[Federal Register Volume 63, Number 115 (Tuesday, June 16, 1998)]
[Rules and Regulations]
[Pages 32713-32717]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-15751]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 63, No. 115 / Tuesday, June 16, 1998 / Rules 
and Regulations

[[Page 32713]]


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DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

7 CFR Part 800

RIN 0580-AA59


Fees for Official Inspection and Official Weighing Services

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

ACTION: Final rule.

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

SUMMARY: The Grain Inspection, Packers and Stockyards Administration 
(GIPSA) is implementing an increase of approximately 2.9 percent in 
certain service fees for official inspection and weighing services 
performed in the United States under the United States Grain Standards 
Act (USGSA), as amended. The increase covers hourly rates and certain 
unit rates on tests performed at other than an applicant's facility. 
The increase is designed to generate additional revenue required to 
recover operational costs created by cost-of-living increases to 
Federal salaries in fiscal year 1998.

EFFECTIVE DATE: July 1, 1998.

FOR FURTHER INFORMATION CONTACT: George Wollam, USDA, GIPSA, ART, Stop 
3649, Washington, D.C. 20250-3649, telephone (202) 720-0292, or FAX 
(202) 720-4628. Electronic mail or Internet to: 
<a href="/cdn-cgi/l/email-protection#a7c0d0c8cbcbc6cae7c1c0ced4c3c489d2d4c3c689c0c8d1"><span class="__cf_email__" data-cfemail="83e4f4ecefefe2eec3e5e4eaf0e7e0adf6f0e7e2ade4ecf5">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be nonsignificant for the purpose 
of Executive Order 12866 and, therefore, has not been reviewed by the 
Office of Management and Budget.

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This action is not intended to have a retroactive 
effect. The USGSA provides in Sec. 87g that no subdivision may require 
or impose any requirements or restrictions concerning the inspection, 
weighing, or description of grain under the Act. Otherwise, this final 
rule will not preempt any State or local laws, regulations, or policies 
unless they present irreconcilable conflict with this final rule. There 
are no administrative procedures which must be exhausted prior to any 
judicial challenge to provisions of this final rule.

Effects on Small Entities

    James R. Baker, Administrator, GIPSA, has determined that this 
final rule will not have a significant economic impact on a substantial 
number of small entities as defined in the Regulatory Flexibility Act 
(5 U.S.C. 601 et seq.). Many users of GIPSA inspection and weighing 
services do not meet the requirements for small entities. GIPSA is 
required by statute to make services available and to recover costs of 
providing such services, as nearly as practicable.
    The final fee revision is primarily applicable to entities engaged 
in the export of grain. Under provisions of the USGSA, most grain 
exported from U.S. export port locations must be officially inspected 
and weighed. Mandatory inspection and weighing services are provided by 
GIPSA on a fee basis at 37 export facilities. All of the export 
facilities are owned and managed by multi-national corporations, large 
cooperatives, or public entities that do not meet the criteria for 
small entities as defined under the Regulatory Flexibility Act and the 
regulations issued thereunder. Some users of the service who request 
non-mandatory official inspection and weighing services (most of which 
represent appeals) at other than export locations could be considered 
small entities. However, this fee increase merely reflects the cost-of-
living increases in Federal salaries for hourly and certain unit fees.
    In fiscal year 1997, GIPSA's obligations were $22,972,026 with 
revenue of $21,527,695, resulting in a loss of $1,444,331 and retained 
earnings of negative $419,417. In fiscal year 1998, as of April 30, 
GIPSA's obligations were $13,658,981 with revenue of $13,454,057 and 
retained earnings of negative $254,728. GIPSA cannot absorb the 2.9 
percent increase in salary costs with the existing deficit in retained 
earnings. Additionally, GIPSA will continue to monitor its costs to 
improve operating efficiencies, and adopt cost saving measures, where 
possible and practicable.
    The approximate 2.9 percent increase in fees would not have a 
significant impact on either small or large entities. GIPSA estimates 
an annual increase of $509,000 in revenue based on a work volume of 
74,045,472 metric tons, the equivalent to fiscal year 1997.

Information Collection and Recordkeeping Requirements

    In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection and recordkeeping requirements 
in Part 800 have been previously approved by the Office of Management 
and Budget under control number 0580-0013.

