[Federal Register Volume 73, Number 119 (Thursday, June 19, 2008)]
[Proposed Rules]
[Pages 34905-34913]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-13819]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF JUSTICE

28 CFR Part 20

[Docket No. FBI 114]
RIN 1110-AA26


FBI Criminal Justice Information Services Division User Fees

AGENCY: Federal Bureau of Investigation (FBI), Justice.

ACTION: Notice of proposed rulemaking.

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

SUMMARY: The FBI is authorized to establish and collect fees for 
providing fingerprint-based and name-based Criminal History Record 
Information (CHRI) checks and other identification services submitted 
by authorized users for noncriminal justice purposes including 
employment and licensing. The FBI may set such fees at a level to 
include an amount to establish a fund to defray expenses for the 
automation of fingerprint identification and criminal justice 
information services and associated costs. The proposed rule explains 
the methodology used to calculate the revised fees, provides the 
proposed fee schedule, and advises that future fee adjustments will be 
made by notice published in the Federal Register. After public comment, 
a final rule and notice of the final fee schedule will be published 
concurrently in the Federal Register.

DATES: Written comments must be received on or before August 18, 2008.

ADDRESSES: You may submit comments, identified by Docket No. FBI 114, 
by either of the following methods:
     Federal Regulations Web site: You may review this 
regulation on http://www.Regulations.gov and use the comment form for 
this regulation to submit your comments. You must include Docket No. 
FBI 114 in the subject box of your message.
     Mail: You may use the U.S. Postal Service or other 
commercial delivery services to submit written comments to the FBI 
Criminal Justice Information Services Division, 1000 Custer Hollow 
Road, Module E-3, Clarksburg, West Virginia 26306, Attention: 
Christopher L. Enourato. To ensure proper handling, please reference 
Docket No. FBI 114 in your comment. When submitting written comments, 
please allow for delivery time plus at least two days for internal mail 
security scanning and delivery.

FOR FURTHER INFORMATION CONTACT: Christopher L. Enourato, FBI, Criminal 
Justice Information Services Division, 1000 Custer Hollow Road, Module 
E-3, Clarksburg, West Virginia 26306, telephone number 304-625-2910.

SUPPLEMENTARY INFORMATION:


I. Posting of Public Comments
II. Background
III. Fee Calculation
IV. Revised Fee Schedule
V. Administrative
VI. Regulatory Certifications

I. Posting of Public Comments

    Please note that all comments on the proposed rule are considered 
part of the public record and made available for public inspection 
online at http://www.Regulations.gov. Such information includes 
personal identifying information (such as your name, address, etc.) 
voluntarily submitted by the commenter.
    If you want to submit personal identifying information (such as 
your name, address, etc.) as part of your comment, but do not want it 
to be posted online, you must include the phrase ``PERSONAL IDENTIFYING 
INFORMATION'' in the first paragraph of your comment. You must also 
locate all the personal identifying information you do not want posted 
online in the first paragraph of your comment and identify what 
information you want redacted.
    If you want to submit confidential business information as part of 
your comment but do not want it to be posted online, you must include 
the phrase ``CONFIDENTIAL BUSINESS INFORMATION'' in the first paragraph 
of your comment. You must also prominently identify confidential 
business information to be redacted within the comment. If a comment 
has so much confidential business information that it cannot be 
effectively redacted, all or part of that comment may not be posted on 
http://www.Regulations.gov.
    Personal identifying information identified and located as set 
forth above will be placed in the agency's public docket file, but not 
posted online. Confidential business information identified and located 
as set forth above will not be placed in the public docket file. If you 
wish to inspect the agency's public docket file in person by 
appointment, please see the ``For Additional Information'' paragraph.

II. Background

    For the purposes of this discussion, the FBI user fees are 
classified according to the FBI division that provides the check in 
question: the Records Management Division (RMD) or the Criminal Justice 
Information Services (CJIS) Division. The proposed rule implements the 
FBI's statutory authority to establish and collect fees for noncriminal 
justice fingerprint-based and name-based CHRI checks and other 
identification services performed by the CJIS Division. Fees for name 
checks performed by RMD will be the subject of a separate rulemaking. 
Further, under 28 CFR 16.33, the FBI is authorized to collect a fee for 
the production of an FBI identification record in response to a written 
request by the subject of the record; adjustments to that fee will be 
set out in a third rulemaking.
    The proposed rule explains the methodology used to calculate the 
FBI's revised fees, provides a proposed fee schedule, and advises that 
future fee adjustments will be made by notice published in the Federal 
Register. After public comment, a final rule and notice of the final 
fee schedule will be published concurrently in the Federal Register. 
The rule will be published at 28 CFR Part 20.

[[Page 34906]]

Legal Authority To Collect Fees

    The FBI has collected user fees for fingerprint-based CHRI checks 
since 1982, when the authority to establish and collect fees to process 
fingerprint-based CHRI checks for noncriminal justice purposes, such as 
employment and licensing, was set out in Public Law (Pub. L.) 97-257. 
This statutory authority was renewed annually by subsequent 
appropriations legislation. Under Public Law 101-162, the FBI was also 
authorized to establish and collect fees for name-based checks and to 
set the fees at a level to include an amount to defray expenses for the 
automation of fingerprint identification and associated costs. 
Congress, in Public Law 101-515, subsequently authorized the FBI to 
establish and collect these fees on a continuing basis. This authority 
was further expanded by Public Law 104-99 with insertion of the term 
``criminal justice information services'' so the FBI was authorized to 
use the collected fees to ``defray expenses for the automation of 
fingerprint identification and criminal justice information services 
and associated costs.'' The same statutory language concerning the 
FBI's authority to establish and collect fees for conducting CHRI 
checks was included in the Private Security Officer Employment 
Authorization Act of 2004, Section 6402 of the Intelligence Reform and 
Terrorism Prevention Act of 2004, Public Law 108-458. As explained 
later, the National Child Protection Act, as amended by the Volunteers 
for Children Act (VCA), Title 42, United States Code (U.S.C.), Section 
5119a, provides user fee authority for fingerprint-based CHRI checks of 
volunteers who work in qualified entities with children, the elderly, 
or disabled persons.

