[Federal Register Volume 70, Number 81 (Thursday, April 28, 2005)]
[Rules and Regulations]
[Pages 21921-21924]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-8519]



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 Rules and Regulations
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  Federal Register / Vol. 70, No. 81 / Thursday, April 28, 2005 / Rules 
and Regulations  

[[Page 21921]]



DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

7 CFR Part 800

RIN 0580-AA87


Export Inspection and Weighing Waiver for High Quality Specialty 
Grains Transported in Containers

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

ACTION: Interim final rule with request for comments.

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

SUMMARY: The Grain Inspection, Packers and Stockyards Administration 
(GIPSA) is amending regulations under the United States Grain Standards 
Act (USGSA) to waive the mandatory inspection and weighing requirements 
of the Act for high quality specialty grains exported in containers. 
GIPSA is establishing this waiver to facilitate the marketing of high 
quality specialty grains exported in containers. This action is 
consistent with the objectives of the USGSA. This action will 
facilitate the continuing development of the high quality specialty 
export market. This waiver will be in effect for a maximum of 5 years, 
and if after this time period GIPSA determines that this waiver 
continues to advance the objectives of the USGSA, GIPSA will consider 
making this waiver permanent.

DATES: Effective April 29, 2005; comments received by June 27, 2005 
will be considered prior to issuance of a final rule. Pursuant to the 
Paperwork Reduction Act, comments on the information collection and 
recordkeeping requirements burden must be received by June 27, 2005.

ADDRESSES: We invite you to submit comments on this interim final 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, SW., Room 1647-S, Washington, DC 
20250-3604.
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
     Please send comments regarding the information collection 
and recordkeeping requirements via electronic mail to: 
[email protected] and to GIPSA at: [email protected].
    Instructions: All comments should make reference to the date and 
page number of this issue of the Federal Register.
    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: John Sharpe, Director, Compliance 
Division, at his e-mail address: [email protected] or telephone 
him at (202) 720-8262.

SUPPLEMENTARY INFORMATION:

Background

    The USGSA authorizes the Department to waive the mandatory 
inspection and weighing requirements of the USGSA in circumstances when 
the objectives of the USGSA would not be impaired. Current waivers from 
the official inspection and Class X weighing requirements for export 
grain appear in section 7 CFR part 800.18 of the regulations. These 
waivers are provided for grain exported for seeding purposes, grain 
shipped in bond, grain exported by rail or truck to Canada or Mexico, 
grain not sold by grade, for exporters and individual elevator 
operators shipping less than 15,000 metric tons during the current and 
preceding calendar year, and when services is not available or in 
emergency situations.
    This interim final rule provides a waiver for high quality 
specialty grains exported in containers.
    Transactions involving high quality specialty grains are typically 
made between dedicated buyers and sellers who have ongoing business 
relationships and fully understand each other's specific needs and 
capabilities. Containerization allows the producer or processor to 
extend control of the product from the field to customer, rather than 
fields to local terminal elevators or export port elevators where 
commingling can occur.
    The high quality specialty grain market has evolved for the past 
years as U.S. shippers have catered to the specific needs of buyers 
around the world. Frequently, sales are for small volumes of grain 
meeting strict commercial contract specifications for quality, 
production, handling, and packaging. Seller and buyers in this 
specialty market typically refer to these grains as ``food quality'' 
grain. The contractual specifications may require a single or limited 
number of seed varieties; may require production in accordance with 
specific agronomic practices; may specify certain harvesting and 
handling practices; may require cleaning and sorting of the grain to 
remove most foreign material and immature or damaged seeds; and 
frequently call for some degree of identity preservation from point of 
origin to final buyer. The quality management processes employed by 
participants of the high quality specialty grain market far exceed 
those practiced by the typical commodity grain market where commingling 
and blending of different quality grains is an inherent part of the 
marketing process. In return, the market value of these high quality 
specialty grains is substantially higher than commodity grain.
    Traditionally, shippers of high quality specialty grain in 
containers handled less than 15,000 metric tons of grain annually and 
thereby, were exempt from mandatory inspection and weighing in 
accordance with Section 800.18(b) of the regulations under the USGSA. 
However, as the high quality specialty grain market has grown volumes 
have begun to exceed the 15,000 metric ton waiver threshold requiring 
shippers to have their high quality specialty grains inspected and 
weighed in accordance with the Act. The cost of official inspection and 
weighing for these specialty operations is approximately $1.80 per 
metric ton compared to an

