Process for Establishing Rates Charged for AMS Services, 53633-53646 [2014-21188]
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53633
Proposed Rules
Federal Register
Vol. 79, No. 175
Wednesday, September 10, 2014
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
Agricultural Marketing Service
7 CFR Parts 27, 28, 29, 51, 52, 54, 56,
58, 62, 70, 75, and 91
[Document Number AMS–LPS–13–0050]
RIN 0581–AD36
Process for Establishing Rates
Charged for AMS Services
Agricultural Marketing Service,
USDA.
ACTION: Proposed rule.
AGENCY:
The Agricultural Marketing
Service (AMS) is proposing to amend its
regulations to provide for a set of
standardized formulas by which fees are
calculated. The methodology used to
calculate and implement the fees
charged by AMS user-funded programs
would be specified in the regulations.
Currently, AMS publishes separate rules
for each of the service fees it collects.
The fees are calculated using formulas
to account for all costs incurred by AMS
in providing these services. Each year,
fees would be announced in a notice in
the Federal Register by June 1 and take
effect at the start of the fiscal year, crop
year, or as required by specific laws.
This would provide greater
transparency to the customers we serve
as to how the fees are derived.
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SUMMARY:
The standardized formulas would be
used to calculate fees that AMS charges
for providing voluntary grading,
inspection, certification, auditing and
laboratory services for a variety of
agricultural commodities including
meat and poultry, fruits and vegetables,
eggs, dairy products, and cotton and
tobacco. The fees would also apply to
those persons requesting such services
including producers, handlers,
processors, importers and exporters.
Fees charged for inspection of fruits,
vegetables, and specialty crops subject
to the Agricultural Marketing
Agreement Act of 1937 also would be
affected by this rule.
Provisions of this proposed rule
would not supersede rates established
by Memorandum of Understanding,
Marketing Orders, or by cooperative
agreements already in place.
Furthermore, the cotton program would
continue to consult with its industry
before rates are established.
DATES: Comments must be received by
October 10, 2014.
ADDRESSES: AMS invites interested
persons to submit comments on this
proposed rule. Comments may be
submitted through the Federal
eRulemaking portal. This Web site
provides the ability to type short
comments directly into the comment
field on the Web page or attach a file
containing lengthier comments. Go to
https://www.regulations.gov and follow
the online instructions at that site for
submitting comments. All comments
submitted by mail or electronic mail
must include the Agency name and
docket number AMS–LPS–13–0050.
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.
For
further information concerning policy
issues contact, Melissa R. Bailey, Ph.D.,
AMS, U.S. Department of Agriculture,
Room 3069–S, 1400 Independence Ave.
SW., Washington, DC 20250; telephone
(202) 720–5115, fax (202) 720–8477.
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
Background
The Agricultural Marketing Act of
1946, as amended, (AMA) (7 U.S.C.
1621–1627), provides for the collection
of fees to cover costs of various
inspection, grading, certification or
auditing services covering many
agricultural commodities and products.
The AMA also provides for the recovery
of costs incurred in providing laboratory
services. The Cotton Statistics and
Estimates Act (7 U.S.C. 471–476) and
the U.S. Cotton Standards Act (7 U.S.C.
51–65) provide for classification of
cotton and development of cotton
standards materials necessary for cotton
classification. The Cotton Futures Act (7
U.S.C. 15b) provides for futures
certification services and the Tobacco
Inspection Act (7 U.S.C. 511–511s)
provides for tobacco inspection and
grading. These Acts also provide for the
recovery of costs associated with these
services. This proposal would set
formulas to calculate these fees and any
other fee currently being charged under
these statutes. The table below shows
the program regulations and types of
fees charged for AMS services.
Cotton Fees
Cotton Statistics and Estimates Act (7 U.S.C. 471–476).
U.S. Cotton Standards Act (7 U.S.C. 51–65).
Cotton Futures Act (7 U.S.C. 15b).
7 CFR Part 27—Cotton Classification Under Cotton Futures Legislation.
Subpart A—Regulations; §§ 27.80–27.90; Costs of Classifications and Micronaire.
7 CFR Part 28—Cotton Classing, Testing, and Standards.
Subpart A—Regulations Under the United States Cotton Standards Act; §§ 28.115–28.126; Fees and Costs.
Subpart D—Cotton Classification and Market News Service for Producers:
§§ 28.909; Costs.
§§ 28.910; Classification of samples and issuance of classification data.
§§ 28.911; Review classification.
Dairy Fees
The Agricultural Marketing Act of 1946, as amended, (AMA) (7 U.S.C. 1621–1627).
7 CFR Part 58—Grading and Inspection, General Specifications for Approved Plants and Standards for Grades of Dairy Products.
Subpart A—Regulations Governing the Inspection and Grading Services of Manufactured or Processed Dairy Products; §§ 58.38–58.46;
Fees and Charges.
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Fruit and Vegetable Fees
The Agricultural Marketing Act of 1946, as amended, (AMA) (7 U.S.C. 1621–1627).
7 CFR Part 51—Fresh Fruits, Vegetables and Other Products (Inspection, Certification, and Standards).
Subpart A—Regulations:
§§ 51.37–51.44; Schedule of Fees and Charges at Destination Markets.
§§ 51.45; Schedule of Fees and Charges at Shipping Point Areas.
7 CFR Part 52—Processed Fruits and Vegetables, Processed Products Thereof, and Other Processed Food Products.
Subpart—Regulations Governing Inspection and Certification; §§ 52.41–52.51; Fees and Charges.
Meat and Livestock Fees
The Agricultural Marketing Act of 1946, as amended, (AMA) (7 U.S.C. 1621–1627).
7 CFR Part 54—Meats, Prepared Meats, and Meat Products (Grading, Certification, and Standards).
Subpart A—Regulations; §§ 54.27–54.28; Charges for Service.
7 CFR Part 54—Meats, Prepared Meats, and Meat Products (Grading, Certification, and Standards).
Subpart C—Regulations Governing the Certification of Sanitary Design and Fabrication of Equipment Used in the Slaughter, Processing
and Packaging of Livestock and Poultry Products; §§ 54.1028; Charges for Service.
7 CFR Part 62—Livestock, Meat and Other Agricultural Commodities (Quality Systems Verification Programs).
Subpart A—Quality Systems Verification Definitions §§ 62.300; Fees and Other Costs for Service.
7 CFR Part 75—Regulations for Inspection and Certification of Quality of Agricultural and Vegetable Seeds; §§ 75.41; General.
Poultry Fees
The Agricultural Marketing Act of 1946, as amended, (AMA) (7 U.S.C. 1621–1627).
7 CFR Part 56—Voluntary Grading of Shell Eggs.
Subpart A—Grading of Shell Eggs; §§ 56.45–56.54; Fees and Charges.
7 CFR Part 70—Voluntary Grading of Poultry and Rabbit Products.
Subpart A—Grading of Poultry and Rabbit Products; §§ 70.70–70.78; Fees and Charges.
Science and Technology Fees
The Agricultural Marketing Act of 1946, as amended, (AMA) (7 U.S.C. 1621–1627).
7 CFR Part 91—Services and General Information (Science and Technology).
Subpart I—Fees and Charges; §§ 91.37–91.45.
Tobacco Fees
Tobacco Inspection Act (7 U.S.C. 511–511s).
7 CFR Part 29—Tobacco Inspection.
Subpart B—Regulations; §§ 29.123–29.129; Fees and Charges.
Subpart F—Policy Statement and Regulations Governing the Identification and Certification of Non-quota Tobacco Produced and Marketed
in Quota Area; §§ 29.9251; Fees and Charges.
Grading, inspection and verification
programs facilitate the movement of
agricultural products through marketing
channels—from growers to wholesalers,
retailers and consumers—in a quick,
efficient, and equitable manner. These
services include the grading, inspection
or certification of quality factors in
accordance with established U.S. Grade
Standards; audits or accreditation
according to International Organization
for Standardization (ISO) standards and/
or Hazard Analysis and Critical Control
Point (HACCP) principles; and other
marketing claims. The quality grades
serve as a basis to reflect the value of
agricultural commodities to both
producers and consumers. AMS’
grading and quality verification and
certification, audit and accreditation,
plant process and equipment
verification, and laboratory approval
services are voluntary tools paid for by
the users on a fee-for-service basis. The
agriculture industry can use these tools
to promote and communicate the
quality of agricultural commodities to
consumers. Laboratory services are
provided for analytic testing, including
but not limited to chemical,
microbiological, biomolecular, and
physical analyses.
Approximately 70 percent of AMS’
operational budget is derived from fees
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assessed for services provided to
agricultural industries. Changes in feefor-service rates may result from
fluctuating customer needs, increases in
employee salary and benefit expenses,
inflationary impact on non-labor
operating expenses and fixed costs, and/
or uncollected revenue (bad debt).
Currently, each AMS program
individually proposes a fee change
when a revenue shortfall is anticipated
for a specific program or activity. As a
result, these changes do not appear in a
single unified fee schedule. Lack of
certainty as to when annual fees will be
announced may affect fiscal planning
for the users of the services, especially
if fees are changed in the middle of a
contract or harvest season. In addition,
because of the separate and repetitive
use of the agency rulemaking process,
programs can experience delays in
recovering the full cost of the services
they provide.
As a result, a number of AMS
programs amended their regulations to
provide for multi-year annual fee
changes that were established by a
single rulemaking action. While this
enabled the Agency to collect revenue
based on a revised fee each year,
estimates used to set the projected
annual rates did not always result in the
Agency collecting revenues sufficient to
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cover its costs. Instead, in some
instances, the Agency recovered partial
costs.
In order to provide both transparency
and predictability to the industries
served and to allow the Agency to
effectively plan for staffing, investments
in infrastructure, and other resources,
AMS is proposing to amend its
regulations to provide for a set of
standardized formulas by which fees are
calculated. This process would use
formulas established to determine fees
for AMS’s grading, inspection,
certification, auditing, and laboratory
services that would cover expected costs
while maintaining a reasonable reserve.
AMS Programs are required to sustain a
certain minimum level of reserve funds
in order to maintain fiscal responsibility
should the program area undergo
closure. Each Program reserve level is
affected by factors such as number of
employees, salaries, benefits, contracted
obligations, and other items.
This rulemaking is similar to one
conducted by the USDA Food Safety
and Inspection Service (FSIS) and
published in the Federal Register on
April 12, 2011 (76 FR 20220). FSIS
established formulas for calculating
basetime, overtime, holiday, and
laboratory services user fee rates in its
final rule.
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Currently, AMS performs financial
analyses on an annual basis to
determine whether the current fees are
adequate to recover the costs incurred
for providing these services. Historical
or prior year cost and workload data,
along with applicable projections are
used to generate estimates of future
obligations and revenues. This proposal
would specify that the rates be based on
the actual cost and workload data of the
previous fiscal year(s) or accounting
period(s) (e.g. crop year) used by
respective programs. On the basis of
these analyses and using the proposed
formulas, AMS would determine the
fees necessary to sustain program
services. This would increase
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predictability and provide information
for planning purposes for the industries
utilizing AMS user fee services.
The components (costs) that AMS will
use to calculate the rates for services are
the same costs used in calculating past
rates.
COMPARISON OF CURRENT VERSUS PROPOSED SERVICE CHARGES (COSTS)
Current charges
Proposed charges
Direct pay .................................................................................................
Cost of living .............................................................................................
Benefits .....................................................................................................
Indirect costs (AMS support—‘‘overhead’’, bad debt) ..............................
Direct pay.
Cost of living.
Benefits.
Operating costs (training, equipment, reserve fund, AMS support—
‘‘overhead’’, and other related expenses).
Bad debt.
See operating costs.
See operating costs.
Travel (if applicable).
Overtime, holiday, Saturday, Sunday, and night differential as per OPM
guidelines.
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See indirect costs .....................................................................................
Reserve ....................................................................................................
Training, equipment and other related expenses ....................................
Travel (if applicable) .................................................................................
Overtime, holiday, Saturday, Sunday, and night differential as per OPM
guidelines.
As required by the Cotton Statistics
and Estimates Act (7 U.S.C. 471–476),
consultations regarding the
establishment of the fee for cotton
classification with U.S. cotton industry
representatives will continue.
Representatives of all segments of the
cotton industry, including producers,
ginners, bale storage facility operators,
merchants, cooperatives, and textile
manufacturers would continue to be
addressed in various industrysponsored forums.
Provisions of this proposed rule
would not supersede rates established
by Memoranda of Understanding,
Marketing Orders, cooperative
agreements or other similar instruments.
Under MOU, cooperative agreements,
and similar instruments, fees are
established based on specific
agreements specified with an individual
entity such as a State or university.
The outcome of this proposal would
be a transparent system for establishing
fee rates for all AMS user fee programs,
whereby financial and resource needs
for continued operation are reviewed on
a pre-determined cycle, using
established formulas. This would avoid
financial crises that may occur when
reserve funds are rapidly depleted due
to unanticipated business events, and
would allow the Agency to more
quickly adjust the cost of the services it
provides. The information would also
greatly benefit AMS customers by
allowing them to better plan for the cost
of AMS services.
Currently, AMS publishes a rule for
each of the service fees it collects. This
rulemaking action supports the
government’s initiative to streamline
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processes (Streamlining Government
Report GAO 11–908, September 2011)
and reduces the number of regulations
that are published by issuing one
regulation containing the formulas and
one notice a year to announce all user
fees. This action also supports the
Department’s goal of formalizing
processes to integrate openness,
transparency, participation and
collaboration (USDA Open Government
Plan, April 7, 2010) into AMS’s every
day operations.
With this action, AMS is proposing to
amend its regulations in 7 CFR parts 27,
28, 29, 51, 52, 54, 56, 58, 62, 70, 75, and
91 by making public the formulas it uses
to calculate user-fee rates. Making the
standardized formulas a part of the
regulations would allow AMS to
announce annual fees in a yearly
Federal Register notice, starting with
the effective date of this rule and for
subsequent years, by June 1 each year or
as required by specific laws. The fee
rates would be effective at the beginning
of the following fiscal year, crop year, or
as required by specific laws and
identified in the yearly notice. The
yearly notice will include all rates
charged by AMS including some that
are not currently part of regulations. The
yearly notice would include a per-hour
rate and, in some instances, the
equivalent per-unit cost. The per-unit
cost will be provided to facilitate
understanding of the costs associated
with the services to the industries that
historically use a unit-cost basis for
payment. In those cases where per-unit
cost is necessary, the formulas would
have an additional step to convert per
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hour costs to per unit costs. This
process is currently followed for cotton
and some fruit and vegetable user fee
services.
Travel costs are also part of the costs
that are charged for user fee services.
Currently, in some instances, travel
costs are already included in the fee
charged for service. In other instances,
travel costs are added to the fee. In both
instances, travel costs are charged to the
recipient of the service. The annual
notice would maintain the same
procedure currently used for recovering
travel costs.
AMS is also making several
administrative changes and corrections
to language in the regulations that is
obsolete, such as changing ‘‘diskette’’ to
‘‘electronic means’’.
Definitions
In order to provide additional clarity,
AMS defines the following terms used
throughout this document as follows:
Bad Debt—Accounts receivable that
will likely remain uncollectable and
will be written off.
Benefits—various non-wage
compensation provided to employees in
addition to their normal wages or
salaries. Examples of items included in
this category are health and
unemployment insurance, retirement,
workers compensation, Thrift Savings
Plan contributions, and other similar
compensation.
Cost of Living Adjustment—the cost of
maintaining a certain standard of living
based on the economic assumptions in
the Office of Management and Budget
(OMB), ‘‘Update to Civilian Position
Full Fringe Benefit Cost Factor, Federal
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Pay Raise Assumptions, and Inflation
Factors used in OMB Circular A–76,
Performance of Commercial Activities’’.
Direct Hours—the regular hours
worked by employees of the Agency.
This does not include overtime or
holiday hours.
Direct Pay—monetary compensation
paid to employees of AMS for work
performed. Pay is based on the U.S.
Office of Personnel Management pay
rate tables. It may include night and
Sunday differential costs.
Holiday—the official days of the
calendar year established by law (5
U.S.C. 6103) or identified by Executive
Order as Federal holidays.
Hour—measure by which grading,
certification, inspection, classification,
laboratory or other services cost is based
and expenses are charged.
Indirect Cost—this cost includes
program and AMS activities that
support the services provided to the
industry. Another common term for this
cost category is ‘‘overhead’’.
Operating Reserve—funds above
expected obligations required to
effectively manage uncertainties in
demand and cash flow timing.
Operating Cost—costs attributed to
performing grading, inspection,
certification, or laboratory services
duties (i.e. training, equipment, and
other such costs), plus operating
reserve, plus indirect costs.
Overtime—hours worked in excess of
the approved schedule. Work performed
after the first 8 hours per day or 40
hours per week is considered overtime.
Regular Rate—the cost per hour for
work provided in accordance with an
applicant contract. Under Federal labor
laws, this rate applies to the first 8
hours per day, or first 40 hours worked
per week by AMS employees.
Unit—any measurement that there is
one of. For example, one bale of cotton
or one truck load of vegetables.
Proposed Formulas for Regular,
Overtime, and Holiday Rates
With this rulemaking, AMS proposes
to amend its regulations to provide a set
of standardized formulas by which fees
are calculated. The methodology used to
calculate and implement the fees
charged by AMS user-funded programs
would be specified in 7 CFR parts 27,
28, 29, 51, 52, 54, 56, 58, 62, 70, 75, and
91.
AMS would use these formulas to
calculate annual fee rates starting with
the effective date of this rule and for
subsequent years. AMS will publish the
specific formulas used to calculate
service fees. AMS intends to announce
the actual annual fee rates in a Federal
Register notice by June 1 each year or
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as required by specific laws. These fees
would be effective at the beginning of
the following fiscal year, crop year, or
as required by specific laws.
Salary, hours, and most rates used in
the formulas would be based on the
prior fiscal year’s (or applicable
accounting period or historical data)
actual costs and hours. AMS would
round the final rates up to make the
amounts divisible by the quarter hour
(15 minutes). Fifteen minutes would be
the minimum charge for services
covered by these rates.1 Travel costs
may be part of a fee or may be added
to the calculated fee.
Currently, some fees are charged on a
per unit basis and others are charged on
a per hour basis. AMS would continue
to provide costs based on a per hour and
per unit basis to maintain consistency.
For cotton and some fruit and vegetable
programs, per unit costs are determined
after converting the hourly costs to
units.
AMS is proposing the following
formulas:
Regular Rate—The total AMS grading,
inspection, certification, classification,
audit, or laboratory service program
personnel direct pay divided by direct
hours for the previous year, which is
then multiplied by the next year’s
percentage of cost of living increase,
plus the benefits rate, plus the operating
rate, plus the allowance for bad debt
rate. If applicable, travel expenses may
also be added to the cost of providing
the service.
An example of the calculation would
look like this: [FY 2013 Direct Pay
divided by Total Direct Hours
($2,663,407/82,985) = $32.10, plus
($32.10 * 1.7% (2014 cost of living
increase)) = $32.64 + $10.04 (benefits
rate) + $28.90 (operating rate) + $.01
(bad debt allowance rate) = $71.59
(rounded to $71.60); rounding is done to
reflect billable quarter hour increments
of 15 minutes. If applicable, travel
expenses may also be added.
