Fees Assessed by the Service, 50149-50151 [05-16952]

Agencies

• DEPARTMENT OF AGRICULTURE
• Grain Inspection, Packers and Stockyards Administration

[Federal Register Volume 70, Number 165 (Friday, August 26, 2005)]
[Rules and Regulations]
[Pages 50149-50151]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-16952]


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DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

7 CFR Part 800

RIN 0580-AA88


Fees Assessed by the Service

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

ACTION: Final rule.

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SUMMARY: The Federal Grain Inspection Service (FGIS), of the Grain 
Inspection, Packers and Stockyards Administration (GIPSA), is amending 
the regulation regarding fees assessed to delegated States and 
designated official agencies, hereafter known as official agencies, 
authorized by GIPSA to provide official inspection and weighing 
services to the U.S. grain industry. The fee adjustment is necessary to 
collect sufficient revenue to cover the current and future cost of 
supervising the performance of the official agencies.
    Current supervision fees are charged to official agencies on a unit 
basis and represent an average rate of approximately 0.8 cent per 
metric ton of grain inspected or weighed by the official agencies. The 
final supervision fee increases the rate to a 1.1 cents per metric ton 
charge. Official agencies include the cost of GIPSA's supervision fee 
as part of the fee they charge their customers for grain services. The 
current average cost for services provided by official agencies is 21 
cents per metric ton. Increasing the supervision fee by approximately 
0.3 cent per metric ton will minimally increase the total cost of 
inspection and weighing services to the grain industry.

DATES: Effective October 1, 2005.

FOR FURTHER INFORMATION CONTACT: David Orr, Director, Field Management 
Division, telephone (202) 720-0228 at USDA, GIPSA, Room 2409, 1400 
Independence Avenue, SW., Washington, DC 20250-3630; Fax Number (202) 
720-1015; E-mail address David.M.Orr@usda.gov.

SUPPLEMENTARY INFORMATION:

Background

    The United States Grain Standards Act (USGSA) (7 U.S.C. 71 et seq.) 
authorizes GIPSA to supervise grain inspection and weighing services 
provided by official agencies and to charge and collect reasonable fees 
to cover the cost of such supervision. These fees are charged by 
official agencies to their customers (grain industry) as part of the 
overall fee charged for inspection and weighing services. Supervision 
fees collected by GIPSA cover, as nearly as practicable, the program 
and administrative costs of supervising official agencies. The current 
supervision fees were published in the Federal Register on May 13, 2004 
(69 FR 26476), and became effective June 14, 2004. This action adjusted 
only the supervision fee charged to delegated States for the inspection 
and weighing of export grain shipments. All other supervision fees 
remained unchanged. The fee for export grain shipments was changed from 
a unit fee of $49.20 per inspection to 1.6 cents per metric ton.
    The fees unchanged by the June 14, 2004, action were last amended 
in September 23, 1985, as published in the Federal Register (50 FR 
38503) and became effective on October 1, 1985. At that time, 
supervision fees were lowered an average 40 percent due to the 
accumulation of a $4.5 million reserve in retained earnings. The fee 
rates established on October 1, 1985, were set at a level so that the 
program operated at a net loss in order to reduce the operating 
reserves on a planned gradual basis. During the 19 year span from 1985 
to 2004, GIPSA has gradually reduced the retained earnings in this 
program and has reached a point where an adjustment is needed to cover 
current and future program costs. In FY 2004, the official agency 
supervision program operating costs totaled $2,606,826, while revenue 
amounted to $1,527,713, a negative margin of $1,079,113. The retained 
earnings balance was $867,191 at the end of FY 2004. GIPSA projects the 
official agency supervision program deficit to continue at a comparable 
rate, and estimates that at the end of FY 2006, the program's retained 
earnings will be negative $1.1 million.

[[Page 50150]]