No Fees for Criminal Justice CHRI Checks

    Under Public Law 101-515 and other statutes, the FBI is authorized 
to charge a fee for noncriminal justice CHRI checks for such purposes 
as employment and licensing. The FBI does not charge a fee for 
identification services performed for criminal justice purposes, 
including checks of applicants for criminal justice employment, which 
are financially supported by federal appropriations.

Proposed Changes to the Fee Schedule

    The proposed fee schedule reflects changes in both the FBI's 
business processes and the volume of noncriminal justice submissions. 
In 1982, the average response time was 27 work days to process the 
60,000 noncriminal justice checks submitted each month. In 1994 when 
the user fees were last adjusted, the FBI's response time to process 
333,000 noncriminal justice fingerprint-based CHRI checks in the same 
time period was 16 work days. In fiscal year (FY) 2006 with a more 
efficient automated identification system in place, the average 
response time for 885,000 noncriminal justice fingerprint checks 
submitted electronically each month was merely 3 hours and 30 minutes.
    When user fees were first implemented in 1982, the authorized user 
community received actual notice of fee changes through CJIS 
Information Letters (formerly called Contributor Letters). The fees 
were adjusted from time-to-time to reflect rising personnel costs and 
the increasing volume of noncriminal justice submissions, and the 
revised fee information was provided to the authorized user community 
through CJIS Information Letters.
    Consistent with that past practice, by CJIS Information Letter 
dated June 1, 2007, the fee schedule in the proposed rule was 
established on an interim basis effective October 1, 2007. Although the 
proposed rule will establish the user fees by notice and comment 
rulemaking, it was necessary to advise the authorized user community of 
the revised fees prior to the start of FY 2008. Setting the revised 
fees on an interim basis will allow contributors to make necessary 
changes to fee processing and accounting procedures before the start of 
the federal fiscal year, thereby avoiding costly and confusing midyear 
changes.
    The FBI will continue to analyze its costs and will review related 
fee charges periodically, as recommended by Office of Management and 
Budget Circular No. A-25, User Charges (OMB Circular A-25). The 
proposed rule advises that future adjustments to the FBI's fees will be 
announced by notice in the Federal Register.

III. Fee Calculation

Standards and Guidelines Used To Calculate the Fees

    Public Law 101-515 links the user fees charged for processing 
fingerprint identification records and name checks to the cost of 
providing these services. This authority also permits the FBI to 
establish user fees at a level to include an amount ``to defray 
expenses for the automation of fingerprint identification and criminal 
justice information services and associated costs.''
    In the absence of express statutory authority, federal agencies are 
authorized to establish fees by the Independent Offices Appropriation 
Act of 1952, 31 U.S.C. 9701, which is implemented by specific 
guidelines in OMB Circular A-25. Since the FBI has specific statutory 
authority to establish and collect fees under Public Law 101-515, the 
FBI is not required to follow strictly the mandates of OMB Circular A-
25. In establishing the fees set out in this proposed rule, the FBI 
referred to OMB Circular A-25 for guidance in calculating fees based on 
costs. For example, in calculating the fees, OMB Circular A-25's 
definition of full cost ``as all direct and indirect costs to any part 
of the Federal Government of providing a good, resource, or service'' 
was used to include direct and indirect personnel costs, physical 
overhead, and other indirect costs such as material costs, utilities, 
travel, and equipment.
    Congress in the VCA, 42 U.S.C. 5119a, limited the fee that can be 
charged to a volunteer to $18, or the actual cost of providing the 
service, whichever is less. The statutory term ``actual cost'' does not 
appear in OMB Circular A-25, which uses the term full cost, defined as 
all direct and indirect costs of providing a service. Thus, the FBI 
defined the actual cost as the full cost of providing this service, 
when calculating the fee for checks of volunteers under the VCA.

Methodology Used To Calculate the User Fees

    The FBI hired a contractor, BearingPoint, Inc., 1676 International 
Drive, McLean, Virginia 22102 (BearingPoint), to conduct an independent 
analysis of pertinent costs and to recommend a revised fee schedule for 
the fingerprint-based and name-based CHRI checks conducted by the CJIS 
Division. Referencing OMB Circular A-25; the Statement of Federal 
Financial Accounting Standards (SFFAS-4): Managerial Cost Accounting 
Concepts and Standards for the Federal Government; and other relevant 
financial management directives, BearingPoint developed a cost 
accounting methodology and related cost models based upon the concepts 
and principles of activity-based costing (ABC).
    ABC is a business management process that provides information 
about the relationships between inputs (costs) and outputs (products or 
services) by quantifying how work is performed (activities). The ABC 
model used to calculate the user fees was developed using commercially 
available ABC software and followed generally accepted cost accounting 
procedures for cost assignment and unit cost calculation. 
Organizational resources were assigned to activities, and then the