Overtime Rate—The total AMS
grading, inspection, certification,
classification, audit, or laboratory
service program personnel direct pay
divided by direct hours, which is then
multiplied by the next year’s percentage
of cost of living increase and then
multiplied by 1.5, plus the benefits rate,
plus the operating rate, plus an
allowance for bad debt. If applicable,
travel expenses may also be added to
the cost of providing the service.
An example of the calculation will
look like this: [FY 2013 Direct Pay
divided by Total Direct Hours
1 The current minimum charge for some services
covered by these rates is 30 minutes.
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($2,663,407/82,985) = $32.10, plus
($32.10 * 1.7% (2014 cost of living
increase)) = $32.64, multiplied by 1.5
($32.64 * 1.5 (overtime rate)) = $48.96
+ $10.04 (benefits rate) + 28.90
(operating rate) + $.01 (bad debt
allowance rate) = $87.91 (rounded to
$87.92); rounding is done to reflect
billable quarter hour of 15 minutes. If
applicable, travel expenses may also be
added.
Holiday Rate—The total AMS
grading, inspection, certification,
classification, audit, or laboratory
service program personnel direct pay
divided by direct hours, which is then
multiplied by the next year’s percentage
of cost of living increase and then
multiplied by 2, plus benefits rate, plus
the operating rate, plus an allowance for
bad debt. If applicable, travel expenses
may also be added to the cost of
providing the service.
An example of the calculation will
look like this: [FY 2013 Direct Pay
divided by Total Direct Hours
($2,663,407/82,985) = $32.10, plus
($32.10 * 1.7% (2014 cost of living
increase)) = $32.64, multiplied by 2
($32.64 * 2 (double time or Holiday
rate)) = $65.28 + $10.04 (benefits rate)
+ $28.90 (operating rate) + $.01 (bad
debt allowance rate) = $104.23 (rounded
to $104.24); rounding is done to reflect
billable quarter hour increments of 15
minutes. If applicable, travel expenses
may also be added.
Formula calculations are based on
prior fiscal year’s actual costs or
historical costs, workload data,
projection of expenses impacting
program costs, cost of living increase
and inflation. Cost of living increases
and inflation factors are based on the
economic assumptions from 2013–2023
which have been updated in the Office
of Management and Budget’s (OMB) FY
2014 Mid-Session Review. Rather than
codify a reference to this OMB budget
document in the proposed rule, each
year AMS intends to use the most recent
economic factors released by OMB for
budget development purposes to
determine cost impacts for these user
fee activities.
Proposed Formulas for the Benefits,
Operating, and Allowance for Bad Debt
Rates
As proposed, AMS intends to derive
the components of proposed formulas
above, using previous fiscal year’s
actual costs/historical costs, as follows:
Benefits Rate—The total AMS
grading, inspection, classification,
certification, audit, or laboratory service
program direct benefits costs divided by
the total hours worked (regular,
overtime, and holiday), which is then
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multiplied by the next calendar year’s
percentage cost of living increase.
An example of the calculation will
look like this: [2013 Direct Benefits cost/
(Total hours + Total Overtime hours +
Total Holiday hours) ($819,207/82,985)]
= $9.87, plus ($9.87 * 1.7% (2014 Cost
of Living)) = $10.04.
Operating Rate—The total AMS
grading, inspection, classification,
certification, audit, or laboratory service
program operating costs divided by total
hours worked (regular, overtime, and
holiday), which is then multiplied by
the percentage of inflation.
An example of the calculation will
look like this: [2013 Total Operating
Costs/(Total hours + Total Overtime
hours + Total Holiday hours)
($2,351,857/82,985)] = $28.34, plus
($28.34 * 2% (2014 Inflation)) = $28.90.
Allowance for Bad Debt Rate—Total
AMS grading, inspection, classification,
certification, audit, or laboratory service
program allowance for bad debt divided
by total hours worked (regular,
overtime, and holiday).
An example of the calculation will
look like this: [2013 Total Bad Debt
cost/(Total hours + Total Overtime
hours + Total Holiday hours) ($1,000/
82,985) = $ 0.01.
As noted above, the proposed
formulas reflect that the cost of
providing services include both direct
and indirect costs. Direct costs include
the cost of salaries, employee benefits,
and if applicable, travel and some
operating costs. Indirect or overhead
costs include the cost of program and
Agency activities supporting the
services provided to the industry.
Indirect cost expenditures are allocated
across the Agency for each direct hour
of grading, inspection, classification,
certification, auditing, or laboratory
service provided. For purposes of these
formulas, indirect costs have been
included as part of operating costs.
Executive Order 12866 and Executive
Order 13563
Executive Orders 12866 and 13563
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits, of
reducing costs, of harmonizing rules,
and of promoting flexibility. This
proposed rule is not a significant
regulatory action under section 3(f) of
Executive Order 12866, Regulatory
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Planning and Review, as supplemented
by Executive Order 13563. The Office of
Management and Budget has not
reviewed this proposal under these
Orders.
Executive Order 13175
This rule has been reviewed in
accordance with the requirements of
Executive Order 13175, Consultation
and Coordination with Indian Tribal
Governments. The review reveals that
this regulation would not have
substantial and direct effect on Tribal
governments and would not have
significant Tribal implications.
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.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
(5 U.S.C. 601–612) requires agencies to
consider the economic impact of each
rule on small entities and evaluate
alternatives that would accomplish the
objectives of the rule without unduly
burdening small entities or erecting
barriers that would restrict their ability
to compete in the market. The purpose
is to fit regulatory actions to the scale of
businesses subject to the action. Section
605 of the RFA allows an agency to
certify a rule, in lieu of preparing an
analysis, if the rulemaking is not
expected to have a significant economic
impact on a substantial number of small
entities.
Most small agricultural service firms
have been defined by the Small
Business Administration (SBA) (13 CFR
121.201) as those having annual receipts
of less than $7,000,000. For certain
types of businesses (e.g., dairy, egg, and
meat processing; handlers of produce),
the SBA considers a small entity as
those that employ less than 500
employees.
The grading, inspection, certification
and auditing services provided under
these regulations are voluntary.2 3 The
benefits of using grading, inspection,
certification, auditing, and laboratory
services outpace the costs of obtaining
these services. These services are used
by meat and poultry establishments,
2 Currently, there is no mandatory inspection and
grading of tobacco under the Tobacco Inspection
Act (7 U.S.C. 511–511s).
3 Fees charged for inspection of fruits, vegetables,
and specialty crops subject to the Agricultural
Marketing Agreement Act of 1937 also would be
affected by this rule.
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fruit and vegetable handlers and
processors, egg processing plants, dairy
processors, users of cotton and tobacco
program services, importers and
exporters of the above commodities, and
other interested persons to determine
quality and prices of their products.
AMS estimates that approximately
849 entities use voluntary meat grading
and certification services. This estimate
includes 413 egg, poultry, and rabbit
packing plants that use the USDA grade
shield. Of these 413 plants,
approximately fifteen percent would be
considered a small business under the
SBA criteria. The remaining 436 entities
includes livestock slaughterers, brokers,
meat and other processors, distributors,
organic certification companies, trade
associations, State and Federal entities,
and livestock producers and feeders. Of
these 436 entities, approximately 70
percent would be considered a small
business under the SBA criteria.
AMS estimates that 60 cotton
merchants use AMS services for cotton
futures classification, 20,000 cotton
producers and 637 cotton gins use AMS
services for normal cotton classification,
and 125 tobacco customers use AMS
services. Of these entities,
approximately 80 percent would be
considered a small business under the
SBA criteria.
AMS estimates that, over the last two
fiscal years, we provided user fee
services to an average of 2,308 fruit and
vegetable companies for fresh products.
AMS estimates that, over the last two
fiscal years, we provided user fee
services to an average of 1,087 fruit and
vegetable companies for processed
products. We estimate that
approximately 98 percent of these 3,395
companies would be considered a small
business under the SBA criteria. The
number of entities referenced above
includes those subject to the provisions
of the Agricultural Marketing
Agreement Act of 1937.
AMS estimates that 360 dairy plants
use AMS’ dairy grading and inspection
services. We believe that approximately
96 percent of these plants would be
considered a small business under the
SBA criteria.
AMS considered the economic impact
of this action on these small entities.
The proposed formulas would have a
minimal impact on entities that request
these services. The difference in fee
rates would be negligible since the costs
used in the formulas to calculate the
current and future fees would remain
the same. For example, it is expected
that the Dairy user fee would change
from $76 per hour to $78 per hour under
the proposed formulas. AMS has not
updated several of its programs’ user
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tkelley on DSK3SPTVN1PROD with PROPOSALS
fees for a number of years. For those fees
that have not been updated recently,
there may be a change in fees. These
possible changes would be the result of
using current economic data and cost
estimates to calculate the fee rates. AMS
would take into consideration, when
appropriate, economic and industry
conditions before adjusting fees. The
process would maintain up-to-date fees.
By including the formulas used to
calculate annual user fee rates in the
regulations, the Agency would
streamline the rulemaking process to
help ensure that fees are effective at the
beginning of each fiscal year or other
period as required by law. Fees would
cover inflation and national and locality
pay raises but would not support any
new budgetary initiative. Any cost
changes are similar to other changes that
the industry would experience because
of inflation and wage increases.
The outcome of this proposal would
be a transparent system for establishing
fee rates for all AMS user fee programs,
whereby financial and resource needs
for continued operation are reviewed on
a pre-determined cycle, using
established formulas. This would avoid
financial crises that occur when reserve
funds are rapidly depleted due to
unanticipated business events, and
would allow the Agency to more
quickly adjust the cost of the services it
provides. The information would also
greatly benefit AMS customers by
allowing them to better plan for the cost
of AMS services.
The total volume of commodities
graded, inspected and certified under
the associated regulations in 2012 was
approximately 91 billion pounds. An
overall increase in cost per pound of
product associated with the new fees is
estimated at $.0002. Even in competitive
industries such as fruit and vegetables,
meat, poultry, dairy and eggs, this
amount of increase in costs would have
an insignificant impact on profits and
processes. Accordingly, AMS certifies
that this rule will not have a significant
economic impact on a substantial
number of small entities.
Paperwork Reduction Act
This rule does not contain any new
information collection or recordkeeping
requirements that are subject to the
Office of Management and Budget
(OMB) approval under the Paperwork
Reduction Act, 44 U.S.C. Chapter 35.
E-Government Act
AMS 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
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information technologies and providing
increased opportunities for citizen
access to Government information and
services, and for other purposes.
Public awareness of all segments of
rulemaking and policy development is
important. Consequently, in an effort to
ensure that all interested parties,
including minorities, women, and
persons with disabilities are aware of
this notice, AMS will announce it
online and make copies of this Federal
Register publication available through
the AMS Web page located at https://
www.ams.usda.gov/AMSv1.0/. In
addition, AMS offers a subscription
service which provides automatic and
customized access to selected
agricultural commodity news and
information. Further, each program will
make a concerted effort to inform their
respective industries while performing
inspections and providing services.
Finally, USDA has not identified any
relevant Federal rules that duplicate,
overlap, or conflict with this proposed
rule.
A 30-day comment period is provided
to allow interested persons to respond
to this proposal. Thirty days is deemed
appropriate because this action needs to
be in place no later than March 2015 to
allow sufficient time for fees to be
published and the industry to be
notified. Further, this action does not
change the services for which fees are
charged. All written comments received
in response to this rule by the date
specified will be considered prior to
finalizing this action.
List of Subjects
7 CFR Part 27
Commodity futures, Cotton.
7 CFR Part 51
Agricultural commodities, Food
grades and standards, Fruits, Nuts,
Reporting and recordkeeping
requirements, Vegetables.
7 CFR Part 52
Food grades and standards, Food
labeling, Frozen foods, Fruits, Reporting
and recordkeeping requirements,
Vegetables
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7 CFR Part 58
Dairy products, Food grades and
standards, Food labeling, Reporting and
recordkeeping requirements.
7 CFR Part 62
Food grades and standards, Food
labeling, and Meat and meat products.
7 CFR Part 70
Food grades and standards, Food
labeling, Poultry and poultry products,
Rabbits and rabbit products, Reporting
and recordkeeping requirements.
7 CFR Part 75
Administrative practice and
procedure, Agricultural commodities,
Reporting and recordkeeping
requirements, Seeds, Vegetables.
7 CFR Part 91
Administrative practice and
procedure, Agricultural commodities,
Laboratories, Reporting and
recordkeeping requirements.
For the reasons set forth in the
preamble, 7 CFR chapter I is proposed
to be amended as follows:
PART 27—COTTON CLASSIFICATION
UNDER COTTON FUTURES
LEGISLATION
1. The authority citation for 7 CFR
part 27 continues to read as follows:
7 CFR Part 29
Administrative practice and
procedure, Advisory committees,
Government publications, Imports,
Pesticide and pests, Reporting and
recordkeeping requirements, Tobacco.
Frm 00006
7 CFR Part 56
Eggs and egg products, Food grades
and standards, Food labeling, Reporting
and recordkeeping requirements.
■
7 CFR Part 28
Administrative practice and
procedure, Cotton, Reporting and
recordkeeping requirements,
Warehouses.
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7 CFR Part 54
Food grades and standards, Food
labeling, Meat and meat products,
Poultry and poultry products.
Authority: 7 U.S.C. 15b, 7 U.S.C. 473a–b,
7 U.S.C. 1622(g).
2. Revise § 27.80 by adding
paragraphs (a) and (b) and removing
paragraphs (c) and (d).
The additions read as follows:
■
§ 27.80 Fees; review classification, futures
classification and supervision.
*
*
*
*
*
(a) For each calendar year, AMS will
calculate the rate for services, per hour
per program employee using the
following formulas:
(1) Regular rate. The total AMS
grading or classification program
personnel direct pay divided by direct
hours, which is then multiplied by the
next year’s percentage of cost of living
increase, plus the benefits rate, plus the
operating rate, plus the allowance for
bad debt rate. If applicable, travel
expenses may also be added to the cost
of providing the service.
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(2) Overtime rate. The total AMS
grading or classification program
personnel direct pay divided by direct
hours, which is then multiplied by the
next year’s percentage of cost of living
increase and then multiplied by 1.5 plus
the benefits rate, plus the operating rate,
plus an allowance for bad debt. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(3) Holiday rate. The total AMS
grading or classification program
personnel direct pay divided by direct
hours which is then multiplied by the
next year’s percentage of cost of living
increase and then multiplied by 2, plus
benefits rate, plus the operating rate,
plus an allowance for bad debt. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(b) For each calendar year, based on
historical costs, AMS will calculate the
benefits, operating, and allowance for
bad debt components of the regular,
overtime and holiday rates as follows:
(1) Benefits rate. The total AMS
grading or classification program direct
benefits costs divided by the total hours
(regular, overtime, and holiday) worked,
which is then 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) Operating rate. The total AMS
grading or classification program
operating costs divided by total hours
(regular, overtime, and holiday) worked,
which is then multiplied by the
percentage of inflation.
(3) Allowance for bad debt rate. Total
AMS grading or classification program
allowance for bad debt divided by total
hours (regular, overtime, and holiday)
worked.
(c) Basis. The calendar year cost of
living expenses and percentage of
inflation factors used in the formulas in
this section are based on the most
current Office of Management and
Budget’s Presidential Economic
Assumptions.
■ 3. Revise § 27.81 to read as follows:
tkelley on DSK3SPTVN1PROD with PROPOSALS
§ 27.81
Fees; certificates
For each new certificate issued in
substitution for a prior certificate at the
request of the holder thereof, for the
purpose of business convenience, or
when made necessary by the transfer of
cotton under the supervision of any
exchange inspection agency as provided
in § 27.73, the person making the
request shall pay a fee determined as
described in § 27.80 of this part.
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PART 28—COTTON CLASSING,
TESTING, AND STANDARDS
4. The authority citation for 7 CFR
part 28, Subpart A, continues to read as
follows:
■
Authority: 7 U.S.C. 55 and 61.
■
5. Revise § 28.116 to read as follows:
§ 28.116 Amounts of fees for
classification; exemption.
(a) For the classification of any cotton
or samples, the person requesting the
services shall pay a fee, based on the
description that follows, subject to the
additional fee provided by paragraph (c)
of this section.
(1) For each calendar year, AMS will
calculate the rate for services per hour
per program employee using the
following formulas:
(i) Regular rate. The total AMS
grading or classification program
personnel direct pay divided by direct
hours, which is then multiplied by the
next year’s percentage of cost of living
increase, plus the benefits rate, plus the
operating rate, plus the allowance for
bad debt rate. If applicable, travel
expenses may also be added to the cost
of providing the service.
(ii) Overtime rate. The total AMS
grading or classification program
personnel direct pay divided by direct
hours, which is then multiplied by the
next year’s percentage of cost of living
increase and then multiplied by 1.5 plus
the benefits rate, plus the operating rate,
plus an allowance for bad debt. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(iii) Holiday rate. The total AMS
grading or classification program
personnel direct pay divided by direct
hours which is then multiplied by the
next year’s percentage of cost of living
increase and then multiplied by 2, plus
benefits rate, plus the operating rate,
plus an allowance for bad debt. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(2) For each calendar year, based on
historical costs, AMS will calculate the
benefits, operating, and allowance for
bad debt components of the regular,
overtime and holiday rates as follows:
(i) Benefits rate. The total AMS
grading or classification program direct
benefits costs divided by the total hours
(regular, overtime, and holiday) worked,
which is then 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.
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53639
(ii) Operating rate. The total AMS
grading or classification program
operating costs divided by total hours
(regular, overtime, and holiday) worked,
which is then multiplied by the
percentage of inflation.
(iii) Allowance for bad debt rate. Total
AMS grading or classification program
allowance for bad debt divided by total
hours (regular, overtime, and holiday)
worked.
(3) The calendar year cost of living
expenses and percentage of inflation
factors used in the formulas in this
section are based on the most current
Office of Management and Budget’s
Presidential Economic Assumptions.
(b) When a comparison is requested of
any samples with a type or with other
samples, the fees prescribed in
paragraph (a) of this section shall apply
to every sample involved, including
each of the samples of which the type
is composed.
(c) An additional fee based on current
shipping rates shall be assessed for
returning samples unless the request for
service is so worded that the samples
become government property
immediately after classification.
(d) For any review of classification or
comparison of any cotton, the fees
prescribed in paragraph (a) of this
section shall apply. The additional fee
prescribed in paragraph (c) of this
section is not applicable to review of
classification if made on the same
sample as the original class or
comparison.
■ 6. Revise § 28.117 to read as follows:
§ 28.117 Fee for new memorandum or
certificate.
For each new memorandum or
certificate issued in substitution for a
prior memorandum or certificate at the
request of the holder, thereof, on
account of the breaking or splitting of
the lot of cotton covered thereby or
otherwise for his business convenience,
the person requesting such substitution
shall pay a fee determined as described
in § 28.116 of this part. If the
memorandum is provided by electronic
means, the fee shall be determined
using the same provisions.
■ 7. Revise § 28.122 to read as follows:
§ 28.122 Fee for practical classing
examination.
The fee for the practical classing
examination for cotton shall be
determined as described in § 28.116 of
this part. Any applicant who passes the
examination may be issued a certificate
indicating this accomplishment. Any
person who fails to pass the
examination may be reexamined. The
fee for this practical reexamination will
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be determined as described in section
28.116.
