Changes in Fees for Meat, Poultry, and Egg Products Inspection Services, 51800-51806 [E9-24283]
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51800
Proposed Rules
Federal Register
Vol. 74, No. 194
Thursday, October 8, 2009
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
DEPARTMENT OF AGRICULTURE
Food Safety and Inspection Service
9 CFR Parts 391, 590, and 592
[FDMS Docket Number FSIS–2006–0025]
RIN 0583–AD40
Changes in Fees for Meat, Poultry, and
Egg Products Inspection Services
AGENCY: Food Safety and Inspection
Service, USDA.
ACTION: Proposed rule.
The Food Safety and
Inspection Service (FSIS) is proposing
to amend its regulations to establish
formulas for calculating the fees that it
charges meat and poultry
establishments, egg products plants,
importers, and exporters for providing
voluntary inspection, identification and
certification services, overtime and
holiday inspection services, and
laboratory services. If the rule becomes
effective, FSIS will calculate these fees
based on the formulas. For future fiscal
years, FSIS will calculate the fees on an
annual basis and apply them at the start
of the fiscal year. The Agency is also
proposing to increase the codified flat
annual fee for its Accredited Laboratory
Program.
DATES: The Agency must receive
comments by November 9, 2009.
ADDRESSES: FSIS invites interested
persons to submit comments on this
proposed rule. Comments may be
submitted by either of the following
methods:
• Federal eRulemaking Portal: This
Web site provides the ability to type
short comments directly into the
comment field on this Web page or
attach a file for lengthier comments. Go
to https://www.regulations.gov. Follow
the online instructions at that site for
submitting comments.
• Mail, including floppy disks or CD–
ROMs, and hand- or courier-delivered
items: Send to Docket Clerk, U.S.
Department of Agriculture (USDA),
FSIS, Room 2–2127, George Washington
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SUMMMARY:
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Carver Center, 5601 Sunnyside Avenue,
Mailstop 5474, Beltsville, MD 20705–
5474.
Instructions: All items submitted by
mail or electronic mail must include the
Agency name and docket number FSIS–
2006–0025. Comments received in
response to this docket will be made
available for public inspection and
posted without change, including any
personal information, to https://
www.regulations.gov.
Docket: For access to background
documents or to comments received, go
to the FSIS Docket Room at the address
listed above between 8:30 a.m. and 4:30
p.m., Monday through Friday.
All comments submitted in response
to this proposal, as well as background
information used by FSIS in developing
this document, will be available for
public inspection in the FSIS Docket
Room at the address listed above
between 8:30 a.m. and 4:30 p.m.,
Monday through Friday.
FOR FURTHER INFORMATION CONTACT: For
further information concerning policy
issues contact Rachel Edelstein,
Director, Policy Issuances Division,
Office of Policy and Program
Development, FSIS, U.S. Department of
Agriculture, Room 6065 South Building,
1400 Independence Ave, SW.,
Washington, DC 20250–3700; telephone
(202) 720–0399, fax (202) 690–0486.
For further information concerning
fees contact Deborah Patrick, Director,
Budget Division, Office of Management,
FSIS, U.S. Department of Agriculture,
Room 2159 South Building, 1400
Independence Avenue, SW.,
Washington, DC 20250–3700; telephone
(202) 720–2912, fax (202) 720–5399.
SUPPLEMENTARY INFORMATION:
Background
The Federal Meat Inspection Act
(FMIA) (21 U.S.C. 601 et seq.) and the
Poultry Products Inspection Act (PPIA)
(21 U.S.C. 451 et seq.) provide for
mandatory Federal inspection of
livestock and poultry slaughtered at
official establishments and of meat and
poultry processed at official
establishments, respectively. The Egg
Products Inspection Act (EPIA) (21
U.S.C. 1031 et seq.) provides for
mandatory inspection of egg products
processing at official plants. FSIS bears
the cost of mandatory inspection
provided during non-overtime and nonholiday hours of operation. Official
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establishments and egg products plants
pay for inspection services performed
on holidays or on an overtime basis.
Under the Agricultural Marketing Act
of 1946 (AMA), as amended (7 U.S.C.
1621 et seq.), FSIS provides a range of
voluntary inspection, certification, and
identification services to assist in the
orderly marketing of various animal
products and byproducts. These
services include the certification of
technical animal fats and the inspection
of exotic animal products, such as
antelope and elk. The AMA provides
that FSIS may prescribe the collection of
fees to recover the costs of the voluntary
inspection, certification, and
identification services it provides.
Also under the AMA, FSIS provides
certain voluntary laboratory services
that establishments and others may
request the Agency to perform.
Laboratory services are provided for
four types of analytic testing:
Microbiological testing, residue
chemistry tests, food composition tests,
and pathology testing. Again, the AMA
provides that FSIS may collect fees to
recover the costs of providing these
services.
FSIS also accredits non-Federal
analytical laboratories under its
Accredited Laboratory Program. Such
accreditation allows laboratories to
conduct analyses of official meat and
poultry samples. The Food, Agriculture,
Conservation, and Trade Act of 1990, as
amended, mandates that laboratory
accreditation fees cover the costs of the
Accredited Laboratory Program. This
same Act mandates an annual payment
of an accreditation fee on the
anniversary date of each accreditation.
Historically, FSIS amended its
regulations annually to change the fees
it charges establishments for providing
overtime and holiday inspection
services; voluntary inspection,
certification, and identification services;
and laboratory services and
accreditation. Because of the length of
the rulemaking process, each year the
fiscal year would partially elapse before
the Agency could publish a final rule to
amend its fees. As a result, the Agency
was unable to recover the full cost of the
services it provided, which represented
a considerable fiscal loss to FSIS. In
2006, in an effort to address the delays
that resulted from the rulemaking
process, FSIS amended its regulations to
provide for multiple annual fee
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increases in one action (71 FR 2135).
With the rulemaking to increase fees for
2006–2008, FSIS established criteria for
determining the fee increases on a
multi-year basis. While this solution
enabled the Agency to collect an
increased fee each year, estimates used
to set out the annual rates were
imprecise and may well have left the
Agency collecting too little in fees to
fully cover its costs. The difference
between the established rate and current
economic conditions will likely be
small during the first year of a multiyear rule but could well become large
during the later years.
The Agency performed a cost analysis
in 2008 (at the same time that the new
fees analysis was performed) to
determine whether the fees established
were adequate to recover the costs that
it incurred in providing these services.
On the basis of this analysis, FSIS
determined the necessary fees for FY
2010 and established the proposed
formulas to determine the fees for FY
2010 and subsequent fiscal years.
Proposed Formulas
With this rulemaking, FSIS is
proposing to amend its regulations to
codify formulas in 9 CFR parts 391, 590,
and 592 that FSIS will use to calculate
and apply annual fees starting with the
effective date of this rule and for
subsequent fiscal years. FSIS intends to
announce the actual annual fees in
Federal Register notices prior to the
start of each fiscal year.
Salary, hours, and all rates used in the
formulas will be based on the prior
fiscal year’s actual costs and hours. In
9 CFR 391.2 and 592.510, FSIS is
proposing the following formula to
calculate the base time rate per hour per
program employee: Base Time Rate =
Office of Field Operations (OFO) plus
Office of International Affairs (OIA)
inspection program personnel salaries
paid divided by regular hours
multiplied by the next year’s percentage
of cost of living increase (e.g., pay raise
of 2.9% for 1⁄4 of FY 2008 + 3.2% for
3⁄4 of FY 2008), plus the benefits rate,
plus the travel and operating rate, plus
the overhead rate, plus an allowance for
bad debt.
For the 2010 base time rate per hour
per program employee, the calculation
will look like this: [2008 Direct Pay
divided by Total Direct Hours
($447,373,444/17,417,642)] = $25.69 *
2.175% (2009 Cost of Living) = $26.25
* 3.125% (2010 Cost of Living) = $27.07
+ $6.83 (benefits rate) + $16.55 (travel
and operating rate) + $.91 (overhead
rate) + $.02 (bad debt allowance rate)=
$51.38 (rounded to $51.36; rounding is
done to reflect billable quarters).
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In 9 CFR 391.3, 590.126 and, 592.520
and 592.530, FSIS is proposing to
establish the following formulas for
overtime and holiday rates per hour per
program employee: Overtime = Salary
component of Base Time Rate (OFO
plus OIA inspection program personnel
salaries paid divided by regular hours
multiplied by the next year’s percentage
of cost of living increase) multiplied by
1.5 plus the benefits rate, plus the travel
and operating rate, plus the overhead
rate, plus an allowance for bad debt.
For the 2010 overtime rate per hour
per program employee, the calculation
will look like this: $27.07 * 1.5 (Time
and one half) = $40.60 + $6.83 + $16.55
+ $.91 + $.02 = $64.91 (rounded to
$64.88).
Holiday Rate = Salary component of
base time rate multiplied by 2, plus
benefits rate, plus the travel and
operating rate, plus the overhead rate,
plus an allowance for bad debt.
For the 2010 holiday rate per hour per
program employee, the calculation will
look like this: $27.07 * 2 (Double time)
= $54.14 + $6.83 + $16.55 + $.91 + $.02
= $78.44.
In 9 CFR 391.4, FSIS is proposing the
following formula for the laboratory
services rate per hour per program
employee: Laboratory Salary Rate =
Office of Public Health Science (OPHS)
salaries paid divided by OPHS Hours
worked, multiplied by the next calendar
year’s percentage cost of living increase,
plus the benefits rate, plus the travel
and operating rate, plus the overhead
rate, plus an allowance for bad debt.
For the 2010 holiday salary per hour
per program employee, the calculation
will look like this: [2008 Total OPHS
Direct Pay/Total OPHS hours
(21,312,832/550,424)] = $38.72 *
2.175% (2009 Cost of Living) = $39.56
* 3.125% (2010 Cost of Living) = $40.80
+ $6.83 + $16.55 + $.91 + $.02 = $65.11
(rounded to $65.08).
