WSR 25-10-098

PROPOSED RULES

DEPARTMENT OF AGRICULTURE

[Filed May 7, 2025, 8:07 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 23-21-090.

Title of Rule and Other Identifying Information: Chapter 16-303 WAC, Seed assessment, fees for seed services and seed certification.

Hearing Location(s): On June 24, 2025, at 1:00 p.m., via Microsoft Teams at https://teams.microsoft.com/l/meetup-join/19%3ameeting_OTdlZjczZmMtNTJmOS00NGIxLTkzNzktM2QzZTFkMjcwZGU0%40thread.v2/0?context=%7b%22Tid%22%3a%2211d0e217-264e-400a-8ba0-57dcc127d72d%22%2c%22Oid%22%3a%22838c55c7-c187-44ae-8de0-2be684ce5d4a%22%7d, Meeting ID 288 767 947 492 1, Passcode 3MM9P985; or dial by phone +1 564-999-2000,,790995666# United States, Olympia.

Date of Intended Adoption: July 1, 2025.

Submit Written Comments to: Gloriann Robinson, Rules Coordinator, P.O. Box 42560, Olympia, WA 98504-2560, email wsdarulescomments@agr.wa.gov, fax 360-902-2092, by June 24, 2025.

Assistance for Persons with Disabilities: Contact Timothy Estes, division operations analyst, phone 360-902-1931, fax 360-902-2085, TTY 800-833-6388, email timothy.estes@agr.wa.gov, by June 17, 2025.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The department of agriculture (department) certifies, inspects, samples, tests, and analyzes agricultural, vegetable, or flower seed sold or offered for sale in Washington state. The department designated the Washington State Crop Improvement Association (WSCIA) as the director's duly authorized agent for the purpose of certifying seed of buckwheat, chickpeas, field peas, lentils, millet, soybeans, small grain, and sorghum in WAC 16-302-010. WSCIA funds the cost for certifying these seed crops through the collection of fees in WAC 16-303-340.

The department is considering amending this chapter to:

Reasons Supporting Proposal: Overhead costs for providing these services have risen dramatically over the last several years; however, the fees in this section have not been revised since 2012. After a thorough budget review, the WSCIA board of directors have determined that they cannot continue to provide certifying services at the current fee rate and must revise the fees in this section to more accurately recover the cost for these services. In order for the agency to continue providing certifying services, the fees in this section must be revised to more accurately recover the cost for these services. The department has determined that the proposed changes are necessary based upon the requirements and conditions of the industry and will serve to promote the well-being of purchasers and users of seed as well as members of the seed industry.

Statutory Authority for Adoption: RCW 15.49.005, [15.49].310, and [15.49].370.

Statute Being Implemented: Chapter 15.49 RCW.

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: WSCIA, public.

Name of Agency Personnel Responsible for Drafting: Timothy Estes, 1111 Washington Street S.E., Olympia, WA 98504, 360-902-1931; Implementation and Enforcement: Paula Lundt, 21 North 1st Avenue, Suite 203, Yakima, WA 98902, 509-314-1032.

A school district fiscal impact statement is not required under RCW 28A.305.135.

A cost-benefit analysis is not required under RCW 34.05.328. The department is not a listed agency under RCW 34.05.328 (5)(a)(i).

Scope of exemption from rule proposal from Regulatory Fairness Act requirements:

Is not exempt.

The proposed rule does impose more-than-minor costs on businesses.

Chapter 16-303 WAC

Seed Assessment, Fees for Seed Services and Seed Certification

Describe the proposed rule, including: A brief history of the issue; an explanation of why the proposed rule is needed; and a brief description of the probable compliance requirements and the kinds of professional services that a small business is likely to need in order to comply with the proposed rule: WSCIA is a 501 (c)(5) nonprofit organization that works with Washington State University, Oregon State University, and other public and private breeding programs, seed growers, and conditioners to develop, produce, and distribute certified seed to improve crop quality and yields in Washington. WSCIA is designated in WAC 16-302-010 to act as the director's duly authorized agent for the purpose of certifying seed of buckwheat, chickpeas, field peas, lentils, millet, quinoa, soybeans, small grain (including quinoa), sorghum, and forest trees, including conditioning plant inspections for these crops. As part of these duties, WSCIA routinely reviews the certification rules for these crops, and petitions for changes that reflect the requirements and conditions of the industry, as well as promote the well-being of the purchasers and users of seed and the members of the seed industry. This rule amendment proposes revisions to chapter 16-303-340 WAC that address fees collected by WSCIA for field inspections.