[[Page 21922]]

average $0.34 per metric ton for bulk commodity exports. Furthermore, 
the contract quality specifications for the high quality specialty 
grains far exceed the Official United States Standards for Grain 
applied during the mandatory inspection and weighing process. GIPSA is 
therefore waiving high quality specialty grain exported in containers 
from the mandatory export inspection and weighing requirements. 
Accordingly, this action will promote the marketing of grain of high 
quality and will not impair the objectives of the USGSA.
    High quality specialty grain for the purposes of this waiver is 
grain sold under contract terms that (1) specify quality better than 
the grade limits for U.S. No. 1 grain, or (2) specify ``organic'' as 
defined by the regulations 7 CFR part 205 under the Organic Foods 
Production Act of 1990, as amended. The following are examples of what 
GIPSA would consider to be high quality specialty grains: Corn with 
broken corn limits of 0.5 percent or less; post-harvest, pesticide-free 
corn; and organically grown soybeans. The following would not meet 
GIPSA's definition of high quality specialty grain: U.S. No. 2 or 
better Yellow soybeans grown in a particular geographic area; U.S. No. 
2 or better Soft White wheat with maximum 10.5 percent protein and 
minimum Falling Number of 300 seconds; and non-genetically modified 
corn.
    This waiver will not prevent the buyer or seller from requesting 
and receiving official inspection and weighing service should they 
desire such services. Moreover, this waiver will be in affect for a 
maximum of 5 years and if after this time period GIPSA determines that 
this waiver continues to advance the objectives of the USGSA, GIPSA 
will consider making this waiver permanent. GIPSA will monitor this 
waiver of official inspection and weighing requirements; however, if at 
any time, GIPSA determines that this waiver is not consistent with the 
objectives of the Act, GIPSA will remove this waiver.
    Pursuant to 5 U.S.C 553, it is found and determined upon good cause 
that it is impracticable, unnecessary, and contrary to public interest 
to give preliminary notice prior to putting this rule in effect and 
that good cause exists for not postponing the effective date of this 
rule until 30 days after publication in the Federal Register because: 
(1) The relieving of regulatory burden on affected entities is 
necessary to facilitate the continuing development of the high quality 
specialty export market and; therefore, this action should be 
implemented as soon as possible and (2) this rule provides a 60-day 
opportunity for comment; and all written comments timely received will 
be considered prior to finalization of the rule.

