Fees for Rice Inspection

DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

7 CFR Part 868

RIN 0580-AA67

Fees for Rice Inspection

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 increasing certain fees for Federal rice inspection services

performed under the Agricultural Marketing Act (AMA) of 1946. This fee

increase is intended to cover, as nearly as practicable, the projected

approximate 3.6 percent increase to Federal salaries for Federal Rice

Inspection Services. The increase is designed to generate additional

revenue required to recover operational costs created by cost-of-living

increases to Federal salaries January 1, 1999.

EFFECTIVE DATE: March 1, 1999.

FOR FURTHER INFORMATION CONTACT: Sharon Vassiliades, USDA, GIPSA, ART,

1400 Independence Avenue, SW, Stop 3649, Washington, D.C. 20250-3649;

telephone (202) 720-1738; electronic mail or Internet

[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 rule has been reviewed under Executive Order 12988, Civil

Justice Reform. This action is not intended to have a retroactive

effect. This action will not preempt any State or local laws,

regulations, or policies unless they present irreconcilable conflict

with this rule. There are no administrative procedures which must be

exhausted prior to any judicial challenge to provisions of this rule.

Regulatory Flexibility Act and Effects on Small Entities

James R. Baker, Administrator, GIPSA, has determined that this rule

will not have a significant economic impact on a substantial number of

small entities as defined under the Regulatory Flexibility Act (5

U.S.C. 601 et seq.).

The cost of living increase in the rice service fee is primarily

applicable to GIPSA customers that produce, process, and market rice

for the domestic and international markets. There are approximately 550

such customers located primarily in the Arkansas, Louisiana, and Texas

geographic areas. Many of these customers meet the criteria for small

business. GIPSA has determined that this rule will have a limited

economic impact on small entities as defined in the Regulatory

Flexibility Act.

Under the provisions of the Agricultural Marketing Act of 1946 (7

U.S.C. 1621 et seq.), rice inspection services are provided upon

customer request and GIPSA must recover from the customer the cost of

providing such services. GIPSA will recover the January 1, 1999,

average 3.6 percent increase in Federal salary costs by raising its

rice service fee. The increase will affect only that portion of the

fees associated with the hourly salaries paid to Federal employees and

administrative personnel; overhead costs are not included in this

increase.

GIPSA cannot absorb the approximate 3.6 percent increase in salary

costs with the existing deficit in retained earnings. In fiscal year

1998, GIPSA's obligations were $3,820,820 with revenue of $4,011,446,

resulting in a positive margin of $190,626 and retained earnings of

negative $895,584.

The increase in fees will not have a significant impact on either

small or large entities. GIPSA estimates that the increased fee charged

to its 550 customers will provide an annual increase of $155,356 in

revenue (assuming fiscal year 1998 volume equivalents).

Information Collection and Record Keeping Requirements

In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C.

Chapter 35), the information collection and record keeping requirements

concerning applications for official inspection services including rice

inspections have been previously approved by the Office of Management

and Budget under control number 0580-0013.

Background

On November 25, 1998, GIPSA published in the Federal Register (63

FR 65134) a proposal to increase certain fees for Federal rice

inspection services performed under the Agricultural Marketing Act of

1946.

The rice inspection fees were last amended on July 3, 1996 (61 FR

34714), with a tri-level fee increase with effective dates of August 2,

1996, January 1, 1997, and January 1, 1998. These fees were to cover,

as nearly as practicable, the projected operating costs, including

related supervisory and administrative costs and to maintain an

operating reserve for Federal rice inspection services. They presently

appear at 7 CFR 868.91 in Tables 1 and 2. Currently, the regular

workday contract and noncontract fees are $40.20 and $48.90,

respectively, while the nonregular workday contract and noncontract

fees are $56.00 and $67.90, respectively. The unit rate per

hundredweight for export port services is currently $ .048/cwt. and the

unit rate for total oil and free fatty acid tests is currently $39.80.

These unit rates are also being changed.

The increase affects only that portion of the fees associated with

hourly salaries paid to Federal employees and administrative personnel;

overhead recovery is not included. The fee increase generates

additional revenue required to recover operational costs created by the

January 1999 cost-of-living increase to Federal salaries. The average

salary increase for GIPSA employees in calendar year 1999 is projected

at approximately 3.6 percent. This action is being taken to ensure that

the service fees charged by GIPSA generate adequate revenue to cover

the additional cost created by the January 1999 Federal salary

increase.

The hourly fees covered by this rule generate revenue to cover the

basic

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salary, benefits, and leave for those employees providing direct

service delivery and administrative salaries and benefits, as well as

contributing to overall overhead cost recovery. GIPSA has also

identified that part of the hourly rate that is directly attributable

to salaries and benefits and certain unit fees for services not

performed at an applicant's facility that contain labor costs. This

rule increases those hourly rates and unit fees based on an approximate

3.6 percent increase to the labor cost of each hourly rate and unit.

The amount of revenue collected under this rule will be a direct

result of the work volume. GIPSA estimates an annual increase of

$155,356 in revenue (assuming fiscal year 1998 volume equivalents). If

GIPSA foregoes this adjustment, GIPSA will incur a net loss equivalent

to the approximate 3.6 percent Federal salary increase for every hour

worked by an employee providing direct service delivery and

administrative personnel.

