Fees for Supervision of Official Inspection and Weighing Services Performed by Delegated States and/or Designated Agencies, Miscellaneous Fees for Other Services, and Removal of Specific Fee References
| Published date | 02 March 2021 |
| Citation | 86 FR 12119 |
| Record Number | 2021-03537 |
| Section | Proposed rules |
| Court | Agricultural Marketing Service |
Federal Register, Volume 86 Issue 39 (Tuesday, March 2, 2021)
[Federal Register Volume 86, Number 39 (Tuesday, March 2, 2021)]
[Proposed Rules]
[Pages 12119-12122]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-03537]
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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. 86, No. 39 / Tuesday, March 2, 2021 /
Proposed Rules
[[Page 12119]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 800
[Doc. No. AMS-FGIS-20-0001]
RIN 0581-AD94
Fees for Supervision of Official Inspection and Weighing Services
Performed by Delegated States and/or Designated Agencies, Miscellaneous
Fees for Other Services, and Removal of Specific Fee References
AGENCY: Agricultural Marketing Service, Department of Agriculture
(USDA).
ACTION: Proposed rule.
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SUMMARY: The Agricultural Marketing Service (AMS) invites comments on a
proposal to implement a standardized formula model for calculating
Federal Grain Inspection Service (FGIS) supervision fees. The proposed
change would enable FGIS to adjust supervision fees annually in order
to maintain an appropriate operating reserve as required by the United
States Grain Standards Act (USGSA). As with other AMS fee-based
programs, AMS would publish annual FGIS fee updates in the Federal
Register and post updated fee schedules on its website. The proposed
rule would also eliminate or revise certain registration and
duplication fees charged by FGIS.
DATES: Comments must be received on or before April 1, 2021.
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 http://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 USGSA (7 U.S.C. 71 et seq.) authorizes
FGIS, a program area within AMS, to supervise grain inspection and
weighing services provided by official agencies and to charge and
collect reasonable fees to cover the cost of such supervision. These
fees are charged by official agencies to their customers (grain
industry) as part of the overall fee charged for inspection and
weighing services. Supervision fees collected by FGIS cover, as nearly
as practicable, the program and administrative costs of supervising
official agencies.
FGIS regularly reviews its user-fee financed programs under USGSA
to determine whether the fees are adequate and appropriate operating
reserve fund levels are maintained. On July 1, 2016, following such a
review (81 FR 41790; June 28, 2016), FGIS suspended the assessment of
fees for supervision of official inspection and weighing services
performed by delegated States and/or designated agencies to reduce the
operating reserve. This suspension ended on December 31, 2020. FGIS's
operating reserve at that time was adequate to cover 3 to 6 months'
operating expenses as required, but the program will need to resume
assessment of tonnage fees to cover the ongoing costs of supervision.
Based on the review, FGIS proposes to move to a standardized
formula model for annual fee adjustments to recover the costs
associated with administering the official agency supervision program.
This action would maintain FGIS's financial stability to assure
continued inspection and weighing services to the grain industry, which
would further facilitate the sound and orderly marketing of grain in
domestic and export markets. FGIS believes this approach would be
acceptable to the grain industry.
The fees for supervising official agencies were last revised in
2005 (70 FR 50149; August 26, 2005). The fee schedule at 7 CFR
800.71(a)(2) (Schedule B) has not been changed since then. Currently,
the FGIS fee for supervision of official agencies is set at $0.011 per
metric ton of domestic U.S. grain shipments inspected and/or weighed,
including land carrier shipments to Canada or Mexico.
Financial data for the supervision of official agencies program for
fiscal years (FY) 2016 through 2020 is reviewed in Table 1.
Table 1--Supervision of Official Agencies Financial Analysis
[Millions of dollars] *
----------------------------------------------------------------------------------------------------------------
FY 16 FY 17 FY 18 FY 19 FY 20
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Revenue........................................ $1.91 $0.00 $0.00 $0.00 $0.00
Obligations.................................... 1.43 1.78 1.88 1.55 1.81
Annual Surplus or (Deficit).................... 0.47 (1.78) (1.88) (1.55) (1.81)
Operating Reserve--running balance............. 8.73 6.95 5.08 3.53 1.73
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* Figures may not sum due to rounding and adjustments of prior year obligations.
