[Federal Register Volume 75, Number 137 (Monday, July 19, 2010)]
[Rules and Regulations]
[Pages 41693-41695]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-17529]


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DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

7 CFR Part 800

RIN 0580-AB18
[Docket GIPSA-2010-FGIS-0002]


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

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

ACTION: Interim Rule with request for comments.

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SUMMARY: The United States Department of Agriculture's (USDA) Grain 
Inspection, Packers and Stockyards Administration (GIPSA) is issuing an 
interim rule to potentially make permanent the current waiver for high 
quality grain exported in containers

[[Page 41694]]

from the mandatory inspection and weighing requirements of the United 
States Grain Standards Act (USGSA). This interim rule only extends for 
2 years a 5-year waiver that is set to expire on July 31, 2010, and 
asks for interested parties to comment on making this waiver permanent. 
This action advances the objectives of the USGSA by providing relief to 
an evolving sector of the grain industry.

DATES: Effective July 20, 2010; comments received by September 17, 2010 
will be considered prior to the issuance of a final rule.

ADDRESSES: You may submit your written or electronic comments on this 
interim rule to:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
     Mail: Tess Butler, GIPSA, USDA, 1400 Independence Avenue, 
SW., room 1643-S, Washington, DC 20260-3642.
     E-mail comments to [email protected].
     Fax: (202) 690-2173.
    Comments should be identified as ``High Quality Special Grain 
Waiver,'' and should make reference to the date and page number of this 
issue of the Federal Register. All comments will become a matter of 
public record and available for public inspection at the above address 
during regular business hours (7 CFR 1.27(b)). Please call the GIPSA 
Management Support Staff at (202) 720-7486 for an appointment to view 
the comments.

FOR FURTHER INFORMATION CONTACT: Thomas O'Connor, Director, Compliance 
Division, at his e-mail address: [email protected] or by 
telephone at (202) 720-8262.

SUPPLEMENTARY INFORMATION: 

Background

    The USGSA authorizes USDA 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 
Sec.  800.18 (7 CFR 800.18) of the regulations issued under the USGSA. 
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, exporters and individual elevator 
operators shipping less than 15,000 metric tons during the current and 
preceding calendar years, and when services are not available or in 
emergency situations.
    This interim rule extends for 2 years, or until July 31, 2012, a 
current 5-year waiver for high quality specialty grains exported in 
containers that was established by a final rule on December 13, 2005 
(70 FR 73556). This interim rule also invites interested parties to 
comment on making this waiver for high quality specialty grain exported 
in containers permanent.
    Typically, shippers of high quality specialty grain exported in 
containers are small entities that up until recently handled less than 
15,000 metric tons of grain annually and thereby were exempt from 
mandatory inspection and weighing requirements in accordance with Sec.  
800.18(b) of the USGSA regulations. As the high quality specialty 
market has expanded, the volume of this specialty product has begun to 
exceed the 15,000 metric ton waiver threshold, making such grain 
subject to mandatory inspection and weighing under the USGSA.
    GIPSA implemented the 5-year high quality specialty grain waiver in 
2005 to relieve the burden of having to obtain mandatory official 
inspection and weighing services for this emerging niche market. High 
quality specialty grain is defined as grain in which all factors exceed 
the grade limits for U.S. No. 1 grain, except for the factor test 
weight, or grain designated as ``organic'' as defined in Sec.  205.2 (7 
CFR 205.2) of the regulations issued under the Organic Foods Production 
Act of 1990, as amended (OFPA) (7 U.S.C. 6501-6522).
    GIPSA has found that transactions involving high quality specialty 
grains typically are made between dedicated buyers and sellers who have 
ongoing business relationships and fully understand each other's 
specific needs and capabilities. Typically, sales are for grain that 
meets strict commercial contract specifications for quality, 
production, handling, and packaging. GIPSA believes that mandating 
official inspection and weighing services for this specialty market 
would add an unnecessary cost. The cost of official inspection and 
weighing for these specialty operations is approximately $1.80 per 
metric ton compared to an average $0.34 per metric ton for traditional 
grain exports.
    Since establishing the 5-year waiver, GIPSA has required that 
exporters of high quality specialty grain in containers maintain, 
submit upon request, and make available documentation that fully and 
correctly discloses their transactions. GIPSA has used this 
documentation to determine if the high quality specialty grain waiver 
continues to advance the objectives of the USGSA and to ensure that 
exporters of high quality specialty grain comply with the waiver 
provisions: (1) That all factors exceed the grade limits for U.S. No. 1 
grain, except for the factor test weight, or (2) Specify ``organic'' as 
defined by the regulations issued under the OFPA. Under this waiver 
(temporary or permanent), GIPSA still must collect information from 
exporters of high quality specialty grain in containers in order to 
ensure the integrity of the high quality specialty grain program.
    During the 5-year waiver period, GIPSA reviewed documentation 
provided by exporters of high quality specialty grain and determined 
that it complied with the waiver provisions. This action provides 
regulatory relief to a small but continuously evolving sector of the 
grain industry that specializes in high quality grains. GIPSA believes 
that the high quality specialty grain waiver should eventually become 
permanent because it continues to advance the objectives of the USGSA. 
GIPSA, however, is issuing this interim final rule to extend the waiver 
until July 31, 20112, and is providing interested parties the 
opportunity to comment on whether this waiver should instead be made 
permanent.
    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 for the 
following reasons: (1) This interim rule will avoid market disruption 
that would result should the waiver expire and avoid uncertainty in the 
markets that would likewise result; (2) continued relief of the 
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 
(3) this rule provides a 60-day opportunity for comment; and all 
written comments timely received will be considered prior to 
finalization of the rule.