The formulas are based on the prior
fiscal year’s actual costs and cost of
living increases and percentage of
inflation factors from the economic
assumptions in the Office of
Management and Budget (OMB)
Memorandum M–08–13, ‘‘Update to
Civilian Position Full Fringe Benefit
Cost Factor, Federal Pay Raise
Assumptions, and Inflation Factors used
in OMB Circular A–76, Performance of
Commercial Activities’’ Memorandum
M–08–13, dated March 11, 2008, which
is available at the following link: https://
www.whitehouse.gov/omb/assets/omb/
memoranda/fy2008/m08-13.pdf. Rather
than codify a reference to OMB
Memorandum M–08–13 in the proposed
rule, FSIS intends to use the economic
factors in the memo for calculating the
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fees until new economic assumptions
are issued in a new OMB Memorandum
in the future.
As is proposed in §§ 391.2 and
592.510, FSIS intends to derive the
components of proposed formulas,
using previous fiscal year actual costs,
as follows:
Benefits Rate: Direct benefits costs
multiplied by the next calendar year’s
percentage cost of living increase. Some
examples of direct benefits are health
insurance, retirement, life insurance,
and Thrift Savings Plan (TSP)
retirement basic and matching
contributions.
For the 2010 benefits rate per hour per
program employee, the calculation will
look like this: [2008 Direct Benefits/
(Total Direct hours + Total OT hours +
Total Holiday hours) ($130,744,894/
20,164,116)] = $6.48 * 2.175% (2009
Cost of Living) = $6.62 * 3.125% (2009
Cost of Living) = $6.83.
Travel and Operating Rate: Total
direct travel and operating costs
multiplied by the percentage of
inflation.
For the 2010 travel and operating rate
per hour per program employee, the
calculation will look like this: [2008
Total Direct Travel and Operating Costs/
(Total Direct hours + Total OT hours +
Total Holiday hours) (17,489,892/
20,164,116)] = $.87 * 2.00% (2009
Inflation) = $.89 * 2.00% (2010
Inflation) = $.91.
Overhead Rate: All indirect costs plus
the average information technology (IT)
costs over the previous two years in the
Public Health Data Communication
Infrastructure System Fund plus the
Office of Management Program cost in
the Reimbursable and Voluntary Funds
plus provision for the operating balance
less any Greenbook costs (i.e., costs of
USDA support services prorated to the
service component for which fees are
charged) that are not related to food
inspection, divided by total direct hours
(regular, overtime, and holiday) worked
across all funds, multiplied by the
percentage of inflation.
For the 2010 the overhead rate per
hour per program employee, the
calculation will look like this: [2008
Total Overhead/(Total Direct hours +
Total OT hours + Total Holiday hours)
(320,820,057/20,164,116)] = $15.91 *
2.00% (2009 Inflation) = $16.23 * 2.00%
(2010 Inflation) = $16.55.
Allowance for Bad Debt Rate = Total
allowance for bad debt (for plants and
establishments that declare bankruptcy)
divided by total direct hours (regular,
overtime, and holiday) worked.
For the 2010 allowance for bad debt
rate per hour per program employee, the
calculation will look like this: [2008
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Total Bad Debt/Total Direct hours +
Total OT hours + Total Holiday hours)
($325,481/20,164,116)] = $.02 (for 2009
and after).
As is noted above, the proposed
formulas reflect that the cost of
providing inspection services includes
both direct and overhead costs.
Overhead costs include the cost of
program and Agency activities that
support the food inspection services
provided by the industry. Overhead
expenditures are allocated across the
Agency for each direct hour of
inspection. Direct costs include the cost
of salaries, employee benefits, travel and
operating costs. Because of
improvements in accessing data from
the accounting system, the Agency has
been able to estimate the employee
benefits ascribable to overtime work and
has included these in the fee
calculation.
Section 10703 of the 2002 Farm Bill
authorized the Secretary of Agriculture
to set the hourly rate of compensation
for FSIS employees exempt from the
Fair Labor Standards Act (i.e.,
veterinarians) who work in
establishments subject to the FMIA and
PPIA at one and one-half times the
employee’s hourly rate of base pay. In
FSIS’s January 13, 2006, final rule on
fees, FSIS adjusted its overtime fees to
reflect these costs. Previously,
veterinarians were limited to the time
and a half rate paid to employees at
grade level GS–10, step 1. This
proposed rule continues to provide
overtime rates at one and one-half times
the employee’s hourly rate of base pay.
In this rule, FSIS is proposing to
differentiate the holiday rate from the
overtime rate in future years in order to
collect the full expenditure of providing
services on holidays. FSIS inspectors
are paid double time for holiday work,
while the current overtime rate only
accounts for time and a half. Therefore,
FSIS is proposing a holiday rate of two
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times the employee’s hourly rate of base
pay.
Laboratory Accreditation Fee
The Food, Agriculture, Conservation,
and Trade Act of 1990, as amended,
mandates that laboratory accreditation
fees cover the costs of the Accredited
Laboratory Program. This same Act
mandates an annual payment of an
accreditation fee on the anniversary date
of each accreditation. Because these fees
are fixed amounts and do not fluctuate
with economic conditions, FSIS is not
proposing a formula for these fees. FSIS
will propose to change the codified
laboratory accreditation fees through
future rulemaking when necessary.
FSIS needs to raise its fees for the
Accredited Laboratory Program to cover
its increased direct overhead costs,
including those for salary increases,
employee benefits, inflation, and bad
debt and to maintain an adequate
operating reserve. Furthermore, FSIS
must maintain a ‘‘carryover’’ amount
each year as a reserve and uses it to
cover the contractual costs that the
Accredited Laboratory Program must
pay at the beginning of each fiscal year.
The proposed increases are also
necessary to cover salaries and other
operating expenses during the first two
to three months of the fiscal year. Less
than 5% of the program’s income is
received during the first two months of
a fiscal year. Approximately 75% of the
program’s income is received in late
December and early January; the
remainder of the program’s income is
distributed about evenly across the rest
of the fiscal year. Maintaining an
adequate reserve is therefore essential
for the Accredited Laboratory Program
to be fully functional during the first
quarter of any fiscal year.
FSIS is proposing to amend 9 CFR
391.5 to keep the laboratory
accreditation fee at $4,500 for FY 2009,
2010, and 2011 and increase it to $5,000
for FY 2012 and FY 2013. These
adjustments are necessary to recover
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FSIS costs for providing these
accreditation services, including
maintaining an adequate reserve. The
amount of the accreditation fee each
year is based on the number of expected
new and renewal accreditations, the
anticipated costs directly related to the
accreditation process, and the estimated
reserve from previous years. These fees
are set based on FSIS’s best projections
of what it will cost the Agency to
provide these services in fiscal years
2010 through 2013.
Projected Fees
The differing proposed fee increases
for each type of service are the result of
the different amounts that it costs FSIS
to provide these four types of services.
The differences in costs stem from
various factors, including the different
salary levels of the program employees
who perform the services.
In the Agency’s analysis of projected
costs, set forth in Table 2, the Agency
has identified the bases for the fiscal
year 2010 increases in the cost of
voluntary base time inspection services,
overtime and holiday inspection
services, and laboratory services. FSIS
calculated its projected increases in
salaries and inflation in fiscal year 2010.
The average pay raise for Federal
employees in calendar year 2010,
reflecting both a national cost of living
increase and locality differentials, will
be 2.9 percent for .25 of the fiscal year
and 3.2 percent for .75 of the fiscal year.
Inflation for fiscal year 2010 is projected
to be 2 percent.
The estimates in the tables below are
based on the Presidential Economic
Assumptions for FY 2009 and the out
years in the OMB Memorandum M–08–
13. In Table 1, FSIS estimated fees for
subsequent fiscal years based on
previous fiscal year actual costs,
projected inflation, and cost of living
factors.
The current and proposed fees are
listed by type of service in Table 1.
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TABLE 1—CURRENT AND NEW FEES (PER HOUR PER EMPLOYEE) BY TYPE OF SERVICE
Current rate
2008 & 2009
Service
Base time .............................................................................................................................................................................................
Overtime & holiday ..............................................................................................................................................................................
Laboratory ............................................................................................................................................................................................
Service
Proposed rate
2010
Projected rate
2011
$49.93
58.93
70.82
Projected rate
2012
(estimates rounded to reflect billable quarters)
Base Time ....................................................................................................................................
Overtime ......................................................................................................................................
Holiday .........................................................................................................................................
Laboratory ....................................................................................................................................
The base time rate for inspection
services provided pursuant to §§ 350.7,
351.8, 351.9, 352.5, 354.101, 355.12, and
362.5 is an estimated $51.36 per hour
per program employee in fiscal year
2010, $52.84 per hour per program
employee in fiscal year 2011, and
$54.64 per hour per program employee
in fiscal year 2012.
The overtime rate for inspection
services provided pursuant to §§ 307.5,
350.7, 351.8, 351.9, 352.5, 354.101,
355.12, 362.5 and 381.38 is an estimated
$64.88 per hour per program employee
in fiscal year 2010, $66.84 per hour per
$51.36
64.88
78.44
65.08
program employee in fiscal year 2011,
and $68.84 per hour per program
employee in fiscal year 2012.
The holiday rate for inspection
services provided pursuant to §§ 307.5,
350.7, 351.8, 351.9, 352.5, 354.101,
355.12, 362.5 and 381.38 is an estimated
hourly rate of $78.44 per hour per
program employee in fiscal year 2010,
$80.84 per hour per program employee
in fiscal year 2011, and $83.82 per hour
per program employee in fiscal year
2012.