■ 8. The authority citation for 7 CFR
part 28, Subpart D, continues to read as
follows:
Authority: 7 U.S.C. 51–65; 7 U.S.C. 471–
476.
§ 28.911
9. Amend § 28.909 by revising
paragraph (b) to read as follows:
■
§ 28.909
Costs.
*
*
*
*
*
(b) The cost of High Volume
Instrument (HVI) cotton classification
service to producers will be based on
formulas set forth in § 28.116 of this
part. The proceeds of the sale of cotton
samples shall be used to defray the costs
of providing the service under this
subpart.
*
*
*
*
*
■ 10. Revise § 28.910 to read as follows:
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§ 28.910 Classification of samples and
issuances of classification data.
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Jkt 232001
Review classification.
(a) A producer may request one
review classification for each bale of
eligible cotton. The fee for review
classification shall be determined based
on the formulas in § 28.116.
(b) * * * Producers who request
return of their samples after classing
will pay a fee determined based on the
formulas in § 28.116.
PART 29—TOBACCO INSPECTION
12. The authority citation for part 29
is revised to read as follows:
■
Authority: 7 U.S.C. 511–511s.
13. Amend § 29.123 by:
a. Revising the first sentence of
paragraph (a);
■ b. Revising paragraph (b);
■ c. Redesignating paragraphs (c), (d),
and (e) as paragraphs (d), (e), and (f)
respectively;
■ d. Adding new paragraph (c); and
■ e. Revising newly redesignated
paragraph (d).
The revisions and addition read as
follows:
■
■
(a)(1) The samples submitted as
provided in the subpart shall be
classified by employees of the Division
and classification memoranda showing
the official quality determination of
each sample according to the official
cotton standards of the United States
shall be issued by any one of the
following methods at no additional
charge:
(i) Electronic means, or
(ii) Telecommunications, with all long
distance telephone line charges paid by
the receiver of data.
(2) When an additional copy of the
classification memorandum is issued by
any method listed in paragraph (a)(1) of
this section, there will be a charge
determined as described in § 28.116. If
provided as an additional method of
data transfer, the minimum fee for each
method issued shall also be determined
as described in § 28.116.
(b) Owners of cotton, other than
producers, may receive classification
data showing the official quality
determination of each sample by means
of telecommunications from a central
database to be maintained by the
Division. The fee for this service shall
be determined as described in § 28.116,
with all communication charges paid by
the receiver of data.
(c) Upon request of an owner of cotton
for which classification memoranda
have been issued under the subpart, a
new memorandum shall be issued for
the business convenience of such owner
without the reclassification of the
cotton. Such rewritten memorandum
shall bear the date of its issuance and
the date or inclusive dates of the
original classification. The per-hour fee
for a new memorandum shall be
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determined according to § 28.116, with
a minimum per-sheet fee determined
under the same provisions.
■ 11. Amend § 28.911 by revising
paragraph (a) and the last sentence in
paragraph (b) to read as follows:
§ 29.123
Fees and charges.
*
*
*
*
*
(a) Mandatory inspection. For each
year, AMS will calculate the rate for
services, per hour per program
employee as described in § 29.123(b)
and (c). * * *
(b) Domestic permissive inspection
and certification—(1) Regular rate. The
total AMS grading, inspection, or
sampling program personnel direct pay
divided by direct hours, which is then
multiplied by the next year’s percentage
of cost of living increase, plus the
benefits rate, plus the operating rate,
plus the allowance for bad debt rate. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(2) Overtime rate. The total AMS
grading, inspection, or sampling
program personnel direct pay divided
by direct hours, which is then
multiplied by the next year’s percentage
of cost of living increase and then
multiplied by 1.5 plus the benefits rate,
plus the operating rate, plus an
allowance for bad debt. If applicable,
travel expenses may also be added to
the cost of providing the service.
(3) Holiday rate. The total AMS
grading, inspection, or sampling
program personnel direct pay divided
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by direct hours which is then multiplied
by the next year’s percentage of cost of
living increase and then multiplied by
2, plus benefits rate, plus the operating
rate, plus an allowance for bad debt. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(4) Applicability. The fees in
paragraphs (b)(1) through (3) of this
section shall be applicable for hogshead,
bale cases, or sample inspections.
(c)(1) For each calendar year, based on
previous fiscal year/historical actual
costs, AMS will calculate the benefits,
operating, and allowance for bad debt
components of the regular, overtime and
holiday rates as follows:
(i) Benefits rate. The total AMS
grading, inspection, or sampling
program direct benefits costs divided by
the total hours (regular, overtime, and
holiday) worked, which is then
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.
(ii) Operating rate. The total AMS
grading, inspection, or sampling
program operating costs divided by total
hours (regular, overtime, and holiday)
worked, which is then multiplied by the
percentage of inflation.
(iii) Allowance for bad debt rate. Total
AMS grading, inspection, or sampling
program allowance for bad debt divided
by total hours (regular, overtime, and
holiday) worked.
(2) The calendar year cost of living
expenses and percentage of inflation
factors used in the formulas in this
section are based on the most recent
Office of Management and Budget’s
Presidential Economic Assumptions.
(d) Export permissive inspection and
certification. The inspection and
certification fee for export tobacco will
be determined as described in
§ 29.123(b) and (c).
*
*
*
*
*
■ 14. Amend § 29.500 by revising the
first sentence of paragraph (a) and
revising paragraphs (b) and (c) to read
as follows:
§ 29.500 Fees and charges for inspection
and acceptance of imported tobacco.
(a) The fee for inspection of imported
tobacco will be determined as described
in § 29.123 and shall be paid by the
importer. * * *
(b) The fee for sampling, accepting,
and certification of imported flue-cured
and burley tobacco for prohibited
pesticide residues will be determined as
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described in § 29.123 and shall be paid
by the importer.
(c) The fee for accepting imported
flue-cured and burley tobacco not
accompanied by a certification that it is
free of prohibited pesticide residues will
be determined as described in § 29.123.
Fees for services rendered shall be
remitted by check or draft in accordance
with a statement issued by the Director,
and shall be made payable to
‘‘Agricultural Marketing Service.’’
PART 51—FRESH FRUITS,
VEGETABLES AND OTHER
PRODUCTS (INSPECTION,
CERTIFICATION, AND STANDARDS)
15. The authority citation for part 51
continues to read as follows:
■
Authority: 7 U.S.C. 1621–1627.
■
16. Revise § 51.38 to read as follows:
tkelley on DSK3SPTVN1PROD with PROPOSALS
§ 51.38
Basis for fees and rates.
(a) For each calendar year, AMS will
calculate the rate for services, per hour
per program employee using the
following formulas:
(1) Regular rate. The total AMS
inspection program personnel direct pay
divided by direct hours, which is then
multiplied by the next year’s percentage
of cost of living increase, plus the
benefits rate, plus the operating rate,
plus the allowance for bad debt rate. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(2) Overtime rate. The total AMS
inspection program personnel direct pay
divided by direct hours, which is then
multiplied by the next year’s percentage
of cost of living increase and then
multiplied by 1.5 plus the benefits rate,
plus the operating rate, plus an
allowance for bad debt. If applicable,
travel expenses may also be added to
the cost of providing the service.
(3) Holiday rate. The total AMS
inspection program personnel direct pay
divided by direct hours which is then
multiplied by the next year’s percentage
of cost of living increase and then
multiplied by 2, plus benefits rate, plus
the operating rate, plus an allowance for
bad debt. If applicable, travel expenses
may also be added to the cost of
providing the service.
(b)(1) For each calendar year, based
on previous fiscal year/historical actual
costs, AMS will calculate the benefits,
operating, and allowance for bad debt
components of the regular, overtime and
holiday rates as follows:
(i) Benefits rate. The total AMS
inspection program direct benefits costs
divided by the total hours (regular,
overtime, and holiday) worked, which is
then multiplied by the next calendar
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Jkt 232001
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.
(ii) Operating rate. The total AMS
inspection program operating costs
divided by total hours (regular,
overtime, and holiday) worked, which is
then multiplied by the percentage of
inflation.
(iii) Allowance for bad debt rate. Total
allowance for bad debt divided by total
hours (regular, overtime, and holiday)
worked.
(2) The calendar year cost of living
expenses and percentage of inflation
factors used in the formulas in this
section are based on the most recent
Office of Management and Budget’s
Presidential Economic Assumptions.
(c) When an inspection is delayed
because product is not available or
readily accessible, a charge for waiting
time shall be determined using the
formulas in this section.
PART 52—PROCESSED FRUITS AND
VEGETABLES, PROCESSED
PRODUCTS THEREOF, AND OTHER
PROCESSED FOOD PRODUCTS
17. The authority citation for part 52
continues to read as follows:
■
Authority: 7 U.S.C. 1621–1627.
§ 52.2
[Amended]
18. Amend § 52.2 by removing the
definition of ‘‘In-plant sampler’’.
■ 19. Revise § 52.42 to read as follows:
■
§ 52.42
Schedule of fees.
(a) For each calendar year, AMS will
calculate the rate for services, per hour
per program employee using the
following formulas:
(1) Regular rate. The total AMS
inspection program personnel direct pay
divided by direct hours, which is then
multiplied by the next year’s percentage
of cost of living increase, plus the
benefits rate, plus the operating rate,
plus the allowance for bad debt rate. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(2) Overtime rate. The total AMS
inspection program personnel direct pay
divided by direct hours, which is then
multiplied by the next year’s percentage
of cost of living increase and then
multiplied by 1.5 plus the benefits rate,
plus the operating rate, plus an
allowance for bad debt. If applicable,
travel expenses may also be added to
the cost of providing the service.
(3) Holiday rate. The total AMS
inspection program personnel direct pay
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divided by direct hours which is then
multiplied by the next year’s percentage
of cost of living increase and then
multiplied by 2, plus benefits rate, plus
the operating rate, plus an allowance for
bad debt. If applicable, travel expenses
may also be added to the cost of
providing the service.
(b) For each calendar year, based on
previous fiscal year/historical actual
costs, AMS will calculate the benefits,
operating, and allowance for bad debt
components of the regular, overtime and
holiday rates as follows:
(1) Benefits rate. The total AMS
inspection program direct benefits costs
divided by the total hours (regular,
overtime, and holiday) worked, which is
then 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) Operating rate. The total AMS
inspection program operating costs
divided by total hours (regular,
overtime, and holiday) worked, which is
then multiplied by the percentage of
inflation.
(3) Allowance for bad debt rate. Total
AMS inspection program allowance for
bad debt divided by total hours (regular,
overtime, and holiday) worked.
(c) The calendar year cost of living
expenses and percentage of inflation
factors used in the formulas in this
section are based on the most recent
Office of Management and Budget’s
Presidential Economic Assumptions.
■ 20. Revise § 52.50 to read as follows:
§ 52.50
Travel and other expenses.
Charges may be assessed to cover the
cost of travel time incurred in
connection with the performance of any
inspection service, including appeal
inspections, as described in § 52.42 of
this part. This includes time spent
waiting for transportation as well as
time spent traveling, but not to exceed
eight hours of travel time for any one
person for any one day: And provided
further, that if travel is by common
carrier, no hourly charge may be made
for travel time outside the employee’s
official work hours.
■ 21. Amend § 52.51 by revising
paragraphs (a), (b), (c), and (d) to read
as follows:
§ 52.51 Charges for inspection services on
a contract basis.
(a) The Administrator may enter into
contracts with applicants to perform
continuous inspection services or other
types of inspection services pursuant to
the regulations in this part and other
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requirements as prescribed by the
Administrator in such contract, and the
charges for such inspection service
provided in such contracts shall be
based on such basis as will reimburse
the Agricultural Marketing Service of
the Department for the full cost of
rendering such inspection service as
described in § 52.42 of this subpart.
(b) The Administrator may enter into
a written memorandum of
understanding or contract, whichever
may be appropriate, with any
administrative agency charged with the
administration of a marketing agreement
or a marketing order effective pursuant
to the Agricultural Marketing
Agreement Act of 1937, as amended (7
U.S.C. 601 et seq.) for the making of
inspections pursuant to said agreement
or order on such basis as will reimburse
the Agricultural Marketing Service of
the Department for the full cost of
rendering such inspection service based
on the formulas in § 52.42 of this
subpart. Likewise, the Administrator
may enter into a written memorandum
of understanding or contract, whichever
may be appropriate, with an
administrative agency charged with an
administration of a similar program
operated pursuant to the laws of any
State.
(c) Charges for year-round in-plant
inspection services on a contract basis
will be billed to the applicant monthly
for all hours worked with a minimum of
40 hours per week for each inspector
assigned to perform the inspection
services. Charges for work performed in
excess of an employee’s regular work
schedule will be calculated as described
in § 52.42(a)(2) of this subpart.
(d) Charges for less than year-round
in-plant inspection services (four or
more consecutive 40 hour weeks) on a
contract basis will be billed to the
applicant monthly for all hours with a
minimum of 40 hours for each inspector
assigned to perform the inspection
services and will be calculated based on
the formulas in § 52.42 of this subpart.
*
*
*
*
*
PART 54—MEATS, PREPARED
MEATS, AND MEAT PRODUCTS
(GRADING, CERTIFICATION, AND
STANDARDS)
22. The authority citation for 7 CFR
part 54 continues to read as follows:
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■
Authority: 7 U.S.C. 1621–1627.
§ 54.6
[Amended]
23. Amend § 54.6 in paragraph (c)(2),
in the first sentence, by removing the
phrase ‘‘as provided in § 54.27(b)’’ and
adding ‘‘as provided in § 54.27’’ in its
place.
■
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■
24. Revise § 54.27 to read as follows:
§ 54.27 Fees and other charges for
service.
(a) Fees and other charges equal as
nearly as may be to the cost of the
services rendered shall be assessed and
collected from applicants in accordance
with the following provisions unless
otherwise provided in the cooperative
agreement under which the services are
furnished, or as provided in § 54.6 of
this subpart. For each calendar year,
AMS will calculate the rate for
inspection, grading, or certification
services, per hour per program
employee using the following formulas:
(1) Regular rate. The total AMS
grading, inspection, or certification
program personnel direct pay divided
by direct hours, which is then
multiplied by the next year’s percentage
of cost of living increase, plus the
benefits rate, plus the operating rate,
plus the allowance for bad debt rate. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(2) Overtime rate. The total AMS
grading, inspection, or certification
program personnel direct pay divided
by direct hours, which is then
multiplied by the next year’s percentage
of cost of living increase and then
multiplied by 1.5 plus the benefits rate,
plus the operating rate, plus an
allowance for bad debt. If applicable,
travel expenses may also be added to
the cost of providing the service.
(3) Holiday rate. The total AMS
grading, inspection, or certification
program personnel direct pay divided
by direct hours which is then multiplied
by the next year’s percentage of cost of
living increase and then multiplied by
2, plus benefits rate, plus the operating
rate, plus an allowance for bad debt. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(b)(1) For each calendar year, based
on previous fiscal year/historical actual
costs, AMS will calculate the benefits,
operating, and allowance for bad debt
components of the regular, overtime and
holiday rates as follows:
(i) Benefits rate. The total AMS
grading, inspection, or certification
program direct benefits costs divided by
the total hours (regular, overtime, and
holiday) worked, which is then
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.
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(ii) Operating rate. The total AMS
grading, inspection, or certification
program operating costs divided by total
hours (regular, overtime, and holiday)
worked, which is then multiplied by the
percentage of inflation.
(iii) Allowance for bad debt rate. Total
AMS grading, inspection, or
certification program allowance for bad
debt divided by total hours (regular,
overtime, and holiday) worked.
(2) The calendar year cost of living
expenses and percentage of inflation
factors used in the formulas in this
section are based on the most recent
Office of Management and Budget’s
Presidential Economic Assumptions.
(c) Fees for service on commitment
basis. Minimum fees for service
performed under a commitment
agreement or an agreement by
memorandum shall be on the basis of 8
hours per day, Monday through Friday,
excluding Federal legal holidays
occurring Monday through Friday on
which no grading and certification
services are performed. Fees will be
based on the formulas in this section.
The Agency reserves the right under
such a commitment agreement or
agreement by memorandum to use any
grader assigned to the plant on a
commitment basis to perform service for
other applicants, as provided in
§ 54.6(c), crediting the commitment
applicant with the number of hours
charged to the other applicant, provided
the allowable credit hours plus hours
actually worked for the applicants do
not exceed 8 hours on any day, Monday
through Friday, excluding legal
holidays.
(d) Fees for appeal service. Fees for
appeal service shall be determined on
the basis of the time, of two official
graders, required to render the service,
including the time required for the
preparation of certificates and travel of
such graders in connection with the
performance of the service. Provided,
That when on appeal it is found that
there was error in the original
determination equal to or exceeding ten
percent of the total number of similar
units of the products involved, no
charge will be made for the appeal
service unless a special agreement
therefor was made with the applicant in
advance.
(e) Fees for extra copies of certificates.
In addition to copies of certificates
furnished under § 54.14, any financially
interested person may obtain not to
exceed three copies of any such
certificate within one year from its date
of issuance upon payment of a fee, and
not to exceed three copies of any such
certificate at any time thereafter, while
a copy of such certificate is on file in the
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Department. The fee for copies of
certificates will be determined using the
formulas in this section.
PART 56—VOLUNTARY GRADING OF
SHELL EGGS
25. The authority citation for part 56
continues to read as follows:
■
Authority: 7 U.S.C. 1621–1627.
■
26. Revise § 56.46 to read as follows:
tkelley on DSK3SPTVN1PROD with PROPOSALS
§ 56.46
On a fee basis.
(a) Unless otherwise provided in this
part, the fees to be charged and
collected for any service performed, in
accordance with this part, on a fee basis
shall be based on the applicable
formulas specified in this section. For
each calendar year or crop year, AMS
will calculate the rate for grading or
audit services, per hour per program
employee using the following formulas:
(1) Regular rate. The total AMS
grading or audit program personnel
direct pay divided by direct hours,
which is then multiplied by the next
year’s percentage of cost of living
increase, plus the benefits rate, plus the
operating rate, plus the allowance for
bad debt rate. If applicable, travel
expenses may also be added to the cost
of providing the service.
(2) Overtime rate. The total AMS
grading or audit program personnel
direct pay divided by direct hours,
which is then multiplied by the next
year’s percentage of cost of living
increase and then multiplied by 1.5 plus
the benefits rate, plus the operating rate,
plus an allowance for bad debt. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(3) Holiday rate. The total AMS
grading or audit program personnel
direct pay divided by direct hours
which is then multiplied by the next
year’s percentage of cost of living
increase and then multiplied by 2, plus
benefits rate, plus the operating rate,
plus an allowance for bad debt. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(b)(1) For each calendar year, based
on previous fiscal year/historical actual
costs, AMS will calculate the benefits,
operating, and allowance for bad debt
components of the regular, overtime and
holiday rates as follows:
(i) Benefits rate. The total AMS
grading or audit program direct benefits
costs divided by the total hours (regular,
overtime, and holiday) worked, which is
then multiplied by the next calendar
year’s percentage cost of living increase.
Some examples of direct benefits are
health insurance, retirement, life
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insurance, and Thrift Savings Plan
(TSP) retirement basic and matching
contributions.