Executive Order 12866 and Effect on Small Entities

    This interim final rule has been determined not to be significant 
for the purpose of Executive Order 12866 and, therefore, has not been 
reviewed by the Office of Management and Budget (OMB). This rule would 
provide regulatory relief to both large and small businesses. Small 
agricultural service firms have been defined by the Small Business 
Administration (SBA) (13 CFR 121.201) as those that employ fewer than 
500 employees. This action would effectively eliminate the cost impact 
on small businesses that would otherwise have to pay for onsite 
inspection and weighing.
    In addition, pursuant to requirements set forth in the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.), GIPSA has considered the 
economic impact of this interim final rule on small entities and has 
determined that its provisions would not have a significant economic 
impact on a substantial number of small entities because it is an 
elimination of burden. Interested parties are invited to submit 
information on the regulatory and informational impacts of this action 
on small businesses.
    The growing market for high quality specialty grain exported in 
containers has caused shippers of high quality specialty grains to 
exceed the 15,000 metric ton waiver threshold for export inspection and 
weighing. GIPSA posed this situation to its Advisory Committee on 
November 16, 2004. GIPSA's Advisory Committee is composed of members 
representing producers, handlers, processors, and exporters. The 
Advisory Committee resolved that GIPSA should continue to enforce the 
mandatory export inspection and weighing requirements for commodity 
grains and establish a waiver for high quality specialty grains 
exported in containers. GIPSA believes that waiving high quality 
specialty grains exported in containers is consistent with the intent 
of the USGSA and will allow this market to continue to grow.
    Various methods were considered to address the challenges facing 
U.S. high quality specialty grain producers, marketers, processors, and 
handlers exporting via containers from global competition. GIPSA looked 
at requiring relaxed inspection and weighing requirements for these 
grains and decided that they would still place an undue burden on these 
types of shipments.
    This rule will allow exporters of high quality specialty grains 
shipped in containers to ship such grain without the burden of 
mandatory inspection and weighing, while allowing them to request the 
service when desired. Relieving this burden will allow the industry to 
grow and equitably compete with global competitors.
    This rule poses minimal additional cost to exporters as explained 
below in the Paperwork Reduction Act section of this rule. However, 
this rule eliminates the cost of the mandatory export inspection and 
weighing requirements for high quality specialty grain exported in 
containers. GIPSA estimates this cost to be at $1.80 per metric ton of 
grain exported and GIPSA believes that the benefits of this rule 
outweighs the cost.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), this rule announces that GIPSA has requested emergency 
approval for a new information collection request that waives high 
quality specialty grain exported in containers from the mandatory 
inspection and weighing requirements outlined in the United States 
Grain Standards Act. The emergency clearance is necessary because 
insufficient time is available to follow normal clearance procedures. 
OMB has approved this emergency information collection request under 
OMB Control No. 0580-0022.
    GIPSA is committed to compliance with the GPEA, which requires 
Government agencies, in general, to provide the public the option of 
submitting information or transacting business electronically to the 
maximum extent possible.
    Title: Export Inspection and Weighing Waiver for High Quality 
Specialty Grains Transported in Containers.
    OMB Number: 0580-0022.
    Type of Request: New.
    Abstract: GIPSA is amending regulations under the United States 
Grain Standards Act (USGSA) to waive the mandatory inspection and 
weighing requirements for high quality specialty grains exported in 
containers. GIPSA is establishing this waiver to facilitate the 
marketing of high quality specialty grains exported in containers. This 
action is consistent with the objectives of the USGSA and will 
facilitate the continuing development of the high quality specialty 
export market.
    Traditionally, shippers of high quality specialty grain in 
containers handled less than 15,000 metric tons of grain

[[Page 21923]]

annually and thereby, were exempt from mandatory inspection and 
weighing in accordance with Section 800.18(b) of the regulations under 
the USGSA. However, as the high quality specialty grain market has 
grown volumes have begun to exceed the 15,000 metric ton threshold 
requiring shippers to have their high quality specialty grains 
inspected and weighed in accordance with the USGSA.
    To ensure that exporters of high quality specialty grains comply 
with this waiver, GIPSA is asking these exporters to maintain records 
generated during their normal course of business that pertain to these 
shipments and make these documents available to the GIPSA upon request, 
for review or copying purposes. GIPSA is not requiring exporters of 
high quality specialty grains to complete or submit new Federal 
government record(s), form(s), or report(s). GIPSA is requesting 
exporters to maintain and make available documentation that fully and 
correctly disclose transactions concerning high quality specialty grain 
exported in containers. These records shall be maintained for a period 
of 3 years. This information collection requirement in this request is 
essential to ensure that exporters who ship high quality specialty 
grain in containers comply with the waiver.
    The Paperwork Reduction Act requires the Agency to measure 
recordkeeping burden. Under this interim final rule, exporters must 
maintain records generated during the normal course of business. 
Experience has shown that the U.S. grain industry maintains grain 
contracts which specify quality parameters agreed to by buyers and 
sellers of grain. GIPSA believes that grain contracts would provide 
sufficient information to determine if exporters of high quality 
specialty grain are complying with the waiver. GIPSA made estimates 
regarding the number of entities who would likely export high quality 
specialty grain. Because GIPSA has no basis to determine the number of 
prospective exporters of high quality specialty grain, GIPSA drew upon 
its oversight experience of the U.S. grain industry and believes that 
the overall estimates presented in this interim final rule are 
accurate. GIPSA estimates that approximately 80 organizations will 
export high quality specialty grain in containers. GIPSA estimates that 
the time required for each exporter to maintain and make available 
contractual information in a manner consistent with this rule is an 
average of 5-hours per year at $5.50 per hour for a total annual burden 
of $27.50 per exporter. Assuming that the estimated 80 exporters of 
high quality specialty grain in containers provide GIPSA's this 
contractual information, the total annual burden is estimated to be 
$2,200.

