Fees for Rice Inspection Services and Removal of Specific Fee References, 45439-45443 [2019-18602]

Download as PDF 45439 Proposed Rules Federal Register Vol. 84, No. 168 Thursday, August 29, 2019 This section of the FEDERAL REGISTER contains notices to the public of the proposed issuance of rules and regulations. The purpose of these notices is to give interested persons an opportunity to participate in the rule making prior to the adoption of the final rules. DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 868 [Doc. No. AMS–FGIS–18–0088] RIN 0581–AD85 Fees for Rice Inspection Services and Removal of Specific Fee References Agricultural Marketing Service, USDA. ACTION: Proposed rule. AGENCY: The Agricultural Marketing Service (AMS) invites comments on a proposal to reduce the fees for the sampling, inspection, weighing, and certification of rice performed under authority of the Agricultural Marketing Act of 1946 (AMA), as amended. Under the proposal, fees would decrease by 20 percent for fiscal year (FY) 2020 and by another 20 percent for FY 2021. The proposed changes are necessary to lower the balance in the program’s operating reserve to a level adequate to cover three to six months’ expenses. AMS is also proposing to adopt standardized AMS user-fee calculations used in other AMS programs for rice inspection services beginning in FY 2022. SUMMARY: Comments must be received on or before September 30, 2019. ADDRESSES: Interested persons are invited to submit written comments concerning this proposed rule. All comments must be submitted through the Federal e-rulemaking portal at https://www.regulations.gov and should reference the document number and the date and page number of this issue of the Federal Register. All comments submitted in response to this proposed rule will be included in the record and will be made available to the public. Please be advised that the identity of the individuals or entities submitting comments will be made public on the internet at the address provided above. FOR FURTHER INFORMATION CONTACT: Denise Ruggles, FGIS Executive Program Analyst, AMS, USDA; Telephone: (816) 659–8406; Email: Denise.M.Ruggles@ usda.gov. SUPPLEMENTARY INFORMATION: The AMA (7 U.S.C. 1621–1638) authorizes the Federal Grain Inspection Service (FGIS) to provide official inspection and weighing services—on a user-fee basis— for rice (7 U.S.C. 1622(h)). FGIS, formerly part of the Grain Inspection and Packers and Stockyards Administration (GIPSA), is now part of AMS, due to a recent merger of the two agencies. Section 203(h) of the AMA provides for the assessment and collection of reasonable fees from the users of the services to cover, as nearly as practicable, the costs of the services rendered. The fees reflect direct and indirect costs of providing services. Direct costs include employee salaries and benefits and certain operating DATES: expenses, such as travel. Indirect overhead costs include expenses related to FGIS and AMS activities supporting the services provided to the industry, including administrative and supervisory expenses, rent, communication, utilities, contractual services, supplies, and equipment. The formula used to calculate the fee rates also includes the cost of building and maintaining an operating reserve, as required by AMS. Reserves are held to meet financial obligations in case of program closure or other unexpected events. The fees for rice inspection services were last revised in 2007 (72 FR 1931). The fee schedule at 7 CFR 868.91 provides for fee increases at set intervals, the most recent taking effect in October 2010 for the 2011 fiscal year and beyond. Although fees have not increased since then, the current fee structure has generated a recurring annual operating surplus for several years, resulting in an estimated reserve balance at the end of FY 2019 that would cover 21 months of rice inspection program expenses, exceeding AMS’s target of maintaining funds to cover 3 to 6 months’ expenses. Estimated monthly costs to operate the rice inspection program in FY 2019 are $457,000. Thus, AMS would consider an operating reserve of between $1.37 million and $2.74 million (3 and 6 times the monthly operating cost, respectively) at the end of FY 2019 to be appropriate. Financial data for the rice inspection program for fiscal years 2015 through 2019 is reviewed in Table 1. TABLE 1— RICE PROGRAM FINANCIAL ANALYSIS [Millions of dollars] * FY 15 khammond on DSKBBV9HB2PROD with PROPOSALS Revenue ............................................................................... Obligations ........................................................................... Annual Surplus or (Deficit) ................................................... Operating Reserve—running balance ................................. FY 16 $6.93 5.13 1.80 8.45 FY 17 $5.79 5.36 0.43 8.88 $5.84 5.44 0.40 9.28 FY 18 $5.50 5.39 0.11 9.38 FY 19 ** $5.49 5.48 0.01 9.39 * Figures may not sum due to rounding and adjustments of prior year obligations. ** FY 2019 values are projections. As illustrated by Table 1, even though revenues have generally declined due to varying requests for service and increased efficiencies, and obligations have generally increased over the last five years due to inflation and costs of VerDate Sep<11>2014 15:50 Aug 28, 2019 Jkt 247001 living adjustments, year-after-year surpluses have continued to increase. The result is an operating reserve running balance exceeding the range AMS deems appropriate. PO 00000 Frm 00001 Fmt 4702 Sfmt 4702 AMS proposes to address the surplus by reducing fees for rice inspection services by 20 percent across the board for FY 2020 and by another 20 percent for FY 2021. AMS expects that reducing fees in the proposed manner would E:\FR\FM\29AUP1.SGM 29AUP1 45440 Federal Register / Vol. 84, No. 168 / Thursday, August 29, 2019 / Proposed Rules gradually reduce the balance in the reserve fund while also allowing FGIS to continue making strategic operational expenditures to meet industry expectations and achieve United States Department of Agriculture (USDA) goals. The rates proposed in this rule are for Federal inspection services only. Third- party inspection service providers establish their rates independently. Proposed fees for fiscal years 2020 and 2021 are shown in Tables 2 and 3 below: TABLE 2—HOURLY RATES/UNIT RATE PER CWT Regular workday (Monday–Saturday) Service 1 FY 2020: Contract (per hour per Service representative) ....................................................................... Noncontract (per hour per Service representative) .................................................................. Nonregular workday (Sunday and holiday) $49.40 60.20 Export Port Services (per hundredweight) 2 ............................................................................. $68.50 82.90 0.059 FY 2021: Contract (per hour per Service representative) ....................................................................... Noncontract (per hour per Service representative) .................................................................. 39.50 48.20 Export Port Services (per hundredweight) 2 ............................................................................. 