[Federal Register Volume 70, Number 53 (Monday, March 21, 2005)]
[Proposed Rules]
[Pages 13411-13413]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-5501]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 70, No. 53 / Monday, March 21, 2005 / 
Proposed Rules  

[[Page 13411]]



DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

7 CFR Part 800

RIN 0580-AA88


Fees Assessed by the Service

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

ACTION: Proposed rule.

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SUMMARY: The Federal Grain Inspection Service (FGIS), of the Grain 
Inspection, Packers and Stockyards Administration (GIPSA), is proposing 
to increase fees assessed to delegated States and designated official 
agencies, hereafter known as official agencies, authorized by GIPSA to 
provide official inspection and weighing services to the U.S. grain 
industry. The increase in fees is necessary to collect sufficient 
revenue to cover the current and future cost of supervising the 
performance of the official agencies.
    Current supervision fees are charged to official agencies on a unit 
basis and represent an average rate of approximately 0.8 cent per 
metric ton of grain inspected or weighed by the official agencies. The 
proposed supervision fee increases the rate to a 1.1 cents per metric 
ton charge. Official agencies include the cost of GIPSA's supervision 
fee as part of the fee they charge their customers for grain services. 
The current average cost for services provided by official agencies is 
21 cents per metric ton. Increasing the supervision fee by 
approximately 0.3 cent per metric ton should minimally increase the 
total cost of inspection and weighing services to the grain industry.

DATES: Written comments must be submitted on or before May 20, 2005.

ADDRESSES: We invite you to submit comments on this proposed rule. You 
may submit comments by any of the following methods:
     E-Mail: Send comments via electronic mail to 
[email protected].
     Mail: Send hardcopy written comments to Tess Butler, 
GIPSA, USDA, 1400 Independence Avenue, SW., Room 1647-S, Washington, DC 
20250-3604.
     Fax: Send comments by facsimile transmission to (202) 690-
2755.
     Hand Deliver or Courier: Deliver comments to: Tess Butler, 
GIPSA, USDA, 1400 Independence Avenue, SE., Room 1647, Washington, DC 
20250-3604.
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
    Instructions: All comments should make reference to the date and 
page number of this issue of the Federal Register.
    Background Documents: Regulatory analyses and other documents 
relating to this action will be available for public inspection in the 
above office during regular business hours.
    Read Comments: All comments will be available for public inspection 
in the above office during regular business hours (7 CFR 1.27(b)).

FOR FURTHER INFORMATION CONTACT: David Orr, Director, Field Management 
Division, telephone (202) 720-0228 at USDA, GIPSA, Room 2409, 1400 
Independence Avenue, SW., Washington, DC, 20250-3630; Fax Number (202) 
720-1015; E-mail address [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The United States Grain Standards Act (USGSA) (7 U.S.C. 71 et seq.) 
authorizes GIPSA to supervise grain inspection and weighing services 
provided by official agencies and to charge and collect reasonable fees 
to cover the cost of such supervision. These fees are charged by 
official agencies to their customers (grain industry) as part of the 
overall fee charged for inspection and weighing services. Supervision 
fees collected by GIPSA cover, as nearly as practicable, the program 
and administrative costs of supervising official agencies. The current 
supervision fees were published in the Federal Register on May 13, 2004 
(69 FR 26476), and became effective June 14, 2004. This action adjusted 
only the supervision fee charged to delegated States for the inspection 
and weighing of export grain shipments. All other supervision fees 
remained unchanged. The fee for export grain shipments was increased 
from a unit fee of $49.20 per inspection to 1.6 cents per metric ton.
    The fees unchanged by the June 14, 2004, action were last amended 
in September 23, 1985, as published in the Federal Register (50 FR 
38503) and became effective on October 1, 1985. At that time, 
supervision fees were lowered an average 40 percent due to the 
accumulation of a $4.5 million reserve in retained earnings. The fee 
rates established on October 1, 1985, were set at a level so that the 
program operated at a net loss in order to reduce the operating 
reserves on a planned gradual basis. During the 19 year span from 1985 
to 2004, GIPSA has gradually reduced the retained earnings in this 
program and has reached a point where an adjustment is needed to cover 
current and future program costs. In FY 2004, the official agency 
supervision program operating costs totaled $2,606,826, while revenue 
amounted to $1,527,713, a negative margin of $1,079,113. The retained 
earnings balance was $867,191 at the end of FY 2004. GIPSA projects the 
official agency supervision program deficit to continue at a comparable 
rate, and estimates that at the end of FY 2006, the program's retained 
earnings will be negative $1.1 million.
    GIPSA regularly reviews its user-fee-financed programs under the 
USGSA (7 U.S.C. 71 et seq.) to determine if the fees are adequate. 
GIPSA recognizes the need to reduce inspection and weighing supervision 
costs as much as possible before increasing fees and therefore has 
taken action through the years to minimize costs. GIPSA plans to reduce 
costs by initiating a transition to a central monitoring program. This 
action, scheduled for implementation in FY 2008, should reduce overall 
operating expenses an estimated $1.2 million or 43 percent. 
Implementing the central monitoring process, coupled with a new 
supervision fee, will assist GIPSA in reaching an adequate 3-month 
retained earnings balance.
    GIPSA reviewed the official agency inspection and weighing programs 
and proposes to change the manner in which it collects user fees and 
increase fees in order to recover the retained earnings to their 
desired 3-month level.

