[Federal Register Volume 76, Number 146 (Friday, July 29, 2011)]
[Rules and Regulations]
[Pages 45397-45399]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-19250]



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 Rules and Regulations
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  Federal Register / Vol. 76, No. 146 / Friday, July 29, 2011 / Rules 
and Regulations  

[[Page 45397]]



DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

7 CFR Part 800

RIN 0580-AB18


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

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

ACTION: Final rule.

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SUMMARY: The United States Department of Agriculture's (USDA), Grain 
Inspection, Packers and Stockyards Administration (GIPSA) is amending 
the regulations issued under the United States Grain Standards Act 
(USGSA) to make permanent a waiver due to expire on July 31, 2012, for 
high quality specialty grain exported in containers from the mandatory 
inspection and weighing requirements of the USGSA. GIPSA also has 
determined that making the export inspection and weighing waiver 
permanent will advance the objectives of the USGSA.

DATES: Effective August 29, 2011.

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

SUPPLEMENTARY INFORMATION:

Background

    The USGSA (7 U.S.C. 71-87k) 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.
    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 
Food Productions Act of 1990, as amended (OFPA) (7 U.S.C. 6501-6522). 
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 were exempt from mandatory 
inspection and weighing requirements in accordance with Sec.  800.18(b) 
of the USGSA regulations. As the high quality specialty grain 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 has found that transactions involving high quality specialty 
grain 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 
adds 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.
    On December 13, 2005, GIPSA published in the Federal Register a 
final rule (70 FR 73556) establishing a 5-year waiver for high quality 
specialty grain exported in containers in order to relieve the burden 
of grain exporters having to obtain and pay for mandatory official 
inspection and weighing services for this emerging niche market. On 
July 19, 2010, GIPSA published in the Federal Register an interim rule 
that extended the waiver until July 31, 2012, and proposed making the 
waiver permanent. Based on the comments discussed below, this final 
rule makes permanent the waiver for high quality specialty grain 
exported in containers.
    Since establishing the waiver in 2005, 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 final 
rule, GIPSA will continue to collect information from exporters of high 
quality specialty grain in containers in order to ensure the integrity 
of the high quality specialty grain program. GIPSA will also require 
exporters to maintain records generated during their normal course of 
business that pertain to these shipments and make these documents 
available to GIPSA upon request for review or copying purposes. These 
records must be maintained for a period of 3 years. Accordingly, 
organizations exporting high quality specialty grain will continue to 
be required to notify GIPSA of their actions for registration purposes 
in accordance with the USGSA. Moreover, nothing in this permanent 
waiver will prevent buyers and sellers of high quality specialty grain 
exported in containers from requesting and receiving official 
inspection and weighing services should they desire such services.
    Since the waiver was implemented, GIPSA has reviewed documentation 
provided by exporters of high quality specialty grain and has 
determined that the documentation provided by exporters complied with 
the waiver provisions. By making this waiver permanent, GIPSA believes 
that this final rule will provide regulatory relief to a small evolving 
sector of the grain

[[Page 45398]]

industry, while continuing to advance the objectives of the USGSA.

Discussion of Comments and Final Action

    On July 19, 2010, GIPSA published an interim rule (75 FR 41693) 
that extended for 2 years, or until July 31, 2012, and also proposed 
making the waiver pernment for high quality specialty grain exported in 
containers that was established from a final rule on December 13, 2005 
(70 FR 73556). The interim rule invited interested parties to comment 
on making this waiver for high quality specialty grain exported in 
containers permanent. GIPSA received two comments, which are discussed 
below:
    One comment supported the issuance of the interim rule to extend 
through July 31, 2012, the waiver from mandatory inspection and 
weighing requirements for high quality specialty grain exported in 
containers to eliminate uncertainty that otherwise might have occurred. 
The commenter also supported making the waiver permanent and urged 
GIPSA to not propose major changes to the mandatory inspection and 
weighing requirements of the USGSA that would adversely affect the 
marketing system or current priorities and operations of the agency. 
Because this commenter agreed that the waiver be made permanent, we are 
making no changes to this final rule based on the comment.
    The second commenter did not support GIPSA making permanent the 
current waiver for high quality specialty grain exported in containers 
from the mandatory inspection and weighing requirements and urged GIPSA 
to extend the waiver for an additional year and review the quality 
assurance options for rail shipments to Mexico and the impact of this 
rule change on overseas container shipments. GIPSA does not believe 
that this rule will impact rail shipments to Mexico or have an adverse 
impact on overseas container shipments. GIPSA established the waiver to 
facilitate the marketing of high quality specialty grain by eliminating 
the burden of obtaining mandatory inspection and weighing requirements 
for organic and other types of high quality specialty grain. Since the 
waiver was implemented in 2005, GIPSA has collected data from exporters 
of high quality specialty grain that verifies that exporters of high 
quality specialty grain have complied with the waiver provisions and 
that a permanent waiver will continue to advance the objectives of the 
USGSA. Moreover, nothing in this final rule will prevent buyers and 
sellers of high quality specialty grain from requesting and receiving 
official inspection and weighing services should they desire such 
services. Therefore, GIPSA is making no change to the final rule based 
on the comment.

Executive Order 12866 and Effect on Small Entities

    This 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.
    This final 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). Small grain exporters that export 
less than 15,000 metric tons per year are exempt from the mandatory 
inspection and weighing requirements under Sec.  800.18 of the USGSA 
regulations (7 CFR 800.18). GIPSA believes that making permanent this 
waiver would effectively eliminate the cost impact on small grain 
exporters that would otherwise have to pay for GIPSA's onsite 
inspection and weighing services without impairing the objectives of 
the USGSA.
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    \1\ See: http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf.
---------------------------------------------------------------------------

    The growing market for high quality specialty grain exported in 
containers has caused shippers of high quality specialty grain 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 grain exported in containers from the mandatory inspection 
and weighing requirements of the USGSA. GIPSA agrees with the Advisory 
Committee that granting a permanent waiver is consistent with the 
intent of the USGSA and will allow this market to continue to grow.
    This final rule will continue to allow exporters of high quality 
specialty grain shipped in containers to ship high quality specialty 
grain without the cost burden of mandatory inspection and weighing, 
while allowing them to request GIPSA inspection and weighing services 
when desired. Relieving this cost burden will continue to allow the 
grain industry to grow and equitably compete with global competitors.
    Therefore, pursuant to requirements set forth in the Regulatory 
Flexibility Act (5 U.S.C. 601-612), GIPSA has considered the economic 
impact of this 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.

Executive Order 12988

    This final 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 
subdivision may require or impose any requirements or restrictions 
concerning the inspection, weighing, or description of grain under the 
USGSA. Otherwise, this final 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 final rule.

Executive Order 13175

    This final rule has been reviewed with the requirements of 
Executive Order 13175, Consultation and Coordination with Indian Tribal 
Governments. This rule will not have substantial and direct effects on 
Tribal governments and will not have significant Tribal implications.

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 final rule were approved by the Office of Management and Budget 
under Control No. 0580-0022, and will 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.

[[Page 45399]]

List of Subjects in 7 CFR Part 800

    Administrative practice and procedure, Export, Grain.

    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.

* * * * *
    (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.
* * * * *

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.

J. Dudley Butler,
Administrator, Grain Inspection, Packers and Stockyards Administration.
[FR Doc. 2011-19250 Filed 7-28-11; 8:45 am]
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