[Federal Register Volume 61, Number 131 (Monday, July 8, 1996)]
[Proposed Rules]
[Pages 35687-35691]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16853]
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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. 61, No. 131 / Monday, July 8, 1996 / Proposed
Rules
[[Page 35687]]
DEPARTMENT OF AGRICULTURE
Grain Inspection, Packers and Stockyards Administration
7 CFR Part 868
RIN 0580-AA48
Fees for Commodity Inspection
AGENCY: Grain Inspection, Packers and Stockyards Administration, USDA.
ACTION: Proposed rule.
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SUMMARY: The Federal Grain Inspection Service (FGIS), a program of the
Grain Inspection, Packers and Stockyards Administration (GIPSA), is
proposing to make the following changes to fees charged for inspection
services for commodities, other than rice, performed under the
Agricultural Marketing Act of 1946: Increase hourly and unit fees;
charge actual travel and per diem costs; charge for sanitation
inspections, pre-inspection conferences, and related services;
establish hourly fees at time and one-half for service provided on
Saturdays, Sundays, and Federal holidays; eliminate the provisions for
entering into a contract for service; and change in the fee structure
for stowage examinations from an hourly rate to a unit fee.
These revisions are designed to generate revenue sufficient to
cover, as nearly as practicable, the projected operating costs,
including related supervisory and administrative costs, for commodity
inspection services rendered and to maintain an appropriate operating
reserve.
DATES: Written comments must be submitted on or before August 7, 1996.
ADDRESSES: Written comments must be submitted to George Wollam, USDA-
GIPSA-ART, Room 0623--South Building, 1400 Independence Avenue, SW.,
Washington, DC 20090-6454, or FAX (202) 720-4628. Comments may be sent
by electronic mail or Internet to: gwollam@fgis.usda.gov.
All comments received will be available for public inspection
during regular business hours in Room 062--South Building, 1400
Independence Avenue, SW., Washington, DC (7 CFR 1.27(b)).
FOR FURTHER INFORMATION CONTACT:
George Wollam at the address above or by telephone at (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. The five changes being proposed are designed
to generate revenue sufficient to recover the operating costs for
commodity inspection services and to maintain an appropriate operating
reserve. FGIS is proposing the following changes: (1) Increase in the
hourly and unit fees for commodity inspection services, (2) begin
charging actual travel costs for airlines, rental cars, etc. and per
diem for travel beyond 25 miles of an official assigned duty location,
(3) begin charging for sanitation inspections, pre-inspection
conferences, and related services, (4) establish new hourly fees at
time and one-half for service provided on Saturdays, Sundays, and
Federal holidays, (5) eliminate the provisions for entering into a
contract for service; and (6) change in the fee structure for stowage
examinations from an hourly rate to a unit fee.
Fees for commodity inspection services were last increased on June
28, 1984 (49 FR 26547). For nearly 10 years, the 1984 fee schedule
sufficiently recovered operating expenses and maintained a minimum 3-
month operating reserve. However, by fiscal year (FY) 95, increased
operating costs coupled with reductions in the number of services
requested rendered the 1984 fee schedule inadequate for generating
sufficient revenue to cover operating expenses. The operating reserve,
which has been funding losses to the commodity inspection program for
the past 4 years, was drawn down to the minimum 3-month operating
reserve. Given these conditions, the Administrator of GIPSA determined
that a fee necessary to meet rising costs and maintain an adequate
reserve balance.
Executive Order 12778
This proposed rule has been reviewed under Executive Order 12778,
Civil Justice Reform. It is not intended to have a retroactive effect,
nor will this proposed rule preempt any State or local laws,
regulations, or policies unless they present irreconcilable conflict
with this rule. No administrative procedures must be exhausted prior to
any judicial challenge to provisions of this rule.
Regulatory Flexibility Act Certification
James R. Baker, Administrator, GIPSA, has determined that this
proposed 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
commodity inspection services do not meet the requirements for small
entities. In addition, FGIS is required by statute to recover the costs
of commodity inspection services, as nearly as practicable.
Information Collection and Record Keeping Requirements
In compliance with the Paperwork Reduction Act of 1980 (44 U.S.C.