54.80 66.30 0.047 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 3—UNIT RATES SERVICE 3 FY 2020 Inspection for quality (per lot, sublot, or sample inspection): (a) Rough rice ........................................................................................................................... (b) Brown rice for processing ................................................................................................... (c) Milled rice ............................................................................................................................ Factor analysis for any single factor (per factor): (a) Milling yield (per sample) (Rough or Brown rice) ............................................................... (b) All other factors (per factor) (all rice) .................................................................................. Total free and fatty acid ................................................................................................................... Stowage Examination (service-on-request): (a) Ship (per stowage space) (minimum 5 spaces per ship) ................................................... (b) Subsequent ship examination (same as original) (minimum 3 spaces per ship) .............. (c) Barge (per examination) ..................................................................................................... (d) All other carriers (per examination) .................................................................................... FY 2021 $37.80 32.50 23.40 $30.20 26.00 18.70 29.30 14.10 45.80 23.40 11.30 36.60 40.40 40.40 32.40 12.40 32.30 32.30 25.90 9.90 khammond on DSKBBV9HB2PROD with PROPOSALS 3 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 in combination at other than the applicant’s facility. For FY 2022 and beyond, AMS proposes to determine rice inspection service fees by adopting the standardized formulas AMS has established for calculating user fees for Cotton, Dairy, Fruits and Vegetables, Meat and Livestock, Poultry, Science and Technology, and Tobacco. Established in 2014 (79 FR 67313), the standardized method enables AMS to use current information about resource needs and projected costs of providing services to update rates for services on an annual basis, thus better avoiding unexpected financial shortfalls or unintended reserve surpluses. AMS announces the fees pertaining to all the AMS inspection-related services for the coming year annually through a notice in the Federal Register by the preceding June 1. AMS posts the fees on the Agency’s website for customer reference during the year. AMS believes that this proposed action for rice would help VerDate Sep<11>2014 15:50 Aug 28, 2019 Jkt 247001 FGIS adjust the rice inspection reserve account as necessary and provide its customers with information they need for planning purposes. Once the reserve balance has reached an appropriate level, AMS anticipates that the standardized formula for fee rates will appropriately account for increases in the actual costs of providing inspection services. Currently, 7 CFR 868.91—Fees for certain Federal rice inspection services—provides the fees for rice inspections. Section 868.91 lists the fees in two tables: Hourly rates or per unit rates per hundredweight for contract and noncontract services, and unit rates for inspecting, analyzing, or providing other related services. The tables give annual rates effective in 2007, 2008, 2009, and 2010. The current rates have not been adjusted since October 1, 2010. AMS proposes to remove the two tables from § 868.91 for FY 2020. AMS PO 00000 Frm 00002 Fmt 4702 Sfmt 4702 proposes to publish instead reduced fees—as described in Tables 2 and Table 3 above—on the AMS website for FY 2020 and FY 2021. For FY 2022 and beyond, AMS proposes to add a new § 868.91(b) specifying the formulas for calculating rice inspection fees on an annual basis. As with other programs, AMS would perform financial analyses each year to determine whether the current fees are adequate to recover the costs incurred by providing rice inspection services. AMS would use historical or prior year cost and workload data, along with applicable projections to generate estimates of future obligations and revenues. On the bases of these analyses and formulas, AMS would determine the rates necessary to sustain rice inspection program services. Using the formulas to calculate the fees, and reviewing the fees on an annual basis, would more accurately reflect the actual E:\FR\FM\29AUP1.SGM 29AUP1 Federal Register / Vol. 84, No. 168 / Thursday, August 29, 2019 / Proposed Rules khammond on DSKBBV9HB2PROD with PROPOSALS cost of providing inspection services each year and would provide greater transparency and predictability to the rice industry. AMS would publish the fees for each upcoming fiscal year in the annual AMS user-fee notice in the Federal Register by the preceding June 1. The yearly notice would include both the per-hour rates and the per-unit rates. Updated fees schedules would no longer appear in the Code of Federal Regulations but would be available on the AMS website. Calculations AMS proposes to base salary, hours, and most factors used in the proposed calculations on the prior year’s actual costs, workload data, projection of expenses impacting program costs, cost of living increase, and inflation. AMS would base cost of living increase and inflation factors on the most recent economic data released by the Office of Management and Budget (OMB) for budget development purposes. AMS would round the final rates up to make the amounts divisible by the quarter hour (15 minutes). Under the proposed rate formulas, the minimum charge for services covered by the inspection fee rates would be for 15 minutes. As explained later in this document, the applicant requesting inspection service would be charged travel costs on an actual basis. AMS chose to propose these formulas for rice inspection fees so they would be consistent with the formulas used agency wide in other AMS programs. Currently, some rice inspection service fees are charged on a per hour basis, and some are charged on a per unit basis. AMS proposes to continue providing costs on both bases to maintain continuity. As well, AMS would provide the specific amounts used to calculate each year’s rates upon request. AMS proposes to add a new § 868.91(b)(1) to include the following formulas for calculating fee rates for FY 2022 and succeeding fiscal years. • The regular rate is the Service’s total grading, inspection, certification, classification, audit, or laboratory service program personnel direct pay divided by direct hours for the previous year, which is then multiplied by the next year’s percentage of cost of living increase, plus the benefits rate, plus the operating rate, plus the allowance for bad debt rate. • The overtime rate is the Service’s total grading, inspection, certification, classification, audit, or laboratory service program personnel direct pay divided by direct hours for the previous year, which is then multiplied by the VerDate Sep<11>2014 15:50 Aug 28, 2019 Jkt 247001 next year’s percentage of cost of living increase and then multiplied by 1.5, plus the benefits rate, plus the operating rate, plus the allowance for bad debt rate. • The holiday rate is the Service’s total grading, inspection, certification, classification, audit, or laboratory service program personnel direct pay divided by direct hours for the previous year, which is then multiplied by the next year’s percentage of cost of living increase and then multiplied by 2, plus the benefits rate, plus the operating rate, plus the allowance for bad debt rate. AMS further proposes to add a new § 868.91(b)(2) to include the following component formulas, which AMS would derive by using the previous year’s actual costs/historical costs. • The benefits rate is the Service’s total inspection program direct benefits costs divided by the total hours (regular, overtime, holiday) worked, which is then multiplied by the next year’s percentage of cost of living increase. Some examples of direct benefits are health insurance, retirement, life insurance, and Thrift Savings Plan (TSP) retirement basic and matching contributions. • The operating rate is the Service’s total inspection program operating costs divided by total hours (regular, overtime, and holiday) worked, which is then multiplied by the percentage of inflation. • The allowance for bad debt rate is the total allowance for bad debt, divided by total hours (regular, overtime, holiday) worked. Finally, AMS proposes to add a new § 868.91(b)(3), which would specify that AMS would use the most recently released OMB economic data to generate the cost of living and inflation factors used in the above formulas. Travel Expense One factor that may have contributed to the operating reserve buildup over time is the incorporation of an allowance for travel expenses in the current rice inspection fee rates that may not have reflected actual travel costs. AMS proposes to address this by specifying in the fee calculation formulas that travel expenses related to providing inspection services, such as commercial transportation costs, mileage, and per diem, would be based on actual travel costs incurred to perform the service. The fee rate calculations in proposed § 868.91(b) would specify that actual travel expenses for rice inspection services may be added to the cost of providing the service, consistent with current practice under most other AMS PO 00000 Frm 00003 Fmt 4702 Sfmt 4702 45441 programs. This change would be applicable to fee rates beginning in FY 2022. As a conforming change, AMS proposes to remove the language in § 868.92(a)(2)—Explanation of service fees and additional fees, which makes specific reference to the inclusion of travel expenses in the current rice inspection fee calculations, as that language would be obsolete. Delegation of Authority The Secretary of Agriculture delegated to the Under Secretary for Marketing and Regulatory Programs (MRP) authorities ‘‘related to grain inspection, packers and stockyards.’’ 