U.S. Warehouse Act Fees

DEPARTMENT OF AGRICULTURE

Agricultural Stabilization and Conservation Service

7 CFR Parts 735, 736, 737, 738, 739, 740, 741, and 742

RIN 0560-AD13

U.S. Warehouse Act Fees

AGENCY: Agricultural Stabilization and Conservation Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule revises the regulations under the United

States Warehouse Act (USWA) to increase the fees charged to grain,

tobacco, wool, dry bean, nut, syrup, cotton and cottonseed warehousemen

for licensing and inspection services. In addition, a schedule of fees

has been added to impose annual fees on cotton warehousemen. Future fee

changes will be announced by a notice in the Federal Register prior to

July 1, to be effective October 1 of each year, when such changes have

been determined to be necessary.

EFFECTIVE DATE: October 1, 1994.

FOR FURTHER INFORMATION CONTACT: Director, Licensing Authority

Division, United States Department of Agriculture (USDA), Agricultural

Stabilization and Conservation Service (ASCS), PO Box 2415, Washington,

DC 20013-2415, telephone 202-720-2121, FAX 202-690-0014.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be significant and was reviewed by

Office of Management and Budget (OMB) under Executive Order 12866.

Executive Order 12372

This program is not subject to the provisions of Executive Order

12372 which requires intergovernmental consultation with State and

local officials. See the notice related to 7 CFR part 3015, subpart V,

published at 48 FR 29115 (June 24, 1983).

Executive Order 12778

The Office of General Counsel has certified to the OMB that these

regulations meet the applicable standards provided in sections 2(a) and

2(b)(2) of this Executive Order.

Paperwork Reduction Act

The amendments set forth in this final rule do not generate any new

or revised information collection or recordkeeping requirements on the

public.

Regulatory Flexibility Act

It has been determined that the Regulatory Flexibility Act is not

applicable to this final rule. It has been determined that this rule

will not have a significant effect on a substantial number of small

businesses because licensing under the USWA is strictly voluntary on

the part of the warehouseman. The actions taken herein are required by

statute.

Executive Order 12612

It has been determined that the policies and procedures contained

in this rule will not have substantial direct effects on states or

their political subdivisions, or on the distribution of power and

responsibilities among the various levels of government.

National Environmental Policy Act

This action is not expected to have any significant impact on the

quality of the human environment, health, and safety. Therefore,

neither an Environmental Assessment nor an Environmental Impact

Statement is needed.

Background

Pursuant to the provisions of the USWA, the Secretary has the

authority to license public warehousemen. Warehousemen that opt to have

a USWA license understand that fees will be imposed to cover the costs

of the program. Specifically, the Omnibus Budget Reconciliation Act of

1981 mandates the imposition of fees for USWA licensed warehouses. The

Act stipulates that:

The Secretary of Agriculture * * * shall charge, assess, and

cause to be collected a reasonable fee for: (1) Each examination or

inspection of a warehouse * * *; (2) each license issued to any

person to classify, inspect, grade, sample, or weigh agricultural

products stored or to be stored * * *; (3) each annual warehouse

license issued to a warehouseman to conduct a warehouse * * *; and

(4) each warehouse license amended, modified, extended, or

reinstated * * *. Such fees shall cover, as nearly as practicable,

the costs of providing such services and licenses * * * including

administrative and supervisory costs * * *.

This final rule adopts and changes the fees charged and collected,

discontinues publication of fee amounts in the Regulations for

Warehouses (7 CFR, chapter VII, subchapter C), and provides for fees to

be adjusted annually in order to cover program costs. Fees assessed in

fiscal year 1995, are stated in the paragraphs and tables contained

herein. This fee information was also contained in the proposed rule

published on May 19, 1994, in the Federal Register at 59 FR 26146. The

table covering annual fees for cotton, as proposed, has been adjusted

for warehouses that have a capacity exceeding 160,000 bales.

Warehouse and Service License Fees

The fee for original issuance, reissuance, or duplication of a

license for cotton, grain, tobacco, wool, dry beans, nut, syrup, and

cottonseed is $65 for each license issued.

The fee charged to license individuals to inspect, sample, grade,

classify, or weigh commodities is $26 for each service license issued.

Warehouse Annual and Inspection Fees

These fees are in the following tables by agricultural product.