As illustrated by Table 1, while revenues have been suspended since
July 2016, FGIS obligations have generally increased due to inflation
and cost of living adjustments. The exception was in FY19, when the
accounts of the former Grain Inspection, Packers and Stockyards
Administration (GIPSA), which included FGIS, were merged with AMS,
along with the close-out of obligations. As explained above, the
current fee structure generated a recurring annual operating surplus
for several years, resulting in a decision to suspend the collection of
the fees in
[[Page 12120]]
2016 that would gradually reduce the operating reserves to meet AMS's
target of maintaining funds to cover 3 to 6 months' expenses. Monthly
costs to operate the supervision of official agencies in FY 2020 were
$151,000. Thus, AMS would consider an operating reserve of between
$0.45 million and $0.91 million (3 and 6 times the monthly operating
cost, respectively) at the end of FY 2020 to be appropriate. At the end
of FY 2020, the operating reserve balance was $1.73 million, enough to
cover eleven and one half months of expenses.
To prevent accumulating a reserve balance beyond the targeted
amount (3 to 6 times the monthly operating cost), AMS proposes to adopt
a standardized formula for calculating user fees for each calendar year
(CY). AMS expects that reducing fees in the proposed manner would
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.
Calculations
This proposal calculates the supervision tonnage fee using the
prior year's actual costs and average yearly tonnage of domestic U.S.
grain shipments inspected and/or weighed, including land carrier
shipments to Canada and Mexico during the previous 5 fiscal years.
As a result, we are proposing to add new Sec. 800.71(b)(2)(i) and
(ii) to include the following formulas for calculating fee rates for CY
2021 and succeeding years.
Operating Reserve Adjustment. FGIS would divide the total prior
year supervision costs by 2 to determine the 6-months operating reserve
goal. From that value, FGIS would subtract the FY operating reserve
ending balance to obtain the operating reserve adjustment for
determining the supervision tonnage fee.
Supervision tonnage fee. FGIS would add the total prior year
supervision costs and the operating reserve adjustment, then divide the
result by the previous 5-year average tonnage. If the calculated fee is
zero or a negative value, FGIS would suspend collection of supervision
tonnage fees for the next calendar year.
In addition to implementing a new formula for calculating
supervision tonnage fees, this proposal would also revise:
Section 801.71(a)(2)--Schedule B--to remove the currently
specified fee and provide that annual supervision fees would be as
published on the AMS website.
The introductory text of Sec. 801.71(b)--Annual review of
fees--to convey that weighing and inspection fees, as well as
supervision fees, would be recalculated annually.
Section 801.71(b)(1) to clarify that the tonnage fees
calculated in that section pertain only to FGIS inspection and weighing
(Schedule A) fees.
Section 801.71(b) by redesignating paragraph (b)(2) as
paragraph (b)(3) and adding a new paragraph (b)(2) that outlines the
supervision fee calculations, as described earlier.
Miscellaneous Fees for Other Services
In addition to the above changes related to supervision fees, AMS
proposes to make the following changes to other fee requirements in
Sec. 801.71(d).
The proposed rule would remove the introductory text of Sec.
801.71(d)(1)(i)--Registration certificates and renewals, and would
consolidate paragraphs (d)(1)(i)(A) and (B) of that section, which
currently provide flat fees for registering business operations that
buy, handle, weigh, or transport grain for sale in foreign commerce or
for such businesses that are also in a control relationship with
respect to a business that buys, handles, weighs, or transports grain
for sale in interstate commerce. Currently, the registration fee for
the former is $135, and the registration fee for the latter is $270.
The proposed rule would combine the two charges into one. AMS proposes
to calculate the export registration fee using the following formula
and adjust the fees annually, as necessary.
Registration certificates and renewals. FGIS would multiply Sec.
800.71(a) Table 1 of Schedule A noncontract hourly rate by quantity of
five. The fee covers FGIS personnel costs to review applications,
monitor annually, publication costs, and administrative expenses.
AMS would publish the annual rate in the Federal Register and on
the AMS website. The anticipated consolidated fee for calendar year
2021 is estimated to be $300 using current published fees.
The proposed rule would remove Sec. 800.71(d)(1)(ii), which
provides charges for providing extra copies of registration
certificates, as the certificates are now provided electronically for
printing by the applicant.
