................................................         32   82,268,405    4,845,464    2,549,397    3,603,356    6,152,753  (1,307,290)
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Headquarters cost portion per field office calculated by dividing the total amount of headquarters cost by the total number of metric tons
  inspected. That amount ($0.0438 per ton) was then multiplied by the number of tons inspected by each field office.

    Table 2 indicates the average revenue per ton collected by each 
office, the component amounts of administrative and supervisory 
revenues per ton needed to meet field office and headquarters costs, 
and the estimated cost per metric ton calculated for each alternative. 
There are differences in the actual average revenue collected per ton 
in each office for FY 2002. This ranges from $0.048 per ton in New 
Orleans to $0.127 per ton in Baltimore. These

[[Page 26484]]

differences are due to the 6-level administrative tonnage fee which 
decreases the amount per ton collected as the total tonnage increases. 
Under Alternative 3, these differences in revenue collected from each 
field office would continue because the current 6-level administrative 
tonnage fee would remain in effect.

                         Table 2.--Administrative Tonnage Fee Comparison (FY 2002 Data)
----------------------------------------------------------------------------------------------------------------
                                                        Dollars per ton      Dollars per ton needed to recover
                                                     needed to recover F/              total overhead
                                          Actual FY   O & H.Q. costs per  --------------------------------------
                                              02              ton          Alternative
              Field office                 revenue  ---------------------- 1--regional  Alternative  Alternative
                                           per ton                           per ton       2--one    3--increase
                                                        F/O      H.Q.\1\      total      admin fee    ranges ton
                                                                             overhead     per ton     fee by 27%
----------------------------------------------------------------------------------------------------------------
Baltimore...............................     $0.127     $0.138     $0.044      $0.182       $0.075       $0.162
League City.............................      0.090      0.087      0.044       0.131        0.075        0.115
New Orleans.............................      0.048      0.012      0.044       0.056        0.075        0.062
Portland................................      0.098      0.100      0.044       0.144        0.075        0.126
Toledo..................................      0.116      0.139      0.044       0.183        0.075       0.149
----------------------------------------------------------------------------------------------------------------
\1\ $0.0438 rounded to $0.044.

    The administrative and supervisory cost attributed to headquarters 
in Table 2 is $0.044 (rounded from $0.0438) per metric ton inspected. 
This amount is determined by dividing the amount of headquarters cost 
($3,603,356 from Table 1) by the number of total metric tons inspected 
(82,268,405 tons from Table 1). The administrative cost of each office 
is determined by dividing the offices administrative cost (from Table 
1) by the number of metric tons inspected by each office (from Table 
1).
    In Table 2, establishing an administrative tonnage fee specific to 
each field office (Alternative 1) is arrived at by combining the 
calculated field office tonnage rate with the headquarters tonnage 
rate. This results in the unique field office tonnage rate required to 
cover the entire field office administrative costs and the field office 
portion of the national administrative cost. Establishing a fixed rate 
national administrative tonnage fee (Alternative 2) tonnage rates is 
arrived at by taking the total administrative costs (all field office 
costs plus headquarters costs) divided by the total billable tonnage. 
This results in a single tonnage fee that is applicable to all GIPSA 
customers. Increasing the current 6-level administrative tonnage fee 
(Alternative 3) is determined by taking the current tonnage rate tables 
and increasing them by 27 percent. The 27 percent increase is what 
GIPSA determined the shortage was in the revenue to the costs.
    Table 3 shows the projected administrative tonnage revenues based 
on the tonnage fees from Table 2. The projected information shows all 
offices collect sufficient revenues to cover the local administrative 
and supervisory costs as well as the headquarters cost when the 
regional tonnage fees are used (Alternative 1). The other alternatives 
cover the total cost of administration and supervision; however, some 
offices do not collect the revenues needed to support the field office 
costs and some do not cover the total of the field office cost combined 
with a portion of the headquarters administrative cost as a result of 
the employee cost increases and the changes in grain marketing.