Inspection fees are assessed for each original examination or

inspection, or reexamination or reinspection for modification of an

existing license. Annual fees are assessed independently of inspection

fees.

Cotton

[In bales]

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

Annual fee Annual fee

for each for each

warehouse warehouse

Licensed capacity location location

with a CCC without a

storage CCC storage

agreement agreement

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

1-20,000...................................... $500 $1,000

20,001-40,000................................. 650 1,300

40,001-60,000................................. 800 1,600

60,001-80,000................................. 1,000 2,000

80,001-100,000................................ 1,250 2,500

100,001-120,000............................... 1,500 3,000

120,001-140,000............................... 1,750 3,500

140,001-160,000............................... 2,000 4,000

160,001+...................................... *2,250 **4,500

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

*Plus $50.00 per 5,000 bale capacity above 160,000 bales or fraction

thereof.

**Plus $100.00 per 5,000 bale capacity above 160,000 bales or fraction

thereof.

Inspection fees will be charged at the rate of $65 for each 1,000 bales

of licensed capacity, or fraction thereof, but in no case less than

$130 nor more than $1,300.

Grain

[In bushels]

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

Annual fee Annual fee

for each for each

warehouse warehouse

Licensed capacity location location

with a CCC without a

storage CCC storage

agreement agreement

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

1-150,000..................................... $130 $260

150,001-250,000............................... 260 520

250,001-500,000............................... 390 780

500,001-750,000............................... 520 1,040

750,001-1,000,000............................. 650 1,300

1,000,001-1,200,000........................... 780 1,560

1,200,001-1,500,000........................... 910 1,820

1,500,001-2,000,000........................... 1,040 2,080

2,000,001-2,500,000........................... 1,170 2,340

2,500,001-5,000,000........................... 1,300 2,600

5,000,001-7,500,000........................... 1,430 2,860

7,500,001-10,000,000.......................... 1,560 3,120

10,000,001+................................... *1,560 **3,120

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

*Plus $40 per million bushels above 10,000,000 or fraction thereof.

**Plus $80 per million bushels above 10,000,000 or fraction thereof.

Inspection fees will be charged at the rate of $13 for each 10,000

bushels or fraction thereof, but in no case less than $130 nor more

than $1,300.

Dry Beans

[In hundredweight]

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

Licensed capacity Annual fee

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

100-90,000................................................. $650

90,100-150,000............................................. 910

150,100-300,000............................................ 1,170

300,100-450,000............................................ 1,430

450,100-600,000............................................ 1,690

600,100-720,000............................................ 1,950

720,100-900,000............................................ 2,210

900,100-1,200,000.......................................... 2,470

1,200,100-1,500,000........................................ 2,730

1,500,100-3,000,000........................................ 2,990

3,000,100+................................................. 3,250

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

Inspection fees will be charged at the rate of $13 for each 1,000

hundredweight, or fraction thereof, but in no case less than $130 nor

more than $650.

Tobacco and Wool

Annual fee:

$13 for each 100,000 pounds of licensed capacity, or fraction thereof,

but in no case less than $520 nor more than $2,600.

Inspection fee:

$13 for each 100,000 pounds of licensed capacity, or fraction thereof,

but in no case less than $130 nor more than $650.

Nuts

Annual fee:

13 cents for each short ton of licensed capacity, or fraction thereof,

but in no case less than $520 nor more than $2,600.

Inspection fee:

$7 for each 100 short ton of licensed capacity, or fraction thereof,

of peanuts, and $13 for each 1,000 hundredweight, or fraction

thereof, of other nuts, but in no case less than $130 nor more than

$1,300.

Syrup

Annual fee:

$4 for each 5,000 gallons of licensed capacity, or fraction thereof,

but in no case less than $520 nor more than $2,600.

Inspection fee:

$4 for each 5,000 gallons, or fraction thereof, but in no case less

than $130 nor more than $650.

Cottonseed

Annual fee:

$13 for each 1,000 short tons of licensed capacity, or fraction

thereof, but in no case less than $520 nor more than $2,600.

Inspection fee:

$13 for each 1,000 short tons of licensed capacity, or fraction

thereof, but in no case less than $130 nor more than $650.

General Summary of Comments

The proposed rule was published in the Federal Register (59 FR

26146) on May 19, 1994. Comments from interested parties were due on or

before the close of business on June 3, 1994.