7 CFR 2.22(a)(3)(i)–(vi). In 7 CFR 2.81, the Under Secretary for MRP further delegated these authorities to the Administrator of GIPSA. In a November 14, 2017, Secretary’s Memorandum, the Secretary directed that the authorities at 7 CFR 2.81 be re-delegated to the Administrator of AMS, and that the delegations to the Administrator of GIPSA be revoked. The delegations to the Under Secretary of MRP related to grain inspection, packers, and stockyards at 7 CFR 2.22(a)(3) remain unchanged. The AMS Administrator has authority to administer former GIPSA programs but does not currently have authority to revise the Code of Federal Regulations sections that pertain to grain inspections. MRP will address the transfer of such authority in a separate rulemaking. AMS expects to change the meaning of certain terms in § 868.1, such as ‘‘Administrator’’ and ‘‘Service,’’ to reflect the change in management from GIPSA to AMS at that time. Executive Orders 12866, 13563, and 13771 Executive Orders 12866—Regulatory Planning and Review, and 13563— Improving Regulation and Regulatory Review, direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits of reducing costs, harmonizing rules, and promoting flexibility. This proposed rule does not meet the criteria of a significant regulatory action under Executive Order 12866 as supplemented by Executive Order 13563. Therefore, OMB has not reviewed this rule under those Orders. Additionally, because this E:\FR\FM\29AUP1.SGM 29AUP1 45442 Federal Register / Vol. 84, No. 168 / Thursday, August 29, 2019 / Proposed Rules proposed rule does not meet the definition of a significant regulatory action under Executive Order 12866, it does not trigger the requirements contained in Executive Order 13771. See OMB’s memorandum titled ‘‘Interim Guidance Implementing Section 2 of the E.O. of January 30, 2017, titled ‘Reducing Regulation and Controlling Regulatory Costs’ ’’ (February 2, 2017). AMS considered several alternatives to the changes in this proposed rule, including making larger decreases to the FY 2020 and FY 2021 rates to bring the reserve balance down more quickly or making a larger fee rate decrease for FY 2020 only. Ultimately, AMS determined that the proposed approach of making smaller—but still significant— reductions two years in a row before transitioning to the standardized fee calculations would be the alternative least disruptive to the industry while moving toward desirable reserve levels. AMS expects the proposed changes to benefit the rice industry by reducing rates by 20% for each of the next two years and then adjusting rates as needed annually thereafter to reflect actual expenses related to rice inspections. Under the proposed rule, rice inspection service users would likely enjoy further savings since most inspection sites are near FGIS field offices and charges for travel would be based on actual expenses rather than the standard flat amount incorporated into the current fee rates. AMS does not expect the proposed rule to provide any environmental, public health, or safety benefits. AMS has not identified any costs related to this proposed action. khammond on DSKBBV9HB2PROD with PROPOSALS Executive Order 12988 This proposed rule has been reviewed under Executive Order 12988—Civil Justice Reform. This rule is not intended to have retroactive effect. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule. No administrative proceedings would be required before parties could file suit in court challenging the provisions of this rule. Congressional Review Act Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), the Office of Information and Regulatory Affairs designated this rule as not a major rule, as defined by 5 U.S.C. 804(2). Regulatory Flexibility Analysis Pursuant to the requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601–602), AMS has considered the economic impact of this proposed action on small entities. The purpose of VerDate Sep<11>2014 15:50 Aug 28, 2019 Jkt 247001 the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. There are approximately 169 applicants who receive rice inspection services. AMS estimates 42 percent of these users would be considered small businesses based on criteria established by the Small Business Administration (13 CFR 121.201) to differentiate between large and small business entities. SBA uses the North American Industry Classification System (NAICS) to categorize various industry businesses. SBA defines small rice farmers, NAICS code 111160, as those whose annual receipts do not exceed $750,000 and small rice millers, NAICS code 311212, as those with no more than 500 employees. When the current rice inspection fees were set in 2007, an 18 percent increase was implemented to cover program deficits caused by increases in employee salaries and benefits, the replacement of aging rice inspection equipment, and upgrading the information technology system used to generate certificates. The increase also was intended to create the operating reserve. However, as explained earlier in this document, revenues have continued to exceed expenditures, indicating that an adjustment to the fee schedule is now warranted. In addition, travel expenses were built into the hourly and unit fees currently charged by the program, resulting in higher than necessary revenues to cover the actual service provided. Proposed changes to the fees would reduce the cost of rice inspections by 20 percent for all services in FY 2020 across the board, regardless of the business entity’s size, for a projected savings of approximately $1.17 million to the industry. A further 20 percent reduction as proposed for FY 2021 would net approximately $2.13 million in savings to the industry. All entities using rice inspection services, large and small, would be expected to benefit from reduced expenses for these services. Savings would be proportionate to the number of inspection services an entity requests each year. Proposed adoption of standardized AMS user-fee rate calculations for FY 2022 and beyond would benefit all inspection applicants, regardless of size, as fees would more closely reflect the current cost of inspections, and the fee calculation process would be more transparent. Through its annual review, AMS would be able to monitor the financial status of the rice inspection program to PO 00000 Frm 00004 Fmt 4702 Sfmt 4702 determine whether further adjustments are necessary. AMS has determined this proposed rule would not have a significant economic impact on a substantial number of entities as defined under the RFA because fewer than half the applicants for rice inspection services meet the definition of small entities. Further, rice inspection and weighing services are provided upon request, and rice industry businesses are under no obligation to use these services. Finally, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule. Paperwork Reduction Act and EGovernment Act In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), the information collection