The rate for laboratory services
provided pursuant to §§ 350.7, 351.9,
$52.84
66.84
80.84
67.04
$54.64
68.84
83.32
69.08
352.5, 354.101, 355.12, and 362.5 is an
estimated $65.08 per hour per program
employee in fiscal year 2010, $67.04 per
hour per program employee in fiscal
year 2011, and $69.08 in fiscal year
2012.
The projected fees for FY 2010, 2011,
and 2012 may not be significantly
different from current codified fees.
Table 2 summarizes the calculations for
the different types of services for 2010.
See Table 3 for the proposed Laboratory
Accreditation Fees.
TABLE 2—CALCULATIONS FOR THE DIFFERENT TYPES OF SERVICES FOR FY 2010
Actual costs
per hour
FY 2009
Base Time:
Actual 2009 Base Salary (Pay raise of 2.9% for .25 of FY + 3.2% for .75 of FY) ..............
Benefits .................................................................................................................................
$26.25
6.62
Overhead (Department, Agency, and Program, including IT costs) ....................................
Travel/Operating Costs .........................................................................................................
Bad Debt Allowance .............................................................................................................
Cost of living
allowance
Projected salary costs per
hour FY 2010
$27.07
6.83
16.23
0.89
0.02
3.125%
3.125%
Inflation
2.0%
2.0%
........................
Total Projected Costs ....................................................................................................
........................
........................
51.38
Overtime ......................................................................................................................................
Holiday Pay ..................................................................................................................................
Laboratory Fees ...........................................................................................................................
39.37
52.50
39.56
3.125%
3.125%
3.125%
40.60
54.14
40.80
16.55
0.91
0.02
* Similar benefits, overhead, travel/operating costs, and bad debt allowance for projected salary costs are also added to arrive to the totals
shown in Table 1 for FY 2010 for overtime, holiday, and laboratory projected salary fees.
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TABLE 3—CALCULATIONS FOR ACCREDITED LABORATORY FEES FY 2009–2013
Estimated
FY 2009
Estimated Income ....................................................................................
Estimated Expenses ................................................................................
New Accreditation Fee .............................................................................
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$364,500
386,230
4,500
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Proposed
FY 2010
$382,500
423,863
4,500
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Proposed
FY 2011
$382,500
438,453
4,500
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Proposed
FY 2012
$405,000
444,886
5,000
Proposed
FY 2013
$425,000
456,464
5,000
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Executive Order 12866 and Regulatory
Flexibility Act
Because this proposed rule has been
determined to be not significant, the
Office of Management and Budget
(OMB) did not review it under EO
12866.
The Administrator, FSIS, has
determined that this proposed rule
would not have a significant economic
impact, as defined by the Regulatory
Flexibility Act (5 U.S.C. 601), on a
substantial number of small entities.
The inspection services provided under
these proposed fees are voluntary. Meat
and poultry establishments and egg
products plants requesting these
services are likely to have calculated
that the revenues generated from
additional production will exceed the
incremental costs of the services.
Similarly, laboratories will determine
whether the additional revenue for
services that require accreditation will
exceed the costs of becoming accredited.
srobinson on DSKHWCL6B1PROD with PROPOSALS
Economic Effects of New Fees
By proposing to codify formulas to
calculate future increases in annual fees
instead of proposing to codify actual
fees, the Agency will streamline the
rulemaking process to help ensure that
the fee increases are effective at the
beginning of each fiscal year. In
subsequent years, food safety will be
maintained at the establishments
affected by this rule as the Agency
provides the services. The increased
fees will cover inflation and national
and locality pay raises but will not
support any new budgetary initiative.
The costs that industry will experience
by the raise in fees are similar to other
increases that the industry will
experience because of inflation and
wage increases.
The total volume of meat and poultry
slaughtered under Federal inspection in
2007 was about 91 billion pounds (2007
Livestock, Dairy, Meat, and Poultry
Outlook Report, Economic Research
Service, USDA). The total volume in egg
product production in 2007 was about
2.8 billion pounds (2007 National
Agricultural Statistical Service, USDA).
The increase in cost per pound of
product associated with the new
increased fees is, in general, $.0002.
Even in competitive industries such as
meat, poultry, and egg products, this
amount of increase in costs would have
an insignificant impact on profits and
processes.
Even though this increase in fees is
negligible, the industry is likely to pass
along a significant portion of the
proposed fee increases to consumers
because of the inelastic nature of the
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demand curve facing consumers.
Research has shown that consumers are
unlikely to reduce demand significantly
for meat, poultry, and egg products,
when prices increase. Huang estimates
that demand would fall by .36 percent
for a one percent increase in price
(Huang, Kao S., A Complete System for
Demand for Food. USDA/ERS Technical
Bulletin No. 1821, 1993, p. 24). Because
of the inelastic nature of demand and
the competitive nature of the industry,
individual firms are not likely to
experience any change in market share
in response to an increase in inspection
fees.
As a result of the new Accredited
Laboratory Program fees, the Agency
expects to collect about $2 million over
the next 5 years from 85 laboratories, an
average of $4,700 per entity per year.
Paperwork Reduction Act
This rule does not contain any new
information collection or record keeping
requirements that are subject to the
Office of Management and Budget
(OMB) approval under the Paperwork
Reduction Act, 44 U.S.C. 3501 et seq.
E-Government Act
FSIS and USDA are committed to
achieving the purposes of the EGovernment Act (44 U.S.C. 3601, et
seq.) by, among other things, promoting
the use of the Internet and other
information technologies and providing
increased opportunities for citizen
access to Government information and
services, and for other purposes.
Executive Order 12988
This proposed rule has been reviewed
under Executive Order 12988, Civil
Justice Reform. This proposed rule: (1)
Has no retroactive effect; and (2) does
not require administrative proceedings
before parties may file suit in court
challenging this rule. However, the
administrative procedures specified in 9
CFR 306.5, 381.35, and 590.300 through
590.370, respectively, must be
exhausted before any judicial challenge
may be made of the application of the
provisions of the proposed rule, if the
challenge involves any decision of an
FSIS employee relating to inspection
services provided under the FMIA,
PPIA, or EPIA.
Additional Public Notification
Public awareness of all segments of
rulemaking and policy development is
important. Consequently, in an effort to
ensure that minorities, women, and
persons with disabilities are aware of
this notice, FSIS will announce it online
through the FSIS Web page located at
https://www.fsis.usda.gov/
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Regulations_&_Policies/
2009_Proposed_Rules_Index/index.asp.
FSIS will also make copies of this
Federal Register publication available
through the FSIS Constituent Update,
which is used to provide information
regarding FSIS policies, procedures,
regulations, Federal Register notices,
FSIS public meetings, and other types of
information that could affect or would
be of interest to constituents and
stakeholders. The Update is
communicated via Listserv, a free
electronic mail subscription service for
industry, trade and farm groups,
consumer interest groups, allied health
professionals, and other individuals
who have asked to be included. The
Update is also available on the FSIS
Web page. Through the Listserv and
Web page, FSIS is able to provide
information to a much broader and more
diverse audience. In addition, FSIS
offers an e-mail subscription service
which provides automatic and
customized access to selected food
safety news and information. This
service is available at https://
www.fsis.usda.gov/news_and_events/
email_subscription/. Options range from
recalls to export information to
regulations, directives and notices.
Customers can add or delete
subscriptions themselves, and have the
option to password protect their
accounts.
List of Subjects
9 CFR Part 391
Fees and charges, Government
employees, Meat inspection, Poultry
products.
9 CFR Part 590
Eggs and egg products, Exports, Food
labeling, Imports.
9 CFR Part 592
Eggs and egg products, Exports, Food
labeling, Imports.
For the reasons set forth in the
preamble, FSIS proposes to amend 9
CFR Chapter III as follows:
PART 391—FEES AND CHARGES FOR
INSPECTION AND LABORATORY
ACCREDITATION
1. The authority citation for part 391
continues to read as follows:
Authority: 7 U.S.C. 138d; 7 U.S.C. 1622,
1627 and 2219al; 21 U.S.C. 451 et seq.; 21
U.S.C 601–695;
2. Section 391.2 is revised to read as
follows:
§ 391.2
Base time rate.
(a) For each fiscal year and based on
the previous fiscal year’s actual costs
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Federal Register / Vol. 74, No. 194 / Thursday, October 8, 2009 / Proposed Rules
and hours, FSIS calculates the base time
rate for inspection services, per hour per
program employee, provided pursuant
to §§ 350.7, 351.8, 351.9, 352.5, 354.101,
355.12, and 362.5 using the following
formula: Office of Field Operations plus
Office of International Affairs inspection
program personnel salaries paid divided
by regular hours multiplied by the next
year’s percentage of cost of living
increase, plus the benefits rate, plus the
travel and operating rate, plus the
overhead rate, plus an allowance for bad
debt.
(b) FSIS calculates the components of
the base time rate, which are based on
previous fiscal year’s actual costs, using
the following formulas:
(1) Benefits Rate. Direct benefits costs
multiplied by the next calendar year’s
percentage cost of living increase. Some
examples of direct benefits are health
insurance, retirement, life insurance,
and Thrift Savings Plan (TSP)
retirement basic and matching
contributions.
(2) Travel and Operating Rate. Total
direct travel and operating costs
multiplied by the percentage of
inflation.
(3) Overhead Rate. All indirect costs
plus the average information technology
(IT) costs over the previous two years in
the Public Health Data Communication
Infrastructure System Fund plus the
Office of Management Program cost in
the Reimbursable and Voluntary Funds
less any Greenbook costs (i.e., costs of
USDA support services prorated to the
service component for which fees are
charged) that are not related to food
inspection, divided by total direct hours
(regular, overtime, and holiday) worked
across all funds, multiplied by the
percentage of inflation.
