Editorial Note on Subchapter A of Chapter VIII
Authority: 7 U.S.C. 71-87K, 1621-1627.

Editorial Note on Subchapter A of Chapter VIII
Editorial Note: Nomenclature changes to subchapter A appear at 84 FR 45645, Aug. 30, 2019.

§ 800.196 Designations. ( a ) *General.* Eligible persons or governmental agencies may be designated to perform official services (excluding appeal inspection) within a specified area (other than export port locations).
( b ) *Restrictions* — ( 1 ) *General.* If official inspection services are performed in an area by a designated agency, Class X and Class Y weighing services in that area may be performed only by the designated agency if the agency applies for designation to provide weighing services and is found qualified by the Service. If the agency designated to provide official inspection services is found not qualified or does not apply, the Class X and Class Y weighing services may be performed by another available agency that is found qualified and is designated by the Service, or the official services may be performed by the Service.
( 2 ) *Interim authority.* ( i ) *By agency.* A designated agency may perform official services outside its assigned area on an interim basis when authorized by the Service.
( ii ) *By Service.* Official inspection services and/or Class X and Class Y weighing services may be performed by the Service in an area (other than export port locations) on an interim basis in accordance with sections 7(h) and 7A(c) of the Act.
( c ) *Who can apply.* Any State or local governmental agency or any person may apply, subject to sections 7 and 7A of the Act, to the Service for designation as an official agency to perform official inspection services (excluding appeal inspection) and/or Class X and Class Y weighing services in a given area (other than export port locations) in the United States.
( d ) *When and how to apply.* An application for designation should be filed with the Service, according to the provisions of the Federal Register notice which requests applicants for designation to perform official services in existing or new geographic areas. The application for designation: ( 1 ) Shall be submitted on a form furnished by the Service;
( 2 ) Shall be typewritten or legibly written in English;
( 3 ) Shall show or be accompanied by documents which show all information requested on the form, or otherwise required by the Service; and
( 4 ) Shall be signed by the applicant or its chief operating officer.
( e ) *Review of conditions and criteria for designation* — ( 1 ) *Application.* Each application for a designation shall be reviewed to determine whether it complies with paragraph (d) of this section. If an application is not in compliance, the applicant shall be provided an opportunity to submit the needed information. If the needed information is not submitted within a reasonable time, as determined by the Service, the application may be dismissed. When an application is dismissed, the Service shall notify the applicant, in writing, of the reason(s) for the dismissal.
( 2 ) *Applicant.* Each applicant for authority to operate as as designated agency shall be reviewed to determine whether the applicant meets the conditions and criteria contained in sections 7(f)(1)(A) and (B) of the Act, § 800.199 of the regulations, and paragraph (g) of this section. The requested designation may be granted if the Service determines that: ( i ) The requested action is consistent with the need for official services;
( ii ) The applicant meets the conditions and criteria specified in the Act and regulations;
( iii ) The applicant is better able than any other applicant to provide official services; and
( iv ) The applicant addresses concerns identified during consultations that the Service conducts with applicants for service to the satisfaction of the Service.
( f ) *Area of responsibility* — ( 1 ) *General.* Each agency shall be assigned an area of responsibility by the Service. Each area shall be identified by geographical boundaries and, in the case of a State or local government, shall not exceed the jurisdictional boundaries of the State or the local government, unless otherwise approved by the Service. The area of responsibility may not include any export elevators at export port locations or any portion of an area of responsibility assigned to another agency that is performing the same functions, except as otherwise provided in § 800.117. A designated agency may perform official services at locations outside its assigned area of responsibility only after obtaining approval from the Service, or in accordance with provisions set forth in § 800.117.
( 2 ) *Amending.* A request for an amendment to an assigned area of responsibility shall ( i ) be submitted to the Service in writing;
( ii ) specify the change desired;
( iii ) be signed by the applicant or its chief operating officer; and
( iv ) be accompanied by the fee prescribed by the Service. The assigned area may be amended if the Service determines that the amendment is consistent with the provisions and objectives of the Act, regulations, and instructions. Upon a finding of need, the Service may initiate action to change an assigned area of responsibility.