and record keeping requirements of the rice inspection program have previously been approved by OMB under control number 0580–0013. No additional reporting, record keeping, or other compliance requirements would be imposed as a result of this proposed rule. AMS is committed to complying with the E-Government Act (44 U.S.C. 3601, et seq.), to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes. List of Subjects in 7 CFR Part 868 Administrative practice and procedure, Agricultural commodities. For the reasons set out in the preamble, AMS proposes to amend 7 CFR part 868 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: 7 U.S.C. 1621–1627. ■ 2. Revise § 868.91 to read as follows: § 868.91 Fees for certain Federal rice inspection services. The fees for services in paragraph (a) of this section apply to Federal inspection services. Starting with fiscal year 2022, calculations provided in paragraph (b) of this section will be used to determine annual fee rates. (a) Fees for services are published on the Service’s website. (b) For each fiscal year, starting with 2022, the Administrator will calculate the rates for services, issue a public notice, and publish fees on the Service’s E:\FR\FM\29AUP1.SGM 29AUP1 khammond on DSKBBV9HB2PROD with PROPOSALS Federal Register / Vol. 84, No. 168 / Thursday, August 29, 2019 / Proposed Rules website with an effective date of October 1 of each year. (1) For each year, the Administrator will calculate the rates for services, per hour per inspection program employee using the following formulas: (i) Regular rate. The Service’s total inspection program personnel direct pay divided by direct hours, which is then multiplied by the next year’s percentage of cost of living increase, plus the benefits rate, plus the operating rate, plus the allowance for bad debt rate. If applicable, actual travel expenses may also be added to the cost of providing the service. (ii) Overtime rate. The Service’s total inspection program personnel direct pay divided by direct hours, which is then multiplied by the next year’s percentage of cost of living increase and then multiplied by 1.5, plus the benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, actual travel expenses may also be added to the cost of providing the service. (iii) Holiday rate. The Service’s total inspection program personnel direct pay divided by direct hours, which is then multiplied by the next year’s percentage of cost of living increase and then multiplied by 2, plus the benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, actual travel expenses may also be added to the cost of providing the service. (2) For each year, based on previous year/historical actual costs, the Administrator will calculate the benefits, operating, and allowance for bad debt components of the regular, overtime, and holiday rates as follows: (i) Benefits rate. The Service’s total inspection program direct benefits costs divided by the total hours (regular, overtime, holiday) worked, which is then multiplied by the next year’s percentage of cost of living increase. Some examples of direct benefits are health insurance, retirement, life insurance, and Thrift Savings Plan (TSP) retirement basic and matching contributions. (ii) Operating rate. The Service’s total inspection program operating costs divided by total hours (regular, overtime, and holiday) worked, which is then multiplied by the percentage of inflation. (iii) Allowance for bad debt rate. Total allowance for bad debt, divided by total hours (regular, overtime, holiday) worked. (3) The Administrator will use the most recent economic factors released by the Office of Management and Budget for budget development VerDate Sep<11>2014 15:50 Aug 28, 2019 Jkt 247001 purposes to derive the cost of living expenses and percentage of inflation factors used in the formulas in this section. § 868.92 [Amended] 3. Amend § 868.92 by: a. Removing paragraph (a)(2) and redesignating paragraphs (a)(3) through (5) as paragraphs (a)(2) through (4), respectively. ■ b. In newly redesignated paragraph (a)(4), removing ‘‘§ 868.92(c)’’ and adding ‘‘paragraph (c) of this section’’ in its place. ■ ■ Dated: August 23, 2019. Greg Ibach, Under Secretary, Marketing and Regulatory Programs. [FR Doc. 2019–18602 Filed 8–28–19; 8:45 am] BILLING CODE 3410–02–P FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Part 327 RIN 3064–AF16 Assessments Federal Deposit Insurance Corporation (FDIC). ACTION: Notice of proposed rulemaking. AGENCY: The Federal Deposit Insurance Corporation (FDIC) invites public comment on a notice of proposed rulemaking that would amend the deposit insurance assessment regulations that govern the use of small bank assessment credits (small bank credits) and one-time assessment credits (OTACs) by certain insured depository institutions (IDIs). Under the proposal, once the FDIC begins to apply small bank credits to quarterly deposit insurance assessments, such credits would continue to be applied as long as the Deposit Insurance Fund (DIF) reserve ratio is at least 1.35 percent (instead of, as currently provided, 1.38 percent). In addition, after small bank credits have been applied for eight quarterly assessment periods, and as long as the reserve ratio is at least 1.35 percent, the FDIC would remit the full nominal value of any remaining small bank credits in lump-sum payments to each IDI holding such credits in the next assessment period in which the reserve ratio is at least 1.35 percent, and would simultaneously remit the full nominal value of any remaining OTACs in lumpsum payments to each IDI holding such credits. DATES: Comments must be received on or before September 30, 2019. SUMMARY: PO 00000 Frm 00005 Fmt 4702 Sfmt 4702 45443 You may submit comments, identified by RIN 3064–AF16, by any of the following methods: • Agency website: https:// www.fdic.gov/regulations/laws/federal/. Follow the instructions for submitting comments on the Agency website. • Email: Comments@FDIC.gov. Include RIN 3064–AF16 in the subject line of the message. • Mail: Robert E. Feldman, Executive Secretary, Attention: Comments, Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, DC 20429. • Hand Delivery/Courier: Guard station at the rear of the 550 17th Street Building (located on F Street) on business days between 7 a.m. and 5 p.m. (EDT). • Federal eRulemaking Portal: https:// www.regulations.gov. Follow the instructions for submitting comments. • Public Inspection: All comments received will be posted without change to https://www.fdic.gov/regulations/ laws/federal, including any personal information provided. Paper copies of public comments may be ordered from the FDIC Public Information Center, 3501 North Fairfax Drive, Room E–1002, Arlington, VA 22226, or by telephone at (877) 275–3342 or (703) 562–2200. FOR FURTHER INFORMATION CONTACT: Ashley Mihalik, Chief, Banking and Regulatory Policy Section, Division of Insurance and Research, (202) 898– 3793, amihalik@FDIC.gov; LaVaughn Henry, Policy Analyst, Banking and Regulatory Policy Section, Division of Insurance and Research, (202) 898– 6798, lahenry@FDIC.gov; Jithendar Kamuni, Manager, Assessment Operations Section, (703) 562–2568, jikamuni@FDIC.gov; Samuel B. Lutz, Counsel, Legal Division, (202) 898– 3773, salutz@FDIC.gov. SUPPLEMENTARY INFORMATION: ADDRESSES: I. Policy Objectives The FDIC maintains and administers the DIF in order to assure the agency’s capacity to meet its obligations as the insurer of deposits and receiver of failed IDIs.1 The FDIC considers the adequacy of the DIF in terms of the reserve ratio, which is equal to the DIF balance divided by estimated insured deposits. A higher reserve ratio reduces the risk that losses from IDI failures during an economic downturn will exhaust the DIF and also reduces the risk of large, pro-cyclical increases in deposit insurance assessments to maintain a 1 As used in this Notice of Proposed Rulemaking, the term ‘‘insured depository institution’’ has the same meaning as the definition used in Section 3 of the Federal Deposit Insurance Act (FDI Act), 12 U.S.C. 1813(c)(2). E:\FR\FM\29AUP1.SGM 29AUP1