                     Table 3.--Administrative Tonnage Fee Revenue Comparison (FY 2002 Data)
----------------------------------------------------------------------------------------------------------------
                                                                                        Alternative  Alternative
                                                           Total needed F/ Alternative     2--one    3--increase
                Field office                   FY 02 ton      O & H.Q.     1--regional   admin fee    ranges ton
                                                           administrative    per ton      per ton     fee by 27%
                                                                cost         revenue      revenue      revenue
----------------------------------------------------------------------------------------------------------------
Baltimore...................................      876,586       $159,112      $159,112      $65,569     $142,019
League City.................................   10,071,370      1,321,875     1,321,875      753,339    1,159,644
New Orleans.................................   64,622,607      3,609,229     3,610,173    4,833,775    4,006,405
Portland....................................    4,142,092        597,589       597,589      309,829      520,826
Toledo......................................    2,555,750        464,948       467,039      191,170      380,394
                                             --------------
    Total...................................   82,268,405      6,152,753     6,155,789    6,153,682    6,209,288
----------------------------------------------------------------------------------------------------------------

    All alternatives collect the targeted amount needed to fully fund 
both field and headquarters overhead in total. GIPSA believes each 
field office should collect sufficient revenue from customers to 
support the local field office administrative and supervisory costs in 
addition to their share of the national administrative and supervisory 
costs. This would put each field office in an independent financial 
position and would encourage customers to work directly with each field 
office and headquarters to continue the implementation of grain 
handling efficiencies while raising the awareness of local 
administrative and supervisory costs.
    The national administrative fee approach (Alternative 2) relies 
heavily on the New Orleans Field Office to support the administrative 
and supervisory costs of the other offices. The alternative to increase 
the current 6-level tonnage fee structure by 27 percent (Alternative 3) 
results in the same situation. After a complete evaluation, GIPSA 
believes the regional tonnage method (Alternative 1) is the best 
approach to collect revenues for these

[[Page 26485]]

costs. Under Alternative 1, users of the service would be paying their 
share of the local costs of operating and maintaining a field office in 
their port area.
    GIPSA is establishing new administrative tonnage fees based on the 
concept of Alternative 1. These tonnage fees are calculated to recover 
the projected increases in administrative and supervisory costs related 
to employee costs as determined by the OMB estimates and based on a 
minimum 80 MMT of billable tonnage.
    Table 4 lists the expected tonnage and the expected administrative 
and supervisory costs for field offices and headquarters projected out 
to FY 2007. This information was then used to determine the specific 
field office tonnage rate needed to recover field office costs and the 
tonnage rate needed to recover the headquarters cost. The field office 
tonnage rate in Table 4 was determined by dividing the projected field 
office cost by the projected tonnage.

              Table 4.--Projected Administrative Metric Tonnage Fees and Costs (FY 2007 Projection)
----------------------------------------------------------------------------------------------------------------
                                                                                         Projected
                                                               Projected   Projected F/    admin.     Projected
                   Field office                    No. elev.      tons       O admin.   tonnage fee  total F/O &
                                                               inspected       cost      for field   H.Q. admin.
                                                                                        offices \1\      cost
----------------------------------------------------------------------------------------------------------------
Baltimore........................................  Field office was closed and elevators and costs redistributed
                                                                       to other field offices
                                                  ------------
League City......................................          7    9,130,000   $1,048,000       $0.115   $1,522,760
New Orleans......................................         14   63,330,000      946,000        0.015    4,239,160
Portland.........................................          3    5,335,000      447,000        0.084      724,420
Toledo...........................................          8    2,253,000      296,000        0.131      413,156
                                                  ------------
    Total........................................         32   80,048,000    2,737,000        \(2)\  ...........
----------------------------------------------------------------------------------------------------------------
\1\ The projected fees for some locations are lower than or equal to those of FY 2002. This is due to changes in
  expected export volumes, redistribution of workload and costs due to the closing of the Baltimore Field
  Office, and certain one-time costs.
\2\ The projected fee needed to recover the headquarters cost ($0.052) was calculated by dividing the total
  amount of headquarters cost ($4,154,000) by the total number of metric tons inspected.