( 3 ) *Specified service points.* An agency may change its specified service points by notifying the Service in advance. Interested persons may obtain a list of specified service points within an agency's area of responsibility by contacting the agency. The list shall include all specified service points and shall identify each specified service point which operates on an intermittent or seasonal basis.
( g ) *Responsibilities* — ( 1 ) *Providing official services.* Insofar as practicable, each agency shall be responsible for providing at all locations in its assigned area each service authorized by the designation. An agency may, subject to Service approval, make arrangements with a neighboring agency to provide official services requested infrequently. The agency shall perform all official services according to the Act, regulations, and instructions in effect at the time of designation or which may be promulgated subsequently.
( 2 ) *Fees.* The agency shall charge fees according to § 800.70.
( 3 ) *Staffing, licensing, and training* — ( i ) *General.* The agency shall employ sufficient personnel to provide the official services normally requested in an accurate and timely manner. Each agency shall only use personnel licensed by the Service for the performance of official services and shall train and assist its personnel in acquiring and maintaining the necessary skills. Each agency shall keep the Service informed of the employment status of each of its licensees and any substantial change in a licensee's duties.
( ii ) *State agencies.* State agencies shall employ official personnel on the basis of job qualifications rather than political affiliations.
( 4 ) *Rotation of personnel.* Where feasible, each agency shall rotate licensees among elevators and other facilities as is necessary to preserve the integrity of the official inspection and weighing systems.
( 5 ) *Supervision.* The agency and its officials shall be responsible for the actions of the official personnel employed by the agency, for direct supervision of the daily activities of such personnel, and for the conduct of official services and related activities at the agency. The agency shall supervise official activities, in accordance with the Act, regulations, and instructions, and shall take action necessary to ensure that its employees are not performing prohibited functions and are not involved in any action prohibited by the Act, regulations, or instructions. Each agency shall report to the responsible field office information which shows or may show a violation of any provision of the Act, regulations, or instructions and information on any instructions which have been issued to agency personnel by Service personnel or by any other person which are inconsistent with the Act, regulations, or instructions.
( 6 ) *Conflict of interest* — ( i ) *General.* Each agency and any officer, director, stockholder, employee, or other related entity shall not have a conflict of interest, as defined in Section 11 of the Act and § 800.199 of the regulations. A conflict of interest may be waived pursuant to § 800.199(d). The agency shall advise the Service immediately of any proposed change in name, ownership, officers or directors, or control of the agency and, if a trust, any change affecting the trust agreement.
( ii ) *Unofficial activities.* Except as provided in § 800.76(a), the agency or personnel employed by the agency shall not perform any unofficial service that is the same as the official services covered by the designation.
( 7 ) *Facilities and equipment* — ( i ) *General.* The laboratory and office facilities of each agency shall be: Located; equipped; and large enough so that requested services are provided in an orderly and timely manner.
( ii ) *Equipment testing.* Each agency shall test the equipment it uses for official services according to the instructions.
( 8 ) *Security.* Each agency shall provide sufficient security to ensure that official samples, records, equipment, and forms are reasonably secure from theft, alteration, or misuse.
( 9 ) *Certificate control system.* Each agency shall establish a certificate control system for all official certificates it receives, issues, voids, or otherwise renders useless. The system shall provide for ( i ) recording the numbers of the official certificates printed or received;
( ii ) protecting unused certificates from fraudulent or unauthorized use; and
( iii ) maintaining a file copy of each certificate issued, voided, or otherwise rendered useless in a manner that would permit retrieval.
( 10 ) *Records.* Each agency shall maintain the records specified in §§ 800.145 through 800.159.