(4) Allowance for Bad Debt Rate. Total
allowance for bad debt (for plants and
establishments that declare bankruptcy)
divided by total direct hours (regular,
overtime, and holiday) worked.
(c) The cost of living increases and
percentage of inflation factors used in
the formulas in this section are based on
the Office of Management and Budget’s
Presidential Economic Assumptions.
3. Section 391.3 is revised to read as
follows:
srobinson on DSKHWCL6B1PROD with PROPOSALS
§ 391.3
Overtime and holiday rate.
For each fiscal year and based on the
previous fiscal year’s actual costs and
hours, FSIS calculates the overtime and
holiday rates, per hour per program
employee, provided pursuant to
§§ 307.5, 350.7, 351.8, 351.9, 352.5,
354.101, 355.12, 362.5, and 381.38 using
the following formulas:
(a) Overtime. Office of Field
Operations plus Office of International
VerDate Nov<24>2008
17:02 Oct 07, 2009
Jkt 220001
Affairs inspection program personnel
salaries paid divided by regular hours
multiplied by the next year’s percentage
of cost of living increase multiplied by
1.5 plus the benefits rate, plus the travel
and operating rate, plus the overhead
rate, plus an allowance for bad debt.
(b) Holiday Rate. Office of Field
Operations plus Office of International
Affairs inspection program personnel
salaries paid divided by regular hours
multiplied by the next year’s percentage
of cost of living increase multiplied by
2, plus benefits rate, plus the travel and
operating rate, plus the overhead rate,
plus an allowance for bad debt.
(c) FSIS calculates the benefits rate,
travel and operating rate, overhead rate,
and allowance for bad debt using the
formulas in § 391.2(b), and the cost of
living increases and percentage of
inflation factors in 391.2(c).
4. Section 391.4 is revised to read as
follows:
§ 391.4
Laboratory services rate.
(a) For each fiscal year and based on
the previous fiscal year’s actual costs
and hours, FSIS calculates the
laboratory services rate, per hour per
program employee, provided pursuant
to §§ 350.7, 351.9, 352.5, 354.101,
355.12, and 362.5 will be calculated for
future fiscal years using the following
formula: Office of Public Health Science
(OPHS) salaries paid divided by OPHS
hours worked, multiplied by the next
calendar year’s percentage cost of living
increase, plus the benefits rate, plus the
travel and operating rate, plus the
overhead rate, plus an allowance for bad
debt.
(b) FSIS calculates the benefits rate,
the travel and operating rate, the
overhead rate, and the allowance for bad
debt using the formulas in 391.2(b), and
the cost of living increases and
percentage of inflation factors in
391.2(c).
5. Paragraph (a) of § 391.5 is revised
to read as follows:
§ 391.5
Laboratory accreditation fee.
(a) The annual fee for the initial
accreditation and maintenance of
accreditation provided pursuant to
§ 439.5 shall be $4,500.00 for fiscal
years 2010 and 2011; and $5,000.00 for
fiscal years 2012 and 2013.
*
*
*
*
*
PART 590—INSPECTION OF EGGS
AND EGG PRODUCTS (EGG
PRODUCTS INSPECTION ACT)
6. The authority citation for part 590
continues to read as follows:
Authority: 21 U.S.C. 1031–1056.
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51805
7. In § 590.126, revise the second
sentence to read as follows:
§ 590.126
Overtime inspection service.
* * * The official plant must give
reasonable advance notice to the
inspector of any overtime service
necessary and must pay for such
overtime. For each fiscal year and based
on previous fiscal year’s actual costs
and hours, FSIS calculates the overtime
rate for inspection service, per hour per
program employee, using the following
formula: Office of Field Operations plus
Office of International Affairs inspection
program personnel salaries paid divided
by regular hours multiplied by the next
year’s percentage of cost of living
increase multiplied by 1.5 plus the
benefits rate, plus the travel and
operating rate, plus the overhead rate,
plus an allowance for bad debt. FSIS
calculates the benefits rate, travel and
operating rate, overhead rate, and
allowance for bad debt using the
formulas in § 592.510(b) and the cost of
living increases and percentage of
inflation factors in § 592.510(c).
8. In § 590.128(a), revise the second
sentence to read as follows:
§ 590.128
Holiday inspection service.
(a) * * * The official plant must, in
advance of such holiday work, request
the inspector in charge to furnish
inspection service during such period
and must pay the Agency for such
holiday work at the hourly rate. For
each fiscal year and based on the
previous year’s actual costs and hours,
FSIS calculates the holiday rate for
inspection service, per hour per
program employee, using the following
formula: Office of Field Operations plus
Office of International Affairs inspection
program personnel salaries paid divided
by regular hours multiplied by the next
year’s percentage of cost of living
increase multiplied by 2, plus benefits
rate, plus the travel and operating rate,
plus the overhead rate, plus an
allowance for bad debt. FSIS calculates
the benefits rate, travel and operating
rate, overhead rate, and allowance for
bad debt using the formulas in
§ 592.510(b), and the cost of living
increases and percentage of inflation
factors in § 592.510(c).
*
*
*
*
*
PART 592—VOLUNTARY INSPECTION
OF EGG PRODUCTS
9. The authority citation for part 592
continues to read as follows:
Authority: 7 U.S.C. 1621–1627.
10. Section 592.510 is revised to read
as follows:
E:\FR\FM\08OCP1.SGM
08OCP1
51806
§ 592.510
Federal Register / Vol. 74, No. 194 / Thursday, October 8, 2009 / Proposed Rules
Base time rate.
(a) For each fiscal year and based on
the previous fiscal year’s actual costs
and hours, FSIS calculates the base time
rate for inspection services, per hour per
program employee, using the following
formula: Office of Field Operations plus
Office of International Affairs inspection
program personnel salaries paid divided
by regular hours multiplied by the next
year’s percentage of cost of living
increase, plus the benefits rate, plus the
travel and operating rate, plus the
overhead rate, plus an allowance for bad
debt.
(b) FSIS calculates the components of
the base time rate (which are based on
previous fiscal year’s actual costs) using
the following formulas:
(1) Benefits Rate: Direct benefits costs
multiplied by the next calendar year’s
percentage cost of living increase. Some
examples of direct benefits are health
insurance, retirement, life insurance,
and Thrift Saving Plan (TSP) retirement
basic and matching contributions.
(2) Travel and Operating Rate: Total
direct travel and operating costs
multiplied by the percentage of
inflation.
(3) Overhead Rate: All indirect costs
plus the average information technology
(IT) costs over the previous two years in
the Public Health Data Communication
Infrastructure System Fund plus the
Office of Management Program cost in
the Reimbursable and Voluntary Funds
less any Greenbook costs (i.e., costs of
USDA support services prorated to the
service component for which fees are
charged) that are not related to food
inspection, divided by total direct hours
(regular, overtime, and holiday) worked
across all funds, multiplied by the
percentage of inflation.
(4) Allowance for Bad Debt Rate: Total
allowance for bad debt (for plants and
establishments that declare bankruptcy)
divided by total direct hours (regular,
overtime, and holiday) worked.
(c) The cost of living increases and
percentage of inflation factors used in
the formulas in this section are based on
the Office of Management and Budget’s
Presidential Economic Assumptions.
12. In § 592.520, revise the second
sentence to read as follows:
srobinson on DSKHWCL6B1PROD with PROPOSALS
§ 592.520
Overtime rate.
* * * The official plant must give
reasonable advance notice to the
inspector of any overtime service
necessary. For each fiscal year and
based on the previous fiscal year’s
actual costs and hours, FSIS calculates
the overtime rate for inspection service,
per hour per program employee, using
the following formula: Office of Field
Operations plus Office of International
VerDate Nov<24>2008
17:02 Oct 07, 2009
Jkt 220001
Affairs inspection program personnel
salaries paid divided by regular hours
multiplied by the next year’s percentage
of cost of living increase multiplied by
1.5 plus the benefits rate, plus the travel
and operating rate, plus the overhead
rate, plus an allowance for bad debt.
FSIS calculates the benefits rate, travel
and operating rate, overhead rate, and
allowance for bad debt using the
formulas in § 592.510(b), and the cost of
living increases and percentage of
inflation factors in § 592.510(b).
13. In 592.530, revise the second
sentence to read as follows:
§ 592.530
Holiday rate.
* * * The official plant must, in
advance of such holiday work, request
that the inspector in charge furnish
inspection service during such period
and must pay the Agency for such
holiday work at the hourly rate. For
each fiscal year and based on the
previous fiscal year’s actual costs and
hours, FSIS calculates the holiday rate
for inspection service, per hour per
program employee, using the following
formula: Office of Field Operations plus
Office of International Affairs inspection
program personnel salaries paid divided
by regular hours multiplied by the next
year’s percentage of cost of living
increase multiplied by 2, plus benefits
rate, plus the travel and operating rate,
plus the overhead rate, plus an
allowance for bad debt. FSIS calculates
the benefits rate, travel and operating
rate, overhead rate, and allowance for
bad debt using the formulas in
§ 592.510(b), and the cost of living
increases and percentage of inflation
factors in § 592.510(b).
Done in Washington, DC, on October 5,
2009.
Alfred V. Almanza,
Administrator.
[FR Doc. E9–24283 Filed 10–7–09; 8:45 am]
BILLING CODE 3410–DM–P
FEDERAL RESERVE SYSTEM
[Regulation A; Docket No. R–1371]
12 CFR Part 201
Extensions of Credit by Federal
Reserve Banks
AGENCY: Board of Governors of the
Federal Reserve System.
ACTION: Proposed rule.