    Table 5 combines the field office tonnage rates with the 
headquarters tonnage rates to calculate the specific field office 
tonnage rate. The projected tonnage rate was used to calculate the 
projected revenue for each field office by multiplying the projected 
tons for each field office by the specific field office rate. The 
projected revenue for each office was compared to the projected total 
costs (field office and headquarters) for each field office (from Table 
4) to determine if each field office collected sufficient revenues to 
cover their costs.

              Table 5.--Projected Costs and Revenues Collected by Field Office (FY 2007 Projection)
----------------------------------------------------------------------------------------------------------------
                                                Projected administrative        Projected fees and revenue
                                    Projected          tonnage fee       ---------------------------------------
           Field office                tons    --------------------------  Projected                  Projected
                                    inspected                             tonnage fee   Projected   cost/revenue
                                                    F/O          H.Q.     ($/ton) \1\  revenue ($)   balance ($)
----------------------------------------------------------------------------------------------------------------
League City......................    9,130,000       $0.115       $0.052       $0.167   $1,524,710       $1,950
New Orleans......................   63,330,000        0.015        0.052        0.067    4,243,110        3,950
Portland.........................    5,335,000        0.084        0.052        0.136      725,560        1,140
Toledo...........................    2,253,000        0.131        0.052        0.183      412,299         (857)
                                  -------------
    Total........................   80,048,000  ...........  ...........  ...........    6,905,679  ............
----------------------------------------------------------------------------------------------------------------
\1\ The projected fees for some locations are lower than or equal to those of FY 2002. This is due to changes in
  expected export volumes, redistribution of workload and costs due to the closing of the Baltimore Field
  Office, and certain one-time costs.

    Table 5 demonstrates that the projected tonnage fees produce 
revenues to cover, as nearly as practicable, overall costs for each 
field office. The Toledo Field Office calculated tonnage rate, however, 
does not cover their costs. Therefore, GIPSA increased their rate by 
one-tenth of a cent per ton to fully recover their costs.
    As GIPSA evaluated the administrative and supervisory fees needed 
to cover field office and national administrative and supervisory 
costs, GIPSA also considered the contribution of revenue collected from 
official agencies to cover the costs of administration and supervision 
of their programs. GIPSA initiated this review by determining the total 
administrative and supervisory costs of overseeing the official 
agencies ($2,330,343) and the total number of metric tons inspected by 
official agencies in both the domestic and export markets (150,650,608 
metric tons) to determine the overall cost per ton needed to cover 
these administrative and supervisory costs. This resulted in $0.016 per 
metric ton to cover administration and supervision of official 
agencies.
    Currently, GIPSA assesses $49.20 per ship to delegated States for 
providing official inspection and weighing services. This fee is then 
passed on to the exporter by the delegated State. In FY 2002, delegated 
States exported 19,049,018 metric tons of grain (655 ships) and GIPSA 
collected $32,226 in revenues from the $49.20 per ship fee. This makes 
the current ship fee equivalent to $0.00169 per metric ton. This is far 
less than the $0.016 per metric ton GIPSA calculated was needed to 
recover costs. Since the current ship fee is contributing very little 
to recover the costs of administration and supervision of the

