U.S. Grain Standards Act: Reauthorization in the 114th Congress
Congressional research reportNov 12, 2015
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U.S. Grain Standards Act: Reauthorization in
the 114th Congress
/name redacted/
Analyst in Agricultural Policy
November 12, 2015
Congressional Research Service
7-....
www.crs.gov
R43803
U.S. Grain Standards Act: Reauthorization in the 114th Congress
Summary
Under the United States Grain Standards Act (USGSA) of 1916, the federal government is
authorized to establish official marketing standards (not health and safety standards) for grains
and oilseeds, and to provide procedures for grain inspection and weighing. To encourage the
marketing of high-quality grain for an agriculture sector that is highly dependent on export
demand, the USGSA requires that exported grains and oilseeds be officially inspected (if sold by
grade) and weighed. Domestic shipments do not require official inspection and weighing, but the
service is available and is often performed. As authorized by the USGSA, all official services are
financed by user fees, with the federal portion of fee revenue maintained in a trust fund. Activities
such as developing grain standards and procedures for measuring quality are financed with
congressionally appropriated funds.
The Federal Grain Inspection Service (FGIS) of the U.S. Department of Agriculture (USDA)
promotes the uniform application of U.S. grain standards by official inspection personnel. FGIS
inspects or oversees the inspection (by official state or private agencies) of more than half of the
grain produced in the United States. FGIS directly inspects about two-thirds of exported grain and
oversees the inspection (by state agencies) of the remainder.
Most of the USGSA is permanently authorized, including mandatory inspection and weighing of
exported grain, as well as authority to amend grain standards of quality. However, several
provisions were set to expire on September 30, 2015. A lapse in authorization could have
disrupted the current grain inspection and weighing program, but it would not necessarily have
halted official grain inspections.
The USGSA was reauthorized on September 30, 2015, with the enactment of the Agriculture
Reauthorizations Act of 2015 (P.L. 114-54). Four expiring provisions—authority for
appropriations, authority to charge fees, an administrative/supervisory cost cap, and authority for
an advisory committee—were extended until September 30, 2020.
Besides extending the four expiring provisions, the act addressed several policy issues. These
policy issues were included in either the original House (H.R. 2088) or Senate (S. 1417)
reauthorization bills, or both.
For example, the final reauthorization act (P.L. 114-54) included provisions on disruptions in
inspection and weighing services. The act requires USDA to take immediate action to address a
disruption of inspection and weighing services, but leaves the decision about how to resume
services to the Secretary. The act also requires USDA to keep Congress informed should there be
other disruptions in service. P.L. 114-54 also allows customers to utilize inspection and weighing
services outside of exclusive geographic boundaries if certain conditions are met. In addition, the
act requires that delegated state agencies be certified every five years and UDSA has one year to
establish a notice-and-comment process for certifying delegated state agencies.
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U.S. Grain Standards Act: Reauthorization in the 114th Congress
Contents
Reauthorization of USGSA ............................................................................................................. 1
The United States Grain Standards Act ........................................................................................... 1
U.S. Grain Inspection System ......................................................................................................... 2
Legislative History .......................................................................................................................... 4
Enactment of Federal Grain Standards and Inspections in 1916............................................... 4
Amendments Through 1976: Increasing the Federal Role ........................................................ 4
1980s and 1990s: Funding, Advisory Committee, and Quality ................................................ 5
Since 1990: Cost Containment and Modest Change ................................................................. 5
Major Provisions in the Final Reauthorization ................................................................................ 6
Expiring Provisions ................................................................................................................... 7
Additional Policy Issues ............................................................................................................ 8
Interruption in Service/Continuity of Operations ............................................................... 8
Geographical Boundaries for Official Agencies ............................................................... 10
Period of Official Agency Designation ............................................................................. 10
Approval Process for Delegated State Agencies ................................................................ 11
Expanding the Pool of Agencies for Export Inspections ................................................... 11
Fees for Standards Development and Maintenance .......................................................... 12
Fee Changes and the User Fee Trust Fund........................................................................ 12
Tables
Table 1. Comparison of Current Law, House-Passed Bill (H.R. 2088), Senate Agriculture
Committee-Approved Bill (S. 1417), and Enacted Law (P.L. 114-54) ...................................... 14
Table A-1. Laws, Regulations, and Other Information .................................................................. 23
Table A-2. Legislative History of the United States Grain Standards Act (USGSA) .................... 24
Appendixes
Appendix A. References for United States Grain Standards Act................................................... 23
Appendix B. Issues for Expiring Provisions ................................................................................. 26
Contacts
Author Contact Information .......................................................................................................... 28
Acknowledgments ......................................................................................................................... 28
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U.S. Grain Standards Act: Reauthorization in the 114th Congress
Reauthorization of USGSA
Most of the United States Grain Standards Act (USGSA) is permanently authorized, including
mandatory inspection and weighing of exported grain, and federal authority to establish and
amend grain standards of quality. However, several key provisions of the law were set to expire
on September 30, 2015. While the expiring provisions would not necessarily have brought
official grain inspections and weighing to a halt, a lapse could have affected funding and
disrupted the current grain inspection and weighing program.
The USGSA was reauthorized on September 30, 2015, with the enactment of the Agriculture
Reauthorizations Act of 2015 (P.L. 114-54). Four expiring provisions—authority for
appropriations, authority to charge fees, an administrative/supervisory cost cap, and authority for
an advisory committee—were extended until September 30, 2020. Besides extending the four
provisions, the act included provisions addressing disruptions in inspection and weighing
services, geographic service boundaries, and inspection and weighing authorities that were
included in the House (H.R. 2088) and/or Senate (S. 1417) reauthorization bills. (See Table 1 for
a comparison of the two bills and the enacted bill.)
The agriculture committees in both chambers approved by voice vote their respective bills to
reauthorize the expiring provisions for five years. The House passed H.R. 2088 by voice vote on
June 9, 2015. The Senate-reported bill did not receive a floor vote. The Senate amended the
House-passed Mandatory Price Reporting Act of 2015 (H.R. 2051) to include reauthorization
provisions for the USGSA, Mandatory Price Reporting, and the National Forest Foundation, all of
which were set to expire on September 30, 2015. H.R. 2051, as amended by the Senate, passed
the Senate by unanimous consent and passed the House by voice vote.
The United States Grain Standards Act
The United States Grain Standards Act (USGSA) of 1916—P.L. 64-190, as amended (7 U.S.C. 71
et seq.)—authorizes the Federal Grain Inspection Service (FGIS) of the U.S. Department of
Agriculture (USDA) to establish official marketing standards (not health and safety standards) for
certain grains and oilseeds.1 The specific crops are barley, canola, corn, flaxseed, oats, rye,
sorghum, soybeans, sunflower seed, triticale, wheat, and mixed grain.2 As issued and modified in
regulations, official grain standards define each grain, classes of the grain, and numerical grades.
The grades specify physical characteristics such as minimum weight and maximum percentage of
defects (e.g., foreign material, damaged kernels). The standards facilitate the marketing of grain
by serving as contract language, enabling buyers and sellers to more easily determine quality (and
therefore value) of these commodities.
FGIS promotes the uniform application of U.S. grain standards by official inspection personnel.
Specifically, to encourage the marketing of high-quality grain for an agriculture sector that is
highly dependent upon export demand, the USGSA requires that exported grains and oilseeds be
1
FGIS is located in USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA).
Under a separate law, the Agricultural Marketing Act (AMA) of 1946, as amended, FGIS also administers and
enforces certain inspection and standardization activities related to rice, pulses, lentils, and processed grain products
such as flour and corn meal, as well as other agricultural commodities.
2
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officially inspected (if sold by grade) and weighed.3 Export inspections are carried out by either
federal inspectors or federally supervised state inspection agencies, called delegated official
inspection agencies. Domestically marketed grain and oilseeds may be, but are not required to be,
officially inspected. Official inspections of domestically traded grain are done by federally
supervised state agencies and private companies, called designated official inspection agencies.
As authorized by the USGSA, all official inspections are financed by user fees, with the federal
portion of fee revenue maintained in a trust fund.4 FGIS activities such as developing grain
standards and improving techniques for measuring grain quality are financed with
congressionally appropriated funds. In FY2014, user fee revenue under USGSA was $45.8
million, and the FGIS appropriation was $17.9 million.5
The USGSA also prohibits deceptive practices with respect to the inspection and weighing of
grain and provides penalties for violations of the act. Prohibitions include altering official
certificates, exporting grain without official personnel on site, and adding foreign material to any
grain. In general, policy officials in USDA and the grain industry support the continuation of
nationally uniform grades, the availability of official inspections in the domestic market, and the
mandatory application of official weighing and inspection for exported grain.
Table A-1, at the end of this report, contains links to the act’s statutory provisions, associated
regulations, official service providers, and other information.