(ii) Operating rate. The total AMS
grading or audit program operating costs
divided by total hours (regular,
overtime, and holiday) worked, which is
then multiplied by the percentage of
inflation.
(iii) Allowance for bad debt rate. Total
AMS grading or audit program
allowance for bad debt divided by total
hours (regular, overtime, and holiday)
worked.
(2) The calendar year cost of living
expenses and percentage of inflation
factors used in the formulas in this
section are based on the most recent
Office of Management and Budget’s
Presidential Economic Assumptions.
(c) Fees for grading services will be
based on the time required to perform
the services. The hourly charges shall
include the time actually required to
perform the grading, waiting time, travel
time, and any clerical costs involved in
issuing a certificate.
(d) Fees for audit services will be
based on the time and expenses
required to perform the audit. The
hourly charge shall include the time
actually required to perform the audit,
waiting time, travel time, and any
clerical costs involved in issuing an
audit report.
■ 27. Amend § 56.52 by:
■ a. Revising the introductory text;
■ b. Revising the second sentence of
paragraph (a)(1); and
■ c. Revising the first sentence of
paragraph (a)(2) introductory text.
The revisions read as follows:
§ 56.54 Charges for continuous grading
performed on a nonresident basis.
§ 56.52 Charges for continuous grading
performed on a resident basis.
§ 58.43 Fees for inspection, grading,
sampling, and certification.
Fees to be charged and collected for
any grading service, other than for an
appeal grading, on a resident grading
basis, shall be calculated as described in
this part. The fees to be charged for any
appeal grading shall be as provided in
§ 56.47.
(a) * * *
(1) * * * The costs for completing the
plant survey shall be borne by the
applicant on a fee basis as described in
§ 56.46. * * *
(2) Charges for the cost of each grader
assigned to a plant will be calculated as
described in section 56.46 of this part,
except that no charge will be assessed
when the assigned grader is temporarily
reassigned by AMS to perform grading
service for other than the applicant.
* * *
*
*
*
*
*
■ 28. Amend § 56.54 by revising the
introductory text and paragraph (a)(1)
introductory text to read as follows:
(a) Unless otherwise provided in this
part, the fees to be charged and
collected for any service performed, in
accordance with this part, on a fee basis
shall be based on the applicable
formulas specified in this section. For
each calendar year, AMS will calculate
the rate for grading, certification, or
inspection services, per hour per
program employee using the following
formulas:
(1) Regular rate. The total AMS
grading, certification, or inspection
program personnel direct pay divided
by direct hours, which is then
multiplied by the next year’s percentage
of cost of living increase, plus the
benefits rate, plus the operating rate,
plus the allowance for bad debt rate. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(2) Overtime rate. The total AMS
grading, certification, or inspection
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Fees to be charged and collected for
grading service on a nonresident grading
basis, shall be calculated as described in
this part. The fees to be charged for any
appeal grading shall be calculated as
provided in § 56.47.
(a) * * *
(1) A charge for the salary and other
costs, calculated as described in § 56.46
of this part, for each grader while
assigned to a plant, except that no
charge will be made when the assigned
grader is temporarily reassigned by
AMS to perform grading service for
other than the applicant. Charges to
plants are as follows:
*
*
*
*
*
PART 58—GRADING AND
INSPECTION, GENERAL
SPECIFICATIONS FOR APPROVED
PLANTS AND STANDARDS FOR
GRADES OF DAIRY PRODUCTS
29. The authority citation for 7 CFR
part 58 continues to read as follows:
■
Authority: 7 U.S.C. 1621–1627.
■
30. Revise § 58.39 to read as follows:
§ 58.39 Fees for holiday or other
nonworktime.
If an applicant requests that
inspection or grading service be
performed on a holiday, Saturday, or
Sunday or in excess of each 8-hour shift
Monday through Friday, the applicant
shall be charged for such service at a
rate determined using the formulas in
§ 58.43.
■ 31. Revise § 58.43 to read as follows:
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tkelley on DSK3SPTVN1PROD with PROPOSALS
program personnel direct pay divided
by direct hours, which is then
multiplied by the next year’s percentage
of cost of living increase and then
multiplied by 1.5 plus the benefits rate,
plus the operating rate, plus an
allowance for bad debt. If applicable,
travel expenses may also be added to
the cost of providing the service.
(3) Holiday rate. The total AMS
grading, certification, or inspection
program personnel direct pay divided
by direct hours which is then multiplied
by the next year’s percentage of cost of
living increase and then multiplied by
2, plus benefits rate, plus the operating
rate, plus an allowance for bad debt. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(b) For each calendar year, based on
previous fiscal year/historical actual
costs, AMS will calculate the benefits,
operating, and allowance for bad debt
components of the regular, overtime and
holiday rates as follows:
(1) Benefits rate. The total AMS
grading, certification, or inspection
program direct benefits costs divided by
the total hours (regular, overtime, and
holiday) worked, which is then
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) Operating rate. The total AMS
grading, certification, or inspection
program operating costs divided by total
hours (regular, overtime, and holiday)
worked, which is then multiplied by the
percentage of inflation.
(3) Allowance for bad debt rate. Total
AMS grading, certification, or
inspection program allowance for bad
debt divided by total hours (regular,
overtime, and holiday) worked.
(c) The calendar year cost of living
expenses and percentage of inflation
factors used in the formulas in this
section are based on the most recent
Office of Management and Budget’s
Presidential Economic Assumptions.
■ 32. Revise § 58.45 to read as follows:
§ 58.45 Fees for continuous resident
services.
Charges for the inspector(s) and
grader(s) assigned to a continuous
resident program shall be calculated
using the formulas in § 58.43 of this
part.
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PART 62—LIVESTOCK, MEAT AND
OTHER AGRICULTURAL
COMMODITIES (QUALITY SYSTEMS
VERIFICATION PROGRAMS)
33. The authority citation for part 62
continues to read as follows:
■
Authority: 7 U.S.C. 1621–1627.
■
34. Revise § 62.300 to read as follows:
§ 62.300
Fees and other costs of service.
(a) For each calendar year, AMS will
calculate the rate for quality systems
verification services, per hour per
program employee using the following
formulas:
(1) Regular rate. The total AMS
quality systems verification program
(QSVP) personnel direct pay divided by
direct hours, which is then multiplied
by the next year’s percentage of cost of
living increase, plus the benefits rate,
plus the operating rate, plus the
allowance for bad debt rate. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(2) Overtime rate. The total AMS
QSVP personnel direct pay divided by
direct hours, which is then multiplied
by the next year’s percentage of cost of
living increase and then multiplied by
1.5 plus the benefits rate, plus the
operating rate, plus an allowance for
bad debt. If applicable, travel expenses
may also be added to the cost of
providing the service.
(3) Holiday rate. The total AMS QSVP
personnel direct pay divided by direct
hours which is then multiplied by the
next year’s percentage of cost of living
increase and then multiplied by 2, plus
benefits rate, plus the operating rate,
plus an allowance for bad debt. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(b)(1) For each calendar year, based
on previous fiscal year/historical actual
costs, AMS will calculate the benefits,
operating, and allowance for bad debt
components of the regular, overtime and
holiday rates as follows:
(i) Benefits rate. The total AMS QSVP
direct benefits costs divided by the total
hours (regular, overtime, and holiday)
worked, which is then 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.
(ii) Operating rate. The total AMS
QSVP operating costs divided by total
hours (regular, overtime, and holiday)
worked, which is then multiplied by the
percentage of inflation.
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(iii) Allowance for bad debt rate. Total
AMS QSVP allowance for bad debt
divided by total hours (regular,
overtime, and holiday) worked.
(2) The calendar year cost of living
expenses and percentage of inflation
factors used in the formulas in this
section are based on the most recent
Office of Management and Budget’s
Presidential Economic Assumptions.
(c) Transportation costs. Applicants
are responsible for paying actual travel
costs incurred to provide QSVP services
including but not limited to: Mileage
charges for use of privately owned
vehicles, rental vehicles and gas,
parking, tolls, and public transportation
costs such as airfare, train, and taxi
service.
(d) Per diem costs. The applicant is
responsible for paying per diem costs
incurred to provide QSVP services away
from the auditor’s or USDA officials’
official duty station(s). Per diem costs
shall be calculated in accordance with
existing travel regulations (41 CFR,
subtitle F—Federal Travel Regulation
System, chapter 301).
(e) Other costs. When costs, other
than those costs specified in paragraphs
(a), through (c) of this section, are
involved in providing the QSVP
services, the applicant shall be
responsible for these costs. The amount
of these costs shall be determined
administratively by the Chief. However,
the applicant will be notified of these
costs before the service is rendered.
PART 70—VOLUNTARY GRADING OF
POULTRY AND RABBIT PRODUCTS
35. The authority citation for part 70
continues to read as follows:
■
Authority: 7 U.S.C. 1621–1627.
■
36. Revise § 70.71 to read as follows:
§ 70.71
On a fee basis.
Unless otherwise provided in this
part, the fees to be charged and
collected for any grading or audit
service performed in accordance with
this part, on a fee basis shall be based
on the applicable formulas specified in
this section.
(a) For each calendar year, AMS will
calculate the rate for grading and audit
services, per hour per program
employee using the following formulas:
(1) Regular rate. The total AMS
grading or audit program personnel
direct pay divided by direct hours,
which is then multiplied by the next
year’s percentage of cost of living
increase, plus the benefits rate, plus the
operating rate, plus the allowance for
bad debt rate. If applicable, travel
expenses may also be added to the cost
of providing the service.
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(2) Overtime rate. The total AMS
grading or audit program personnel
direct pay divided by direct hours,
which is then multiplied by the next
year’s percentage of cost of living
increase and then multiplied by 1.5 plus
the benefits rate, plus the operating rate,
plus an allowance for bad debt. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(3) Holiday rate. The total AMS
grading or audit program personnel
direct pay divided by direct hours
which is then multiplied by the next
year’s percentage of cost of living
increase and then multiplied by 2, plus
benefits rate, plus the operating rate,
plus an allowance for bad debt. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(b)(1) For each calendar year, based
on previous fiscal year/historical actual
costs, AMS will calculate the benefits,
operating, and allowance for bad debt
components of the regular, overtime and
holiday rates as follows:
(i) Benefits rate. The total AMS
grading or audit program direct benefits
costs divided by the total hours (regular,
overtime, and holiday) worked, which is
then 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.
(ii) Operating rate. The AMS grading
or audit program total operating costs
divided by total hours (regular,
overtime, and holiday) worked, which is
then multiplied by the percentage of
inflation.
(iii) Allowance for bad debt rate. Total
AMS grading or audit program
allowance for bad debt divided by total
hours (regular, overtime, and holiday)
worked.
(2) The calendar year cost of living
expenses and percentage of inflation
factors used in the formulas in this
section are based on the most recent
Office of Management and Budget’s
Presidential Economic Assumptions.
(c) Fees for grading services will be
based on the time required to perform
the services. The hourly charges shall
include the time actually required to
perform the grading, waiting time, travel
time, and any clerical costs involved in
issuing a certificate.
(d) Fees for audit services will be
based on the time and expenses
required to perform the audit. The
hourly charge shall include the time
actually required to perform the audit,
waiting time, travel time, and any
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clerical costs involved in issuing an
audit report.
■ 37. Revise § 70.72 to read as follows:
§ 70.72 Fees for appeal grading or review
of a grader’s decision.
The costs of an appeal grading, or
review of a grader’s decision, shall be
borne by the appellant on a fee basis at
rates determined based on the formulas
in § 70.71 of this part. If the appeal
grading, or review of a grader’s decision
discloses that a material error was made
in the original determination, no fee or
expenses will be charged.
■ 38. Amend § 70.76 by revising the
introductory text and the first sentence
of paragraph (a)(1) introductory text to
read as follows:
§ 70.76 Charges for continuous poultry
grading performed on a nonresident basis.
Fees to be charged and collected for
grading service on a nonresident grading
basis shall be based on the formulas
provided in this part. The fees to be
charged for any appeal grading shall be
as provided in § 70.72.
(a) * * *
(1) A charge for the salary and other
costs, based on § 70.71 of this part, for
each grader while assigned to a plant,
except that no charge will be made
when the assigned grader is temporarily
reassigned by AMS to perform
grading service for other than the
applicant. * * *
*
*
*
*
*
■ 39. Amend § 70.77 by revising the
introductory text and paragraphs (a)(1)
and (2) to read as follows:
§ 70.77 Charges for continuous poultry or
rabbit grading performed on a resident
basis.
Fees to be charged and collected for
any grading service on a resident
grading basis and for an appeal grading
shall be determined based on the
formulas in section 70.71.
(a) * * *
(1) When a signed application for
service has been received, the State
supervisor or the supervisor’s assistant
shall complete a plant survey pursuant
to § 70.34. The costs for completing the
plant survey shall be borne by the
applicant on a fee basis based on the
formulas in § 70.71. No charges will be
assessed when the application is
required because of a change in name or
ownership. If service is not installed
within 6 months from the date the
application is filed, or if service is
inactive due to an approved request for
removal of a grader(s) for a period of 6
months, the application will be
considered terminated, but a new
application may be filed at any time. In
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53645
addition, there will be a charge of $300
if the application is terminated at the
request of the applicant for reasons
other than for a change in location
within 12 months from the date of the
inauguration of service.
(2) A charge for the salary and other
costs, as specified in this part, for each
grader while assigned to a plant, except
that no charge will be made when the
assigned grader is temporarily
reassigned by AMS to perform grading
service for other than the applicant.
*
*
*
*
*
PART 75—REGULATIONS FOR
INSPECTION AND CERTIFICATION OF
QUALITY OF AGRICULTURAL AND
VEGETABLE SEEDS
40. The authority citation for part 75
continues to read as follows:
■
Authority: 7 U.S.C. 1622, 1624.
■
41. Revise § 75.41 to read as follows:
§ 75.41
General.
Fees and charges for inspection or
certification services performed by
Federal employees shall cover the cost
of performing the service. Fees shall be
for actual time required to render the
service. For each calendar year, AMS
will calculate the rate for inspection or
certification services, per hour per
program employee using the following
formulas:
(1) Regular rate. The total AMS
inspection or certification program
personnel direct pay divided by direct
hours, which is then multiplied by the
next year’s percentage of cost of living
increase, plus the benefits rate, plus the
operating rate, plus the allowance for
bad debt rate. If applicable, travel
expenses may also be added to the cost
of providing the service.
(2) Overtime rate. The total AMS
inspection or certification program
personnel direct pay divided by direct
hours, which is then multiplied by the
next year’s percentage of cost of living
increase and then multiplied by 1.5 plus
the benefits rate, plus the operating rate,
plus an allowance for bad debt. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(3) Holiday rate. The total AMS
inspection or certification program
personnel direct pay divided by direct
hours which is then multiplied by the
next year’s percentage of cost of living
increase and then multiplied by 2, plus
benefits rate, plus the operating rate,
plus an allowance for bad debt. If
applicable, travel expenses may also be
added to the cost of providing the
service.
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Federal Register / Vol. 79, No. 175 / Wednesday, September 10, 2014 / Proposed Rules
(b) For each calendar year, based on
previous fiscal year/historical actual
costs, AMS will calculate the benefits,
operating, and allowance for bad debt
components of the regular, overtime and
holiday rates as follows:
(1) Benefits rate. The total AMS
inspection or certification program
direct benefits costs divided by the total
hours (regular, overtime, and holiday)
worked, which is then 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) Operating rate. The total AMS
inspection or certification program
operating costs divided by total hours
(regular, overtime, and holiday) worked,
which is then multiplied by the
percentage of inflation.
(3) Allowance for bad debt rate. Total
AMS inspection or certification program
allowance for bad debt divided by total
hours (regular, overtime, and holiday)
worked.
(c) The calendar year cost of living
expenses and percentage of inflation
factors used in the formulas in this
section are based on the most recent
Office of Management and Budget’s
Presidential Economic Assumptions.
■ 42. Amend § 75.42 by revising
paragraph (b) to read as follows:
§ 75.42
Sampling and sealing.
*
*
*
*
*
(b) When onsite inspection services
are performed by Federal employees at
the request of the applicant charges will
be based on the formulas in § 75.41 of
this part.
■ 43. Amend § 75.43 by revising
paragraphs (a) and (c) to read as follows:
§ 75.43
Laboratory testing.
*
*
*
*
*
(a) Fees assessed based on the
formulas in section 75.41 of this part.
*
*
*
*
*
(c) The fee for a preliminary report
issued prior to completion of testing
shall be assessed in accordance with
paragraph (a) of this section.
PART 91—SERVICES AND GENERAL
INFORMATION (SCIENCE AND
TECHNOLOGY)
44. The authority citation for part 91
continues to read as follows:
tkelley on DSK3SPTVN1PROD with PROPOSALS
■
Authority: 7 U.S.C. 1622, 1624.
45. Amend § 91.37 by:
a. Revising paragraphs (a) and (b);
b. Removing paragraph (c); and
c. Redesignating paragraphs (d) and
(e) as paragraphs (c) and (d),
respectively.
■
■
■
■
VerDate Mar<15>2010
16:29 Sep 09, 2014
Jkt 232001
The revisions read as follows:
§ 91.37 Standard hourly fee rate for
laboratory testing, analysis, and other
services.
(a) For each fiscal year, AMS will
calculate the rate for laboratory testing,
analysis, and other services, per hour
per program employee using the
following formulas:
(1) Regular rate. The total AMS
laboratory service program personnel
direct pay divided by direct hours,
which is then multiplied by the next
year’s percentage of cost of living
increase, plus the benefits rate, plus the
operating rate, plus the allowance for
bad debt rate. If applicable, travel
expenses may also be added to the cost
of providing the service.
(2) Overtime rate. The total AMS
laboratory service program personnel
direct pay divided by direct hours,
which is then multiplied by the next
year’s percentage of cost of living
increase and then multiplied by 1.5 plus
the benefits rate, plus the operating rate,
plus an allowance for bad debt. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(3) Holiday rate. The total AMS
laboratory service program personnel
direct pay divided by direct hours
which is then multiplied by the next
year’s percentage of cost of living
increase and then multiplied by 2, plus
benefits rate, plus the operating rate,
plus an allowance for bad debt. If
applicable, travel expenses may also be
added to the cost of providing the
service.
(b)(1) For each calendar year, based
on previous fiscal year/historical actual
costs, AMS will calculate the benefits,
operating, and allowance for bad debt
components of the regular, overtime and
holiday rates as follows:
(i) Benefits rate. The total AMS
laboratory service program direct
benefits costs divided by the total hours
(regular, overtime, and holiday) worked,
which is then 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.
(ii) Operating rate. The total AMS
laboratory service program operating
costs divided by total hours (regular,
overtime, and holiday) worked, which is
then multiplied by the percentage of
inflation.
(iii) Allowance for bad debt rate. Total
AMS laboratory service program
allowance for bad debt divided by total
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Sfmt 4702
hours (regular, overtime, and holiday)
worked.
(2) The calendar year cost of living
expenses and percentage of inflation
factors used in the formulas in this
section are based on the most recent
Office of Management and Budget’s
Presidential Economic Assumptions.
*
*
*
*
*
■ 46. Amend § 91.38 by revising
paragraph (a) to read as follows:
§ 91.38 Additional fees for appeal of
analysis.