[[Page 26486]]

delegation and designation program, GIPSA is changing this fee from a 
unit fee to a tonnage fee. The tonnage fee is set at $0.016 per ton 
since this is what GIPSA calculated as the amount needed to recover 
costs.
    Summary of Benefits. This rule will allow GIPSA to collect revenues 
from our customers to support direct service costs along with the 
administrative and supervisory costs of providing these services. The 
revenues collected from this rule will provide GIPSA the resources 
needed to replenish the retained earnings account to a 3-month 
operating reserve. This increase in fees is needed to recover the costs 
of providing service and to provide the financial foundation for GIPSA 
to maintain a highly skilled and professional work force to inspect and 
weigh grain. The action would also foster further development of grain 
handling efficiencies implemented by grain companies. This would 
further reduce the cost of GIPSA services by reducing the number of 
employees needed to provide service. These combined actions would 
assist GIPSA in fulfilling its mission to facilitate the marketing of 
grain in domestic and export markets by assuring continued inspection 
and weighing services to the grain industry.
    User fees promote the internalization of the real cost of providing 
inspection and weighing services in consumer transaction decisions. 
User fees also achieve savings in Government expenditures, and, 
therefore, reduce the tax support necessary for the system to operate 
at a given level. These tax funds can then be used in other programs or 
to reduce taxes overall and, thus, diminish the efficiency losses 
associated with the generation of taxes (deadweight loss plus 
collection costs). The revision of user fees helps ensure that the user 
fees adequately reflect the cost of performing the services over time.
    Summary of Costs. GIPSA has determined that the total cost to the 
grain industry to implement the changes will be approximately $5 
million per year. This represents an approximate 21 percent increase in 
revenues or an average increase of 6.5 cents per ton. These 
calculations are based on the assumptions that the projected OMB 
employee costs for continued annual Federal pay increases will increase 
a total of 17.38 percent from FY 2002 to FY 2007 and GIPSA will collect 
revenue from a minimum of 80 MMT per year which was used to establish 
the tonnage fee. GIPSA will collect this additional revenue by (1) 
increasing the 1-year contract hourly rate by approximately 20 percent 
and the non-contract hourly rate by 47 percent and eliminating 
provisions for the 3-month and 6-month contracts; (2) increasing hourly 
rates for services not performed at an applicant's facility by 
approximately 11.5 percent; (3) increasing unit fees for additional 
tests provided by GIPSA; (4) eliminating the 6-level administrative 
tonnage fee and replacing it with regional administrative tonnage fees; 
(5) eliminating the unit fee charged to delegated States for export 
ships and replacing it with a tonnage fee; (6) increasing hourly fees 
for special weighing services by approximately 30 percent above the 
non-contract hourly rate; and (7) establishing a $500 usage fee per 
facility when the GIPSA test car is used to test track scales.
    This 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 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 provisions of this rule.

Paperwork Reduction Act and Government Paperwork Elimination Act

    In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection and recordkeeping requirements 
included in this rule have been submitted for approval to the Office of 
Management and Budget (OMB). The rule would require applicants to 
complete Form FGIS-4, Application and Agreement for Contract Services, 
if they intend to enter into a one-year contract service agreement with 
GIPSA. Copies of this information collection can be obtained from Tess 
Butler, GIPSA, USDA, 1400 Independence Avenue, SW., Room 1647-S, 
Washington, DC 20250-3604.
    GIPSA is committed to compliance with the Government Paperwork 
Elimination Act, which requires Government agencies, in general, to 
provide the public the option of submitting information or transacting 
business electronically to the maximum extent possible.

Civil Rights Review

    In promulgating this regulation, GIPSA considered the potential 
civil rights implications on minorities, women, or persons with 
disabilities and prepared a Civil Rights Impact Analysis to ensure that 
no person or group shall be discriminated against on the basis of race, 
color, sex, national origin, religion, age disability, or marital or 
family status. 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 rule will apply in the same manner 
to all persons and groups whose activities are regulated, regardless of 
race, gender, national origin, or disability. Information indicates 
that the rule will have no effect on protected populations.

