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, 12119-12122 [2021-03537]

Download as PDF 12119 Proposed Rules Federal Register Vol. 86, No. 39 Tuesday, March 2, 2021 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. 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 Agricultural Marketing Service, Department of Agriculture (USDA). ACTION: Proposed rule. AGENCY: 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 SUMMARY: 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 https://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: Denise.M.Ruggles@ usda.gov. 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 jbell on DSKJLSW7X2PROD with PROPOSALS Revenue ................................................................................................... Obligations ............................................................................................... Annual Surplus or (Deficit) ....................................................................... Operating Reserve—running balance ..................................................... FY 17 $1.91 1.43 0.47 8.73 FY 18 $0.00 1.78 (1.78) 6.95 $0.00 1.88 (1.88) 5.08 FY 19 $0.00 1.55 (1.55) 3.53 FY 20 $0.00 1.81 (1.81) 1.73 * 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 VerDate Sep<11>2014 16:34 Mar 01, 2021 Jkt 253001 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- PO 00000 Frm 00001 Fmt 4702 Sfmt 4702 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 E:\FR\FM\02MRP1.SGM 02MRP1 12120 Federal Register / Vol. 86, No. 39 / Tuesday, March 2, 2021 / Proposed Rules jbell on DSKJLSW7X2PROD with PROPOSALS 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 § 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 VerDate Sep<11>2014 16:34 Mar 01, 2021 Jkt 253001 fees would be as published on the AMS website. • The introductory text of § 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 § 801.71(d). The proposed rule would remove the introductory text of § 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 § 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 § 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 § 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 PO 00000 Frm 00002 Fmt 4702 Sfmt 4702 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 § 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 § 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. E:\FR\FM\02MRP1.SGM 02MRP1 Federal Register / Vol. 86, No. 39 / Tuesday, March 2, 2021 / Proposed Rules 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. jbell on DSKJLSW7X2PROD with PROPOSALS 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 VerDate Sep<11>2014 16:34 Mar 01, 2021 Jkt 253001 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 PO 00000 Frm 00003 Fmt 4702 Sfmt 4702 12121 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 EGovernment 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 1. The authority citation for part 800 continues to read as follows: ■ Authority: 7 U.S.C. 71–87k. E:\FR\FM\02MRP1.SGM 02MRP1 12122 § 800.71 Federal Register / Vol. 86, No. 39 / Tuesday, March 2, 2021 / Proposed Rules [Amended] 2. Amend § 800.71 by: a. Revising paragraph (a)(2); b. Revising the introductory text in paragraph (b); ■ c. Revising the first sentence in paragraph (b)(1); ■ d. Redesignating paragraph (b)(2) as paragraph (b)(3); ■ e. Adding new paragraph (b)(2); and ■ f. Revising paragraph (d). The revisions and addition read as follows: ■ ■ ■ jbell on DSKJLSW7X2PROD with PROPOSALS § 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. * * * * * VerDate Sep<11>2014 16:34 Mar 01, 2021 Jkt 253001 (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. Food Safety and Inspection Service, USDA. ACTION: Proposed rule. regulatory condition of receiving inspection. Under this proposal, FSIS would not require establishments without internet access to purchase it or to upgrade the internet services they have, if inadequate for FSIS use. DATES: Submit comments on or before May 3, 2021. ADDRESSES: FSIS invites interested persons to submit comments on the proposed rule. Comments may be submitted by one of the following methods: • Federal eRulemaking Portal: This website provides the ability to type short comments directly into the comment field on this web page or attach a file for lengthier comments. Go to https://www.regulations.gov. Follow the on-line instructions at that site for submitting comments. • Mail, including CD–ROMs, etc.: Send to Docket Clerk, U.S. Department of Agriculture, Food Safety and Inspection Service, 1400 Independence Avenue SW, Mailstop 3758, Washington, DC 20250–3700. • Hand- or courier-delivered submittals: Deliver to 1400 Independence Avenue SW, Jamie L. Whitten Building, Room 350–E, Washington, DC 20250–3700. Instructions: All items submitted by mail or electronic mail must include the Agency name and docket number FSIS– 2020–0019. Comments received in response to this docket will be made available for public inspection and posted without change, including any personal information, to https:// www.regulations.gov. Docket: For access to background documents or comments received, call (202) 720–5627 to schedule a time to visit the FSIS Docket Room at 1400 Independence Avenue SW, Washington, DC 20250–3700. FOR FURTHER INFORMATION CONTACT: Rachel Edelstein, Assistant Administrator, Office of Policy and Program Development; Telephone: (202) 720–0399. SUPPLEMENTARY INFORMATION: The Food Safety and Inspection Service (FSIS) is proposing to amend its regulations to require official meat and poultry establishments and egg products plants and businesses receiving voluntary inspection services from FSIS that have an internet connection to provide FSIS access to it for the purposes of conducting and recording inspection verification activities. FSIS views internet service as a necessary utility, like lighting, heating, and laundry services, that should be provided by establishments as a Background FSIS has been delegated the authority to exercise the functions of the Secretary (7 CFR 2.18, 2.53) as specified in the Federal Meat Inspection Act (FMIA) (21 U.S.C. 601, et seq.), the Poultry Products Inspection Act (PPIA) (21 U.S.C. 451, et seq.) and the Egg Products Inspection Act (EPIA) (21 U.S.C. 1031, et seq.). These statutes mandate that FSIS protect the public by verifying that meat, poultry, and egg products are safe, wholesome, unadulterated, and properly labeled and packaged. In Bruce Summers, Administrator, Agricultural Marketing Service. [FR Doc. 2021–03537 Filed 3–1–21; 8:45 am] BILLING CODE P DEPARTMENT OF AGRICULTURE Food Safety and Inspection Service 9 CFR Parts 307, 350, 352, 354, 362, 381, 533, 590, and 592 [Docket No. FSIS–2020–0019] RIN 0583–AD86 Internet Access at Official Establishments and Plants AGENCY: SUMMARY: PO 00000 Frm 00004 Fmt 4702 Sfmt 4702 E:\FR\FM\02MRP1.SGM 02MRP1

Agencies

[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]


========================================================================
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.

========================================================================


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.

-----------------------------------------------------------------------

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 https://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
----------------------------------------------------------------------------------------------------------------
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
----------------------------------------------------------------------------------------------------------------
* 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]
BILLING CODE P