(a) The applicant for appeal sample
testing will be charged a fee based on
the formulas in § 91.37 of this part.
*
*
*
*
*
■ 47. Amend § 91.39 by revising
paragraph (a) to read as follows:
§ 91.39 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
based on the formulas in § 91.37 of this
part.
*
*
*
*
*
Dated: August 29, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural
Marketing Service.
[FR Doc. 2014–21188 Filed 9–9–14; 8:45 am]
BILLING CODE 3410–02–P
SMALL BUSINESS ADMINISTRATION
13 CFR Part 121
RIN 3245–AG51
Small Business Size Standards:
Industries With Employee Based Size
Standards Not Part of Manufacturing,
Wholesale Trade, or Retail Trade
U.S. Small Business
Administration.
ACTION: Proposed rule.
AGENCY:
The U.S. Small Business
Administration (SBA) proposes to
increase employee based small business
SUMMARY:
E:\FR\FM\10SEP1.SGM
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]]>Agencies
[Federal Register Volume 79, Number 175 (Wednesday, September 10, 2014)]
[Proposed Rules]
[Pages 53633-53646]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-21188]
========================================================================
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. 79, No. 175 / Wednesday, September 10, 2014 /
Proposed Rules
[[Page 53633]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 27, 28, 29, 51, 52, 54, 56, 58, 62, 70, 75, and 91
[Document Number AMS-LPS-13-0050]
RIN 0581-AD36
Process for Establishing Rates Charged for AMS Services
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Agricultural Marketing Service (AMS) is proposing to amend
its regulations to provide for a set of standardized formulas by which
fees are calculated. The methodology used to calculate and implement
the fees charged by AMS user-funded programs would be specified in the
regulations. Currently, AMS publishes separate rules for each of the
service fees it collects. The fees are calculated using formulas to
account for all costs incurred by AMS in providing these services. Each
year, fees would be announced in a notice in the Federal Register by
June 1 and take effect at the start of the fiscal year, crop year, or
as required by specific laws. This would provide greater transparency
to the customers we serve as to how the fees are derived.
The standardized formulas would be used to calculate fees that AMS
charges for providing voluntary grading, inspection, certification,
auditing and laboratory services for a variety of agricultural
commodities including meat and poultry, fruits and vegetables, eggs,
dairy products, and cotton and tobacco. The fees would also apply to
those persons requesting such services including producers, handlers,
processors, importers and exporters. Fees charged for inspection of
fruits, vegetables, and specialty crops subject to the Agricultural
Marketing Agreement Act of 1937 also would be affected by this rule.
Provisions of this proposed rule would not supersede rates
established by Memorandum of Understanding, Marketing Orders, or by
cooperative agreements already in place. Furthermore, the cotton
program would continue to consult with its industry before rates are
established.
DATES: Comments must be received by October 10, 2014.
ADDRESSES: AMS invites interested persons to submit comments on this
proposed rule. Comments may be submitted through the Federal
eRulemaking portal. This Web site provides the ability to type short
comments directly into the comment field on the Web page or attach a
file containing lengthier comments. Go to https://www.regulations.gov
and follow the online instructions at that site for submitting
comments. All comments submitted by mail or electronic mail must
include the Agency name and docket number AMS-LPS-13-0050. 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.
FOR FURTHER INFORMATION CONTACT: For further information concerning
policy issues contact, Melissa R. Bailey, Ph.D., AMS, U.S. Department
of Agriculture, Room 3069-S, 1400 Independence Ave. SW., Washington, DC
20250; telephone (202) 720-5115, fax (202) 720-8477.
SUPPLEMENTARY INFORMATION:
Background
The Agricultural Marketing Act of 1946, as amended, (AMA) (7 U.S.C.
1621-1627), provides for the collection of fees to cover costs of
various inspection, grading, certification or auditing services
covering many agricultural commodities and products. The AMA also
provides for the recovery of costs incurred in providing laboratory
services. The Cotton Statistics and Estimates Act (7 U.S.C. 471-476)
and the U.S. Cotton Standards Act (7 U.S.C. 51-65) provide for
classification of cotton and development of cotton standards materials
necessary for cotton classification. The Cotton Futures Act (7 U.S.C.
15b) provides for futures certification services and the Tobacco
Inspection Act (7 U.S.C. 511-511s) provides for tobacco inspection and
grading. These Acts also provide for the recovery of costs associated
with these services. This proposal would set formulas to calculate
these fees and any other fee currently being charged under these
statutes. The table below shows the program regulations and types of
fees charged for AMS services.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Cotton Fees
Cotton Statistics and Estimates Act (7 U.S.C. 471-476).
U.S. Cotton Standards Act (7 U.S.C. 51-65).
Cotton Futures Act (7 U.S.C. 15b).
7 CFR Part 27--Cotton Classification Under Cotton Futures Legislation.
Subpart A--Regulations; Sec. Sec. 27.80-27.90; Costs of
Classifications and Micronaire.
7 CFR Part 28--Cotton Classing, Testing, and Standards.
Subpart A--Regulations Under the United States Cotton Standards Act;
Sec. Sec. 28.115-28.126; Fees and Costs.
Subpart D--Cotton Classification and Market News Service for
Producers:
Sec. Sec. 28.909; Costs.
Sec. Sec. 28.910; Classification of samples and issuance of
classification data.
Sec. Sec. 28.911; Review classification.
Dairy Fees
The Agricultural Marketing Act of 1946, as amended, (AMA) (7 U.S.C. 1621-
1627).
7 CFR Part 58--Grading and Inspection, General Specifications for
Approved Plants and Standards for Grades of Dairy Products.
Subpart A--Regulations Governing the Inspection and Grading Services
of Manufactured or Processed Dairy Products; Sec. Sec. 58.38-
58.46; Fees and Charges.
[[Page 53634]]
Fruit and Vegetable Fees
The Agricultural Marketing Act of 1946, as amended, (AMA) (7 U.S.C. 1621-
1627).
7 CFR Part 51--Fresh Fruits, Vegetables and Other Products (Inspection,
Certification, and Standards).
Subpart A--Regulations:
Sec. Sec. 51.37-51.44; Schedule of Fees and Charges at
Destination Markets.
Sec. Sec. 51.45; Schedule of Fees and Charges at Shipping
Point Areas.
7 CFR Part 52--Processed Fruits and Vegetables, Processed Products
Thereof, and Other Processed Food Products.
Subpart--Regulations Governing Inspection and Certification; Sec.
Sec. 52.41-52.51; Fees and Charges.
Meat and Livestock Fees
The Agricultural Marketing Act of 1946, as amended, (AMA) (7 U.S.C. 1621-
1627).
7 CFR Part 54--Meats, Prepared Meats, and Meat Products (Grading,
Certification, and Standards).
Subpart A--Regulations; Sec. Sec. 54.27-54.28; Charges for
Service.
7 CFR Part 54--Meats, Prepared Meats, and Meat Products (Grading,
Certification, and Standards).
Subpart C--Regulations Governing the Certification of Sanitary
Design and Fabrication of Equipment Used in the Slaughter,
Processing and Packaging of Livestock and Poultry Products; Sec.
Sec. 54.1028; Charges for Service.
7 CFR Part 62--Livestock, Meat and Other Agricultural Commodities
(Quality Systems Verification Programs).
Subpart A--Quality Systems Verification Definitions Sec. Sec.
62.300; Fees and Other Costs for Service.
7 CFR Part 75--Regulations for Inspection and Certification of Quality
of Agricultural and Vegetable Seeds; Sec. Sec. 75.41; General.
Poultry Fees
The Agricultural Marketing Act of 1946, as amended, (AMA) (7 U.S.C. 1621-
1627).
7 CFR Part 56--Voluntary Grading of Shell Eggs.
Subpart A--Grading of Shell Eggs; Sec. Sec. 56.45-56.54; Fees and
Charges.
7 CFR Part 70--Voluntary Grading of Poultry and Rabbit Products.
Subpart A--Grading of Poultry and Rabbit Products; Sec. Sec.
70.70-70.78; Fees and Charges.
Science and Technology Fees
The Agricultural Marketing Act of 1946, as amended, (AMA) (7 U.S.C. 1621-
1627).
7 CFR Part 91--Services and General Information (Science and
Technology).
Subpart I--Fees and Charges; Sec. Sec. 91.37-91.45.
Tobacco Fees
Tobacco Inspection Act (7 U.S.C. 511-511s).
7 CFR Part 29--Tobacco Inspection.
Subpart B--Regulations; Sec. Sec. 29.123-29.129; Fees and
Charges.
Subpart F--Policy Statement and Regulations Governing the
Identification and Certification of Non-quota Tobacco Produced and
Marketed in Quota Area; Sec. Sec. 29.9251; Fees and Charges.
------------------------------------------------------------------------
Grading, inspection and verification programs facilitate the
movement of agricultural products through marketing channels--from
growers to wholesalers, retailers and consumers--in a quick, efficient,
and equitable manner. These services include the grading, inspection or
certification of quality factors in accordance with established U.S.
Grade Standards; audits or accreditation according to International
Organization for Standardization (ISO) standards and/or Hazard Analysis
and Critical Control Point (HACCP) principles; and other marketing
claims. The quality grades serve as a basis to reflect the value of
agricultural commodities to both producers and consumers. AMS' grading
and quality verification and certification, audit and accreditation,
plant process and equipment verification, and laboratory approval
services are voluntary tools paid for by the users on a fee-for-service
basis. The agriculture industry can use these tools to promote and
communicate the quality of agricultural commodities to consumers.
Laboratory services are provided for analytic testing, including but
not limited to chemical, microbiological, biomolecular, and physical
analyses.
Approximately 70 percent of AMS' operational budget is derived from
fees assessed for services provided to agricultural industries. Changes
in fee-for-service rates may result from fluctuating customer needs,
increases in employee salary and benefit expenses, inflationary impact
on non-labor operating expenses and fixed costs, and/or uncollected
revenue (bad debt). Currently, each AMS program individually proposes a
fee change when a revenue shortfall is anticipated for a specific
program or activity. As a result, these changes do not appear in a
single unified fee schedule. Lack of certainty as to when annual fees
will be announced may affect fiscal planning for the users of the
services, especially if fees are changed in the middle of a contract or
harvest season. In addition, because of the separate and repetitive use
of the agency rulemaking process, programs can experience delays in
recovering the full cost of the services they provide.
As a result, a number of AMS programs amended their regulations to
provide for multi-year annual fee changes that were established by a
single rulemaking action. While this enabled the Agency to collect
revenue based on a revised fee each year, estimates used to set the
projected annual rates did not always result in the Agency collecting
revenues sufficient to cover its costs. Instead, in some instances, the
Agency recovered partial costs.
In order to provide both transparency and predictability to the
industries served and to allow the Agency to effectively plan for
staffing, investments in infrastructure, and other resources, AMS is
proposing to amend its regulations to provide for a set of standardized
formulas by which fees are calculated. This process would use formulas
established to determine fees for AMS's grading, inspection,
certification, auditing, and laboratory services that would cover
expected costs while maintaining a reasonable reserve. AMS Programs are
required to sustain a certain minimum level of reserve funds in order
to maintain fiscal responsibility should the program area undergo
closure. Each Program reserve level is affected by factors such as
number of employees, salaries, benefits, contracted obligations, and
other items.
This rulemaking is similar to one conducted by the USDA Food Safety
and Inspection Service (FSIS) and published in the Federal Register on
April 12, 2011 (76 FR 20220). FSIS established formulas for calculating
basetime, overtime, holiday, and laboratory services user fee rates in
its final rule.
[[Page 53635]]
Currently, AMS performs financial analyses on an annual basis to
determine whether the current fees are adequate to recover the costs
incurred for providing these services. Historical or prior year cost
and workload data, along with applicable projections are used to
generate estimates of future obligations and revenues. This proposal
would specify that the rates be based on the actual cost and workload
data of the previous fiscal year(s) or accounting period(s) (e.g. crop
year) used by respective programs. On the basis of these analyses and
using the proposed formulas, AMS would determine the fees necessary to
sustain program services. This would increase predictability and
provide information for planning purposes for the industries utilizing
AMS user fee services.
The components (costs) that AMS will use to calculate the rates for
services are the same costs used in calculating past rates.
Comparison of Current Versus Proposed Service Charges (Costs)
------------------------------------------------------------------------
Current charges Proposed charges
------------------------------------------------------------------------
Direct pay............................. Direct pay.
Cost of living......................... Cost of living.
Benefits............................... Benefits.
Indirect costs (AMS support-- Operating costs (training,
``overhead'', bad debt). equipment, reserve fund, AMS
support--``overhead'', and
other related expenses).
See indirect costs..................... Bad debt.
Reserve................................ See operating costs.
Training, equipment and other related See operating costs.
expenses.
Travel (if applicable)................. Travel (if applicable).
Overtime, holiday, Saturday, Sunday, Overtime, holiday, Saturday,
and night differential as per OPM Sunday, and night differential
guidelines. as per OPM guidelines.
------------------------------------------------------------------------
As required by the Cotton Statistics and Estimates Act (7 U.S.C.
471-476), consultations regarding the establishment of the fee for
cotton classification with U.S. cotton industry representatives will
continue. Representatives of all segments of the cotton industry,
including producers, ginners, bale storage facility operators,
merchants, cooperatives, and textile manufacturers would continue to be
addressed in various industry-sponsored forums.
Provisions of this proposed rule would not supersede rates
established by Memoranda of Understanding, Marketing Orders,
cooperative agreements or other similar instruments. Under MOU,
cooperative agreements, and similar instruments, fees are established
based on specific agreements specified with an individual entity such
as a State or university.
The outcome of this proposal would be a transparent system for
establishing fee rates for all AMS user fee programs, whereby financial
and resource needs for continued operation are reviewed on a pre-
determined cycle, using established formulas. This would avoid
financial crises that may occur when reserve funds are rapidly depleted
due to unanticipated business events, and would allow the Agency to
more quickly adjust the cost of the services it provides. The
information would also greatly benefit AMS customers by allowing them
to better plan for the cost of AMS services.
Currently, AMS publishes a rule for each of the service fees it
collects. This rulemaking action supports the government's initiative
to streamline processes (Streamlining Government Report GAO 11-908,
September 2011) and reduces the number of regulations that are
published by issuing one regulation containing the formulas and one
notice a year to announce all user fees. This action also supports the
Department's goal of formalizing processes to integrate openness,
transparency, participation and collaboration (USDA Open Government
Plan, April 7, 2010) into AMS's every day operations.
With this action, AMS is proposing to amend its regulations in 7
CFR parts 27, 28, 29, 51, 52, 54, 56, 58, 62, 70, 75, and 91 by making
public the formulas it uses to calculate user-fee rates. Making the
standardized formulas a part of the regulations would allow AMS to
announce annual fees in a yearly Federal Register notice, starting with
the effective date of this rule and for subsequent years, by June 1
each year or as required by specific laws. The fee rates would be
effective at the beginning of the following fiscal year, crop year, or
as required by specific laws and identified in the yearly notice. The
yearly notice will include all rates charged by AMS including some that
are not currently part of regulations. The yearly notice would include
a per-hour rate and, in some instances, the equivalent per-unit cost.
The per-unit cost will be provided to facilitate understanding of the
costs associated with the services to the industries that historically
use a unit-cost basis for payment. In those cases where per-unit cost
is necessary, the formulas would have an additional step to convert per
hour costs to per unit costs. This process is currently followed for
cotton and some fruit and vegetable user fee services.
Travel costs are also part of the costs that are charged for user
fee services. Currently, in some instances, travel costs are already
included in the fee charged for service. In other instances, travel
costs are added to the fee. In both instances, travel costs are charged
to the recipient of the service. The annual notice would maintain the
same procedure currently used for recovering travel costs.
AMS is also making several administrative changes and corrections
to language in the regulations that is obsolete, such as changing
``diskette'' to ``electronic means''.
Definitions
In order to provide additional clarity, AMS defines the following
terms used throughout this document as follows:
Bad Debt--Accounts receivable that will likely remain uncollectable
and will be written off.
Benefits--various non-wage compensation provided to employees in
addition to their normal wages or salaries. Examples of items included
in this category are health and unemployment insurance, retirement,
workers compensation, Thrift Savings Plan contributions, and other
similar compensation.
Cost of Living Adjustment--the cost of maintaining a certain
standard of living based on the economic assumptions in the Office of
Management and Budget (OMB), ``Update to Civilian Position Full Fringe
Benefit Cost Factor, Federal
[[Page 53636]]
Pay Raise Assumptions, and Inflation Factors used in OMB Circular A-76,
Performance of Commercial Activities''.
Direct Hours--the regular hours worked by employees of the Agency.
This does not include overtime or holiday hours.
Direct Pay--monetary compensation paid to employees of AMS for work
performed. Pay is based on the U.S. Office of Personnel Management pay
rate tables. It may include night and Sunday differential costs.
Holiday--the official days of the calendar year established by law
(5 U.S.C. 6103) or identified by Executive Order as Federal holidays.
Hour--measure by which grading, certification, inspection,
classification, laboratory or other services cost is based and expenses
are charged.
Indirect Cost--this cost includes program and AMS activities that
support the services provided to the industry. Another common term for
this cost category is ``overhead''.
Operating Reserve--funds above expected obligations required to
effectively manage uncertainties in demand and cash flow timing.
Operating Cost--costs attributed to performing grading, inspection,
certification, or laboratory services duties (i.e. training, equipment,
and other such costs), plus operating reserve, plus indirect costs.
Overtime--hours worked in excess of the approved schedule. Work
performed after the first 8 hours per day or 40 hours per week is
considered overtime.
Regular Rate--the cost per hour for work provided in accordance
with an applicant contract. Under Federal labor laws, this rate applies
to the first 8 hours per day, or first 40 hours worked per week by AMS
employees.
Unit--any measurement that there is one of. For example, one bale
of cotton or one truck load of vegetables.
Proposed Formulas for Regular, Overtime, and Holiday Rates
With this rulemaking, AMS proposes to amend its regulations to
provide a set of standardized formulas by which fees are calculated.
The methodology used to calculate and implement the fees charged by AMS
user-funded programs would be specified in 7 CFR parts 27, 28, 29, 51,
52, 54, 56, 58, 62, 70, 75, and 91.
AMS would use these formulas to calculate annual fee rates starting
with the effective date of this rule and for subsequent years. AMS will
publish the specific formulas used to calculate service fees. AMS
intends to announce the actual annual fee rates in a Federal Register
notice by June 1 each year or as required by specific laws. These fees
would be effective at the beginning of the following fiscal year, crop
year, or as required by specific laws.
Salary, hours, and most rates used in the formulas would be based
on the prior fiscal year's (or applicable accounting period or
historical data) actual costs and hours. AMS would round the final
rates up to make the amounts divisible by the quarter hour (15
minutes). Fifteen minutes would be the minimum charge for services
covered by these rates.\1\ Travel costs may be part of a fee or may be
added to the calculated fee.
---------------------------------------------------------------------------
\1\ The current minimum charge for some services covered by
these rates is 30 minutes.
---------------------------------------------------------------------------
Currently, some fees are charged on a per unit basis and others are
charged on a per hour basis. AMS would continue to provide costs based
on a per hour and per unit basis to maintain consistency. For cotton
and some fruit and vegetable programs, per unit costs are determined
after converting the hourly costs to units.