Regulatory Flexibility Act Certification

    GIPSA has 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.). 
The USGSA (7 U.S.C. 71 et seq.) 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.
    GIPSA adopted its current fee structure (61 FR 43301) effective 
October 1, 1996, for services provided by GIPSA employees. This fee 
structure change was needed because advances in technology had allowed 
exporters to improve operational efficiencies, which, in turn, had 
reduced the number of GIPSA personnel required to service certain 
facilities. The fee structure was changed from primarily using hourly 
fees to recover costs to a method that uses a mix of hourly and unit 
fees for its inspection and weighing services. Direct service costs are 
recovered through hourly fees charged for employees providing the 
inspection and weighing services. Administrative costs are recovered by 
a tonnage fee applied to grain inspected and weighed as shipments from 
an export facility. Export grain companies are paying for direct labor 
costs and pay a share of the local and national administrative costs.
    Since implementing the fees in 1996, GIPSA has adjusted hourly fees 
to correspond with annual Federal pay increases. This action is 
necessary since employee payroll costs account for approximately 84 
percent of GIPSA's total operating budget. The current USGSA fees were 
published in the

[[Page 26487]]

Federal Register on June 2, 2003, (68 FR 32623) and became effective on 
July 2, 2003.
    GIPSA regularly reviews its programs to determine if the fees are 
adequate. Since implementing the fees in 1996, GIPSA has only 
experienced one year where the revenues exceeded the costs. Annual 
losses have been between $1 million to $1.7 million since 1996 except 
for the one positive year GIPSA revenue exceeded the costs by $88,000.
    GIPSA recognizes the need to reduce inspection and weighing costs 
as much as possible before increasing fees. Therefore, GIPSA has taken 
action through the years to minimize payroll costs. These actions 
include utilizing employee buyouts to remove high-salaried, senior 
employees from the active employment list; taking advantage of employee 
attrition to reduce total staff by not hiring to fill vacant positions; 
hiring and scheduling more part-time and intermittent employees to 
better manage staff costs during fluctuating work periods; and reducing 
the amount of paid overtime via creative scheduling processes. Although 
GIPSA has observed a 14 percent reduction in paid hours and has reduced 
overtime pay by 2 percent, this is not enough to avoid continued 
financial losses.
    GIPSA has completed a review of the grain inspection and weighing 
programs and has determined it is necessary to amend the fees in order 
to replenish the retained earnings accounts and to maintain a 3-month 
operating reserve. These changes are targeted to recover employee costs 
directly related to services provided and to recover the costs 
associated with administering and supervising the grain inspection and 
weighing programs. Maintaining GIPSA's financial stability will assure 
continued inspection and weighing services to the grain industry which 
will further facilitate the sound and orderly marketing of grain in 
domestic and export markets.
    To minimize the impact of a fee increase, GIPSA has decided to 
establish fee rates that collect sufficient revenue to immediately 
cover operating expenses, while striving to create a 3-month operating 
reserve by FY 2010. These fees are designed to collect sufficient 
annual revenue through FY 2007, to achieve an average estimated 
positive $1,000,000 balance annually based on an inspection volume of 
80 MMT per year. The cost of living projections used in calculating 
future salary and benefits out to FY 2007 were supplied by OMB as set 
forth in their Federal Register publication (68 FR 12388) on March 14, 
2003. GIPSA will evaluate, every six months, the financial status of 
the grain inspection and weighing program to determine if it is meeting 
the goal of obtaining a 3-month operating reserve by FY 2010 and to 
determine if other adjustments are necessary. Although it has not done 
so in the recent past, GIPSA will ensure that future annual fee 
adjustments for Federal pay increases will take into account longevity 
pay, locality pay, and benefits.
    Under the provisions of the United States Grain Standards Act, 
grain exported from the United States must be officially inspected and 
weighed. Mandatory inspection and weighing services are provided by 
GIPSA at 32 export facilities and by delegated States at 19 export 
facilities. All of these facilities are owned by multi-national 
corporations, large cooperatives, or public entities that do not meet 
the requirements for small entities established by the Small Business 
Administration. Further, the regulations are applied equally to all 
entities.
    The USGSA (7 U.S.C. 87f-1) requires the registration of all persons 
engaged in the business of buying grain for sale in foreign commerce. 
In addition, those individuals who handle, weigh, or transport grain 
for sale in foreign commerce must also register. The USGSA regulations 
(7 CFR 800.30) define a foreign commerce grain business as persons who 
regularly engage in buying for sale, handling, weighing, or 
transporting grain totaling 15,000 metric tons or more during the 
preceding or current calendar year. At present, there are 90 
registrants registered to export grain. While most of the 90 
registrants are large businesses, we assume that some may be small.
    GIPSA also provides nonmandatory inspection and weighing services 
at other than export locations. Approximately 75 different applicants 
receive nonmandatory inspection services each year and approximately 50 
different locations receive track scale tests as a miscellaneous 
service each year. While most of these applicants are large businesses, 
we assume that the final rule should not significantly affect many 
small businesses requesting these official services. Furthermore, any 
of these applicants that wish to avoid the fee increase may do so by 
using an alternative source for these services. Such a decision should 
not prevent the business from marketing its product or conducting 
business as usual.
    GIPSA has determined that the total cost to the grain industry to 
implement the final rule will be approximately $5 million per year. 
This represents an approximate 21 percent increase in revenues or an 
average increase of 6.5 cents per ton. These calculations are based on 
the assumptions that the projected OMB employee costs for continued 
annual Federal pay increases will increase a total of 17.38 percent 
from FY 2002 to FY 2007 and GIPSA will collect revenue from a minimum 
of 80 MMT per year which was used to establish the tonnage fee.
    Most users of the official inspection and weighing services do not 
meet the requirements for small entities. Further, GIPSA is required by 
statute to make services available and to recover, as nearly as 
practicable, the costs of providing such services. Additionally, GIPSA 
has not identified any other Federal rules which may duplicate, 
overlap, or conflict with this proposed rule. Therefore, Donna 
Reifschneider, Administrator, GIPSA, has certified 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.).