Background

    On March 27, 1998, GIPSA published in the Federal Register (63 FR 
14840) a proposal to increase by approximately 2.9 percent certain fees 
it charges for official inspection and weighing services.
    The USGSA requires GIPSA to charge and collect reasonable fees for 
performing official inspection and weighing services. The fees are to 
cover, as nearly as practicable, GIPSA's costs for performing these 
services, including related administrative and supervisory costs.
    The 2.9 percent fee increase will generate additional revenue 
required to recover operational costs created by a January 1998 cost-
of-living increase to Federal salaries. The average salary increase for 
GIPSA employees in calendar year 1998 is approximately 2.9 percent. 
This final action is being taken to ensure that service fees charged by 
GIPSA generate adequate revenue to cover the additional cost created by 
the January 1998 Federal salary increase.
    The current USGSA fees covering hourly rates and certain unit rates 
on tests performed at other than an applicant's facility were published 
in the Federal Register on June 11, 1997 (62 FR 31701), and became 
effective on June 15, 1997. They appear in the 1998 edition of 7 CFR 
800.71, Schedule A, Fees for Official Inspection and Weighing Services 
Performed in the United States. The hourly fees covered by this final 
rule will generate revenue

[[Page 32714]]

to cover the basic salary, benefits, and leave for those employees 
providing direct service delivery. GIPSA has also identified certain 
unit fees, for services not performed at an applicant's facility, that 
contain direct labor costs. This final rule increases those unit fees 
based on a 2.9 percent increase to the labor cost of each unit. Other 
associated costs, including overhead, are collected through additional 
fees contained in the published fee schedule and are not included under 
this final rule.
    The amount of revenue collected as a result of this final rule is a 
direct function of the work volume. GIPSA estimates an annual increase 
of $509,000 in revenue based on a work volume of 74,045,472 metric 
tons, the equivalent to fiscal year 1997. If GIPSA foregoes this 
adjustment, GIPSA will incur a net loss equivalent to 2.9 percent for 
every hour worked by an employee providing direct service delivery.
    In fiscal year 1997, GIPSA's obligations were $22,972,026 with 
revenue of $21,527,695, resulting in a loss of $1,444,331 and retained 
earnings of negative $419,417. In fiscal year 1998, as of April 30, 
GIPSA's obligations were $13,658,981 with revenue of $13,454,057 and 
retained earnings of negative $254,728. GIPSA cannot afford to absorb 
an additional $509,000 loss due to the 2.9 percent increase in salary 
costs with the existing deficit in retained earnings. Additionally, 
GIPSA will continue to monitor its costs to improve operating 
efficiencies and adopt cost saving measures, where possible and 
practicable.

