[Federal Register Volume 61, Number 129 (Wednesday, July 3, 1996)]
[Rules and Regulations]
[Pages 34714-34716]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16993]
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DEPARTMENT OF AGRICULTURE
Grain Inspection, Packers and Stockyards Administration
7 CFR Part 868
RIN 0580-AA47
Fees for Rice Inspection
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 increasing
the fees for Federal Rice Inspection Services, as performed under the
Agricultural Marketing Act (AMA) of 1946. This fee increase is intended
to cover, as nearly as practicable, the projected operating costs,
including related supervisory and administrative costs, for Federal
Rice Inspection Services rendered and to generate sufficient revenues
to cover costs and maintain an appropriate operating reserve.
EFFECTIVE DATE: August 2, 1996.
FOR FURTHER INFORMATION CONTACT:
George Wollam, USDA-GIPSA, Room 0623--South Building, 1400 Independence
Avenue, SW, Washington, D.C., 20090-6454, telephone (202) 720-0292.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rule has been determined to be significant for the purposes of
Executive Order 12866 and, therefore, has been reviewed by the Office
of Management and Budget. This increase in the service fees is
necessary to recover operating losses in the Federal Rice Inspection
Services. These fees were last increased on January 1, 1995 56 FR
15483), but revenue is still not covering operating costs. The overall
cost of operating the Federal Rice Inspection Service program increased
between fiscal years (FY) 1994 and 1995 by more than 6 percent. In FY
1955, the program generated revenue of $3,982,744 with operating costs
of $4,274,733, resulting in a 1-year operating loss of $291,990.
Executive Order 12778
This final rule has been reviewed under Executive Order 12778,
Civil Justice Reform. This action is not intended to have a retroactive
effect. This final 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 which must be
exhausted prior to any judicial challenge to provisions of this rule.
Effect on Small Entities
James R. Baker, Administrator, GIPSA, has determined that this
final rule will not have a significant economic impact on a substantial
number of small entities as defined in the Regulatory Flexibility Act
(5 U.S.C. 601 et seq.) because most users of the rice inspection
services do not meet the requirements for small entities. In addition,
GIPSA is required by statute to recover the costs of providing rice
inspection services.
Information Collection and Record Keeping Requirements
In compliance with the Paperwork Reduction Act of 1980 (44 U.S.C.
Chapter 35), the information collection and recordkeeping requirements
concerning applications for official inspection services, including
rice inspections, have been approved by the Office of Management and
Budget under control number 0580-0013.
Background
On January 11, 1996, FGIS proposed in the Federal Register (61 FR
1013) to increase fees charged for Federal Rice Inspection Services.
The rice inspection fees were last amended on January 1, 1995 (56 FR
15483). They presently appear in Sec. 868.91 in Tables 1 and 2 of the
regulations (7 CFR 868.91 (Tables 1 and 2)). Since publication of the
proposed rule, FY 96 cost and revenue information has become available
and has been included in the discussion herein.
FGIS continually monitors its cost, revenue, and operating reserve
levels to ensure that there are sufficient resources for operations.
During FYs 1993, 1994, and 1995, respectively, FGIS implemented cost-
saving measures in an effort to provide more cost effective services.
However, while the quantity of rice inspections may fluctuate, certain
FGIS costs remain constant. Consequently, revenues ($3,758,893;
$3,500,597; $3,982,744) did not cover operating costs ($3,847,762;
$4,022,194; and $4,274,733) for FYs 1993, 1994, and 1995, respectively.
This reflects a reduction in operating reserves for all three fiscal
years.
At the time of the publication of the proposed rule, FY 94 offered
the most current 1-year figures available to compare FGIS' rice
inspection operating costs with revenue. The figures for this year were
used to project the budgeted FY 95 rice inspection operating costs and
establish revenue levels necessary to cover projected operating costs.
During the period of October 1, 1994, to July 31, 1995, the actual
operating cost was $3,760,305 and revenue was $3,438,683, resulting in
a reduction in operating reserves of $321,667.