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 (a) is amended by revising Schedule A and Tables 1 
and 2 in Schedule C 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

[[Page 26488]]



   Table 1.--Fees for Official Services Performed at an Applicant's Facility in an Onsite FGIS Laboratory \1\
----------------------------------------------------------------------------------------------------------------
                                                               Monday to    Monday to    Saturday,
                                                               Friday  (6   Friday  (6  Sunday, and
                                                               a.m. to 6    p.m. to 6     overtime     Holidays
                                                                 p.m.)        a.m.)         \2\
----------------------------------------------------------------------------------------------------------------
(1) Inspection and Weighing Services Hourly Rates (per
 service representative):
    1-year contract ($ per hour)............................        36.00        37.60        43.00        64.00
    Noncontract ($ per hour)................................        64.00        64.00        64.00        64.00
-------------------------------------------------------------
(2) Additional Tests (cost per test, assessed in addition to the hourly rate): \3\


 
 
------------------------------------------------------------------------
    (i) Aflatoxin (rapid test kit method)..................       $10.00
    (ii) Corn oil, protein, and starch (one or any                  2.25
     combination)..........................................
    (iii) Soybean protein and oil (one or both)............         2.25
    (iv) Wheat protein (per test)..........................         2.25
    (v) Sunflower oil (per test)...........................         2.25
    (vi) Vomitoxin (qualitative)...........................        12.50
    (vii) Vomitoxin (quantitative).........................        18.50
    (viii) Waxy corn (per test)............................         2.25
    (ix) Fees for other tests not listed above will be
     based on the lowest noncontract hourly rate
    (x) 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 serviced by the specific
     field office (per-metric ton):
        (a) League City....................................        0.167
        (b) New Orleans....................................        0.067
        (c) Portland.......................................        0.136
        (d) Toledo.........................................       0.184
\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.