Comment Review

    GIPSA received two comments, one from an industry exporter and the 
other from an industry trade association representing grain, feed, and 
processing companies during the 60-day comment period. One commenter 
opposed the proposed increase. This commenter raised several concerns, 
including that the fees charged by GIPSA are spiraling upward out of 
control; that they had no other option but to use our service since 
inspection and weighing services on export grain are mandatory; and 
that private business were not allowed to compete with GIPSA in 
providing official services, noting that the service GIPSA provides is 
a totally non-competitive service.
    The second commenter did not oppose the fee increase, but indicated 
that it was disappointed that GIPSA was again proposing to increase 
user fees for official services. The commenter indicated that GIPSA 
must begin to anticipate the yearly salary increases and take action 
that will offset their effects by implementing cost cutting measures, 
improving productivity, or a combination of both. The commenter stated 
that it remained concerned about the continued financial deterioration 
in the official inspection system, the continued losses, the depleted 
operating reserve, and weak imports. The commenter reiterated its view 
that GIPSA should not rely on fee increases as the primary tool to 
reverse the declining financial condition of the inspection and 
weighing programs and it went on to state that the Agency should 
continue its efforts to significantly and quickly reduce costs and 
increase productivity. The commenter stated that GIPSA should review 
its operating structure to determine and identify cost savings 
efficiencies as discussed in the comment.
    The proposed fee increase, a cost-of-living increase, covers the 
hourly rate and certain unit fees on tests performed at other than an 
applicant's facility. These fees cover only the basic salary, benefit, 
and leave costs associated with those employees directly providing 
service to the applicant. The hourly cost to the industry is directly 
related to the number of employees required to perform service at any 
particular facility.
    GIPSA continually monitors its overall costs and has implemented 
numerous cost cutting measures. GIPSA has streamlined, restructured, 
and reorganized to respond to changes in marketing practices and 
industry structure. Restructuring efforts have focused on streamlining 
headquarters and administrative operations and consolidating the field 
structure into fewer, but better staffed and equipped offices. Other 
associated costs, including overhead, are collected through other 
published fees. Any increases to those fees would be addressed through 
separate rulemaking.
    Given the status of the inspection and weighing programs in terms 
of costs, revenues, and operating reserves, we believe that these fee 
changes are the most responsible and reasonable action that can be 
taken at this time in the administration of these programs. The Agency 
has embarked upon cost savings initiatives, including reductions-in-
force over the past several years. These efforts will continue to play 
a central role in GIPSA's efforts to reduce costs. At the same time, we 
do note that some costs, such as salary increases, require close 
attention and become more significant and compelling when the Agency's 
financial condition is such that operating reserves are depleted. The 
USGSA explicitly identifies the structure and makeup of the Federal, 
State and private agency relationship for performance of official 
services. The Act also requires GIPSA to charge and collect reasonable 
fees for performing official inspection and weighing services. We 
believe that GIPSA should continue to work closely with the FGIS 
Advisory Committee and the industry itself in order to provide the most 
cost efficient and productive program services possible.
    It is found that good cause exists for not postponing the effective 
date of this rule until 30 days after publication in the Federal 
Register (5 U.S.C. 553) because: (1) Projected exports and the 
associated requests for official services for such grain are projected 
to decrease in the coming months due to seasonal and other adjustments; 
(2) given the current level of the operating reserve, the fee increase 
should be implemented as soon as possible; and (3) the effective date 
coincides with the beginning of a billing cycle.

Final Action

    GIPSA is applying an approximate 2.9 percent increase to those 
hourly and certain unit rates in 7 CFR 800.71, Table 1--Fees for 
Official Services Performed at an Applicant's Facility in an Onsite 
GIPSA Laboratory; Table 2--Services Performed at Other Than an 
Applicant's Facility in a GIPSA Laboratory; and Table 3--Miscellaneous 
Services.
    In reviewing the fee schedule to identify fees that would require 
an approximate 2.9 percent increase, GIPSA has identified several fees 
that, under the current fee schedule, are at levels that would not 
require any change. Accordingly, these fees would remain the same at 
this time.

List of Subjects in 7 CFR Part 800

    Administrative practice and procedure, Grains.

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

PART 800--GENERAL REGULATIONS

    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.)

    2. Section 800.71, paragraph (a), Schedule A is revised to read as 
follows:


Sec. 800.71  Fees assessed by the Service.

    (a) * * *

[[Page 32715]]

Schedule A.--Fees for Official Inspection and Weighing Services 
Performed in the United States

   Table 1.--Fees for Official Services Performed at an Applicant's Facility in an Onsite FGIS Laboratory \1\   
                                                                                                                