Agencies

[Federal Register Volume 84, Number 168 (Thursday, August 29, 2019)]
[Proposed Rules]
[Pages 45439-45443]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-18602]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 84, No. 168 / Thursday, August 29, 2019 / 
Proposed Rules

[[Page 45439]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 868

[Doc. No. AMS-FGIS-18-0088]
RIN 0581-AD85


Fees for Rice Inspection Services and Removal of Specific Fee 
References

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: The Agricultural Marketing Service (AMS) invites comments on a 
proposal to reduce the fees for the sampling, inspection, weighing, and 
certification of rice performed under authority of the Agricultural 
Marketing Act of 1946 (AMA), as amended. Under the proposal, fees would 
decrease by 20 percent for fiscal year (FY) 2020 and by another 20 
percent for FY 2021. The proposed changes are necessary to lower the 
balance in the program's operating reserve to a level adequate to cover 
three to six months' expenses. AMS is also proposing to adopt 
standardized AMS user-fee calculations used in other AMS programs for 
rice inspection services beginning in FY 2022.

DATES: Comments must be received on or before September 30, 2019.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. All comments must be submitted through 
the Federal e-rulemaking portal at https://www.regulations.gov and 
should reference the document number and the date and page number of 
this issue of the Federal Register. All comments submitted in response 
to this proposed rule will be included in the record and will be made 
available to the public. Please be advised that the identity of the 
individuals or entities submitting comments will be made public on the 
internet at the address provided above.

FOR FURTHER INFORMATION CONTACT: Denise Ruggles, FGIS Executive Program 
Analyst, AMS, USDA; Telephone: (816) 659-8406; Email: 
[email protected].

SUPPLEMENTARY INFORMATION: The AMA (7 U.S.C. 1621-1638) authorizes the 
Federal Grain Inspection Service (FGIS) to provide official inspection 
and weighing services--on a user-fee basis--for rice (7 U.S.C. 
1622(h)). FGIS, formerly part of the Grain Inspection and Packers and 
Stockyards Administration (GIPSA), is now part of AMS, due to a recent 
merger of the two agencies. Section 203(h) of the AMA provides for the 
assessment and collection of reasonable fees from the users of the 
services to cover, as nearly as practicable, the costs of the services 
rendered. The fees reflect direct and indirect costs of providing 
services. Direct costs include employee salaries and benefits and 
certain operating expenses, such as travel. Indirect overhead costs 
include expenses related to FGIS and AMS activities supporting the 
services provided to the industry, including administrative and 
supervisory expenses, rent, communication, utilities, contractual 
services, supplies, and equipment. The formula used to calculate the 
fee rates also includes the cost of building and maintaining an 
operating reserve, as required by AMS. Reserves are held to meet 
financial obligations in case of program closure or other unexpected 
events.
    The fees for rice inspection services were last revised in 2007 (72 
FR 1931). The fee schedule at 7 CFR 868.91 provides for fee increases 
at set intervals, the most recent taking effect in October 2010 for the 
2011 fiscal year and beyond. Although fees have not increased since 
then, the current fee structure has generated a recurring annual 
operating surplus for several years, resulting in an estimated reserve 
balance at the end of FY 2019 that would cover 21 months of rice 
inspection program expenses, exceeding AMS's target of maintaining 
funds to cover 3 to 6 months' expenses. Estimated monthly costs to 
operate the rice inspection program in FY 2019 are $457,000. Thus, AMS 
would consider an operating reserve of between $1.37 million and $2.74 
million (3 and 6 times the monthly operating cost, respectively) at the 
end of FY 2019 to be appropriate.
    Financial data for the rice inspection program for fiscal years 
2015 through 2019 is reviewed in Table 1.

                                    Table 1-- Rice Program Financial Analysis
                                             [Millions of dollars] *
----------------------------------------------------------------------------------------------------------------
                                       FY 15           FY 16           FY 17           FY 18         FY 19 **
----------------------------------------------------------------------------------------------------------------
Revenue.........................           $6.93           $5.79           $5.84           $5.50           $5.49
Obligations.....................            5.13            5.36            5.44            5.39            5.48
Annual Surplus or (Deficit).....            1.80            0.43            0.40            0.11            0.01
Operating Reserve--running                  8.45            8.88            9.28            9.38            9.39
 balance........................
----------------------------------------------------------------------------------------------------------------
* Figures may not sum due to rounding and adjustments of prior year obligations.
** FY 2019 values are projections.