Since the publication of the proposed rule, FY 95 offers the most
current 1-year figures available to compare FGIS' rice inspection
operating costs with revenue. The figures for FY 95 used to project the
budgeted FY 96 rice inspection operating costs and establish revenue
levels necessary to cover those projected costs confirms the trend
toward reducing operating reserves. From October 1, 1994, to September
30, 1995, the actual operating cost was $4,274,733 and revenue was
$3,982,744, resulting in a reduction in operating reserves of $291,990.
The trend, as reflected in FY 94 to FY 95 data, is expected to
continue. This overall trend necessitates an increase in fees and an
increase to the per-hundred-weight volume charge for services performed
at export port locations on lots at rest in order to recover the
projected operating costs and maintain
[[Page 34715]]
a 3-month operating reserve. As of September 30, 1995, the reserve was
at a level of negative $1,089,741.
In fiscal year 1995, FGIS reduced costs to the rice program by
closing and/or reducing field offices to suboffices. Two field offices
were reduced to suboffices and one field office was closed entirely.
The estimated savings from these measures is $220,000 over two years.
FGIS believes that actions taken to this point represent an appropriate
balance between running an efficient operation and providing a high
level of service to our customers. However, we will continue to seek
out further cost savings that do not compromise our service. In
addition, numerous talks were held with rice industry trade groups
outlining FGIS' intention of increasing fees. Industry realized the
need for the increase.
Alternatives Considered
FGIS considered several options to the final fees. It considered:
(1) a straight 14 percent increase in fees and (2) reforming the
current system of fees to gather revenue in a manner less dependent
upon seasonal shifts, and (3) incremental increases of fees. The third
alternative was selected. It was decided to propose three incremental
six percent fee increases, the first increase to be implemented May 1,
1996, second on January 1, 1997, and third on January 1, 1998. This
alternative was selected for several reasons: the negative balance in
retained earnings requires the increases be implemented in a more
timely manner; the trade is familiar with incremental increases and
incremental increases allows the rice industry time to adjust their
operations to the increased fees. We will propose the second option at
a later date when we have had a chance to evaluate the operation of a
current proposal to reform the Grain Inspection and Weighing. That
proposal, under the United States Grain Standards Act will change the
methodology in fee collection from the current system, an hourly rate
basis, to a combination of reduced hourly rates, more contract options,
and per metric ton administrative charge to recover obligations.
Comment Review
FGIS received no comments during the 30-day comment period.
Final Action
Section 203 of the AMA (7 U.S.C. 1622) provides for the
establishment and collection of fees that are reasonable and, as nearly
as practicable, cover the costs of the services rendered. These fees
cover the FGIS administrative and supervisory costs for the performance
of official services, including personnel compensation, personnel
benefits, travel, rent, communications, utilities, contractual
services, supplies, and equipment.
Section 868.91, Tables 1 and 2 (as currently shown in section
868.91, Tables 1 and 2 of the regulations), are revised to provide for
the increase in rice inspection fees. A 3-stage increase plan to raise
hourly rates and unit fees by approximately 6 percent per year for
calendar years 1996, 1997, and 1998 is implemented. These incremental
increases will lessen the impact of the amount of increase required to
replenish retained earnings to appropriate levels.
FGIS will review its costs, revenue, and operating reserve levels
to ensure that the fee increases scheduled for calendar years 1997 and
1998 are required at the levels specified. FGIS, as the fee increases
are implemented, will review the level of the operational reserve and
if available funds exceed what is needed to maintain a reasonable
reserve, we will consider proposing a reduction in fees. In the event
that a change in the fees appears necessary, FGIS will engage in
rulemaking before making any changes.
List of Subjects in 7 CFR Part 868
Administrative practice and procedure, Agricultural commodities.
For reasons set out in the preamble, 7 CFR Part 868 is amended as
follows:
PART 868--GENERAL REGULATIONS AND STANDARDS FOR CERTAIN
AGRICULTURAL COMMODITIES
1. The authority citation for Part 868 continues to read as
follows:
Authority: Secs. 202-208, 60 Stat. 1087, as amended (7 U.S.C.
1621 et. seq.)
2. Section 868.91 is revised to read as follows:
Sec. 868.91 Fees for Certain Federal Rice Inspection Services.
The fees shown in Tables 1 and 2 apply to Federal Rice Inspection
Services.