[[Page 13412]]

    The current supervision fee is assessed on a unit or carrier basis 
and does not necessarily reflect the amount of grain inspected and 
weighed. GIPSA believes assessing supervision fees proportionate to the 
weight of grain inspected and/or weighed is a reasonable approach. This 
process was implemented for the supervision of export grain inspected 
and weighed by Delegated States in the changes effective June 14, 2004 
(69 FR 26476). Therefore, GIPSA proposes charging all supervision fees 
based on a per metric ton basis.
    In FY 2004, customers of official agencies, the grain industry, 
paid an estimated $39 million or 21 cents per metric ton for official 
inspection and weighing services on an estimated 187 million metric 
tons of grain. Of the $39 million paid for services, $1,527,713 (3.92 
percent or 0.82 cents per metric ton) represented GIPSA collected 
supervision fees. GIPSA's actual program costs for FY 2004 were 
$2,606,826 or 1.39 cents per metric ton which resulted in a net loss of 
approximately 0.57 cents per metric ton.
    To minimize the impact of a fee increase, GIPSA has decided to 
propose supervision fee rates that will collect sufficient revenue over 
time to cover operating expenses, while striving to create a 3-month 
operating reserve by FY 2014. The cost of living projections used in 
calculating future salary, benefits, and all other non-salary expenses 
out to FY 2014 were supplied by the Office of Management and Budget 
(OMB) as set forth in their Federal Register publication (69 FR 26900) 
on May 14, 2004. In projecting revenue to FY 2014, GIPSA used a 5 year 
average of the total tons inspected and/or weighed by official 
agencies. GIPSA will evaluate the financial status of the supervision 
of the grain inspection and weighing program on a continuous basis to 
determine if it is meeting the goal of obtaining a 3-month operating 
reserve by FY 2014, and to determine if other adjustments are 
necessary.
    GIPSA proposes to gradually replenish the reserve rather than 
sharply increase supervision fees in the short term to immediately 
replenish the retained earnings. GIPSA welcomes all comments regarding 
the proposed action.

Proposed Action

    GIPSA is proposing a change in the supervision fees and a change in 
the methodology for assessing supervision fees to official agencies. 
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 are assessed annual charges as 
noted in the State's Delegation of Authority document. GIPSA has a 
long-standing agreement with the State of Washington whereby the State 
pays GIPSA for direct local costs along with their portion of the 
national administrative costs. The financial data and information used 
to develop the fees for Schedule C do not include the costs and tonnage 
associated with the State of Washington since the State is charged for 
their direct local costs and their share of the national administrative 
costs as established by the agreement.
    GIPSA projected that the new fees should be implemented no later 
than FY 2007 and has projected costs to FY 2014 to develop the new fees 
for Schedule C. GIPSA projections are based on an average total 
inspection and weighing tonnage of 170 million metric tons per year.
    GIPSA has determined that if the new fees are implemented by FY 
2007 and the goal is to replenish the retained earnings and 3-month 
operating reserve by FY 2014, then GIPSA will need to collect 
approximately $1.9 million per year from FY 2007 through FY 2014 to 
achieve this goal. GIPSA has concluded that a 1.1 cents per metric ton 
fee would generate approximately $1.9 million per year based on an 
average annual service volume of 170 million metric tons. This new fee 
would generate sufficient funds to rebuild the retained earnings to its 
desired 3-month level by FY 2014. GIPSA will continue to monitor and 
evaluate the program to ensure the goal is achieved.
    GIPSA is also proposing to change the method to assess supervision 
fees to the official agencies. GIPSA has historically charged 
supervision fees based on the type of carrier serviced and further 
charged supervision fees based on the kinds and levels of services 
received. GIPSA is proposing to charge the 1.1 cents per metric ton 
supervision fees based on the total tonnage of grain officially 
inspected and/or weighed by official agencies. GIPSA proposes to 
utilize a standard metric ton conversion rate for submitted samples and 
specific carriers serviced in order to calculate and assess the 
supervision fees to the official agencies. The following table 
transmits the standard metric ton conversion rate that GIPSA will use 
to assess the total tons serviced by the official agencies.

