[Federal Register: October 8, 2009 (Volume 74, Number 194)]
[Proposed Rules]
[Page 51800-51806]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08oc09-18]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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[[Page 51800]]
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DEPARTMENT OF AGRICULTURE
Food Safety and Inspection Service
9 CFR Parts 391, 590, and 592
[FDMS Docket Number FSIS-2006-0025]
RIN 0583-AD40
Changes in Fees for Meat, Poultry, and Egg Products Inspection
Services
AGENCY: Food Safety and Inspection Service, USDA.
ACTION: Proposed rule.
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SUMMMARY: The Food Safety and Inspection Service (FSIS) is proposing to
amend its regulations to establish formulas for calculating the fees
that it charges meat and poultry establishments, egg products plants,
importers, and exporters for providing voluntary inspection,
identification and certification services, overtime and holiday
inspection services, and laboratory services. If the rule becomes
effective, FSIS will calculate these fees based on the formulas. For
future fiscal years, FSIS will calculate the fees on an annual basis
and apply them at the start of the fiscal year. The Agency is also
proposing to increase the codified flat annual fee for its Accredited
Laboratory Program.
DATES: The Agency must receive comments by November 9, 2009.
ADDRESSES: FSIS invites interested persons to submit comments on this
proposed rule. Comments may be submitted by either of the following
methods:
Federal eRulemaking Portal: This Web site provides the
ability to type short comments directly into the comment field on this
Web page or attach a file for lengthier comments. Go to http://
www.regulations.gov. Follow the online instructions at that site for
submitting comments.
Mail, including floppy disks or CD-ROMs, and hand- or
courier-delivered items: Send to Docket Clerk, U.S. Department of
Agriculture (USDA), FSIS, Room 2-2127, George Washington Carver Center,
5601 Sunnyside Avenue, Mailstop 5474, Beltsville, MD 20705-5474.
Instructions: All items submitted by mail or electronic mail must
include the Agency name and docket number FSIS-2006-0025. Comments
received in response to this docket will be made available for public
inspection and posted without change, including any personal
information, to http://www.regulations.gov.
Docket: For access to background documents or to comments received,
go to the FSIS Docket Room at the address listed above between 8:30
a.m. and 4:30 p.m., Monday through Friday.
All comments submitted in response to this proposal, as well as
background information used by FSIS in developing this document, will
be available for public inspection in the FSIS Docket Room at the
address listed above between 8:30 a.m. and 4:30 p.m., Monday through
Friday.
FOR FURTHER INFORMATION CONTACT: For further information concerning
policy issues contact Rachel Edelstein, Director, Policy Issuances
Division, Office of Policy and Program Development, FSIS, U.S.
Department of Agriculture, Room 6065 South Building, 1400 Independence
Ave, SW., Washington, DC 20250-3700; telephone (202) 720-0399, fax
(202) 690-0486.
For further information concerning fees contact Deborah Patrick,
Director, Budget Division, Office of Management, FSIS, U.S. Department
of Agriculture, Room 2159 South Building, 1400 Independence Avenue,
SW., Washington, DC 20250-3700; telephone (202) 720-2912, fax (202)
720-5399.
SUPPLEMENTARY INFORMATION:
Background
The Federal Meat Inspection Act (FMIA) (21 U.S.C. 601 et seq.) and
the Poultry Products Inspection Act (PPIA) (21 U.S.C. 451 et seq.)
provide for mandatory Federal inspection of livestock and poultry
slaughtered at official establishments and of meat and poultry
processed at official establishments, respectively. The Egg Products
Inspection Act (EPIA) (21 U.S.C. 1031 et seq.) provides for mandatory
inspection of egg products processing at official plants. FSIS bears
the cost of mandatory inspection provided during non-overtime and non-
holiday hours of operation. Official establishments and egg products
plants pay for inspection services performed on holidays or on an
overtime basis.
Under the Agricultural Marketing Act of 1946 (AMA), as amended (7
U.S.C. 1621 et seq.), FSIS provides a range of voluntary inspection,
certification, and identification services to assist in the orderly
marketing of various animal products and byproducts. These services
include the certification of technical animal fats and the inspection
of exotic animal products, such as antelope and elk. The AMA provides
that FSIS may prescribe the collection of fees to recover the costs of
the voluntary inspection, certification, and identification services it
provides.
Also under the AMA, FSIS provides certain voluntary laboratory
services that establishments and others may request the Agency to
perform. Laboratory services are provided for four types of analytic
testing: Microbiological testing, residue chemistry tests, food
composition tests, and pathology testing. Again, the AMA provides that
FSIS may collect fees to recover the costs of providing these services.