Alternatives Considered

    GIPSA considered allowing this waiver to expire, but rejected that 
option since it would be financially burdensome to small businesses by 
requiring that they pay approximately $1.80 per metric ton for weighing 
and inspection services for high quality specialty grain, compared to 
an average $0.34 per metric ton for bulk grain exports. GIPSA also 
considered requiring relaxed inspection and weighing requirements for 
these grains,

[[Page 41695]]

but determined that even relaxed inspection and weighing requirements 
would still place an undue burden on these types of shipments.

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. The Small Business Administration (SBA) defines small 
businesses by their North American Industry Classification System Codes 
(NAICS).\1\ The SBA defines small grain exporters in its regulations 
(13 CFR 121.201) as entities having less than $7,000,000 in average 
annual receipts (NAICS code 115114). GIPSA believes this waiver 
effectively eliminates a cost impact on all high quality specialty 
grain exporters that would otherwise have to pay for GIPSA's onsite 
inspection and weighing services, without impairing the objectives of 
the USGSA. GIPSA estimates that there are currently 32 small and 8 
large businesses (as defined by the SBA) operating as exporters of high 
quality specialty grain.
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    \1\ See: http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf.
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    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (5 U.S.C. 601-612), GIPSA has considered the economic impact of 
this interim rule on small entities and has determined that its 
provisions would not have a significant economic impact on a 
substantial number of small entities. GIPSA invites interested parties 
to comment on the impacts of this action on small businesses and on 
whether this waiver should be made permanent.
    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 has consulted with its Grain Inspection Advisory 
Committee (Advisory Committee) on this issue. GIPSA's Advisory 
Committee is composed of members representing grain producers, 
handlers, processors, and exporters. The Advisory Committee has 
advocated that GIPSA make permanent the waiver for high quality 
specialty grains exported in containers. While GIPSA agrees with the 
Advisory Committee that permanently 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, GIPSA is issuing 
this interim final rule to (1) extend by 2 years the waiver, and (2) 
request that interested parties comment on whether this waiver should 
instead be made permanent.
    This interim rule will continue to allow exporters of high quality 
specialty grains shipped in containers to ship high quality specialty 
grain without the cost burden of mandatory inspection and weighing, 
while allowing them to request the service when desired. Relieving this 
cost burden will continue to allow the industry to grow and equitably 
compete with global competitors.

Executive Order 12988

    This interim rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This action is not intended to have retroactive 
effect. The USGSA provides in section 87g (7 U.S.C. 87g) that no State 
or subdivision thereof may require or impose any requirements or 
restrictions concerning the inspection, weighing, or description of 
grain under the USGSA. Otherwise, this interim rule would not preempt 
any State or local laws, or regulations, or policies unless they 
present an 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 rule.

Paperwork Reduction Act

    In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3520), the information collection and recordkeeping included in 
this interim rule were approved by Office of Management and Budget 
under Control No. 0580-0022, and expire on May 31, 2012. This 
information collection continues to be necessary in order for GIPSA to 
ensure that exporters of high quality specialty grain shipped in 
containers comply with the waiver provisions contained in Sec.  800.18 
(7 CFR 800.18) of the regulations issued under the USGSA.

E-Government Compliance

    GIPSA is committed to complying with the E-Government Act, to 
promote the use of the Internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

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:  7 U.S.C. 71-87k.


0
2. In Sec.  800.0, paragraph (b)(44) is revised to read as follows:


Sec.  800.0   Meaning of terms.

* * * * *

0
(b) * * *
    (44) High Quality Specialty Grain. Grain sold under contract terms 
that specify all factors exceed the grade limits for U.S. No. 1 grain, 
except for the factor test weight, or specify ``organic'' as defined by 
7 CFR Part 205. This waiver expires on July 31, 2012.
* * * * *

0
3. In Sec.  800.18, paragraph (b)(8) is revised 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 must be made 
available to the Service upon request, for review or copying. These 
records must be maintained for a period of 3 years. This waiver expires 
on July 31, 2012.


J. Dudley Butler,
Administrator, Grain Inspection, Packers and Stockyards Administration.
[FR Doc. 2010-17529 Filed 7-16-10; 8:45 am]
BILLING CODE 3410-KD-P