The department is an official Association of Seed Certifying Agencies (AOSCA) program dedicated to preserving genetic purity and varietal identity of seeds. The mission of AOSCA is to promote and facilitate the movement of seed or plant products in local, national, and international markets through the coordinated efforts of official seed certification agencies acting to evaluate, document, and verify that a seed or plant product meets certain accepted standards. Additionally, AOSCA establishes minimum standards for genetic purity and identity and recommends minimum standards for seed quality for the classes of certified seed. They standardize seed certification regulations and procedures, as well as operational procedures in interagency seed certification, and they periodically review agency genetic standards and procedures to assure compliance with the Federal Seed Act. By maintaining these strict standards and inspection procedures, AOSCA programs help promote widespread agricultural marketability, productivity, and sustainability.

Why the rule change for WAC 16-303-340 is needed: Beginning in 2022, WSCIA staff and its board of directors have been assessing the need for possible fee increases to account for rising operational costs (including web portal development/maintenance) and increased demand for services. Most notably, the assessment revealed that field inspection fees have not increased since 2012 and that the costs to provide inspection services, including both labor and transportation, have significantly increased since that time. Additionally, an initiative was launched in 2018 to both streamline the processing and recordkeeping of field applications and resulted in the development of WSCIA's "field application and bulk certificate web portal," which has, to date, required funding of over $179,024. In sum, WSCIA is proposing an increase to some of the existing fees in this rule to ensure that the costs of providing services are recovered and that its certification operations are sustained.

Probable compliance requirements: The only probable compliance requirement will be paying the updated fees for seed certification. Section 3 provides a detailed overview of what the cost of compliance will look like with the proposed changes. WSCIA performed an in-depth analysis to determine the proposed fee structure, and that information is also provided in Section 3. No professional services will be required by businesses in order to comply with the proposed rule amendments.

Analyze the probable cost of compliance. Identify the probable costs to comply with the proposed rule, including: Cost of equipment, supplies, labor, professional services and increased administrative costs; and whether compliance with the proposed rule will cause businesses to lose sales or revenue: The proposed revisions to WAC 16-303-340 do not result in an across the board increase for all fees. An in-depth analysis of the fees collected by the different types of operations allowed WSCIA to only increase fees that will better recover costs per services provided. The result of the restructure is an increase in some fees and no increase on others. Table 3.1 shows the proposed new fee schedule as it compares to the current fees. The probable cost of compliance will be dependent on services that each business requests. Table 3.2 provides an overview of how businesses will be impacted based on the proposed fees as compared to the fees they paid in 2024.

In addition, the proposed revisions to this rule are not likely to have an appreciable impact on the cost of equipment, supplies, labor, professional services, or administrative costs. Compliance with the proposed rule will not likely cause businesses to lose sales or revenue. However, it will likely increase overall expenses for each business. In contrast, if the program was not able to continue providing the current level of service, or had to shut down completely due to lack of funds, the businesses it serves would likely lose sales due to the inability to have their seeds certified when many small grain varieties are PvP Title V so must be sold as a certified class.

While the proposed revision aims to increase the existing fee structure for seed certification, it does not impose any additional recordkeeping or administrative costs beyond those currently present in the existing rule.

Proposed rule is not expected to cause businesses any loss of sale or revenue.

Determine whether the proposed rule may have a disproportionate impact on small businesses as compared to the 10 percent of businesses that are the largest businesses required to comply with the proposed rule: RCW 19.85.040(1) requires the department to compare the cost of compliance for small businesses with the cost of compliance for the 10 percent of businesses that are the largest businesses required to comply with the proposed rules using one or more of the following as a basis for comparing costs: (a) Cost per employee; (b) cost per hour of labor; or (c) cost per $100 of sales.