FSIS also accredits non-Federal analytical laboratories under its
Accredited Laboratory Program. Such accreditation allows laboratories
to conduct analyses of official meat and poultry samples. The Food,
Agriculture, Conservation, and Trade Act of 1990, as amended, mandates
that laboratory accreditation fees cover the costs of the Accredited
Laboratory Program. This same Act mandates an annual payment of an
accreditation fee on the anniversary date of each accreditation.
Historically, FSIS amended its regulations annually to change the
fees it charges establishments for providing overtime and holiday
inspection services; voluntary inspection, certification, and
identification services; and laboratory services and accreditation.
Because of the length of the rulemaking process, each year the fiscal
year would partially elapse before the Agency could publish a final
rule to amend its fees. As a result, the Agency was unable to recover
the full cost of the services it provided, which represented a
considerable fiscal loss to FSIS. In 2006, in an effort to address the
delays that resulted from the rulemaking process, FSIS amended its
regulations to provide for multiple annual fee
[[Page 51801]]
increases in one action (71 FR 2135). With the rulemaking to increase
fees for 2006-2008, FSIS established criteria for determining the fee
increases on a multi-year basis. While this solution enabled the Agency
to collect an increased fee each year, estimates used to set out the
annual rates were imprecise and may well have left the Agency
collecting too little in fees to fully cover its costs. The difference
between the established rate and current economic conditions will
likely be small during the first year of a multi-year rule but could
well become large during the later years.
The Agency performed a cost analysis in 2008 (at the same time that
the new fees analysis was performed) to determine whether the fees
established were adequate to recover the costs that it incurred in
providing these services. On the basis of this analysis, FSIS
determined the necessary fees for FY 2010 and established the proposed
formulas to determine the fees for FY 2010 and subsequent fiscal years.
Proposed Formulas
With this rulemaking, FSIS is proposing to amend its regulations to
codify formulas in 9 CFR parts 391, 590, and 592 that FSIS will use to
calculate and apply annual fees starting with the effective date of
this rule and for subsequent fiscal years. FSIS intends to announce the
actual annual fees in Federal Register notices prior to the start of
each fiscal year.
Salary, hours, and all rates used in the formulas will be based on
the prior fiscal year's actual costs and hours. In 9 CFR 391.2 and
592.510, FSIS is proposing the following formula to calculate the base
time rate per hour per program employee: Base Time Rate = Office of
Field Operations (OFO) plus Office of International Affairs (OIA)
inspection program personnel salaries paid divided by regular hours
multiplied by the next year's percentage of cost of living increase
(e.g., pay raise of 2.9% for \1/4\ of FY 2008 + 3.2% for \3/4\ of FY
2008), plus the benefits rate, plus the travel and operating rate, plus
the overhead rate, plus an allowance for bad debt.
For the 2010 base time rate per hour per program employee, the
calculation will look like this: [2008 Direct Pay divided by Total
Direct Hours ($447,373,444/17,417,642)] = $25.69 * 2.175% (2009 Cost of
Living) = $26.25 * 3.125% (2010 Cost of Living) = $27.07 + $6.83
(benefits rate) + $16.55 (travel and operating rate) + $.91 (overhead
rate) + $.02 (bad debt allowance rate)= $51.38 (rounded to $51.36;
rounding is done to reflect billable quarters).
In 9 CFR 391.3, 590.126 and, 592.520 and 592.530, FSIS is proposing
to establish the following formulas for overtime and holiday rates per
hour per program employee: Overtime = Salary component of Base Time
Rate (OFO plus OIA inspection program personnel salaries paid divided
by regular hours multiplied by the next year's percentage of cost of
living increase) multiplied by 1.5 plus the benefits rate, plus the
travel and operating rate, plus the overhead rate, plus an allowance
for bad debt.
For the 2010 overtime rate per hour per program employee, the
calculation will look like this: $27.07 * 1.5 (Time and one half) =
$40.60 + $6.83 + $16.55 + $.91 + $.02 = $64.91 (rounded to $64.88).
Holiday Rate = Salary component of base time rate multiplied by 2,
plus benefits rate, plus the travel and operating rate, plus the
overhead rate, plus an allowance for bad debt.
For the 2010 holiday rate per hour per program employee, the
calculation will look like this: $27.07 * 2 (Double time) = $54.14 +
$6.83 + $16.55 + $.91 + $.02 = $78.44.
In 9 CFR 391.4, FSIS is proposing the following formula for the
laboratory services rate per hour per program employee: Laboratory
Salary Rate = Office of Public Health Science (OPHS) salaries paid
divided by OPHS Hours worked, multiplied by the next calendar year's
percentage cost of living increase, plus the benefits rate, plus the
travel and operating rate, plus the overhead rate, plus an allowance
for bad debt.