U.S. Grain Inspection System6
FGIS inspects or oversees the inspection of more than half of the grain produced in the United
States. During FY2011-FY2013, the average annual amount of grain receiving official inspection
was 273 million metric tons, or about 56% of U.S. production. Of the inspected amount, 62% was
for domestic shipment and the remainder for export. Grain not officially inspected includes grain
that does not require official inspection (e.g., grain used domestically), grain inspected by
unofficial entities, and exports by companies shipping less than 15,000 metric tons, which are not
covered by the USGSA.7
For domestic shipments, voluntary official grain inspection is provided primarily by a network of
official state and private agencies under the USGSA. FGIS’s Domestic Inspection Operations
Office (DIOO) in Kansas City oversees a total of about 50 official agencies (called designated
state agencies and designated private agencies) located throughout the country.8 Each agency
3
References to official inspection in this report also include official weighing.
Appropriators typically limit agency obligations for inspection and weighing services from fees collected (however,
the annual appropriations law typically does not limit the amount of user fees that can be collected). The limit was $50
million in FY2014 (not accounting for any reduction due to sequestration). Total FGIS user fee account obligations
under both USGSA and AMA were a combined $46 million in FY2014.
5
User fees collected under AMA totaled $8 million in FY2014. The FGIS appropriation covers activities under both
acts (USGSA and AMA).
6
The primary source for this section is U.S. Department of Agriculture, Federal Grain Inspection Service: 2013
Annual Report, December 2013, http://www.gipsa.usda.gov/publications/fgis/ar/2013-fgis-AR.pdf.
7
The USGSA requires registration of exporters who buy, handle, weigh, or transport at least 15,000 metric tons per
year of U.S. grain for sale in foreign commerce. During FY2014, FGIS issued 106 certificates of registration to
individuals and firms.
8
See map at http://www.gipsa.usda.gov/about/pdf_files/map-oa.pdf.
4
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covers a specific and exclusive geographic area, which is authorized by the USGSA in part to
ensure that the official state or private agency receives enough business for it to remain
financially viable and to maintain staff for an on-site laboratory that can serve the entire area.9
FGIS grants requests by grain shippers that allow for some boundary flexibility.
All employees of an official agency must be licensed and lab equipment must meet federal
standards. User fees charged by official state and private agencies for services are approved by
FGIS and must be “reasonable” as specified in 7 C.F.R. Section 800.70.10 An additional fee is
charged by FGIS for supervising official inspection and/or weighing services. Other (unofficial)
inspection companies may be operating in these regions, but only an agency designated by FGIS
is allowed to issue official inspection certificates.
For exports, FGIS directly inspects about two-thirds of exported grain and oversees the inspection
of the remainder. Exporters are required to use the service provided by either the FGIS field
offices (located in Louisiana, Ohio, Oregon, and Texas) or a delegated state agency (Alabama,
South Carolina, Virginia, Washington, and Wisconsin) within geographic boundaries of the export
port in which they operate. FGIS provides mandatory export inspection and weighing services on
a fee basis at 45 export elevators, including 4 floating rigs. The five delegated state agencies offer
official service at an additional 13 export elevators with FGIS oversight. Fees are specified in 7
C.F.R. Section 800.71, and are composed of hourly rates, fees for services beyond basic grade
analysis (e.g., protein level), and a fee for each metric ton to cover local administrative and/or
national support costs.11
In 2013, amid broad industry support to maintain inspection services, USDA increased fees to
ensure full funding of official inspection and weighing services in future years.12 With reduced
levels of grain volume in FY2012 and FY2013 due to drought-reduced crops in 2012, fee revenue
did not keep pace with costs, resulting in a negative balance in the user fee trust fund for the
export inspection and weighing program in FY2013. With a rebound in grain volumes (and higher
fees), fee revenues in FY2014 increased substantially, resulting in a positive fund balance.13
FGIS headquarters are located in Washington, DC. The agency operates the National Grain
Center in Kansas City, MO, seven field offices, one federal/state office, and three sub-offices. In
9
According to USDA, exclusive territories also minimize the risk of “grade shopping” that could be exacerbated by
competition for business if every agency could provide service anywhere. Furthermore, without exclusive territories,
inspection agencies might focus on larger, higher volume exporters and possibly overlook smaller exporters. The
opposing view is that elimination of geographic boundaries would benefit the grain industry by increasing competition
and would not necessarily jeopardize the integrity of the official inspection program.
10
Fees are to (a) cover the cost of inspection and weighing services, (b) be consistent with similar fees assessed by
adjacent agencies, (c) be assessed based on average cost of similar services at all locations, and (d) be supported by
information showing how the fees were developed. Approved fee schedules are posted at http://www.gipsa.usda.gov/
fgis/svc_provid/providers.html.
11
In 7 C.F.R. §800.71, Schedule A is FGIS inspections and Schedule B is FGIS supervision of inspection and weighing
services.
12
USDA did not receive any comments opposing the proposed rule. See Grain Inspection, Packers and Stockyards
Administration, “Fees for Official Inspection and Official Weighing Services Under the United States Grain Standards
Act (USGSA),” 78 Federal Register 22151-22166, April 15, 2013.
13
In FY2013, trust fund levels were positive for the other three FGIS programs: oversight of official agencies, rice
program, and commodity program (edible beans, peas, lentils, and processed products like wheat flour, soybean meal,
vegetable oil, and corn meal). Annual user fee account data are available for FY2000-FY2014 at
http://www.gipsa.usda.gov/fgis/public_financialdata.aspx.
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FY2013, the agency employed approximately 400 full-time staff and 123 temporary staff. In total,
the U.S. grain inspection network consists of approximately 2,000 staff members at federal, state,
and private laboratories.
Legislative History
During the last half of the 19th century, and prior to enactment of current grain standards law,
local grain markets were operated with their own grades and grading methods. By 1900,
numerous states and trade organizations were inspecting grain for quality at inspection points
across the country, often with widely different standards and terminology. The lack of accepted
grain standards and inspection procedures contributed to chaotic marketing conditions and
inefficient marketing of agricultural commodities. Disputes arose between producers, traders, and
buyers from as far away as Europe with charges of poor quality and unfair practices.14
Enactment of Federal Grain Standards and Inspections in 1916
Following unsuccessful attempts by the industry to voluntarily adopt grain standards, the United
States Grain Standards Act (USGSA) was enacted on August 11, 1916, to help coordinate efforts
to improve the grading system. The first standard was established for corn and became effective
December 1, 1916. The act also required certain export and interstate shipments of grain to be
officially inspected if sold by grade. USDA was directed to issue licenses to state inspectors and
private inspection agencies, and to supervise their activities. Only licensed inspectors could issue
official grade certificates.
Amendments Through 1976: Increasing the Federal Role
The USGSA has been amended 18 times since it was enacted (see Table A-2). The first change
came in 1940 when it was modified to include soybeans. In 1956 it was amended to prohibit
issuance of false certificates by the deceptive loading, handling, or sampling of grain. In 1958, an
amendment authorized USDA to recover the cost of overtime resulting from performing appeal
inspection services.
A major revision came in 1968, when Congress eliminated the requirement that interstate
shipments be inspected if sold by grade, which reportedly created inefficiencies in grain
movements and added costs by requiring inspections even when neither buyer nor seller wanted
an official grade. (For export shipments, inspections and designations by grade remained
mandatory.) Other provisions extended the lead time to initiate changes in standards from 90 days
to one year and increased penalties for violations of the act.
Another significant change in the mid-1970s elevated the federal role following investigations
into reports of misgrading of grain, “short” weighing, bribery, and other irregularities in grain
inspection and weighing. A number of firms and individuals were indicted by federal grand juries
and ultimately convicted. The incidents threatened the credibility of the U.S. grain marketing
system, and in response, amendments to USGSA were enacted in 1976 that for the first time
14
Information sources for this section include USDA, The Federal Grain Inspection Service (FGIS), Annual Report to
Congress 1977, http://www.gipsa.usda.gov/fgis/publication/ar/1977_fgis_AR.pdf; and Lowell D. Hill, Grain Grades
and Standards—Historical Issues Shaping the Future (Urbana, IL: University of Illinois Press, 1990).
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established official weighing services, recordkeeping by elevators, registration of grain exporters,
and user fees to cover federal supervision costs. Importantly, the 1976 amendment established the
Federal Grain Inspection Service (FGIS) and required either federal inspection or state agency
inspections for export. Previous law had required either state agency or private agency
inspections but had not authorized federal inspections. The 1976 amendment also included
provisions restricting grain companies and boards of trade from sponsoring inspection agencies,
which had apparently led to conflicts of interest.
1980s and 1990s: Funding, Advisory Committee, and Quality
In the late 1970s and early 1980s, legislation focused on funding and advisory issues, including a
repeal and then reinstatement of user fees, establishment of an industry advisory committee,
elimination of the requirement for official weighing except for exports, and limits on
administrative and supervisory costs in user fees. Also, for the first time, legislation in 1981
provided the authorization of appropriations for a specified period of time (through FY1984).
