Changes in Hourly Fee Rates for Science and Technology Laboratory Services-Fiscal Years 2007-2009, 55369-55380 [06-7821]

Download as PDF 55369 Federal Register / Vol. 71, No. 184 / Friday, September 22, 2006 / Proposed Rules (b) * * * Subpart—United States Standards for Grades of Table Grapes (European or Vinifera Type) § 51.886 * * Tolerances. * * * TABLE II.—TOLERANCES EN ROUTE OR AT DESTINATION U.S. extra fancy table Factor (A) For bunches failing to meet color requirements .................................................................... (B) For bunches failing to meet requirements for minimum diameter of berries ........................ (C) For bunches failing to meet stem color requirements .......................................................... (D) For offsize bunches and for bunches and berries failing to meet the remaining requirements for the grade .................................................................................................................. (E) For shattered berries in consumer size packages an allowance of 10 percent is provided. Any percent of shattered berries exceeding the allowance of 10 percent shall be scored as berries failing to meet the requirements of the grade. Including in (D): (a) For permanent defects .................................................................................................... (b) For serious damage ........................................................................................................ And, including in (b): (i) For serious damage by permanent defects ..................................................................... (ii) For decay ........................................................................................................................ Dated: September 15, 2006. Lloyd C. Day, Administrator, Agricultural Marketing Service. [FR Doc. 06–7869 Filed 9–21–06; 8:45 am] BILLING CODE 3410–02–P DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Parts 91 and 92 [Docket Number ST–05–01] RIN 0581–AC48 Changes in Hourly Fee Rates for Science and Technology Laboratory Services—Fiscal Years 2007–2009 Agricultural Marketing Service, USDA. ACTION: Proposed rule with request for comments. jlentini on PROD1PC65 with PROPOSAL AGENCY: SUMMARY: The Agricultural Marketing Service (AMS) is proposing to change the hourly fee rates for Science and Technology (S&T) Laboratory Services. The agency is proposing to raise these rates to reflect, among other factors, national and locality pay increases for Federal employees and inflation, operating costs, instrumentation and training, and program and agency administrative overhead costs. In the past, AMS has amended its regulations on an as needed basis in order to recover laboratory program costs. With this proposed regulation, AMS is providing for three annual standard hourly fee rate increases for fiscal years VerDate Aug<31>2005 19:43 Sep 21, 2006 Jkt 208001 2007–2009. This would provide the agricultural commodity industries and other stakeholders with more timely and relevant information regarding voluntary user fees for laboratory testing services. The agency is also proposing to remove tables and schedules with listings of individual tests and services. Three annual hourly fee rate adjustments are proposed for appeals, holiday, and overtime services to reflect the anticipated increase in cost of providing these laboratory services each fiscal year. The regulations also are updated to identify current facility addresses. Part 92 is obsolete and therefore has been removed. DATES: Comments must be received on or before October 23, 2006. ADDRESSES: Send comments to James V. Falk, Docket Manager, USDA, AMS, Science and Technology Programs, 1400 Independence Avenue, SW., Mail Stop 0272, Washington, DC 20250–0272; telephone (202) 690–4089; fax (202) 720–4631, or e-mail: James.falk@usda.gov. State that your comments refer to Docket No. ST–05– 01. Comments may also be submitted electronically through https:// www.regulations.gov. Submitted comments will be available for public inspection during regular business hours in Room 1090 South Building, U.S. Department of Agriculture, 1400 Independence Avenue, SW., Washington, DC. FOR FURTHER INFORMATION CONTACT: Dr. Robert L. Epstein, Science and Technology Programs, Agricultural Marketing Service, United States Department of Agriculture, Mail Stop PO 00000 Frm 00016 Fmt 4702 Sfmt 4702 U.S. fancy table U.S. No. 1 table 10 10 10 10 10 10 10 12 12 12 8 4 8 4 8 4 2 1 2 1 2 1 0270, 1400 Independence Avenue, SW., Washington, DC 20250–0270, telephone number (202) 720–5231; fax (202) 720– 6496, and e-mail: Robert.epstein@usda.gov. SUPPLEMENTARY INFORMATION: Background Science and Technology (S&T) Programs has been performing voluntary laboratory services under the Agricultural Marketing Act of 1946, as amended, for the AMS commodity programs (Fruit and Vegetable, Cotton, Livestock and Seed, Poultry, Dairy, and Tobacco) and applicable customers in these industries since its inception on August 17, 1988. Before that, voluntary laboratory testing was provided for a user fee by AMS under the various commodity programs. The current standard hourly rate of $45.00 and the premium hourly rate of $67.50 have been in effect since publication in the Federal Register on October 27, 2000 (65 FR 64302). The standard fee rate for laboratory services is proposed to be increased to $60.00 per hour in fiscal year 2007, $63.00 per hour in fiscal year 2008, and $67.00 per hour in fiscal year 2009. The premium hourly fee rates would also be adjusted for fiscal years 2007 through 2009. An increase in the premium hourly rates over the three fiscal years for laboratory services performed on holidays, appeal samples, and overtime basis is also needed since Science and Technology laboratory personnel may be required to work extended hours of service at the time and a half pay or the double hourly pay to accommodate clients. This is due to E:\FR\FM\22SEP1.SGM 22SEP1 55370 Federal Register / Vol. 71, No. 184 / Friday, September 22, 2006 / Proposed Rules stakeholder demand for immediate test results. Generally, the processing of all laboratory samples is continuous over a 24/7 timeframe due to the recent introduction of automated equipment. The AMS laboratory testing programs are voluntary, user fee services, conducted under the authority of the Agricultural Marketing Act of 1946 (AMA), as amended (7 U.S.C. 1621, et seq.). The AMA authorizes the Secretary of Agriculture to provide Federal analytical testing services that facilitate marketing and trade. In addition, consumers may be able to determine the quality and wholesomeness characteristics of a commodity or product through laboratory testing. This allows agricultural products to be assigned official AMS grade designations or to meet specifications. The AMA also requires that reasonable fees be collected from the users of the services to cover as nearly as possible the costs of maintaining the programs. AMS regularly reviews its user-feesupported laboratory service programs to determine if the voluntary fees are adequate to cover expenses. The most recent review determined that the existing fee schedules and tables of individual tests or services, which have been in place since October 27, 2000, will not generate sufficient revenues to recover operating costs. A more flexible user fee system, using set hourly rates for multiple fiscal years, is proposed by this rulemaking to ensure that AMS properly recovers its full costs for providing laboratory services, and that all stakeholders are charged reasonable fees. By enacting a three year fee increase instead of a single year fee increase, AMS would help ensure that the fee increases are effective at the beginning of each fiscal year (October 1). In addition, the existing fee schedules and tables in 7 CFR, part 91, § 91.37 would be removed. The analytical tests listed in the tables are not specific to individual commodity testing requirements or stakeholder needs. The current tables do not represent the actual operational costs to perform single tests and newer methodologies. Laboratory services are provided for five types of analytical testing: Microbiological, physical, residue chemistry, proximate analysis for composition, and biomolecular testing. AMS must recover the costs of providing these services. The proposed hourly fee rates would recover these costs. AMS calculated its actual costs for fiscal years 2001 through 2005 and its projected increases in salaries and inflation in fiscal years 2006 through 2009. The estimates for increases in salaries for fiscal year 2006 as the base year and the succeeding out years are from the Office of Management and Budget’s (OMB) multi-year ‘‘Economic Assumptions’’ tables. The Federal pay raise for calendar years 2002, 2003, and 2004 were 4.6 percent, 4.1 percent and 4.1 percent, respectively. This information comes from Table 11–1, ‘‘Economic Assumptions’’, of the Office of Management and Budget’s Fiscal Year 2005 Budget which is available at https://www.whitehouse.gov/omb/ budget/fy2005/econ.html. The average fiscal year pay raise for Federal employees in calendar years 2005 and 2006 was 3.5 percent effective January 2005 and 3.1 percent effective January 2006. The average combined national and locality pay raise is estimated to be 2.2 percent for fiscal years 2007, 2008, and 2009. Inflation for fiscal year 2006 is estimated to be 2.1 percent. Inflation for fiscal year 2007 is estimated to be 2.2 percent. Inflation for fiscal year 2008 is estimated to be 2.1 percent. Inflation for fiscal year 2009 is estimated to be 2.1 percent. These estimates for inflation percent can be obtained from Table 12– 1, ‘‘Economic Assumptions’’, of the OMB’s Fiscal Year 2007 Budget which is available at https://www.whitehouse.gov/omb/ budget/fy2007/econ.html. The Agency will initiate another rulemaking to adjust any fee established, if estimated increases for pay and inflation do not adequately cover the Agency’s costs of providing the services. The cost of providing laboratory services includes both direct and overhead costs. Direct costs include the cost of salaries, employee benefits, operation cost and infrastructure cost. The Agency is able to estimate the employee benefits attributable to overtime work and has included these in the fee calculations. TABLE 1.—CURRENT AND PROPOSED HOURLY FEE RATES (PER HOUR) BY TYPE OF SERVICE Service Current rate Laboratory ........................................................................................................................ Appeal .............................................................................................................................. Overtime .......................................................................................................................... Legal Holiday ................................................................................................................... 1 2 3 Hourly $ 45.00 67.50 67.50 67.50 FY 2007 rate 1 $ 60.00 71.00 71.00 82.00 FY 2008 rate 2 $ 63.00 74.00 74.00 85.00 FY 2009 rate 3 $ 67.00 78.00 78.00 89.00 values for FY 2007–FY 2009 are rounded off to nearest whole dollar. With this proposed action, the AMS would amend its regulations to provide for three annual fee increases in one action. Table 1 shows the summary of the current rates and the proposed hourly fee rates for fiscal years 2007 through 2009 for the four different types of services (regular laboratory, appeal, overtime, and legal holiday work) that Science and Technology Programs employees perform. TABLE 2.—CALCULATIONS FOR THE STANDARD HOURLY RATE FOR LABORATORY PROGRAM SERVICES FOR FY 2006 Apportioned fee rate jlentini on PROD1PC65 with PROPOSAL Laboratory services Base Time: Actual FY 2005 Salaries 1 @ $2,787,474 .................................................................................................................................... FY 2006 Pay Adjustment 2 = [Actual FY 2005 Salaries ($20.00)] x 0.031 + $0.86 (weighted portion @ $119,500 increase for the FY 2006 period changes with payroll for within-grade pay step increases for General Schedule salaries, promotion pay costs and new employee position pay costs) .................................................................................................................... Benefits 3 ....................................................................................................................................................................................... Operational Costs 4 ....................................................................................................................................................................... Infrastructure Costs 5 .................................................................................................................................................................... VerDate Aug<31>2005 19:43 Sep 21, 2006 Jkt 208001 PO 00000 Frm 00017 Fmt 4702 Sfmt 4702 E:\FR\FM\22SEP1.SGM 22SEP1 $20.00 1.48 6.90 11.60 8.78 Federal Register / Vol. 71, No. 184 / Friday, September 22, 2006 / Proposed Rules 55371 TABLE 2.—CALCULATIONS FOR THE STANDARD HOURLY RATE FOR LABORATORY PROGRAM SERVICES FOR FY 2006— Continued Apportioned fee rate Laboratory services Program Overhead 6 ..................................................................................................................................................................... Agency Overhead 7 ....................................................................................................................................................................... FY 2006 Inflation (2.1 %) = [Costs excluding infrastructure and payroll] x .021. ........................................................................ 3.44 3.28 0.53 Total Rate Per Hour—Base Time ......................................................................................................................................... 56.01 1 Actual 2 Actual 3 Actual 4 Actual 5 Actual 6 Actual 7 Actual cost cost cost cost cost cost cost of of of of of of of FY 2005 salaries ($2,787,474) ÷ (2,080 program hours times 67 program employees) = $20.00 unit cost. FY 2006 pay adjustment ($205,911) ÷ (2,080 program hours times 67 program employees) = $1.48 unit cost. benefits ($961,668) ÷ (2,080 program hours times 67 program employees) = $6.90 unit cost. operational costs ($1,616,645) ÷ (2,080 program hours times 67 program employees) = $11.60 unit cost. infrastructure ($1,223,570) ÷ (2,080 program hours times 67 program employees) = $8.78 unit cost. Program overhead ($479,000) ÷ (2,080 program hours times 67 program employees) = $3.44 unit cost. Agency overhead ($457,000) ÷ (2,080 program hours times 67 program employees) = $3.28 unit cost. TABLE 3.—CALCULATIONS FOR THE STANDARD HOURLY RATE FOR LABORATORY PROGRAM SERVICES FOR FY 2007 Apportioned fee rate Laboratory services Base Time: FY 2006 Salaries = Actual FY 2005 Salaries ($20.00) + FY 2006 Pay Adjustment ($1.48) ...................................................... FY 2007 Pay Adjustment = FY 2006 Salaries × 0.022 ............................................................................................................... Benefits ......................................................................................................................................................................................... Operational Costs ......................................................................................................................................................................... Infrastructure Cost ........................................................................................................................................................................ Program Overhead ....................................................................................................................................................................... Agency Overhead ......................................................................................................................................................................... FY 2006 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... FY 2007 Inflation (2.2%) = [Costs excluding infrastructure and payroll] × 022 ........................................................................... $21.48 0.47 6.90 11.60 11.75 3.44 3.28 0.53 0.57 Total Rate Per Hour—Base Time ......................................................................................................................................... 60.02 TABLE 4.—CALCULATIONS FOR THE STANDARD HOURLY RATE FOR LABORATORY PROGRAM SERVICES FOR FY 2008 Apportioned fee rate Laboratory services Base Time: FY 2007 Salaries = FY 2006 Salaries ($21.48) + FY 2007 Pay Adjustment ($0.47) ................................................................. FY 2008 Pay Adjustment = FY 2007 Salaries × 0.022 ............................................................................................................... Benefits ......................................................................................................................................................................................... Operational Costs ......................................................................................................................................................................... Infrastructure Cost ........................................................................................................................................................................ Program Overhead ....................................................................................................................................................................... Agency Overhead ......................................................................................................................................................................... FY 2006 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... FY 2007 Inflation (2.2%) = [Costs excluding infrastructure and payroll] × .022 .......................................................................... FY 2008 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... $21.95 0.48 6.90 11.60 13.47 3.44 3.28 0.53 0.57 0.55 Total Rate Per Hour—Base Time ......................................................................................................................................... 62.77 TABLE 5.—CALCULATIONS FOR THE STANDARD HOURLY RATE FOR LABORATORY PROGRAM SERVICES FOR FY 2009 Apportioned fee rate jlentini on PROD1PC65 with PROPOSAL Laboratory services Base Time: FY 2008 Salaries = FY 2007 Salaries ($21.95) + FY 2008 Pay Adjustment ($0.48) ................................................................. FY 2009 Pay Adjustment = FY 2008 Salaries × 0.022 ............................................................................................................... Benefits ......................................................................................................................................................................................... Operational Costs ......................................................................................................................................................................... Infrastructure Cost ........................................................................................................................................................................ Program Overhead ....................................................................................................................................................................... Agency Overhead ......................................................................................................................................................................... FY 2006 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... FY 2007 Inflation (2.2%) = [Costs excluding infrastructure and payroll] × .022 .......................................................................... FY 2008 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... FY 2009 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... VerDate Aug<31>2005 19:43 Sep 21, 2006 Jkt 208001 PO 00000 Frm 00018 Fmt 4702 Sfmt 4702 E:\FR\FM\22SEP1.SGM 22SEP1 $22.43 0.49 6.90 11.60 16.15 3.44 3.28 0.53 0.57 0.55 0.56 55372 Federal Register / Vol. 71, No. 184 / Friday, September 22, 2006 / Proposed Rules TABLE 5.