For the 2010 holiday salary per hour per program employee, the
calculation will look like this: [2008 Total OPHS Direct Pay/Total OPHS
hours (21,312,832/550,424)] = $38.72 * 2.175% (2009 Cost of Living) =
$39.56 * 3.125% (2010 Cost of Living) = $40.80 + $6.83 + $16.55 + $.91
+ $.02 = $65.11 (rounded to $65.08).
The formulas are based on the prior fiscal year's actual costs and
cost of living increases and percentage of inflation factors from the
economic assumptions in the Office of Management and Budget (OMB)
Memorandum M-08-13, ``Update to Civilian Position Full Fringe Benefit
Cost Factor, Federal Pay Raise Assumptions, and Inflation Factors used
in OMB Circular A-76, Performance of Commercial Activities'' Memorandum
M-08-13, dated March 11, 2008, which is available at the following
link: http://www.whitehouse.gov/omb/assets/omb/memoranda/fy2008/m08-
13.pdf. Rather than codify a reference to OMB Memorandum M-08-13 in the
proposed rule, FSIS intends to use the economic factors in the memo for
calculating the fees until new economic assumptions are issued in a new
OMB Memorandum in the future.
As is proposed in Sec. Sec. 391.2 and 592.510, FSIS intends to
derive the components of proposed formulas, using previous fiscal year
actual costs, as follows:
Benefits Rate: Direct benefits costs multiplied by the next
calendar year's percentage cost of living increase. Some examples of
direct benefits are health insurance, retirement, life insurance, and
Thrift Savings Plan (TSP) retirement basic and matching contributions.
For the 2010 benefits rate per hour per program employee, the
calculation will look like this: [2008 Direct Benefits/(Total Direct
hours + Total OT hours + Total Holiday hours) ($130,744,894/
20,164,116)] = $6.48 * 2.175% (2009 Cost of Living) = $6.62 * 3.125%
(2009 Cost of Living) = $6.83.
Travel and Operating Rate: Total direct travel and operating costs
multiplied by the percentage of inflation.
For the 2010 travel and operating rate per hour per program
employee, the calculation will look like this: [2008 Total Direct
Travel and Operating Costs/(Total Direct hours + Total OT hours + Total
Holiday hours) (17,489,892/20,164,116)] = $.87 * 2.00% (2009 Inflation)
= $.89 * 2.00% (2010 Inflation) = $.91.
Overhead Rate: All indirect costs plus the average information
technology (IT) costs over the previous two years in the Public Health
Data Communication Infrastructure System Fund plus the Office of
Management Program cost in the Reimbursable and Voluntary Funds plus
provision for the operating balance less any Greenbook costs (i.e.,
costs of USDA support services prorated to the service component for
which fees are charged) that are not related to food inspection,
divided by total direct hours (regular, overtime, and holiday) worked
across all funds, multiplied by the percentage of inflation.
For the 2010 the overhead rate per hour per program employee, the
calculation will look like this: [2008 Total Overhead/(Total Direct
hours + Total OT hours + Total Holiday hours) (320,820,057/20,164,116)]
= $15.91 * 2.00% (2009 Inflation) = $16.23 * 2.00% (2010 Inflation) =
$16.55.
Allowance for Bad Debt Rate = Total allowance for bad debt (for
plants and establishments that declare bankruptcy) divided by total
direct hours (regular, overtime, and holiday) worked.
For the 2010 allowance for bad debt rate per hour per program
employee, the calculation will look like this: [2008
[[Page 51802]]
Total Bad Debt/Total Direct hours + Total OT hours + Total Holiday
hours) ($325,481/20,164,116)] = $.02 (for 2009 and after).
As is noted above, the proposed formulas reflect that the cost of
providing inspection services includes both direct and overhead costs.
Overhead costs include the cost of program and Agency activities that
support the food inspection services provided by the industry. Overhead
expenditures are allocated across the Agency for each direct hour of
inspection. Direct costs include the cost of salaries, employee
benefits, travel and operating costs. Because of improvements in
accessing data from the accounting system, the Agency has been able to
estimate the employee benefits ascribable to overtime work and has
included these in the fee calculation.
Section 10703 of the 2002 Farm Bill authorized the Secretary of
Agriculture to set the hourly rate of compensation for FSIS employees
exempt from the Fair Labor Standards Act (i.e., veterinarians) who work
in establishments subject to the FMIA and PPIA at one and one-half
times the employee's hourly rate of base pay. In FSIS's January 13,
2006, final rule on fees, FSIS adjusted its overtime fees to reflect
these costs. Previously, veterinarians were limited to the time and a
half rate paid to employees at grade level GS-10, step 1. This proposed
rule continues to provide overtime rates at one and one-half times the
employee's hourly rate of base pay.