The proposed rule would revise Sec. 800.71(d)(2) to remove the
provision of a flat fee for applications to amend an official agency
designation and would instead calculate the rate using the following
formula. The rate will be adjusted annually and published on the AMS
website.
Designation amendments. FGIS will calculate the rate using Federal
Register publication rate for 3 columns, plus 1 hour of noncontract
hourly rate from Sec. 800.71(a) Table 1 of Schedule A. The fee covers
FGIS personnel costs, administrative expenses, and Federal Register
publication costs.
The current rate is $75 per application; AMS estimates the fee
would be $510 for calendar year 2021 using current published fees. AMS
typically receives only one or two requests each year, so the overall
cost to official agencies is not expected to be significant. AMS
proposes to review the costs to process and publish designation
amendments and adjust the fees annually, as necessary.
Finally, the proposed rule would remove Sec. 800.71(d)(3), which
provides a flat application fee for operating a scale testing
organization. FGIS hasn't approved such an organization in the past 5
years. Now States that operate as scale testing organizations, in
addition to FGIS, provide service in areas that are not in reasonably
close proximity to FGIS duty stations. Scale operators pay far less in
travel costs by obtaining services provided by their local State scale
testing organizations on behalf of FGIS. Additionally, this increases
FGIS efficiency by reducing staff travel and allowing their deployment
to other mission duties.
Executive Orders 12866 and 13563
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, the Office of
Management and Budget (OMB) has not reviewed this rule under those
orders.
AMS considered several alternatives to the changes in this proposed
rule, including reinstating the current fee or applying a standardized
formula using 1 year of supervision tonnage versus the 5-year
supervision tonnage average.
[[Page 12121]]
Ultimately, AMS determined that the proposed approach of recalculating
the fee each year using a standard formula based on a 5-year
supervision tonnage average would provide savings to the industry when
the operating reserve balance exceeds FGIS's goal and would limit large
fee increases following years where supervision tonnage volumes are
significantly less. AMS expects the proposed changes to benefit the
grain industry by adjusting supervision fee as needed annually to
reflect actual expenses related to grain inspections supervision and
maintaining appropriate operating reserve balances. 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 proposed rule is not intended to have
retroactive effect. The USGSA provides in Sec. 87g that no State or
subdivision thereof may require or impose any requirements or
restrictions concerning the inspection, weighing, or description of
grain under the Act. This proposed rule will not preempt any State or
local laws, regulations, or policies, unless they present an
irreconcilable conflict with this proposed rule. No administrative
proceedings would be required before parties could file suit in court
challenging the provisions of this proposed rule.
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.
This proposed rule sets the fees for three different FGIS
functions: (1) Fees for FGIS Supervision, (2) fees for registration
certificates and renewals for exporters of grain, and (3) fees for
amending the designation of official agencies.
AMS has determined that this proposed rule does not have a
significant economic impact on a substantial number of small entities,
because most applicants (grain industry) that apply for these official
services and are subjected to AMS supervision fees, do not meet the
requirements for small entities. This proposed rule will affect
entities engaged in shipping grain to and from points within the United
States and exporting grain from the United States to Canada and Mexico.
There are approximately 9,500 off-farm storage facilities in the United
States that could receive grain services from delegated States or
designated agencies. AMS estimates 25 percent of these users would be
considered small businesses based on criteria established by the Small
Business Administration (13 CFR 121.201) (SBA) 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 grain farmers, NAICS codes 424510 and
493130, as those whose annual receipts do not exceed $750,000 and no
more than 500 employees.
With respect to fees for supervision, those fees are a minor amount
compared to the total value of the grain shipments. The carrier types
shipped by small entities are submitted samples and trucks with a
standardized weight of 23.95 metric tons and railcars with a
standardized weight of 99.79 metric tons. Supervision fees assessed on
these carriers at the current published rate are $0.26 per truck with a
2020 corn market year value of $2,700, and $1.10 per railcar with a
2020 corn market year value of $12,600.
The registration certificates and renewal fee applies to persons
engaged in the business of buying grain for sale in foreign commerce,
and in the business of handling, weighing, or transporting of grain for
sale in foreign commerce. Under the provisions of the USGSA, grain
exported from the United States must be officially inspected and
weighed. Mandatory inspection and weighing services were provided by
AMS and official agencies on a fee basis for 73 registered exporters in
CY 2019. Seventy-seven of the currently registered entities are owned
and managed by multi-national corporations, large cooperatives, or
public entities that do not meet the criteria for small entities
established by the SBA. In 2019, approximately 11 small exporters
registered with FGIS, and in 2020 approximately 7 small exporters
registered with FGIS. As explained, with the estimated calculation of
the registration fees for 2021 at $300, FGIS believes the registration
fees would have a minor effect on the small number of small business
that register with FGIS.