Table 1.--Hourly Rates/Unit Rate Per CWT
[Fees for Federal Rice Inspection Services]
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Regular Workday (Monday- Nonregular Workday (Sunday-
Service \1\ Saturday) Holiday)
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Effective August 2, 1996
Contract (per hour per Service representative). $35.80......................... $49.80
Noncontract (per hour per Service 43.50.......................... 60.50
representative).
Export Port Services \2\....................... .042/CWT....................... .042/CWT
Effective January 1, 1997
Contract (per hour per Service representative). 37.90.......................... 52.80
Noncontract (per hour per Service 46.10.......................... 64.10
representative).
Export Port Services \2\....................... .045/CWT....................... .045/CWT
Effective January 1, 1998
Contract (per hour per Service representative). 40.20.......................... 56.00
Noncontract (per hour per Service 48.90.......................... 67.90
representative).
Export Port Services \2\....................... .048/CWT....................... .048/CWT
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\1\ Original and appeal inspection services include: Sampling, grading, weighing, and other services requested
by the applicant when performed at the applicant's facility.
\2\ Services performed at export port locations on lots at rest.
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Table 2.--Unit Rates
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Brown rice
Service \1\ \3\ Rough rice for Milled rice
processing
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Effective August 2, 1996
Inspection for quality (per lot, sublot, or sample inspection........ $29.20 $25.30 $18.00
Factor analysis for any single factor (per factor):
(a) Milling yield (per sample)................................... 22.70 22.70 ...........
(b) All other factors (per factor)............................... 10.80 10.80 10.80
Total oil and free fatty acid........................................ ........... 35.40 35.40
Interpretive line samples:\2\ ........... ........... ...........
(a) Milling degree (per set)..................................... ........... ........... 75.80
(b) Parboiled light (per sample)................................. ........... ........... 19.00
Extra copies of certificates (per copy).............................. 3.00 3.00 3.00
Effective January 1, 1997
Inspection for quality (per lot, sublot, or sample inspection)....... 31.00 26.80 19.10
Factor analysis for any single factor (per factor):
(a) Milling yield (per sample)................................... 24.10 24.10 ...........
(b) All other factors (per factor)............................... 17.40 11.40 11.40
Total oil and free fatty acid........................................ ........... 37.50 37.50
Interpretive line samples: \2\ ........... ........... ...........
(a) Milling degree (per set)..................................... ........... ........... 80.30
(b) Parboiled light (per sample)................................. ........... ........... 20.10
Extra copies of certificates (per copy).............................. 3.00 3.00 3.00
Effective January 1, 1998
Inspection for quality (per lot, sublot, or sample inspection)....... 32.90 28.40 20.20
Factor analysis for any single factor (per factor):
(a) Milling yield (per sample)................................... 25.50 25.50 ...........
(b) All other factors per factor):............................... 12.10 12.10 12.10
Total oil and free fatty acid........................................ ........... 39.80 39.80
Interpretive line samples: \2\
(a) Milling degree (per set)..................................... ........... ........... 85.10
(b) Parboiled light (per sample)................................. ........... ........... 21.30
Extra copies of certificates (per copy).............................. 3.00 3.00 3.00
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\1\ Fees apply to determinations (original or appeals) for kind, class, grade, factor analysis, equal to type,
milling yield, or any other quality designation as defined in the U.S. Standards for Rice or applicable
instructions, whether performed singly or in combination at other than at the applicant's facility.
\2\ Interpretive line samples may be purchased from the U.S. Department of Agriculture, Grain Inspection,
Packers and Stockyards Administration; Technical Services Division; Board of Appeals and Review; FGIS
Technical Center, 10383 North Executive Hills Boulevard, Kansas City, MO 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 Deputy Director, Field Management Division, USDA, GIPSA, FGIS, P.O. Box 96454, Washington, DC 20090-
6454. The interpretive line samples illustrate the lower limit for milling degrees only and the color limit
for the factor ``Parboiled Light'' rice.
\3\ Fees for other services not referenced in Table 2 will be based on the noncontract hourly rate listed in
Section 868.90, Table 1.
Dated: June 27, 1996.
Michael V. Dunn,
Assistant Secretary, Marketing and Regulatory Programs.
[FR Doc. 96-16993 Filed 7-2-96; 8:45 am]
BILLING CODE 3410-EN-M