    As illustrated by Table 1, even though revenues have generally 
declined due to varying requests for service and increased 
efficiencies, and obligations have generally increased over the last 
five years due to inflation and costs of living adjustments, year-
after-year surpluses have continued to increase. The result is an 
operating reserve running balance exceeding the range AMS deems 
appropriate.
    AMS proposes to address the surplus by reducing fees for rice 
inspection services by 20 percent across the board for FY 2020 and by 
another 20 percent for FY 2021. AMS expects that reducing fees in the 
proposed manner would

[[Page 45440]]

gradually reduce the balance in the reserve fund while also allowing 
FGIS to continue making strategic operational expenditures to meet 
industry expectations and achieve United States Department of 
Agriculture (USDA) goals.
    The rates proposed in this rule are for Federal inspection services 
only. Third-party inspection service providers establish their rates 
independently.
    Proposed fees for fiscal years 2020 and 2021 are shown in Tables 2 
and 3 below:

                 Table 2--Hourly Rates/Unit Rate per CWT
------------------------------------------------------------------------
                                 Regular workday     Nonregular workday
         Service \1\            (Monday-Saturday)   (Sunday and holiday)
------------------------------------------------------------------------
FY 2020:
    Contract (per hour per                  $49.40                $68.50
     Service representative)
    Noncontract (per hour                    60.20                 82.90
     per Service
     representative)........
                             -------------------------------------------
    Export Port Services
     (per hundredweight) \2\                     0.059
                             -------------------------------------------
FY 2021:
    Contract (per hour per                   39.50                 54.80
     Service representative)
    Noncontract (per hour                    48.20                 66.30
     per Service
     representative)........
                             -------------------------------------------
    Export Port Services
     (per hundredweight) \2\                     0.047
------------------------------------------------------------------------
\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 3--Unit Rates Service 3
------------------------------------------------------------------------
                                     FY 2020               FY 2021
------------------------------------------------------------------------
Inspection for quality (per
 lot, sublot, or sample
 inspection):
    (a) Rough rice..........                $37.80                $30.20
    (b) Brown rice for                       32.50                 26.00
     processing.............
    (c) Milled rice.........                 23.40                 18.70
Factor analysis for any
 single factor (per factor):
    (a) Milling yield (per                   29.30                 23.40
     sample) (Rough or Brown
     rice)..................
    (b) All other factors                    14.10                 11.30
     (per factor) (all rice)
Total free and fatty acid...                 45.80                 36.60
Stowage Examination (service-
 on-request):
    (a) Ship (per stowage                    40.40                 32.30
     space) (minimum 5
     spaces per ship).......
    (b) Subsequent ship                      40.40                 32.30
     examination (same as
     original) (minimum 3
     spaces per ship).......
    (c) Barge (per                           32.40                 25.90
     examination)...........
    (d) All other carriers                   12.40                  9.90
     (per examination)......
------------------------------------------------------------------------
\3\ 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 in combination at
  other than the applicant's facility.

    For FY 2022 and beyond, AMS proposes to determine rice inspection 
service fees by adopting the standardized formulas AMS has established 
for calculating user fees for Cotton, Dairy, Fruits and Vegetables, 
Meat and Livestock, Poultry, Science and Technology, and Tobacco. 
Established in 2014 (79 FR 67313), the standardized method enables AMS 
to use current information about resource needs and projected costs of 
providing services to update rates for services on an annual basis, 
thus better avoiding unexpected financial shortfalls or unintended 
reserve surpluses. AMS announces the fees pertaining to all the AMS 
inspection-related services for the coming year annually through a 
notice in the Federal Register by the preceding June 1. AMS posts the 
fees on the Agency's website for customer reference during the year. 
AMS believes that this proposed action for rice would help FGIS adjust 
the rice inspection reserve account as necessary and provide its 
customers with information they need for planning purposes. Once the 
reserve balance has reached an appropriate level, AMS anticipates that 
the standardized formula for fee rates will appropriately account for 
increases in the actual costs of providing inspection services.
    Currently, 7 CFR 868.91--Fees for certain Federal rice inspection 
services--provides the fees for rice inspections. Section 868.91 lists 
the fees in two tables: Hourly rates or per unit rates per 
hundredweight for contract and noncontract services, and unit rates for 
inspecting, analyzing, or providing other related services. The tables 
give annual rates effective in 2007, 2008, 2009, and 2010. The current 
rates have not been adjusted since October 1, 2010. AMS proposes to 
remove the two tables from Sec.  868.91 for FY 2020. AMS proposes to 
publish instead reduced fees--as described in Tables 2 and Table 3 
above--on the AMS website for FY 2020 and FY 2021.
    For FY 2022 and beyond, AMS proposes to add a new Sec.  868.91(b) 
specifying the formulas for calculating rice inspection fees on an 
annual basis. As with other programs, AMS would perform financial 
analyses each year to determine whether the current fees are adequate 
to recover the costs incurred by providing rice inspection services. 
AMS would use historical or prior year cost and workload data, along 
with applicable projections to generate estimates of future obligations 
and revenues. On the bases of these analyses and formulas, AMS would 
determine the rates necessary to sustain rice inspection program 
services. Using the formulas to calculate the fees, and reviewing the 
fees on an annual basis, would more accurately reflect the actual

[[Page 45441]]

cost of providing inspection services each year and would provide 
greater transparency and predictability to the rice industry. AMS would 
publish the fees for each upcoming fiscal year in the annual AMS user-
fee notice in the Federal Register by the preceding June 1. The yearly 
notice would include both the per-hour rates and the per-unit rates. 
Updated fees schedules would no longer appear in the Code of Federal 
Regulations but would be available on the AMS website.