Subsequent reauthorizations of the USGSA have extended this authority for varying periods of
time, including through FY2015 in the USGSA reauthorization enacted in 2005.
Beginning in the mid-1980s, congressional focus shifted to grain quality. The 1985 farm bill (P.L.
99-198) required a study on grain export standards and blending practices. In 1986, measures
were enacted to prohibit reintroduction of foreign material (including dust) once removed from
grain, and to study incentives for high quality and feasibility of tests for determining value of
end-use characteristics. The quality emphasis continued in the 1990 farm bill (P.L. 101-624),
which established a grain quality committee within USDA and provisions for improving
cleanliness of grain through existing standards and additional prohibitions on contamination.
Since 1990: Cost Containment and Modest Change
In 1993, Congress extended the authorization of appropriations for grain inspection services and
collection of user fees through FY2000, authorized inspection and weighing activities in
Canadian ports, and authorized a pilot program to permit more than one official agency to carry
out inspections within a single geographic area. Congress also directed USDA to develop and
carry out a comprehensive cost containment plan to minimize expenditures and user fees.15
Congress in 2000 reauthorized the pilot program to allow more than one designated official
agency to carry out inspections and weighing services within the same geographic area under
certain conditions. It also reduced the limitation on administrative and supervisory costs in user
fees from 40% to 30% and prohibited the disguising of grain quality. Congress also extended
through FY2005 the authorization of appropriations for grain inspection services, collection of
certain user fees, and authority for an advisory committee.
The most recent reauthorization of the USGSA was enacted as P.L. 109-83 in 2005 (see box
below). It made no change to the law except to extend the respective end dates for certain
authorities through FY2015. To reduce federal staff costs, Congress had considered giving USDA
authority to contract export inspections and weighing services to private companies (with federal
oversight), but USDA determined it already had that authority.16 USDA later evaluated the cost
15
16
In 1994, P.L. 103-354 made miscellaneous conforming amendments to USGSA.
Senator Chambliss, “U.S. Grain Standards Act,” Congressional Record, September 28, 2005, p. S10583.
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effectiveness of using its existing contract authority for contractors to provide official inspection
and weighing services at export port locations. It concluded that doing so would not result in
savings for the industry or enhance the competitiveness of U.S. grain exports.17 In contrast,
analysis conducted for the North American Grain Export Association concluded that a
competitive model of inspection service delivery might result in lower overall costs for the
industry based on a cost comparison across countries (see “Expanding the Pool of Agencies for
Export Inspections”).18
Text of P.L. 109-83
SECTION 1. REAUTHORIZATION OF ACT. (a) IN GENERAL.—Sections 7(j)(4), 7A(l)(3), 7D, 19, and 21(e) of the
United States Grains Standards Act (7 U.S.C. 79(j)(4), 79a(l)(3), 79d, 87h, 87j(e)) are amended by striking ‘‘2005’’ each
place it appears and inserting ‘‘2015’’. (b) EFFECTIVE DATE.—The amendments made by subsection (a) take effect on
September 30, 2005.
Major Provisions in the Final Reauthorization
The 114th Congress had several options when considering expiration of several provisions of the
U.S. Grain Standards Act (USGSA). One was to reauthorize them, as Congress did most recently
in 2005, by simply extending the date of expiration. Another option was to reauthorize and make
program modifications, such as fee changes or provisions to minimize service disruptions. A third
option was to let the provisions expire, which would have shifted all export inspections and
weighing services to FGIS and disrupted current operations that use both federal and state agency
inspection services.
Congressional action to reauthorize the USGSA started with H.R. 2088, which was introduced on
April 29, 2015, and offered by the bipartisan leadership of the House Agriculture Committee. The
committee approved the bill by voice vote and without amendment on April 30, 2015. The House
passed H.R. 2088 by voice vote on June 9, 2015.
A similar pattern emerged in the Senate. The Senate Agriculture Committee held a hearing on
May 5, 2015. The committee on May 21, 2015, approved a bill (S. 1417) by voice vote and
without amendment. However, S. 1417 did not receive floor action.
On September 21, 2015, the Senate passed, by unanimous consent, an amended version of the
House-passed Mandatory Price Reporting Act of 2015 (H.R. 2051) that included reauthorization
provisions for the USGSA, Mandatory Price Reporting, and the National Forest Foundation, three
laws (or certain provisions of the laws) that would have expired on September 30, 2015. The
House took up Senate-amended H.R. 2051 on September 28, 2015, and the House passed it by
voice vote. The Agriculture Reauthorizations Act of 2015 (P.L. 114-54) was enacted on
September 30, 2015.
17
USDA, GIPSA, Federal Grain Inspection Service, Evaluation of the Use of Contractors to Enhance the Delivery of
Official Inspection and Weighing Services at Export Port Locations, March 2009, http://www.gipsa.usda.gov/fgis/
publication/Contracting-Report-03-2009.pdf.
18
WKMGlobal Consulting, U.S. Grain and Oilseed Inspection Services Competitiveness Study Report, Export
Competitor and Importer Information, Fairfax, VA, January 30, 2015.
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Expiring Provisions
Most of the USGSA is permanently authorized, including mandatory export inspections and
USDA’s authority to establish (and amend) grain standards. Four specific provisions of the law
would have expired on September 30, 2015.
A summary of the July 2014 meeting of the Grain Inspection Advisory Committee noted that “no
major changes have been suggested” for the 2015 reauthorization of the USGSA, and the
committee recommended that the expiring provisions of the act should be reauthorized for a
minimum of 10 years in order to assure uninterrupted service.19 Others, including the National
Grain and Feed Association and the North American Export Grain Association, recommended a
shorter, five-year authorization, given the dynamic nature of the grain industry.
The following four provisions were extended five years until September 30, 2020, in the enacted
Agriculture Reauthorizations Act of 2015 (P.L. 114-54).
Authority for appropriations (7 U.S.C. 87h). Congress appropriates funds to
GIPSA that are made available to FGIS for developing standards, paying for
related agency costs, and improving measurement procedures. Of the $40.3
million appropriated to GIPSA in FY2014, GIPSA provided $17.9 million for
FGIS activities. Appropriations do not fund inspections, which are covered by
user fees.
FGIS authority for charging fees required for federal supervision of state
agencies’ export inspections and weighing (7 U.S.C. 79(j)(4) and 7 U.S.C.
79a(l)(3)). Official inspections and weighing services are performed by either
FGIS or official agencies under FGIS supervision. The authority allows FGIS to
charge fees for the required federal supervision of export inspections performed
by a state agency and the authority to invest these funds. Similarly, the authority
allows FGIS to collect fees for the required federal supervision of weighing
services performed by an official agency.
Administrative/supervisory cost cap of 30% (7 U.S.C. 79d). The reauthorized
statute maintains a 30% limit on administrative and supervisory costs relative to
total costs for services. The cap was established (and subsequently reduced) to
encourage cost cutting.
Authority for an advisory committee (7 U.S.C. 87j(e)). The advisory
committee meets regularly to advise FGIS on programs and services it delivers,
and its recommendations are designed to help the agency better meet the needs of
its customers.
See Appendix B, Issues for Expiring Provisions, for a discussion of potential consequences if
the four provisions had not been reauthorized.
19
Grain Inspection Advisory Committee, Meeting Summary, Kansas City, MO, July 15-16, 2014,
http://www.gipsa.usda.gov/fgis/advcommittee/july2014/Summary-GIAC-Meeting-KC-071514.pdf.
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Additional Policy Issues
Besides expiring authorities, several policy issues were considered as Congress reviewed the
reauthorization of the USGSA. These issues involved fees, the period of official agency
designation, the approval process for delegated state agencies, limits on geographical boundaries,
and a congressional response to the interruption in export services in the state of Washington in
2014.20
Some of the policy issues and enacted provisions, where relevant, are discussed below. Table 1
provides a detailed comparison of all provisions in H.R. 2088 and S. 1417 with current law, and
the enacted legislation, P.L. 114-54.
Interruption in Service/Continuity of Operations
In early July 2014, the state agency providing export inspections at the United Grain Corporation
terminal at the Port of Vancouver (Washington) discontinued its service amid an ongoing labor
dispute between United Grain (and two other exporting companies) and the International
Longshore and Warehouse Union. The inspection agency had been concerned with employee
safety at the entrance of the site where demonstrations had been held since the dispute began in
2013. The United Grain terminal is a major grain export facility on the West Coast.
In mid-July 2014, a number of agricultural groups urged USDA to take immediate action to
restore service, by using either federal inspectors or qualified inspectors from other delegated
agencies.21 The Grain Advisory Committee also called on USDA to restore grain inspection
service. The committee adopted the following resolution in its July 2014 meeting.22
Therefore be it resolved that the Grain Inspection Advisory Committee urges in the strongest
terms that FGIS take whatever actions are necessary to immediately restore official grain
inspection and weighing service wherever and whenever it is disrupted, either by immediately
replacing absent inspectors with FGIS Official personnel or with inspectors from available
qualified providers, including other designated or delegated Official Agencies.