In this rule, FSIS is proposing to differentiate the holiday rate
from the overtime rate in future years in order to collect the full
expenditure of providing services on holidays. FSIS inspectors are paid
double time for holiday work, while the current overtime rate only
accounts for time and a half. Therefore, FSIS is proposing a holiday
rate of two times the employee's hourly rate of base pay.
Laboratory Accreditation Fee
The Food, Agriculture, Conservation, and Trade Act of 1990, as
amended, mandates that laboratory accreditation fees cover the costs of
the Accredited Laboratory Program. This same Act mandates an annual
payment of an accreditation fee on the anniversary date of each
accreditation. Because these fees are fixed amounts and do not
fluctuate with economic conditions, FSIS is not proposing a formula for
these fees. FSIS will propose to change the codified laboratory
accreditation fees through future rulemaking when necessary.
FSIS needs to raise its fees for the Accredited Laboratory Program
to cover its increased direct overhead costs, including those for
salary increases, employee benefits, inflation, and bad debt and to
maintain an adequate operating reserve. Furthermore, FSIS must maintain
a ``carryover'' amount each year as a reserve and uses it to cover the
contractual costs that the Accredited Laboratory Program must pay at
the beginning of each fiscal year. The proposed increases are also
necessary to cover salaries and other operating expenses during the
first two to three months of the fiscal year. Less than 5% of the
program's income is received during the first two months of a fiscal
year. Approximately 75% of the program's income is received in late
December and early January; the remainder of the program's income is
distributed about evenly across the rest of the fiscal year.
Maintaining an adequate reserve is therefore essential for the
Accredited Laboratory Program to be fully functional during the first
quarter of any fiscal year.
FSIS is proposing to amend 9 CFR 391.5 to keep the laboratory
accreditation fee at $4,500 for FY 2009, 2010, and 2011 and increase it
to $5,000 for FY 2012 and FY 2013. These adjustments are necessary to
recover FSIS costs for providing these accreditation services,
including maintaining an adequate reserve. The amount of the
accreditation fee each year is based on the number of expected new and
renewal accreditations, the anticipated costs directly related to the
accreditation process, and the estimated reserve from previous years.
These fees are set based on FSIS's best projections of what it will
cost the Agency to provide these services in fiscal years 2010 through
2013.
Projected Fees
The differing proposed fee increases for each type of service are
the result of the different amounts that it costs FSIS to provide these
four types of services. The differences in costs stem from various
factors, including the different salary levels of the program employees
who perform the services.
In the Agency's analysis of projected costs, set forth in Table 2,
the Agency has identified the bases for the fiscal year 2010 increases
in the cost of voluntary base time inspection services, overtime and
holiday inspection services, and laboratory services. FSIS calculated
its projected increases in salaries and inflation in fiscal year 2010.
The average pay raise for Federal employees in calendar year 2010,
reflecting both a national cost of living increase and locality
differentials, will be 2.9 percent for .25 of the fiscal year and 3.2
percent for .75 of the fiscal year. Inflation for fiscal year 2010 is
projected to be 2 percent.
The estimates in the tables below are based on the Presidential
Economic Assumptions for FY 2009 and the out years in the OMB
Memorandum M-08-13. In Table 1, FSIS estimated fees for subsequent
fiscal years based on previous fiscal year actual costs, projected
inflation, and cost of living factors.
The current and proposed fees are listed by type of service in
Table 1.
[[Page 51803]]
Table 1--Current and New Fees (per Hour per Employee) by Type of Service
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Current rate
Service 2008 & 2009
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Base time............................................... $49.93
Overtime & holiday...................................... 58.93
Laboratory.............................................. 70.82
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Service Proposed rate Projected rate Projected rate
2010 2011 2012
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(estimates rounded to reflect billable
quarters)
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Base Time....................................................... $51.36 $52.84 $54.64
Overtime........................................................ 64.88 66.84 68.84
Holiday......................................................... 78.44 80.84 83.32
Laboratory...................................................... 65.08 67.04 69.08
The base time rate for inspection services provided pursuant to
Sec. Sec. 350.7, 351.8, 351.9, 352.5, 354.101, 355.12, and 362.5 is an
estimated $51.36 per hour per program employee in fiscal year 2010,
$52.84 per hour per program employee in fiscal year 2011, and $54.64
per hour per program employee in fiscal year 2012.
