Fees for Official Inspection and Official Weighing Services

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.

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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:

[email protected].

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)

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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

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(2) Additional Tests (cost per test, assessed in addition to the hourly

rate) \3\

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(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

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(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).

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(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

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\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\

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(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

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\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\

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(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)

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\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]]

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Dated: June 5, 1998.

James R. Baker,

Administrator.

[FR Doc. 98-15751 Filed 6-15-98; 8:45 am]

BILLING CODE 3410-EN-P