Under the USGSA and given that export inspections are mandatory, USDA has discretion to grant
a waiver of inspection in an emergency, and the Secretary of Agriculture has broad authority to
determine what constitutes an emergency.23 In July 2014, United Grain reportedly shipped grain
by obtaining a waiver from the inspection requirement.24 The company also relocated grain to
other facilities for inspection, which increased shipping costs, as it attempted to maintain grain
20
Information in this section is based in part on testimony delivered during the hearings conducted by the House and
Senate Agriculture Committees. For testimony, see https://agriculture.house.gov/hearing/subcommittee-general-farmcommodities-and-risk-management-%E2%80%93-public-hearing and http://www.ag.senate.gov/hearings/review-ofthe-us-grain-standards-act.
21
National Grain and Feed Association, “USDA Urged to Immediately Restore Official Grain Inspection Service at
Port of Vancouver, Wash.,” press release, July 29, 2014, http://www.ngfa.org/2014/07/29/usda-urged-to-immediatelyrestore-official-grain-inspection-service-at-port-of-vancouver-wash/.
22
Grain Inspection Advisory Committee, Resolutions, Kansas City, MO, July 15, 2014, http://www.gipsa.usda.gov/
fgis/advcommittee/july2014/July-2014-Meeting-Resolutions.pdf.
23
7 U.S.C. §77(a)(1).
24
Mike Francis, “United Grain Operations Slow at Port of Vancouver after Gov. Inslee Pulls Security Escorts,” The
Oregonian, July 24, 2014, http://www.oregonlive.com/business/index.ssf/2014/07/
united_grain_operations_slow_a.html.
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U.S. Grain Standards Act: Reauthorization in the 114th Congress
flows to export customers. In early August 2014, USDA declined using federal inspectors at the
United Grain Corporation terminal at the Port of Vancouver because “the situation does not
ensure that FGIS inspectors will have safe access to the facility.”25 Later that month, the grain
companies and union reached an agreement to end the dispute, and inspections resumed at the
United Grain company terminal. Although the incident was resolved, grain industry and
congressional concerns continued through fall 2014 and into 2015.26
In response to questions about the July/August 2014 events, FGIS reported at the March 3, 2015,
hearing of the House Appropriations Subcommittee on Agriculture that the agency now has a
safety mitigation plan in place for entrance and exit at the Port of Vancouver, Washington.
Consequently, FGIS is confident that the next time an incident occurs, the response time for
sending in federal inspectors to ensure the export of grain will be much shorter. After reviewing
the plan and the situation on the ground, FGIS expects to work as quickly as possible to relocate
federal inspectors to Vancouver from other parts of the country. FGIS has also prepared
preliminary safety plans for all grain export facilities in the United States by using lessons learned
in Vancouver, including researching and cataloging all local, state, and federal emergency
contacts in the locality of each facility.
These steps by FGIS might not sufficiently address industry and congressional concerns.
Testimony at a House Agriculture Subcommittee hearing on April 22, 2015, by the grain
industry—including the National Grain and Feed Association (NGFA), North American Export
Grain Association (NAEGA), and American Farm Bureau—called for legislative language that
would reinforce the obligation of USDA to perform inspections, including a specific timeline for
action by USDA to maintain the availability of export inspections.
A point of contention is who would serve as the “safety valve” when inspections provided by
state agencies are disrupted. Some groups, including NGFA and NAEGA, want to use private
inspectors to fill the gap in the event of a disruption, noting the cost-competiveness of private
inspectors and widespread use of additional inspection services that they currently provide.
Others, including the National Association of Wheat Growers and the American Federation of
Government Employees, prefer that any restored service would be conducted by FGIS or by
another delegated state agency, given serious problems in the 1970s with private export
inspection agencies that led to a more prominent federal role for official export inspections.
Separately, the National Farmers Union is concerned that enacting a specific timeline and
required actions for USDA could limit or even eliminate USDA’s discretionary authority when
responding to unforeseen events.
Both H.R. 2088 and S. 1417 addressed the issue of service disruptions and maintaining the
availability of export inspections, but they differed in how USDA is to respond. The House bill
required mandatory waivers of requirements for export inspection. The Senate bill left more
discretion to the Secretary in determining how to address a disruption.
25
Christine Stebbins, “US Pacific Northwest Exports Backlogged, Delays Could Worsen,” Reuters, August 8, 2014.
For example, see Office of Senator Steve Daines, “Daines Demands Commitment to On-Time Federal Grain
Inspection Services,” press release, March 10, 2015, http://www.daines.senate.gov/content/daines-demandscommitment-time-federal-grain-inspection-service. Concerns from the industry include the U.S. Wheat Associates, the
export market development organization for the U.S. wheat industry, which has emphasized the need for uninterrupted
grain inspection services. See “Policy Matters,” Wheat Life, March 2015, pp. 22-23, http://www.wheatlife.org/Issues/
03_WLMar15web.pdf.
26
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U.S. Grain Standards Act: Reauthorization in the 114th Congress
Enacted Provisions
The final reauthorization act (P.L. 114-54) requires USDA to take immediate action to address a
disruption of inspection and weighing services, but leaves the decision about how to resume
services to the Secretary. Within 24 hours of a disruption, USDA is required to submit a report to
Congress that describes the disruption and what actions need to be taken to address it. USDA is to
continue to send Congress daily update reports until the inspection and weighing services are
resumed. The act also requires any state agency that decides to temporarily suspend inspection
and weighing services to provide USDA an advance notice of at least 72 hours.
Lastly, the act requires USDA to submit a report to Congress on the factors that led to the
disruption in federal inspection of grain exports at the Port of Vancouver in the summer of 2014.
The report is to include a description of the port facility, security needs at the port (with available
resources for security), and any policy changes that can be implemented to prevent a similar
disruption at any location.
Geographical Boundaries for Official Agencies
Each official agency covers a specific and exclusive geographic area, which is authorized by the
USGSA. Exclusivity is granted to ensure the economic viability of inspection and weighing
services (see “U.S. Grain Inspection System”). Inspection customers could seek a waiver of the
geographic boundaries restriction (if, for example, they are not satisfied with their service), and
USDA could consider granting it under certain circumstances. These included the official
inspection agency not being able to conduct the inspection in a timely manner, the customer not
previously being an existing customer of the official agency, or the customer was requesting a
probe inspection on a barge-lot basis.
A provision in the House bill (H.R. 2088) addressed exclusive geographic boundaries by allowing
official agencies to perform domestic inspection and weighing services outside their geographic
boundaries under certain conditions. The Senate bill (S. 1417) did not include a provision on
geographic boundaries
Enacted Provisions
The reauthorization act states that USDA “shall allow” official agencies to cross geographic
boundaries to conduct inspections under three conditions. The “timely manner” and “probe
inspection” provisions were maintained. The “existing customer” condition was dropped. The
third condition, from H.R. 2088, allows customers to receive official domestic inspection or
weighing from a service provider in an adjacent geographic area if both the prospective service
provider and the current one agree to waive, in writing, the current geographic area restriction at
the request of the customer.
Period of Official Agency Designation
USDA approves state and private entities to provide official inspection and/or weighing services
on behalf of the federal government. The time period for “official agency designation” was three
years, as specified in regulation, after which the agency must request a renewal of the
Congressional Research Service
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U.S. Grain Standards Act: Reauthorization in the 114th Congress
designation.27 The American Association of Grain Inspection and Weighing Agencies (AAGIWA)
wanted Congress to extend the period of designation to five years. The association expects that
the longer period would allow agencies to secure more favorable financing and better control
business costs without limiting FGIS’s authority to revoke the designation if the agency does not
adequately perform. Both House and Senate bills included provisions to increase the designation
duration to five years.
Enacted Provisions
The final reauthorization act (P.L. 114-54) changed the period of designation from three to five
years.
Approval Process for Delegated State Agencies
The National Grain and Feed Association (NGFA) and the North American Export Grain
Association (NAEGA) advocated for more openness in the process of approving a delegated state
agency (for export inspections). They would like FGIS to adopt the approach used for approving
agencies for domestic inspection, including a Federal Register notice-and-comment period. The
industry groups said the current process did not provide for a periodic and public review of state
inspection agencies. H.R. 2088 and S. 1417 included provisions to address the certification of
delegated state agencies.
Enacted Provisions
The final reauthorization act (P.L. 114-54) requires that state agencies be certified every five
years. Within one year of enactment, USDA is to develop a certification process for delegating
authority to state agencies. The process must include a Federal Register notice-and-comment
period. Final approval must include consideration of the public comments and describe the
rationale for approval.