    GIPSA regularly reviews its user-fee-financed programs under the 
USGSA (7 U.S.C. 71 et seq.) to determine if the fees are adequate. 
GIPSA recognizes the need to reduce inspection and weighing supervision 
costs as much as possible before increasing fees and therefore has 
taken action through the years to minimize costs. GIPSA plans to reduce 
costs by initiating a transition to a central monitoring program. This 
action, scheduled for implementation in FY 2008, should reduce overall 
operating expenses an estimated $1.2 million or 43 percent. 
Implementing the central monitoring process, coupled with a new 
supervision fee, will assist GIPSA in reaching an adequate 3-month 
retained earnings balance.
    GIPSA completed a review of the official agency inspection and 
weighing programs and determined it was necessary to propose a change 
in the manner in which it collects user fees and to increase fees in 
order to recover the retained earnings to their desired 3-month level. 
On March 21, 2005, GIPSA proposed in the Federal Register (70 FR 13411) 
to amend the fees to recover the costs associated with administering 
the official agency supervision program. This action would maintain 
GIPSA's financial stability to assure continued inspection and weighing 
services to the grain industry, which will further facilitate the sound 
and orderly marketing of grain in domestic and export markets.
    The current supervision fee is assessed on a unit or carrier basis 
and does not necessarily reflect the amount of grain inspected and 
weighed. GIPSA believes assessing supervision fees proportionate to the 
weight of grain inspected and/or weighed is a reasonable approach. This 
process was implemented for the supervision of export grain inspected 
and weighed by Delegated States in the changes effective June 14, 2004 
(69 FR 26476). Therefore, GIPSA proposed charging all supervision fees 
based on a per metric ton basis.
    In FY 2004, customers of official agencies, the grain industry, 
paid an estimated $39 million or 21 cents per metric ton for official 
inspection and weighing services on an estimated 187 million metric 
tons of grain. Of the $39 million paid for services, $1,527,713 (3.92 
percent or 0.82 cents per metric ton) represented GIPSA collected 
supervision fees. GIPSA's actual program costs for FY 2004 were 
$2,606,826 or 1.39 cents per metric ton which resulted in a net loss of 
approximately 0.57 cents per metric ton.
    To minimize the impact of a fee increase, GIPSA proposed 
supervision fee rates that would collect sufficient revenue over time 
to cover operating expenses, while striving to create a 3-month 
operating reserve by FY 2014. The cost of living projections used in 
calculating future salary, benefits, and all other non-salary expenses 
out to FY 2014 were supplied by the Office of Management and Budget 
(OMB) as set forth in their Federal Register publication (69 FR 26900) 
on May 14, 2004. In projecting revenue to FY 2014, GIPSA used a 5 year 
average of the total tons inspected and/or weighed by official 
agencies. GIPSA will evaluate the financial status of the supervision 
of the grain inspection and weighing program on a continuous basis to 
determine if it is meeting the goal of obtaining a 3-month operating 
reserve by FY 2014, and to determine if other adjustments are 
necessary.
    GIPSA proposed to gradually replenish the reserve rather than 
sharply increase supervision fees in the short term to immediately 
replenish the retained earnings. GIPSA proposed a change in the 
supervision fees and a change in the methodology for assessing 
supervision fees to official agencies. Section 800.71 of the 
regulations provides that the fees shown in Schedule C apply to 
official inspection and weighing services performed by delegated States 
and designated agencies in the United States, except for those State 
agencies that are delegated additional responsibilities by GIPSA. These 
States are assessed annual charges as noted in the State's Delegation 
of Authority document. GIPSA has a long-standing agreement with the 
State of Washington whereby the State pays GIPSA for direct local costs 
along with their portion of the national administrative costs. The 
financial data and information used to develop the fees for Schedule C 
did not include the costs and tonnage associated with the State of 
Washington since the State is charged for their direct local costs and 
their share of the national administrative costs as established by the 
agreement.
    GIPSA projected that the new fees should be implemented no later 
than FY 2007 and projected costs to FY 2014 to develop the new fees for 
Schedule C. GIPSA projections are based on an average total inspection 
and weighing tonnage of 170 million metric tons per year.
    GIPSA determined that if the new fees are implemented by FY 2007 
and the goal is to replenish the retained earnings and 3-month 
operating reserve by FY 2014, then GIPSA will need to collect 
approximately $1.9 million per year from FY 2007 through FY 2014 to 
achieve this goal. GIPSA concluded that a 1.1 cents per metric ton fee 
would generate approximately $1.9 million per year based on an average 
annual service volume of 170 million metric tons. This new fee would 
generate sufficient funds to rebuild the retained earnings to its 
desired 3-month level by FY 2014. GIPSA will continue to monitor and 
evaluate the program to ensure the goal is achieved.
    GIPSA also proposed to change the method to assess supervision fees 
to the official agencies. GIPSA has historically charged supervision 
fees based on the type of carrier serviced and further charged 
supervision fees based on the kinds and levels of services received. 
GIPSA proposed to charge the 1.1 cents per metric ton supervision fees 
based on the total tonnage of grain officially inspected and/or weighed 
by official agencies. GIPSA proposed to utilize a standard metric ton 
conversion rate for submitted samples and specific carriers serviced in 
order to calculate and assess the supervision fees to the official 
agencies. The following table illustrates the standard metric ton 
conversion rate that GIPSA will use to assess the total tons serviced 
by the official agencies.

