[Federal Register Volume 85, Number 63 (Wednesday, April 1, 2020)]
[Proposed Rules]
[Pages 18155-18156]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-06614]


 ========================================================================
 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. 85, No. 63 / Wednesday, April 1, 2020 / 
Proposed Rules  

[[Page 18155]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 800

[Doc. No. AMS-FGIS-19-0062]


Exceptions to Geographic Boundaries

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Advance notice of proposed rulemaking; request for comments.

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

SUMMARY: The Agricultural Marketing Service (AMS) is issuing this 
advance notice of proposed rulemaking (ANPR) in response to recent 
changes to the United States Grain Standards Act (USGSA or Act). The 
Agricultural Improvement Act of 2018 (Farm Bill) amended the USGSA to 
allow customers to obtain grain inspection services from other than the 
designated official inspection agency (OA) for the customer's 
geographic area if the customer has not been receiving services from 
the designated OA. AMS is seeking public comment on criteria to 
evaluate requests submitted under this provision, known as the ``nonuse 
of service'' exception. The Agency is also seeking input on criteria to 
evaluate requests submitted under another USGSA exception provision, 
``timely service.''

DATES: Comments must be received by May 1, 2020.

ADDRESSES: 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 notice 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: Sophie Parker, Deputy Director, 
Quality Assurance and Compliance Division, Federal Grain Inspection 
Service, AMS, USDA; phone: (202) 720-9170 or email: [email protected].

SUPPLEMENTARY INFORMATION: Under the USGSA (7 U.S.C. 71 et seq), each 
OA in the United States is assigned a specific geographic area in which 
it performs all official grain inspection and weighing services for 
customers within that geographic area (7 U.S.C. 79(f)(2)(A)). This 
ensures effective and efficient delivery of official services to all 
customers within the OA's designated territory and enhances the orderly 
marketing of grain. The USGSA also provides that customers may obtain 
services from other OAs under certain circumstances. For instance, OAs 
may cross geographic boundaries to provide services to requesting 
customers if: (1) The designated OA for the customer's geographic area 
is unable to provide necessary services on a timely basis; (2) the 
customer requires probe inspection on barge-lot basis; or (3) the OA 
for the customer's geographic area agrees in writing with the adjacent 
official agency to waive the current geographic restriction at the 
customer's request (7 U.S.C. 79(f)(2)(B)(i),(iii), and (iv)). These 
allowances are considered exceptions to the USGSA's standard 
requirements regarding the use of designated OAs to perform inspection 
services within specified geographic areas. Exceptions must be approved 
on a case-by-case basis by AMS's Federal Grain Inspection Service 
(FGIS), which administers the regulations under the USGSA.\1\ The 
regulations at 7 CFR part 800 provide the limitations for use of these 
exceptions.
---------------------------------------------------------------------------

    \1\ FGIS, formerly part of USDA's Grain Inspection, Packers and 
Stockyards Administration, was merged with USDA's Agricultural 
Marketing Service in 2018.
---------------------------------------------------------------------------

Service Exceptions

    A notable exception that has been implemented in the past is known 
as the ``nonuse of service'' exception. In that exception, a customer 
who had not obtained inspection services from the designated OA in the 
customer's geographic area for a specified length of time could obtain 
services from another OA. At times, the regulations required customers 
to have not used their designated OA for at least 90 consecutive days; 
at other times the regulations specified a 180-day nonuse period before 
the customer could request service from another OA. However, lack of 
clarity about how FGIS determined whether to grant ``nonuse of 
service'' exceptions fostered confusion and conflicts among involved 
parties and created a perception of inconsistency regarding the 
handling of such requests. Congress eliminated the ``nonuse of 
service'' exception from the USGSA in 2015; \2\ FGIS subsequently 
removed that exception from the regulations.\3\
---------------------------------------------------------------------------

    \2\ The Agricultural Reauthorizations Act of 2015, enacted 
September 20, 2015 (Pub. L. 114-54 sec. 301(b)(3)(A)).
    \3\ 81 FR 49855, July 29, 2016.
---------------------------------------------------------------------------

    Although the ``nonuse of service'' exception was eliminated from 
the USGSA in 2015, Congress reinstated authority to implement a 
``nonuse of service'' exception through an amendment to the USGSA in 
the 2018 Farm Bill.\4\ FGIS must now consider regulatory options 
related to the reinstatement of the ``nonuse of service'' exception 
(see 7 U.S.C. 79(f)(2)(B)(ii).
---------------------------------------------------------------------------

    \4\ The Agricultural Improvement Act of 2018, enacted December 
20, 2018 (Pub. L. 115-334 sec. 12610(a)(1)(D)).
---------------------------------------------------------------------------

    With this ANPR, AMS is requesting public input into the development 
of criteria FGIS could apply to determinations about whether to grant 
``timely service'' or ``nonuse of service'' exceptions to requesting 
customers. Particularly, AMS seeks input from industry participants and 
OAs who use and provide official services and are familiar with grain 
inspection services under the USGSA. A list of criteria and/or 
questions commenters may address is provided below. AMS welcomes the 
submission of data and other information to support commenters' views.