Calculations

    AMS proposes to base salary, hours, and most factors used in the 
proposed calculations on the prior year's actual costs, workload data, 
projection of expenses impacting program costs, cost of living 
increase, and inflation. AMS would base cost of living increase and 
inflation factors on the most recent economic data released by the 
Office of Management and Budget (OMB) for budget development purposes. 
AMS would round the final rates up to make the amounts divisible by the 
quarter hour (15 minutes). Under the proposed rate formulas, the 
minimum charge for services covered by the inspection fee rates would 
be for 15 minutes. As explained later in this document, the applicant 
requesting inspection service would be charged travel costs on an 
actual basis. AMS chose to propose these formulas for rice inspection 
fees so they would be consistent with the formulas used agency wide in 
other AMS programs.
    Currently, some rice inspection service fees are charged on a per 
hour basis, and some are charged on a per unit basis. AMS proposes to 
continue providing costs on both bases to maintain continuity. As well, 
AMS would provide the specific amounts used to calculate each year's 
rates upon request.
    AMS proposes to add a new Sec.  868.91(b)(1) to include the 
following formulas for calculating fee rates for FY 2022 and succeeding 
fiscal years.
     The regular rate is the Service's total grading, 
inspection, certification, classification, audit, or laboratory service 
program personnel direct pay divided by direct hours for the previous 
year, which is then multiplied by the next year's percentage of cost of 
living increase, plus the benefits rate, plus the operating rate, plus 
the allowance for bad debt rate.
     The overtime rate is the Service's total grading, 
inspection, certification, classification, audit, or laboratory service 
program personnel direct pay divided by direct hours for the previous 
year, which is then multiplied by the next year's percentage of cost of 
living increase and then multiplied by 1.5, plus the benefits rate, 
plus the operating rate, plus the allowance for bad debt rate.
     The holiday rate is the Service's total grading, 
inspection, certification, classification, audit, or laboratory service 
program personnel direct pay divided by direct hours for the previous 
year, which is then multiplied by the next year's percentage of cost of 
living increase and then multiplied by 2, plus the benefits rate, plus 
the operating rate, plus the allowance for bad debt rate.
    AMS further proposes to add a new Sec.  868.91(b)(2) to include the 
following component formulas, which AMS would derive by using the 
previous year's actual costs/historical costs.
     The benefits rate is the Service's total inspection 
program direct benefits costs divided by the total hours (regular, 
overtime, holiday) worked, which is then multiplied by the next year's 
percentage of cost of living increase. Some examples of direct benefits 
are health insurance, retirement, life insurance, and Thrift Savings 
Plan (TSP) retirement basic and matching contributions.
     The operating rate is the Service's total inspection 
program operating costs divided by total hours (regular, overtime, and 
holiday) worked, which is then multiplied by the percentage of 
inflation.
     The allowance for bad debt rate is the total allowance for 
bad debt, divided by total hours (regular, overtime, holiday) worked.
    Finally, AMS proposes to add a new Sec.  868.91(b)(3), which would 
specify that AMS would use the most recently released OMB economic data 
to generate the cost of living and inflation factors used in the above 
formulas.

Travel Expense

    One factor that may have contributed to the operating reserve 
buildup over time is the incorporation of an allowance for travel 
expenses in the current rice inspection fee rates that may not have 
reflected actual travel costs. AMS proposes to address this by 
specifying in the fee calculation formulas that travel expenses related 
to providing inspection services, such as commercial transportation 
costs, mileage, and per diem, would be based on actual travel costs 
incurred to perform the service. The fee rate calculations in proposed 
Sec.  868.91(b) would specify that actual travel expenses for rice 
inspection services may be added to the cost of providing the service, 
consistent with current practice under most other AMS programs. This 
change would be applicable to fee rates beginning in FY 2022.
    As a conforming change, AMS proposes to remove the language in 
Sec.  868.92(a)(2)--Explanation of service fees and additional fees, 
which makes specific reference to the inclusion of travel expenses in 
the current rice inspection fee calculations, as that language would be 
obsolete.

Delegation of Authority

    The Secretary of Agriculture delegated to the Under Secretary for 
Marketing and Regulatory Programs (MRP) authorities ``related to grain 
inspection, packers and stockyards.'' 7 CFR 2.22(a)(3)(i)-(vi). In 7 
CFR 2.81, the Under Secretary for MRP further delegated these 
authorities to the Administrator of GIPSA. In a November 14, 2017, 
Secretary's Memorandum, the Secretary directed that the authorities at 
7 CFR 2.81 be re-delegated to the Administrator of AMS, and that the 
delegations to the Administrator of GIPSA be revoked. The delegations 
to the Under Secretary of MRP related to grain inspection, packers, and 
stockyards at 7 CFR 2.22(a)(3) remain unchanged.
    The AMS Administrator has authority to administer former GIPSA 
programs but does not currently have authority to revise the Code of 
Federal Regulations sections that pertain to grain inspections. MRP 
will address the transfer of such authority in a separate rulemaking. 
AMS expects to change the meaning of certain terms in Sec.  868.1, such 
as ``Administrator'' and ``Service,'' to reflect the change in 
management from GIPSA to AMS at that time.

Executive Orders 12866, 13563, and 13771

    Executive Orders 12866--Regulatory Planning and Review, and 13563--
Improving Regulation and Regulatory Review, direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits of reducing costs, harmonizing rules, and promoting 
flexibility. This proposed rule does not meet the criteria of a 
significant regulatory action under Executive Order 12866 as 
supplemented by Executive Order 13563. Therefore, OMB has not reviewed 
this rule under those Orders. Additionally, because this

[[Page 45442]]

proposed rule does not meet the definition of a significant regulatory 
action under Executive Order 12866, it does not trigger the 
requirements contained in Executive Order 13771. See OMB's memorandum 
titled ``Interim Guidance Implementing Section 2 of the E.O. of January 
30, 2017, titled `Reducing Regulation and Controlling Regulatory Costs' 
'' (February 2, 2017).
    AMS considered several alternatives to the changes in this proposed 
rule, including making larger decreases to the FY 2020 and FY 2021 
rates to bring the reserve balance down more quickly or making a larger 
fee rate decrease for FY 2020 only. Ultimately, AMS determined that the 
proposed approach of making smaller--but still significant--reductions 
two years in a row before transitioning to the standardized fee 
calculations would be the alternative least disruptive to the industry 
while moving toward desirable reserve levels. AMS expects the proposed 
changes to benefit the rice industry by reducing rates by 20% for each 
of the next two years and then adjusting rates as needed annually 
thereafter to reflect actual expenses related to rice inspections. 
Under the proposed rule, rice inspection service users would likely 
enjoy further savings since most inspection sites are near FGIS field 
offices and charges for travel would be based on actual expenses rather 
than the standard flat amount incorporated into the current fee rates. 
AMS does not expect the proposed rule to provide any environmental, 
public health, or safety benefits. AMS has not identified any costs 
related to this proposed action.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988--
Civil Justice Reform. This rule is not intended to have retroactive 
effect. This rule will not preempt any State or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with this rule. No administrative proceedings would be 
required before parties could file suit in court challenging the 
provisions of this rule.

Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a major rule, as defined by 5 U.S.C. 804(2).