Twenty-two letters were received on time from entities concerned

with issues regarding the cotton and grain USWA changes. Because of the

definite division of the comments between cotton and grain, our

``Summary of Comments'' will be separated accordingly.

Seventeen of the 22 letters concern cotton fees, delaying the

effective date of USWA fee charges, and a maximum limit on fees. The 17

cotton entities are comprised of nine cotton compressors/ginners, four

warehousemen, and four Associations. One of the letters from an

association states that its members support maintaining the integrity

of the USWA warehouse receipt system, but association policy will not

allow for constructive comment on the proposal at this time.

Five of the 22 letters concern grain fee increases and future fee

announcements. The five entities are comprised of three associations

and two warehousemen.

A total of 41 comments were received. Thirty-two of these comments

concerned cotton, and 9 concerned grain. Discussion of Comments

Most of the commenters were supportive of the continued need for

the USWA and of the concepts behind the proposal. However, many of the

comments suggest that a different approach would be more desirable to

finance the costs of the program.

The final rule adopts the proposed fees for grain, tobacco, wool,

dry bean, nut, syrup, and cottonseed warehouses without change. One

minor change to the fee proposal regarding cotton has been made. The

amount of fees collected in warehouses where the capacity exceeds

160,000 bales, will be subject to incremental increases.

Summary of Comments

Cotton

Fees

Some degree of confusion exists among the commenters as they refer

to the federal and State regulation programs and warehouses with a

Commodity Credit Corporation (CCC) Cotton Storage Agreement as being

one and the same. Specifically, they believe that all regulatory and

contractual fees should be announced at the same time. However, these

three agencies operate under different legislation with different

authorities. Therefore, these comments are not discussed below in

detail.

A total of 11 comments were received regarding fees. One comment

opposes the warehouse and service license fee increase, as well as the

annual and inspection fee increases. One comment states that it is

assumed that warehousemen who are currently licensed would be

grandfathered into this fee structure and would be opposed to any new

assessment of fees to cover the cost of existing licensed space. One

comment strongly opposes the implementation of user fees for cotton,

stating that it is a new taxation. One comment understands the need for

fees; but believes fees should be based on an hourly rate of actual

time spent. The commenter feels that if the main purpose is to cover an

inspector's expenses, that it would be more appropriate than using the

bale capacity as the basis. One comment states that the proposed fees

are far greater than any suggested at recent meetings. The commenter

feels that omission of any inspection fees for State licensed

warehouses is discriminatory. One comment states that the proposed fees

are much too high, and that ASCS should lock in any fee for at least

five years. One comment states that user fees are not opposed, but that

the fee schedule in the Federal Register discriminates against small

warehouses. One comment states that the importance of the examination

system is questioned. When examiners logged in each bale and knew what

was missing, the audit provided valuable information. The commenter

feels that if a bale by bale check was still done it would be useful

and that he would be glad to pay the fees for the service. One comment

supports the need for inspection fees, but believes we should consider

a freeze on the level of fees for a specific time, say five years, on

the basis that escalations should not be needed in the near term. One

comment opposes the proposed fees. The commenter feels that the fees

are too much, too soon, and if fees are a must, they should be phased

in over not less than a 3-year period. One comment states that there is

reluctant concurrence with the imposition of fees, but that they fully

support the need for inspection fees to be imposed for cotton.

After consideration of these comments, ASCS decided to proceed with

the implementation of fees on USWA licensed cotton warehousemen. To

cancel or delay such fees would not be in accordance with the statutory

requirements to collect fees for services. Since the USWA licensing

authority has no control over, or influence on, State regulatory

agencies or CCC, it is not feasible to announce all such fees at the

same time. The CCC contractual year is not the same as the USDA fiscal

year. The State authority has no connection with the USWA programs.

Delaying Effective Date of USWA Fee Charges

A total of 10 comments were received regarding the effective date.

Nine commenters feel that all cotton warehouses, including state

licensed and CCC warehousemen, should be treated equitably in the

timing of fee announcements. One comment, from a grain association,

fully supports the proposal for cotton warehouses to pay their fair

share of the costs of the federal warehouse system.

After consideration, ASCS decided it could not change the manner in

which the initial annual fees would be assessed for cotton warehouses.