AMS is proposing the following formulas:
Regular Rate--The total AMS grading, inspection, certification,
classification, audit, or laboratory service program personnel direct
pay divided by direct hours for the previous year, which is then
multiplied by the next year's percentage of cost of living increase,
plus the benefits rate, plus the operating rate, plus the allowance for
bad debt rate. If applicable, travel expenses may also be added to the
cost of providing the service.
An example of the calculation would look like this: [FY 2013 Direct
Pay divided by Total Direct Hours ($2,663,407/82,985) = $32.10, plus
($32.10 * 1.7% (2014 cost of living increase)) = $32.64 + $10.04
(benefits rate) + $28.90 (operating rate) + $.01 (bad debt allowance
rate) = $71.59 (rounded to $71.60); rounding is done to reflect
billable quarter hour increments of 15 minutes. If applicable, travel
expenses may also be added.
Overtime Rate--The total AMS grading, inspection, certification,
classification, audit, or laboratory service program personnel direct
pay divided by direct hours, which is then multiplied by the next
year's percentage of cost of living increase and then multiplied by
1.5, plus the benefits rate, plus the operating rate, plus an allowance
for bad debt. If applicable, travel expenses may also be added to the
cost of providing the service.
An example of the calculation will look like this: [FY 2013 Direct
Pay divided by Total Direct Hours ($2,663,407/82,985) = $32.10, plus
($32.10 * 1.7% (2014 cost of living increase)) = $32.64, multiplied by
1.5 ($32.64 * 1.5 (overtime rate)) = $48.96 + $10.04 (benefits rate) +
28.90 (operating rate) + $.01 (bad debt allowance rate) = $87.91
(rounded to $87.92); rounding is done to reflect billable quarter hour
of 15 minutes. If applicable, travel expenses may also be added.
Holiday Rate--The total AMS grading, inspection, certification,
classification, audit, or laboratory service program personnel direct
pay divided by direct hours, which is then multiplied by the next
year's percentage of cost of living increase and then multiplied by 2,
plus benefits rate, plus the operating rate, plus an allowance for bad
debt. If applicable, travel expenses may also be added to the cost of
providing the service.
An example of the calculation will look like this: [FY 2013 Direct
Pay divided by Total Direct Hours ($2,663,407/82,985) = $32.10, plus
($32.10 * 1.7% (2014 cost of living increase)) = $32.64, multiplied by
2 ($32.64 * 2 (double time or Holiday rate)) = $65.28 + $10.04
(benefits rate) + $28.90 (operating rate) + $.01 (bad debt allowance
rate) = $104.23 (rounded to $104.24); rounding is done to reflect
billable quarter hour increments of 15 minutes. If applicable, travel
expenses may also be added.
Formula calculations are based on prior fiscal year's actual costs
or historical costs, workload data, projection of expenses impacting
program costs, cost of living increase and inflation. Cost of living
increases and inflation factors are based on the economic assumptions
from 2013-2023 which have been updated in the Office of Management and
Budget's (OMB) FY 2014 Mid-Session Review. Rather than codify a
reference to this OMB budget document in the proposed rule, each year
AMS intends to use the most recent economic factors released by OMB for
budget development purposes to determine cost impacts for these user
fee activities.
Proposed Formulas for the Benefits, Operating, and Allowance for Bad
Debt Rates
As proposed, AMS intends to derive the components of proposed
formulas above, using previous fiscal year's actual costs/historical
costs, as follows:
Benefits Rate--The total AMS grading, inspection, classification,
certification, audit, or laboratory service program direct benefits
costs divided by the total hours worked (regular, overtime, and
holiday), which is then
[[Page 53637]]
multiplied by the next calendar year's percentage cost of living
increase.
An example of the calculation will look like this: [2013 Direct
Benefits cost/(Total hours + Total Overtime hours + Total Holiday
hours) ($819,207/82,985)] = $9.87, plus ($9.87 * 1.7% (2014 Cost of
Living)) = $10.04.
Operating Rate--The total AMS grading, inspection, classification,
certification, audit, or laboratory service program operating costs
divided by total hours worked (regular, overtime, and holiday), which
is then multiplied by the percentage of inflation.
An example of the calculation will look like this: [2013 Total
Operating Costs/(Total hours + Total Overtime hours + Total Holiday
hours) ($2,351,857/82,985)] = $28.34, plus ($28.34 * 2% (2014
Inflation)) = $28.90.
Allowance for Bad Debt Rate--Total AMS grading, inspection,
classification, certification, audit, or laboratory service program
allowance for bad debt divided by total hours worked (regular,
overtime, and holiday).
An example of the calculation will look like this: [2013 Total Bad
Debt cost/(Total hours + Total Overtime hours + Total Holiday hours)
($1,000/82,985) = $ 0.01.
As noted above, the proposed formulas reflect that the cost of
providing services include both direct and indirect costs. Direct costs
include the cost of salaries, employee benefits, and if applicable,
travel and some operating costs. Indirect or overhead costs include the
cost of program and Agency activities supporting the services provided
to the industry. Indirect cost expenditures are allocated across the
Agency for each direct hour of grading, inspection, classification,
certification, auditing, or laboratory service provided. For purposes
of these formulas, indirect costs have been included as part of
operating costs.
Executive Order 12866 and Executive Order 13563
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This proposed rule is not a significant regulatory action
under section 3(f) of Executive Order 12866, Regulatory Planning and
Review, as supplemented by Executive Order 13563. The Office of
Management and Budget has not reviewed this proposal under these
Orders.
Executive Order 13175
This rule has been reviewed in accordance with the requirements of
Executive Order 13175, Consultation and Coordination with Indian Tribal
Governments. The review reveals that this regulation would not have
substantial and direct effect on Tribal governments and would not have
significant Tribal implications.
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.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) requires
agencies to consider the economic impact of each rule on small entities
and evaluate alternatives that would accomplish the objectives of the
rule without unduly burdening small entities or erecting barriers that
would restrict their ability to compete in the market. The purpose is
to fit regulatory actions to the scale of businesses subject to the
action. Section 605 of the RFA allows an agency to certify a rule, in
lieu of preparing an analysis, if the rulemaking is not expected to
have a significant economic impact on a substantial number of small
entities.
Most small agricultural service firms have been defined by the
Small Business Administration (SBA) (13 CFR 121.201) as those having
annual receipts of less than $7,000,000. For certain types of
businesses (e.g., dairy, egg, and meat processing; handlers of
produce), the SBA considers a small entity as those that employ less
than 500 employees.
The grading, inspection, certification and auditing services
provided under these regulations are voluntary.2 3 The
benefits of using grading, inspection, certification, auditing, and
laboratory services outpace the costs of obtaining these services.
These services are used by meat and poultry establishments, fruit and
vegetable handlers and processors, egg processing plants, dairy
processors, users of cotton and tobacco program services, importers and
exporters of the above commodities, and other interested persons to
determine quality and prices of their products.
---------------------------------------------------------------------------
\2\ Currently, there is no mandatory inspection and grading of
tobacco under the Tobacco Inspection Act (7 U.S.C. 511-511s).
\3\ Fees charged for inspection of fruits, vegetables, and
specialty crops subject to the Agricultural Marketing Agreement Act
of 1937 also would be affected by this rule.
---------------------------------------------------------------------------
AMS estimates that approximately 849 entities use voluntary meat
grading and certification services. This estimate includes 413 egg,
poultry, and rabbit packing plants that use the USDA grade shield. Of
these 413 plants, approximately fifteen percent would be considered a
small business under the SBA criteria. The remaining 436 entities
includes livestock slaughterers, brokers, meat and other processors,
distributors, organic certification companies, trade associations,
State and Federal entities, and livestock producers and feeders. Of
these 436 entities, approximately 70 percent would be considered a
small business under the SBA criteria.
AMS estimates that 60 cotton merchants use AMS services for cotton
futures classification, 20,000 cotton producers and 637 cotton gins use
AMS services for normal cotton classification, and 125 tobacco
customers use AMS services. Of these entities, approximately 80 percent
would be considered a small business under the SBA criteria.
AMS estimates that, over the last two fiscal years, we provided
user fee services to an average of 2,308 fruit and vegetable companies
for fresh products. AMS estimates that, over the last two fiscal years,
we provided user fee services to an average of 1,087 fruit and
vegetable companies for processed products. We estimate that
approximately 98 percent of these 3,395 companies would be considered a
small business under the SBA criteria. The number of entities
referenced above includes those subject to the provisions of the
Agricultural Marketing Agreement Act of 1937.
AMS estimates that 360 dairy plants use AMS' dairy grading and
inspection services. We believe that approximately 96 percent of these
plants would be considered a small business under the SBA criteria.
AMS considered the economic impact of this action on these small
entities. The proposed formulas would have a minimal impact on entities
that request these services. The difference in fee rates would be
negligible since the costs used in the formulas to calculate the
current and future fees would remain the same. For example, it is
expected that the Dairy user fee would change from $76 per hour to $78
per hour under the proposed formulas. AMS has not updated several of
its programs' user
[[Page 53638]]
fees for a number of years. For those fees that have not been updated
recently, there may be a change in fees. These possible changes would
be the result of using current economic data and cost estimates to
calculate the fee rates. AMS would take into consideration, when
appropriate, economic and industry conditions before adjusting fees.
The process would maintain up-to-date fees.
By including the formulas used to calculate annual user fee rates
in the regulations, the Agency would streamline the rulemaking process
to help ensure that fees are effective at the beginning of each fiscal
year or other period as required by law. Fees would cover inflation and
national and locality pay raises but would not support any new
budgetary initiative. Any cost changes are similar to other changes
that the industry would experience because of inflation and wage
increases.
The outcome of this proposal would be a transparent system for
establishing fee rates for all AMS user fee programs, whereby financial
and resource needs for continued operation are reviewed on a pre-
determined cycle, using established formulas. This would avoid
financial crises that occur when reserve funds are rapidly depleted due
to unanticipated business events, and would allow the Agency to more
quickly adjust the cost of the services it provides. The information
would also greatly benefit AMS customers by allowing them to better
plan for the cost of AMS services.
The total volume of commodities graded, inspected and certified
under the associated regulations in 2012 was approximately 91 billion
pounds. An overall increase in cost per pound of product associated
with the new fees is estimated at $.0002. Even in competitive
industries such as fruit and vegetables, meat, poultry, dairy and eggs,
this amount of increase in costs would have an insignificant impact on
profits and processes. Accordingly, AMS certifies that this rule will
not have a significant economic impact on a substantial number of small
entities.
Paperwork Reduction Act
This rule does not contain any new information collection or
recordkeeping requirements that are subject to the Office of Management
and Budget (OMB) approval under the Paperwork Reduction Act, 44 U.S.C.
Chapter 35.
E-Government Act
AMS 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.
Public awareness of all segments of rulemaking and policy
development is important. Consequently, in an effort to ensure that all
interested parties, including minorities, women, and persons with
disabilities are aware of this notice, AMS will announce it online and
make copies of this Federal Register publication available through the
AMS Web page located at https://www.ams.usda.gov/AMSv1.0/. In addition,
AMS offers a subscription service which provides automatic and
customized access to selected agricultural commodity news and
information. Further, each program will make a concerted effort to
inform their respective industries while performing inspections and
providing services.
Finally, USDA has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this proposed rule.
A 30-day comment period is provided to allow interested persons to
respond to this proposal. Thirty days is deemed appropriate because
this action needs to be in place no later than March 2015 to allow
sufficient time for fees to be published and the industry to be
notified. Further, this action does not change the services for which
fees are charged. All written comments received in response to this
rule by the date specified will be considered prior to finalizing this
action.
List of Subjects
7 CFR Part 27
Commodity futures, Cotton.
7 CFR Part 28
Administrative practice and procedure, Cotton, Reporting and
recordkeeping requirements, Warehouses.
7 CFR Part 29
Administrative practice and procedure, Advisory committees,
Government publications, Imports, Pesticide and pests, Reporting and
recordkeeping requirements, Tobacco.
7 CFR Part 51
Agricultural commodities, Food grades and standards, Fruits, Nuts,
Reporting and recordkeeping requirements, Vegetables.
7 CFR Part 52
Food grades and standards, Food labeling, Frozen foods, Fruits,
Reporting and recordkeeping requirements, Vegetables
7 CFR Part 54
Food grades and standards, Food labeling, Meat and meat products,
Poultry and poultry products.
7 CFR Part 56
Eggs and egg products, Food grades and standards, Food labeling,
Reporting and recordkeeping requirements.
7 CFR Part 58
Dairy products, Food grades and standards, Food labeling, Reporting
and recordkeeping requirements.
7 CFR Part 62
Food grades and standards, Food labeling, and Meat and meat
products.
7 CFR Part 70
Food grades and standards, Food labeling, Poultry and poultry
products, Rabbits and rabbit products, Reporting and recordkeeping
requirements.
7 CFR Part 75
Administrative practice and procedure, Agricultural commodities,
Reporting and recordkeeping requirements, Seeds, Vegetables.
7 CFR Part 91
Administrative practice and procedure, Agricultural commodities,
Laboratories, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, 7 CFR chapter I is
proposed to be amended as follows:
PART 27--COTTON CLASSIFICATION UNDER COTTON FUTURES LEGISLATION
0
1. The authority citation for 7 CFR part 27 continues to read as
follows:
Authority: 7 U.S.C. 15b, 7 U.S.C. 473a-b, 7 U.S.C. 1622(g).
0
2. Revise Sec. 27.80 by adding paragraphs (a) and (b) and removing
paragraphs (c) and (d).
The additions read as follows:
Sec. 27.80 Fees; review classification, futures classification and
supervision.
* * * * *
(a) For each calendar year, AMS will calculate the rate for
services, per hour per program employee using the following formulas:
(1) Regular rate. The total AMS grading or classification program
personnel direct pay divided by direct hours, which is then multiplied
by the next year's percentage of cost of living increase, plus the
benefits rate, plus the operating rate, plus the allowance for bad debt
rate. If applicable, travel expenses may also be added to the cost of
providing the service.
[[Page 53639]]
(2) Overtime rate. The total AMS grading or classification program
personnel direct pay divided by direct hours, which is then multiplied
by the next year's percentage of cost of living increase and then
multiplied by 1.5 plus the benefits rate, plus the operating rate, plus
an allowance for bad debt. If applicable, travel expenses may also be
added to the cost of providing the service.
(3) Holiday rate. The total AMS grading or classification program
personnel direct pay divided by direct hours which is then multiplied
by the next year's percentage of cost of living increase and then
multiplied by 2, plus benefits rate, plus the operating rate, plus an
allowance for bad debt. If applicable, travel expenses may also be
added to the cost of providing the service.
(b) For each calendar year, based on historical costs, AMS will
calculate the benefits, operating, and allowance for bad debt
components of the regular, overtime and holiday rates as follows:
(1) Benefits rate. The total AMS grading or classification program
direct benefits costs divided by the total hours (regular, overtime,
and holiday) worked, which is then 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) Operating rate. The total AMS grading or classification program
operating costs divided by total hours (regular, overtime, and holiday)
worked, which is then multiplied by the percentage of inflation.
(3) Allowance for bad debt rate. Total AMS grading or
classification program allowance for bad debt divided by total hours
(regular, overtime, and holiday) worked.
(c) Basis. The calendar year cost of living expenses and percentage
of inflation factors used in the formulas in this section are based on
the most current Office of Management and Budget's Presidential
Economic Assumptions.
0
3. Revise Sec. 27.81 to read as follows:
Sec. 27.81 Fees; certificates
For each new certificate issued in substitution for a prior
certificate at the request of the holder thereof, for the purpose of
business convenience, or when made necessary by the transfer of cotton
under the supervision of any exchange inspection agency as provided in
Sec. 27.73, the person making the request shall pay a fee determined
as described in Sec. 27.80 of this part.
PART 28--COTTON CLASSING, TESTING, AND STANDARDS
0
4. The authority citation for 7 CFR part 28, Subpart A, continues to
read as follows:
Authority: 7 U.S.C. 55 and 61.
0
5. Revise Sec. 28.116 to read as follows:
Sec. 28.116 Amounts of fees for classification; exemption.
(a) For the classification of any cotton or samples, the person
requesting the services shall pay a fee, based on the description that
follows, subject to the additional fee provided by paragraph (c) of
this section.
(1) For each calendar year, AMS will calculate the rate for
services per hour per program employee using the following formulas:
(i) Regular rate. The total AMS grading or classification program
personnel direct pay divided by direct hours, which is then multiplied
by the next year's percentage of cost of living increase, plus the
benefits rate, plus the operating rate, plus the allowance for bad debt
rate. If applicable, travel expenses may also be added to the cost of
providing the service.
(ii) Overtime rate. The total AMS grading or classification program
personnel direct pay divided by direct hours, which is then multiplied
by the next year's percentage of cost of living increase and then
multiplied by 1.5 plus the benefits rate, plus the operating rate, plus
an allowance for bad debt. If applicable, travel expenses may also be
added to the cost of providing the service.
(iii) Holiday rate. The total AMS grading or classification program
personnel direct pay divided by direct hours which is then multiplied
by the next year's percentage of cost of living increase and then
multiplied by 2, plus benefits rate, plus the operating rate, plus an
allowance for bad debt. If applicable, travel expenses may also be
added to the cost of providing the service.
(2) For each calendar year, based on historical costs, AMS will
calculate the benefits, operating, and allowance for bad debt
components of the regular, overtime and holiday rates as follows:
(i) Benefits rate. The total AMS grading or classification program
direct benefits costs divided by the total hours (regular, overtime,
and holiday) worked, which is then 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.
(ii) Operating rate. The total AMS grading or classification
program operating costs divided by total hours (regular, overtime, and
holiday) worked, which is then multiplied by the percentage of
inflation.
(iii) Allowance for bad debt rate. Total AMS grading or
classification program allowance for bad debt divided by total hours
(regular, overtime, and holiday) worked.
(3) The calendar year cost of living expenses and percentage of
inflation factors used in the formulas in this section are based on the
most current Office of Management and Budget's Presidential Economic
Assumptions.
(b) When a comparison is requested of any samples with a type or
with other samples, the fees prescribed in paragraph (a) of this
section shall apply to every sample involved, including each of the
samples of which the type is composed.
(c) An additional fee based on current shipping rates shall be
assessed for returning samples unless the request for service is so
worded that the samples become government property immediately after
classification.
(d) For any review of classification or comparison of any cotton,
the fees prescribed in paragraph (a) of this section shall apply. The
additional fee prescribed in paragraph (c) of this section is not
applicable to review of classification if made on the same sample as
the original class or comparison.
0
6. Revise Sec. 28.117 to read as follows:
Sec. 28.117 Fee for new memorandum or certificate.
For each new memorandum or certificate issued in substitution for a
prior memorandum or certificate at the request of the holder, thereof,
on account of the breaking or splitting of the lot of cotton covered
thereby or otherwise for his business convenience, the person
requesting such substitution shall pay a fee determined as described in
Sec. 28.116 of this part. If the memorandum is provided by electronic
means, the fee shall be determined using the same provisions.
0
7. Revise Sec. 28.122 to read as follows:
Sec. 28.122 Fee for practical classing examination.