Chapter 35), the previously approved information collection and
recordkeeping requirements for applications for inspection services,
including official commodity inspections, have been approved by the
Office of Management and Budget under control number 0580-0013.
Background
The commodity inspection fees were last amended effective June 28,
1984 (49 FR 26547). These fees were to cover, as nearly as practicable,
the operating costs for the program. They presently appear in
Sec. 868.90, Tables 1 and 2, of the regulations (7 CFR 868.90, Tables 1
and 2).
The majority of processed commodity inspections performed under the
Agricultural Marketing Act of 1946 are on purchases made by the Farm
Service Agency (FSA) formerly Agricultural Soil Conservation Service.
Historically, approximately 92 percent of the services performed have
been for FSA purchases. Defense Personnel Support Center (DPSC)
inspections account for approximately 2 percent of the inspections; the
remaining 6 percent are performed under nongovernment contracts.
Approximately 65 percent of graded commodity inspections are for
government purchases, and the
[[Page 35688]]
remaining 35 percent are for commercial sales.
Several actions have caused a general decrease in the number of
inspections performed for both graded and processed commodities.
Beginning in FY 92, FSA commodity purchases began to decline as a
result of the success of a market-oriented farm program that virtually
eliminated government-owned commodity grain stocks and, in turn, the
portion of processed commodities derived from these stocks. In
addition, in FY 94, responsibility for inspecting many products for
DPSC was transferred from FGIS to AMS.
Processed commodities comprise approximately 90 percent of the
program's revenue. In FY 91, FGIS inspected 26,218 lots. By FY 92, the
number of inspected lots dropped to 24,004; in FY 93, 17,494 lots were
inspected; and FY 94 saw a slight increase to 19,664. In FY 95,
however, the total again decreased to 15,065, or a 43 percent reduction
from the number of lots inspected in FY 91. Corresponding decreases
have also been experienced for graded commodities.
Revenue collected in FY 91 totaled $6,562,940 and operating costs
totaled $5,987,299 for a positive margin of $575,570. Revenue in FY 92
dropped to $5,158,903 due to the decrease in inspections and resulted
in a $179,396 loss to the program. Losses were incurred in each of the
following years: $1,184,602 in FY 93, $764,865 in FY 94, and $1,456,944
in FY 95. At the same time, FGIS reduced operating costs for the
program from $5,987,370 in FY 91 to $5,468,059 in FY 95.
FGIS maintains an operating reserve specifically to cover the cost
of shutting down the program in case of an emergency. Agency policy is
to maintain the reserve at a level equal to 3 months operating
expenses. In FY 91, the reserve was $4,942,934, which represented 10
months of operating costs. The loss of $179,396 in FY 92 was covered by
this reserve.
In FY 92, FGIS reviewed the program's operating reserve to
determine if the fund was being maintained at an adequate level. The
Agency determined that, while the level exceeded the three-month
reserve minimum, it would not be prudent to decrease the reserve
because of anticipated downturns in the number of service requests and
the consequent need to cover program losses while restructuring the
program.
Again in FY 93, the $1,184,602 loss was covered by the reserve,
which was drawn down to a year-end total of $3,889,429. Even with the
loss, the fund still represented an 8.5 month reserve. By FY 94, the
reserve had dropped to $3,173,033, or the equivalent of 7 months'
operating costs. The losses incurred in FY 95 reduced the margin to
$1,716,090, which is a 3.2 month reserve and represents the target
level for the fund.
In FY 94, FGIS responded to the decline in services requests by
initiating a field restructuring plan that continued into FY 95. During
this time period, three field offices and one suboffice that were
directly involved with providing services were closed and consolidated.
This eliminated the cost of maintaining a field office and streamlined
overall operations. On two separate occasions, retirement incentives
(buyouts) were offered to employees which reduced the staffing levels
in this program. Other personnel were transferred to field offices and
redirected to other programs. In FY 91, approximately 103 staff years
where devoted to this program. By FY 95, the staffing level had been
reduced by 35 percent to 67 staff years. The FY 95 level of 15,065
services performed is expected to remain fairly constant in the future.
Large numbers of service requests as seen in the late 1980s and early
1990s are not forecasted. However, further losses are projected if
adjustments to the fee schedule are not made.