In fiscal year 1998, GIPSA's obligations were $3,820,820 with

revenue of $4,011,446, resulting in a positive margin of $190,626 and

retained earnings of negative $895,584. GIPSA cannot afford to absorb a

$155,356 loss due to the approximate 3.6 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 one comment during the 60-day comment period. The

commenter, a grain trade association representing grain, feed, and

processing companies, opposed the fee increase, stating that the agency

is simply passing on increased costs to users of the rice inspection

program without first relying on cost saving measures and improved

efficiencies to offset the anticipated increase in salaries for Federal

employees. The comment went on to say that the agency should look at

current activities to determine where programs can be streamlined,

staffing can be reduced or be made more efficient, and services can be

automated as the primary method to control costs and re-build the 3-

month operating reserve in the trust fund account.

GIPSA is required by the AMA to recover its costs for providing

rice inspection services by establishing reasonable fees to cover their

estimated costs. The 3.6 percent increase is consistent with the

provisions of the AMA concerning the establishment of fees. Absorbing

the average 3.6 percent salary increase is impractical considering the

extremely low retained earnings of negative $895,584. Further, GIPSA

has conducted numerous cost saving measures in the past few years,

early retirements, field office consolidations, and reduction in travel

and training. GIPSA will continue to monitor its costs to improve

operating efficiencies and adopt cost saving measures, where possible

and practicable.

Final Action

Section 203 of the AMA (7 U.S.C. 1622) provides for the

establishment and collection of fees that are reasonable and, as nearly

as practicable, cover the costs of the services rendered. These fees

cover the GIPSA costs, including administrative and supervisory costs,

for the performance of official services, including personnel

compensation, personnel benefits, travel, rent, communications,

utilities, contractual services, supplies, and equipment.

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) Given the current level of the

operating reserve, the fee increase should be implemented as soon as

possible, and (2) the effective date coincides with the beginning of a

billing cycle.

In Section 868.91, Tables 1 and 2 are revised to provide for the

increases in rice inspection fees.

List of Subjects in 7 CFR Part 868

Administrative practice and procedure, Agricultural commodities.

For reasons set out in the preamble, 7 CFR Part 868 is amended as

follows:

PART 868 --GENERAL REGULATIONS AND STANDARDS FOR CERTAIN

AGRICULTURAL COMMODITIES

1. The authority citation for part 868 continues to read as

follows:

Authority: Secs. 202-208, 60 Stat. 1087, as amended (7 U.S.C.

1621 et seq.).

2. Section 868.91 is revised to read as follows:

Sec. 868.91 Fees for certain Federal rice inspection services.

The fees shown in Tables 1 and 2 apply to Federal Rice Inspection

Services.

Table 1.--Hourly Rates/Unit Rate Per CWT

[Fees for Federal Rice Inspection Services]

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Regular Nonregular

workday workday

Service \1\ (Monday- (Sunday-

Saturday) holiday)

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Contract (per hour per Service

representative)........................ $40.80 $56.80

Noncontract (per hour per Service

representative) \2\.................... 50.00 69.00

Export Port Services \2\................ 0.05 0.05

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\1\ Original and appeal inspection services include: Sampling, grading,

weighing, and other services requested by the applicant when performed

at the applicant's facility.

\2\ Services performed at export port locations on lots at rest.

TABLE 2.--Unit Rates

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Brown rice for

Service 1,3 Rough rice processing Milled rice

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Inspection for quality (per lot, sublot, or sample inspection).. $32.90 $28.40 $20.20

Factor analysis for any single factor (per factor):

(a) Milling yield (per sample).............................. 25.50 25.50

(b) All other factors (per factor).......................... 12.10 12.10 12.10

Total oil and free fatty acid interpretive line samples: \2\.... 40.00 40.00

(a) Milling degree (per set)................................ 85.10

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(b) Parboiled light (per sample)............................ 21.30

Extra copies of certificates (per copy)..................... 3.00 3.00 3.00

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\1\ Fees apply to determinations (original or appeals) for kind, class, grade, factor analysis, equal to type,

milling yield, or any other quality designation as defined in the U.S. Standards for Rice or applicable

instructions, whether performed singly or combined at other than at the applicant's facility.

\2\ Interpretive line samples may be purchased from the U.S. Department of Agriculture, GIPSA, FGIS, Technical

Services Division, 10383 North Executive Hills Boulevard, Kansas City, Missouri 68030. Interpretive line

samples also are available for examination at selected FGIS field offices. A list of field offices may be

obtained from the Director, Field Management Division, USDA, GIPSA, FGIS, 1400 Independence Avenue, SW, STOP

3630, Washington, DC 20250-3630. The interpretive line samples illustrate the lower limit for milling degrees

only and the color limit for the factor ``Parboiled Light'' rice.

\3\ Fees for other services not referenced in Table 2 will be based on the noncontract hourly rate listed in

Section 868.90, Table 1.

James R. Baker,

Administrator.

[FR Doc. 99-3338 Filed 2-11-99; 8:45 am]

BILLING CODE 3410-EN-P