—CALCULATIONS FOR THE STANDARD HOURLY RATE FOR LABORATORY PROGRAM SERVICES FOR FY 2009— Continued Apportioned fee rate Laboratory services Total Rate Per Hour—Base Time ......................................................................................................................................... In order to project the hourly fee rates for the laboratory program services for fiscal years 2007 through 2009, the current fiscal year 2006 is used as a base. The total base time hourly fee rate calculation (Table 2) for fiscal year 2006 begins with the actual salaries for fiscal year 2005 ($2,787,474) and adds the fiscal year 2006 pay raises (3.1 percent) and add other fiscal year 2006 pay adjustments ($119,500) for within-grade pay step increases for General Schedule (GS) salaries, promotion pay costs, and new employee position pay costs. Table 2 contains footnotes 1–7 that provide the common mathematical formula used to calculate the apportioned rate for each fee charge category for fiscal year 2006. The formula uses the actual cost or projected cost in dollars for the applicable fiscal year for each individual fee charge category divided by the available program hours and further divided by the number of laboratory service program employees. The formula derives the apportioned fee rate for each fee charge category (salaries with pay adjustment, benefits, 66.50 operational costs, infrastructure cost, program administrative overhead and agency overhead). The same formula that is used in Table 2 and that is indicated in its footnotes is also applied in the other tables to derive each category unit rate with the different actual costs or variable projected costs to be inserted in the formula equation for the applicable fiscal year. Table 3 through Table 5 show the calculation of the total standard hourly fee rates to be rounded off for fiscal years 2007 through 2009. TABLE 6.—CALCULATIONS FOR THE APPEAL AND OVERTIME HOURLY RATES FOR LABORATORY PROGRAM SERVICES FOR FY 2006 Apportioned fee rate Laboratory services Appeal and Overtime Rates: Actual Salaries @ 1.5 (time and a half): FY 2005 Salaries @ 1.5 = [Actual 2005 Salaries ($20.00)] × 1.5 ............................................................................................... FY 2006 Pay Adjustment = [Actual FY 2005 Salaries ($20.00) × 0.031 + $0.86 (weighted portion @ $119,500 increase for the FY 2006 period changes with payroll for within-grade pay step increases for General Schedule salaries, promotion pay costs, and new employee position pay costs)] × 1.5 ........................................................................................................ Benefits ......................................................................................................................................................................................... Operational Costs ......................................................................................................................................................................... Infrastructure Cost ........................................................................................................................................................................ Program Overhead ....................................................................................................................................................................... Agency Overhead ......................................................................................................................................................................... FY 2006 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... Total Rate Per Hour—Appeal and Overtime ........................................................................................................................ $30.00 2.22 6.90 11.60 8.78 3.44 3.28 0.53 66.75 TABLE 7.—CALCULATIONS FOR THE APPEAL AND OVERTIME HOURLY RATES FOR LABORATORY PROGRAM SERVICES FOR FY 2007 Apportioned fee rate Laboratory services $32.22 0.71 6.90 11.60 11.75 3.44 3.28 0.53 0.57 Total Rate Per Hour—Appeal and Overtime ........................................................................................................................ jlentini on PROD1PC65 with PROPOSAL Appeal and Overtime Rates: Actual Salaries @ 1.5 (time and a half): FY 2006 Salaries @ 1.5 = [Actual 2005 Salaries ($20.00) + 2006 Pay Adjustment ($1.48)] × 1.5 ........................................... FY 2007 Pay Adjustment = FY 2006 Salaries @ 1.5 × 0.022 .................................................................................................... Benefits ......................................................................................................................................................................................... Operational Costs ......................................................................................................................................................................... Infrastructure Cost ........................................................................................................................................................................ Program Overhead ....................................................................................................................................................................... Agency Overhead ......................................................................................................................................................................... FY 2006 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... FY 2007 Inflation (2.2%) = [Costs excluding infrastructure and payroll] × .022 .......................................................................... 71.00 TABLE 8.—CALCULATIONS FOR THE APPEAL AND OVERTIME HOURLY RATES FOR LABORATORY PROGRAM SERVICES FOR FY 2008 Apportioned fee rate Laboratory services Appeal and Overtime Rates: Actual Salaries @ 1.5 (time and a half): FY 2007 Salaries @ 1.5 = [FY 2006 Salaries ($21.48) + FY 2007 Pay Adjustment ($0.47)] × 1.5 ........................................... VerDate Aug<31>2005 19:43 Sep 21, 2006 Jkt 208001 PO 00000 Frm 00019 Fmt 4702 Sfmt 4702 E:\FR\FM\22SEP1.SGM 22SEP1 $32.93 Federal Register / Vol. 71, No. 184 / Friday, September 22, 2006 / Proposed Rules 55373 TABLE 8.—CALCULATIONS FOR THE APPEAL AND OVERTIME HOURLY RATES FOR LABORATORY PROGRAM SERVICES FOR FY 2008—Continued Apportioned fee rate Laboratory services FY 2008 Pay Adjustment = FY 2007 Salaries @ 1.5 × 0.022 .................................................................................................... Benefits ......................................................................................................................................................................................... Operational Costs ......................................................................................................................................................................... Infrastructure Cost ........................................................................................................................................................................ Program Overhead ....................................................................................................................................................................... Agency Overhead ......................................................................................................................................................................... FY 2006 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... FY 2007 Inflation (2.2%) = [Costs excluding infrastructure and payroll] × .022 .......................................................................... FY 2008 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... 0.72 6.90 11.60 13.47 3.44 3.28 0.53 0.57 0.55 Total Rate Per Hour—Appeal and Overtime ........................................................................................................................ 73.99 TABLE 9.—CALCULATIONS FOR THE APPEAL AND OVERTIME HOURLY RATES FOR LABORATORY PROGRAM SERVICES FOR FY 2009 Apportioned fee rate Laboratory services Appeal and Overtime Rates: Actual Salaries @ 1.5 (time and a half): FY 2008 Salaries @ 1.5 = [FY 2007 Salaries ($21.95) + FY 2008 Pay Adjustment ($0.48)] × 1.5 .................................................. FY 2009 Pay Adjustment = FY 2008 Salaries @ 1.5 × 0.022 ............................................................................................................ Benefits ......................................................................................................................................................................................... Operational Costs ......................................................................................................................................................................... Infrastructure Cost ........................................................................................................................................................................ Program Overhead ....................................................................................................................................................................... Agency Overhead ......................................................................................................................................................................... FY 2006 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... FY 2007 Inflation (2.2%) = [Costs excluding infrastructure and payroll] × .022 .......................................................................... FY 2008 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... FY 2009 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... $33.65 0.74 6.90 11.60 16.15 3.44 3.28 0.53 0.57 0.55 0.56 Total Rate Per Hour—Appeal and Overtime ........................................................................................................................ 77.97 Table 6 through Table 9 show the calculation of the total appeal and total overtime hourly fee rates to be rounded off for fiscal years 2006 through 2009. These tables incorporate the differentials in costs associated with the necessity of laboratory personnel to work extended hours of service at the time and a half pay doing either overtime or appeal sample testing. TABLE 10.—CALCULATIONS FOR THE FEDERAL HOLIDAY HOURLY RATE FOR LABORATORY PROGRAM SERVICES FOR FY 2006 Apportioned fee rate Laboratory services Holiday Rate: Actual Salaries @ 2.0 (double time): FY 2005 Salaries @ 2.0 [Actual 2005 Salaries ($20.00)] × 2.0 .................................................................................................. FY 2006 Pay Adjustment = [Actual FY 2005 Salaries ($20.00) × 0.031 + $0.86 (weighted portion @ $119,500 increase for the FY 2006 period changes with payroll for within-grade pay step increases for General Schedule salaries, promotion pay costs, and new employee position pay costs)] × 2.0 ........................................................................................................ Benefits ......................................................................................................................................................................................... Operational Costs ......................................................................................................................................................................... Infrastructure Cost ........................................................................................................................................................................ Program Overhead ....................................................................................................................................................................... Agency Overhead ......................................................................................................................................................................... FY 2006 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... jlentini on PROD1PC65 with PROPOSAL Total Rate Per Hour—Holidays ............................................................................................................................................. VerDate Aug<31>2005 19:43 Sep 21, 2006 Jkt 208001 PO 00000 Frm 00020 Fmt 4702 Sfmt 4702 E:\FR\FM\22SEP1.SGM 22SEP1 $40.00 2.96 6.96 11.60 8.78 3.44 3.28 0.53 77.49 55374 Federal Register / Vol. 71, No. 184 / Friday, September 22, 2006 / Proposed Rules TABLE 11.—CALCULATIONS FOR THE FEDERAL HOLIDAY HOURLY RATE FOR LABORATORY PROGRAM SERVICES FOR FY 2007 Apportioned fee rate Laboratory services Holiday Rate: Actual Salaries @ 2.0 (double time): FY 2006 Salaries @ 2.0 = [Actual 2005 Salaries ($20.00) + 2006 Pay Adjustment ($1.48)] × 2.0 ........................................... FY 2007 Pay Adjustment = FY 2006 Salaries @ 2.0 × 0.022 .................................................................................................... Benefits ......................................................................................................................................................................................... Operational Costs ......................................................................................................................................................................... Infrastructure Cost ........................................................................................................................................................................ Program Overhead ....................................................................................................................................................................... Agency Overhead ......................................................................................................................................................................... FY 2006 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... FY 2007 Inflation (2.2%) = [Costs excluding infrastructure and payroll] × .022 .......................................................................... $42.96 0.95 6.90 11.60 11.75 3.44 3.28 0.53 0.57 Total Rate Per Hour—Holidays ............................................................................................................................................. 81.98 TABLE 12.—CALCULATIONS FOR THE FEDERAL HOLIDAY HOURLY RATE FOR LABORATORY PROGRAM SERVICES FOR FY 2008 Apportioned fee rate Laboratory services Holiday Rate: Actual Salaries @ 2.0 (double time): FY 2007 Salaries @ 2.0 = [FY 2006 Salaries ($21.48) + FY 2007 Pay Adjustment ($0.47)] × 2.0 ........................................... FY 2008 Pay Adjustment = FY 2007 Salaries @ 2.0 × 0.022 .................................................................................................... Benefits ......................................................................................................................................................................................... Operational Costs ......................................................................................................................................................................... Infrastructure Cost ........................................................................................................................................................................ Program Overhead ....................................................................................................................................................................... Agency Overhead ......................................................................................................................................................................... FY 2006 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... FY 2007 Inflation (2.2%) = [Costs excluding infrastructure and payroll] × .022 .......................................................................... FY 2008 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... $43.90 0.97 6.90 11.60 13.47 3.44 3.28 0.53 0.57 0.55 Total Rate Per Hour—Holidays ............................................................................................................................................. 85.21 TABLE 13.—CALCULATIONS FOR THE FEDERAL HOLIDAY HOURLY RATE FOR LABORATORY PROGRAM SERVICES FOR FY 2009 Apportioned fee rate Laboratory services $44.86 0.99 6.90 11.60 16.15 3.44 3.28 0.53 0.57 0.55 0.56 Total Rate Per Hour—Holidays ............................................................................................................................................. jlentini on PROD1PC65 with PROPOSAL Holiday Rate: Actual Salaries @ 2.0 (double time): FY 2008 Salaries @ 2.0 = [FY 2007 Salaries ($21.95) + FY 2008 Pay Adjustment ($0.48)] × 2.0 ........................................... FY 2009 Pay Adjustment = FY 2008 Salaries @ 2.0 × 0.022 .................................................................................................... Benefits ......................................................................................................................................................................................... Operational Costs ......................................................................................................................................................................... Infrastructure Cost ........................................................................................................................................................................ Program Overhead ....................................................................................................................................................................... Agency Overhead ......................................................................................................................................................................... FY 2006 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... FY 2007 Inflation (2.2%) = [Costs excluding infrastructure and payroll] × .022 .......................................................................... FY 2008 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... FY 2009 Inflation (2.1%) = [Costs excluding infrastructure and payroll] × .021 .......................................................................... 