Based on the information within Table 5.1, the department determined that the proposed rule may have a disproportionate economic impact on small businesses. The data reveals that small businesses reported significantly higher compliance costs relative to their size (measured by number of employees) compared to the largest 10 percent of businesses required to comply with the proposed rule. In essence, this information demonstrates that large business respondents benefit greatly from economies of scale in absorbing regulatory costs, whereas the small business respondents face a higher per-employee cost burden. These comparative impact analyses are shown below:

The data reveal disparities in operational costs between small and large businesses, with smaller businesses facing significantly higher costs per employee. While large businesses often benefit from economies of scale and streamlined processes, small businesses may lack these advantages, forcing them to allocate a far greater share of their resources per worker. While the department cannot definitively conclude that the proposed rule will create disproportionate impacts on small businesses, the survey results strongly suggest a likelihood of uneven financial burdens.

If the proposed rule has a disproportionate impact on small businesses, identify the steps taken to reduce the costs of the rule on small businesses. If the costs cannot be reduced provide a clear explanation of why: WSCIA's program determined that it does not have an option to reduce costs to perform the work because doing so would create a cash deficit/inability to continue operations.

WSCIA staff provides service to more acreage with less staff than ever before. With the increase of cost per staff and Washington state overtime rules, this has put a strain on funds. In addition to the increasing costs previously absorbed by WSCIA, they continue to make large investments into modernizing their field inspection process to remain efficient with their time. The cost to provide certification services has increased drastically since the previous fee increase.

The cost to small businesses would be limited because if the certification costs are paid by the seed field farmer, they will charge an increased amount to the seed dealer they are growing for so the cost is captured by the small business.

RCW 19.85.030(2) requires consideration of the following methods of reducing the impact of the proposed amendment on small businesses:

(a)Reducing, modifying, or eliminating substantive regulatory requirements: WAC 16-302-010 designates WSCIA to act as the director's authorized agent for the purpose of certifying buckwheat, chickpeas, field peas, lentils, millet, quinoa, soybeans, small grain, sorghum and forest trees, including conditioning plant inspections for these crops. WSCIA's field inspection activities are funded by inspection fees in WAC 16-303-340. The fees have not been evaluated in 12 years and are no longer able to cover the cost of providing these services. WSCIA's board of directors determined the increase is necessary to maintain the current level of service. Reducing, modifying, or eliminating the services would conflict with AOSCA/WSDA certification standards. In order for the agency to continue providing certifying services, the fees in this section must be revised to more accurately recover the cost for these services. WSDA has determined that the proposed changes are necessary based upon the requirements and conditions of the industry and will serve to promote the well-being of purchasers and users of seed as well as members of the seed industry.

(b) Simplifying, reducing, or eliminating recordkeeping and reporting requirements: There are no recordkeeping or reporting requirements associated with the proposed rule amendment.

(c) Reducing the frequency of inspections: Inspections are a mandatory part of WSCIA's certification services and are required to complete the necessary steps for certification. AOSCA mandates the number and frequency of inspections.

(d) Delaying compliance timetables: Delaying compliance is not a feasible step as WSCIA has already delayed increasing fees for many years. The proposed rule is a necessary step to maintain the level of certification services WSCIA provides.

(e) Reducing or modifying fine schedules for noncompliance: There are no fine schedules associated with the proposed rule amendment.

(f) Any other mitigation techniques including those suggested by small businesses or small business advocates: A few services remain the same and have not increased. The current time study for the staff labor and inputs of resources indicates the fee should remain the same. The revision of reports upon request from customers, the shipping and handling fee, plus the cost for the annual and rough bluegrass quarantine per acre fee will all remain the same. No other mitigation techniques were suggested by small businesses or small business advocates.

Describe how small businesses were involved in the development of the proposed rule: A combination of both small and large businesses were engaged for each outreach in the table below as industry and WSCIA's board of directors is made up of small and large businesses. The need for the program to increase fees was discussed with the WSCIA board on several occasions in the years leading up to this proposed rule change. WSCIA board of directors discussed the budgetary need to maintain the current level of services with the escalating cost of providing these services.

Identify the estimated number of jobs that will be created or lost as the result of compliance with the proposed rule: A survey was conducted by WSCIA and sent to their customers on August 14, 2024. The survey results were inconclusive, as only three responses were received. No jobs are estimated to be created or lost in complying with this proposed rule.

A copy of the statement may be obtained by contacting Gloriann Robinson, Rules Coordinator, P.O. Box 42560, Olympia, WA 98504-2560, phone 360-902-1802, fax 360-902-2092, TTY 800-833-6388, email wsdarulescomments@agr.wa.gov.

May 7, 2025

Jessica Allenton

Assistant Director

OTS-5957.1