The overtime rate for inspection services provided pursuant to
Sec. Sec. 307.5, 350.7, 351.8, 351.9, 352.5, 354.101, 355.12, 362.5
and 381.38 is an estimated $64.88 per hour per program employee in
fiscal year 2010, $66.84 per hour per program employee in fiscal year
2011, and $68.84 per hour per program employee in fiscal year 2012.
The holiday rate for inspection services provided pursuant to
Sec. Sec. 307.5, 350.7, 351.8, 351.9, 352.5, 354.101, 355.12, 362.5
and 381.38 is an estimated hourly rate of $78.44 per hour per program
employee in fiscal year 2010, $80.84 per hour per program employee in
fiscal year 2011, and $83.82 per hour per program employee in fiscal
year 2012.
The rate for laboratory services provided pursuant to Sec. Sec.
350.7, 351.9, 352.5, 354.101, 355.12, and 362.5 is an estimated $65.08
per hour per program employee in fiscal year 2010, $67.04 per hour per
program employee in fiscal year 2011, and $69.08 in fiscal year 2012.
The projected fees for FY 2010, 2011, and 2012 may not be
significantly different from current codified fees. Table 2 summarizes
the calculations for the different types of services for 2010. See
Table 3 for the proposed Laboratory Accreditation Fees.
Table 2--Calculations for the Different Types of Services for FY 2010
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Projected
Actual costs Cost of living salary costs
per hour FY allowance per hour FY
2009 2010
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Base Time:
Actual 2009 Base Salary (Pay raise of 2.9% for .25 of FY + $26.25 3.125% $27.07
3.2% for .75 of FY)........................................
Benefits.................................................... 6.62 3.125% 6.83
Inflation
Overhead (Department, Agency, and Program, including IT 16.23 2.0% 16.55
costs).....................................................
Travel/Operating Costs...................................... 0.89 2.0% 0.91
Bad Debt Allowance.......................................... 0.02 .............. 0.02
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Total Projected Costs................................... .............. .............. 51.38
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Overtime........................................................ 39.37 3.125% 40.60
Holiday Pay..................................................... 52.50 3.125% 54.14
Laboratory Fees................................................. 39.56 3.125% 40.80
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* Similar benefits, overhead, travel/operating costs, and bad debt allowance for projected salary costs are also
added to arrive to the totals shown in Table 1 for FY 2010 for overtime, holiday, and laboratory projected
salary fees.
Table 3--Calculations for Accredited Laboratory Fees FY 2009-2013
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Estimated Proposed FY Proposed FY Proposed FY Proposed FY
FY 2009 2010 2011 2012 2013
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Estimated Income............................... $364,500 $382,500 $382,500 $405,000 $425,000
Estimated Expenses............................. 386,230 423,863 438,453 444,886 456,464
New Accreditation Fee.......................... 4,500 4,500 4,500 5,000 5,000
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[[Page 51804]]
Executive Order 12866 and Regulatory Flexibility Act
Because this proposed rule has been determined to be not
significant, the Office of Management and Budget (OMB) did not review
it under EO 12866.
The Administrator, FSIS, has determined that this proposed rule
would not have a significant economic impact, as defined by the
Regulatory Flexibility Act (5 U.S.C. 601), on a substantial number of
small entities. The inspection services provided under these proposed
fees are voluntary. Meat and poultry establishments and egg products
plants requesting these services are likely to have calculated that the
revenues generated from additional production will exceed the
incremental costs of the services. Similarly, laboratories will
determine whether the additional revenue for services that require
accreditation will exceed the costs of becoming accredited.
Economic Effects of New Fees
By proposing to codify formulas to calculate future increases in
annual fees instead of proposing to codify actual fees, the Agency will
streamline the rulemaking process to help ensure that the fee increases
are effective at the beginning of each fiscal year. In subsequent
years, food safety will be maintained at the establishments affected by
this rule as the Agency provides the services. The increased fees will
cover inflation and national and locality pay raises but will not
support any new budgetary initiative. The costs that industry will
experience by the raise in fees are similar to other increases that the
industry will experience because of inflation and wage increases.
The total volume of meat and poultry slaughtered under Federal
inspection in 2007 was about 91 billion pounds (2007 Livestock, Dairy,
Meat, and Poultry Outlook Report, Economic Research Service, USDA). The
total volume in egg product production in 2007 was about 2.8 billion
pounds (2007 National Agricultural Statistical Service, USDA). The
increase in cost per pound of product associated with the new increased
fees is, in general, $.0002. Even in competitive industries such as
meat, poultry, and egg products, this amount of increase in costs would
have an insignificant impact on profits and processes.