Expanding the Pool of Agencies for Export Inspections
Besides allowing private agencies to serve as a backup for state agencies in a contingency plan,
groups representing grain exporters also are interested in using current statutory authority to
allow private agencies to perform official inspections at export elevators, thereby potentially
reducing system-wide export inspection costs. The NGFA and NAEGA say foreign buyers of U.S.
grain often require a wide variety of documented characteristics in addition to certificates
specifying U.S. grade, and consequently many shipments are assessed a second time by private
agencies for protein levels or for other analyses. According to the proponents, the current practice
of additional testing by private agencies, and the widespread acceptance by foreign buyers of
their results, suggest that potential cost savings are available to the industry as a whole if official
inspections and additional testing activities are consolidated and performed by a single entity,
with official inspection and weighing activities remaining under federal supervision. Opponents
remain wary of reducing the federal role in direct inspection and prefer to keep the current system
27
7 C.F.R. 800.196 (h).
Congressional Research Service
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U.S. Grain Standards Act: Reauthorization in the 114th Congress
intact, with export inspections performed directly by FGIS or by delegated state agencies.28
Neither the House nor Senate bills addressed expanding the pool of inspection agencies.
Enacted Provisions
The final reauthorization act (P.L. 114-54) did not include provisions on using private inspectors.
Fees for Standards Development and Maintenance
The President’s FY2016 budget proposal recommended that user fees replace $6 million of
appropriated funds to pay for FGIS standardization activities. Standardization activities include
the setting and updating of official standards and the evaluation, selection, and calibration of
testing equipment. This proposal was first made in the early 1980s and has been repeated most
years since. The House and Senate Appropriations Committees have not accepted the proposal,
noting that such a change in policy belongs with the authorizing committees (the House and
Senate Agriculture Committees). The argument in favor of charging fees for standardization is
that the grain industry clearly benefits from the service and should pay the cost. Opponents argue
that the entire industry benefits, not only the users of inspection services, and it would be unfair
to require the users of inspection services to pay the entire cost. Neither bill included provisions
to add user fees to replace some appropriations for standardization activities.
Enacted Provisions
The final reauthorization act (P.L. 114-54) did not include provisions on user fees for
standardization activities.
Fee Changes and the User Fee Trust Fund
The Grain Inspection Advisory Committee has asked for a suspension of additional increases in
export grain inspection and weighing fees when FGIS retained earnings (fee revenue minus costs)
exceed the agency’s three-month reserve level (and tonnage is at or above projected levels),
which is maintained so that FGIS has sufficient operational funds. A step further is advocated by
the National Grain and Feed Association and the North American Grain Export Association,
which want tonnage fees based on a flexible calculation that would result in more accurate fees
and prevent an excessive buildup in the trust fund.29 The Advisory Committee also recommended
that the Grain Inspection, Packers and Stockyards Administration publish financial information
for FGIS user fee accounts on a monthly basis to the agency website for access by users.30 Both
the House and Senate bills included provisions to set a method to calculate inspection and
weighing fees.
28
Official inspections of grain headed for export via inland containers account for about 13% of official export
inspections. These official inspections are performed by designated agencies (not delegated state agencies).
29
Testimony by Nick Friant, on behalf of National Grain and Feed Association and North American Export Grain
Association, U.S. Congress, House Committee on Agriculture, Subcommittee on General Farm Commodities and Risk
Management, hearing to review the reauthorization of the U.S. Grain Standards Act, 114th Cong., 1st sess., April 22,
2015, https://agriculture.house.gov/sites/republicans.agriculture.house.gov/files/pdf/Friant%20Testimony.pdf.
30
Annual figures are available at http://www.gipsa.usda.gov/fgis/public_financialdata.aspx.
Congressional Research Service
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U.S. Grain Standards Act: Reauthorization in the 114th Congress
Enacted Provisions
The final reauthorization act (P.L. 114-54) specified a method to determine fees for inspection
and weighing services at export ports. The portion of fees based on export tonnage is to be based
on the rolling five-year average of exports. USDA is to maintain a three- to six-month operating
reserve, and the Secretary is to adjust fees annually to maintain the reserve.
Table 1 provides a detailed comparison of all provisions in H.R. 2088 and S. 1417 with current
law, and the enacted legislation, P.L. 114-54.
Congressional Research Service
13
Table 1. Comparison of Current Law, House-Passed Bill (H.R. 2088), Senate Agriculture Committee-Approved Bill (S. 1417),
and Enacted Law (P.L. 114-54)
Current Law/Policy
House-Passed Bill
Senate Agriculture CommitteeApproved Bill
Enacted: Agriculture
Reauthorizations Act of 2015
(H.R. 2088)
(S. 1417)
(H.R. 2051; P.L. 114-54)
General Policy and Definitions
The United States Grain Standards
Act (USGSA) of 1916—P.L. 64-190, as
amended—authorizes the Federal
Grain Inspection Service (FGIS) of the
U.S. Department of Agriculture
(USDA) to establish official marketing
standards (not health and safety
standards) for certain grains and
oilseeds.
Most of the act is permanently
authorized, including mandatory
inspection and weighing of exported
grain, and federal authority to
establish and amend grain standards of
quality. However, several provisions
expire on September 30, 2015 (see
below). [7 U.S.C. 71 et seq.]
This act may be cited as the ‘‘United
States Grain Standards Act
Reauthorization Act of 2015.” [§1]
Same as House bill. [§1]
Reauthorization of the U.S. Grain
Standards Act was combined with
Mandatory Price Reporting and the
National Forest Foundation Act
Reauthorization into a single bill.
The act may be cited as the Agriculture
Reauthorizations Act of 2015. [§1]
Specifies that it is the policy of
Congress—(1) to promote the
marketing of grain of high quality to
both domestic and foreign buyers; (2)
that the primary objective of the
official U.S. standards for grain is to
certify the quality of grain as
accurately as practicable; and (3) that
official standards for grain shall define
uniform and accepted descriptive
terms to facilitate trade in grain and
provide other functions for efficient
marketing of grain. [7 U.S.C. 74(b)]
Deletes ‘‘to both domestic and foreign
buyers’’ (in paragraph 1) and replaces
with ‘‘responsive to the purchase
specifications of domestic and foreign
buyers.”
A fourth policy objective is added: “to
provide an accurate, reliable, consistently
available, and cost-effective official grain
inspection and weighing system.’’ [§2(a)]
No comparable provision.
No comparable provision.
CRS-14
House-Passed Bill
Senate Agriculture CommitteeApproved Bill
Enacted: Agriculture
Reauthorizations Act of 2015
Current Law/Policy
(H.R. 2088)
(S. 1417)
(H.R. 2051; P.L. 114-54)
Defines a list of terms for official
inspection and weighing, including the
term "grain," which means corn,
wheat, rye, oats, barley, flaxseed,
sorghum, soybeans, mixed grain, and
any other food grains, feed grains, and
oilseeds for which standards are
established under Section 7 (canola,
sunflower seed, and triticale). [7
U.S.C. 75]
For a new provision establishing
continuity of operations (below), adds the
term “major disaster,” which has the
meaning given that term in Section 102(2)
of the Robert T. Stafford Disaster Relief
and Emergency Assistance Act (42 U.S.C.
5122(2)), except that the term also
includes a severe weather incident
causing a region-wide interruption of
government services.’’ [§2(b)]
No comparable provision.
No comparable provision.
Exported grain must be officially
inspected and weighed (not required if
grain is not sold by grade or not
requested by the shipper or receiver).
The Secretary of Agriculture may
waive the requirement in an
emergency. [7 U.S.C. 77(a)(1-2)]
Changes waiver authority from
discretionary to mandatory by replacing
the words “may waive” with “shall
promptly waive.” [§2(c)(1)]
No comparable provision.
Similar to the House bill as “shall waive”
replaces “may waive.” [§301(a)(1)]
Incoming grain at export elevators
(for overseas shipment) must be
weighed, except for intra-company
shipments and for grain transferred
into an export elevator by
transportation modes other than
barge. [7 U.S.C. 77(a)(2)]
The waiver for incoming grain is
broadened to cover shipments of grain
into an export elevator by any mode of
transportation. [§2(c)(2)]
Same as House bill. [§2(a)(1)]
Same as House bill. [§301(a)(2)]
Official Inspection and Weighing
CRS-15
Current Law/Policy
House-Passed Bill
Senate Agriculture CommitteeApproved Bill
Enacted: Agriculture
Reauthorizations Act of 2015
(H.R. 2088)
(S. 1417)
(H.R. 2051; P.L. 114-54)
Delegation of Official Inspection Authority (Exports)
Authorizes the Secretary to delegate
authority for official inspection of
export shipments to state agencies
that qualify to perform official
inspection and were performing
official inspections at export port
locations on or before July 1, 1976.
Any such delegation may be revoked
by the Secretary at any time. There is
no provision for length of delegation
term or requirement for renewal of
delegation authority. [7 U.S.C.
