03-11595. Fees for Rice Inspection Services

AGENCY:

Grain Inspection, Packers and Stockyards Administration, USDA.

ACTION:

Final rule.

SUMMARY:

The Grain Inspection, Packers and Stockyards Administration (GIPSA) is implementing an approximate 4.1 percent increase in fees for all hourly rates and certain unit rates for inspection services performed under the Agricultural Marketing Act (AMA) of 1946 in the rice inspection program. These increases are needed to cover increased operational costs resulting from the mandated January 2003 Federal pay increase.

EFFECTIVE DATE:

June 9, 2003.

FOR FURTHER INFORMATION CONTACT:

David Orr, Director, Field Management Division, at his E-mail address: David.M.Orr@.usda.gov, or telephone him at [phone].

SUPPLEMENTARY INFORMATION:

Executive Order 12866, the Regulatory Flexibility Act, and the Paperwork Reduction Act

This final 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.

Also, pursuant to the requirements set forth in the Regulatory Flexibility Act, Donna Reifschneider, Administrator, GIPSA, has determined that this final rule will not have a significant economic impact on a substantial number of small entities as defined in the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).

GIPSA regularly reviews its user-fee programs to determine if the fees are adequate and continues to seek cost-saving opportunities and implement appropriate changes to reduce costs. Such actions can provide alternatives to fee increases. Employee salaries and benefits are major program costs that account for approximately 84 percent of GIPSA's total operating budget. The mandated January 2003 general and locality salary increase that averages 4.1 percent for all GIPSA employees has increased program costs in the rice inspection program.

The existing fee schedule for GIPSA's rice inspection program will not generate sufficient revenues to cover program costs while maintaining an adequate reserve balance. Fees for this program are in Tables 1 and 2 of 7 CFR 868.91. In Fiscal Year (FY) 2000, operating costs in the rice program were $4,034,964 with revenue of $4,837,116 that resulted in a positive margin of $802,152 and a positive reserve of $406,359. In FY 2001, operating costs in the rice program were $3,842,326 with revenue of $4,102,960 that resulted in a positive margin of $260,634 and a positive reserve of $611,654. In FY 2002, operating costs in the rice program were $3,882,574 with revenue of $3,885,121 that resulted in a positive margin of $2,547 and a positive reserve of $311,596. The current positive reserve balance of $311,596 is below the desired 3-month reserve of approximately $1 million.

GIPSA has reviewed the financial position of our rice inspection program based on the increased salary and benefit costs, along with the projected FY 2003 workload. Even though the financial status of the rice inspection program has improved, GIPSA has concluded that it cannot absorb the increased costs caused by the 4.1 percent salary increase with the small positive reserve balance. This fee increase will collect an estimated $155,500 in additional revenues in the rice program based on the projected FY 2003 work volume of 3.4 million metric tons.

This fee increase applies primarily to GIPSA customers that produce, process, and market rice for the domestic and international markets. There are approximately 550 such customers located primarily in Arkansas, Louisiana, and Texas. Many of these customers meet the criteria for small entities established by the Small Business Administration criteria for small businesses. Even though the fees are being increased, the increase will not be excessive (4.1 percent) and should not significantly affect those entities. Those entities are under no obligation to use GIPSA's service and, therefore, any decision on their part to discontinue the use of service should not prevent them from marketing their products.

There will be no additional reporting or record keeping requirements imposed by this final action. In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 35), the information collection and record keeping requirements in part 868 have been previously approved by the Office of Management and Budget under control number 0580-0013. GIPSA has not identified any other Federal rules which may duplicate, overlap, or conflict with this final rule.

Executive Order 12988

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This final action is not intended to have a retroactive effect. This final 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 that must be exhausted prior to any judicial challenge to the provisions of this final rule.