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)..........       $20.00
        (b) Railcar (per carrier)..........................        29.70
        (c) Barge (per carrier)............................       187.50
        (d) Sacked grain (per hour per service                      0.04
         representative 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)..........        12.00
        (b) Railcar (per carrier)..........................        25.00
        (c) Barge (per carrier)............................       128.10
        (d) Sacked grain (per hour per service                      0.04
         representative plus an administrative fee per
         hundredweight) (CWT)..............................
    (iv) Other services
        (a) Submitted sample (per sample--grade and factor)        12.00
        (b) Warehouseman inspection (per sample)...........        21.00
        (c) Factor only (per factor--maximum 2 factors)....         5.70
        (d) Checkloading/condition examination (use hourly          0.04
         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 pre service                 64.00
         representative)...................................
    (v) Additional tests (excludes sampling):
        (a) Aflatoxin (rapid test kit method)..............        30.00
        (b) Corn oil, protein, and starch (one or any              10.00
         combination)......................................
        (c) Soybean protein and oil (one or both)..........        10.00
        (d) Wheat protein (per test).......................        10.00
        (e) Sunflower oil (per test).......................        10.00
        (f) Vomitoxin (qualitative)........................        31.00
        (g) Vomitoxin (quantitative).......................        38.50
        (h) Waxy corn (per test)...........................        10.00
        (i) Canola (per test--00 dip test).................        10.00
        (j) Pesticide Residue Testing: \3\
            (1) Routine Compounds (per sample).............       216.00
            (2) Special Compounds (per hour per service           115.00
             representative)...............................

[[Page 26489]]

 
        (k) 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).......        82.00
        (a) Factor only (per factor--max 2 factors)........        43.00
        (b) Sampling service for Appeals additional (hourly
         rates from Table 1)
    (ii) Additional tests (assessed in addition to all
     other applicable fees):
        (a) Aflatoxin (rapid test kit method)..............        30.00
        (b) Corn oil, protein, and starch (one or any              17.70
         combination)......................................
        (c) Soybean protein and oil (one or both)..........        17.70
        (d) Wheat protein (per test).......................        17.70
        (e) Sunflower oil (per test).......................        17.70
        (f) Vomitoxin (per test--qualitative)..............        41.00
        (g) Vomitoxin (per test--quantitative).............        47.00
        (h) Vomitoxin per test--HPLC Board Appeal).........       141.00
        (i) Pesticide Residue Testing: \3\
            (1) Routine Compounds (per sample).............       216.00
            (2) Special Compounds (per hour per service           115.00
             representative)...............................
        (j) 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, 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                  $64.00
 representative) \2\.......................................
(2) Certification of diverter-type mechanical samplers (per        64.00
 hour per service representative) \2\......................
(3) Special weighing services (per hour per service
 representative): \2\
    (i) Scale testing and certification....................        83.20
    (ii) Scale testing and certification of railroad track         83.20
     scales................................................
    (iii) Evaluation of weighing and material handling             83.20
     systems...............................................
    (iv) NTEP Prototype evaluation (other than Railroad            83.20
     Track Scales).........................................
    (v) NTEP Prototype evaluation of Railroad Track Scale..        83.20
    (vi) Use of GIPSA railroad track scale test equipment         500.00
     per facility for each requested service. (Track scales
     tested under the Association of American Railroads
     agreement are exempt.)................................
    (vii) Mass standards calibration and reverification....        83.20
    (viii) Special projects................................        83.20
(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)....         3.00
(7) Divided-lot certificates (per certificate).............         1.75
(8) Extra copies of certificates (per certificate).........         1.75
(9) Faxing (per page)......................................         1.75
(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 $64.00
  per hour.
\2\ Regular business hours--Monday through Friday--service provided at
  other than regular hours charged at the applicable overtime hourly
  rate.