79(e)(2)]
Prior to delegating authority to a state
agency for performing official
inspection at export port locations,
the Secretary shall conduct an
investigation to determine whether
such agency is qualified. [7 U.S.C.
79(e)(3)]
CRS-16
Removes language specifying that state
agencies are required to have been
operating as of a certain date. [§2(d)(1
and 2(A))]
No comparable provision.
No comparable provision.
Establishes a maximum length of
delegation of five years, and delegation
may be renewed. [§2(d)(2)(A)(iii)]
State agencies must be certified every five
years. [§2(b)(1)]
Same as Senate bill. [§301(b)(1)(C)]
Specifies the process for reviewing an
applicant requesting the delegation of
authority (or renewal of authority),
including a notice of the application
published in the Federal Register with a
minimum 30-day comment period and an
investigation based on public comments
and other information. A notice is to be
published in the Federal Register
announcing whether the state agency has
been approved and the rationale for its
approval.
State agencies must provide at least a 72hour advance notice if services are going
to be temporarily discontinued.
[§2(d)(2)(C)]
Process for certifying state agencies is
similar to House bill. It includes
consideration of any notice of disruption
that the state agency may have filed
(requires a 72 hour advance notice by the
state agency). [§2(b)(1)]
Same as the Senate. [§301(b)(1)(C)]
Current Law/Policy
No comparable provision.
House-Passed Bill
Senate Agriculture CommitteeApproved Bill
Enacted: Agriculture
Reauthorizations Act of 2015
(H.R. 2088)
(S. 1417)
(H.R. 2051; P.L. 114-54)
Not later than two years after the date of
the enactment of this act, the Secretary
shall determine if each state agency is
qualified to continue to perform official
inspection services at export elevators at
export port locations on behalf of the
Secretary [§2(d)(4)]
No comparable provision.
No comparable provision.
Continuity of Operations for Export Inspections and Weighing
No comparable provision.
No comparable provision.
Within 180 days of enactment, the
Secretary must submit to Congress a
report describing the specific factors that
led to disruption in federal inspection of
grain exports at the Port of Vancouver in
the summer of 2014, including a
description of the port facility, security
needs, and available resources for that
purpose. The report is to include any
changes in policy that the Secretary has
implemented to ensure that a similar
disruption in any location does not occur
in the future. [§3]
Same as Senate bill. [§302]
No comparable provision.
Except in the case of a major disaster, the
Secretary shall provide official inspections
at export port locations without
interruption by either official inspection
personnel employed by the Secretary or
by a state agency delegated such
authority. If interrupted, services are to
be resumed by utilizing official inspection
personnel employed by the Secretary or
by another delegated state agency.
Service is to resume within 6 hours after
the interruption if the Secretary received
advance notice of interruption, or within
12 hours if the state agency failed to
provide the required advance notice.
Requires the Secretary to take immediate
action to address any disruption in
inspections or weighing and leaves the
decision on how to resume service to the
Secretary. [§2(a)(2)]
Same as Senate bill. [§301(a)(3)]
CRS-17
Current Law/Policy
No comparable provision.
CRS-18
House-Passed Bill
Senate Agriculture CommitteeApproved Bill
Enacted: Agriculture
Reauthorizations Act of 2015
(H.R. 2088)
(S. 1417)
(H.R. 2051; P.L. 114-54)
If the Secretary is unable to restore
official inspection services within the
applicable time period, the interested
person requesting such services at the
export elevator shall be authorized to
utilize official inspection personnel
employed by another state agency with
delegated authority (exports) or
designated authority (domestic). Such
service by a delegated or designated
agency may continue for up to 90 days.
[§2(e)] Provisions also apply to official
weighing. [§2(i)]
No comparable provision.
No comparable provision.
Except in the case of a major disaster, if a
state agency fails to perform at export
port locations, the Secretary shall submit
a report to Congress on the reasons for
the failure and the rationale as to
whether or not the Secretary will permit
the state agency to retain its delegated
authority. [§2(d)(2)(C)]
Not later than 24 hours after the start of
the disruption, the Secretary must submit
to Congress a report that describes the
disruption and actions necessary to
address the problems so that service may
resume. Daily updates to Congress are
required until official service has resumed.
[§2(a)(2)]
Same as Senate bill. [§301(a)(3)]
If a state agency intends to temporarily
discontinue inspection or weighing
services, the state agency must notify the
Secretary at least 72 hours in advance.
[§2(e)]
Same as House bill. [§2(b)(1)]
Same as House bill. [§301(b)(1)(C)]
Current Law/Policy
House-Passed Bill
Senate Agriculture CommitteeApproved Bill
Enacted: Agriculture
Reauthorizations Act of 2015
(H.R. 2088)
(S. 1417)
(H.R. 2051; P.L. 114-54)
Geographic Boundaries for Official Agencies
Official Inspection Authority.
USDA is authorized to designate a
state or local agency or person as to
conduct official inspections based on
certain criteria. [7 U.S.C. 79(f)(1)]
Not more than one official agency
shall operate at the same time in any
geographic area defined by the
Secretary. Exceptions are allowed if
the Secretary determines that the
presence of more than one designated
official agency in the same geographic
area will not undermine the general
policy objectives of the U.S. Grain
Standards Act (e.g., facilitate the
marketing of grain). [7 U.S.C.
79(f)(2)]
No comparable provision.
The Secretary is to conduct periodic
consultations with customers of
inspection agencies to review
performance, and work with agencies to
address concerns. [§2(b)(2)]
No comparable provision.
Same as Senate bill. [§301(b)(2)]
The Secretary may allow more than
one designated official agency to carry
out inspections within the same
geographical area as part of a pilot
program. [7 U.S.C. 79(f)(2)(A)]
Deletes this provision.
No comparable provision.
Same as House bill. [§301(b)(3)(A)]
The Secretary may allow a designated
official agency to cross boundary lines
to carry out inspections in another
geographic area if:
The Secretary shall allow a designated
official agency to cross boundary lines
under following conditions (two are
unchanged, one is modified).
No comparable provision.
Same as House bill. [§301(b)(3)(A)]
(i) the current designated official
agency for that geographic area is
unable to provide inspection services
in a timely manner;
Retains condition.
No comparable provision.
Same as House bill. [§301(b)(3)(A)]
CRS-19
Restrictions and exceptions continue,
with changes below. [§2(f)(1)]
For inspection services, mandates USDA
to allow designated official agencies to
cross boundaries if certain conditions are
met. [§301(b)(3)(A)]
House-Passed Bill
Senate Agriculture CommitteeApproved Bill
Enacted: Agriculture
Reauthorizations Act of 2015
Current Law/Policy
(H.R. 2088)
(S. 1417)
(H.R. 2051; P.L. 114-54)
(ii) a person requesting inspection
services in that geographic area has
not been receiving official inspection
services from the current designated
official agency for that geographic
area; or
Condition replaced with “the current
official agency for that geographic area
agrees in writing with the adjacent official
agency to waive the current geographic
area restriction at the request of the
applicant for service.”
No comparable provision.
Same as House bill. [§301(b)(3)(A)]
(iii) a person requesting inspection
services in that geographic area
requests a probe inspection on a
barge-lot basis. [7 U.S.C. 79(f)(2)(B)]
Retains condition.
No comparable provision.
Same as House bill. [§301(b)(3)(A)]
Official Weighing Authority. Same
as inspection authority above but
excludes item (iii) above. [7 U.S.C.
79a(i)(2)]
Same provisions as for inspections above
but excludes condition related to probe
inspection on a barge-lot basis. [§2(f)(2)]
No comparable provision.
Same as House bill. [§301(b)(3)(B)]
Duration of the designation term is
increased from 3 years to 5 years. [§2(g)]
Same as House bill. [§2(b)(3)]
Same as House bill. [§301(b)(4)]
Provision retained.
Specifies a method to determine fees for
official inspection and weighing at export
port locations (performed either by
USDA or delegated state agencies) to
better reflect current export levels
(which affect per-unit costs). The portion
of fees based on export tonnage shall be
based on a rolling five-year average of
export tonnage. Also, in order to
maintain an operating reserve of between
three to six months, the Secretary shall
adjust fees at least annually. [§2(h)(1)]
Same as House bill for inspections
[§2(b)(4)] and weighing [§2(c)].
For inspection, same as House bill.
[§301(b)(5)(B) & (D)]
For weighing, same as House bill.