[[Page 34907]]

activities were assigned to services based upon reported patterns of 
consumption. BearingPoint identified the total resources associated 
with the fingerprint-based and name-based CHRI check services and 
assigned these costs to the services using relevant cost drivers. The 
cost drivers were selected primarily for their strong cause-effect 
linkages between the resources and the activities and services that 
consumed them. BearingPoint worked extensively with FBI staff, 
including programmatic subject matter experts and statistical experts, 
to gather the information necessary to devise the cost accounting 
methodology and to construct a representative ABC model. BearingPoint 
developed its cost accounting methodology in six steps for the 
nonautomation portion of the fee.
    1. Operational labor costs were reviewed and assigned to activities 
and then to services.
    2. Support labor costs were reviewed and assigned to activities and 
then to services.
    3. Nonlabor costs, including unfunded personnel and judgment fund 
costs, were reviewed and assigned to activities and then to services.
    4. Cost estimates were made for FY 2008, when the revised user fees 
are expected to be implemented.
    5. Transaction volumes and trends were analyzed to predict 
appropriate transaction volumes for FY 2008.
    6. Finally, using the projected FY 2008 costs and the projected FY 
2008 transaction volumes, the projected unit costs for each service 
were calculated. The recommended user fees were based on these 
projected unit costs.
    As explained above, under Public Law 101-515, the FBI is also 
authorized to charge an additional amount for the automation of 
fingerprint identification and criminal justice information services 
and associated costs. A similar process was used to develop this 
portion of the fee. It was determined that the most appropriate basis 
for the calculation of this portion of the fee was the capital 
investment and anticipated depreciation costs for automated fingerprint 
identification and other criminal justice information service 
capabilities and enhancements to certain automated systems. The costs 
for these automation efforts were obtained from the FBI's asset 
management and financial management systems and records, and program 
planning documentation. By employing this methodology, users paying the 
fee will pay for services based on the cost of the automation which is 
already in place at the time their request is processed. While the 
funds collected will be used to develop future capabilities, the cost 
basis of the fee will be the automation in place. The projected FY 2008 
volumes were then used to calculate the unit costs for this portion of 
the fee.
    Once the unit costs were calculated, BearingPoint generated the 
revised fee schedule. The FBI then independently reviewed the 
BearingPoint recommendations, compared them to current fee calculations 
and plans for future services, and determined that the revised 
schedules were both objectively reasonable and in consonance with the 
underlying legal authorities.

Overview of the Costs Included in the Fee Calculation

    The fee calculation was made by gathering the labor and nonlabor 
costs of those divisions of the FBI that directly or indirectly support 
the provision of the fingerprint-based and name-based CHRI check 
services, and then using various drivers to assign those costs to the 
identified activities. The activities were then assigned to the 
specific fingerprint-based and name-based CHRI check services or to a 
general category for all other costs. The ABC model examined in detail 
only those costs which were related to the fingerprint-based and name-
based CHRI check services. These services included both the criminal 
justice and law enforcement and the noncriminal justice identification 
services performed by the CJIS Division of the FBI. The discussion 
below is limited to those costs in the ABC model which were assigned to 
the fingerprint-based and name-based CHRI check services that are 
supported by the user fees. In other words, even though the ABC model 
calculated unit costs for various criminal justice fingerprint-based 
CHRI check services, these costs will not be discussed in this 
regulation since they are funded with appropriations and not with user 
fees.
    The costs for providing the fee-supported fingerprint-based and 
name-based CHRI check services include the personnel costs for both 
direct and indirect support, as well as nonlabor costs such as travel, 
training, rent, equipment, utilities, printing, contract support, and 
supplies. In addition, depreciation for existing nonautomation assets 
was included per OMB Circular A-25 guidance. Finally, portions of the 
FBI's costs for workers compensation, unemployment compensation, and 
the judgment fund, used to pay judgments against the United States 
where appropriations have not otherwise been provided, were included. 
These costs were derived from the FBI's financial systems and audited 
financial statements. The FY 2008 predicted costs were obtained by 
recalculating the depreciation and adding an inflation factor for labor 
and other nonlabor expenses. The OMB pay raise and inflation factors 
provided in OMB Circular A-11, Preparation, Submission, and Execution 
of an Agency Budget, were used. The costs associated with providing the 
services do not include any of the automation costs which instead were 
captured in the capital investment and depreciation costs for the 
automation portion of the fee described below.
    The automation costs are divided into those which support 
fingerprint identification services currently in operation and those 
which support other criminal justice information services. Both types 
of automation costs are authorized by Public Law 101-515. The FBI chose 
to separate these costs to facilitate calculation of the cost of 
providing fingerprint-based CHRI checks for volunteers, since the VCA 
limits the fee to the actual cost or $18.00, whichever is less. The FBI 
is interpreting the actual cost of providing the service to include 
only the costs for the automation of fingerprint services currently in 
operation; the actual cost does not include the costs for the 
automation of other criminal justice information services.
    The costs for the automation of the fingerprint identification 
services include depreciation costs for the fingerprint identification 
infrastructure and the costs for developing a disaster recovery 
capability which would allow the FBI's essential fingerprint 
identification services to continue in all circumstances as required by 
OMB Circular A-130, Management of Federal Information Resources (OMB 
Circular A-130).
    The costs for the automation of other criminal justice information 
services are based on the depreciation of assets already in place and 
the costs of enhancements which have passed through the approval gates 
for the planning stages of system development under the FBI's life 
cycle management directive. These enhancements include the Next 
Generation Identification program, which will increase the speed, 
capacity, and functionality of the FBI's fingerprint identification 
process, and the Biometric Interoperability Program which will provide 
two-way access to information in other major fingerprint databases such 
as the Department of Homeland Security's database of nonimmigrant 
visitors to the United States. The costs also include the automation of 
certain aspects of the National Crime Information Center (NCIC), the 
Law Enforcement National