89.43 Table 10 through Table 13 show the calculation of the total legal holiday hourly fee rates to be rounded off for fiscal years 2006 through 2009. These tables incorporate the differentials in costs associated with the necessity of laboratory personnel to work extended hours of service at the double hourly pay rate doing sample testing on a VerDate Aug<31>2005 19:43 Sep 21, 2006 Jkt 208001 Federal holiday or a designated day for the Federal holiday. The Agency proposes to recover the actual cost of services for multiple fiscal years covered by this rule. These fee increases are essential for the continued sound financial management of the Agency’s budget. In order to enhance the transparency of the hourly fee rates in the aforementioned Tables 3 through PO 00000 Frm 00021 Fmt 4702 Sfmt 4702 13 for fiscal year 2007, fiscal year 2008 and fiscal year 2009, a description is provided of each fee charge category. Federal salaries with national and locality pay adjustments and choices in benefits are made available on an annual basis by the Office of Personnel Management (OPM). Operational costs include expenses for rents, communications, utilities, medical E:\FR\FM\22SEP1.SGM 22SEP1 jlentini on PROD1PC65 with PROPOSAL Federal Register / Vol. 71, No. 184 / Friday, September 22, 2006 / Proposed Rules examinations, safety equipment, sample preparation equipment, training, trash and hazardous waste disposal, travel and transportation costs. Communication expenditures include costs for photocopying, printing, emailing, Internet services, telephone, and faxing equipment. There have been large capital improvement expenditures in the laboratories in recent years. These expenditures include costs for the Food Emergency Response Network (FERN) and the capital improvements for the Environmental Management Systems (EMS) in accordance with the applicable mandates for Federal laboratories of Executive Order 13148 of April 21, 2000, Greening the Government Through Leadership in Environmental Management (65 FR 24593). These capital improvement costs are included in the normal operations of the Science and Technology field service laboratories. In addition, operational costs include expenses for office and laboratory supplies, chemicals, reagents, security and guard services, waste removal, robots, cleaning and internal building maintenance, billing and collection services, and a Laboratory Information Management System (LIMS). Infrastructure costs are mainly laboratory instruments and capital equipment with service and maintenance contracts and replacement spare parts. Infrastructure expenses include consumable supply costs associated directly with the proper operation of analytical instruments and laboratory equipment. Stakeholders demand that AMS provide cost effective and timely product testing requiring modern and sometimes automated instrumentation. These instruments are expensive and undergo equipment capitalization for determining costs. Equipment capitalization is the determined cost per year to replace the equipment after its useful service life has been established. Infrastructure costs include database acquisitions and maintenance for e-business. Infrastructure costs include large computer hardware and software expenses. Agency and Program overhead is the pro-rated share, attributable to a particular service, of the agency’s management and support costs. Management and administrative support costs include the costs of providing budget and accounting services, regulatory services, investigative and enforcement services, debt-management services, personnel services, public information services, legal services, statistical services, and other general program and agency management services of support activities above the VerDate Aug<31>2005 18:17 Sep 21, 2006 Jkt 208001 local laboratory level. Overhead expenditures are allocated across the Agency for each direct hour of laboratory service. AMS no longer uses the Billings and Collections System (BLCO) for billings and collections through the National Finance Center (NFC) in New Orleans, LA. The Agency now uses the ‘‘accounts receivable’’ functions in Foundation Financial Information System (FFIS) as the document feeder system for customer billings and the collections now come through our lockbox. Accordingly, § 91.42 would be updated to reflect these changes. The regulations also are updated to identify current facility addresses. This proposed rule would also remove and reserve 7 CFR part 92. Part 92 is obsolete because it relates to the mandatory testing of imported tobacco for prohibited pesticide residues and the statutory requirement for such testing has been removed by the Fair and Equitable Tobacco Reform Act of 2004 (7 U.S.C. 518). The tests had been conducted by Science and Technology (S&T) Programs for the AMS Tobacco Program, which sampled imported tobacco and administered the program for imported tobacco. Executive Order 12866, Regulatory Flexibility Act, and Paperwork Reduction Act This proposed rule has been reviewed under Executive Order 12866. Although not economically significant, this rule has been determined to be significant for the purposes of Executive Order 12866 and, therefore, has been reviewed by the Office of Management and Budget (OMB). An economic analysis follows to review the impacts on laboratory customers of the proposed revisions in AMS voluntary user fees for laboratory services. The economic analysis provides a cost-benefit analysis as required by Executive Order 12866 and an analysis of the potential economic effects on small entities as required by the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.). In accordance with 5 U.S.C. 603, AMS has performed an Initial Regulatory Flexibility Analysis for this proposed rule. AMS is inviting comments about this proposed rule as it relates to small entities. In particular, AMS is interested in obtaining information concerning the number and kind of small entities who may incur benefits or costs from implementation of this proposed rule and the impact of those benefits or costs on decisions to utilize AMS voluntary testing services. Regulations must be designed in the most cost-effective manner possible to PO 00000 Frm 00022 Fmt 4702 Sfmt 4702 55375 obtain the objective of a sustainable cost recovery program while imposing the least burden on society. AMS has prepared a Regulatory Impact Assessment (RIA) consisting of a statement of the need for the proposed action, an examination of alternative approaches, and an economic analysis of the benefits and costs. Need for Proposed Action. The AMS laboratory testing programs are voluntary, user fee services conducted under the authority of the Agricultural Marketing Act of 1946 (AMA), as amended (7 U.S.C. 1621, et seq.). The AMA authorizes the Secretary of Agriculture to provide Federal analytical testing services that facilitate marketing and trade. The AMA also requires that reasonable fees be collected from the users of the services to cover as nearly as practicable the costs of maintaining the programs. Science and Technology (S&T) Programs of AMS regularly reviews its user-fee-financed laboratory service programs to determine if the fee levels are adequate. The most recent review determined that the existing fee schedule, effective October 27, 2000 (65 FR 64302) does not generate sufficient revenues to recover operating costs. For fiscal year 2005 the Science and Technology program reported a $702,000 deficit at the current fee levels. The Science and Technology program costs and revenues for fiscal year 2005 were $6,393,000 and $5,691,000, respectively. Program obligations for fiscal year 2006 are projected at $6,602,000 and revenues are projected at $5,834,000 for an estimated deficit of $768,000. With this proposed action, the Agency expects to collect an estimated $6,521,000, $7,186,000, and $7,553,000 in fiscal years 2007 through 2009 respectively, to cover the cost of routine laboratory services, appeal requests, overtime, and holiday services for Science and Technology customers and other program stakeholders. Alternatives Alternatives to the proposed rate increase were considered by the Agency. One alternative to this proposed rule would be to make no changes to the current user fees. As a result, AMS would not recover the full cost of program activities and services would have to be reduced or terminated. Were this to happen, the users of AMS laboratory services would be unable to meet certain AMS program requirements, would find it more difficult to meet foreign government or importer testing requirements, and would lose the opportunity to support E:\FR\FM\22SEP1.SGM 22SEP1 55376 Federal Register / Vol. 71, No. 184 / Friday, September 22, 2006 / Proposed Rules their marketing efforts with what they believe to be preferred government laboratory test results. Consequently, AMS does not consider this alternative to be reasonable. Another alternative considered would be to calculate the fee increases needed over the next three year period and then spread this overall increase evenly in annual increments. Because the increases are necessary to cover ongoing costs, e.g., rent, salaries and benefits, and equipment replacement, and financial stability needs to be maintained for this program, adequate funds must be generated immediately, rather than spread over a three year period. Thus, AMS does not consider this alternative to be reasonable. To ensure full costs are being covered as they are incurred, the preferred alternative is to match fee increases with expected costs on an annual basis over the next three years. This alternative will assure costs are appropriately covered and that laboratory testing services remain available as program customers request them. With this proposed action, the Agency expects to collect an estimated $6,521,000, $7,186,000, and $7,553,000 in fiscal years 2007 through 2009, respectively, to cover the cost of routine laboratory services, appeal requests, overtime, and holiday services. Summary of Impacts Under this proposal AMS would continue to offer laboratory testing services under the Agricultural Marketing Act of 1946 as amended, to facilitate marketing and allow products to obtain grade designations or meet marketing standards. As such, the program provides a viable option for a wide variety of clients by delivering scientific and analytical support services to the agricultural community and provides a valuable resource for those businesses and industries that wish to use a USDA shield. Further, by proposing a three year fee increase instead of a single year fee increase, the Agency would help ensure that the fee increases are effective at the beginning of each fiscal year on October 1. An increase over three fiscal years would permit customers and other program stakeholders an opportunity to plan for annual changes in costs of laboratory service and to incorporate them into their budgetary plans. For analytical purposes, projected collections are based on calculations using an effective date of October 1, 2006 for the proposed fiscal year 2007 user fees. There are essentially three rate increases being proposed for the basic laboratory services—$45 to $60 or 33.3 percent in fiscal year 2007, $60 to $63 or 5.0 percent in fiscal year 2008 and $63 to $67 or 6.4 percent in fiscal year 2009. The rate increases for overtime and appeals are $67.50 to $71 or 5.2 percent, $71 to $74 or 4.2 percent, and $74 to $78 or 5.4 percent in fiscal years 2007, 2008, and 2009, respectively. The rate increases for holiday service are $67.50 to $82 or 21.5 percent, $82 to $85 or 3.7 percent, and $85 to $89 or 4.7 percent in fiscal years 2007, 2008, and 2009, respectively. This is a voluntary program and the costs to each user would be proportional to their use of laboratory services each year. The increased fees will cover inflation and national and locality pay raises and replacement of equipment and other infrastructure improvements. Under the Regulatory Flexibility Act, the impact ofthis proposed rule on small businesses must be analyzed. There are 811 current users of AMS laboratory testing services. Such users of services include food processors, handlers, growers, Federal and State government agencies, and exporters. Many of these users are small entities under the criteria established by the Small Business Administration (13 CFR 121.201). Any decision by stakeholders and customers to discontinue the use of the laboratory services because of increased fees would not hinder food processors or other industry members from marketing their products. For the following cost analysis, certain assumptions are used. First, base year data is actual fiscal year 2005 amount billed for voluntary services performed for the public. Second, seven percent of the total amount billed represents overtime costs and five percent represents costs related to appeals. Third, the calculated amounts in fiscal year 2007 are using the base year data as if the base year was fiscal year 2006. Fourth, each of the 811 customers had the exact same tests, using the same amount of time, and thus were billed the exact same amount. This customer is the ‘‘average’’ laboratory customer. Table 14 sets the total levels for the dollar ($) amounts billed in the base year (Fiscal Year 2006). TABLE 14.—BASE YEAR DATA (FISCAL YEAR 2006) Total Billed ............................ Basic Laboratory Services .... Overtime Costs (7%) ............ Appeal Costs (5%) ............... $1,536,688 1,352,285 107,568 76,834 Table 15 presents the base year costs and estimates costs in fiscal year 2007, fiscal year 2008, and fiscal year 2009 for the ‘‘average’’ laboratory customer. The base year values are derived by dividing basic laboratory services, overtime costs, and appeal costs by 811. The values for fiscal years 2007, 2008, and 2009 are derived multiplying each year by the appropriate percentage rate. TABLE 15.—COSTS ($) FOR THE ‘‘AVERAGE’’ CUSTOMER, BASE YEAR THROUGH FISCAL YEAR 2009 Base year FY 2007 FY 2008 FY 2009 Total Diff.1 Lab Services ............................................................................................ Overtime .................................................................................................. Appeals .................................................................................................... 1,667 133 95 2,223 140 100 2,334 146 104 2,483 154 110 816 21 15 Total .................................................................................................. 1,895 2,463 2,584 2,747 852 jlentini on PROD1PC65 with PROPOSAL 1 Net difference calculated between costs in dollars ($) between base year and Fiscal Year 2009. After the third increase, the customer will pay an additional average of $852 for all laboratory services. This is a VerDate Aug<31>2005 18:17 Sep 21, 2006 Jkt 208001 44.96 percent increase over the base year. The percentage increase for the basic laboratory services is 49.0 percent, PO 00000 Frm 00023 Fmt 4702 Sfmt 4702 overtime is 15.8 percent, and an appeal sample is 15.8 percent. E:\FR\FM\22SEP1.SGM 22SEP1 Federal Register / Vol. 71, No. 184 / Friday, September 22, 2006 / Proposed Rules 55377 TABLE 16.—COSTS ($) FOR A ‘‘LARGE BUSINESS’’ CUSTOMER, BASE YEAR THROUGH FISCAL YEAR (FY) 2009 Base year FY 2007 FY 2008 FY 2009 Total diff.1 Lab Services ............................................................................................ Overtime .................................................................................................. Appeals .................................................................................................... 704,000 56,000 40,000 938,432 58,912 42,080 985,354 61,386 43,847 1,048,417 64,701 46,215 344,417 8,701 6,215 Total .................................................................................................. 800,000 1,039,424 1,090,587 1,159,333 359,333 1 Net difference calculated between costs in dollars ($) between base year and Fiscal Year 2009. Table 16 presents the base year costs and estimates costs in fiscal years 2007, 2008, and 2009 for a ‘‘large business’’ laboratory customer. While the numerical values increase significantly, the percentages are the same. Even though the ‘‘large business’’ customer is paying $359,333 more then what was paid for the same services in the base year, the increase is still approximately 44.9 percent above what was billed in the base year. The same is true for a ‘‘small business’’ customer. Table 17 presents the costs associated with a customer billed $29,000. Again the total difference between the billing in fiscal year 2009 and the base year is significantly smaller than the billing of an ‘‘average’’ customer, but the percentage increase is still near 44.9 percent. TABLE 17.—COSTS ($) FOR A ‘‘SMALL BUSINESS’’ CUSTOMER, BASE YEAR THROUGH FISCAL YEAR (FY) 2009 Base year FY 2007 FY 2008 FY 2009 Total diff.l Lab Services ............................................................................................ Overtime .................................................................................................. Appeals .................................................................................................... 25,520 2,030 1,450 34,018 2,136 1,525 35,719 2,226 1,589 38,005 2,346 1,675 12,485 316 225 Total .................................................................................................. 29,000 37,679 39,534 42,026 13,026 jlentini on PROD1PC65 with PROPOSAL 1 Net difference calculated between costs in dollars ($) between base year and FY 2009. Under the Regulatory Flexibility Act, the impact of this proposed rule on small businesses must be considered. The Agency estimates that 25 percent of the laboratory fees billed in fiscal year 2005 was to small businesses. Thus, a total of $384,172 was billed to small businesses. If the entire proposed fee increase had been implemented, small businesses would have been billed $556,665, a 44.9 percent increase. One question is how each of these customers including small businesses will react to cost increases at these amounts. The increases are spread over a three year period which will mitigate some of the impact. But the focus should be on the reaction to the increase occurring in fiscal year 2007 which is a one third increase over the base year. The answer is dependent on the customer’s business, and is proportional to the number of samples involved. The lower the cost per unit of product being sampled, the higher the probability the customer will continue to use AMS laboratory services and pass on some or all of the additional costs, the exact amount of which is not known. Also, use of AMS laboratory services is voluntary and other private or public laboratory options are available. This proposed rule contains no new information collection or recordkeeping requirements that are subject to the Office of Management and Budget VerDate Aug<31>2005 18:17 Sep 21, 2006 Jkt 208001 (OMB) approval under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501– 3520). AMS is committed to implementation of the Government Paperwork Elimination Act which provides for the use of information resources to improve the efficiency and effectiveness of governmental operations, including providing the public with the option of submitting information or transacting business electronically to the extent practicable. USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule. alternatives and adopt the least costly, more cost-effective or least burdensome alternative that achieves the objectives of the rule. This rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) that impose costs on State, local, or tribal governments or to the private sector of $100 million or more in anyone year. Thus, this rule is not subject to the requirements of sections 202 and 205 of UMRA. Unfunded Mandate Analysis Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Public Law 104–4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of UMRA, the Department generally must prepare a written statement, including a cost benefit analysis, for proposed and final rules with ‘‘Federal mandates’’ that may result in expenditures to State, local, or tribal governments, in the aggregate, or to the private sector, of $100 million or more in anyone year. When such a statement is needed for a rule, section 205 of UMRA generally requires that the Department identify and consider a reasonable number of regulatory This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. This proposed rule would not preempt any State or local laws, regulation, or policies, unless they present an irreconcilable conflict with this rule. There are no administrative procedures which must be exhausted prior to any judicial challenge to this rule or the application of its provisions. PO 00000 Frm 00024 Fmt 4702 Sfmt 4702 Civil Justice Reform (Executive Order 12988) Civil Rights Review AMS has considered the potential civil rights implications of this rule on minorities, women, or persons with disabilities to ensure that no person or group shall be discriminated against on the basis of race, color, national origin, E:\FR\FM\22SEP1.SGM 22SEP1 55378 Federal Register / Vol. 71, No. 184 / Friday, September 22, 2006 / Proposed Rules gender, religion, age, disability, sexual orientation, marital or family status, political beliefs, parental status, or protected genetic information. AMS has included at § 91.7 the provision in the regulation under part 91 to describe in detail the requirements for nondiscrimination when reviewing or granting any person or entity the benefits of Science and Technology Programs laboratory service. This regulation is consistent with USDA regulations which prohibit discrimination in its programs and activities. This proposed rule would not require affected entities to relocate or alter their operations in ways that could adversely affect such persons or groups. Further, this proposed rule would not deny any persons or groups the benefits of the program or subject any persons or groups to discrimination. AMS has reviewed this proposed rule in accordance with the Department Regulation 4300–4, ‘‘Civil Rights Impact Analysis.’’ AMS has determined this proposed action ensures the civil rights of all Science and Technology Programs applicants and customers. They represent minorities (24.4%), women (51.1%), and persons with disabilities (14.5%) in the same percent proportions to the entire customer base as their compositions are represented in the total approximate general population (299 million) of the United States of America available in descriptive tables at https://www.census.gov/. In addition, each and every customer would receive the same user fee for each identical service. jlentini on PROD1PC65 with PROPOSAL Comments A thirty day comment period is provided for interested persons to comment on this proposed action. All comments received by October 23, 2006 will be considered. A thirty day period for public comment is justified in order to allow the agency to recover the full cost of operating a voluntary user fee laboratory testing program. The existing fee schedules have been in place since October 2000. AMS regularly reviews its user-fee-supported programs to determine if the voluntary fees are adequate to cover expenses. Due to the length of the rulemaking process, the fiscal year has partially elapsed by the time the agency publishes a final rule to amend its fees. As a result the agency is unable to recover the full cost of its services in a timely manner. Therefore, a thirty day comment period is reasonable. VerDate Aug<31>2005 19:43 Sep 21, 2006 Jkt 208001 List of Subiects 7 CFR Part 91 Administrative practice and procedure, Agricultural commodities, Laboratories, Reporting and recordkeeping requirements. 7 CFR Part 92 Agricultural commodities, Laboratories, Pesticides and pests, Tobacco. Under the authority of 7 U.S.C. 1622 and 1624, the Agricultural Marketing Service proposes to amend parts 91 and 92 of Title 7, chapter I, subchapter E, of the Code of Federal Regulations as follows: PART 91—SERVICES AND GENERAL INFORMATION [AMENDED] 1. The authority citation for part 91 continues to read as follows: Authority: 7 U.S.C. 1622, 1624. 2. Section 91.5 is revised to read as follows: § 91.5 Where services are offered. (a) Services are offered to applicants at the Science and Technology laboratories and facilities as listed below. (1) Science and Technology Programs National Science Laboratory. A variety of proximate, chemical, microbiological and biomolecular tests and laboratory analyses performed on fruits and vegetables, poultry, meat and meat products, fiber products and processed foods are performed at the Science and Technology Programs (S&T) laboratory located at: USDA, AMS, Science and Technology Programs, National Science Laboratory (NSL), 801 Summit Crossing Place, Suite B, Gastonia, North Carolina 28054–2193. (2) Science and Technology (S&T) Programs Science Satellite Laboratories. The specialty satellite laboratories performing aflatoxin and other testing on peanuts, peanut products, dried fruits, grains, edible seeds, tree nuts, shelled corn products, oilseed products, vegetable oils, juices, citrus products, and other commodities are located as follows: (i) USDA, AMS, Science & Technology, Citrus Laboratory, 98 Third Street, SW., Winter Haven, Florida 33880–2905. (ii) USDA, AMS, Science & Technology, 6567 Chancey Mill Road, Blakley, Georgia 39823–2785. (iii) USDA, AMS, Science & Technology, c/o Golden Peanut Company LLC, (Mail: P.O. Box 272), 715 Martin Luther King Drive, Dawson, Georgia 39842–1002. PO 00000 Frm 00025 Fmt 4702 Sfmt 4702 (iv) USDA, AMS, Science & Technology, 107 South Fourth Street, Madill, Oklahoma 73446–3431. (v) USDA, AMS, Science & Technology, (Mail: P.O. Box 1130), 308 Culloden Street, Suffolk, VA 23434– 4706. (3) Program laboratories. Laboratory services are available in all areas covered by cooperative agreements providing for this laboratory work and entered on behalf of the Department with cooperating Federal or State laboratory agencies pursuant to authority contained in Act(s) of Congress. Also, services may be provided in other areas not covered by a cooperative agreement if the Administrator determines that it is possible to provide such laboratory services. (4) Other alternative laboratories. Laboratory analyses may be conducted at alternative Science and Technology Programs laboratories and can be reached from any commodity market in which a laboratory facility is located to the extent laboratory personnel are available. (5) The Plant Variety Protection (PVP) Office. The PVP office and plant examination facility of the Science and Technology programs issues certificates of protection to developers of novel varieties of plants which reproduce sexually. The PVP office is located as follows: USDA, AMS, Science & Technology Programs, Plant Variety Protection Office, National Agricultural Library Building, Room 401, 10301 Baltimore Boulevard, Beltsville, MD 20705–2351. (6) Science and Technology Programs headquarters offices. The examination, licensure, quality assurance reviews, laboratory approval/certification and consultation services are provided by headquarters staff located in Washington, DC. The main headquarters office is located as follow: USDA, AMS, Science and Technology Programs, Office of the Deputy Administrator, South Agriculture Bldg., Mail Stop 0270, 1400 Independence Ave., SW., Washington, DC 20250–0270. (7) The Information Technology (IT) Group. The IT office of the Science and Technology Programs is headed by the Associate Deputy Administrator for Technology/Chief Information Officer and provides information technology services and management systems to the Agency and other agencies within the USDA. The main IT office is located as follows: USDA, AMS, Science and Technology, Office of the Associate Deputy Administrator for Technology, 1752 South Agriculture Bldg., Mail Stop E:\FR\FM\22SEP1.SGM 22SEP1 jlentini on PROD1PC65 with PROPOSAL Federal Register / Vol. 71, No. 184 / Friday, September 22, 2006 / Proposed Rules 0204, 1400 Independence Ave., SW., Washington, DC 20250–0204. (8) Statistics Branch Office. The Statistics Branch office of Science and Technology Programs (S&T) provides statistical services to the Agency and other agencies within the USDA. In addition, the Statistics Branch office generates sample plans and performs consulting services for research studies in joint efforts with or in a leading role with other program areas of AMS or of the USDA. The Statistics Branch office is located as follows: USDA, AMS, S&T Statistics Branch, 0603 South Agriculture Bldg., Mail Stop 0223, 1400 Independence Ave., SW., Washington, DC 20250–0223. (9) Technical Services Branch Office. The Technical Services Branch office of Science and Technology (S&T) provides technical support services to all Agency programs and other agencies within the USDA. In addition, the Technical Services Branch office provides certification and approval services of private and State government laboratories as well as oversees quality assurance programs; import and export certification of laboratory tested commodities. The Technical Services Branch mailing address is as follows: USDA, AMS, S&T Technical Services Branch, South Agriculture Bldg., Mail Stop 0272, 1400 Independence Ave., SW., Washington, DC 20250–0272. The Technical Services Branch office is located as follows: USDA, AMS, Science and Technology Technical Services Branch, Room 306, Cotton Annex Bldg., 300 12th Street, SW., Washington, DC 20250. (10) Monitoring Programs Office. Services afforded by the Pesticide Data Program (PDP) and Microbiological Data Program (MDP) are provided by USDA, AMS, Science and Technology Monitoring Programs Office, 8609 Sudley Road, Suite 206, Manassas, VA 20110–8411. (11) Pesticide Records Branch Office. Services afforded by the Federal Pesticide Record Keeping Program for restricted-use pesticides by private certified applicators are provided by USDA, AMS, Science and Technology, Pesticide Records Branch, 8609 Sudley Road, Suite 203, Manassas, VA 20110– 8411. (b) The addresses of the various laboratories and offices appear in the pertinent parts of this subchapter. A prospective applicant may obtain a current listing of addresses and telephone numbers of Science and Technology Programs laboratories, offices, and facilities by addressing an inquiry to the Administrative Officer, Science and Technology Programs, VerDate Aug<31>2005 18:17 Sep 21, 2006 Jkt 208001 Agricultural Marketing Service, United States Department of Agriculture (USDA), 1400 Independence Ave., SW., Room 0725, South Agriculture Building, Mail Stop 0271, Washington, DC 20250– 0271. 3. Sections 91.37 through 91.39 are revised to read as follows: § 91.37 Standard hourly fee rate for laboratory testing, analysis, and other services. (a) The standard hourly fee rate in this section for the individual laboratory analyses cover the costs of Science and Technology laboratory services, including issuance of certificates and personnel and overhead costs other than the commodity inspection fees referred to in 7 CFR 52.42 through 52.46, 52.48 through 52.51, 55.510 through 55.530, 55.560 through 55.570, 58.38 through 58.43, 58.45 through 58.46, 70.71 through 70.72, and 70.75 through 70.78. The hourly fee rates in this part 91 apply to all commodity and processed commodity products. The new fiscal year for Science and Technology Programs commences on October 1 of each calendar year. The rate for laboratory services is $60.00 per hour in fiscal year 2007, $63.00 per hour in fiscal year 2008, and $67.00 per hour in fiscal year 2009. (b) Printed updated schedules of the laboratory testing fees for processed fruits and vegetables (7 CFR part 93), poultry and egg products (7 CFR part 94), and meat and meat products (7 CFR part 98) will be available for distribution to Science and Technology’s constituents and stakeholders by the individual Laboratory Managers of Science and Technology laboratories listed in § 91.5. These single test laboratory fee schedules are based upon the applicable hourly fee rate stated in § 91.37(a). (c) Except as otherwise provided in this section, charges will be made at the applicable hourly rate stated in § 91.37(a) for the time required to perform the service. A charge will be made for service pursuant to each request or certificate issued. (d) When a laboratory test service is provided for AMS by a commercial or State government laboratory, the applicant will be assessed a fee which covers the costs to the Science and Technology program for the service provided. (e) When Science and Technology staff provides applied and developmental research and training activities for microbiological, physical, chemical, and biomolecular analyses on agricultural commodities the applicant PO 00000 Frm 00026 Fmt 4702 Sfmt 4702 55379 will be charged a fee on a reimbursable cost to AMS basis. § 91.38 Additional fees for appeal of analysis. (a) The applicant for appeal sample testing will be charged a fee at the hourly rate for laboratory service that appears in this paragraph. The new fiscal year for Science and Technology Programs commences on October 1 of each calendar year. The appeal rate for laboratory service is $71.00 per hour in fiscal year 2007, $74.00 per hour in fiscal year 2008, and $78.00 per hour in fiscal year 2009. (b) The appeal fee will not be waived for any reason if analytical testing was completed in addition to the original analysis. § 91.39 Premium hourly fee rates for overtime and legal holiday service. (a) When analytical testing in a Science and Technology facility requires the services of laboratory personnel beyond their regularly assigned tour of duty on any day or on a day outside the established schedule, such services are considered as overtime work. When analytical testing in a Science and Technology facility requires the services of laboratory personnel on a Federal holiday or a day designated in lieu of such a holiday, such services are considered holiday work. Laboratory analyses initiated at the request of the applicant to be rendered on Federal holidays, and on an overtime basis will be charged fees at hourly rates for laboratory service that appear in this paragraph. The new fiscal year for Science and Technology Programs commences on October 1 of each calendar year. The laboratory analysis rate for overtime service is $71.00 per hour in fiscal year 2007, $74.00 per hour in fiscal year 2008, and $78.00 per hour in fiscal year 2009. The laboratory analysis rate for Federal holiday or designed holiday service is $82.00 per hour in fiscal year 2007, $85.00 per hour in fiscal year 2008, and $89.00 per hour in fiscal year 2009. (b) Information on legal holidays or what constitutes overtime service at a particular Science and Technology laboratory is available from the Laboratory Manager or facility supervisor. 4. Section 91.42 is revised to read as follows: § 91.42 Billing. (a) Each billing cycle will end on the 25th of the month. The applicant will be billed by the National Finance Center (NFC) using the Foundation Financial Information System (FFIS) on the 1st E:\FR\FM\22SEP1.SGM 22SEP1 55380 Federal Register / Vol. 71, No. 184 / Friday, September 22, 2006 / Proposed Rules day, following the end of the billing cycle in which voluntary laboratory services and other services were rendered at a particular Science and Technology laboratory or office. (b) The total charge or fee shall normally be stated directly on the analysis report or on a standardized official certificate form for the laboratory analysis of a specific agricultural commodity and related commodity products. (c) The actual bill for collection will be issued by the USDA, National Finance Center Billings and Collection Branch, (Mail: P.O. Box 60075), 13800 Old Gentilly Road, New Orleans, Louisiana 70160–0001. PART 92—[REMOVED AND RESERVED] 5. Part 92 is removed in its entirety and reserved. Dated: September 14, 2006. Lloyd C. Day, Administrator, Agricultural Marketing Service. [FR Doc. 06–7821 Filed 9–21–06; 8:45 am] BILLING CODE 3410–02–M DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 993 [Docket No. FV06–993–1 PR] Dried Prunes Produced in California; Decreased Assessment Rate Agricultural Marketing Service, USDA. ACTION: Proposed rule. jlentini on PROD1PC65 with PROPOSAL AGENCY: SUMMARY: This rule would decrease the assessment rate established for the Prune Marketing Committee (committee) under Marketing Order No. 993 for the 2006–07 and subsequent crop years from $0.65 to $0.40 per ton of salable dried prunes. The committee locally administers the marketing order which regulates the handling of dried prunes grown in California. Assessments upon dried prune handlers are used by the committee to fund reasonable and necessary expenses of the program. The crop year began August 1 and ends July 31. The assessment rate would remain in effect indefinitely unless modified, suspended, or terminated. DATES: Comments must be received by October 23, 2006. ADDRESSES: Interested persons are invited to submit written comments concerning this rule. Comments must be VerDate Aug<31>2005 18:17 Sep 21, 2006 Jkt 208001 sent to the Docket Clerk, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250–0237; Fax: (202) 720–8938; or E-mail: moab.docketclerk@usda.gov, or Internet: https://www.regulations.gov. Comments should reference the docket number and the date and page number of this issue of the Federal Register and will be available for public inspection in the Office of the Docket Clerk during regular business hours, or can be viewed at: https://www.ams.usda.gov/fv/moab.html. FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Program Analyst, or Terry Vawter, Marketing Specialist, California Marketing Field Office, Fruit and Vegetable Programs, AMS, USDA; Telephone: (559) 487–5901; Fax (559) 487–5906, or E-mail: Toni.Sasselli@usda.gov or Terry.Vawter@usda.gov. Small businesses may request information on complying with this regulation by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250–0237; Telephone: (202) 720– 2491, Fax: (202) 720–8938, or E-mail: Jay.Guerber@usda.gov. SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Agreement No. 110 and Marketing Order No. 993, both as amended (7 CFR part 993), regulating the handling of dried prunes grown in California, hereinafter referred to as the ‘‘order.’’ The marketing agreement and order are effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601– 674), hereinafter referred to as the ‘‘Act.’’ The Department of Agriculture (USDA) is issuing this rule in conformance with Executive Order 12866. This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing order now in effect, California dried prune handlers are subject to assessments. Funds to administer the order are derived from such assessments. It is intended that the assessment rate as proposed herein would be applicable to all assessable dried prunes beginning August 1, 2006, and continue until amended, suspended, or terminated. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule. The Act provides that administrative proceedings must be exhausted before PO 00000 Frm 00027 Fmt 4702 Sfmt 4702 parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA’s ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling. This rule would decrease the assessment rate established for the committee for the 2006–07 and subsequent crop years from $0.65 to $0.40 per ton of salable dried prunes handled. The California dried prune marketing order provides authority for the committee, with the approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the committee are producers and handlers of California dried prunes. They are familiar with the committee’s needs and with the costs for goods and services in their local area; and are, thus, in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in at least one public meeting. Thus, all directly affected persons have an opportunity to participate and provide input. For the 2005–06 and subsequent crop years, the committee recommended, and USDA approved, an assessment rate that would continue in effect from crop year to crop year unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the committee or other information available to USDA. The committee met on June 29, 2006, and unanimously recommended a decreased assessment rate of $0.40 per ton of salable dried prunes and expenditures totaling $77,215 for the 2006–07 crop year. In comparison, last year’s approved expenses were $89,090. The proposed assessment rate of $0.40 per ton of salable dried prunes is $0.25 lower than the rate currently in effect. The committee recommended a lower assessment rate based on an estimated production of 145,000 tons of salable dried prunes. At the proposed assessment rate, the assessment income E:\FR\FM\22SEP1.SGM 22SEP1