Background

In the February 28, 2003, Federal Register (68 FR 9593) GIPSA proposed an approximate 4.1 percent increase in fees for rice inspection services performed under the Agricultural Marketing Act of 1946. Under the provisions of the AMA (7 U.S.C. 1621, et seq.), rice inspection services are provided upon request and GIPSA must collect a fee from the customer to cover the cost of providing such services. Section 203 (h) of the AMA (7 U.S.C. 1622 (h)) 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 administrative and supervisory costs for the performance of official services, including personnel compensation and benefits, travel, rent, communications, utilities, contractual services, supplies, and equipment. The existing fee schedule for GIPSA's rice inspection program will not generate sufficient revenues to cover program costs while maintaining an adequate reserve balance. Fees for this program are in Tables 1 and 2 of 7 CFR 868.91. In FY 2000, operating costs in the rice program were $4,034,964 with revenue of $4,837,116 that resulted in a positive margin of $802,152 and a positive reserve of $406,359. In FY 2001, operating costs in the rice program were $3,842,326 with revenue of $4,102,960 that resulted in a positive margin of $260,634 and a positive reserve of $611,654. In FY 2002, operating costs in the rice program were $3,882,574 with revenue of $3,885,121 that resulted in a positive margin of $2,547 and a positive reserve of $311,596. The current positive reserve balance of $311,596 is below the desired 3-month reserve of approximately $1 million.

GIPSA has reviewed the financial position of its rice inspection program based on the projected increased salary and benefit costs, along with the projected FY 2003 workload. Even though the financial status of the rice inspection program has improved, GIPSA has concluded that with the small positive reserve balance it cannot absorb the increased costs caused by the 4.1 percent salary increase. This fee increase will collect an estimated $155,500 in additional revenues in the rice program based on the projected FY 2003 work volume of 3.4 million metric tons.

In 7 CFR 868.91, Table 1—Hourly Rates/Unit Rate Per CWT and Table 2—Unit Rates, currently the regular workday contract and noncontract fees are $44.60 and $54.30, respectively, while the nonregular workday contract and noncontract fees are $61.80 and $75.00, respectively. The unit rate per hundredweight for export port services is currently $0.054 per hundredweight. The rice inspection programs current unit rates are:

Service	Rough rice	Brown rice for processing	Milled rice
Inspection for quality (per lot, sublot, or sample inspection)	$34.80	$30.00	$21.50
Factor analysis for any single factor (per factor):
(a) Milling yield (per sample)	27.00	27.00
(b) All other factors (per factor)	12.90	12.90	12.90
Total oil and free fatty acid		42.60	42.60
Interpretive line samples:
(a) Milling degree (per set)			91.00
(b) Parboiled light (per sample)			22.60
Extra copies of certificates (per copy)	3.00	3.00	3.00

Comment Review

GIPSA received no comments in response to the proposed rulemaking published February 28, 2003, in the Federal Register at (68 FR 9593).

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 service 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.

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:

§ 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]

Service 1	Regular Workday (Monday-Saturday)	Nonregular Workday (Sunday-Holiday)
Contract (per hour per Service representative)	$46.40	$64.40
Noncontract (per hour per Service representative)	56.60	78.00
Export Port Services (per hundredweight)2	.056	.056
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

Service 1,3	Rough rice	Brown rice for processing	Milled rice
Inspection for quality (per lot, sublot, or sample inspection)	$35.50	$30.50	$22.00
Factor analysis for any single factor (per factor):
(a) Milling yield (per sample)	27.50	27.50
(b) All other factors (per factor)	13.20	13.20	13.20
Total oil and free fatty acid		43.00	43.00
Interpretive line samples:2
(a) Milling degree (per set)			94.00
(b) Parboiled light (per sample)			23.00
Extra copies of certificates (per copy)	3.00	3.00	3.00
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 in combination 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 Ambassador Drive, Kansas City, Missouri 64153-1394. 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, D.C. 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 § 868.90, Table 1.

Dated: May 6, 2003.

Donna Reifschneider,

Administrator, Grain Inspection, Packers and Stockyards Administration.