[[Page 34908]]

Data Exchange (N-DEx) program, and the Uniform Crime Reporting (UCR) 
program.
    There is one additional component of cost which was considered when 
determining the fees. Federal agencies, certain state agencies, and 
approved nongovernmental entities that submit fingerprint-based CHRI 
checks function as de facto centralized billing service providers 
(CBSPs) by collecting the appropriate fee from individuals or 
subordinate agencies and submitting a consolidated payment. It is more 
cost-effective for the FBI to bill a CBSP than to process individual 
direct payments for single fingerprint-based CHRI check submissions. 
The FBI employs this centralized billing methodology to collect payment 
for more than 9.8 million fingerprint-based CHRI checks each year. 
Under the fee schedule proposed in this rule, the FBI will continue the 
practice of allowing approved CBSPs to retain a portion (currently 
$2.00) of the fee for fingerprint-based CHRI checks for performing this 
centralized billing service. In order to allow the CBSPs to retain this 
portion of the fee, it is necessary to include this cost when 
determining the full costs which the fee must cover. At this time, this 
cost is calculated by multiplying the amount the CBSPs are allowed to 
retain by the volume of billed transactions. The centralized billing 
process will be subject to further analysis and, consequently, may be 
revised in the future.

Proposed Changes to the Fee Schedule

Fingerprint-Based CHRI Checks
    The FBI utilizes categories or fee classes to set the charges for 
fingerprint-based CHRI checks.
    Current fee classes are determined by the:
     Type of submission--manual or electronic.
     Source of funding--federally appropriated or other 
funding.
     Volunteer status under the VCA.
    Proposed fee classes will be determined by the:
     Type of transaction--manual, electronic, or electronic 
submission with manual response.
     Volunteer status under the VCA.

Note that under the proposed rule, there is no distinction in fees 
based on the source of funding.
Name-Based CHRI Checks
    As noted earlier, the RMD and the CJIS Division of the FBI both 
provide name-based checks of FBI maintained records. The CJIS Division 
name-based CHRI checks provide CHRI from records of individuals 
fingerprinted as a result of arrest or incarceration. The FBI 
maintained records have been submitted voluntarily by state, local, 
tribal and federal law enforcement agencies. The noncriminal justice 
name-based checks are searched against the descriptive data in the FBI 
maintained records, using the applicant's name and descriptive data, 
such as his date of birth. Since the CHRI response, if any, to the 
name-based CHRI request is not obtained through positive 
identification, such as fingerprints, the FBI does not confirm that the 
CHRI is related to the applicant. The name-based CHRI checks are 
available only to authorized federal agencies for purposes specifically 
authorized by statute, e.g., pursuant to the Security Clearance 
Information Act, 5 U.S.C. 9101. The FBI had previously established fee 
classes for name-based CHRI checks which differentiated between manual 
and electronic submissions. The proposed rule continues these same 
classes.
New Services
    If the FBI offers a new service or otherwise requires a new fee 
class in the future, the charge for this new fee class will be based 
upon the closest existing fee class until such time as a new fee class 
can be established. Authorized users will be advised of the new service 
or new fee class by CJIS Information Letter or other CJIS 
communication. The FBI will calculate a fee for the new fee class using 
the methodology discussed in this NPRM, and will publish a revised fee 
schedule as a notice in the Federal Register.

Discussion of Proposed Changes to Fees and Fee Classes

    Proposed changes to the fees and fee classes, due to automation 
costs, types of transaction, and the submission of volunteers under the 
VCA are discussed in detail below.
Automation Cost
    As noted above, OMB Circular A-25 defines ``full costs'' to include 
all direct and indirect costs, including the cost of improving or 
automating processes used to provide the services in question. 
Similarly, Public Law 101-515 authorizes the FBI to establish fees for 
fingerprint-based and name-based CHRI checks at a level sufficient to 
defray the expenses of automating fingerprint identification and 
criminal justice information services and associated costs. Even so, 
the FBI did not previously charge federal agencies the full costs 
contemplated by OMB Circular A-25 or Public Law 101-515. The FBI 
proposes to establish fees for all users, at a level that will permit 
all costs, including automation expenses, to be fully defrayed, as 
authorized by Public Law 101-515. The FBI has determined that actual 
costs for volunteers submitting under the VCA will be defined to 
include the cost of the automation of the fingerprint services, but not 
to include the cost of the automation of other criminal justice 
information services.
Type of Transaction
    Under the proposed rule, the type of transaction will be a 
determining factor in calculating the fee charged for all fingerprint-
based and name-based CHRI checks, except for volunteer checks submitted 
under the VCA which are calculated separately.
1. Fingerprint-Based Checks
    Under current business practice, requests for fingerprint-based 
CHRI checks may be submitted manually, by sending a hard-copy 
fingerprint card, or electronically, by sending fingerprint images 
through the Integrated Automated Fingerprint Identification System 
(IAFIS). Responses to manual submissions are provided in hard-copy 
format and responses to electronic submissions are provided in an 
electronic format. Some agencies have been authorized by the CJIS 
Division to request hard-copy responses to electronic submissions.
    Processing electronic submissions is more efficient and cost-
effective than processing manual submissions which require entry of the 
descriptive data and scanning of the fingerprint images to convert the 
hard-copy card into an electronic format for processing by the IAFIS. 
After processing, the IAFIS response is then converted to a hard-copy 
format for delivery by mail to the requester. The independent analysis 
by BearingPoint determined that the cost of processing a manually 
submitted fingerprint-based CHRI check is significantly higher than the 
cost of processing an electronically submitted fingerprint-based CHRI 
check. Under current business practice, agencies paying with federally 
appropriated funds are charged higher fees for processing manual checks 
than for electronic fingerprint-based CHRI checks, while agencies 
paying with other funds are charged the same fee for both types of 
transactions. Under the proposed rule, the FBI will charge all agencies 
higher fees for manual than for electronic checks.
    Under current business practice, an agency submitting fingerprints 
electronically but requesting a manual