Agencies

[Federal Register Volume 71, Number 184 (Friday, September 22, 2006)]
[Proposed Rules]
[Pages 55369-55380]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-7821]

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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 91 and 92

[Docket Number ST-05-01]
RIN 0581-AC48

Changes in Hourly Fee Rates for Science and Technology Laboratory
Services--Fiscal Years 2007-2009

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule with request for comments.

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

SUMMARY: The Agricultural Marketing Service (AMS) is proposing to
change the hourly fee rates for Science and Technology (S&T) Laboratory
Services. The agency is proposing to raise these rates to reflect,
among other factors, national and locality pay increases for Federal
employees and inflation, operating costs, instrumentation and training,
and program and agency administrative overhead costs. In the past, AMS
has amended its regulations on an as needed basis in order to recover
laboratory program costs. With this proposed regulation, AMS is
providing for three annual standard hourly fee rate increases for
fiscal years 2007-2009. This would provide the agricultural commodity
industries and other stakeholders with more timely and relevant
information regarding voluntary user fees for laboratory testing
services. The agency is also proposing to remove tables and schedules
with listings of individual tests and services. Three annual hourly fee
rate adjustments are proposed for appeals, holiday, and overtime
services to reflect the anticipated increase in cost of providing these
laboratory services each fiscal year. The regulations also are updated
to identify current facility addresses. Part 92 is obsolete and
therefore has been removed.

DATES: Comments must be received on or before October 23, 2006.

ADDRESSES: Send comments to James V. Falk, Docket Manager, USDA, AMS,
Science and Technology Programs, 1400 Independence Avenue, SW., Mail
Stop 0272, Washington, DC 20250-0272; telephone (202) 690-4089; fax
(202) 720-4631, or e-mail: James.falk@usda.gov. State that your
comments refer to Docket No. ST-05-01. Comments may also be submitted
electronically through https://www.regulations.gov. Submitted comments
will be available for public inspection during regular business hours
in Room 1090 South Building, U.S. Department of Agriculture, 1400
Independence Avenue, SW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Dr. Robert L. Epstein, Science and
Technology Programs, Agricultural Marketing Service, United States
Department of Agriculture, Mail Stop 0270, 1400 Independence Avenue,
SW., Washington, DC 20250-0270, telephone number (202) 720-5231; fax
(202) 720-6496, and e-mail: Robert.epstein@usda.gov.

SUPPLEMENTARY INFORMATION:

Background

Science and Technology (S&T) Programs has been performing voluntary
laboratory services under the Agricultural Marketing Act of 1946, as
amended, for the AMS commodity programs (Fruit and Vegetable, Cotton,
Livestock and Seed, Poultry, Dairy, and Tobacco) and applicable
customers in these industries since its inception on August 17, 1988.
Before that, voluntary laboratory testing was provided for a user fee
by AMS under the various commodity programs. The current standard
hourly rate of $45.00 and the premium hourly rate of $67.50 have been
in effect since publication in the Federal Register on October 27, 2000
(65 FR 64302). The standard fee rate for laboratory services is
proposed to be increased to $60.00 per hour in fiscal year 2007, $63.00
per hour in fiscal year 2008, and $67.00 per hour in fiscal year 2009.
The premium hourly fee rates would also be adjusted for fiscal years
2007 through 2009. An increase in the premium hourly rates over the
three fiscal years for laboratory services performed on holidays,
appeal samples, and overtime basis is also needed since Science and
Technology laboratory personnel may be required to work extended hours
of service at the time and a half pay or the double hourly pay to
accommodate clients. This is due to

[[Page 55370]]

stakeholder demand for immediate test results. Generally, the
processing of all laboratory samples is continuous over a 24/7
timeframe due to the recent introduction of automated equipment.
The AMS laboratory testing programs are voluntary, user fee
services, conducted under the authority of the Agricultural Marketing
Act of 1946 (AMA), as amended (7 U.S.C. 1621, et seq.). The AMA
authorizes the Secretary of Agriculture to provide Federal analytical
testing services that facilitate marketing and trade. In addition,
consumers may be able to determine the quality and wholesomeness
characteristics of a commodity or product through laboratory testing.
This allows agricultural products to be assigned official AMS grade
designations or to meet specifications. The AMA also requires that
reasonable fees be collected from the users of the services to cover as
nearly as possible the costs of maintaining the programs.
AMS regularly reviews its user-fee-supported laboratory service
programs to determine if the voluntary fees are adequate to cover
expenses. The most recent review determined that the existing fee
schedules and tables of individual tests or services, which have been
in place since October 27, 2000, will not generate sufficient revenues
to recover operating costs.
A more flexible user fee system, using set hourly rates for
multiple fiscal years, is proposed by this rulemaking to ensure that
AMS properly recovers its full costs for providing laboratory services,
and that all stakeholders are charged reasonable fees. By enacting a
three year fee increase instead of a single year fee increase, AMS
would help ensure that the fee increases are effective at the beginning
of each fiscal year (October 1).
In addition, the existing fee schedules and tables in 7 CFR, part
91, Sec. 91.37 would be removed. The analytical tests listed in the
tables are not specific to individual commodity testing requirements or
stakeholder needs. The current tables do not represent the actual
operational costs to perform single tests and newer methodologies.
Laboratory services are provided for five types of analytical testing:
Microbiological, physical, residue chemistry, proximate analysis for
composition, and biomolecular testing. AMS must recover the costs of
providing these services. The proposed hourly fee rates would recover
these costs.
AMS calculated its actual costs for fiscal years 2001 through 2005
and its projected increases in salaries and inflation in fiscal years
2006 through 2009. The estimates for increases in salaries for fiscal
year 2006 as the base year and the succeeding out years are from the
Office of Management and Budget's (OMB) multi-year ``Economic
Assumptions'' tables. The Federal pay raise for calendar years 2002,
2003, and 2004 were 4.6 percent, 4.1 percent and 4.1 percent,
respectively. This information comes from Table 11-1, ``Economic
Assumptions'', of the Office of Management and Budget's Fiscal Year
2005 Budget which is available at https://www.whitehouse.gov/omb/budget/
fy2005/econ.html. The average fiscal year pay raise for Federal
employees in calendar years 2005 and 2006 was 3.5 percent effective
January 2005 and 3.1 percent effective January 2006. The average
combined national and locality pay raise is estimated to be 2.2 percent
for fiscal years 2007, 2008, and 2009. Inflation for fiscal year 2006
is estimated to be 2.1 percent. Inflation for fiscal year 2007 is
estimated to be 2.2 percent. Inflation for fiscal year 2008 is
estimated to be 2.1 percent. Inflation for fiscal year 2009 is
estimated to be 2.1 percent. These estimates for inflation percent can
be obtained from Table 12-1, ``Economic Assumptions'', of the OMB's
Fiscal Year 2007 Budget which is available at https://
www.whitehouse.gov/omb/budget/fy2007/econ.html.
The Agency will initiate another rulemaking to adjust any fee
established, if estimated increases for pay and inflation do not
adequately cover the Agency's costs of providing the services. The cost
of providing laboratory services includes both direct and overhead
costs. Direct costs include the cost of salaries, employee benefits,
operation cost and infrastructure cost. The Agency is able to estimate
the employee benefits attributable to overtime work and has included
these in the fee calculations.