* * * * *

Schedule C--Fees for FGIS Supervision of Official Inspection and 
Weighing Services Performed by Delegated States and/or Designated 
Agencies in the United States \1\

[[Page 26490]]



                                 Table 1
------------------------------------------------------------------------
                                                           Official
                                                         inspection or
     Inspection services (bulk or sacked grain)          reinspection
                                                           services
------------------------------------------------------------------------
(1) Official sample lot inspection service:
    (i) For official grade and official factor
     determinations:
        (a) Truck or trailer (per inspection) \2\...               $0.30
        (b) Boxcar or hopper car (per inspection)                   0.95
         \2\........................................
        (c) Barge (per inspection) \2\..............                6.15
        (d) Ship (per metric ton) \3\...............               0.016
        (e) All other lots (per inspection) \2\ \4\.                0.30
    (ii) For official factor or official criteria
     determinations:
        (a) Factor determination (per inspection)                   0.20
         (maximum 2 factors) \5\....................
        (b) Official criteria \2\ \6\...............                0.20
(2) Stowage examination certificates:
    (i) Ship (per stowage certificate)..............                3.00
    (ii) Other carriers (per stowage certificate)...                0.20
(3) Warehouseman's sample-lot inspection service or
 submitted sample inspection service:
    (i) For official grade and official factor                      0.30
     determination (per inspection).................
    (ii) For official factor or official factor
     determinations:
        (a) Factor determination (per inspection)                   0.20
         (maximum 2 factors) \5\
        (b) Official criteria \2\ \6\                               0.20
(4) Reinspection services:
    (i) Truck, boxcar, hopper car, barge, ship,                     0.30
     warehouseman's sample-lot, submitted sample,
     factor determination, and all other lots (per
     sample inspected)..............................
    (ii) Official criteria \2\ \6\..................               0.20
------------------------------------------------------------------------
Note: The footnotes for table 1 are shown at the end of table 2.


                                                     Table 2
----------------------------------------------------------------------------------------------------------------
                                                                 Official weighing services
 Official services (bulk or sacked grain) ----------------------------------------------------------------------
                                                        (Class X)                          (Class Y)
----------------------------------------------------------------------------------------------------------------
Official weighing services:
    (i) Truck or trailer (per carrier)...  $0.30.............................  $0.20.
    (ii) Boxcar or hopper car (per         0.95..............................  0.25.
     carrier).
    (iii) Barge (per carrier)............  6.15..............................  1.55.
    (iv) Ship \3\ \7\....................  0.016/metric ton..................  12.30/ship.
    (v) All other lots (per lot or part    0.30..............................  0.20.
     lot) \4\.
----------------------------------------------------------------------------------------------------------------
\1\ The fees include the cost of supervision functions performed by the Service for official inspection and
  weighing services performed by delegated States and\or designated agencies.
\2\ A fee shall be assessed for each carrier or sample inspected if a combined lot certificate is issued or a
  uniform loading plan is used to determine grade.
\3\ A fee shall be assessed per ship regardless of the number of lots or sublots loaded at a specific service
  point. A fee shall not be assessed for divided-lot certificates. Only one fee is assessed when inspection and
  weighing services are performed on the same ship at the same time.
\4\ Inspection services for all other lots include, but are not limited to, sampling service, condition
  examinations, and examination of grain in bins and containers. For weighing services, all other lots include,
  but are not limited to, seavans, and inhouse bin transfers.
\5\ Fees shall be assessed for a maximum of two factors. If more than two factors are determined, fees are
  assessed at rates in table 1 (1)(i) or (3)(i) above, as applicable, based on carrier or type sample
  represented.
\6\ Official criteria includes, but is not limited to, protein and oil analyses. A fee shall be assessed for
  each sample tested.
\7\ A Class Y ship fee shall be assessed for shipments destined for domestic markets only.

* * * * *


Sec.  800.73  [Amended]

0
3. Section 800.73, paragraph (e) is removed; paragraph (f) is 
redesignated as (e); and paragraph (g) is redesignated as (f).

Marianne Plaus,
Acting Administrator, Grain Inspection, Packers and Stockyards 
Administration.
[FR Doc. 04-10632 Filed 5-12-04; 8:45 am]
BILLING CODE 3410-EN-P