[[Page 34909]]

response is charged the fee for a manual submission and response. 
BearingPoint also calculated the cost of processing a transaction with 
an electronic submission of fingerprints and a manual response, and 
that calculation was used to establish a separate fee class for 
processing electronic submission/manual response transactions.
2. Name-Based CHRI Checks
    Under current business practice, if specifically authorized by 
statute, requests for name-based CHRI checks may be submitted manually 
or electronically by federal agencies. The proposed rule continues 
these same fee classes.
Volunteer Submissions Under the VCA
    Fingerprint-based CHRI checks for volunteers submitted under the 
VCA are in a separate fee class since the pertinent statute provides 
that the fee charged by the FBI in such cases may not exceed $18.00 or 
the actual cost of the background check, whichever is less. The FBI is 
interpreting actual cost to be the full cost as defined by OMB Circular 
A-25. The FBI has determined that full cost for volunteers submitting 
under the VCA will include the direct and indirect personnel and 
nonpersonnel costs, the cost of the automation of the fingerprint 
services, and the cost of billing services, where applicable. The full 
cost for volunteers submitting under the VCA will not include the cost 
of the automation of other criminal justice information services. Due 
to the very small volume of volunteer transactions, it is more cost-
effective to charge all volunteer submissions under the VCA the same 
fee regardless of submission type.

Detail of the Costs Used To Calculate the Fee

    The costs of providing the fingerprint-based and name-based CHRI 
check services were calculated using the ABC model constructed by 
BearingPoint. The costs include operational labor costs; support labor 
costs; nonlabor costs including unfunded personnel and judgment fund 
costs; fingerprint identification automation costs; other criminal 
justice information service automation costs; and billing costs. These 
costs are discussed in more detail below.
    Operational labor costs for fingerprint-based and name-based CHRI 
checks include the costs of those FBI employees who are involved in the 
operations and maintenance of the IAFIS and the processing of these 
transactions. Examples of these employees would include fingerprint 
examiners who use the IAFIS to make positive fingerprint 
identifications; information technology specialists who run the 
automated system network and communications lines; and a variety of 
other specialist positions providing customer service, billing, 
communication, policy, audit, and other direct support for the 
fingerprint-based and name-based CHRI check processes. The majority of 
these employees spend all of their time supporting these processes 
except the information technology specialists whose support is often 
provided for the whole CJIS Division infrastructure including other 
systems. BearingPoint conducted a robust analysis of the time these 
employees spent in support of each system within the overall 
infrastructure known as the system of systems. The costs for these 
employees are assigned to the user fee classes of service based on the 
results of this analysis.
    Support labor costs for fingerprint-based and name-based CHRI 
checks include the costs of those FBI employees who are not directly 
involved in the CHRI check processes but who provide necessary support 
for these operations. Like the information technology specialists who 
support the whole CJIS Division infrastructure, many of the FBI 
employees perform activities which support a wide array of services. 
The costs for these employees were assigned to the user fee classes of 
service and to the general account for all other services based upon an 
analysis of the level of effort these positions provide to support the 
fingerprint-based and name-based CHRI check services. Examples of these 
employees would include human resource specialists, budget analysts, 
financial analysts, administrative support specialists, legal 
specialists, and some higher level management positions.
    Nonlabor costs include items such as travel, utilities, printing, 
contractor support, supplies, and equipment. These costs also include 
depreciation for the facilities and buildings that the FBI owns. The 
equipment costs do not include any costs for the IAFIS. These costs 
could be listed here, but rather are listed in the fingerprint 
identification automation section for clarity. In all cases, these 
costs are assigned to the fingerprint-based and name-based CHRI check 
services and to the general account for all other services as 
appropriate based on detailed analysis of how these items are used.
    Unfunded personnel costs were analyzed and the Federal Employee 
Compensation Account Workers Compensation and Unemployment Compensation 
costs were included in the ABC model constructed by BearingPoint. In 
1956, Congress established a judgment fund to cover payment for legal 
judgments against the United States. The FBI's contribution to the 
judgment fund was also included in the ABC model. These costs were 
assigned to the fingerprint-based and name-based CHRI check services as 
well as to the general account as appropriate.
    The fingerprint identification process automation costs include 
depreciation on the cost of automating the process for fingerprint-
based and name-based CHRI checks. Note that these name-based CHRI 
checks are searches based on the biographic identifiers associated with 
fingerprint-based CHRI files and as such are part of the fingerprint 
identification process. These costs also include the costs for 
implementing a Continuity of Operations Program (COOP) as mandated by 
OMB Circular A-130. Again, these costs were assigned to the 
fingerprint-based and name-based check services as appropriate. COOP 
costs cover more than the fingerprint identification system since the 
FBI plan covers the entire infrastructure. These costs were also 
assigned to the general account as appropriate. The fingerprint 
identification process automation costs could be collected under OMB 
Circular A-25 as full costs of providing these services, but are being 
identified separately since the FBI also has specific authority under 
Public Law 101-515 to collect user fees to cover these costs.
    Public Law 101-515 also authorizes the FBI to collect user fees to 
cover the automation costs for other criminal justice information 
services. These services are not specifically defined, and the FBI 
retains the authority to determine which system automation efforts will 
be classified as criminal justice information systems and funded with 
user fees. For the purposes of calculating these proposed fees, costs 
for automating certain functionalities, such as the NCIC, UCR, and the 
N-DEx, were included.
Electronic Fingerprint-Based CHRI Checks
    The categories of cost were calculated for the electronic 
fingerprint-based CHRI check service as described above:

              Electronic Fingerprint-Based CHRI Check Costs
                             [In thousands]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Operational Labor..........................................      $30,085
Support Labor..............................................       11,119
Nonlabor...................................................       38,152
Fingerprint Identification Automation......................       86,829

[[Page 34910]]

 
Other Criminal Justice Information Services Automation.....       50,253
Billing Costs..............................................       25,223
                                                            ------------
    Total Costs............................................  * $241,661
------------------------------------------------------------------------
* Note: Numbers may not add up due to rounding.

Electronic Submission/Manual Response Fingerprint-Based CHRI Checks
    After the ABC model constructed by BearingPoint was developed, the 
CJIS Division added a new fee class for fingerprint-based CHRI checks, 
submitted electronically but requiring a manual response. In order to 
calculate the cost of these transactions, BearingPoint examined the 
costs and activities which are applicable to the processing of 
transactions submitted electronically but receiving a manual response. 
These costs can not be detailed in the same manner as the costs within 
the model because this fee was calculated outside of the model as a 
unit cost.
Manual Fingerprint-Based CHRI Checks
    The categories of cost were calculated for the manual fingerprint-
based CHRI check service as described above:

                Manual Fingerprint-Based CHRI Check Costs
                             [In thousands]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Operational Labor Costs....................................       $6,380
Support Labor..............................................        3,439
Nonlabor...................................................        8,803
Fingerprint Identification Automation......................        7,371
Other Criminal Justice Information Services Automation.....        4,266
Billing....................................................        2,141
                                                            ------------
    Total Costs............................................   * $32,400
------------------------------------------------------------------------
* Note: Numbers may not add up due to rounding.

Volunteer Fingerprint-Based CHRI Checks
    As previously stated, the fee for fingerprint-based CHRI checks for 
volunteers submitting under the VCA is statutorily limited to $18.00 or 
the actual cost, whichever is less. The FBI has interpreted actual 
costs to be the full costs that could be collected under OMB Circular 
A-25. This includes the automation costs for the fingerprint 
identification process, but does not include the automation costs for 
other criminal justice information services. As stated previously, due 
to the small volume of volunteer transactions, it is not cost effective 
to charge different fees for volunteers based upon the type of 
transaction. The categories of cost were calculated for the volunteer 
fingerprint-based CHRI check service as described above:

              Volunteer Fingerprint-Based CHRI Check Costs
                             [In thousands]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Operational Labor Costs..................  $557.
Support Labor............................  206.
Nonlabor.................................  706.
Fingerprint Identification Automation....  1,606.
Other Criminal Justice Information         Not applied.
 Services Automation.
Billing Costs............................  467.
                                          ------------------------------
    Total Costs..........................  * $3,541.
------------------------------------------------------------------------
* Note: Numbers may not add up due to rounding.

Electronic Name-Based CHRI Checks
    Now that automation has significantly reduced response times for 
fingerprint-based CHRI checks, name checks are becoming obsolete. While 
these services are still being offered, the volume of these 
transactions has continued to decline due in large part to the 
increased speed of the fingerprint-based CHRI check service. Automation 
costs have not been added to the name-based CHRI check costs. Since 
name-based CHRI checks are only available to certain federal agencies, 
it is known that all submissions are billed and a separate billing cost 
was not calculated. The categories of cost were calculated for the 
electronic name-based CHRI check service as described above:

                 Electronic Name-Based CHRI Check Costs
                             [In thousands]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Operational Labor Costs..................  $144.
Support Labor............................  132.
Nonlabor.................................  160.
Fingerprint Identification Automation....  Not applied.
Other Criminal Justice Information         Not applied.
 Services Automation.
Billing..................................  Not applied.
                                          ------------------------------
    Total Costs..........................  *$435.
------------------------------------------------------------------------
*Note: Numbers may not add up due to rounding.

Manual Name-Based CHRI Checks
    As explained for electronic name-based CHRI checks, these costs do 
not include the automation or billing costs. The categories of cost 
were calculated for the manual name-based CHRI check service as 
described above:

                   Manual Name-Based CHRI Check Costs
                             [In thousands]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Operational Labor........................  $182.
Support Labor............................  89.
Nonlabor.................................  83.
Fingerprint Identification Automation....  Not applied.
Other Criminal Justice Information         Not applied.
 Services Automation.
Billing..................................  Not applied.
                                          ------------------------------
    Total Costs..........................  *$355.
------------------------------------------------------------------------
* Note: Numbers may not add up due to rounding.

