[Federal Register Volume 70, Number 129 (Thursday, July 7, 2005)]
[Proposed Rules]
[Pages 39199-39201]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-13297]


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DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

7 CFR Part 868

RIN 0580-AA89


Review Inspection Requirements for Graded Commodities

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

ACTION: Proposed rule.

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SUMMARY: The Grain Inspection, Packers and Stockyards Administration 
(GIPSA) is proposing to revise the regulations under the United States 
Agricultural Marketing Act of 1946 (AMA), as amended, to allow 
interested persons to specify the quality factor(s) that would be 
redetermined during an appeal inspection or a Board appeal inspection 
for grade. Currently, both appeal and Board appeal inspections for 
grade must include a redetermination (i.e., a complete review or 
examination) of all official factors that may determine the grade, as 
reported on the original certificate, or as required to be shown. 
Requiring that all quality factors be completely reexamined during an 
appeal or Board appeal inspection for grade is not efficient, is time 
consuming, and can be costly. Further, a detailed review of the 
preceding inspection service is not always needed to confirm the 
quality of the commodity. This proposed action would allow interested 
parties to specify which quality factor(s) should be redetermined 
during the appeal or Board appeal inspection service.

DATES: Comments must be received on or before September 6, 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 hard copy written comments to Tess Butler, 
GIPSA, USDA, 1400 Independence Avenue, SW., Room 1647-S, Washington, DC 
20250-3604.
     Fax: Send comment by facsimile transmission to: (202) 690-
2755.
     Hand Delivery 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.
    Instructions: All comments should make reference to the date and 
page

[[Page 39200]]

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: John C. Giler, Deputy Director, Field 
Management Division: e-mail address [email protected], telephone: 
(202) 720-1748.

SUPPLEMENTARY INFORMATION:

Background

    Pursuant to the United States AMA, as amended, graded commodities 
have established standards which are used to measure and describe the 
physical and biological properties of the commodities at the time of 
inspection. The grade, class, and condition that are reported on the 
official inspection certificate are based on factors that are defined 
in these standards. There are three kinds of factors: Condition 
factors, grade determining factors, and non-grade determining factors.
    Condition factors include heating, odor (musty, sour, and 
commercially objectionable), infestation, special grade factors (e.g., 
smut and aromatic), and distinctly low quality factors, such as toxic 
seeds. When a graded commodity is found to contain an unacceptable 
level of one or more of these condition factors, the commodity is 
graded U.S. Sample Grade or assigned a special grade, such as Infested.
    Grade determining factors include, but are not limited to, foreign 
material, defects, damaged kernels, and other classes. These factors 
are common to most commodities. As the percentage of such factors 
increases, the numerical grade decreases. For example: U.S. No. 2 Long 
Grain Milled Rice may contain not more than 1.5 percent red rice and 
damaged kernels, U.S. No. 3 may contain not more than 2.5 percent, and 
U.S. No. 4 may contain not more than 4.0 percent.
    Non-grade determining factors include, but are not limited to, 
total oil and free-fatty acid in rice, and seed count and checked seed 
coats in beans. These factors are only determined upon request as 
additional information and do not affect the numerical grade 
designation.
    After the sample has been analyzed for all factors, a grade is 
assigned to the sample equal to the lowest grade determined for any one 
of the factors. For example, if all of the factors were determined to 
be at the U.S. No. 1 level, except for one factor that was at the U.S. 
No. 3 level, then the lot would be graded U.S. No. 3.
    Therefore, the final grade assigned to a sample or lot is directly 
dependent on achieving accuracy (closeness to the true value) and 
precision (repeatability) in the values obtained for the various 
grading factors. Accuracy and precision are affected mainly by the type 
of sampling device, the sampling procedure, and the grading factors; 
i.e., machine-determined values (objective), human judgment values 
(subjective), and sample homogeneity (inherent). The sources of 
variation are highly interrelated; each is involved, to some extent, in 
the final value ascribed to each grading factor of a lot and to the 
grade designation of that lot.
    Due to inherent sampling and inspection variability, users of the 
official inspection system have an opportunity to obtain another 
inspection service when certificated results are questionable. That is, 
if an interested party disagrees with the grade or factor results 
assigned to the graded commodity, they may request that the GIPSA 
perform an appeal inspection.
    From the original inspection service an interested person may 
obtain an appeal inspection service, or a Board appeal inspection 
service. The same inspection office that provided the original 
inspection service provides the appeal inspection. GIPSA's Board of 
Appeals and Review (BAR) in Kansas City, Missouri, provides the Board 
appeal inspection service, the highest level of inspection service 
available. The scope of the appeal or Board appeal inspection is 
limited to the scope of the original inspection.
    Section 868.60 of the regulations currently require that appeal 
inspections for grade must include a complete review of all official 
factors that: (1) May determine the grade; or (2) are reported on the 
original certificate; and (3) are required to be shown. Consequently, 
even if the official inspector who is performing the appeal inspection 
finds there is only one grade-determining factor, all of the factors 
that were reported on the original certificate must be redetermined.
    In most instances, the applicant for service does not need a 
complete review. Even though not allowed, most applications currently 
request an appeal inspection of a specific factor. Redetermining all 
official factors requires significant time to complete. This increases 
inspection costs.
    The following table shows the total number of inspections versus 
number of appeal and Board appeal inspections for grade that have been 
determined during the last four fiscal years for dry beans, peas, 
lentils, and rice.