Restoration of Previous Nonuse of Service Exceptions

    Subsequent to the 2015 amendments to the USGSA and the 2016 changes 
to the FGIS regulations, a number of ``nonuse of service'' exceptions 
were terminated. The 2018 Farm Bill directed USDA to allow for 
restoration of those exceptions where appropriate. Interested parties 
were given an opportunity to submit restoration requests to FGIS, as 
described in a

[[Page 18156]]

Notice to Trade published by AMS on March 5, 2019.\5\
---------------------------------------------------------------------------

    \5\ Restoring Certain Exceptions to the U.S. Grain Standards 
Act, published March 5, 2019. https://www.ams.usda.gov/content/restoring-certain-exceptions-us-grain-standards-act.
---------------------------------------------------------------------------

Termination of Nonuse of Service Exceptions

    The amended USGSA provides that the ``nonuse of service'' exemption 
may only be terminated if all the parties to the exception jointly 
agree on the termination.\6\ This means that the customer, the 
designated OA in the customer's geographic area, the OA that has been 
providing service under the exception, and FGIS must agree to terminate 
the exception. This ensures that: (1) All parties are aware of the 
change and (2) the designated OA for the assigned area will resume 
providing service to the customer.
---------------------------------------------------------------------------

    \6\ Public Law 115-334 sec. 12610(a)(1)(E).
---------------------------------------------------------------------------

    The requirement for all parties to jointly agree on termination of 
the ``nonuse of service'' exception does not apply if the designation 
of an official agency is terminated.\7\ If the designation of an 
official agency is renewed or restored after being terminated, the 
exceptions that were previously approved, under 7 U.S.C. 79(f)(2)(B), 
may be renewed or restored by requesting a determination from FGIS.
---------------------------------------------------------------------------

    \7\ Public Law 115-334 sec. 12610(a)(2).
---------------------------------------------------------------------------

Request for Comments

    AMS is considering use of the following information for evaluating 
exceptions requests under 7 U.S.C. 79(f)(2)(B)(i) and (ii). We invite 
comments, as well as suggested alternative or additional criteria.

i. Timely Service

    a. The requesting facility would submit a verbal or written request 
for a ``timely service'' exception.
    b. The requesting facility would provide documentation that the 
designated OA cannot provide service within six (6) hours from the time 
of the request. Valid documentation may include voice mail message, 
text message, or email which shows the date and time of the request.
    c. The services requested from the designated OA would be within 
the time frames established in the OA's approved fee schedule.

ii. Nonuse of Service

    a. The requesting facility would submit a written request for a 
``nonuse of service'' exception.
    b. The requesting facility would demonstrate it has not had 
official sample-lot inspection or weighing services for 90-consecutive 
days from its designated OA.
    c. The request would document, in writing, why the requesting 
facility has not received official sample-lot inspection or weighing 
services for 90-consecutive days from its designated OA. Reasons would 
be based on data and facts regarding the designated OA's operational 
capacity to provide requested service.
    d. Prior to finalizing a decision for a ``nonuse of service'' 
exception, AMS would take the following into consideration:
    1. The location of the specified service point(s);
    2. Services offered/requested;
    3. The ability of the alternate OA to take on additional customers;
    4. The ability to staff an onsite laboratory;
    5. Impact of weather conditions on the designated OA's ability to 
provide service; and
    6. Whether the requesting facility has ever utilized the official 
system (i.e., facilities that have never used the official system 
before do not automatically qualify for ``nonuse of service'').

Additional Considerations for Comment

    AMS received several questions from industry members regarding 
factors that could impact decisions on exceptions. We are sharing these 
questions to receive public input on whether and/or how these concerns 
should be included in the process for making decisions on geographic 
area exceptions under 7 U.S.C 79(f)(2)(B):
    1. How should FGIS determine whether someone has not been receiving 
official services? Should FGIS use time (e.g., 90 days or 180 days) as 
a basis for establishing ``non-use?
    2. How should FGIS determine if OA is unable to provide services in 
a timely manner? Should timely results be considered under the timely 
service exception? If so, what should the baseline for determining 
timeliness?
    3. Should the approval under timely service be granted on a one-
time basis or for a longer period of time? If longer, what should that 
timeframe be?
    4. What process should be put in place to make sure all parties are 
aware of an exception?
    5. Should there be baseline performance measures or qualifications 
established for an OA to be considered as a part of an exception 
request? If so, what should they be?
    6. Should any of the following factors be considered in granting a 
``nonuse of service'' exception request: (1) Distance between a 
facility and the closest office of each OA, (2) fees charged, (3) 
services offered, (4) number of exceptions already approved for an OA, 
(5) number of facilities already lost by exceptions to other OAs, (5) 
ability and willingness to staff an onsite lab? Why or why not?
    7. Should requests for ``nonuse of service'' exceptions be 
restricted to OAs that only cross into an adjacent OA's designated 
geographic area? Why or why not?
    8. Should customers be able to switch back and forth between 
official agencies when they have received a ``nonuse of service'' 
exception?
    a. Why or why not?
    b. If switching was allowed, should there be any restrictions and 
why?
    9. Is it difficult to receive accurate, timely and effective 
service from your officially designated inspection agency?
    a. If so, how does this impact your facility's operations?
    b. How can this be corrected?
    10. Should FGIS continue to grant ``nonuse of service'' exceptions 
to grain handling facilities that make the request? If so, what 
parameters should the agency use to base the decision upon?
    11. Should revenue be a factor considered in evaluating and 
determining ``nonuse of service'' exceptions?
    a. What is the rationale for using or not using such a factor?
    b. What type of financial documentation should be required from a 
requesting facility to justify their claim?
    c. Should the financial impact on the designated OA be taken into 
consideration? Why or why not?
    Comments in response to any or all of the above criteria and 
questions should be submitted to the address provided in the ADDRESSES 
section of this notice and must be received by May 1, 2020 to ensure 
consideration.

    Authority: 7 U.S.C. 71-87k.

Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-06614 Filed 3-31-20; 8:45 am]
BILLING CODE P