Due to reduced and sporadic FSA purchases, efficiencies gained
through volume inspections have disappeared. Fluctuations in service
demand have increased, even at locations that routinely requested
service on a daily basis. These changes have impacted on FGIS' ability
to maintain qualified staff at some locations and especially those that
are large distances from a field office. In addition, there has been an
increase in the proportion of inspections requested by facilities that
may need service only one or two weeks per year. Many of these
locations are far from field offices. The result is a great deal of
long-distance travel from field offices to remote locations for one or
two week jobs. Such travel has increased operating costs and, in some
instances, has offset the savings gained through the restructuring.
The 1984 fee schedule was designed to recover all costs associated
with performing commodity inspection service, including overtime,
travel, per diem, and other related services. For nearly ten years, the
1984 fee schedule generated sufficient revenue to cover operating
expenses. This was due, in large part, to continuously improved
efficiencies in service delivery and strong market demand for
inspection services. Although additional costs saving measures were
implemented during fiscal years 94 and 95, operating expenses and
service demand have reached a level at which the 1984 fee schedule no
longer generates sufficient revenue to cover costs of providing
service.
Since FY 90, there has been a 40 percent decrease in the amount of
commodity inspections requested. The commodity inspection program
experienced a $1,642,720 loss (revenue $4,011,116 and cost $5,468,059)
during FY 95. The commodity program's retained earnings are currently
$1,476,487, a 3.8-month operating reserve. Further losses are projected
if adjustments to the 1984 fee schedule are not made.
Proposed 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. In accordance
with this section, FGIS proposes the following changes to maintain the
current commodity inspection program: (1) Increase hourly and unit
fees; (2) charge actual travel and per diem costs; (3) charge for
sanitation inspections, pre-inspection conferences, and related
services; (4) establish hourly fees at time and one-half for service
provided on Saturdays, Sundays, and Federal holidays; (5) eliminate the
provisions for entering into a contract for service; and (6) change in
the fee structure for stowage examinations from an hourly rate to a
unit fee.
1. Hourly Rates. The proposed new hourly rates are divided into two
categories: Regular Workday (Monday through Friday) and Nonregular
Workday (Saturday, Sunday, and Holiday). Section 868.90, Tables 1 and
3, currently define Saturday as a Regular Workday. The revised Table 1
redefines a Nonregular Workday as a Saturday, Sunday, and Holiday and
the hourly rate reflects time and one-half paid to employees. In
addition, the two separate hourly rates for regular and nonregular
workdays contained in Tables 1 and 3 are combined into one set of
hourly rates in a revised Table 1 that covers all services.
Section 868.90, Tables 1 and 3, currently provide for reduced
hourly fees for applicants who elect to enter into a contract with
FGIS. No applicants have used this provision since it was introduced in
1984. Because the current trends of decreasing service requests and
increasing demand fluctuations indicate less likelihood for applicants
to use this provision in the future, it is eliminated.
[[Page 35689]]
The rate for a Regular Workday will increase to $33.00 and
Nonregular Workday will increase to $42.80. These new hourly fees cover
FGIS' administrative and supervisory costs for the performance of
official services. These costs include personnel compensation and
benefits, rent, communications, utilities, contractual services,
supplies, and equipment.
2. Unit Rates. Section 868.90, Table 2 currently provides unit fees
for the grading of beans, peas, lentils, hops, and other nongraded,
nonprocessed commodities. These rates are increased and the current
Table 2 is deleted and combined with proposal Table 1. The new unit
rates cover FGIS' administrative and supervisory costs for performing
the official service, including costs for personnel compensation and
benefits, rent, communication, utilities, contractual services,
supplies, and equipment.
3. Travel and Per Diem. FGIS is making changes to Sec. 868.92 of
the regulations concerning the application of fees covered in Table 1.
Specifically, service, as provided under Sec. 868.90, Table 1, will
include service provided within 25 miles of the employee's assigned
duty point. Travel, per diem, and other related costs will be assessed
for providing service beyond the 25-mile limit. Section 868.91, Table
1, Fees for certain Federal rice inspection services, remain unchanged;
travel, per diem, and other related costs continue to be included in
the hourly rate.