----------------------------------------------------------------------------------------------------------------
                                                                    Total inspections of beans, peas,  lentils,
                                                                                     and rice
                        Fiscal year  (FY)                        -----------------------------------------------
                                                                     Original         Appeal       Board appeal
                                                                    inspections     inspections     inspections
----------------------------------------------------------------------------------------------------------------
FY 2001.........................................................         104,730             345              13
FY 2002.........................................................          61,270             322              19
FY 2003.........................................................          62,784             455              33
FY 2004.........................................................          57,182             314              21
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    Under provisions of the AMA (7 U.S.C. 16210 et seq.), it is not 
mandatory for rice and pulses (the subject of this rule) to be 
officially inspected. This proposed rule relieves regulatory 
requirements and improves the efficiency of official inspection 
services.
    The cost savings of the proposed action on the graded commodity 
industry could be very positive. Although it is impossible to estimate 
an exact dollar savings, the time spent waiting for appeal inspection 
results could be reduced by at least 50 percent and could, in certain 
circumstances, exceed 90 percent.
    To provide effective and efficient official inspection services 
that better meet industry needs, GIPSA proposes that applicants for 
service be allowed to specify the factor(s) that are to be redetermined 
as part of an appeal or Board appeal inspection service for grade. 
However, appeal and Board appeal inspections for grade may

[[Page 39201]]

include a review of any pertinent factor(s), as deemed necessary by 
official personnel. All official inspections (original, appeal or Board 
appeal inspection) must be accurate. If there is an indication that a 
factor (or factors) may have been misgraded or overlooked on the 
previous inspection, then the factor(s) in question will be 
redetermined.
    On August 21, 2002, GIPSA proposed this same action under the U.S. 
Grain Standards Act (67 FR 54133). GIPSA received seven comments 
regarding the proposed action. All comments supported the action. 
Accordingly, GIPSA amended the regulations to allow requests for a 
reinspection and an appeal inspection to one or more grade or condition 
factors. This final rule was published on October 28, 2003, in (68 FR 
61326).
    Two of the comments received from the original proposal were from 
associations involved with graded commodities inspected under the 
authority of the AMA, asking that GIPSA extend the action to include 
graded products (rice and pulses).

Proposed Action

    GIPSA proposes to revise Sec. 868.1 to redefine the definitions of 
appeal and Board appeal inspection services, and Sec. 868.60 to revise 
the conditions for requesting appeal and Board appeal inspection 
services.

Executive Order 12866

    This proposed rule has been determined to be non-significant for 
the purpose of Executive Order 12866 and, therefore, has not been 
reviewed by the Office of Management and Budget (OMB). This action 
simplifies the regulations concerning official requirements for 
commodity inspections. This action reduces cost to the affected 
entities.