SUMMARY: The Board of Governors
(Board) is publishing for public
comment a proposed amendment to
Regulation A that would provide a
process by which the Federal Reserve
PO 00000
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Fmt 4702
Sfmt 4702
Bank of New York may determine the
eligibility of credit rating agencies and
the ratings they issue for use in the
Term Asset-Backed Securities Loan
Facility, which is maintained by the
Federal Reserve Bank of New York and
for which the Board has expressly set a
particular credit rating requirement for
collateral offered by the borrower. The
proposed rule would not apply to
discount window lending or other
extensions of credit provided by the
Federal Reserve System. In addition, the
rule would only apply to asset-backed
securities that are not backed by
commercial real estate. This proposed
amendment is designed to provide the
Federal Reserve Bank of New York with
a consistent framework for determining
the eligibility of ratings issued by
individual credit rating agencies when
used in conjunction with a separate
asset-level risk assessment process. The
proposed amendment does not
represent a change in the stance of
monetary policy. The Board solicits
comment on all aspects of the proposal,
as well as specific aspects of the
proposal as set out in the preamble.
DATES: Written comments on this notice
of proposed rulemaking must be
submitted on or before November 9,
2009.
ADDRESSES: You may submit comments,
identified by Docket Number R–1371,
by any of the following methods:
• Agency Web site: https://
www.federalreserve.gov. Follow the
instructions for submitting comments at
https://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm.
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• E-mail:
regs.comments@federalreserve.gov.
Include docket number in the subject
line of the message.
• Fax: (202) 452–3819 or (202) 452–
3102.
• Mail: Jennifer J. Johnson, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue, NW., Washington,
DC 20551.
All public comments are available
from the Board’s Web site at https://
www.federalreserve.gov/generalinfo/
foia/ProposedRegs.cfm, as submitted,
unless modified for technical reasons.
Accordingly, your comments will not be
edited to remove any identifying or
contact information. Public comments
may also be viewed electronically or in
paper in Room MP–500 of the Board’s
Martin Building (20th and C Streets,
NW.) between 9 a.m. and 5 p.m. on
weekdays.
E:\FR\FM\08OCP1.SGM
08OCP1
]]>Agencies
[Federal Register Volume 74, Number 194 (Thursday, October 8, 2009)]
[Proposed Rules]
[Pages 51800-51806]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-24283]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 74, No. 194 / Thursday, October 8, 2009 /
Proposed Rules
[[Page 51800]]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Food Safety and Inspection Service
9 CFR Parts 391, 590, and 592
[FDMS Docket Number FSIS-2006-0025]
RIN 0583-AD40
Changes in Fees for Meat, Poultry, and Egg Products Inspection
Services
AGENCY: Food Safety and Inspection Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMMARY: The Food Safety and Inspection Service (FSIS) is proposing to
amend its regulations to establish formulas for calculating the fees
that it charges meat and poultry establishments, egg products plants,
importers, and exporters for providing voluntary inspection,
identification and certification services, overtime and holiday
inspection services, and laboratory services. If the rule becomes
effective, FSIS will calculate these fees based on the formulas. For
future fiscal years, FSIS will calculate the fees on an annual basis
and apply them at the start of the fiscal year. The Agency is also
proposing to increase the codified flat annual fee for its Accredited
Laboratory Program.
DATES: The Agency must receive comments by November 9, 2009.
ADDRESSES: FSIS invites interested persons to submit comments on this
proposed rule. Comments may be submitted by either of the following
methods:
Federal eRulemaking Portal: This Web site provides the
ability to type short comments directly into the comment field on this
Web page or attach a file for lengthier comments. Go to https://www.regulations.gov. Follow the online instructions at that site for
submitting comments.
Mail, including floppy disks or CD-ROMs, and hand- or
courier-delivered items: Send to Docket Clerk, U.S. Department of
Agriculture (USDA), FSIS, Room 2-2127, George Washington Carver Center,
5601 Sunnyside Avenue, Mailstop 5474, Beltsville, MD 20705-5474.
Instructions: All items submitted by mail or electronic mail must
include the Agency name and docket number FSIS-2006-0025. Comments
received in response to this docket will be made available for public
inspection and posted without change, including any personal
information, to https://www.regulations.gov.
Docket: For access to background documents or to comments received,
go to the FSIS Docket Room at the address listed above between 8:30
a.m. and 4:30 p.m., Monday through Friday.
All comments submitted in response to this proposal, as well as
background information used by FSIS in developing this document, will
be available for public inspection in the FSIS Docket Room at the
address listed above between 8:30 a.m. and 4:30 p.m., Monday through
Friday.
FOR FURTHER INFORMATION CONTACT: For further information concerning
policy issues contact Rachel Edelstein, Director, Policy Issuances
Division, Office of Policy and Program Development, FSIS, U.S.
Department of Agriculture, Room 6065 South Building, 1400 Independence
Ave, SW., Washington, DC 20250-3700; telephone (202) 720-0399, fax
(202) 690-0486.
For further information concerning fees contact Deborah Patrick,
Director, Budget Division, Office of Management, FSIS, U.S. Department
of Agriculture, Room 2159 South Building, 1400 Independence Avenue,
SW., Washington, DC 20250-3700; telephone (202) 720-2912, fax (202)
720-5399.
SUPPLEMENTARY INFORMATION:
Background
The Federal Meat Inspection Act (FMIA) (21 U.S.C. 601 et seq.) and
the Poultry Products Inspection Act (PPIA) (21 U.S.C. 451 et seq.)
provide for mandatory Federal inspection of livestock and poultry
slaughtered at official establishments and of meat and poultry
processed at official establishments, respectively. The Egg Products
Inspection Act (EPIA) (21 U.S.C. 1031 et seq.) provides for mandatory
inspection of egg products processing at official plants. FSIS bears
the cost of mandatory inspection provided during non-overtime and non-
holiday hours of operation. Official establishments and egg products
plants pay for inspection services performed on holidays or on an
overtime basis.
Under the Agricultural Marketing Act of 1946 (AMA), as amended (7
U.S.C. 1621 et seq.), FSIS provides a range of voluntary inspection,
certification, and identification services to assist in the orderly
marketing of various animal products and byproducts. These services
include the certification of technical animal fats and the inspection
of exotic animal products, such as antelope and elk. The AMA provides
that FSIS may prescribe the collection of fees to recover the costs of
the voluntary inspection, certification, and identification services it
provides.
Also under the AMA, FSIS provides certain voluntary laboratory
services that establishments and others may request the Agency to
perform. Laboratory services are provided for four types of analytic
testing: Microbiological testing, residue chemistry tests, food
composition tests, and pathology testing. Again, the AMA provides that
FSIS may collect fees to recover the costs of providing these services.
FSIS also accredits non-Federal analytical laboratories under its
Accredited Laboratory Program. Such accreditation allows laboratories
to conduct analyses of official meat and poultry samples. The Food,
Agriculture, Conservation, and Trade Act of 1990, as amended, mandates
that laboratory accreditation fees cover the costs of the Accredited
Laboratory Program. This same Act mandates an annual payment of an
accreditation fee on the anniversary date of each accreditation.
Historically, FSIS amended its regulations annually to change the
fees it charges establishments for providing overtime and holiday
inspection services; voluntary inspection, certification, and
identification services; and laboratory services and accreditation.
Because of the length of the rulemaking process, each year the fiscal
year would partially elapse before the Agency could publish a final
rule to amend its fees. As a result, the Agency was unable to recover
the full cost of the services it provided, which represented a
considerable fiscal loss to FSIS. In 2006, in an effort to address the
delays that resulted from the rulemaking process, FSIS amended its
regulations to provide for multiple annual fee
[[Page 51801]]
increases in one action (71 FR 2135). With the rulemaking to increase
fees for 2006-2008, FSIS established criteria for determining the fee
increases on a multi-year basis. While this solution enabled the Agency
to collect an increased fee each year, estimates used to set out the
annual rates were imprecise and may well have left the Agency
collecting too little in fees to fully cover its costs. The difference
between the established rate and current economic conditions will
likely be small during the first year of a multi-year rule but could
well become large during the later years.
The Agency performed a cost analysis in 2008 (at the same time that
the new fees analysis was performed) to determine whether the fees
established were adequate to recover the costs that it incurred in
providing these services. On the basis of this analysis, FSIS
determined the necessary fees for FY 2010 and established the proposed
formulas to determine the fees for FY 2010 and subsequent fiscal years.
Proposed Formulas
With this rulemaking, FSIS is proposing to amend its regulations to
codify formulas in 9 CFR parts 391, 590, and 592 that FSIS will use to
calculate and apply annual fees starting with the effective date of
this rule and for subsequent fiscal years. FSIS intends to announce the
actual annual fees in Federal Register notices prior to the start of
each fiscal year.
Salary, hours, and all rates used in the formulas will be based on
the prior fiscal year's actual costs and hours. In 9 CFR 391.2 and
592.510, FSIS is proposing the following formula to calculate the base
time rate per hour per program employee: Base Time Rate = Office of
Field Operations (OFO) plus Office of International Affairs (OIA)
inspection program personnel salaries paid divided by regular hours
multiplied by the next year's percentage of cost of living increase
(e.g., pay raise of 2.9% for \1/4\ of FY 2008 + 3.2% for \3/4\ of FY
2008), plus the benefits rate, plus the travel and operating rate, plus
the overhead rate, plus an allowance for bad debt.
For the 2010 base time rate per hour per program employee, the
calculation will look like this: [2008 Direct Pay divided by Total
Direct Hours ($447,373,444/17,417,642)] = $25.69 * 2.175% (2009 Cost of
Living) = $26.25 * 3.125% (2010 Cost of Living) = $27.07 + $6.83
(benefits rate) + $16.55 (travel and operating rate) + $.91 (overhead
rate) + $.02 (bad debt allowance rate)= $51.38 (rounded to $51.36;
rounding is done to reflect billable quarters).