------------------------------------------------------------------------
                                                              Estimated
                      Carrier/service                        metric tons
------------------------------------------------------------------------
Truck......................................................        19.39
Submitted Sample...........................................        19.39
Container..................................................        20.04
Railcar....................................................       103.42
Midwest Barge..............................................     1,292.74
Pacific Northwest Barge....................................     2,267.96
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    GIPSA determined that ships will be assessed the 1.1 cents per 
metric ton supervision fee based on the actual certified weight for the 
ship.
    The change in supervision fees would increase the average current 
fee rate by approximately 0.3 cent per metric ton. This additional 
increase should minimally affect the amount an applicant (grain 
industry) pays for service.

Comment Review

    GIPSA received comments in response to the proposed rulemaking 
published March 21, 2005, in the Federal Register (70 FR 13411). One 
comment indicated that GIPSA should streamline its operations and 
reduce staff before imposing a fee increase. As discussed earlier in 
this document, GIPSA recognizes the need to reduce inspection and 
weighing costs as much as possible before increasing fees and has taken 
action through the years to minimize costs. However, the fee adjustment 
is necessary to collect sufficient revenue to cover the current

[[Page 50151]]

and future costs of supervising the performance of official agencies. A 
second response did not respond to the proposed action. Consequently, 
GIPSA is implementing the fee changes as they were proposed.

Executive Orders 12866 and 12988

    This rule has been determined to be non-significant for the 
purposes of Executive Order 12866 and therefore has not been reviewed 
by the OMB. This 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 rule 
will not preempt any State or local laws, regulations, or policies 
unless they present irreconcilable conflict with this rule. There are 
no administrative procedures that must be exhausted prior to any 
judicial challenge to the provisions of this rule.

Paperwork Reduction Act and Government Paperwork Elimination Act

    In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection and recordkeeping requirements 
included in this rule has been approved by the OMB under control number 
0580-0013.
    GIPSA is committed to compliance with the Government Paperwork 
Elimination Act, which requires Government agencies, in general, to 
provide the public the option of submitting information or transacting 
business electronically to the maximum extent possible.

Regulatory Flexibility Act Certification

    GIPSA has determined that this rule does 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.), because the 
majority of applicants (grain industry) that apply for these official 
services, and are subjected to GIPSA supervision fees, do not meet the 
requirements for small entities. This rule will affect entities engaged 
in shipping grain to and from points within the United States and 
exporting grain from the United States. GIPSA estimates there are 
approximately 9,500 off-farm storage facilities and 18 export elevators 
in the United States that could receive services from delegated States 
or designated agencies. Official services are available from 7 
delegated States and 49 designated agencies. For clarification, any and 
all grain that is exported from the U.S. export port locations must, as 
required by the USGSA, be inspected and/or weighed. These services are 
either performed by GIPSA or delegated States. Further, some grain 
exported from interior locations may also require inspection and/or 
weighing services unless the services are waived as provided in section 
800.18 of the regulations. These services are provided by designated 
agencies. The USGSA does not require inspection or weighing services 
for grain marketed within the U.S. Consequently, these services are 
permissive and may be performed by official agencies. The USGSA (7 
U.S.C. 71 et seq.) authorizes GIPSA to provide supervision of official 
grain inspection and weighing services, and to charge and collect 
reasonable fees for performing these services. The fees collected are 
to cover, as nearly as practicable, GIPSA's costs for performing these 
services, including related administrative and supervisory costs.
    GIPSA realizes that any increase in supervision fees will be 
charged by official agencies to the users (grain industry) of the 
official grain inspection and weighing system.
    Although, the overall effect of this rule will be passed on to the 
users of official grain inspection and weighing services, mostly large 
corporations, David R. Shipman, Acting Administrator, GIPSA, has 
determined that this rule will not have a significant impact on a 
substantial number of small entities as defined in the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.).

List of Subjects in 7 CFR Part 800

    Administrative practice and procedure; Grain.


0
For the reasons set out in the preamble, 7 CFR part 800 is amended as 
follows:

PART 800--GENERAL REGULATIONS

0
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.)


0
2. In Sec.  800.71, paragraph(a), Schedule C is amended by removing 
Tables 1 and 2 and adding introductory text in their place to read as 
follows:


Sec.  800.71  Fees assesses by the Service.

    (a) * * *

SCHEDULE C--FEES FOR FGIS SUPERVISION OF OFFICIAL INSPECTION AND 
WEIGHING SERVICES PERFORMED BY DELEGATED STATES AND/OR DESIGNATED 
AGENCIES IN THE UNITED STATES.

    The supervision fee is charged at $0.011 per metric ton inspected 
and/or weighed.
* * * * *

David R. Shipman,
Acting Administrator, Grain Inspection, Packers and Stockyards 
Administration.
[FR Doc. 05-16952 Filed 8-25-05; 8:45 am]
BILLING CODE 3410-EN-P