( h ) *Termination and renewal* — ( 1 ) *Triennial* — ( i ) *Termination.* A designation shall terminate at a time specified by the Administrator, but not later than 5 years after the effective date of the designation. A notice of termination shall be issued by the Service to a designated agency at least 120 calendar days in advance of the termination date. The notice shall provide instructions for requesting renewal of the designation. Failure to receive a notice from the Service shall not exempt a designated agency from the responsibility of having its designation renewed on or before the specified termination date.
( ii ) *Renewal.* Designations may be renewed, upon application, in accordance with criteria and procedures for designation prescribed in section 7(f) of the Act and this section of the regulations. The Administrator may decline to renew a designation if: ( A ) The requesting agency fails to meet or comply with any of the criteria for designation set forth in the Act, regulations, and instructions, of
( B ) The Administrator determines that another qualified applicant is better able to provide official services in the assigned area.
( 2 ) *Automatic termination.* Failure to pay the user fees prescribed by the Service for supervisory costs related to official inspection and weighing services within 30 days after due shall result in the automatic termination of the designation. The designation shall be reinstated if fees currently due, plus interest and any further expenses incurred by the Service because of the termination, are paid within 60 days after the termination.
( 3 ) *Voluntary cancellation.* An agency may request that its designation be canceled by giving 90 days written notice to the Service.
( 4 ) *Suspension or revocation of designation.* ( i ) *General.* A designation is subject to suspension or revocation, under section 7(g)(3) of the Act, by the Service, whenever the Administrator determines that: ( A ) The agency has failed to meet one or more of the criteria specified in section 7(f) of the Act or the regulations for the performance of official functions, or otherwise has not complied with any provision of the Act, regulations, or instructions, or
( B ) Has been convicted of any violation of other Federal law involving the handling or official inspection of grain.
( ii ) *Summary suspension.* The Service may, without first affording the agency (hereafter referred to in this paragraph as the “respondent”) an opportunity for a hearing, suspend a designation or refuse to reinstate a designation when the suspension period has expired, pending final determination of the proceeding whenever the Service has reason to believe there is cause for revocation of the designation and considers such action to be in the best interest of the official inspection and weighing system. A suspension or refusal to reinstate a suspended designation shall be effective upon the respondent's receipt of a notice from the Service. Within 30 calendar days following the issuance of a notice of such action, the Service shall afford the respondent an opportunity for a hearing under paragraph (h)(4)(iii) of this section. The Service may terminate the action if it finds that alternative managerial, staffing, financial, or operational arrangements satisfactory to the Service can be and are made by the respondent.
( iii ) *Other than summary suspension.* Except as provided in paragraph (h)(4)(ii) of the section, before the Service revokes or suspends a designation, the respondent shall be: ( A ) Notified by the Service of the proposed action and the reason(s) therefor, and
( B ) afforded an opportunity for a hearing in accordance with the Rules of Practice Governing Formal Adjudicatory Proceedings Instituted by the Secretary Under Various Statutes (7 CFR part 1, subpart H). Before initiating formal adjudicatory proceedings, the Service may, at its discretion, afford the respondent an opportunity to present its views on the proposed action and the reason(s) therefor in an informal conference. If, as a result of the informal conference, a consent agreement is reached, no formal adjudicatory proceedings shall be initiated.
( i ) *Provision of services following suspension or termination.* If the designation of an agency is suspended, terminated, or the renewal of a designation is not granted, the Service shall attempt, upon a finding of need, to arrange for a replacement agency. If a qualified replacement agency cannot be designated on a timely basis, a qualified agency, if available, shall be designated on an interim basis. If a qualified agency is not available on an interim basis, the Service shall provide needed services on an interim basis.
(Approved by the Office of Management and Budget under control number 0580-0013) [49 FR 30915, Aug. 2, 1984, as amended at 50 FR 18989, May 6, 1985; 54 FR 5924, Feb. 7, 1989; 60 FR 65236, Dec. 19, 1995; 63 FR 45677, Aug. 27, 1998; 68 FR 19139, Apr. 18, 2003; 81 FR 49863, July 29, 2016]