In 9 CFR 391.3, 590.126 and, 592.520 and 592.530, FSIS is proposing
to establish the following formulas for overtime and holiday rates per
hour per program employee: Overtime = Salary component of Base Time
Rate (OFO plus OIA inspection program personnel salaries paid divided
by regular hours multiplied by the next year's percentage of cost of
living increase) multiplied by 1.5 plus the benefits rate, plus the
travel and operating rate, plus the overhead rate, plus an allowance
for bad debt.
For the 2010 overtime rate per hour per program employee, the
calculation will look like this: $27.07 * 1.5 (Time and one half) =
$40.60 + $6.83 + $16.55 + $.91 + $.02 = $64.91 (rounded to $64.88).
Holiday Rate = Salary component of base time rate multiplied by 2,
plus benefits rate, plus the travel and operating rate, plus the
overhead rate, plus an allowance for bad debt.
For the 2010 holiday rate per hour per program employee, the
calculation will look like this: $27.07 * 2 (Double time) = $54.14 +
$6.83 + $16.55 + $.91 + $.02 = $78.44.
In 9 CFR 391.4, FSIS is proposing the following formula for the
laboratory services rate per hour per program employee: Laboratory
Salary Rate = Office of Public Health Science (OPHS) salaries paid
divided by OPHS Hours worked, multiplied by the next calendar year's
percentage cost of living increase, plus the benefits rate, plus the
travel and operating rate, plus the overhead rate, plus an allowance
for bad debt.
For the 2010 holiday salary per hour per program employee, the
calculation will look like this: [2008 Total OPHS Direct Pay/Total OPHS
hours (21,312,832/550,424)] = $38.72 * 2.175% (2009 Cost of Living) =
$39.56 * 3.125% (2010 Cost of Living) = $40.80 + $6.83 + $16.55 + $.91
+ $.02 = $65.11 (rounded to $65.08).
The formulas are based on the prior fiscal year's actual costs and
cost of living increases and percentage of inflation factors from the
economic assumptions in the Office of Management and Budget (OMB)
Memorandum M-08-13, ``Update to Civilian Position Full Fringe Benefit
Cost Factor, Federal Pay Raise Assumptions, and Inflation Factors used
in OMB Circular A-76, Performance of Commercial Activities'' Memorandum
M-08-13, dated March 11, 2008, which is available at the following
link: https://www.whitehouse.gov/omb/assets/omb/memoranda/fy2008/m08-13.pdf. Rather than codify a reference to OMB Memorandum M-08-13 in the
proposed rule, FSIS intends to use the economic factors in the memo for
calculating the fees until new economic assumptions are issued in a new
OMB Memorandum in the future.
As is proposed in Sec. Sec. 391.2 and 592.510, FSIS intends to
derive the components of proposed formulas, using previous fiscal year
actual costs, as follows:
Benefits Rate: Direct benefits costs multiplied by the next
calendar year's percentage cost of living increase. Some examples of
direct benefits are health insurance, retirement, life insurance, and
Thrift Savings Plan (TSP) retirement basic and matching contributions.
For the 2010 benefits rate per hour per program employee, the
calculation will look like this: [2008 Direct Benefits/(Total Direct
hours + Total OT hours + Total Holiday hours) ($130,744,894/
20,164,116)] = $6.48 * 2.175% (2009 Cost of Living) = $6.62 * 3.125%
(2009 Cost of Living) = $6.83.
Travel and Operating Rate: Total direct travel and operating costs
multiplied by the percentage of inflation.
For the 2010 travel and operating rate per hour per program
employee, the calculation will look like this: [2008 Total Direct
Travel and Operating Costs/(Total Direct hours + Total OT hours + Total
Holiday hours) (17,489,892/20,164,116)] = $.87 * 2.00% (2009 Inflation)
= $.89 * 2.00% (2010 Inflation) = $.91.
Overhead Rate: All indirect costs plus the average information
technology (IT) costs over the previous two years in the Public Health
Data Communication Infrastructure System Fund plus the Office of
Management Program cost in the Reimbursable and Voluntary Funds plus
provision for the operating balance less any Greenbook costs (i.e.,
costs of USDA support services prorated to the service component for
which fees are charged) that are not related to food inspection,
divided by total direct hours (regular, overtime, and holiday) worked
across all funds, multiplied by the percentage of inflation.
For the 2010 the overhead rate per hour per program employee, the
calculation will look like this: [2008 Total Overhead/(Total Direct
hours + Total OT hours + Total Holiday hours) (320,820,057/20,164,116)]
= $15.91 * 2.00% (2009 Inflation) = $16.23 * 2.00% (2010 Inflation) =
$16.55.
Allowance for Bad Debt Rate = Total allowance for bad debt (for
plants and establishments that declare bankruptcy) divided by total
direct hours (regular, overtime, and holiday) worked.
For the 2010 allowance for bad debt rate per hour per program
employee, the calculation will look like this: [2008
[[Page 51802]]
Total Bad Debt/Total Direct hours + Total OT hours + Total Holiday
hours) ($325,481/20,164,116)] = $.02 (for 2009 and after).
As is noted above, the proposed formulas reflect that the cost of
providing inspection services includes both direct and overhead costs.
Overhead costs include the cost of program and Agency activities that
support the food inspection services provided by the industry. Overhead
expenditures are allocated across the Agency for each direct hour of
inspection. Direct costs include the cost of salaries, employee
benefits, travel and operating costs. Because of improvements in
accessing data from the accounting system, the Agency has been able to
estimate the employee benefits ascribable to overtime work and has
included these in the fee calculation.
Section 10703 of the 2002 Farm Bill authorized the Secretary of
Agriculture to set the hourly rate of compensation for FSIS employees
exempt from the Fair Labor Standards Act (i.e., veterinarians) who work
in establishments subject to the FMIA and PPIA at one and one-half
times the employee's hourly rate of base pay. In FSIS's January 13,
2006, final rule on fees, FSIS adjusted its overtime fees to reflect
these costs. Previously, veterinarians were limited to the time and a
half rate paid to employees at grade level GS-10, step 1. This proposed
rule continues to provide overtime rates at one and one-half times the
employee's hourly rate of base pay.
In this rule, FSIS is proposing to differentiate the holiday rate
from the overtime rate in future years in order to collect the full
expenditure of providing services on holidays. FSIS inspectors are paid
double time for holiday work, while the current overtime rate only
accounts for time and a half. Therefore, FSIS is proposing a holiday
rate of two times the employee's hourly rate of base pay.
Laboratory Accreditation Fee
The Food, Agriculture, Conservation, and Trade Act of 1990, as
amended, mandates that laboratory accreditation fees cover the costs of
the Accredited Laboratory Program. This same Act mandates an annual
payment of an accreditation fee on the anniversary date of each
accreditation. Because these fees are fixed amounts and do not
fluctuate with economic conditions, FSIS is not proposing a formula for
these fees. FSIS will propose to change the codified laboratory
accreditation fees through future rulemaking when necessary.
FSIS needs to raise its fees for the Accredited Laboratory Program
to cover its increased direct overhead costs, including those for
salary increases, employee benefits, inflation, and bad debt and to
maintain an adequate operating reserve. Furthermore, FSIS must maintain
a ``carryover'' amount each year as a reserve and uses it to cover the
contractual costs that the Accredited Laboratory Program must pay at
the beginning of each fiscal year. The proposed increases are also
necessary to cover salaries and other operating expenses during the
first two to three months of the fiscal year. Less than 5% of the
program's income is received during the first two months of a fiscal
year. Approximately 75% of the program's income is received in late
December and early January; the remainder of the program's income is
distributed about evenly across the rest of the fiscal year.
Maintaining an adequate reserve is therefore essential for the
Accredited Laboratory Program to be fully functional during the first
quarter of any fiscal year.
FSIS is proposing to amend 9 CFR 391.5 to keep the laboratory
accreditation fee at $4,500 for FY 2009, 2010, and 2011 and increase it
to $5,000 for FY 2012 and FY 2013. These adjustments are necessary to
recover FSIS costs for providing these accreditation services,
including maintaining an adequate reserve. The amount of the
accreditation fee each year is based on the number of expected new and
renewal accreditations, the anticipated costs directly related to the
accreditation process, and the estimated reserve from previous years.
These fees are set based on FSIS's best projections of what it will
cost the Agency to provide these services in fiscal years 2010 through
2013.
Projected Fees
The differing proposed fee increases for each type of service are
the result of the different amounts that it costs FSIS to provide these
four types of services. The differences in costs stem from various
factors, including the different salary levels of the program employees
who perform the services.
In the Agency's analysis of projected costs, set forth in Table 2,
the Agency has identified the bases for the fiscal year 2010 increases
in the cost of voluntary base time inspection services, overtime and
holiday inspection services, and laboratory services. FSIS calculated
its projected increases in salaries and inflation in fiscal year 2010.
The average pay raise for Federal employees in calendar year 2010,
reflecting both a national cost of living increase and locality
differentials, will be 2.9 percent for .25 of the fiscal year and 3.2
percent for .75 of the fiscal year. Inflation for fiscal year 2010 is
projected to be 2 percent.
The estimates in the tables below are based on the Presidential
Economic Assumptions for FY 2009 and the out years in the OMB
Memorandum M-08-13. In Table 1, FSIS estimated fees for subsequent
fiscal years based on previous fiscal year actual costs, projected
inflation, and cost of living factors.
The current and proposed fees are listed by type of service in
Table 1.