Table 1.--Current and Proposed Hourly Fee Rates (Per Hour) by Type of Service
----------------------------------------------------------------------------------------------------------------
Current FY 2007 FY 2008 FY 2009
Service rate rate \1\ rate \2\ rate \3\
----------------------------------------------------------------------------------------------------------------
Laboratory.................................................. $ 45.00 $ 60.00 $ 63.00 $ 67.00
Appeal...................................................... 67.50 71.00 74.00 78.00
Overtime.................................................... 67.50 71.00 74.00 78.00
Legal Holiday............................................... 67.50 82.00 85.00 89.00
----------------------------------------------------------------------------------------------------------------
1 2 3 Hourly values for FY 2007-FY 2009 are rounded off to nearest whole dollar.

With this proposed action, the AMS would amend its regulations to
provide for three annual fee increases in one action. Table 1 shows the
summary of the current rates and the proposed hourly fee rates for
fiscal years 2007 through 2009 for the four different types of services
(regular laboratory, appeal, overtime, and legal holiday work) that
Science and Technology Programs employees perform.

Table 2.--Calculations for the Standard Hourly Rate for Laboratory
Program Services for FY 2006
------------------------------------------------------------------------
Apportioned
Laboratory services fee rate
------------------------------------------------------------------------
Base Time:
Actual FY 2005 Salaries \1\ @ $2,787,474............ $20.00
FY 2006 Pay Adjustment \2\ = [Actual FY 2005 1.48
Salaries ($20.00)] x 0.031 + $0.86 (weighted
portion @ $119,500 increase for the FY 2006 period
changes with payroll for within-grade pay step
increases for General Schedule salaries, promotion
pay costs and new employee position pay costs).....
Benefits \3\........................................ 6.90
Operational Costs \4\............................... 11.60
Infrastructure Costs \5\............................ 8.78

[[Page 55371]]

Program Overhead \6\................................ 3.44
Agency Overhead \7\................................. 3.28
FY 2006 Inflation (2.1 %) = [Costs excluding 0.53
infrastructure and payroll] x .021.................
---------------
Total Rate Per Hour--Base Time.................. 56.01
------------------------------------------------------------------------
\1\ Actual cost of FY 2005 salaries ($2,787,474) / (2,080 program hours
times 67 program employees) = $20.00 unit cost.
\2\ Actual cost of FY 2006 pay adjustment ($205,911) / (2,080 program
hours times 67 program employees) = $1.48 unit cost.
\3\ Actual cost of benefits ($961,668) / (2,080 program hours times 67
program employees) = $6.90 unit cost.
\4\ Actual cost of operational costs ($1,616,645) / (2,080 program hours
times 67 program employees) = $11.60 unit cost.
\5\ Actual cost of infrastructure ($1,223,570) / (2,080 program hours
times 67 program employees) = $8.78 unit cost.
\6\ Actual cost of Program overhead ($479,000) / (2,080 program hours
times 67 program employees) = $3.44 unit cost.
\7\ Actual cost of Agency overhead ($457,000) / (2,080 program hours
times 67 program employees) = $3.28 unit cost.

Table 3.--Calculations for the Standard Hourly Rate for Laboratory
Program Services for FY 2007
------------------------------------------------------------------------
Apportioned
Laboratory services fee rate
------------------------------------------------------------------------
Base Time:
FY 2006 Salaries = Actual FY 2005 Salaries ($20.00) $21.48
+ FY 2006 Pay Adjustment ($1.48)...................
FY 2007 Pay Adjustment = FY 2006 Salaries x 0.022... 0.47
Benefits............................................ 6.90
Operational Costs................................... 11.60
Infrastructure Cost................................. 11.75
Program Overhead.................................... 3.44
Agency Overhead..................................... 3.28
FY 2006 Inflation (2.1%) = [Costs excluding 0.53
infrastructure and payroll] x .021.................
FY 2007 Inflation (2.2%) = [Costs excluding 0.57
infrastructure and payroll] x 022..................
---------------
Total Rate Per Hour--Base Time.................. 60.02
------------------------------------------------------------------------

Table 4.--Calculations for the Standard Hourly Rate for Laboratory
Program Services for FY 2008
------------------------------------------------------------------------
Apportioned
Laboratory services fee rate
------------------------------------------------------------------------
Base Time:
FY 2007 Salaries = FY 2006 Salaries ($21.48) + FY $21.95
2007 Pay Adjustment ($0.47)........................
FY 2008 Pay Adjustment = FY 2007 Salaries x 0.022... 0.48
Benefits............................................ 6.90
Operational Costs................................... 11.60
Infrastructure Cost................................. 13.47
Program Overhead.................................... 3.44
Agency Overhead..................................... 3.28
FY 2006 Inflation (2.1%) = [Costs excluding 0.53
infrastructure and payroll] x .021.................
FY 2007 Inflation (2.2%) = [Costs excluding 0.57
infrastructure and payroll] x .022.................
FY 2008 Inflation (2.1%) = [Costs excluding 0.55
infrastructure and payroll] x .021.................
---------------
Total Rate Per Hour--Base Time.................. 62.77
------------------------------------------------------------------------

Table 5.--Calculations for the Standard Hourly Rate for Laboratory
Program Services for FY 2009
------------------------------------------------------------------------
Apportioned
Laboratory services fee rate
------------------------------------------------------------------------
Base Time:
FY 2008 Salaries = FY 2007 Salaries ($21.95) + FY $22.43
2008 Pay Adjustment ($0.48)........................
FY 2009 Pay Adjustment = FY 2008 Salaries x 0.022... 0.49
Benefits............................................ 6.90
Operational Costs................................... 11.60
Infrastructure Cost................................. 16.15
Program Overhead.................................... 3.44
Agency Overhead..................................... 3.28
FY 2006 Inflation (2.1%) = [Costs excluding 0.53
infrastructure and payroll] x .021.................
FY 2007 Inflation (2.2%) = [Costs excluding 0.57
infrastructure and payroll] x .022.................
FY 2008 Inflation (2.1%) = [Costs excluding 0.55
infrastructure and payroll] x .021.................
FY 2009 Inflation (2.1%) = [Costs excluding 0.56
infrastructure and payroll] x .021.................
---------------

[[Page 55372]]

Total Rate Per Hour--Base Time.................. 66.50
------------------------------------------------------------------------

In order to project the hourly fee rates for the laboratory program
services for fiscal years 2007 through 2009, the current fiscal year
2006 is used as a base. The total base time hourly fee rate calculation
(Table 2) for fiscal year 2006 begins with the actual salaries for
fiscal year 2005 ($2,787,474) and adds the fiscal year 2006 pay raises
(3.1 percent) and add other fiscal year 2006 pay adjustments ($119,500)
for within-grade pay step increases for General Schedule (GS) salaries,
promotion pay costs, and new employee position pay costs. Table 2
contains footnotes 1-7 that provide the common mathematical formula
used to calculate the apportioned rate for each fee charge category for
fiscal year 2006. The formula uses the actual cost or projected cost in
dollars for the applicable fiscal year for each individual fee charge
category divided by the available program hours and further divided by
the number of laboratory service program employees. The formula derives
the apportioned fee rate for each fee charge category (salaries with
pay adjustment, benefits, operational costs, infrastructure cost,
program administrative overhead and agency overhead). The same formula
that is used in Table 2 and that is indicated in its footnotes is also
applied in the other tables to derive each category unit rate with the
different actual costs or variable projected costs to be inserted in
the formula equation for the applicable fiscal year.
Table 3 through Table 5 show the calculation of the total standard
hourly fee rates to be rounded off for fiscal years 2007 through 2009.

Table 6.--Calculations for the Appeal and Overtime Hourly Rates for
Laboratory Program Services for FY 2006
------------------------------------------------------------------------
Apportioned
Laboratory services fee rate
------------------------------------------------------------------------
Appeal and Overtime Rates: Actual Salaries @ 1.5 (time
and a half):
FY 2005 Salaries @ 1.5 = [Actual 2005 Salaries $30.00
($20.00)] x 1.5....................................
FY 2006 Pay Adjustment = [Actual FY 2005 Salaries 2.22
($20.00) x 0.031 + $0.86 (weighted portion @
$119,500 increase for the FY 2006 period changes
with payroll for within-grade pay step increases
for General Schedule salaries, promotion pay costs,
and new employee position pay costs)] x 1.5........
Benefits............................................ 6.90
Operational Costs................................... 11.60
Infrastructure Cost................................. 8.78
Program Overhead.................................... 3.44
Agency Overhead..................................... 3.28
FY 2006 Inflation (2.1%) = [Costs excluding 0.53
infrastructure and payroll] x .021.................
---------------
Total Rate Per Hour--Appeal and Overtime........ 66.75
------------------------------------------------------------------------

Table 7.--Calculations for the Appeal and Overtime Hourly Rates for
Laboratory Program Services for FY 2007
------------------------------------------------------------------------
Apportioned
Laboratory services fee rate
------------------------------------------------------------------------
Appeal and Overtime Rates: Actual Salaries @ 1.5 (time
and a half):
FY 2006 Salaries @ 1.5 = [Actual 2005 Salaries $32.22
($20.00) + 2006 Pay Adjustment ($1.48)] x 1.5......
FY 2007 Pay Adjustment = FY 2006 Salaries @ 1.5 x 0.71
0.022..............................................
Benefits............................................ 6.90
Operational Costs................................... 11.60
Infrastructure Cost................................. 11.75
Program Overhead.................................... 3.44
Agency Overhead..................................... 3.28
FY 2006 Inflation (2.1%) = [Costs excluding 0.53
infrastructure and payroll] x .021.................
FY 2007 Inflation (2.2%) = [Costs excluding 0.57
infrastructure and payroll] x .022.................
---------------
Total Rate Per Hour--Appeal and Overtime........ 71.00
------------------------------------------------------------------------

Table 8.--Calculations for the Appeal and Overtime Hourly Rates for
Laboratory Program Services for FY 2008
------------------------------------------------------------------------
Apportioned
Laboratory services fee rate
------------------------------------------------------------------------
Appeal and Overtime Rates: Actual Salaries @ 1.5 (time
and a half):
FY 2007 Salaries @ 1.5 = [FY 2006 Salaries ($21.48) $32.93
+ FY 2007 Pay Adjustment ($0.47)] x 1.5............

[[Page 55373]]

FY 2008 Pay Adjustment = FY 2007 Salaries @ 1.5 x 0.72
0.022..............................................
Benefits............................................ 6.90
Operational Costs................................... 11.60
Infrastructure Cost................................. 13.47
Program Overhead.................................... 3.44
Agency Overhead..................................... 3.28
FY 2006 Inflation (2.1%) = [Costs excluding 0.53
infrastructure and payroll] x .021.................
FY 2007 Inflation (2.2%) = [Costs excluding 0.57
infrastructure and payroll] x .022.................
FY 2008 Inflation (2.1%) = [Costs excluding 0.55
infrastructure and payroll] x .021.................
---------------
Total Rate Per Hour--Appeal and Overtime........ 73.99
------------------------------------------------------------------------

Table 9.--Calculations for the Appeal and Overtime Hourly Rates for
Laboratory Program Services for FY 2009
------------------------------------------------------------------------
Apportioned
Laboratory services fee rate
------------------------------------------------------------------------
Appeal and Overtime Rates: Actual Salaries @ 1.5 (time
and a half):
FY 2008 Salaries @ 1.5 = [FY 2007 Salaries ($21.95) + FY $33.65
2008 Pay Adjustment ($0.48)] x 1.5.....................
FY 2009 Pay Adjustment = FY 2008 Salaries @ 1.5 x 0.022. 0.74
Benefits............................................ 6.90
Operational Costs................................... 11.60
Infrastructure Cost................................. 16.15
Program Overhead.................................... 3.44
Agency Overhead..................................... 3.28
FY 2006 Inflation (2.1%) = [Costs excluding 0.53
infrastructure and payroll] x .021.................
FY 2007 Inflation (2.2%) = [Costs excluding 0.57
infrastructure and payroll] x .022.................
FY 2008 Inflation (2.1%) = [Costs excluding 0.55
infrastructure and payroll] x .021.................
FY 2009 Inflation (2.1%) = [Costs excluding 0.56
infrastructure and payroll] x .021.................
---------------
Total Rate Per Hour--Appeal and Overtime........ 77.97
------------------------------------------------------------------------

Table 6 through Table 9 show the calculation of the total appeal
and total overtime hourly fee rates to be rounded off for fiscal years
2006 through 2009. These tables incorporate the differentials in costs
associated with the necessity of laboratory personnel to work extended
hours of service at the time and a half pay doing either overtime or
appeal sample testing.