The Volumes Used To Calculate the Fee

    The historical volumes of transactions for each type of service 
were reviewed. In 1982, when the user fee was implemented, the FBI 
processed 60,000 noncriminal fingerprint-based CHRI checks per month, 
or about 720,000 per year. The volume of all fingerprint-based CHRI 
checks has grown steadily; the FBI processed over 10 million 
noncriminal fingerprint-based CHRI checks in FY 2005, of which over 9 
million were subject to a user fee. However, within this steady growth, 
there is an overall trend for manual transactions to decrease and for 
electronic transactions to grow even more rapidly than the overall 
volumes indicate.
    After careful analysis of alternative approaches, it was determined 
that the most appropriate method to use for predicting the volumes for 
the fee calculation was a three-year average variance. The volume 
changes from FY 2003 to FY 2004, from FY 2004 to FY 2005, and from FY 
2005 to FY 2006 were calculated and then averaged to determine a growth 
factor which was added to the FY 2006 volume to determine the projected 
FY 2007 volume. The growth factor was then added again to the projected 
FY 2007 volume to project the FY 2008 volume. An exception was made for 
the new fee class for fingerprint-based CHRI checks submitted 
electronically but receiving a manual response. In the past, these 
transactions were billed as manual transactions. In developing a volume 
projection, the FBI analyzed the transactions submitted by the current 
authorized users and estimated that 100,000 fingerprint-based CHRI 
checks submitted electronically but receiving a manual response would 
be processed in FY 2008. This number was then subtracted from the 
manual FY 2008 projection and added as the electronic submission/manual 
response FY 2008 projection. The historical and projected volumes for 
fee-producing name-based

[[Page 34911]]

and fingerprint-based CHRI checks are shown in the chart below.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 FY 2003      FY 2004      FY 2005      FY 2006     Three-year    FY 2007      FY 2008
                           Service                                actual       actual       actual       actual      average     projected    projected
                                                                  volume       volume       volume       volume      variance      volume       volume
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Fingerprint-Based CHRI Checks
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manual.......................................................    2,000,448    1,434,654    1,382,073    1,442,527     -185,974    1,256,553     *970,580
Electronic Submission/Manual Response........................           NA           NA           NA           NA           NA           NA     *100,000
Electronic...................................................    5,777,395    6,668,981    7,874,995    9,877,755    1,366,787   11,244,542   12,611,328
Volunteer....................................................       64,401       92,176      150,384      165,756       33,785      199,541      233,326
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Name-Based CHRI Checks
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manual.......................................................          377          261          313          281          -32          249          217
Electronic...................................................      503,665      325,420      353,570      326,815      -58,950      267,865     208,915
--------------------------------------------------------------------------------------------------------------------------------------------------------
* 100,000 transactions moved from Manual to Electronic In/Manual Out service category to reflect implementation of the new fee class. These transactions
  are currently billed as manual transactions.

IV. Revised Fee Schedule

    BearingPoint's final fee recommendations were made by dividing the 
costs for each service by the projected volume of transactions. The 
resulting unit costs were then rounded up to the next quarter dollar 
($.25), an amount chosen to ensure calculation of full costs while 
avoiding calculation of excessive user fee revenues. The FBI then 
independently reviewed the BearingPoint recommendations, compared them 
to current fee calculations and plans for future services, and 
determined that the revised schedules were both objectively reasonable 
and in consonance with the underlying legal authorities. The following 
chart provides the revised fee schedule for the new classes defined 
above. The net amount to be remitted by a CSBP is provided for 
information purposes.

                      Fingerprint-Based CHRI Checks
------------------------------------------------------------------------
                                        The fee to be    But, the amount
                                       remitted with a   to be remitted
     If the check is a/an . . .        direct payment   by a CBSP is . .
                                          is . . .              .
------------------------------------------------------------------------
Electronic transaction..............            $19.25            $17.25
Electronic submission/manual                     26.00             24.00
 response transaction...............
Manual transaction..................             30.25             28.25
Volunteer under the VCA transaction.             15.25             13.25
------------------------------------------------------------------------


                         Name-Based CHRI Checks
 [Only available to federal agencies with statutory authority to request
                                 checks]
------------------------------------------------------------------------
                                                        The fee is . . .
              If the check is a/an . . .
------------------------------------------------------------------------
Electronic transaction................................             $2.25
Manual transaction....................................              6.00
------------------------------------------------------------------------

    Under the revised schedule, user fees for many fingerprint-based 
and name-based CHRI checks will increase compared to current charges. 
However, the fees for fingerprint-based CHRI checks funded with other 
than federal appropriations and the fees for volunteers under the VCA 
will decrease and the fees for manual name-based CHRI checks will 
remain steady.

V. Administrative

Consultation With Federal, State, Tribal, and Local Governmental and 
Other Entities That Submit Fingerprint-Based and Name-Based CHRI Checks

    The FBI has provided information about this proposed rule to the 
CJIS Advisory Policy Board (APB), an advisory committee chartered under 
provisions of the Federal Advisory Committee Act of 1972, 5 U.S.C. 
Appendix 2. The APB is comprised of representatives of local, state and 
federal law enforcement and criminal justice agencies and is 
responsible for reviewing policy, technical, and operational issues 
related to the criminal justice information services of the FBI. The 
FBI has also provided information about the proposed rule to the 
Compact Council, created pursuant to the National Crime Prevention and 
Privacy Compact Act of 1998, 42 U.S.C. 14611-14616. The Compact 
Council, comprised of state and federal noncriminal justice and 
criminal justice agencies, is permitted to promulgate rules and 
procedures governing the exchange, as authorized by federal and state 
statutes, of CHRI for noncriminal justice purposes. The FBI has also 
provided information about this proposed rule to several of the federal 
agencies which submit fingerprint-based or name-based CHRI checks.