Even though this increase in fees is negligible, the industry is
likely to pass along a significant portion of the proposed fee
increases to consumers because of the inelastic nature of the demand
curve facing consumers. Research has shown that consumers are unlikely
to reduce demand significantly for meat, poultry, and egg products,
when prices increase. Huang estimates that demand would fall by .36
percent for a one percent increase in price (Huang, Kao S., A Complete
System for Demand for Food. USDA/ERS Technical Bulletin No. 1821, 1993,
p. 24). Because of the inelastic nature of demand and the competitive
nature of the industry, individual firms are not likely to experience
any change in market share in response to an increase in inspection
fees.
As a result of the new Accredited Laboratory Program fees, the
Agency expects to collect about $2 million over the next 5 years from
85 laboratories, an average of $4,700 per entity per year.
Paperwork Reduction Act
This rule does not contain any new information collection or record
keeping requirements that are subject to the Office of Management and
Budget (OMB) approval under the Paperwork Reduction Act, 44 U.S.C. 3501
et seq.
E-Government Act
FSIS and USDA are committed to achieving the purposes of the E-
Government Act (44 U.S.C. 3601, et seq.) by, among other things,
promoting the use of the Internet and other information technologies
and providing increased opportunities for citizen access to Government
information and services, and for other purposes.
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This proposed rule: (1) Has no retroactive
effect; and (2) does not require administrative proceedings before
parties may file suit in court challenging this rule. However, the
administrative procedures specified in 9 CFR 306.5, 381.35, and 590.300
through 590.370, respectively, must be exhausted before any judicial
challenge may be made of the application of the provisions of the
proposed rule, if the challenge involves any decision of an FSIS
employee relating to inspection services provided under the FMIA, PPIA,
or EPIA.
Additional Public Notification
Public awareness of all segments of rulemaking and policy
development is important. Consequently, in an effort to ensure that
minorities, women, and persons with disabilities are aware of this
notice, FSIS will announce it online through the FSIS Web page located
at http://www.fsis.usda.gov/Regulations_&_Policies/2009_Proposed_
Rules_Index/index.asp. FSIS will also make copies of this Federal
Register publication available through the FSIS Constituent Update,
which is used to provide information regarding FSIS policies,
procedures, regulations, Federal Register notices, FSIS public
meetings, and other types of information that could affect or would be
of interest to constituents and stakeholders. The Update is
communicated via Listserv, a free electronic mail subscription service
for industry, trade and farm groups, consumer interest groups, allied
health professionals, and other individuals who have asked to be
included. The Update is also available on the FSIS Web page. Through
the Listserv and Web page, FSIS is able to provide information to a
much broader and more diverse audience. In addition, FSIS offers an e-
mail subscription service which provides automatic and customized
access to selected food safety news and information. This service is
available at http://www.fsis.usda.gov/news_and_events/email_
subscription/. Options range from recalls to export information to
regulations, directives and notices. Customers can add or delete
subscriptions themselves, and have the option to password protect their
accounts.
List of Subjects
9 CFR Part 391
Fees and charges, Government employees, Meat inspection, Poultry
products.
9 CFR Part 590
Eggs and egg products, Exports, Food labeling, Imports.
9 CFR Part 592
Eggs and egg products, Exports, Food labeling, Imports.
For the reasons set forth in the preamble, FSIS proposes to amend 9
CFR Chapter III as follows:
PART 391--FEES AND CHARGES FOR INSPECTION AND LABORATORY
ACCREDITATION
1. The authority citation for part 391 continues to read as
follows:
Authority: 7 U.S.C. 138d; 7 U.S.C. 1622, 1627 and 2219al; 21
U.S.C. 451 et seq.; 21 U.S.C 601-695;
2. Section 391.2 is revised to read as follows:
Sec. 391.2 Base time rate.
(a) For each fiscal year and based on the previous fiscal year's
actual costs
[[Page 51805]]
and hours, FSIS calculates the base time rate for inspection services,
per hour per program employee, provided pursuant to Sec. Sec. 350.7,
351.8, 351.9, 352.5, 354.101, 355.12, and 362.5 using the following
formula: Office of Field Operations plus Office of International
Affairs inspection program personnel salaries paid divided by regular
hours multiplied by the next year's percentage of cost of living
increase, plus the benefits rate, plus the travel and operating rate,
plus the overhead rate, plus an allowance for bad debt.
(b) FSIS calculates the components of the base time rate, which are
based on previous fiscal year's actual costs, using the following
formulas:
(1) Benefits Rate. Direct benefits costs multiplied by the next
calendar year's percentage cost of living increase. Some examples of
direct benefits are health insurance, retirement, life insurance, and
Thrift Savings Plan (TSP) retirement basic and matching contributions.
(2) Travel and Operating Rate. Total direct travel and operating
costs multiplied by the percentage of inflation.