Table 10.--Calculations for the Federal Holiday Hourly Rate for
Laboratory Program Services for FY 2006
------------------------------------------------------------------------
Apportioned
Laboratory services fee rate
------------------------------------------------------------------------
Holiday Rate: Actual Salaries @ 2.0 (double time):
FY 2005 Salaries @ 2.0 [Actual 2005 Salaries $40.00
($20.00)] x 2.0....................................
FY 2006 Pay Adjustment = [Actual FY 2005 Salaries 2.96
($20.00) x 0.031 + $0.86 (weighted portion @
$119,500 increase for the FY 2006 period changes
with payroll for within-grade pay step increases
for General Schedule salaries, promotion pay costs,
and new employee position pay costs)] x 2.0........
Benefits............................................ 6.96
Operational Costs................................... 11.60
Infrastructure Cost................................. 8.78
Program Overhead.................................... 3.44
Agency Overhead..................................... 3.28
FY 2006 Inflation (2.1%) = [Costs excluding 0.53
infrastructure and payroll] x .021.................
---------------
Total Rate Per Hour--Holidays................... 77.49
------------------------------------------------------------------------

[[Page 55374]]

Table 11.--Calculations for the Federal Holiday Hourly Rate for
Laboratory Program Services for FY 2007
------------------------------------------------------------------------
Apportioned
Laboratory services fee rate
------------------------------------------------------------------------
Holiday Rate: Actual Salaries @ 2.0 (double time):
FY 2006 Salaries @ 2.0 = [Actual 2005 Salaries $42.96
($20.00) + 2006 Pay Adjustment ($1.48)] x 2.0......
FY 2007 Pay Adjustment = FY 2006 Salaries @ 2.0 x 0.95
0.022..............................................
Benefits............................................ 6.90
Operational Costs................................... 11.60
Infrastructure Cost................................. 11.75
Program Overhead.................................... 3.44
Agency Overhead..................................... 3.28
FY 2006 Inflation (2.1%) = [Costs excluding 0.53
infrastructure and payroll] x .021.................
FY 2007 Inflation (2.2%) = [Costs excluding 0.57
infrastructure and payroll] x .022.................
---------------
Total Rate Per Hour--Holidays................... 81.98
------------------------------------------------------------------------

Table 12.--Calculations for the Federal Holiday Hourly Rate for
Laboratory Program Services for FY 2008
------------------------------------------------------------------------
Apportioned
Laboratory services fee rate
------------------------------------------------------------------------
Holiday Rate: Actual Salaries @ 2.0 (double time):
FY 2007 Salaries @ 2.0 = [FY 2006 Salaries ($21.48) $43.90
+ FY 2007 Pay Adjustment ($0.47)] x 2.0............
FY 2008 Pay Adjustment = FY 2007 Salaries @ 2.0 x 0.97
0.022..............................................
Benefits............................................ 6.90
Operational Costs................................... 11.60
Infrastructure Cost................................. 13.47
Program Overhead.................................... 3.44
Agency Overhead..................................... 3.28
FY 2006 Inflation (2.1%) = [Costs excluding 0.53
infrastructure and payroll] x .021.................
FY 2007 Inflation (2.2%) = [Costs excluding 0.57
infrastructure and payroll] x .022.................
FY 2008 Inflation (2.1%) = [Costs excluding 0.55
infrastructure and payroll] x .021.................
---------------
Total Rate Per Hour--Holidays................... 85.21
------------------------------------------------------------------------

Table 13.--Calculations for the Federal Holiday Hourly Rate for
Laboratory Program Services for FY 2009
------------------------------------------------------------------------
Apportioned
Laboratory services fee rate
------------------------------------------------------------------------
Holiday Rate: Actual Salaries @ 2.0 (double time):
FY 2008 Salaries @ 2.0 = [FY 2007 Salaries ($21.95) $44.86
+ FY 2008 Pay Adjustment ($0.48)] x 2.0............
FY 2009 Pay Adjustment = FY 2008 Salaries @ 2.0 x 0.99
0.022..............................................
Benefits............................................ 6.90
Operational Costs................................... 11.60
Infrastructure Cost................................. 16.15
Program Overhead.................................... 3.44
Agency Overhead..................................... 3.28
FY 2006 Inflation (2.1%) = [Costs excluding 0.53
infrastructure and payroll] x .021.................
FY 2007 Inflation (2.2%) = [Costs excluding 0.57
infrastructure and payroll] x .022.................
FY 2008 Inflation (2.1%) = [Costs excluding 0.55
infrastructure and payroll] x .021.................
FY 2009 Inflation (2.1%) = [Costs excluding 0.56
infrastructure and payroll] x .021.................
---------------
Total Rate Per Hour--Holidays................... 89.43
------------------------------------------------------------------------

Table 10 through Table 13 show the calculation of the total legal
holiday hourly fee rates to be rounded off for fiscal years 2006
through 2009. These tables incorporate the differentials in costs
associated with the necessity of laboratory personnel to work extended
hours of service at the double hourly pay rate doing sample testing on
a Federal holiday or a designated day for the Federal holiday.
The Agency proposes to recover the actual cost of services for
multiple fiscal years covered by this rule. These fee increases are
essential for the continued sound financial management of the Agency's
budget. In order to enhance the transparency of the hourly fee rates in
the aforementioned Tables 3 through 13 for fiscal year 2007, fiscal
year 2008 and fiscal year 2009, a description is provided of each fee
charge category. Federal salaries with national and locality pay
adjustments and choices in benefits are made available on an annual
basis by the Office of Personnel Management (OPM). Operational costs
include expenses for rents, communications, utilities, medical

[[Page 55375]]

examinations, safety equipment, sample preparation equipment, training,
trash and hazardous waste disposal, travel and transportation costs.
Communication expenditures include costs for photocopying, printing, e-
mailing, Internet services, telephone, and faxing equipment. There have
been large capital improvement expenditures in the laboratories in
recent years. These expenditures include costs for the Food Emergency
Response Network (FERN) and the capital improvements for the
Environmental Management Systems (EMS) in accordance with the
applicable mandates for Federal laboratories of Executive Order 13148
of April 21, 2000, Greening the Government Through Leadership in
Environmental Management (65 FR 24593). These capital improvement costs
are included in the normal operations of the Science and Technology
field service laboratories. In addition, operational costs include
expenses for office and laboratory supplies, chemicals, reagents,
security and guard services, waste removal, robots, cleaning and
internal building maintenance, billing and collection services, and a
Laboratory Information Management System (LIMS). Infrastructure costs
are mainly laboratory instruments and capital equipment with service
and maintenance contracts and replacement spare parts. Infrastructure
expenses include consumable supply costs associated directly with the
proper operation of analytical instruments and laboratory equipment.
Stakeholders demand that AMS provide cost effective and timely product
testing requiring modern and sometimes automated instrumentation. These
instruments are expensive and undergo equipment capitalization for
determining costs. Equipment capitalization is the determined cost per
year to replace the equipment after its useful service life has been
established. Infrastructure costs include database acquisitions and
maintenance for e-business. Infrastructure costs include large computer
hardware and software expenses. Agency and Program overhead is the pro-
rated share, attributable to a particular service, of the agency's
management and support costs. Management and administrative support
costs include the costs of providing budget and accounting services,
regulatory services, investigative and enforcement services, debt-
management services, personnel services, public information services,
legal services, statistical services, and other general program and
agency management services of support activities above the local
laboratory level. Overhead expenditures are allocated across the Agency
for each direct hour of laboratory service.
AMS no longer uses the Billings and Collections System (BLCO) for
billings and collections through the National Finance Center (NFC) in
New Orleans, LA. The Agency now uses the ``accounts receivable''
functions in Foundation Financial Information System (FFIS) as the
document feeder system for customer billings and the collections now
come through our lockbox. Accordingly, Sec. 91.42 would be updated to
reflect these changes. The regulations also are updated to identify
current facility addresses.
This proposed rule would also remove and reserve 7 CFR part 92.
Part 92 is obsolete because it relates to the mandatory testing of
imported tobacco for prohibited pesticide residues and the statutory
requirement for such testing has been removed by the Fair and Equitable
Tobacco Reform Act of 2004 (7 U.S.C. 518). The tests had been conducted
by Science and Technology (S&T) Programs for the AMS Tobacco Program,
which sampled imported tobacco and administered the program for
imported tobacco.

Executive Order 12866, Regulatory Flexibility Act, and Paperwork
Reduction Act

This proposed rule has been reviewed under Executive Order 12866.
Although not economically significant, this rule has been determined to
be significant for the purposes of Executive Order 12866 and,
therefore, has been reviewed by the Office of Management and Budget
(OMB).
An economic analysis follows to review the impacts on laboratory
customers of the proposed revisions in AMS voluntary user fees for
laboratory services. The economic analysis provides a cost-benefit
analysis as required by Executive Order 12866 and an analysis of the
potential economic effects on small entities as required by the
Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.). In accordance
with 5 U.S.C. 603, AMS has performed an Initial Regulatory Flexibility
Analysis for this proposed rule. AMS is inviting comments about this
proposed rule as it relates to small entities. In particular, AMS is
interested in obtaining information concerning the number and kind of
small entities who may incur benefits or costs from implementation of
this proposed rule and the impact of those benefits or costs on
decisions to utilize AMS voluntary testing services.
Regulations must be designed in the most cost-effective manner
possible to obtain the objective of a sustainable cost recovery program
while imposing the least burden on society. AMS has prepared a
Regulatory Impact Assessment (RIA) consisting of a statement of the
need for the proposed action, an examination of alternative approaches,
and an economic analysis of the benefits and costs.

Need for Proposed Action.

The AMS laboratory testing programs are voluntary, user fee
services conducted under the authority of the Agricultural Marketing
Act of 1946 (AMA), as amended (7 U.S.C. 1621, et seq.). The AMA
authorizes the Secretary of Agriculture to provide Federal analytical
testing services that facilitate marketing and trade. The AMA also
requires that reasonable fees be collected from the users of the
services to cover as nearly as practicable the costs of maintaining the
programs.
Science and Technology (S&T) Programs of AMS regularly reviews its
user-fee-financed laboratory service programs to determine if the fee
levels are adequate. The most recent review determined that the
existing fee schedule, effective October 27, 2000 (65 FR 64302) does
not generate sufficient revenues to recover operating costs. For fiscal
year 2005 the Science and Technology program reported a $702,000
deficit at the current fee levels. The Science and Technology program
costs and revenues for fiscal year 2005 were $6,393,000 and $5,691,000,
respectively. Program obligations for fiscal year 2006 are projected at
$6,602,000 and revenues are projected at $5,834,000 for an estimated
deficit of $768,000. With this proposed action, the Agency expects to
collect an estimated $6,521,000, $7,186,000, and $7,553,000 in fiscal
years 2007 through 2009 respectively, to cover the cost of routine
laboratory services, appeal requests, overtime, and holiday services
for Science and Technology customers and other program stakeholders.

Alternatives

Alternatives to the proposed rate increase were considered by the
Agency. One alternative to this proposed rule would be to make no
changes to the current user fees. As a result, AMS would not recover
the full cost of program activities and services would have to be
reduced or terminated. Were this to happen, the users of AMS laboratory
services would be unable to meet certain AMS program requirements,
would find it more difficult to meet foreign government or importer
testing requirements, and would lose the opportunity to support

[[Page 55376]]

their marketing efforts with what they believe to be preferred
government laboratory test results. Consequently, AMS does not consider
this alternative to be reasonable.
Another alternative considered would be to calculate the fee
increases needed over the next three year period and then spread this
overall increase evenly in annual increments. Because the increases are
necessary to cover on-going costs, e.g., rent, salaries and benefits,
and equipment replacement, and financial stability needs to be
maintained for this program, adequate funds must be generated
immediately, rather than spread over a three year period. Thus, AMS
does not consider this alternative to be reasonable.
To ensure full costs are being covered as they are incurred, the
preferred alternative is to match fee increases with expected costs on
an annual basis over the next three years. This alternative will assure
costs are appropriately covered and that laboratory testing services
remain available as program customers request them. With this proposed
action, the Agency expects to collect an estimated $6,521,000,
$7,186,000, and $7,553,000 in fiscal years 2007 through 2009,
respectively, to cover the cost of routine laboratory services, appeal
requests, overtime, and holiday services.

Summary of Impacts

Under this proposal AMS would continue to offer laboratory testing
services under the Agricultural Marketing Act of 1946 as amended, to
facilitate marketing and allow products to obtain grade designations or
meet marketing standards. As such, the program provides a viable option
for a wide variety of clients by delivering scientific and analytical
support services to the agricultural community and provides a valuable
resource for those businesses and industries that wish to use a USDA
shield.
Further, by proposing a three year fee increase instead of a single
year fee increase, the Agency would help ensure that the fee increases
are effective at the beginning of each fiscal year on October 1. An
increase over three fiscal years would permit customers and other
program stakeholders an opportunity to plan for annual changes in costs
of laboratory service and to incorporate them into their budgetary
plans.
For analytical purposes, projected collections are based on
calculations using an effective date of October 1, 2006 for the
proposed fiscal year 2007 user fees. There are essentially three rate
increases being proposed for the basic laboratory services--$45 to $60
or 33.3 percent in fiscal year 2007, $60 to $63 or 5.0 percent in
fiscal year 2008 and $63 to $67 or 6.4 percent in fiscal year 2009. The
rate increases for overtime and appeals are $67.50 to $71 or 5.2
percent, $71 to $74 or 4.2 percent, and $74 to $78 or 5.4 percent in
fiscal years 2007, 2008, and 2009, respectively. The rate increases for
holiday service are $67.50 to $82 or 21.5 percent, $82 to $85 or 3.7
percent, and $85 to $89 or 4.7 percent in fiscal years 2007, 2008, and
2009, respectively. This is a voluntary program and the costs to each
user would be proportional to their use of laboratory services each
year. The increased fees will cover inflation and national and locality
pay raises and replacement of equipment and other infrastructure
improvements.
Under the Regulatory Flexibility Act, the impact ofthis proposed
rule on small businesses must be analyzed. There are 811 current users
of AMS laboratory testing services. Such users of services include food
processors, handlers, growers, Federal and State government agencies,
and exporters. Many of these users are small entities under the
criteria established by the Small Business Administration (13 CFR
121.201). Any decision by stakeholders and customers to discontinue the
use of the laboratory services because of increased fees would not
hinder food processors or other industry members from marketing their
products.
For the following cost analysis, certain assumptions are used.
First, base year data is actual fiscal year 2005 amount billed for
voluntary services performed for the public. Second, seven percent of
the total amount billed represents overtime costs and five percent
represents costs related to appeals. Third, the calculated amounts in
fiscal year 2007 are using the base year data as if the base year was
fiscal year 2006. Fourth, each of the 811 customers had the exact same
tests, using the same amount of time, and thus were billed the exact
same amount. This customer is the ``average'' laboratory customer.
Table 14 sets the total levels for the dollar ($) amounts billed in
the base year (Fiscal Year 2006).