4. Services Other Than Inspections. FGIS is proposing a change in
the fee structure for stowage examinations from an hourly fee that
recovers all costs to a service-specific fee structure currently funded
by the hourly rate. The service-specific fee will be a unit fee and
will apply only to stowage examinations.
FGIS is revising Footnote 1 to include provisions for charging for
sanitation examinations, pre-inspection conferences, and other related
services for which FGIS does not currently charge.
5. Fees for Laboratory Testing Services. Fees For Laboratory Test
Services, Table 4, Fees for Official Laboratory Test Services Performed
At the FGIS Commodity Testing Laboratory at Beltsville, Maryland, For
Processed Agricultural Products is revised to read: Table 2--Commodity
Testing Laboratory.
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 proposed to
be 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 868.90 is revised to read as follows:
Sec. 868.90 Fees for certain Federal inspection services.
(a) The fees shown in Table 1 apply to Federal Commodity Inspection
Services specified below.
Table 1.--Hourly Rates \1\ \3\
[Fees for Inspection of Commodities Other Than Rice]
------------------------------------------------------------------------
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Hourly Rates (per service representative):
Monday to Friday--$33.00
Saturday, Sunday, and Holidays--$42.80
Miscellaneous Processed Commodities \2\:
(1) Additional Tests (cost per test, assessed in
addition to the hourly rate):
(i) Aflatoxin Test (Thin Layer Chromatography)... $51.40
(ii) Falling Number.............................. 12.00
)iii) Aflatoxin Test Kit......................... 7.50
Graded Commodities (Beans, Peas, Lentils, Hops, and
Pulses):
(1) Additional Tests--Unit Rates (Beans, Peas,
Lentils):
(i) Field run (per lot or sample)................ 22.70
(ii) Other than field run (per lot or sample).... 13.50
(iii) Factor analysis (per factor)............... 5.50
(2) Additional Tests--Unit Rates (Hops)--(i) Lot or
sample (per lot or sample).......................... 29.00
(3) Additional Tests--Unit Rates (Nongraded
Nonprocessed Commodities--(i) Factor analysis (per
factor)............................................. 5.50
(4) Stowage examination (service-on-request) \4\:
(i) Ship (per stowage space)..................... 50.00
(minimum
$250 per ship)
(ii) Subsequent ship examinations (same as original)
(minimum
$150 per ship)
(iii) Barge (per examination).................... 40.00
(iv) All other carriers (per examination)........ 15.00
------------------------------------------------------------------------
\1\ Fees for original commodity inspection and appeal inspection
services include, but are not limited to, sampling, grading, weighing,
stowage examinations, pre-inspection conferences, sanitation
inspections, and other services requested by the applicant and that
are performed within 25 miles of the field office. Travel and related
expenses (commercial transportation costs, mileage and per diem) will
be assessed in addition to the hourly rate for service beyond the 25-
mile limit. Refer to Secs. 868.92, Explanation of service fees and
additional fees for all other service fees except travel and per diem.
\2\ When performed at a location other than at the commodity testing
laboratory.
\3\ Faxed and extra copies of certificates will be charged at $3.00 per
copy.
\4\ If performed outside of normal business, 1\1/2\ times the applicable
unit fee will be charged.
(b) In addition to the fees, if any, for sampling or other
requested service, a fee will be asssessed for each laboratory test
(original, retest, or appeal) listed in Table 2.
(c) If a requested test is to be reported on a specified moisture
basis, a fee for a moisture test will also be assessed.
[[Page 35690]]
(d) Laboratory tests referenced in Table 2 will be charged at the
applicable laboratory fee when performed at field locations other than
at the applicant's facility.