(3) Overhead Rate. All indirect costs plus the average information
technology (IT) costs over the previous two years in the Public Health
Data Communication Infrastructure System Fund plus the Office of
Management Program cost in the Reimbursable and Voluntary Funds less
any Greenbook costs (i.e., costs of USDA support services prorated to
the service component for which fees are charged) that are not related
to food inspection, divided by total direct hours (regular, overtime,
and holiday) worked across all funds, multiplied by the percentage of
inflation.
(4) Allowance for Bad Debt Rate. Total allowance for bad debt (for
plants and establishments that declare bankruptcy) divided by total
direct hours (regular, overtime, and holiday) worked.
(c) The cost of living increases and percentage of inflation
factors used in the formulas in this section are based on the Office of
Management and Budget's Presidential Economic Assumptions.
3. Section 391.3 is revised to read as follows:
Sec. 391.3 Overtime and holiday rate.
For each fiscal year and based on the previous fiscal year's actual
costs and hours, FSIS calculates the overtime and holiday rates, per
hour per program employee, provided pursuant to Sec. Sec. 307.5,
350.7, 351.8, 351.9, 352.5, 354.101, 355.12, 362.5, and 381.38 using
the following formulas:
(a) Overtime. Office of Field Operations plus Office of
International Affairs inspection program personnel salaries paid
divided by regular hours multiplied by the next year's percentage of
cost of living increase multiplied by 1.5 plus the benefits rate, plus
the travel and operating rate, plus the overhead rate, plus an
allowance for bad debt.
(b) Holiday Rate. Office of Field Operations plus Office of
International Affairs inspection program personnel salaries paid
divided by regular hours multiplied by the next year's percentage of
cost of living increase multiplied by 2, plus benefits rate, plus the
travel and operating rate, plus the overhead rate, plus an allowance
for bad debt.
(c) FSIS calculates the benefits rate, travel and operating rate,
overhead rate, and allowance for bad debt using the formulas in Sec.
391.2(b), and the cost of living increases and percentage of inflation
factors in 391.2(c).
4. Section 391.4 is revised to read as follows:
Sec. 391.4 Laboratory services rate.
(a) For each fiscal year and based on the previous fiscal year's
actual costs and hours, FSIS calculates the laboratory services rate,
per hour per program employee, provided pursuant to Sec. Sec. 350.7,
351.9, 352.5, 354.101, 355.12, and 362.5 will be calculated for future
fiscal years using the following formula: Office of Public Health
Science (OPHS) salaries paid divided by OPHS hours worked, multiplied
by the next calendar year's percentage cost of living increase, plus
the benefits rate, plus the travel and operating rate, plus the
overhead rate, plus an allowance for bad debt.
(b) FSIS calculates the benefits rate, the travel and operating
rate, the overhead rate, and the allowance for bad debt using the
formulas in 391.2(b), and the cost of living increases and percentage
of inflation factors in 391.2(c).
5. Paragraph (a) of Sec. 391.5 is revised to read as follows:
Sec. 391.5 Laboratory accreditation fee.
(a) The annual fee for the initial accreditation and maintenance of
accreditation provided pursuant to Sec. 439.5 shall be $4,500.00 for
fiscal years 2010 and 2011; and $5,000.00 for fiscal years 2012 and
2013.
* * * * *
PART 590--INSPECTION OF EGGS AND EGG PRODUCTS (EGG PRODUCTS
INSPECTION ACT)
6. The authority citation for part 590 continues to read as
follows:
Authority: 21 U.S.C. 1031-1056.
7. In Sec. 590.126, revise the second sentence to read as follows:
Sec. 590.126 Overtime inspection service.
* * * The official plant must give reasonable advance notice to the
inspector of any overtime service necessary and must pay for such
overtime. For each fiscal year and based on previous fiscal year's
actual costs and hours, FSIS calculates the overtime rate for
inspection service, per hour per program employee, using the following
formula: Office of Field Operations plus Office of International
Affairs inspection program personnel salaries paid divided by regular
hours multiplied by the next year's percentage of cost of living
increase multiplied by 1.5 plus the benefits rate, plus the travel and
operating rate, plus the overhead rate, plus an allowance for bad debt.
FSIS calculates the benefits rate, travel and operating rate, overhead
rate, and allowance for bad debt using the formulas in Sec. 592.510(b)
and the cost of living increases and percentage of inflation factors in
Sec. 592.510(c).
8. In Sec. 590.128(a), revise the second sentence to read as
follows:
Sec. 590.128 Holiday inspection service.