------------------------------------------------------------------------
                                                              Estimated
                      Carrier/service                        metric tons
------------------------------------------------------------------------
Truck......................................................        19.39
Submitted Sample...........................................        19.39
Container..................................................        20.04
Railcar....................................................       103.42
Midwest Barge..............................................     1,292.74
Pacific Northwest Barge....................................     2,267.96
------------------------------------------------------------------------

    GIPSA has determined that ships will be assessed the 1.1 cents per 
metric ton supervision fee based on the actual certified weight for the 
ship.
    The proposed change in supervision fees will increase the average 
current fee rate by approximately 0.3 cent per metric ton. This 
additional increase should minimally affect the amount an applicant 
(grain industry) pays for service.

Executive Orders 12866 and 12988

    This proposed rule has been determined to be non-significant for 
the purposes of Executive Order 12866 and therefore has not been 
reviewed by the OMB. This proposed rule has been reviewed under 
Executive Order 12988, Civil Justice Reform. This action is not 
intended to have a retroactive effect. The USGSA provides in Sec. 87g 
that no subdivision may require or impose any requirements or 
restrictions concerning the inspection, weighing, or description of 
grain under the Act. Otherwise, this proposed rule will not preempt any 
State or local laws, regulations, or policies unless they present 
irreconcilable conflict with this proposed rule. There are no 
administrative procedures that must be exhausted prior to any judicial 
challenge to the provisions of this proposed 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 record keeping requirements 
included in this proposed rule has been approved by the OMB under 
control number 0580-0013.
    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.

Regulatory Flexibility Act Certification

    GIPSA has determined that this proposed rule does not have a 
significant economic impact on a substantial number of small entities, 
as

[[Page 13413]]

defined in the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), 
because the majority of applicants (grain industry) that apply for 
these official services, and are subjected to GIPSA supervision fees, 
do not meet the requirements for small entities. This rule will affect 
entities engaged in shipping grain to and from points within the United 
States and exporting grain from the United States. GIPSA estimates 
there are approximately 9,500 off-farm storage facilities and 18 export 
elevators in the United States that could receive services from 
delegated States or designated agencies. Official services are 
available from 7 delegated States and 49 designated agencies. For 
clarification, any and all grain that is exported from the U.S. export 
port locations must, as required by the USGSA, be inspected and/or 
weighed. These services are either performed by GIPSA or delegated 
States. Further, some grain exported from interior locations may also 
require inspection and/or weighing services unless the services are 
waived as provided in section 800.18 of the regulations. These services 
are provided by designated agencies. The USGSA does not require 
inspection or weighing services for grain marketed within the U.S. 
Consequently, these services are permissive and may be performed by 
official agencies. The USGSA (7 U.S.C. 71 et seq.) authorizes GIPSA to 
provide supervision of 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 realizes that any increase in supervision fees will be 
charged by official agencies to the users (grain industry) of the 
official grain inspection and weighing system. Although, the overall 
effect of this proposal will be passed on to the users of official 
grain inspection and weighing services, mostly large corporations, 
David R. Shipman, Deputy Administrator, GIPSA, has determined that this 
proposed rule will not have a significant 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.

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

PART 800--GENERAL REGULATIONS

    1. The authority citation for part 800 continues to read as 
follows:

    Authority: Public Law 94-582, 90 Stat. 2867, as amended (7 
U.S.C. 71 et seq.)

    2. In Sec. 800.71(a), Schedule C is amended by removing Table 1 and 
adding introductory text in its place as set forth below, and by 
redesignating Table 2 as Table 1.


Sec.  800.71  Fees assessed by the Service.

    (a) * * *

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

    The supervision fee is charged at $0.011 per metric ton inspected 
and/or weighed.
* * * * *

David R. Shipman,
Acting Administrator, Grain Inspection, Packers and Stockyards 
Administration.
[FR Doc. 05-5501 Filed 3-18-05; 8:45 am]
BILLING CODE 3410-EN-P