[§301(c)(2)(B) & (D)]
Duration of Designation of Official Agencies
Designations of official agencies shall
terminate at such time as specified by
the Secretary but not later than
triennially and may be renewed. [7
U.S.C. 79(g)(1)]
Inspection Fees
The Secretary shall charge and collect
reasonable inspection fees to cover
the estimated cost to the Secretary
incident to the performance of official
inspection. Fees are deposited into a
fund and made available without fiscal
year limitation for the expenses of the
Secretary incident to providing
services. [7 U.S.C. 79(j)(1)]
CRS-20
Current Law/Policy
House-Passed Bill
Senate Agriculture CommitteeApproved Bill
Enacted: Agriculture
Reauthorizations Act of 2015
(H.R. 2088)
(S. 1417)
(H.R. 2051; P.L. 114-54)
Licensing of Inspectors
The Secretary is authorized to issue
licenses to individuals for official
inspection or weighing. [7 U.S.C.
84(a)] All classes of licenses issued
shall terminate triennially. [7 U.S.C.
84(b)]
Duration of license is increased from
three to five years. [§2(l)(1)]
Same as House bill. [§2(e)]
Same as House bill. [§301(e)]
No comparable provision.
Within 180 days of enactment, the
Secretary is required to submit to
Congress a report describing the policy
barriers to U.S. grain producers in
countries that do not offer grading of U.S.
grain or designate U.S. grain at a lower
grade than its official U.S. grade. [§4]
Same as Senate bill. [§303]
Authority for charging fees for
supervision of inspection services [7
U.S.C. 79(j)(4)] and official weighing
[7 U.S.C. 79a(1)(3)] expires on
September 30, 2015.
Expiration date is changed to September
30, 2020. [§2(h)(2) and §2(j)]
Same as House bill. [§2(b)(4) and §2(c)]
Expiration date is changed to September
30, 2020. [§301(b)(5)(E)]
The total administrative and
supervisory costs that may be
incurred for services performed for
each of the fiscal years 1989 through
2015 shall not exceed 30% of the total
costs. [7 U.S.C. 79d]
Provision is extended through FY2020.
[§2(k)]
Same as House bill. [§2(d)]
Provision is extended through FY2020.
[§301(d)]
Report on Policy Barriers
No comparable provision.
Expiring Provisions
CRS-21
House-Passed Bill
Senate Agriculture CommitteeApproved Bill
Enacted: Agriculture
Reauthorizations Act of 2015
Current Law/Policy
(H.R. 2088)
(S. 1417)
(H.R. 2051; P.L. 114-54)
Congress appropriates funds for
developing standards, paying for
related agency costs, and improving
lab procedures. Appropriations do
not fund inspections, which are
covered by user fees. The authority
for appropriations of such sums as
necessary, to the extent that financing
is not from fees, expires on
September 30, 2015. [7 U.S.C. 87h]
Expiration date is changed to September
30, 2020. [§2(m)]
Same as House bill. [§2(f)]
Expiration date is changed to September
30, 2020. [§301(f)]
An advisory committee meets
regularly to advise the Secretary on
programs and services it delivers.
Authority for the advisory committee
expires on September 30, 2015. [7
U.S.C. 87j(e)]
Expiration date is changed to September
30, 2020. [§2(n)]
Same as House bill. [§2(g)]
Expiration date is changed to September
30, 2020. [§301(g)]
Source: CRS.
CRS-22
U.S. Grain Standards Act: Reauthorization in the 114th Congress
Appendix A. References for United States Grain
Standards Act
Table A-1. Laws, Regulations, and Other Information
Item
Statute
Reference
Link
Compilation, as amended through P.L.
109-83, September 30, 2005
http://www.ag.senate.gov/download/united-statesgrain-standards-act
P.L. 109-83 (USGSA, amendment)
http://www.gpo.gov/fdsys/pkg/PLAW-109publ83/pdf/
PLAW-109publ83.pdf
119 Stat. 2053
http://heinonline.org/HOL/Page?handle=hein.statute/
sal119&id=1&size=2&collection=statute&index=
statdocs#2114
Codification
7 U.S.C. 71 et seq.
http://uscode.house.gov/view.xhtml?path=/
prelim@title7/chapter3&edition=prelim
Regulations
7 C.F.R. §800 - General regulations
http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=
89728873dd6db7cbd4920c182863a5a1&tpl=/
ecfrbrowse/Title07/7cfr800_main_02.tpl
7 C.F.R. §801 - Official performance
requirements for grain inspection
equipment
http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=
89728873dd6db7cbd4920c182863a5a1&tpl=/
ecfrbrowse/Title07/7cfr801_main_02.tpl
7 C.F.R. §802 - Official performance and
procedural requirements for grain
weighing equipment and related grain
handling systems
http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=
89728873dd6db7cbd4920c182863a5a1&tpl=/
ecfrbrowse/Title07/7cfr802_main_02.tpl
7 C.F.R. §810 - Official United States
standards for grain
http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=
89728873dd6db7cbd4920c182863a5a1&tpl=/
ecfrbrowse/Title07/7cfr810_main_02.tpl
Historical
standards
Historical compilation of standards
changes
http://www.gipsa.usda.gov/fgis/standards/history/
standards_history.pdf
Official Service
Providers
List of providers that comprise the official
grain inspection and weighing system
http://www.gipsa.usda.gov/fgis/svcpro.html
FGIS information
Agency reports and publications, including
annual reports, grain export quality
reports, directories, and technical
handbooks, brochures, and procedure
references
http://www.gipsa.usda.gov/Publications/
pub_fgis.html#hb
Source: CRS.
Note: An electronic compilation of USGSA information (in pdf) is available from the author.
Congressional Research Service
23
U.S. Grain Standards Act: Reauthorization in the 114th Congress
Table A-2. Legislative History of the United States Grain Standards Act (USGSA)
Date
Statute
Public Law
Aug. 11,
1916
39 Stat.
482
P.L. 64-190—United
States Grain Standards
Act (USGSA)
Authorized the Secretary of Agriculture to investigate grading of grain,
establish standards of quality for corn, wheat, rye, oats, barley, and
flaxseed. If sold by grade, prohibited interstate or foreign shipment
unless inspected. USDA directed to issue licenses to state inspectors
and private inspection agencies, and supervise their activities.
Jul. 18,
1940
54 Stat.
765
P.L. 76-750—USGSA,
amendment
Added soybeans to list of commodities.
Aug. 1,
1956
70 Stat.
780
P.L. 84-861—USGSA,
amendment
Prohibited issuance of false certificates.
Jul. 11,
1958
72 Stat.
352
P.L. 85-509—USGSA,
amendment
Authorized USDA to recover the cost of overtime from performing
appeal inspection services.
Aug. 15,
1968
82 Stat.
761
P.L. 90-487—U.S. Grain
Standards Act
Removed requirement for inspecting interstate shipments if sold by
grade; greater penalties for violations.
Oct. 21,
1976
90 Stat.
2867
P.L. 94-582—USGSA of
1976
Established the Federal Grain Inspection Service; established official
weighing services; required elevator recordkeeping and exporter
registration; authorized direct FGIS inspections for exports; required
user fees for federal supervision of inspection and weighing services.
Sep. 29,
1977
91 Stat.
1024
P.L. 95-113—USGSA,
amendment; Title XVI of
the Food and Ag. Act of
1977 (1977 farm bill)
Supervisory costs to be paid via appropriations only; established a
temporary advisory committee; reduced recordkeeping burden for
users.
Oct. 13,
1980
94 Stat.
1870
P.L. 96-437—USGSA,
amendment (Dole-Ashley
bill)
Permitted grain to be delivered into or out of export elevators without
official weighing if conveyed by means other than barge.
Aug. 13,
1981
95 Stat.
357
P.L. 97-35—Omnibus
Budget Reconciliation Act
of 1981
Revised the system covering inspection and supervision fees; limited the
administrative and supervisory costs to a maximum of 35% of total
costs; established a permanent advisory committee; specified
authorization for appropriations for only FY1981 through FY1984.
Dec. 22,
1981
95 Stat.
1268
P.L. 97-98—Agricultural
Food Act (1981 farm bill)
Permitted state agency authority for grain inspection at export port
locations if operating prior to July 1, 1976.
Oct. 11,
1984
98 Stat.
1831
P.L. 98-469—Omnibus
Budget Reconciliation Act
of 1981, amendment
Extended the authorization for appropriations through September 1988.
Increased the cap on administrative and supervisory costs from 35% to
40% for FY1985 through FY1988.
Dec. 23,
1985
99 Stat.
1632
P.L. 99-198—Food
Security Act of 1985
(1985 farm bill)
Directed FGIS and the Agricultural Research Service to cooperate in
developing new means of establishing grain classifications. Required a
study by the Office of Technology Assessment on grain export
standards, blending practices, and export competitiveness.
Nov. 10,
1986
100 Stat.
3564
P.L. 99-641—Futures
Trading Act of 1986, Title
III-Grain Quality
Improvement Act of 1986
Prohibited the reintroduction of foreign material (including dust) once
removed from grain; required a study of incentives for high quality and
feasibility of test for determining the value of end-use characteristics.