(a) * * * The official plant must, in advance of such holiday work,
request the inspector in charge to furnish inspection service during
such period and must pay the Agency for such holiday work at the hourly
rate. For each fiscal year and based on the previous year's actual
costs and hours, FSIS calculates the holiday rate for inspection
service, per hour per program employee, using the following formula:
Office of Field Operations plus Office of International Affairs
inspection program personnel salaries paid divided by regular hours
multiplied by the next year's percentage of cost of living increase
multiplied by 2, plus benefits rate, plus the travel and operating
rate, plus the overhead rate, plus an allowance for bad debt. FSIS
calculates the benefits rate, travel and operating rate, overhead rate,
and allowance for bad debt using the formulas in Sec. 592.510(b), and
the cost of living increases and percentage of inflation factors in
Sec. 592.510(c).
* * * * *
PART 592--VOLUNTARY INSPECTION OF EGG PRODUCTS
9. The authority citation for part 592 continues to read as
follows:
Authority: 7 U.S.C. 1621-1627.
10. Section 592.510 is revised to read as follows:
[[Page 51806]]
Sec. 592.510 Base time rate.
(a) For each fiscal year and based on the previous fiscal year's
actual costs and hours, FSIS calculates the base time rate for
inspection services, per hour per program employee, using the following
formula: Office of Field Operations plus Office of International
Affairs inspection program personnel salaries paid divided by regular
hours multiplied by the next year's percentage of cost of living
increase, plus the benefits rate, plus the travel and operating rate,
plus the overhead rate, plus an allowance for bad debt.
(b) FSIS calculates the components of the base time rate (which are
based on previous fiscal year's actual costs) using the following
formulas:
(1) Benefits Rate: Direct benefits costs multiplied by the next
calendar year's percentage cost of living increase. Some examples of
direct benefits are health insurance, retirement, life insurance, and
Thrift Saving Plan (TSP) retirement basic and matching contributions.
(2) Travel and Operating Rate: Total direct travel and operating
costs multiplied by the percentage of inflation.
(3) Overhead Rate: All indirect costs plus the average information
technology (IT) costs over the previous two years in the Public Health
Data Communication Infrastructure System Fund plus the Office of
Management Program cost in the Reimbursable and Voluntary Funds less
any Greenbook costs (i.e., costs of USDA support services prorated to
the service component for which fees are charged) that are not related
to food inspection, divided by total direct hours (regular, overtime,
and holiday) worked across all funds, multiplied by the percentage of
inflation.
(4) Allowance for Bad Debt Rate: Total allowance for bad debt (for
plants and establishments that declare bankruptcy) divided by total
direct hours (regular, overtime, and holiday) worked.
(c) The cost of living increases and percentage of inflation
factors used in the formulas in this section are based on the Office of
Management and Budget's Presidential Economic Assumptions.
12. In Sec. 592.520, revise the second sentence to read as
follows:
Sec. 592.520 Overtime rate.
* * * The official plant must give reasonable advance notice to the
inspector of any overtime service necessary. For each fiscal year and
based on the previous fiscal year's actual costs and hours, FSIS
calculates the overtime rate for inspection service, per hour per
program employee, using the following formula: Office of Field
Operations plus Office of International Affairs inspection program
personnel salaries paid divided by regular hours multiplied by the next
year's percentage of cost of living increase multiplied by 1.5 plus the
benefits rate, plus the travel and operating rate, plus the overhead
rate, plus an allowance for bad debt. FSIS calculates the benefits
rate, travel and operating rate, overhead rate, and allowance for bad
debt using the formulas in Sec. 592.510(b), and the cost of living
increases and percentage of inflation factors in Sec. 592.510(b).
13. In 592.530, revise the second sentence to read as follows:
Sec. 592.530 Holiday rate.
* * * The official plant must, in advance of such holiday work,
request that the inspector in charge furnish inspection service during
such period and must pay the Agency for such holiday work at the hourly
rate. For each fiscal year and based on the previous fiscal year's
actual costs and hours, FSIS calculates the holiday rate for inspection
service, per hour per program employee, using the following formula:
Office of Field Operations plus Office of International Affairs
inspection program personnel salaries paid divided by regular hours
multiplied by the next year's percentage of cost of living increase
multiplied by 2, plus benefits rate, plus the travel and operating
rate, plus the overhead rate, plus an allowance for bad debt. FSIS
calculates the benefits rate, travel and operating rate, overhead rate,
and allowance for bad debt using the formulas in Sec. 592.510(b), and
the cost of living increases and percentage of inflation factors in
Sec. 592.510(b).
Done in Washington, DC, on October 5, 2009.
Alfred V. Almanza,
Administrator.
[FR Doc. E9-24283 Filed 10-7-09; 8:45 am]
BILLING CODE 3410-DM-P