Regulatory Flexibility Analysis

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601-602), AMS has considered the 
economic impact of this proposed action on small entities. The purpose 
of the RFA is to fit regulatory actions to the scale of businesses 
subject to such actions in order that small businesses will not be 
unduly or disproportionately burdened.
    There are approximately 169 applicants who receive rice inspection 
services. AMS estimates 42 percent of these users would be considered 
small businesses based on criteria established by the Small Business 
Administration (13 CFR 121.201) to differentiate between large and 
small business entities. SBA uses the North American Industry 
Classification System (NAICS) to categorize various industry 
businesses. SBA defines small rice farmers, NAICS code 111160, as those 
whose annual receipts do not exceed $750,000 and small rice millers, 
NAICS code 311212, as those with no more than 500 employees.
    When the current rice inspection fees were set in 2007, an 18 
percent increase was implemented to cover program deficits caused by 
increases in employee salaries and benefits, the replacement of aging 
rice inspection equipment, and upgrading the information technology 
system used to generate certificates. The increase also was intended to 
create the operating reserve. However, as explained earlier in this 
document, revenues have continued to exceed expenditures, indicating 
that an adjustment to the fee schedule is now warranted. In addition, 
travel expenses were built into the hourly and unit fees currently 
charged by the program, resulting in higher than necessary revenues to 
cover the actual service provided.
    Proposed changes to the fees would reduce the cost of rice 
inspections by 20 percent for all services in FY 2020 across the board, 
regardless of the business entity's size, for a projected savings of 
approximately $1.17 million to the industry. A further 20 percent 
reduction as proposed for FY 2021 would net approximately $2.13 million 
in savings to the industry. All entities using rice inspection 
services, large and small, would be expected to benefit from reduced 
expenses for these services. Savings would be proportionate to the 
number of inspection services an entity requests each year. Proposed 
adoption of standardized AMS user-fee rate calculations for FY 2022 and 
beyond would benefit all inspection applicants, regardless of size, as 
fees would more closely reflect the current cost of inspections, and 
the fee calculation process would be more transparent. Through its 
annual review, AMS would be able to monitor the financial status of the 
rice inspection program to determine whether further adjustments are 
necessary.
    AMS has determined this proposed rule would not have a significant 
economic impact on a substantial number of entities as defined under 
the RFA because fewer than half the applicants for rice inspection 
services meet the definition of small entities. Further, rice 
inspection and weighing services are provided upon request, and rice 
industry businesses are under no obligation to use these services.
    Finally, USDA has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.

Paperwork Reduction Act and E-Government Act

    In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
chapter 35), the information collection and record keeping requirements 
of the rice inspection program have previously been approved by OMB 
under control number 0580-0013. No additional reporting, record 
keeping, or other compliance requirements would be imposed as a result 
of this proposed rule.
    AMS is committed to complying with the E-Government Act (44 U.S.C. 
3601, et seq.), to promote the use of the internet and other 
information technologies to provide increased opportunities for citizen 
access to Government information and services, and for other purposes.

List of Subjects in 7 CFR Part 868

    Administrative practice and procedure, Agricultural commodities.

    For the reasons set out in the preamble, AMS proposes to amend 7 
CFR part 868 as follows:

PART 868--GENERAL REGULATIONS AND STANDARDS FOR CERTAIN 
AGRICULTURAL COMMODITIES

0
1. The authority citation for part 868 continues to read as follows:

    Authority: 7 U.S.C. 1621-1627.

0
 2. Revise Sec.  868.91 to read as follows:


Sec.  868.91  Fees for certain Federal rice inspection services.

    The fees for services in paragraph (a) of this section apply to 
Federal inspection services. Starting with fiscal year 2022, 
calculations provided in paragraph (b) of this section will be used to 
determine annual fee rates.
    (a) Fees for services are published on the Service's website.
    (b) For each fiscal year, starting with 2022, the Administrator 
will calculate the rates for services, issue a public notice, and 
publish fees on the Service's

[[Page 45443]]

website with an effective date of October 1 of each year.
    (1) For each year, the Administrator will calculate the rates for 
services, per hour per inspection program employee using the following 
formulas:
    (i) Regular rate. The Service's total inspection program personnel 
direct pay divided by direct hours, which is then multiplied by the 
next year's percentage of cost of living increase, plus the benefits 
rate, plus the operating rate, plus the allowance for bad debt rate. If 
applicable, actual travel expenses may also be added to the cost of 
providing the service.
    (ii) Overtime rate. The Service's total inspection program 
personnel direct pay divided by direct hours, which is then multiplied 
by the next year's percentage of cost of living increase and then 
multiplied by 1.5, plus the benefits rate, plus the operating rate, 
plus an allowance for bad debt. If applicable, actual travel expenses 
may also be added to the cost of providing the service.
    (iii) Holiday rate. The Service's total inspection program 
personnel direct pay divided by direct hours, which is then multiplied 
by the next year's percentage of cost of living increase and then 
multiplied by 2, plus the benefits rate, plus the operating rate, plus 
an allowance for bad debt. If applicable, actual travel expenses may 
also be added to the cost of providing the service.
    (2) For each year, based on previous year/historical actual costs, 
the Administrator will calculate the benefits, operating, and allowance 
for bad debt components of the regular, overtime, and holiday rates as 
follows:
    (i) Benefits rate. The Service's total inspection program direct 
benefits costs divided by the total hours (regular, overtime, holiday) 
worked, which is then multiplied by the next year's percentage of cost 
of living increase. Some examples of direct benefits are health 
insurance, retirement, life insurance, and Thrift Savings Plan (TSP) 
retirement basic and matching contributions.
    (ii) Operating rate. The Service's total inspection program 
operating costs divided by total hours (regular, overtime, and holiday) 
worked, which is then multiplied by the percentage of inflation.
    (iii) Allowance for bad debt rate. Total allowance for bad debt, 
divided by total hours (regular, overtime, holiday) worked.
    (3) The Administrator will use the most recent economic factors 
released by the Office of Management and Budget for budget development 
purposes to derive the cost of living expenses and percentage of 
inflation factors used in the formulas in this section.


Sec.  868.92  [Amended]

0
3. Amend Sec.  868.92 by:
0
 a. Removing paragraph (a)(2) and redesignating paragraphs (a)(3) 
through (5) as paragraphs (a)(2) through (4), respectively.
0
b. In newly redesignated paragraph (a)(4), removing ``Sec.  868.92(c)'' 
and adding ``paragraph (c) of this section'' in its place.

    Dated: August 23, 2019.
Greg Ibach,
Under Secretary, Marketing and Regulatory Programs.
[FR Doc. 2019-18602 Filed 8-28-19; 8:45 am]
BILLING CODE 3410-02-P

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