Regulatory Flexibility Act Certification

    GIPSA has considered the economic impact of this proposed rule on 
small entities and has determined that its provision would not have a 
significant economic impact on a substantial number of small entities, 
as defined in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et 
seq.).
    The proposed rule will affect entities engaged in shipping graded 
commodities to and from points within the United States and exporting 
graded commodities from the United States. GIPSA estimates there are 
approximately 2,500 rice mills, and bean, pea, and lentil processing 
plants in the United States that could receive official inspection 
services by GIPSA, designated/delegated states, and cooperators. 
Inspections of graded commodities are performed by eight GIPSA offices, 
one Federal/State office, and six designated States which operate under 
cooperative agreements and under GIPSA supervision. Under the 
provisions of the AMA, it is not mandatory for graded commodities to be 
officially inspected. Further, most users of the official inspection 
services and those entities that perform these services do not meet the 
requirement of small entities. Even though some users could be 
considered small entities, this proposed rule relieves regulatory 
requirements and improves the efficiency of official inspection 
services. No additional cost is expected to result from this action.
    Requiring all appeal inspections and Board appeal inspections for 
grade to include a complete review of all official factors is not 
needed by applicants or other parties to transactions, or by official 
inspection personnel. Furthermore, this requirement often reduces the 
efficiency of providing official inspection services and increases the 
costs.
    This proposed rule relieves regulatory requirements and improves 
the efficiency of official inspection services. Further the regulations 
are applied equally to all entities.

Executive Order 12988

    Under Executive Order 12988, Civil Justice Reform, this action is 
not intended to have a retroactive effect. This action will 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 
the provisions of this notice.

Information Collection and Recordkeeping Requirements

    In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.), the information collection and recordkeeping 
requirements in part 868 have been previously approved by OMB No. 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.

List of Subjects in 7 CFR Part 868

    Administrative practice and procedure, Agricultural commodities.

    For reasons set out in the preamble, 7 CFR part 868 is proposed to 
be amended as follows:

PART 868--GENERAL REGULATIONS AND STANDARDS FOR CERTAIN 
AGRICULTURAL COMMODITIES

    1. The authority citation for part 868 continues to read as 
follows:

    Authority: Secs. 202-208, 60 Stat. 1087, as amended (7 U.S.C. 
1621, et seq.)

    2. Section 868.1, paragraphs (b)(3), and (b)(6) are revised to read 
as follows:


Sec.  868.1  Meaning of terms.

* * * * *
    (b) * * *
    (3) Appeal inspection service. A review by the Service of the 
result(s) of an original inspection or retest inspection service.
* * * * *
    (6) Board appeal inspection service. A review by the Board of 
Appeals and Review of the result(s) of an original inspection or appeal 
inspection service on graded commodities.
* * * * *
    3. Section 868.60, paragraph (b) and the OMB citation at the end of 
the section are revised to read as follows:


Sec.  868.60  Who may request appeal inspection service.

* * * * *
    (b) Kind and scope of request. When the results for more than one 
kind of service are reported on a certificate, an appeal inspection or 
Board appeal inspection service, as applicable, may be requested on any 
or all kinds of services reported on the certificate. The scope of an 
appeal inspection service will be limited to the scope of the original 
inspection or, in the case of a Board appeal inspection service, the 
original or appeal inspection service. A request for appeal inspection 
of a retest inspection will be based upon the scope of the original 
inspection. If the request specifies a different scope, the request 
shall be dismissed. Provided, however, that an applicant for service 
may request an appeal or Board appeal inspection of a specific 
factor(s) or official grade and factors. In addition, appeal and Board 
appeal inspection for grade may include a review of any pertinent 
factor(s), as deemed necessary by official personnel.


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

JoAnn Waterfield,
Acting Administrator, Grain Inspection, Packers and Stockyards 
Administration.
[FR Doc. 05-13297 Filed 7-6-05; 8:45 am]
BILLING CODE 3410-EN-P