The fee for the practical classing examination for cotton shall be
determined as described in Sec. 28.116 of this part. Any applicant who
passes the examination may be issued a certificate indicating this
accomplishment. Any person who fails to pass the examination may be
reexamined. The fee for this practical reexamination will
[[Page 53640]]
be determined as described in section 28.116.
0
8. The authority citation for 7 CFR part 28, Subpart D, continues to
read as follows:
Authority: 7 U.S.C. 51-65; 7 U.S.C. 471-476.
0
9. Amend Sec. 28.909 by revising paragraph (b) to read as follows:
Sec. 28.909 Costs.
* * * * *
(b) The cost of High Volume Instrument (HVI) cotton classification
service to producers will be based on formulas set forth in Sec.
28.116 of this part. The proceeds of the sale of cotton samples shall
be used to defray the costs of providing the service under this
subpart.
* * * * *
0
10. Revise Sec. 28.910 to read as follows:
Sec. 28.910 Classification of samples and issuances of classification
data.
(a)(1) The samples submitted as provided in the subpart shall be
classified by employees of the Division and classification memoranda
showing the official quality determination of each sample according to
the official cotton standards of the United States shall be issued by
any one of the following methods at no additional charge:
(i) Electronic means, or
(ii) Telecommunications, with all long distance telephone line
charges paid by the receiver of data.
(2) When an additional copy of the classification memorandum is
issued by any method listed in paragraph (a)(1) of this section, there
will be a charge determined as described in Sec. 28.116. If provided
as an additional method of data transfer, the minimum fee for each
method issued shall also be determined as described in Sec. 28.116.
(b) Owners of cotton, other than producers, may receive
classification data showing the official quality determination of each
sample by means of telecommunications from a central database to be
maintained by the Division. The fee for this service shall be
determined as described in Sec. 28.116, with all communication charges
paid by the receiver of data.
(c) Upon request of an owner of cotton for which classification
memoranda have been issued under the subpart, a new memorandum shall be
issued for the business convenience of such owner without the
reclassification of the cotton. Such rewritten memorandum shall bear
the date of its issuance and the date or inclusive dates of the
original classification. The per-hour fee for a new memorandum shall be
determined according to Sec. 28.116, with a minimum per-sheet fee
determined under the same provisions.
0
11. Amend Sec. 28.911 by revising paragraph (a) and the last sentence
in paragraph (b) to read as follows:
Sec. 28.911 Review classification.
(a) A producer may request one review classification for each bale
of eligible cotton. The fee for review classification shall be
determined based on the formulas in Sec. 28.116.
(b) * * * Producers who request return of their samples after
classing will pay a fee determined based on the formulas in Sec.
28.116.
PART 29--TOBACCO INSPECTION
0
12. The authority citation for part 29 is revised to read as follows:
Authority: 7 U.S.C. 511-511s.
0
13. Amend Sec. 29.123 by:
0
a. Revising the first sentence of paragraph (a);
0
b. Revising paragraph (b);
0
c. Redesignating paragraphs (c), (d), and (e) as paragraphs (d), (e),
and (f) respectively;
0
d. Adding new paragraph (c); and
0
e. Revising newly redesignated paragraph (d).
The revisions and addition read as follows:
Sec. 29.123 Fees and charges.
* * * * *
(a) Mandatory inspection. For each year, AMS will calculate the
rate for services, per hour per program employee as described in Sec.
29.123(b) and (c). * * *
(b) Domestic permissive inspection and certification--(1) Regular
rate. The total AMS grading, inspection, or sampling program personnel
direct pay divided by direct hours, which is then multiplied by the
next year's percentage of cost of living increase, plus the benefits
rate, plus the operating rate, plus the allowance for bad debt rate. If
applicable, travel expenses may also be added to the cost of providing
the service.
(2) Overtime rate. The total AMS grading, inspection, or sampling
program personnel direct pay divided by direct hours, which is then
multiplied by the next year's percentage of cost of living increase and
then multiplied by 1.5 plus the benefits rate, plus the operating rate,
plus an allowance for bad debt. If applicable, travel expenses may also
be added to the cost of providing the service.
(3) Holiday rate. The total AMS grading, inspection, or sampling
program personnel direct pay divided by direct hours which is then
multiplied by the next year's percentage of cost of living increase and
then multiplied by 2, plus benefits rate, plus the operating rate, plus
an allowance for bad debt. If applicable, travel expenses may also be
added to the cost of providing the service.
(4) Applicability. The fees in paragraphs (b)(1) through (3) of
this section shall be applicable for hogshead, bale cases, or sample
inspections.
(c)(1) For each calendar year, based on previous fiscal year/
historical actual costs, AMS will calculate the benefits, operating,
and allowance for bad debt components of the regular, overtime and
holiday rates as follows:
(i) Benefits rate. The total AMS grading, inspection, or sampling
program direct benefits costs divided by the total hours (regular,
overtime, and holiday) worked, which is then 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.
(ii) Operating rate. The total AMS grading, inspection, or sampling
program operating costs divided by total hours (regular, overtime, and
holiday) worked, which is then multiplied by the percentage of
inflation.
(iii) Allowance for bad debt rate. Total AMS grading, inspection,
or sampling program allowance for bad debt divided by total hours
(regular, overtime, and holiday) worked.
(2) The calendar year cost of living expenses and percentage of
inflation factors used in the formulas in this section are based on the
most recent Office of Management and Budget's Presidential Economic
Assumptions.
(d) Export permissive inspection and certification. The inspection
and certification fee for export tobacco will be determined as
described in Sec. 29.123(b) and (c).
* * * * *
0
14. Amend Sec. 29.500 by revising the first sentence of paragraph (a)
and revising paragraphs (b) and (c) to read as follows:
Sec. 29.500 Fees and charges for inspection and acceptance of
imported tobacco.
(a) The fee for inspection of imported tobacco will be determined
as described in Sec. 29.123 and shall be paid by the importer. * * *
(b) The fee for sampling, accepting, and certification of imported
flue-cured and burley tobacco for prohibited pesticide residues will be
determined as
[[Page 53641]]
described in Sec. 29.123 and shall be paid by the importer.
(c) The fee for accepting imported flue-cured and burley tobacco
not accompanied by a certification that it is free of prohibited
pesticide residues will be determined as described in Sec. 29.123.
Fees for services rendered shall be remitted by check or draft in
accordance with a statement issued by the Director, and shall be made
payable to ``Agricultural Marketing Service.''
PART 51--FRESH FRUITS, VEGETABLES AND OTHER PRODUCTS (INSPECTION,
CERTIFICATION, AND STANDARDS)
0
15. The authority citation for part 51 continues to read as follows:
Authority: 7 U.S.C. 1621-1627.
0
16. Revise Sec. 51.38 to read as follows:
Sec. 51.38 Basis for fees and rates.
(a) For each calendar year, AMS will calculate the rate for
services, per hour per program employee using the following formulas:
(1) Regular rate. The total AMS inspection program personnel direct
pay divided by direct hours, which is then multiplied by the next
year's percentage of cost of living increase, plus the benefits rate,
plus the operating rate, plus the allowance for bad debt rate. If
applicable, travel expenses may also be added to the cost of providing
the service.
(2) Overtime rate. The total AMS inspection program personnel
direct pay divided by direct hours, which is then multiplied by the
next year's percentage of cost of living increase and then multiplied
by 1.5 plus the benefits rate, plus the operating rate, plus an
allowance for bad debt. If applicable, travel expenses may also be
added to the cost of providing the service.
(3) Holiday rate. The total AMS inspection program personnel direct
pay divided by direct hours which is then multiplied by the next year's
percentage of cost of living increase and then multiplied by 2, plus
benefits rate, plus the operating rate, plus an allowance for bad debt.
If applicable, travel expenses may also be added to the cost of
providing the service.
(b)(1) For each calendar year, based on previous fiscal year/
historical actual costs, AMS will calculate the benefits, operating,
and allowance for bad debt components of the regular, overtime and
holiday rates as follows:
(i) Benefits rate. The total AMS inspection program direct benefits
costs divided by the total hours (regular, overtime, and holiday)
worked, which is then 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.
(ii) Operating rate. The total AMS inspection program operating
costs divided by total hours (regular, overtime, and holiday) worked,
which is then multiplied by the percentage of inflation.
(iii) Allowance for bad debt rate. Total allowance for bad debt
divided by total hours (regular, overtime, and holiday) worked.
(2) The calendar year cost of living expenses and percentage of
inflation factors used in the formulas in this section are based on the
most recent Office of Management and Budget's Presidential Economic
Assumptions.
(c) When an inspection is delayed because product is not available
or readily accessible, a charge for waiting time shall be determined
using the formulas in this section.
PART 52--PROCESSED FRUITS AND VEGETABLES, PROCESSED PRODUCTS
THEREOF, AND OTHER PROCESSED FOOD PRODUCTS
0
17. The authority citation for part 52 continues to read as follows:
Authority: 7 U.S.C. 1621-1627.
Sec. 52.2 [Amended]
0
18. Amend Sec. 52.2 by removing the definition of ``In-plant
sampler''.
0
19. Revise Sec. 52.42 to read as follows:
Sec. 52.42 Schedule of fees.
(a) For each calendar year, AMS will calculate the rate for
services, per hour per program employee using the following formulas:
(1) Regular rate. The total AMS inspection program personnel direct
pay divided by direct hours, which is then multiplied by the next
year's percentage of cost of living increase, plus the benefits rate,
plus the operating rate, plus the allowance for bad debt rate. If
applicable, travel expenses may also be added to the cost of providing
the service.
(2) Overtime rate. The total AMS inspection program personnel
direct pay divided by direct hours, which is then multiplied by the
next year's percentage of cost of living increase and then multiplied
by 1.5 plus the benefits rate, plus the operating rate, plus an
allowance for bad debt. If applicable, travel expenses may also be
added to the cost of providing the service.
(3) Holiday rate. The total AMS inspection program personnel direct
pay divided by direct hours which is then multiplied by the next year's
percentage of cost of living increase and then multiplied by 2, plus
benefits rate, plus the operating rate, plus an allowance for bad debt.
If applicable, travel expenses may also be added to the cost of
providing the service.
(b) For each calendar year, based on previous fiscal year/
historical actual costs, AMS will calculate the benefits, operating,
and allowance for bad debt components of the regular, overtime and
holiday rates as follows:
(1) Benefits rate. The total AMS inspection program direct benefits
costs divided by the total hours (regular, overtime, and holiday)
worked, which is then 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) Operating rate. The total AMS inspection program operating
costs divided by total hours (regular, overtime, and holiday) worked,
which is then multiplied by the percentage of inflation.
(3) Allowance for bad debt rate. Total AMS inspection program
allowance for bad debt divided by total hours (regular, overtime, and
holiday) worked.
(c) The calendar year cost of living expenses and percentage of
inflation factors used in the formulas in this section are based on the
most recent Office of Management and Budget's Presidential Economic
Assumptions.
0
20. Revise Sec. 52.50 to read as follows:
Sec. 52.50 Travel and other expenses.
Charges may be assessed to cover the cost of travel time incurred
in connection with the performance of any inspection service, including
appeal inspections, as described in Sec. 52.42 of this part. This
includes time spent waiting for transportation as well as time spent
traveling, but not to exceed eight hours of travel time for any one
person for any one day: And provided further, that if travel is by
common carrier, no hourly charge may be made for travel time outside
the employee's official work hours.
0
21. Amend Sec. 52.51 by revising paragraphs (a), (b), (c), and (d) to
read as follows:
Sec. 52.51 Charges for inspection services on a contract basis.
(a) The Administrator may enter into contracts with applicants to
perform continuous inspection services or other types of inspection
services pursuant to the regulations in this part and other
[[Page 53642]]
requirements as prescribed by the Administrator in such contract, and
the charges for such inspection service provided in such contracts
shall be based on such basis as will reimburse the Agricultural
Marketing Service of the Department for the full cost of rendering such
inspection service as described in Sec. 52.42 of this subpart.
(b) The Administrator may enter into a written memorandum of
understanding or contract, whichever may be appropriate, with any
administrative agency charged with the administration of a marketing
agreement or a marketing order effective pursuant to the Agricultural
Marketing Agreement Act of 1937, as amended (7 U.S.C. 601 et seq.) for
the making of inspections pursuant to said agreement or order on such
basis as will reimburse the Agricultural Marketing Service of the
Department for the full cost of rendering such inspection service based
on the formulas in Sec. 52.42 of this subpart. Likewise, the
Administrator may enter into a written memorandum of understanding or
contract, whichever may be appropriate, with an administrative agency
charged with an administration of a similar program operated pursuant
to the laws of any State.
(c) Charges for year-round in-plant inspection services on a
contract basis will be billed to the applicant monthly for all hours
worked with a minimum of 40 hours per week for each inspector assigned
to perform the inspection services. Charges for work performed in
excess of an employee's regular work schedule will be calculated as
described in Sec. 52.42(a)(2) of this subpart.
(d) Charges for less than year-round in-plant inspection services
(four or more consecutive 40 hour weeks) on a contract basis will be
billed to the applicant monthly for all hours with a minimum of 40
hours for each inspector assigned to perform the inspection services
and will be calculated based on the formulas in Sec. 52.42 of this
subpart.
* * * * *
PART 54--MEATS, PREPARED MEATS, AND MEAT PRODUCTS (GRADING,
CERTIFICATION, AND STANDARDS)
0
22. The authority citation for 7 CFR part 54 continues to read as
follows:
Authority: 7 U.S.C. 1621-1627.
Sec. 54.6 [Amended]
0
23. Amend Sec. 54.6 in paragraph (c)(2), in the first sentence, by
removing the phrase ``as provided in Sec. 54.27(b)'' and adding ``as
provided in Sec. 54.27'' in its place.
0
24. Revise Sec. 54.27 to read as follows:
Sec. 54.27 Fees and other charges for service.
(a) Fees and other charges equal as nearly as may be to the cost of
the services rendered shall be assessed and collected from applicants
in accordance with the following provisions unless otherwise provided
in the cooperative agreement under which the services are furnished, or
as provided in Sec. 54.6 of this subpart. For each calendar year, AMS
will calculate the rate for inspection, grading, or certification
services, per hour per program employee using the following formulas:
(1) Regular rate. The total AMS grading, inspection, or
certification program personnel direct pay divided by direct hours,
which is then multiplied by the next year's percentage of cost of
living increase, plus the benefits rate, plus the operating rate, plus
the allowance for bad debt rate. If applicable, travel expenses may
also be added to the cost of providing the service.
(2) Overtime rate. The total AMS grading, inspection, or
certification program personnel direct pay divided by direct hours,
which is then multiplied by the next year's percentage of cost of
living increase and then multiplied by 1.5 plus the benefits rate, plus
the operating rate, plus an allowance for bad debt. If applicable,
travel expenses may also be added to the cost of providing the service.
(3) Holiday rate. The total AMS grading, inspection, or
certification program personnel direct pay divided by direct hours
which is then multiplied by the next year's percentage of cost of
living increase and then multiplied by 2, plus benefits rate, plus the
operating rate, plus an allowance for bad debt. If applicable, travel
expenses may also be added to the cost of providing the service.
(b)(1) For each calendar year, based on previous fiscal year/
historical actual costs, AMS will calculate the benefits, operating,
and allowance for bad debt components of the regular, overtime and
holiday rates as follows:
(i) Benefits rate. The total AMS grading, inspection, or
certification program direct benefits costs divided by the total hours
(regular, overtime, and holiday) worked, which is then 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.
(ii) Operating rate. The total AMS grading, inspection, or
certification program operating costs divided by total hours (regular,
overtime, and holiday) worked, which is then multiplied by the
percentage of inflation.
(iii) Allowance for bad debt rate. Total AMS grading, inspection,
or certification program allowance for bad debt divided by total hours
(regular, overtime, and holiday) worked.
(2) The calendar year cost of living expenses and percentage of
inflation factors used in the formulas in this section are based on the
most recent Office of Management and Budget's Presidential Economic
Assumptions.
(c) Fees for service on commitment basis. Minimum fees for service
performed under a commitment agreement or an agreement by memorandum
shall be on the basis of 8 hours per day, Monday through Friday,
excluding Federal legal holidays occurring Monday through Friday on
which no grading and certification services are performed. Fees will be
based on the formulas in this section. The Agency reserves the right
under such a commitment agreement or agreement by memorandum to use any
grader assigned to the plant on a commitment basis to perform service
for other applicants, as provided in Sec. 54.6(c), crediting the
commitment applicant with the number of hours charged to the other
applicant, provided the allowable credit hours plus hours actually
worked for the applicants do not exceed 8 hours on any day, Monday
through Friday, excluding legal holidays.
(d) Fees for appeal service. Fees for appeal service shall be
determined on the basis of the time, of two official graders, required
to render the service, including the time required for the preparation
of certificates and travel of such graders in connection with the
performance of the service. Provided, That when on appeal it is found
that there was error in the original determination equal to or
exceeding ten percent of the total number of similar units of the
products involved, no charge will be made for the appeal service unless
a special agreement therefor was made with the applicant in advance.
(e) Fees for extra copies of certificates. In addition to copies of
certificates furnished under Sec. 54.14, any financially interested
person may obtain not to exceed three copies of any such certificate
within one year from its date of issuance upon payment of a fee, and
not to exceed three copies of any such certificate at any time
thereafter, while a copy of such certificate is on file in the
[[Page 53643]]
Department. The fee for copies of certificates will be determined using
the formulas in this section.
PART 56--VOLUNTARY GRADING OF SHELL EGGS
0
25. The authority citation for part 56 continues to read as follows:
Authority: 7 U.S.C. 1621-1627.
0
26. Revise Sec. 56.46 to read as follows:
Sec. 56.46 On a fee basis.
(a) Unless otherwise provided in this part, the fees to be charged
and collected for any service performed, in accordance with this part,
on a fee basis shall be based on the applicable formulas specified in
this section. For each calendar year or crop year, AMS will calculate
the rate for grading or audit services, per hour per program employee
using the following formulas:
(1) Regular rate. The total AMS grading or audit program personnel
direct pay divided by direct hours, which is then multiplied by the
next year's percentage of cost of living increase, plus the benefits
rate, plus the operating rate, plus the allowance for bad debt rate. If
applicable, travel expenses may also be added to the cost of providing
the service.
(2) Overtime rate. The total AMS grading or audit program personnel
direct pay divided by direct hours, which is then multiplied by the
next year's percentage of cost of living increase and then multiplied
by 1.5 plus the benefits rate, plus the operating rate, plus an
allowance for bad debt. If applicable, travel expenses may also be
added to the cost of providing the service.
(3) Holiday rate. The total AMS grading or audit program personnel
direct pay divided by direct hours which is then multiplied by the next
year's percentage of cost of living increase and then multiplied by 2,
plus benefits rate, plus the operating rate, plus an allowance for bad
debt. If applicable, travel expenses may also be added to the cost of
providing the service.
(b)(1) For each calendar year, based on previous fiscal year/
historical actual costs, AMS will calculate the benefits, operating,
and allowance for bad debt components of the regular, overtime and
holiday rates as follows:
(i) Benefits rate. The total AMS grading or audit program direct
benefits costs divided by the total hours (regular, overtime, and
holiday) worked, which is then 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.
(ii) Operating rate. The total AMS grading or audit program
operating costs divided by total hours (regular, overtime, and holiday)
worked, which is then multiplied by the percentage of inflation.