                                                               Monday to    Monday to                           
                                                               Friday  (6   Friday  (6   Saturday,              
                                                                a.m to 6    p.m. to 6   Sunday, and    Holidays 
                                                                 p.m.)        a.m.)       overtime              
                 (1) Inspection and Weighing Services Hourly Rates (per service representative)                 
----------------------------------------------------------------------------------------------------------------
1-year contract.............................................       $24.40       $26.40       $34.40       $41.40
6-month contract............................................        26.80        28.60        36.60        47.80
3-month contract............................................        30.60        31.60        39.80        49.40
Noncontract.................................................        35.40        37.40        45.40        55.80
----------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
 (2) Additional Tests (cost per test, assessed in addition to the hourly
                                rate) \3\                               
------------------------------------------------------------------------
(i) Aflatoxin (other than Thin Layer Chromatography)..........     $8.50
(ii) Aflatoxin (Thin Layer Chromatography method).............     20.00
(iii) Soybean protein and oil (one or both)...................      1.50
(iv) Wheat protein (per test).................................      1.50
(v) Sunflower oil (per test)..................................      1.50
(vi) Vomitoxin (qualitative)..................................      7.50
(vii) Vomitoxin (quantitative)................................     12.50
(viii) Waxy corn (per test)...................................      1.50
(ix) Fees for other tests not listed above will be based on             
 the lowest noncontract hourly rate.                                    
(x) Other services:                                                     
    (a) Class Y Weighing (per carrier)                                  
        (1) Truck/container...................................       .30
        (2) Railcar...........................................      1.25
        (3) Barge.............................................      2.50
------------------------------------------------------------------------
   (3) Administrative Fee (assessed in addition to all other applicable 
 fees, only one administrative fee will be assessed when inspection and 
          weighing services are performed on the same carrier).         
------------------------------------------------------------------------
(i) All outbound carriers (per-metric-ton): \4\                         
    (a) 1-1,000,000...........................................   $0.1013
    (b) 1,000,001-1,500,000...................................    0.0923
    (c) 1,500,001-2,000,000...................................    0.0473
    (d) 2,000,001-5,000,000...................................    0.0360
    (e) 5,000,001-7,000,000...................................    0.0192
    (f) 7,000,000+............................................   0.0023 
------------------------------------------------------------------------
\1\ Fees apply for original inspection and weighing, reinspection, and  
  appeal inspection service include, but are not limited to, sampling,  
  grading, weighing, prior to loading stowage examinations, and         
  certifying results performed within 25 miles of an employee's assigned
  duty station. Travel and related expenses will be charged for service 
  outside 25 miles as found in Sec.  800.72 (a).                        
\2\ Overtime rates will be assessed for all hours in excess of 8        
  consecutive hours that result from an applicant scheduling or         
  requesting service beyond 8 hours, or if requests for additional      
  shifts exceed existing staffing.                                      
\3\ Appeal and reinspection services will be assessed the same fee as   
  the original inspection service.                                      
\4\ The administrative fee is assessed on an accumulated basis beginning
  at the start of the Service's fiscal year (October 1 each year).      


Table 2.--Services Performed at Other Than an Applicant's Facility in an
                         FGIS Laboratory \1\ \2\                        
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
(1) Original Inspection and Weighing (Class X) Services                 
    (i) Sampling only (use hourly rates from Table 1)                   
    (ii) Stationary lots (sampling, grade/factor, &                     
     checkloading):                                                     
        (a) Truck/trailer/container (per carrier).............    $18.00
        (b) Railcar (per carrier).............................     27.50
        (c) Barge (per carrier)...............................    174.25
        (d) Sacked grain (per hour per service representative           
         plus an administrative fee per hundredweight) (CWT)..      0.02
    (iii) Lots sampled online during loading (sampling charge           
     under (i) above, plus):                                            
        (a) Truck/trailer container (per carrier).............      9.75
        (b) Railcar (per carrier).............................     19.00
        (c) Barge (per carrier)...............................    108.00
        (d) Sacked grain (per hour per service representative           
         plus an administrative fee per hundredweight) (CWT)..      0.02
    (iv) Other services:                                                
        (a) Submitted sample (per sample--grade and factor)...     10.50
        (b) Warehouseman inspection (per sample)..............     17.50
        (c) Factor only (per factor--maximum 2 factors).......      4.50
        (d) Checkloading/condition examination ( use hourly             
         rates from Table 1, plus an administrative fee per             
         hundredweight if not previously assessed) (CWT)......      0.02
        (e) Reinspection (grade and factor only. Sampling               
         service additional, item (i) above)..................     11.50
        (f) Class X Weighing (per hour per service                      
         representative)......................................     46.40
    (v) Additional tests (excludes sampling):                           
        (a) Aflatoxin (per test--other than TLC method).......     25.50

[[Page 32716]]