Oct. 24,
1988
102 Stat.
2584
P.L. 100-518—USGSA
Amendments of 1988
Extended the authorization for appropriations through September 1993;
expanded the advisory committee from 12 to 15 members; mandated a
study on dockage in wheat grades; established a pilot program on
incorporating premiums for superior quality grain delivered to the
Commodity Credit Corporation.
Nov. 28,
1990
104 Stat.
3928
P.L. 101-624—Food,
Agriculture,
Established a Committee on Grain Quality at USDA to evaluate
concerns with quality of U.S. grain; established provisions for improving
Congressional Research Service
Selected provisions
24
U.S. Grain Standards Act: Reauthorization in the 114th Congress
Date
Statute
Public Law
Selected provisions
Conservation, and Trade
Act of 1990 (1990 farm
bill), Title XX- Grain
Quality Incentives Act of
1990
the cleanliness of grain through existing standards and additional
prohibitions on grain contamination; directed FGIS to test all exported
corn for aflatoxin contamination.
Nov. 24,
1993
107 Stat.
1525
P.L. 103-156—USGSA
Amendments of 1993
Extended the authorization of appropriations for grain inspection
services and collection of user fees through FY2000, authorized
inspection and weighing activities in Canadian ports, and authorized a
pilot program to permit more than one official agency to carry out
inspections within a single geographic area; directed USDA to carry out
a cost containment plan to minimize taxpayer expenditures and user
fees.
Oct. 13,
1994
108 Stat.
3237
P.L. 103-354—Federal
Crop Insurance Reform
and Department of
Agriculture
Reorganization Act of
1994, USGSA
Amendments of 1994
Enacted miscellaneous conforming amendments.
Nov. 9,
2000
114 Stat.
2058
P.L. 106-472—Grain
Standards and Warehouse
Improvement Act of 2000
Reauthorized the pilot program to allow more than one designated
official agency to carry out inspections and weighing services within the
same geographic area under certain conditions; reduced the limitation
on administrative and supervisory costs in user fees from 40% to 30%;
prohibited the disguising of grain quality; extended through FY2005 the
authorization of appropriations for grain inspection services, collection
of certain user fees, and authority for an advisory committee.
Sep. 30,
2005
119 Stat.
2053
P.L. 109-83—USGSA,
amendment
Extended expiring provisions through FY2015.
P.L. 114-54—Agriculture
Reauthorizations Act of
2015, Title III
Extended expiring provisions through FY2020. Also includes provisions
addressing disruptions of inspection and weighing services, certifying
state agencies, and sets conditions for allowing delegated agencies to
cross geographic boundaries if certain conditions are met.
Sep. 30,
2015
Source: CRS, using statutes and Lowell D. Hill, Grain Grades and Standards—Historical Issues Shaping the Future
(Urbana, IL: University of Illinois Press, 1990).
Congressional Research Service
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U.S. Grain Standards Act: Reauthorization in the 114th Congress
Appendix B. Issues for Expiring Provisions
Authority for Appropriations
Congress appropriates funds to GIPSA that are made available to FGIS for developing standards,
paying for related agency costs, and improving measurement procedures. In general, Congress
appropriates money for programs after a specific act has authorized the appropriation. However,
appropriators could still choose to fund FGIS if this provision lapses, either as a separate FGIS
appropriation or by providing clear legislative intent that the GIPSA appropriation would cover
FGIS activities not funded by fees. There is no constitutional or general statutory requirement that
an appropriation must be preceded by a specific act that authorized the appropriation.31
Nevertheless, renewed authority would eliminate potential uncertainty about whether Congress
would choose to appropriate funds without an authorization.
An example of “unauthorized” appropriations occurred in 2012 during the lapse of the 2008 farm
bill (P.L. 110-246). More than 100 farm bill programs briefly lost their authorization for
appropriations at the end of FY2012, before a one-year extension was passed on January 1, 2013.
These programs nonetheless received appropriations of $2.3 billion in FY2012.32
Collection of Certain Fees for Supervising Inspections and Weighing
Official inspections and weighing services are performed by either FGIS or official agencies
under FGIS supervision. User fees that are separate from those collected for direct services
support FGIS’s supervisory activities. The following provisions would have expired on
September 30, 2015, and affected fees for the required federal supervision of official agencies for
export services. Fee collection for domestic services also would have been affected.
Authority to charge fees for the required federal supervision of export inspections performed by a
state agency and the authority to invest these funds would have expired (USGSA, as amended,
Section 7(j)(4); 7 U.S.C. 79(j)(4)). This would have ended the use of state agencies for export
inspections unless alternative funding for federal supervision were secured.
Similarly, authority to collect fees for the required federal supervision of weighing services
performed by an official agency would have expired (USGSA, as amended, Section 7A(1)(3); 7
U.S.C. 79a(l)(3)). This would have ended the use of official agencies for weighing services unless
alternative funding for federal supervision were secured.
Additionally, for services performed directly by FGIS (both export inspections and weighing)
after September 30, 2015, fees would have had to exclude administrative costs, in the absence of
reauthorization.
Based on CRS interpretation of the statute, the expiring provisions of USGSA would not have
necessarily shut down export inspection and weighing services because of two possible scenarios:
(1) FGIS could have performed all inspections and weighing (financed completely by user fees
31
Note that unauthorized appropriations are subject to, and may be limited by, a point of order during the legislative
process. See CRS Report R42098, Authorization of Appropriations: Procedural and Legal Issues.
32
See CRS Report R42442, Expiration and Extension of the 2008 Farm Bill.
Congressional Research Service
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U.S. Grain Standards Act: Reauthorization in the 114th Congress
and without administrative costs included in the fees), or (2) another source of funding for federal
supervision of state agencies could have been secured to replace revenue from discontinued fees.
In other words, the expiring provisions would not have affected authority for FGIS to perform
direct inspection of exports and weighing services and to collect user fees for these services.
Currently, FGIS accounts for about two-thirds of export inspections, while state agencies account
for the remainder (under federal supervision). Thus, FGIS could have expanded its share to 100%
by providing all export inspections. Such a shift might have disrupted operations of the current
inspection system. FGIS would have needed to hire more staff to handle the substantial increase
in workload of direct inspection and weighing activities. Users would have still paid for the
services because the law allows FGIS to charge user fees to cover the inspection and weighing
costs (but not administrative and supervisory costs). Presumably any additional costs would need
to be covered by appropriated funds.
As an alternative to shifting all export inspections and weighing to FGIS, the agency could have
maintained the current mix of both direct federal inspection and federal supervision of other
official agencies’ export inspections and weighing services, but only if alternative funding had
been secured for federal supervision, such as additional appropriations or transfers from other
accounts.
Expiration of these provisions would likely have disrupted the current grain inspection and
weighing program, and could have imposed significant adjustments to FGIS operations to cope
with loss of authority to collect user fees for supervising export services. No estimates are
available for how user fees or appropriated levels might change if FGIS performs all inspections
and weighing services. Also, given current budget austerity, additional appropriations might have
been unlikely.33
Limits on Administrative and Supervisory Costs
Current law establishes a 30% limit on administrative and supervisory costs relative to total costs
for services. The cap had been put in place (and subsequently reduced) to encourage cost cutting
by FGIS (USGSA, as amended, Section 7D; 7 U.S.C. 79d). If the cap on collecting fees for
supervisory costs (described above) had expired, the result might have been higher total costs for
inspections and weighing (requiring higher user fees) because FGIS would not have been
required by statute to contain administrative and supervisory costs.
Authority for Advisory Committee
Authority for an advisory committee would have expired (USGSA, as amended, Section 21(e); 7
U.S.C. 87j(e)). The advisory committee meets regularly to advise FGIS on programs and services
it delivers, and its recommendations are designed to help the agency better meet the needs of its
customers. The committee is composed of 15 members appointed by the Secretary of Agriculture.
33
Article I, Section 7, Clause 1 of the U.S. Constitution prescribes that the House, and not the Senate, must originate
legislative measures that contain revenue provisions. The “Origination Clause” does not necessarily extend to other
types of receipts or collections, often referred to as “user fees,” which are referred to as “offsetting receipts or
collections,” and not revenue. In general, a user fee is not considered to be revenue (and related legislation would not
have to originate in the House) if two conditions hold: (1) the fee collection pays for the service that payer is receiving,
and (2) the amount is equivalent to the cost of the service provided. For more information, see CRS Report R41408,
Rules and Practices Governing Consideration of Revenue Legislation in the House and Senate.
Congressional Research Service
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U.S. Grain Standards Act: Reauthorization in the 114th Congress
They represent various segments of the grain industry, including grain producers, processors,
merchandisers, handlers, exporters, consumers, grain inspection agencies, and scientists.
Elimination of committee authority would have ended the formal communication link established
by Congress between the industry and FGIS.
Author Contact Information
(name redacted)
Analyst in Agricultural Policy
[redacted]@crs.loc.gov, 7-....
Acknowledgments
This report was originally written by Dennis Shields, who left CRS in August 2015.
Congressional Research Service
28
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