2024-04838. 2024 Rates for Grain Inspection Services Under the United States Grain Standards Act

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Notice.

SUMMARY:

The Agricultural Marketing Service (AMS) is announcing the 2024 rates it will charge for official inspection and weighing services, supervision of official inspection and weighing services, and miscellaneous fees for other services performed under the United States Grain Standards Act, as amended. This action publishes the annual review of fees and the resulting fees.

DATES:

Applicable April 1, 2024.

ADDRESSES:

Prospective customers can find the fee scheduled posted on the Agency's public website: https://www.ams.usda.gov/​about-ams/​fgis-program-directives.

FOR FURTHER INFORMATION CONTACT:

Denise Ruggles, FGIS Executive Program Analyst, USDA AMS; Telephone: [phone], or Email: [e-mail].

SUPPLEMENTARY INFORMATION:

The United States Grain Standards Act (USGSA) provides the Secretary of Agriculture with the authority to charge and collect reasonable fees to cover the costs of performing official services, as well as those associated with managing the program. The grain inspection regulations require that the Federal Grain Inspection Service (FGIS) conducts annual fee reviews of national and local administrative costs related to grain volume/tonnage inspected (7 CFR 800.71).

Overview of Schedule A (Official Inspection and Weighing Services) Fee Calculations

The USGSA and its implementing regulations (7 CFR 800.71(b)(3)(i) and (ii)) require FGIS to maintain an operating reserve of not less than 3 and not more than 6 months' expenses. To comply with this requirement, FGIS conducts an annual review of its tonnage fees and operating reserves. Tonnage fees are calculated according to 7 CFR 800.71(b)(1). After calculating the tonnage fees, FGIS reviews the amount of funds in the operating reserve at the end of the fiscal year (FY) (FY2023 in this case) to ensure that it has 4 1/2 months of operating expenses. FGIS uses 4.5 months of expenses as its target amount because section 800.71(b)(3) of the regulations specifies 4.5 months as the trigger for whether FGIS should make adjustments to its fees. If the operating reserve has more—or less—than 4 1/2 months of operating expenses, then FGIS must adjust all Schedule A fees. For each $1,000,000, rounded down, that the operating reserve varies from the target of 4 1/2 months, FGIS will adjust all Schedule A fees by 2 percent. If the operating reserve exceeds the target, all Schedule A fees will be reduced. If the operating reserve does not meet the target, all Schedule A fees will be increased. The maximum annual increase or decrease in fees is 5 percent (7 CFR 800.71(b)(3)(i)–(ii)).

Tonnage fees for the 5-year rolling average tonnage were calculated on the previous 5 fiscal years (2019, 2020, 2021, 2022, and 2023). Tonnage fees consist of the national tonnage fee and local tonnage fee and are calculated and rounded to the nearest $0.001 per metric ton.

Calculation of national tonnage fee. The national tonnage fee is the national program administrative costs for the previous fiscal year divided by the average yearly tons of export grain officially inspected and/or weighed by delegated States and designated agencies, excluding land carrier shipments to Canada and Mexico, and outbound grain officially inspected and/or weighed by FGIS during the previous 5 fiscal years.

The FY2024 national tonnage fee, prior to the operating reserve review, is $0.054 per metric ton. The calculation of this fee is based on FY2023 national administrative costs of $6,250,062, divided by the 5-year rolling tonnage average of 114,983,338 metric tons.

Table 1—National Tonnage Inspected

Fiscal year	Metric tons
2019	107,896,235
2020	110,090,771
2021	136,574,792
2022	123,745,530
2023	96,609,360
5-year Rolling Average	114,983,338

Calculation of local tonnage fee. The local tonnage fee is the field office administrative costs for the previous fiscal year divided by the average yearly tons of outbound grain officially inspected and/or weighed by FGIS field offices during the previous 5 fiscal years.

Table 2—Local Tonnage Inspected by Field Office

Field office	FY2019	FY2020	FY2021	FY2022	FY2023	5-year rolling average
New Orleans	57,807,378	59,768,303	72,482,289	68,880,711	56,312,940	63,050,324
League City	7,939,994	9,318,595	12,877,525	8,335,121	5,824,829	8,859,213
Pacific Northwest	2,530,648	3,331,672	4,136,482	2,720,001	1,754,725	2,894,706
Toledo	1,597,584	948,840	1,154,856	1,191,938	790,400	1,136,724

The local field office administrative costs for FY2023 and the FY2024 calculated local field office tonnage fee, prior to the operating reserve review, are as follows:

Table 3—Local Administrative Costs and Calculated Local Tonnage Fee by Field Office

Field office	FY2023 local administrative costs	Calculated FY 2024 local tonnage fee
New Orleans	$715,554	$0.011
League City	672,847	0.076
Pacific Northwest	374,859	0.129
Toledo	167,053	0.147

Operating reserve. In order to maintain an operating reserve that is not less than 3 and not more than 6 months of operating expenses, FGIS reviewed the value of the operating reserve at the end of FY2023 to ensure that an operating reserve equivalent to 4 1/2 months of operating expenses is maintained.