                                                                        
        (b) Aflatoxin (per test--TLC method)..................    101.50
        (c) Soybean protein and oil (one or both).............      8.00
        (d) Wheat protein (per test)..........................      8.00
        (e) Sunflower oil (per test)..........................      8.00
        (f) Vomitoxin (qualitative)...........................     26.00
        (g) Vomitoxin (quantitative)..........................     31.00
        (h) Waxy corn (per test)..............................      9.25
        (i) Canola (per test--00 dip test)....................      9.25
        (j) Pesticide Residue Testing \3\                               
            (1) Routine Compounds (per sample)................   $200.00
            (2) Special Compounds (per service representative)    100.00
        (k) Fees for other tests not listed above will be               
         based on the lowest noncontract hourly rate from               
         Table 1.                                                       
(2) Appeal inspection and review of weighing service.\4\                
    (i) Board Appeals and Appeals (grade and factor)..........     75.25
        (a) Factor only (per factor--max 2 factors)...........     39.00
        (b) Sampling service for Appeals additional (hourly             
         rates from Table 1)                                            
    (ii) Additional tests (assessed in addition to all other            
     applicable fees)                                                   
        (a) Aflatoxin (per test, other than TLC)..............     25.75
        (b) Aflatoxin (TLC)...................................    111.00
        (c) Soybean protein and oil (one or both).............     15.75
        (d) Wheat protein (per test)..........................     15.75
        (e) Sunflower oil (per test)..........................     15.75
        (f) Vomitoxin (per test--qualitative).................     36.00
        (g) Vomitoxin (per test--quantitative)................     41.00
        (h) Vomitoxin (per test--HPLC Board Appeal)...........    128.00
        (i) Pesticide Residue Testing \3\                               
            (1) Routine Compounds (per sample)................    200.00
            (2) Special Compounds (per service representative)    100.00
        (j) Fees for other tests not listed above will be               
         based on the lowest noncontract hourly rate from               
         Table 1.                                                       
    (iii) Review of weighing (per hour per service                      
     representative)..........................................     67.40
(3) Stowage examination (service-on-request) \3\                        
    (i) Ship (per stowage space) (minimum $250 per ship)......     50.00
    (ii) Subsequent ship examinations (same as original)                
     (minimum $150 per ship)..................................          
    (iii) Barge (per examination).............................     40.00
    (iv) All other carriers (per examination).................     15.00
------------------------------------------------------------------------
\1\ Fees apply for original inspection and weighing, reinspection, and  
  appeal inspection service include, but are not limited to, sampling,  
  grading, weighing, prior to loading stowage examinations, and         
  certifying results performed within 25 miles of an employee's assigned
  duty station. Travel and related expenses will be charged for service 
  outside 25 miles as found in Sec.  800.72(a).                         
\2\ An additional charge will be assessed when the revenue from the     
  services in Schedule A, Table 2, does not cover what would have been  
  collected at the applicable hourly rate as provided in Sec.           
  800.72(b).                                                            
\3\ If performed outside of normal business, 1\1/2\ times the applicable
  unit fee will be charged.                                             
\4\ If, at the request of the Service, a file sample is located and     
  forwarded by the Agency for an official agency, the Agency may, upon  
  request, be reimbursed at the rate of $2.50 per sample by the Service.


                  Table 3.--Miscellaneous Services \1\                  
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
(1) Grain grading seminars (per hour per service                        
 representative) \2\..........................................    $46.40
(2) Certification of diverter-type mechanical samplers (per             
 hour per service representative) \2\.........................     46.40
(3) Special weighing services (per hour per service                     
 representative): \2\                                                   
    (i) Scale testing and certification.......................     46.40
    (ii) Evaluation of weighing and material handling systems.     46.40
    (iii) NTEP Prototype evaluation (other than Railroad Track          
     Scales)..................................................     46.40
    (iv) NTEP Prototype evaluation of Railroad Track Scales             
     (plus usage fee per day for test car)....................     46.40
                                                                  100.00
    (v) Mass standards calibration and reverification.........     46.40
    (vi) Special projects.....................................     46.40
(4) Foreign travel (per day per service representative).......    430.00
(5) Online customized data EGIS service:                                
    (i) One data file per week for 1 year.....................    500.00
    (ii) One data file per month for 1 year...................    300.00
(6) Samples provided to interested parties (per sample).......      2.50
(7) Divided-lot certificates (per certificate)................      1.50
(8) Extra copies of certificates (per certificate)............      1.50
(9) Faxing (per page).........................................      1.50
(10) Special mailing (actual cost)                                      
(11) Preparing certificates onsite or during other than normal          
 business hours (use hourly rates from Table 1)                         
------------------------------------------------------------------------
\1\ Any requested service that is not listed will be performed at $46.40
  per hour.                                                             
\2\ Regular business hours--Monday thru Friday--service provided at     
  other than regular hours charged at the applicable overtime hourly    
  rate.                                                                 


[[Page 32717]]

* * * * *
    Dated: June 5, 1998.
James R. Baker,
Administrator.
[FR Doc. 98-15751 Filed 6-15-98; 8:45 am]
BILLING CODE 3410-EN-P


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