Table 14.--Base Year Data (Fiscal Year 2006)
------------------------------------------------------------------------

------------------------------------------------------------------------
Total Billed............................................ $1,536,688
Basic Laboratory Services............................... 1,352,285
Overtime Costs (7%)..................................... 107,568
Appeal Costs (5%)....................................... 76,834
------------------------------------------------------------------------

Table 15 presents the base year costs and estimates costs in fiscal
year 2007, fiscal year 2008, and fiscal year 2009 for the ``average''
laboratory customer. The base year values are derived by dividing basic
laboratory services, overtime costs, and appeal costs by 811. The
values for fiscal years 2007, 2008, and 2009 are derived multiplying
each year by the appropriate percentage rate.

Table 15.--Costs ($) for the ``Average'' Customer, Base Year Through Fiscal Year 2009
----------------------------------------------------------------------------------------------------------------
Total
Base year FY 2007 FY 2008 FY 2009 Diff.\1\
----------------------------------------------------------------------------------------------------------------
Lab Services................................... 1,667 2,223 2,334 2,483 816
Overtime....................................... 133 140 146 154 21
Appeals........................................ 95 100 104 110 15
----------------------------------------------------------------
Total...................................... 1,895 2,463 2,584 2,747 852
----------------------------------------------------------------------------------------------------------------
\1\ Net difference calculated between costs in dollars ($) between base year and Fiscal Year 2009.

After the third increase, the customer will pay an additional
average of $852 for all laboratory services. This is a 44.96 percent
increase over the base year. The percentage increase for the basic
laboratory services is 49.0 percent, overtime is 15.8 percent, and an
appeal sample is 15.8 percent.

[[Page 55377]]

Table 16.--Costs ($) for a ``Large Business'' Customer, Base Year Through Fiscal Year (FY) 2009
----------------------------------------------------------------------------------------------------------------
Total
Base year FY 2007 FY 2008 FY 2009 diff.\1\
----------------------------------------------------------------------------------------------------------------
Lab Services................................... 704,000 938,432 985,354 1,048,417 344,417
Overtime....................................... 56,000 58,912 61,386 64,701 8,701
Appeals........................................ 40,000 42,080 43,847 46,215 6,215
----------------------------------------------------------------
Total...................................... 800,000 1,039,424 1,090,587 1,159,333 359,333
----------------------------------------------------------------------------------------------------------------
\1\ Net difference calculated between costs in dollars ($) between base year and Fiscal Year 2009.

Table 16 presents the base year costs and estimates costs in fiscal
years 2007, 2008, and 2009 for a ``large business'' laboratory
customer. While the numerical values increase significantly, the
percentages are the same. Even though the ``large business'' customer
is paying $359,333 more then what was paid for the same services in the
base year, the increase is still approximately 44.9 percent above what
was billed in the base year.
The same is true for a ``small business'' customer. Table 17
presents the costs associated with a customer billed $29,000. Again the
total difference between the billing in fiscal year 2009 and the base
year is significantly smaller than the billing of an ``average''
customer, but the percentage increase is still near 44.9 percent.

Table 17.--Costs ($) for a ``Small Business'' Customer, Base Year Through Fiscal Year (FY) 2009
----------------------------------------------------------------------------------------------------------------
Total
Base year FY 2007 FY 2008 FY 2009 diff.\l\
----------------------------------------------------------------------------------------------------------------
Lab Services................................... 25,520 34,018 35,719 38,005 12,485
Overtime....................................... 2,030 2,136 2,226 2,346 316
Appeals........................................ 1,450 1,525 1,589 1,675 225
----------------------------------------------------------------
Total...................................... 29,000 37,679 39,534 42,026 13,026
----------------------------------------------------------------------------------------------------------------
\1\ Net difference calculated between costs in dollars ($) between base year and FY 2009.

Under the Regulatory Flexibility Act, the impact of this proposed
rule on small businesses must be considered. The Agency estimates that
25 percent of the laboratory fees billed in fiscal year 2005 was to
small businesses. Thus, a total of $384,172 was billed to small
businesses. If the entire proposed fee increase had been implemented,
small businesses would have been billed $556,665, a 44.9 percent
increase.
One question is how each of these customers including small
businesses will react to cost increases at these amounts. The increases
are spread over a three year period which will mitigate some of the
impact. But the focus should be on the reaction to the increase
occurring in fiscal year 2007 which is a one third increase over the
base year. The answer is dependent on the customer's business, and is
proportional to the number of samples involved. The lower the cost per
unit of product being sampled, the higher the probability the customer
will continue to use AMS laboratory services and pass on some or all of
the additional costs, the exact amount of which is not known. Also, use
of AMS laboratory services is voluntary and other private or public
laboratory options are available.
This proposed rule contains no new information collection or
recordkeeping requirements that are subject to the Office of Management
and Budget (OMB) approval under the Paperwork Reduction Act of 1995 (44
U.S.C. 3501-3520). AMS is committed to implementation of the Government
Paperwork Elimination Act which provides for the use of information
resources to improve the efficiency and effectiveness of governmental
operations, including providing the public with the option of
submitting information or transacting business electronically to the
extent practicable. USDA has not identified any relevant Federal rules
that duplicate, overlap, or conflict with this rule.

Unfunded Mandate Analysis

Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of UMRA, the
Department generally must prepare a written statement, including a cost
benefit analysis, for proposed and final rules with ``Federal
mandates'' that may result in expenditures to State, local, or tribal
governments, in the aggregate, or to the private sector, of $100
million or more in anyone year. When such a statement is needed for a
rule, section 205 of UMRA generally requires that the Department
identify and consider a reasonable number of regulatory alternatives
and adopt the least costly, more cost-effective or least burdensome
alternative that achieves the objectives of the rule.
This rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) that impose costs on State, local,
or tribal governments or to the private sector of $100 million or more
in anyone year. Thus, this rule is not subject to the requirements of
sections 202 and 205 of UMRA.

Civil Justice Reform (Executive Order 12988)

This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. It is not intended to have retroactive effect.
This proposed rule would not preempt any State or local laws,
regulation, or policies, unless they present an irreconcilable conflict
with this rule. There are no administrative procedures which must be
exhausted prior to any judicial challenge to this rule or the
application of its provisions.

Civil Rights Review

AMS has considered the potential civil rights implications of this
rule on minorities, women, or persons with disabilities to ensure that
no person or group shall be discriminated against on the basis of race,
color, national origin,

[[Page 55378]]

gender, religion, age, disability, sexual orientation, marital or
family status, political beliefs, parental status, or protected genetic
information. AMS has included at Sec. 91.7 the provision in the
regulation under part 91 to describe in detail the requirements for
nondiscrimination when reviewing or granting any person or entity the
benefits of Science and Technology Programs laboratory service. This
regulation is consistent with USDA regulations which prohibit
discrimination in its programs and activities.
This proposed rule would not require affected entities to relocate
or alter their operations in ways that could adversely affect such
persons or groups. Further, this proposed rule would not deny any
persons or groups the benefits of the program or subject any persons or
groups to discrimination.
AMS has reviewed this proposed rule in accordance with the
Department Regulation 4300-4, ``Civil Rights Impact Analysis.'' AMS has
determined this proposed action ensures the civil rights of all Science
and Technology Programs applicants and customers. They represent
minorities (24.4%), women (51.1%), and persons with disabilities
(14.5%) in the same percent proportions to the entire customer base as
their compositions are represented in the total approximate general
population (299 million) of the United States of America available in
descriptive tables at https://www.census.gov/. In addition, each and
every customer would receive the same user fee for each identical
service.

Comments

A thirty day comment period is provided for interested persons to
comment on this proposed action. All comments received by October 23,
2006 will be considered. A thirty day period for public comment is
justified in order to allow the agency to recover the full cost of
operating a voluntary user fee laboratory testing program. The existing
fee schedules have been in place since October 2000. AMS regularly
reviews its user-fee-supported programs to determine if the voluntary
fees are adequate to cover expenses. Due to the length of the
rulemaking process, the fiscal year has partially elapsed by the time
the agency publishes a final rule to amend its fees. As a result the
agency is unable to recover the full cost of its services in a timely
manner. Therefore, a thirty day comment period is reasonable.

List of Subiects

7 CFR Part 91

Administrative practice and procedure, Agricultural commodities,
Laboratories, Reporting and recordkeeping requirements.

7 CFR Part 92

Agricultural commodities, Laboratories, Pesticides and pests,
Tobacco.

Under the authority of 7 U.S.C. 1622 and 1624, the Agricultural
Marketing Service proposes to amend parts 91 and 92 of Title 7, chapter
I, subchapter E, of the Code of Federal Regulations as follows:

PART 91--SERVICES AND GENERAL INFORMATION [AMENDED]

1. The authority citation for part 91 continues to read as follows:

Authority: 7 U.S.C. 1622, 1624.

2. Section 91.5 is revised to read as follows:

Sec. 91.5 Where services are offered.

(a) Services are offered to applicants at the Science and
Technology laboratories and facilities as listed below.
(1) Science and Technology Programs National Science Laboratory. A
variety of proximate, chemical, microbiological and biomolecular tests
and laboratory analyses performed on fruits and vegetables, poultry,
meat and meat products, fiber products and processed foods are
performed at the Science and Technology Programs (S&T) laboratory
located at: USDA, AMS, Science and Technology Programs, National
Science Laboratory (NSL), 801 Summit Crossing Place, Suite B, Gastonia,
North Carolina 28054-2193.
(2) Science and Technology (S&T) Programs Science Satellite
Laboratories. The specialty satellite laboratories performing aflatoxin
and other testing on peanuts, peanut products, dried fruits, grains,
edible seeds, tree nuts, shelled corn products, oilseed products,
vegetable oils, juices, citrus products, and other commodities are
located as follows:
(i) USDA, AMS, Science & Technology, Citrus Laboratory, 98 Third
Street, SW., Winter Haven, Florida 33880-2905.
(ii) USDA, AMS, Science & Technology, 6567 Chancey Mill Road,
Blakley, Georgia 39823-2785.
(iii) USDA, AMS, Science & Technology, c/o Golden Peanut Company
LLC, (Mail: P.O. Box 272), 715 Martin Luther King Drive, Dawson,
Georgia 39842-1002.
(iv) USDA, AMS, Science & Technology, 107 South Fourth Street,
Madill, Oklahoma 73446-3431.
(v) USDA, AMS, Science & Technology, (Mail: P.O. Box 1130), 308
Culloden Street, Suffolk, VA 23434-4706.
(3) Program laboratories. Laboratory services are available in all
areas covered by cooperative agreements providing for this laboratory
work and entered on behalf of the Department with cooperating Federal
or State laboratory agencies pursuant to authority contained in Act(s)
of Congress. Also, services may be provided in other areas not covered
by a cooperative agreement if the Administrator determines that it is
possible to provide such laboratory services.
(4) Other alternative laboratories. Laboratory analyses may be
conducted at alternative Science and Technology Programs laboratories
and can be reached from any commodity market in which a laboratory
facility is located to the extent laboratory personnel are available.
(5) The Plant Variety Protection (PVP) Office. The PVP office and
plant examination facility of the Science and Technology programs
issues certificates of protection to developers of novel varieties of
plants which reproduce sexually. The PVP office is located as follows:
USDA, AMS, Science & Technology Programs, Plant Variety Protection
Office, National Agricultural Library Building, Room 401, 10301
Baltimore Boulevard, Beltsville, MD 20705-2351.
(6) Science and Technology Programs headquarters offices. The
examination, licensure, quality assurance reviews, laboratory approval/
certification and consultation services are provided by headquarters
staff located in Washington, DC. The main headquarters office is
located as follow: USDA, AMS, Science and Technology Programs, Office
of the Deputy Administrator, South Agriculture Bldg., Mail Stop 0270,
1400 Independence Ave., SW., Washington, DC 20250-0270.
(7) The Information Technology (IT) Group. The IT office of the
Science and Technology Programs is headed by the Associate Deputy
Administrator for Technology/Chief Information Officer and provides
information technology services and management systems to the Agency
and other agencies within the USDA. The main IT office is located as
follows: USDA, AMS, Science and Technology, Office of the Associate
Deputy Administrator for Technology, 1752 South Agriculture Bldg., Mail
Stop

[[Page 55379]]

0204, 1400 Independence Ave., SW., Washington, DC 20250-0204.
(8) Statistics Branch Office. The Statistics Branch office of
Science and Technology Programs (S&T) provides statistical services to
the Agency and other agencies within the USDA. In addition, the
Statistics Branch office generates sample plans and performs consulting
services for research studies in joint efforts with or in a leading
role with other program areas of AMS or of the USDA. The Statistics
Branch office is located as follows: USDA, AMS, S&T Statistics Branch,
0603 South Agriculture Bldg., Mail Stop 0223, 1400 Independence Ave.,
SW., Washington, DC 20250-0223.
(9) Technical Services Branch Office. The Technical Services Branch
office of Science and Technology (S&T) provides technical support
services to all Agency programs and other agencies within the USDA. In
addition, the Technical Services Branch office provides certification
and approval services of private and State government laboratories as
well as oversees quality assurance programs; import and export
certification of laboratory tested commodities. The Technical Services
Branch mailing address is as follows: USDA, AMS, S&T Technical Services
Branch, South Agriculture Bldg., Mail Stop 0272, 1400 Independence
Ave., SW., Washington, DC 20250-0272. The Technical Services Branch
office is located as follows: USDA, AMS, Science and Technology
Technical Services Branch, Room 306, Cotton Annex Bldg., 300 12th
Street, SW., Washington, DC 20250.
(10) Monitoring Programs Office. Services afforded by the Pesticide
Data Program (PDP) and Microbiological Data Program (MDP) are provided
by USDA, AMS, Science and Technology Monitoring Programs Office, 8609
Sudley Road, Suite 206, Manassas, VA 20110-8411.
(11) Pesticide Records Branch Office. Services afforded by the
Federal Pesticide Record Keeping Program for restricted-use pesticides
by

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