Table 2.--Fees for Laboratory Test Services \1\
------------------------------------------------------------------------
Laboratory tests Fees
------------------------------------------------------------------------
(1) Alpha monoglycerides................................... $18.00
(2) Aflatoxin test (other than TLC or Minicolumn method)... 22.50
(3) Aflatoxin (TLC)........................................ 48.00
(4) Aflatoxin (Minicolumn method).......................... 25.00
(5) Appearance & odor...................................... 3.00
(6) Ash.................................................... 8.50
(7) Bacteria count......................................... 10.00
(8) Baking test (cookies).................................. 28.00
(9) Bostwick (cooked)...................................... 12.60
(10) Bostwick (uncooked/cook test/dispersibility).......... 6.50
(11) Brix.................................................. 8.00
(12) Calcium............................................... 12.50
(13) Carotenoid color...................................... 12.50
(14) Cold test (oil)....................................... 10.00
(15) Color test (syrups)................................... 6.50
(16) Cooking test (other than corn soy blend).............. 7.00
(17) Crude fat............................................. 10.00
(18) Crude fiber........................................... 13.00
(19) Dough handling (baking)............................... 8.50
(20) E. coli............................................... 19.00
(21) Falling number........................................ 12.00
(22) Fat (acid hydrolysis)................................. 14.00
(23) Fat stability (A.O.M.)................................ 27.00
(24) Flash point (open & close cup)........................ 14.00
(25) Free fatty acid....................................... 12.00
(26) Hydrogen ion activity (ph)............................ 9.50
(27) Iron enrichment....................................... 15.00
(28) Iodine number/value................................... 9.50
(29) Linolenic acid (fatty acid profile)................... 50.00
(30) Lipid phosphorous..................................... 47.00
(31) Livibond color........................................ 10.00
(32) Margarine (nonfat solids)............................. 23.60
(33) Moisture.............................................. 6.00
(34) Moisture average (crackers)........................... 4.00
(35) Moisture & volatile matter............................ 8.50
(36) Performance test (prepared bakery mix)................ 32.00
(37) Peroxide value........................................ 13.50
(38) Phosphorus............................................ 14.00
(39) Popcorn kernels (total defects)....................... 19.00
(40) Popping ratio/value popcorn........................... 19.00
(41) Potassium bromate..................................... 20.00
(42) Protein............................................... 7.50
(43) Rope spore count...................................... 31.50
(44) Salmonella............................................ 40.00
(45) Salt or sodium content................................ 12.50
(46) Sanitation (filth light).............................. 24.00
(47) Sieve test............................................ 5.00
(48) Smoke point........................................... 22.00
(49) Solid fat index....................................... 85.00
(50) Specific volume (bread)............................... 21.80
(51) Staphylococcus aureus................................. 24.50
(52) Texture............................................... 6.50
(53) Tilletia controversa kuhn (TCK) (Qualitative)......... 25.20
(54) Tilletia controversa kuhn (TCK) (Qualitative)......... 76.00
(55) Unsaponifiable matter................................. 25.00
(56) Urease activity....................................... 12.50
(57) Visual exam (hops pellet)............................. 7.50
(58) Visual exam (insoluble impurities oils & shortenings). 5.00
(59) Visual exam (pasta)................................... 10.50
(60) Visual exam (processed grain products)................ 12.00
(61) Visual exam (total foreign material other than cereal
grains)................................................... 6.50
(62) Vitamin enrichment.................................... 7.00
(63) Vomitoxim (TLC)....................................... 40.00
(64) Vomitoxin (Qualitative)............................... 30.00
(65) Vomitoxin (Quantitative).............................. 40.00
(66) Water activity........................................ 20.00
(67) Wiley melting point................................... 12.50
[[Page 35691]]
(68) Other laboratory tests................................ (\2\)
------------------------------------------------------------------------
\1\ When laboratory test service is provided for GIPSA by a private
laboratory, the applicant will be assessed a fee which, as nearly as
practicable, covers the costs to GIPSA for the service provided.
\2\ Fees for other laboratory tests not referenced above will be based
on the noncontract hourly rate listed in Table 1.
3. Section 868.92 (a)(2) is revised to read as follows:
Sec. 868.92 Explanation of service fees and additional fees.
(a) * * *
(2) The cost of per diem, subsistence, mileage, or commercial
transportation to perform the service for rice inspection only in
Sec. 868.91, Table 1, Fees for certain Federal rice inspection
services. See Sec. 868.90, Table 1, footnote 1 for Fees for Inspection
of Commodities Other Than Rice.
* * * * *
Dated: June 25, 1996.
Michael V. Dunn,
Assistant Secretary, Marketing and Regulatory Programs.
[FR Doc. 96-16853 Filed 7-5-96; 8:45 am]
BILLING CODE 3410-EN-M