(1) Grain Contracts

    Estimate of Burden: Public burden for maintaining contract 
information is estimated to average 5.0 hours per exporter.
    Respondents: Exporters of high quality specialty grain in 
containers.
    Estimated Number of Respondents: 80.
    Estimated Number of Respondents per Request: 1.
    Estimated Total Burden on Respondents: 400 hours.
    Estimated Total Cost: $2,200.
    Comments are invited on: (1) Whether maintaining and providing 
contractual information is necessary to ensure compliance with the 
waiver; (2) The accuracy of the Agency's burden estimates for 
respondents to maintain and provide contractual information including 
the validity of the methodology and assumptions used; and (3) Ways to 
minimize burden of maintaining and providing contractual information on 
those respondents, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology. Please send comments regarding 
the information collection and recordkeeping requirements via 
electronic mail to: [email protected]. In addition, please 
send GIPSA comments regarding the information collection and 
recordkeeping requirements to: [email protected].

Executive Order 12988

    Executive Order 12988, Civil Justice Reform, instructs each 
executive agency to adhere to certain requirements in the development 
of new and revised regulations in order to avoid unduly burdening the 
court system. This interim final rule has been reviewed under this 
Executive Order. This interim final rule is not intended to have a 
retroactive effect. The United States Grain Standards Act provides in 
Section 87g that no State or subdivision may require or impose any 
requirements or restrictions concerning the inspection, weighing, or 
description of grain under the Act. Otherwise, this interim final rule 
will not preempt any State or local laws, regulations, or policies 
unless they present irreconcilable conflict with this rule. There are 
no administrative procedures which must be exhausted prior to any 
judicial challenge to the provisions of this interim final rule.

Action

    To provide waivers from official inspection and Class X weighing 
for exporters of high quality specialty grains shipped in containers, 
GIPSA, under the United States Grain Standards Act, is:
    1. Revising section 800.0 to include a definition of high quality 
specialty grains.
    2. Revising section 800.18 to include a new paragraph (b)(8) to 
exempt high quality specialty grain shipped in containers from 
mandatory export inspection and weighing requirements.

List of Subjects in 7 CFR Part 800

    Administrative practice and procedure, Export, Grain

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

PART 800--GENERAL PROVISIONS

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 800.0 is amended as follows:
0
a. Paragraphs (b)(44) through (106) are redesignated as (b)(45) through 
(107), respectively.
0
b. New paragraph (b)(44) is added to read as follows:


Sec.  800.0  Meaning of terms.

* * * * *
    (b) * * *
    (44) High Quality Specialty Grain. Grain sold under contract terms 
that specify quality better than the grade limits for U.S. No. 1 grain, 
or specify ``organic'' as defined by 7 CFR Part 205. This definition 
expires July 31, 2010.
* * * * *

0
3. Section 800.18 is amended by adding a new paragraph (b)(8) to read 
as follows:


Sec.  800.18  Waivers of the official inspection and Class X weighing 
requirements.

* * * * *
    (b) * * *
    (8) High quality specialty grain shipped in containers. Official 
inspection and weighing requirements do not apply to high quality 
specialty grain exported in containers. Records generated during the 
normal course of business that pertain to these shipments shall be made 
available to the Service upon request, for review or copying. These 
records shall be maintained for a

[[Page 21924]]

period of 3 years. This waiver expires July 31, 2010.

David R. Shipman,
Acting Administrator, Grain Inspection, Packers and Stockyards 
Administration.
[FR Doc. 05-8519 Filed 4-27-05; 8:45 am]
BILLING CODE 3410-EN-P