Finally, the designation amendment applies to an official agency
requesting a modification to its designation within the five-year
designation period. AMS has 42 designated States and agencies, and
thirteen of these designated agencies meet the criteria for small
entities established by the SBA. As explained earlier, the estimated
designation amendment fee for 2021 would be $510. FGIS believes the
designation amendment fee would have a minor impact on small
businesses, since it typically receives no more than two modification
requests per year.
Proposed adoption of standardized AMS user-fee rate calculations
for 2021 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 grain supervision 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 grain inspection
services meet the definition of small entities.
Finally, USDA has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this proposed 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 supervision of official agencies 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 800
Administrative practice and procedure, Grain.
For the reasons set forth in the preamble, AMS proposes to amend 7
CFR part 800 as follows:
PART 800--GENERAL REGULATIONS
0
1. The authority citation for part 800 continues to read as follows:
Authority: 7 U.S.C. 71-87k.
[[Page 12122]]
Sec. 800.71 [Amended]
0
2. Amend Sec. 800.71 by:
0
a. Revising paragraph (a)(2);
0
b. Revising the introductory text in paragraph (b);
0
c. Revising the first sentence in paragraph (b)(1);
0
d. Redesignating paragraph (b)(2) as paragraph (b)(3);
0
e. Adding new paragraph (b)(2); and
0
f. Revising paragraph (d).
The revisions and addition read as follows:
Sec. 800.71 Fees assessed by the Service.
(a) * * *
(2) Schedule B--Fees for FGIS Supervision of Official Inspection
and Weighing Services Performed by Delegated States and/or Designated
Agencies in the United States. The supervision fee charged by the
Service will be assessed per metric ton of domestic U.S. grain
shipments inspected and/or weighed, including land carrier shipments to
Canada and Mexico. For each calendar year, FGIS will calculate Schedule
B fees as defined in paragraph (b) of this section. FGIS will publish a
notice in the Federal Register and post Schedule B fees on the Agency's
public website.
(b) Annual review of fees. For each calendar year, starting with
2021, the Service will review the fees of this section and publish fees
each year according to the following:
(1) Tonnage fees. Tonnage fees in Schedule A in paragraph (a)(1) of
this section will consist of the national tonnage fee and local tonnage
fees and will be calculated and rounded to the nearest $0.001 per
metric ton. * * *
* * * * *
(2) Supervision fee. Supervision fee in Schedule B in paragraph
(a)(2) of this section will be set according to the following:
(i) Operating reserve adjustment. The operating reserve adjustment
is the supervision program costs for the previous fiscal year divided
by 2 less the end of previous fiscal year operating reserve balance.
(ii) Supervision tonnage fee. The supervision tonnage fee is the
sum of the prior fiscal year program costs plus operating reserve
adjustment divided by the average yearly tons of domestic U.S. grain
shipments inspected and/or weighed, including land carrier shipments to
Canada and Mexico during the previous 5 fiscal years. If the calculated
value is zero or a negative value, the collection of supervision
tonnage fees will be suspended for one calendar year.
* * * * *
(d) Miscellaneous fees for other services. For each calendar year,
the Service will review the fees of this section and publish fees in
the Federal Register and on the AMS website.
(1) Registration certificates and renewals. The fee for
registration certificates and renewals will be published annually in
the Federal Register and on the Agency's public website, and will be
based upon the noncontract hourly rate multiplied by five. If you
operate a business that buys, handles, weighs, transports grain for
sale in foreign commerce, or you are also in a control relationship
(see definition in section 17A(b)(2) of the Act) with respect to a
business that buys, handles, weighs, or transports grain for sale in
interstate commerce, you must complete an application and pay the
published fee.
(2) Designation amendments. The fee for amending designations will
be published annually in the Federal Register and on the Agency's
public website. The fee will be based upon the cost of publication plus
one hour at the noncontract hourly rate. If you submit an application
to amend a designation, you must pay the published fee.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2021-03537 Filed 3-1-21; 8:45 am]
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