[[Page 51803]]
Table 1--Current and New Fees (per Hour per Employee) by Type of Service
------------------------------------------------------------------------
Current rate
Service 2008 & 2009
------------------------------------------------------------------------
Base time............................................... $49.93
Overtime & holiday...................................... 58.93
Laboratory.............................................. 70.82
------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Service Proposed rate Projected rate Projected rate
2010 2011 2012
-----------------------------------------------
(estimates rounded to reflect billable
quarters)
----------------------------------------------------------------------------------------------------------------
Base Time....................................................... $51.36 $52.84 $54.64
Overtime........................................................ 64.88 66.84 68.84
Holiday......................................................... 78.44 80.84 83.32
Laboratory...................................................... 65.08 67.04 69.08
The base time rate for inspection services provided pursuant to
Sec. Sec. 350.7, 351.8, 351.9, 352.5, 354.101, 355.12, and 362.5 is an
estimated $51.36 per hour per program employee in fiscal year 2010,
$52.84 per hour per program employee in fiscal year 2011, and $54.64
per hour per program employee in fiscal year 2012.
The overtime rate for inspection services provided pursuant to
Sec. Sec. 307.5, 350.7, 351.8, 351.9, 352.5, 354.101, 355.12, 362.5
and 381.38 is an estimated $64.88 per hour per program employee in
fiscal year 2010, $66.84 per hour per program employee in fiscal year
2011, and $68.84 per hour per program employee in fiscal year 2012.
The holiday rate for inspection services provided pursuant to
Sec. Sec. 307.5, 350.7, 351.8, 351.9, 352.5, 354.101, 355.12, 362.5
and 381.38 is an estimated hourly rate of $78.44 per hour per program
employee in fiscal year 2010, $80.84 per hour per program employee in
fiscal year 2011, and $83.82 per hour per program employee in fiscal
year 2012.
The rate for laboratory services provided pursuant to Sec. Sec.
350.7, 351.9, 352.5, 354.101, 355.12, and 362.5 is an estimated $65.08
per hour per program employee in fiscal year 2010, $67.04 per hour per
program employee in fiscal year 2011, and $69.08 in fiscal year 2012.
The projected fees for FY 2010, 2011, and 2012 may not be
significantly different from current codified fees. Table 2 summarizes
the calculations for the different types of services for 2010. See
Table 3 for the proposed Laboratory Accreditation Fees.
Table 2--Calculations for the Different Types of Services for FY 2010
----------------------------------------------------------------------------------------------------------------
Projected
Actual costs Cost of living salary costs
per hour FY allowance per hour FY
2009 2010
----------------------------------------------------------------------------------------------------------------
Base Time:
Actual 2009 Base Salary (Pay raise of 2.9% for .25 of FY + $26.25 3.125% $27.07
3.2% for .75 of FY)........................................
Benefits.................................................... 6.62 3.125% 6.83
Inflation
Overhead (Department, Agency, and Program, including IT 16.23 2.0% 16.55
costs).....................................................
Travel/Operating Costs...................................... 0.89 2.0% 0.91
Bad Debt Allowance.......................................... 0.02 .............. 0.02
-----------------------------------------------
Total Projected Costs................................... .............. .............. 51.38
-----------------------------------------------
Overtime........................................................ 39.37 3.125% 40.60
Holiday Pay..................................................... 52.50 3.125% 54.14
Laboratory Fees................................................. 39.56 3.125% 40.80
----------------------------------------------------------------------------------------------------------------
* Similar benefits, overhead, travel/operating costs, and bad debt allowance for projected salary costs are also
added to arrive to the totals shown in Table 1 for FY 2010 for overtime, holiday, and laboratory projected
salary fees.
Table 3--Calculations for Accredited Laboratory Fees FY 2009-2013
----------------------------------------------------------------------------------------------------------------
Estimated Proposed FY Proposed FY Proposed FY Proposed FY
FY 2009 2010 2011 2012 2013
----------------------------------------------------------------------------------------------------------------
Estimated Income............................... $364,500 $382,500 $382,500 $405,000 $425,000
Estimated Expenses............................. 386,230 423,863 438,453 444,886 456,464
New Accreditation Fee.......................... 4,500 4,500 4,500 5,000 5,000
----------------------------------------------------------------------------------------------------------------
[[Page 51804]]
Executive Order 12866 and Regulatory Flexibility Act
Because this proposed rule has been determined to be not
significant, the Office of Management and Budget (OMB) did not review
it under EO 12866.
The Administrator, FSIS, has determined that this proposed rule
would not have a significant economic impact, as defined by the
Regulatory Flexibility Act (5 U.S.C. 601), on a substantial number of
small entities. The inspection services provided under these proposed
fees are voluntary. Meat and poultry establishments and egg products
plants requesting these services are likely to have calculated that the
revenues generated from additional production will exceed the
incremental costs of the services. Similarly, laboratories will
determine whether the additional revenue for services that require
accreditation will exceed the costs of becoming accredited.
Economic Effects of New Fees
By proposing to codify formulas to calculate future increases in
annual fees instead of proposing to codify actual fees, the Agency will
streamline the rulemaking process to help ensure that the fee increases
are effective at the beginning of each fiscal year. In subsequent
years, food safety will be maintained at the establishments affected by
this rule as the Agency provides the services. The increased fees will
cover inflation and national and locality pay raises but will not
support any new budgetary initiative. The costs that industry will
experience by the raise in fees are similar to other increases that the
industry will experience because of inflation and wage increases.
The total volume of meat and poultry slaughtered under Federal
inspection in 2007 was about 91 billion pounds (2007 Livestock, Dairy,
Meat, and Poultry Outlook Report, Economic Research Service, USDA). The
total volume in egg product production in 2007 was about 2.8 billion
pounds (2007 National Agricultural Statistical Service, USDA). The
increase in cost per pound of product associated with the new increased
fees is, in general, $.0002. Even in competitive industries such as
meat, poultry, and egg products, this amount of increase in costs would
have an insignificant impact on profits and processes.
Even though this increase in fees is negligible, the industry is
likely to pass along a significant portion of the proposed fee
increases to consumers because of the inelastic nature of the demand
curve facing consumers. Research has shown that consumers are unlikely
to reduce demand significantly for meat, poultry, and egg products,
when prices increase. Huang estimates that demand would fall by .36
percent for a one percent increase in price (Huang, Kao S., A Complete
System for Demand for Food. USDA/ERS Technical Bulletin No. 1821, 1993,
p. 24). Because of the inelastic nature of demand and the competitive
nature of the industry, individual firms are not likely to experience
any change in market share in response to an increase in inspection
fees.
As a result of the new Accredited Laboratory Program fees, the
Agency expects to collect about $2 million over the next 5 years from
85 laboratories, an average of $4,700 per entity per year.
Paperwork Reduction Act
This rule does not contain any new information collection or record
keeping requirements that are subject to the Office of Management and
Budget (OMB) approval under the Paperwork Reduction Act, 44 U.S.C. 3501
et seq.
E-Government Act
FSIS and USDA are committed to achieving the purposes of the E-
Government Act (44 U.S.C. 3601, et seq.) by, among other things,
promoting the use of the Internet and other information technologies
and providing increased opportunities for citizen access to Government
information and services, and for other purposes.
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This proposed rule: (1) Has no retroactive
effect; and (2) does not require administrative proceedings before
parties may file suit in court challenging this rule. However, the
administrative procedures specified in 9 CFR 306.5, 381.35, and 590.300
through 590.370, respectively, must be exhausted before any judicial
challenge may be made of the application of the provisions of the
proposed rule, if the challenge involves any decision of an FSIS
employee relating to inspection services provided under the FMIA, PPIA,
or EPIA.
Additional Public Notification
Public awareness of all segments of rulemaking and policy
development is important. Consequently, in an effort to ensure that
minorities, women, and persons with disabilities are aware of this
notice, FSIS will announce it online through the FSIS Web page located
at https://www.fsis.usda.gov/Regulations_&_Policies/2009_Proposed_Rules_Index/index.asp. FSIS will also make copies of this Federal
Register publication available through the FSIS Constituent Update,
which is used to provide information regarding FSIS policies,
procedures, regulations, Federal Register notices, FSIS public
meetings, and other types of information that could affect or would be
of interest to constituents and stakeholders. The Update is
communicated via Listserv, a free electronic mail subscription service
for industry, trade and farm groups, consumer interest groups, allied
health professionals, and other individuals who have asked to be
included. The Update is also available on the FSIS Web page. Through
the Listserv and Web page, FSIS is able to provide information to a
much broader and more diverse audience. In addition, FSIS offers an e-
mail subscription service which provides automatic and customized
access to selected food safety news and information. This service is
available at https://www.fsis.usda.gov/news_and_events/email_subscription/. Options range from recalls to export information to
regulations, directives and notices. Customers can add or delete
subscriptions themselves, and have the option to password protect their
accounts.
List of Subjects
9 CFR Part 391
Fees and charges, Government employees, Meat inspection, Poultry
products.
9 CFR Part 590
Eggs and egg products, Exports, Food labeling, Imports.
9 CFR Part 592
Eggs and egg products, Exports, Food labeling, Imports.
For the reasons set forth in the preamble, FSIS proposes to amend 9
CFR Chapter III as follows:
PART 391--FEES AND CHARGES FOR INSPECTION AND LABORATORY
ACCREDITATION
1. The authority citation for part 391 continues to read as
follows:
Authority: 7 U.S.C. 138d; 7 U.S.C. 1622, 1627 and 2219al; 21
U.S.C. 451 et seq.; 21 U.S.C 601-695;
2. Section 391.2 is revised to read as follows:
Sec. 391.2 Base time rate.
(a) For each fiscal year and based on the previous fiscal year's
actual costs
[[Page 51805]]
and hours, FSIS calculates the base time rate for inspection services,
per hour per program employee, provided pursuant to Sec. Sec. 350.7,
351.8, 351.9, 352.5, 354.101, 355.12, and 362.5 using the following
formula: Office of Field Operations plus Office of International
Affairs inspection program personnel salaries paid divided by regular
hours multiplied by the next year's percentage of cost of living
increase, plus the benefits rate, plus the travel and operating rate,
plus the overhead rate, plus an allowance for bad debt.