Maximum Limit on Fees

A total of 11 comments were received regarding caps on fees. Nine

commenters state that they oppose the 160,000 cap on charges because

some warehouses are larger, and that the cap would be discriminatory to

the smaller capacity warehouses. One comment opposes the cap on

capacity because there are additional expenses inspecting large

warehouses and they should be charged accordingly. One comment also

opposes the cap and feels that fees should be escalated without regard

to an arbitrary cap.

After consideration of these comments, ASCS decided to remove the

cap of 160,000 bales of capacity for cotton warehouses by adding an

incremental increase with no cap.

Grain

Fee Increases

A total of five comments were received regarding the fee increase.

All five commenters oppose the increase at this time and recommend

deferring it until ASCS takes steps to streamline the program and cut

costs.

After consideration of these comments, ASCS decided to go ahead

with increases as proposed. To cancel or delay this increase would

result in a major decrease in the services provided, and therefore the

integrity of the USWA. Future Fee Announcements

A total of four comments were received regarding future fee

announcements. All four commenters oppose changing the fee setting

process and eliminating advance public notice and comment.

These comments were considered, however, it was determined that the

proposed system is necessary and will be implemented. The regulatory

process of writing, clearing, and publishing proposed and final rules

in the Federal Register takes, on the average, nine to twelve months.

By removing the fees from the regulatory process, ASCS is able to

respond in a timely manner and make necessary fee adjustments.

List of Subjects in 7 CFR Parts 735, 736, 737, 738, 739, 740, 741, and

742

Administrative practice and procedure, agricultural commodities,

Reporting and recordkeeping requirements, Surety bonds, Warehouses.

Accordingly, 7 CFR parts 735 through 742 be amended as follows:

PART 735--COTTON WAREHOUSES

PART 736--GRAIN WAREHOUSES

PART 737--TOBACCO WAREHOUSES

PART 738--WOOL WAREHOUSES

PART 739--DRY BEAN WAREHOUSES

PART 740--NUT WAREHOUSES

PART 741--SIRUP WAREHOUSES

PART 742--COTTONSEED WAREHOUSES

1. The authority citation for 7 CFR parts 735, 736, 737, 738, 739,

740, 741, and 742 is revised to read as follows:

Authority: 7 U.S.C. 241 et seq.

2. Sections 735.50, 736.57, 737.48, 738.46, 739.55, 740.56, 741.48,

and 742.58 are revised to read as follows:

Sec. ____________ License fees.

(a) Fees are collected in advance for each original, amended,

modified, extended, reinstated, or duplicate warehouseman's license;

and for each original, duplicate, or modified license issued to

inspect, sample, grade, classify, or weigh commodities.

(b) Fee changes, if applicable, will be announced by Notice in the

Federal Register on or before July 1, and effective the following

October 1.

3. Sections 735.51, 736.58, 737.49, 738.47, 739.56, 740.57, 741.49,

and 742.59 are revised to read as follows:

Sec. ____________ Warehouse annual and inspection fees.

Warehousemen must pay:

(a) An annual fee which will be determined by computing the

capacity for each warehouse location under a single license and adding

those amounts together to determine the total due. The fee will be

assessed and payable when the warehouse bond is furnished in accordance

with these regulations, for acceptance by the Secretary and annually

thereafter on the bond renewal date. The capacity for each identifiable

location will be determined by the Secretary. The total capacity of all

locations may not exceed the capacity stated in the current license. An

identifiable location is a fully functional public warehouse as

determined by the Secretary. The annual fee a licensed warehouseman is

assessed may be adjusted by the amount Commodity Credit Corporation

(CCC) pays, if CCC has a storage contract or agreement with the

warehouseman.

(b) An inspection fee for each original and amendment inspection.

(c) An inspection fee at the rate of 100 percent of the annual fee

charged warehouses without a CCC storage contract or agreement, in all

cases where the license has been suspended and the warehouseman has

requested reinstatement. No fee will be charged if the Secretary

determines that the suspension was not justified.

(d) A fee for each inspection requested by the warehouseman at the

rate of 100 percent of the annual fee charged warehouses without a CCC

storage contract or agreement.

Signed at Washington, DC, on October 4, 1994.

Bruce R. Weber,

Acting Administrator, Agricultural Stabilization and Conservation

Service.

[FR Doc. 94-25052 Filed 10-7-94; 8:45 am]

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