(iii) Allowance for bad debt rate. Total AMS grading or audit
program allowance for bad debt divided by total hours (regular,
overtime, and holiday) worked.
(2) The calendar year cost of living expenses and percentage of
inflation factors used in the formulas in this section are based on the
most recent Office of Management and Budget's Presidential Economic
Assumptions.
(c) Fees for grading services will be based on the time required to
perform the services. The hourly charges shall include the time
actually required to perform the grading, waiting time, travel time,
and any clerical costs involved in issuing a certificate.
(d) Fees for audit services will be based on the time and expenses
required to perform the audit. The hourly charge shall include the time
actually required to perform the audit, waiting time, travel time, and
any clerical costs involved in issuing an audit report.
0
27. Amend Sec. 56.52 by:
0
a. Revising the introductory text;
0
b. Revising the second sentence of paragraph (a)(1); and
0
c. Revising the first sentence of paragraph (a)(2) introductory text.
The revisions read as follows:
Sec. 56.52 Charges for continuous grading performed on a resident
basis.
Fees to be charged and collected for any grading service, other
than for an appeal grading, on a resident grading basis, shall be
calculated as described in this part. The fees to be charged for any
appeal grading shall be as provided in Sec. 56.47.
(a) * * *
(1) * * * The costs for completing the plant survey shall be borne
by the applicant on a fee basis as described in Sec. 56.46. * * *
(2) Charges for the cost of each grader assigned to a plant will be
calculated as described in section 56.46 of this part, except that no
charge will be assessed when the assigned grader is temporarily
reassigned by AMS to perform grading service for other than the
applicant. * * *
* * * * *
0
28. Amend Sec. 56.54 by revising the introductory text and paragraph
(a)(1) introductory text to read as follows:
Sec. 56.54 Charges for continuous grading performed on a nonresident
basis.
Fees to be charged and collected for grading service on a
nonresident grading basis, shall be calculated as described in this
part. The fees to be charged for any appeal grading shall be calculated
as provided in Sec. 56.47.
(a) * * *
(1) A charge for the salary and other costs, calculated as
described in Sec. 56.46 of this part, for each grader while assigned
to a plant, except that no charge will be made when the assigned grader
is temporarily reassigned by AMS to perform grading service for other
than the applicant. Charges to plants are as follows:
* * * * *
PART 58--GRADING AND INSPECTION, GENERAL SPECIFICATIONS FOR
APPROVED PLANTS AND STANDARDS FOR GRADES OF DAIRY PRODUCTS
0
29. The authority citation for 7 CFR part 58 continues to read as
follows:
Authority: 7 U.S.C. 1621-1627.
0
30. Revise Sec. 58.39 to read as follows:
Sec. 58.39 Fees for holiday or other nonworktime.
If an applicant requests that inspection or grading service be
performed on a holiday, Saturday, or Sunday or in excess of each 8-hour
shift Monday through Friday, the applicant shall be charged for such
service at a rate determined using the formulas in Sec. 58.43.
0
31. Revise Sec. 58.43 to read as follows:
Sec. 58.43 Fees for inspection, grading, sampling, and certification.
(a) Unless otherwise provided in this part, the fees to be charged
and collected for any service performed, in accordance with this part,
on a fee basis shall be based on the applicable formulas specified in
this section. For each calendar year, AMS will calculate the rate for
grading, certification, or inspection services, per hour per program
employee using the following formulas:
(1) Regular rate. The total AMS grading, certification, or
inspection program personnel direct pay divided by direct hours, which
is then multiplied by the next year's percentage of cost of living
increase, plus the benefits rate, plus the operating rate, plus the
allowance for bad debt rate. If applicable, travel expenses may also be
added to the cost of providing the service.
(2) Overtime rate. The total AMS grading, certification, or
inspection
[[Page 53644]]
program personnel direct pay divided by direct hours, which is then
multiplied by the next year's percentage of cost of living increase and
then multiplied by 1.5 plus the benefits rate, plus the operating rate,
plus an allowance for bad debt. If applicable, travel expenses may also
be added to the cost of providing the service.
(3) Holiday rate. The total AMS grading, certification, or
inspection program personnel direct pay divided by direct hours which
is then multiplied by the next year's percentage of cost of living
increase and then multiplied by 2, plus benefits rate, plus the
operating rate, plus an allowance for bad debt. If applicable, travel
expenses may also be added to the cost of providing the service.
(b) For each calendar year, based on previous fiscal year/
historical actual costs, AMS will calculate the benefits, operating,
and allowance for bad debt components of the regular, overtime and
holiday rates as follows:
(1) Benefits rate. The total AMS grading, certification, or
inspection program direct benefits costs divided by the total hours
(regular, overtime, and holiday) worked, which is then 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) Operating rate. The total AMS grading, certification, or
inspection program operating costs divided by total hours (regular,
overtime, and holiday) worked, which is then multiplied by the
percentage of inflation.
(3) Allowance for bad debt rate. Total AMS grading, certification,
or inspection program allowance for bad debt divided by total hours
(regular, overtime, and holiday) worked.
(c) The calendar year cost of living expenses and percentage of
inflation factors used in the formulas in this section are based on the
most recent Office of Management and Budget's Presidential Economic
Assumptions.
0
32. Revise Sec. 58.45 to read as follows:
Sec. 58.45 Fees for continuous resident services.
Charges for the inspector(s) and grader(s) assigned to a continuous
resident program shall be calculated using the formulas in Sec. 58.43
of this part.
PART 62--LIVESTOCK, MEAT AND OTHER AGRICULTURAL COMMODITIES
(QUALITY SYSTEMS VERIFICATION PROGRAMS)
0
33. The authority citation for part 62 continues to read as follows:
Authority: 7 U.S.C. 1621-1627.
0
34. Revise Sec. 62.300 to read as follows:
Sec. 62.300 Fees and other costs of service.
(a) For each calendar year, AMS will calculate the rate for quality
systems verification services, per hour per program employee using the
following formulas:
(1) Regular rate. The total AMS quality systems verification
program (QSVP) personnel direct pay divided by direct hours, which is
then multiplied by the next year's percentage of cost of living
increase, plus the benefits rate, plus the operating rate, plus the
allowance for bad debt rate. If applicable, travel expenses may also be
added to the cost of providing the service.
(2) Overtime rate. The total AMS QSVP personnel direct pay divided
by direct hours, which is then multiplied by the next year's percentage
of cost of living increase and then multiplied by 1.5 plus the benefits
rate, plus the operating rate, plus an allowance for bad debt. If
applicable, travel expenses may also be added to the cost of providing
the service.
(3) Holiday rate. The total AMS QSVP personnel direct pay divided
by direct hours which is then multiplied by the next year's percentage
of cost of living increase and then multiplied by 2, plus benefits
rate, plus the operating rate, plus an allowance for bad debt. If
applicable, travel expenses may also be added to the cost of providing
the service.
(b)(1) For each calendar year, based on previous fiscal year/
historical actual costs, AMS will calculate the benefits, operating,
and allowance for bad debt components of the regular, overtime and
holiday rates as follows:
(i) Benefits rate. The total AMS QSVP direct benefits costs divided
by the total hours (regular, overtime, and holiday) worked, which is
then 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.
(ii) Operating rate. The total AMS QSVP operating costs divided by
total hours (regular, overtime, and holiday) worked, which is then
multiplied by the percentage of inflation.
(iii) Allowance for bad debt rate. Total AMS QSVP allowance for bad
debt divided by total hours (regular, overtime, and holiday) worked.
(2) The calendar year cost of living expenses and percentage of
inflation factors used in the formulas in this section are based on the
most recent Office of Management and Budget's Presidential Economic
Assumptions.
(c) Transportation costs. Applicants are responsible for paying
actual travel costs incurred to provide QSVP services including but not
limited to: Mileage charges for use of privately owned vehicles, rental
vehicles and gas, parking, tolls, and public transportation costs such
as airfare, train, and taxi service.
(d) Per diem costs. The applicant is responsible for paying per
diem costs incurred to provide QSVP services away from the auditor's or
USDA officials' official duty station(s). Per diem costs shall be
calculated in accordance with existing travel regulations (41 CFR,
subtitle F--Federal Travel Regulation System, chapter 301).
(e) Other costs. When costs, other than those costs specified in
paragraphs (a), through (c) of this section, are involved in providing
the QSVP services, the applicant shall be responsible for these costs.
The amount of these costs shall be determined administratively by the
Chief. However, the applicant will be notified of these costs before
the service is rendered.
PART 70--VOLUNTARY GRADING OF POULTRY AND RABBIT PRODUCTS
0
35. The authority citation for part 70 continues to read as follows:
Authority: 7 U.S.C. 1621-1627.
0
36. Revise Sec. 70.71 to read as follows:
Sec. 70.71 On a fee basis.
Unless otherwise provided in this part, the fees to be charged and
collected for any grading or audit service performed in accordance with
this part, on a fee basis shall be based on the applicable formulas
specified in this section.
(a) For each calendar year, AMS will calculate the rate for grading
and audit services, per hour per program employee using the following
formulas:
(1) Regular rate. The total AMS grading or audit program personnel
direct pay divided by direct hours, which is then multiplied by the
next year's percentage of cost of living increase, plus the benefits
rate, plus the operating rate, plus the allowance for bad debt rate. If
applicable, travel expenses may also be added to the cost of providing
the service.
[[Page 53645]]
(2) Overtime rate. The total AMS grading or audit program personnel
direct pay divided by direct hours, which is then multiplied by the
next year's percentage of cost of living increase and then multiplied
by 1.5 plus the benefits rate, plus the operating rate, plus an
allowance for bad debt. If applicable, travel expenses may also be
added to the cost of providing the service.
(3) Holiday rate. The total AMS grading or audit program personnel
direct pay divided by direct hours which is then multiplied by the next
year's percentage of cost of living increase and then multiplied by 2,
plus benefits rate, plus the operating rate, plus an allowance for bad
debt. If applicable, travel expenses may also be added to the cost of
providing the service.
(b)(1) For each calendar year, based on previous fiscal year/
historical actual costs, AMS will calculate the benefits, operating,
and allowance for bad debt components of the regular, overtime and
holiday rates as follows:
(i) Benefits rate. The total AMS grading or audit program direct
benefits costs divided by the total hours (regular, overtime, and
holiday) worked, which is then 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.
(ii) Operating rate. The AMS grading or audit program total
operating costs divided by total hours (regular, overtime, and holiday)
worked, which is then multiplied by the percentage of inflation.
(iii) Allowance for bad debt rate. Total AMS grading or audit
program allowance for bad debt divided by total hours (regular,
overtime, and holiday) worked.
(2) The calendar year cost of living expenses and percentage of
inflation factors used in the formulas in this section are based on the
most recent Office of Management and Budget's Presidential Economic
Assumptions.
(c) Fees for grading services will be based on the time required to
perform the services. The hourly charges shall include the time
actually required to perform the grading, waiting time, travel time,
and any clerical costs involved in issuing a certificate.
(d) Fees for audit services will be based on the time and expenses
required to perform the audit. The hourly charge shall include the time
actually required to perform the audit, waiting time, travel time, and
any clerical costs involved in issuing an audit report.
0
37. Revise Sec. 70.72 to read as follows:
Sec. 70.72 Fees for appeal grading or review of a grader's decision.
The costs of an appeal grading, or review of a grader's decision,
shall be borne by the appellant on a fee basis at rates determined
based on the formulas in Sec. 70.71 of this part. If the appeal
grading, or review of a grader's decision discloses that a material
error was made in the original determination, no fee or expenses will
be charged.
0
38. Amend Sec. 70.76 by revising the introductory text and the first
sentence of paragraph (a)(1) introductory text to read as follows:
Sec. 70.76 Charges for continuous poultry grading performed on a
nonresident basis.
Fees to be charged and collected for grading service on a
nonresident grading basis shall be based on the formulas provided in
this part. The fees to be charged for any appeal grading shall be as
provided in Sec. 70.72.
(a) * * *
(1) A charge for the salary and other costs, based on Sec. 70.71
of this part, for each grader while assigned to a plant, except that no
charge will be made when the assigned grader is temporarily reassigned
by AMS to perform grading service for other than the applicant. * * *
* * * * *
0
39. Amend Sec. 70.77 by revising the introductory text and paragraphs
(a)(1) and (2) to read as follows:
Sec. 70.77 Charges for continuous poultry or rabbit grading performed
on a resident basis.
Fees to be charged and collected for any grading service on a
resident grading basis and for an appeal grading shall be determined
based on the formulas in section 70.71.
(a) * * *
(1) When a signed application for service has been received, the
State supervisor or the supervisor's assistant shall complete a plant
survey pursuant to Sec. 70.34. The costs for completing the plant
survey shall be borne by the applicant on a fee basis based on the
formulas in Sec. 70.71. No charges will be assessed when the
application is required because of a change in name or ownership. If
service is not installed within 6 months from the date the application
is filed, or if service is inactive due to an approved request for
removal of a grader(s) for a period of 6 months, the application will
be considered terminated, but a new application may be filed at any
time. In addition, there will be a charge of $300 if the application is
terminated at the request of the applicant for reasons other than for a
change in location within 12 months from the date of the inauguration
of service.
(2) A charge for the salary and other costs, as specified in this
part, for each grader while assigned to a plant, except that no charge
will be made when the assigned grader is temporarily reassigned by AMS
to perform grading service for other than the applicant.
* * * * *
PART 75--REGULATIONS FOR INSPECTION AND CERTIFICATION OF QUALITY OF
AGRICULTURAL AND VEGETABLE SEEDS
0
40. The authority citation for part 75 continues to read as follows:
Authority: 7 U.S.C. 1622, 1624.
0
41. Revise Sec. 75.41 to read as follows:
Sec. 75.41 General.
Fees and charges for inspection or certification services performed
by Federal employees shall cover the cost of performing the service.
Fees shall be for actual time required to render the service. For each
calendar year, AMS will calculate the rate for inspection or
certification services, per hour per program employee using the
following formulas:
(1) Regular rate. The total AMS inspection or certification program
personnel direct pay divided by direct hours, which is then multiplied
by the next year's percentage of cost of living increase, plus the
benefits rate, plus the operating rate, plus the allowance for bad debt
rate. If applicable, travel expenses may also be added to the cost of
providing the service.
(2) Overtime rate. The total AMS inspection or certification
program personnel direct pay divided by direct hours, which is then
multiplied by the next year's percentage of cost of living increase and
then multiplied by 1.5 plus the benefits rate, plus the operating rate,
plus an allowance for bad debt. If applicable, travel expenses may also
be added to the cost of providing the service.
(3) Holiday rate. The total AMS inspection or certification program
personnel direct pay divided by direct hours which is then multiplied
by the next year's percentage of cost of living increase and then
multiplied by 2, plus benefits rate, plus the operating rate, plus an
allowance for bad debt. If applicable, travel expenses may also be
added to the cost of providing the service.
[[Page 53646]]
(b) For each calendar year, based on previous fiscal year/
historical actual costs, AMS will calculate the benefits, operating,
and allowance for bad debt components of the regular, overtime and
holiday rates as follows:
(1) Benefits rate. The total AMS inspection or certification
program direct benefits costs divided by the total hours (regular,
overtime, and holiday) worked, which is then 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) Operating rate. The total AMS inspection or certification
program operating costs divided by total hours (regular, overtime, and
holiday) worked, which is then multiplied by the percentage of
inflation.
(3) Allowance for bad debt rate. Total AMS inspection or
certification program allowance for bad debt divided by total hours
(regular, overtime, and holiday) worked.
(c) The calendar year cost of living expenses and percentage of
inflation factors used in the formulas in this section are based on the
most recent Office of Management and Budget's Presidential Economic
Assumptions.
0
42. Amend Sec. 75.42 by revising paragraph (b) to read as follows:
Sec. 75.42 Sampling and sealing.
* * * * *
(b) When onsite inspection services are performed by Federal
employees at the request of the applicant charges will be based on the
formulas in Sec. 75.41 of this part.
0
43. Amend Sec. 75.43 by revising paragraphs (a) and (c) to read as
follows:
Sec. 75.43 Laboratory testing.
* * * * *
(a) Fees assessed based on the formulas in section 75.41 of this
part.
* * * * *
(c) The fee for a preliminary report issued prior to completion of
testing shall be assessed in accordance with paragraph (a) of this
section.
PART 91--SERVICES AND GENERAL INFORMATION (SCIENCE AND TECHNOLOGY)
0
44. The authority citation for part 91 continues to read as follows:
Authority: 7 U.S.C. 1622, 1624.
0
45. Amend Sec. 91.37 by:
0
a. Revising paragraphs (a) and (b);
0
b. Removing paragraph (c); and
0
c. Redesignating paragraphs (d) and (e) as paragraphs (c) and (d),
respectively.
The revisions read as follows:
Sec. 91.37 Standard hourly fee rate for laboratory testing, analysis,
and other services.
(a) For each fiscal year, AMS will calculate the rate for
laboratory testing, analysis, and other services, per hour per program
employee using the following formulas:
(1) Regular rate. The total AMS laboratory service program
personnel direct pay divided by direct hours, which is then multiplied
by the next year's percentage of cost of living increase, plus the
benefits rate, plus the operating rate, plus the allowance for bad debt
rate. If applicable, travel expenses may also be added to the cost of
providing the service.
(2) Overtime rate. The total AMS laboratory service program
personnel direct pay divided by direct hours, which is then multiplied
by the next year's percentage of cost of living increase and then
multiplied by 1.5 plus the benefits rate, plus the operating rate, plus
an allowance for bad debt. If applicable, travel expenses may also be
added to the cost of providing the service.
(3) Holiday rate. The total AMS laboratory service program
personnel direct pay divided by direct hours which is then multiplied
by the next year's percentage of cost of living increase and then
multiplied by 2, plus benefits rate, plus the operating rate, plus an
allowance for bad debt. If applicable, travel expenses may also be
added to the cost of providing the service.
(b)(1) For each calendar year, based on previous fiscal year/
historical actual costs, AMS will calculate the benefits, operating,
and allowance for bad debt components of the regular, overtime and
holiday rates as follows:
(i) Benefits rate. The total AMS laboratory service program direct
benefits costs divided by the total hours (regular, overtime, and
holiday) worked, which is then 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.
(ii) Operating rate. The total AMS laboratory service program
operating costs divided by total hours (regular, overtime, and holiday)
worked, which is then multiplied by the percentage of inflation.
(iii) Allowance for bad debt rate. Total AMS laboratory service
program allowance for bad debt divided by total hours (regular,
overtime, and holiday) worked.
(2) The calendar year cost of living expenses and percentage of
inflation factors used in the formulas in this section are based on the
most recent Office of Management and Budget's Presidential Economic
Assumptions.
* * * * *
0
46. Amend Sec. 91.38 by revising paragraph (a) to read as follows:
Sec. 91.38 Additional fees for appeal of analysis.
(a) The applicant for appeal sample testing will be charged a fee
based on the formulas in Sec. 91.37 of this part.
* * * * *
0
47. Amend Sec. 91.39 by revising paragraph (a) to read as follows:
Sec. 91.39 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 based on the formulas in Sec. 91.37 of this part.
* * * * *
Dated: August 29, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-21188 Filed 9-9-14; 8:45 am]
BILLING CODE 3410-02-P