(b) FSIS calculates the components of the base time rate, which are
based on previous fiscal year's actual costs, using the following
formulas:
(1) Benefits Rate. Direct benefits costs multiplied by the next
calendar year's percentage cost of living increase. Some examples of
direct benefits are health insurance, retirement, life insurance, and
Thrift Savings Plan (TSP) retirement basic and matching contributions.
(2) Travel and Operating Rate. Total direct travel and operating
costs multiplied by the percentage of inflation.
(3) Overhead Rate. All indirect costs plus the average information
technology (IT) costs over the previous two years in the Public Health
Data Communication Infrastructure System Fund plus the Office of
Management Program cost in the Reimbursable and Voluntary Funds less
any Greenbook costs (i.e., costs of USDA support services prorated to
the service component for which fees are charged) that are not related
to food inspection, divided by total direct hours (regular, overtime,
and holiday) worked across all funds, multiplied by the percentage of
inflation.
(4) Allowance for Bad Debt Rate. Total allowance for bad debt (for
plants and establishments that declare bankruptcy) divided by total
direct hours (regular, overtime, and holiday) worked.
(c) The cost of living increases and percentage of inflation
factors used in the formulas in this section are based on the Office of
Management and Budget's Presidential Economic Assumptions.
3. Section 391.3 is revised to read as follows:
Sec. 391.3 Overtime and holiday rate.
For each fiscal year and based on the previous fiscal year's actual
costs and hours, FSIS calculates the overtime and holiday rates, per
hour per program employee, provided pursuant to Sec. Sec. 307.5,
350.7, 351.8, 351.9, 352.5, 354.101, 355.12, 362.5, and 381.38 using
the following formulas:
(a) Overtime. Office of Field Operations plus Office of
International Affairs inspection program personnel salaries paid
divided by regular hours multiplied by the next year's percentage of
cost of living increase multiplied by 1.5 plus the benefits rate, plus
the travel and operating rate, plus the overhead rate, plus an
allowance for bad debt.
(b) Holiday Rate. Office of Field Operations plus Office of
International Affairs inspection program personnel salaries paid
divided by regular hours multiplied by the next year's percentage of
cost of living increase multiplied by 2, plus benefits rate, plus the
travel and operating rate, plus the overhead rate, plus an allowance
for bad debt.
(c) FSIS calculates the benefits rate, travel and operating rate,
overhead rate, and allowance for bad debt using the formulas in Sec.
391.2(b), and the cost of living increases and percentage of inflation
factors in 391.2(c).
4. Section 391.4 is revised to read as follows:
Sec. 391.4 Laboratory services rate.
(a) For each fiscal year and based on the previous fiscal year's
actual costs and hours, FSIS calculates the laboratory services rate,
per hour per program employee, provided pursuant to Sec. Sec. 350.7,
351.9, 352.5, 354.101, 355.12, and 362.5 will be calculated for future
fiscal years using the following formula: Office of Public Health
Science (OPHS) salaries paid divided by OPHS hours worked, multiplied
by the next calendar year's percentage cost of living increase, plus
the benefits rate, plus the travel and operating rate, plus the
overhead rate, plus an allowance for bad debt.
(b) FSIS calculates the benefits rate, the travel and operating
rate, the overhead rate, and the allowance for bad debt using the
formulas in 391.2(b), and the cost of living increases and percentage
of inflation factors in 391.2(c).
5. Paragraph (a) of Sec. 391.5 is revised to read as follows:
Sec. 391.5 Laboratory accreditation fee.
(a) The annual fee for the initial accreditation and maintenance of
accreditation provided pursuant to Sec. 439.5 shall be $4,500.00 for
fiscal years 2010 and 2011; and $5,000.00 for fiscal years 2012 and
2013.
* * * * *
PART 590--INSPECTION OF EGGS AND EGG PRODUCTS (EGG PRODUCTS
INSPECTION ACT)
6. The authority citation for part 590 continues to read as
follows:
Authority: 21 U.S.C. 1031-1056.
7. In Sec. 590.126, revise the second sentence to read as follows:
Sec. 590.126 Overtime inspection service.
* * * The official plant must give reasonable advance notice to the
inspector of any overtime service necessary and must pay for such
overtime. For each fiscal year and based on previous fiscal year's
actual costs and hours, FSIS calculates the overtime rate for
inspection service, per hour per program employee, using the following
formula: Office of Field Operations plus Office of International
Affairs inspection program personnel salaries paid divided by regular
hours multiplied by the next year's percentage of cost of living
increase multiplied by 1.5 plus the benefits rate, plus the travel and
operating rate, plus the overhead rate, plus an allowance for bad debt.
FSIS calculates the benefits rate, travel and operating rate, overhead
rate, and allowance for bad debt using the formulas in Sec. 592.510(b)
and the cost of living increases and percentage of inflation factors in
Sec. 592.510(c).
8. In Sec. 590.128(a), revise the second sentence to read as
follows:
Sec. 590.128 Holiday inspection service.
(a) * * * The official plant must, in advance of such holiday work,
request the inspector in charge to furnish inspection service during
such period and must pay the Agency for such holiday work at the hourly
rate. For each fiscal year and based on the previous year's actual
costs and hours, FSIS calculates the holiday rate for inspection
service, per hour per program employee, using the following formula:
Office of Field Operations plus Office of International Affairs
inspection program personnel salaries paid divided by regular hours
multiplied by the next year's percentage of cost of living increase
multiplied by 2, plus benefits rate, plus the travel and operating
rate, plus the overhead rate, plus an allowance for bad debt. FSIS
calculates the benefits rate, travel and operating rate, overhead rate,
and allowance for bad debt using the formulas in Sec. 592.510(b), and
the cost of living increases and percentage of inflation factors in
Sec. 592.510(c).
* * * * *
PART 592--VOLUNTARY INSPECTION OF EGG PRODUCTS
9. The authority citation for part 592 continues to read as
follows:
Authority: 7 U.S.C. 1621-1627.
10. Section 592.510 is revised to read as follows:
[[Page 51806]]
Sec. 592.510 Base time rate.
(a) For each fiscal year and based on the previous fiscal year's
actual costs and hours, FSIS calculates the base time rate for
inspection services, per hour per program employee, using the following
formula: Office of Field Operations plus Office of International
Affairs inspection program personnel salaries paid divided by regular
hours multiplied by the next year's percentage of cost of living
increase, plus the benefits rate, plus the travel and operating rate,
plus the overhead rate, plus an allowance for bad debt.
(b) FSIS calculates the components of the base time rate (which are
based on previous fiscal year's actual costs) using the following
formulas:
(1) Benefits Rate: Direct benefits costs multiplied by the next
calendar year's percentage cost of living increase. Some examples of
direct benefits are health insurance, retirement, life insurance, and
Thrift Saving Plan (TSP) retirement basic and matching contributions.
(2) Travel and Operating Rate: Total direct travel and operating
costs multiplied by the percentage of inflation.
(3) Overhead Rate: All indirect costs plus the average information
technology (IT) costs over the previous two years in the Public Health
Data Communication Infrastructure System Fund plus the Office of
Management Program cost in the Reimbursable and Voluntary Funds less
any Greenbook costs (i.e., costs of USDA support services prorated to
the service component for which fees are charged) that are not related
to food inspection, divided by total direct hours (regular, overtime,
and holiday) worked across all funds, multiplied by the percentage of
inflation.
(4) Allowance for Bad Debt Rate: Total allowance for bad debt (for
plants and establishments that declare bankruptcy) divided by total
direct hours (regular, overtime, and holiday) worked.
(c) The cost of living increases and percentage of inflation
factors used in the formulas in this section are based on the Office of
Management and Budget's Presidential Economic Assumptions.
12. In Sec. 592.520, revise the second sentence to read as
follows:
Sec. 592.520 Overtime rate.
* * * The official plant must give reasonable advance notice to the
inspector of any overtime service necessary. For each fiscal year and
based on the previous fiscal year's actual costs and hours, FSIS
calculates the overtime rate for inspection service, per hour per
program employee, using the following formula: Office of Field
Operations plus Office of International Affairs inspection program
personnel salaries paid divided by regular hours multiplied by the next
year's percentage of cost of living increase multiplied by 1.5 plus the
benefits rate, plus the travel and operating rate, plus the overhead
rate, plus an allowance for bad debt. FSIS calculates the benefits
rate, travel and operating rate, overhead rate, and allowance for bad
debt using the formulas in Sec. 592.510(b), and the cost of living
increases and percentage of inflation factors in Sec. 592.510(b).
13. In 592.530, revise the second sentence to read as follows:
Sec. 592.530 Holiday rate.
* * * The official plant must, in advance of such holiday work,
request that the inspector in charge furnish inspection service during
such period and must pay the Agency for such holiday work at the hourly
rate. For each fiscal year and based on the previous fiscal year's
actual costs and hours, FSIS calculates the holiday rate for inspection
service, per hour per program employee, using the following formula:
Office of Field Operations plus Office of International Affairs
inspection program personnel salaries paid divided by regular hours
multiplied by the next year's percentage of cost of living increase
multiplied by 2, plus benefits rate, plus the travel and operating
rate, plus the overhead rate, plus an allowance for bad debt. FSIS
calculates the benefits rate, travel and operating rate, overhead rate,
and allowance for bad debt using the formulas in Sec. 592.510(b), and
the cost of living increases and percentage of inflation factors in
Sec. 592.510(b).
Done in Washington, DC, on October 5, 2009.
Alfred V. Almanza,
Administrator.
[FR Doc. E9-24283 Filed 10-7-09; 8:45 am]
BILLING CODE 3410-DM-P