The program operating reserve at the end of FY2023 was ($504,270), with a monthly operating expense of $2,645,846. The target of 4.5 months of operating reserve is $11,906,307. Therefore, the operating reserve is $12,410,578 below the 4.5 months target level. Under the regulations, for each $1,000,000, rounded down, below the target level, all Schedule A fees must be increased by 2 percent. The operating reserve is $12.4 million below the target level, indicating a larger increase in fees would be required to fully restore the operating reserve. However, section 800.71(b)(3)(i) limits annual fee changes to 5 percent. which will not increase the operating reserve to the minimum statutory amount of 3 times the monthly operating expenses. In addition to this fee adjustment, and pursuant to section 800.71(c) of the regulations and section 7(j)(4) of the USGSA, FGIS is reviewing all fees to ensure they reflect the true costs of providing and supervising official service.

As described in this notice, FGIS is increasing all the 2023 Schedule A fees for service in Schedule A in § 800.71(a)(1) by 5 percent for FY2024, including calculated FY2024 national and local tonnage fees. All Schedule A fees for service are rounded to the nearest $0.10, except for fees based on tonnage or hundredweight. Schedule A fees will be outlined in FGIS Directive 9180.74 and published on the agency's public website. For example, national and local tonnage fees are adjusted as follows:

Table 4—National Tonnage Fee With Operating Reserve Adjustment and FY2023 Fee

Fee description	FY2024 calculation with operating reserve adjustment	Calculated FY2024 tonnage fee	FY2023 tonnage fee
National (Delegated States/Designated Agencies)	$0.054 plus 5% increase ($0.003) equals $0.057	$0.057	$0.033

Table 5—Field Office Tonnage Fee With Operating Reserve Adjustment and FY2023 Fee

Fee description	FY2024 calculation with operating reserve adjustment	Calculated FY2024 tonnage fee (national + local)	FY2023 tonnage fee
New Orleans	local fee $0.011 plus 5% increase ($0.001) equals $0.012	$0.069	$0.055
League City	local fee $0.076 plus 5% increase ($0.004) equals $0.080	0.137	0.108
Pacific Northwest	local fee $0.129 plus 5% increase ($0.006) equals $0.135	0.192	0.158
Toledo	local fee $0.147 plus 5% increase ($0.007) equals $0.154	0.211	0.310

All Schedule A fees for service are rounded to the nearest $0.10, except for fees based on tonnage or hundredweight. Schedule A fees will be outlined in FGIS Directive 9180.74 and published on the agency's public website.

Overview of Schedule B Fees (Fees for Supervision of Official Inspection and Weighing Services Performed by Delegated States and Designated Agencies in the United States)

FGIS calculates the supervision tonnage fee using the prior year's actual costs and the 5-year average tonnage of domestic U.S. grain shipments inspected, weighed, or both, including land carrier shipments to Canada and Mexico.

Operating reserve adjustment. In order to maintain an operating reserve of not less than 3 and not more than 6 months, FGIS reviewed the value of the operating reserve at the end of FY2023 to ensure that an operating reserve of 6 months is maintained.

The operating reserve adjustment is the difference between FY2023 ending reserves and the operating reserve threshold, which is equivalent to 6 months of supervisory costs. FY2023 supervision costs were $1,186,689. The operating reserve threshold for FY2024 is calculated by dividing FY2023 supervision costs by 2 ($1,186,689/2 = $593,345). The FY2023 operating reserve ending balance ($295,535) is less than the operating reserve threshold ($593,345) by $297,810. Therefore, the operating reserve adjustment for calendar year 2024 is $297,810.

Supervision tonnage fee. FGIS adds the total prior year supervision costs and the operating reserve adjustment, then divides the result by the previous 5-year average tonnage. If the calculated fee is zero or a negative value, FGIS will suspend collection of supervision tonnage fees for the next calendar year.

The supervision tonnage fee for calendar year 2024 is $0.007 per ton. The calculation, based on FY2023 supervision costs of $1,186,689, is $1,186,689 plus the operating reserve adjustment of $297,810, which equals $1,484,499, divided by a 5-year average tonnage of 219,219,620, which equals $0.007 per ton.

Table 6—Tonnage Supervised

Fiscal year	Metric tons
2019	206,693,881
2020	237,649,430
2021	232,738,700
2022	225,570,903
2023	193,445,187
5-year Rolling Average	219,219,620

Therefore, for 2024, FGIS will assess a supervision tonnage fee of $0.007 per ton on domestic shipments officially inspected and/or weighed, including land carrier shipments to Canada and Mexico, performed by delegated States and/or designated agencies on or after April 1, 2024. The Schedule B fee will be published in FGIS Directive 9180.74 and on the agency's public website.

7 CFR 800.71(d) Miscellaneous Fees for Other Services Calculations

Registration certificates and renewals. FGIS calculates the application fee by multiplying the Schedule A non-contract hourly rate (Table 1 in § 800.71(a)) by a quantity of five. The resulting fee is expected to cover FGIS personnel costs to review applications, fee publication expenses, and administrative expenses. The Schedule A non-contract hourly rate is $73. Thus, the application fee for 2024 will be $73 times 5, or $365. The fee will be published on the agency's public website after Federal Register publication.

Designation amendments. FGIS calculates the rate using the Federal Register publication rate for three columns, plus one hour of noncontract hourly rate from § 800.71(a) Table 1 of Schedule A. The fee covers FGIS personnel costs, administrative expenses, and costs for publishing notices regarding the designation of official service providers in the Federal Register . The Federal Register publication rate is $151 per column, and the Schedule A non-contract hourly rate is $73. FGIS calculates the fee will be $526 for calendar year 2024. The fee will be published on the agency's public website after Federal Register publication.

Authority: 7 U.S.C. 71–87k.

Melissa Bailey,

Associate Administrator, Agricultural Marketing Service.