Effective Date for the New Fees

    The FBI seeks public comment in response to this proposed rule. 
Subsequent to the receipt of comments, the FBI will publish a final 
rule in the Federal Register which will outline the FBI's authority to 
establish, collect, and revise its fees. The FBI will publish 
concurrently a notice in the Federal Register which will provide the 
fee schedule. This new schedule will be put into effect in 90 days 
following publication of the notice.

Other Proposed Revisions or Studies

    The FBI is committed to regularly reviewing and updating the costs 
for providing fingerprint-based and name-based CHRI checks. The fees 
will be revised, as appropriate, based on changes in cost and volume. 
Additionally, the FBI plans to conduct specific analyses in the 
following areas.
    1. As mentioned earlier, the FBI will be revising the fee for the 
production of an FBI identification record in response to the written 
request by the subject

[[Page 34912]]

thereof as authorized in 28 CFR 16.33 in a separate rule.
    2. As explained previously, record checks under Public Law 101-515 
may be provided by both the RMD and the CJIS Division of the FBI. The 
proposed rule implements fees for the checks provided by the CJIS 
Division only. User fees for checks performed by RMD will be the 
subject of a separate rulemaking.
    3. The FBI, as stated in section III above, will conduct an in-
depth analysis of the amount that CBSPs are allowed to retain to cover 
the administrative costs that would be incurred by the FBI if 
centralized billing services were not available. This analysis will 
also develop and review alternative strategies to the practice of 
centralized billing services.

Communication Regarding the Fees

    Any changes to the Fee Schedule will be published in the Federal 
Register. The FBI will continue to provide policy updates and 
suggestions for improved service, including tips for avoiding delays 
and errors, through CJIS Information Letters. Information on technical 
changes in fee collection processes, including instructions for the 
appropriate use of system codes that affect fees charged, will also be 
provided through CJIS Information Letters.

VI. Regulatory Certifications

Regulatory Flexibility Act

    When an agency issues a rulemaking proposal, the Regulatory 
Flexibility Act (RFA) requires the agency to ``prepare and make 
available for public comment an initial regulatory flexibility 
analysis'' which will ``describe the impact of the proposed rule on 
small entities.'' (5 U.S.C. 603(a)). Section 605 of the RFA allows an 
agency to certify, in lieu of preparing an analysis, that the proposed 
rulemaking is not expected to have significant economic impact on a 
substantial number of small entities. Small entities are defined by the 
RFA to include small businesses, small organizations, and small 
governmental jurisdictions.
    The fees for providing fingerprint-based and name-based CHRI 
background checks for noncriminal justice purposes normally are imposed 
upon the individual subject of the background check, rather than upon 
small entities. In addition, under the new fee schedule that became 
effective October 1, 2007, the fee imposed on nonfederal users 
submitting electronic fingerprint-based CHRI dropped nearly 20 percent 
per request. This lower fee is applicable to more than 90 percent of 
the total nonfederal fingerprint-based checks. However, the fee for 
manual searches was increased, reflecting comparatively higher 
processing costs for those services. As a result of these different 
fees, the FBI expects that users will seek the lower costs associated 
with providing electronic fingerprint submissions.
    State and federal agencies and certain private entities serve as 
CBSPs, or entities that collect and submit an individual's fingerprints 
to the FBI and remit the fee charged to the individual. There are no 
small businesses, organizations or governmental jurisdictions currently 
providing billing services as CBSPs.
    With regard to name-based CHRI checks, there is no direct or 
indirect impact on small entities, as only federal agencies are 
authorized to request name-based CHRI background checks, and federal 
agencies do not fall within the definition of a ``small entity.'' 
Accordingly, the Director of the FBI hereby certifies that this rule 
will not have a significant economic impact on a substantial number of 
small entities.

Executive Order 12866 (Regulatory Planning and Review)

    This regulation as been drafted and reviewed in accordance with 
Executive Order 12866, Regulatory Planning and Review, section 1(b), 
Principles of Regulation. The FBI has determined that this rule is a 
significant regulatory action under Executive Order 12866, Regulatory 
Planning and Review, section 3(f) and accordingly this rule has been 
reviewed by the OMB.

Executive Order 12988 (Civil Justice Reform)

    This proposed rule meets the applicable standards set forth in 
sections 3(a) and 3(b)(2) of Executive Order 12988.

Executive Order 13132 (Federalism)

    This proposed rule will not have a substantial direct effect on the 
states, on the relationship between the national government and the 
states, or on the distribution of power and responsibilities among the 
various levels of government. The fees for providing fingerprint-based 
and name-based CHRI background checks for noncriminal justice purposes 
are imposed upon the individual subject of the background check, rather 
than on the state. Some states serve as CBSPs by collecting and 
submitting an individual's fingerprints to the FBI and remitting the 
fee charged to the individual. The proposed rule does not alter the 
amount the FBI allows CBSPs to retain for providing these services, but 
merely makes small adjustments to the fee schedule already in place. 
The proposed rule does not alter any of the policy set out at 28 CFR 
Part 20, or 28 CFR, Parts 901-906. Therefore, in accordance with 
Executive Order 13132, it is determined that this rule does not have 
sufficient federalism implications to warrant the preparation of a 
Federalism Assessment.

Unfunded Mandates Reform Act of 1995

    This proposed rule does not contain a mandate that will result in 
the expenditure by state, local, and tribal governments (in the 
aggregate) or by the private sector of $100 million or more in any one 
year, and it will not significantly or uniquely affect small 
governments. While CBSPs may need to adjust their internal automated 
systems and processes, the change in fee amount is a foreseeable and 
expected eventuality and therefore, it is expected that these internal 
systems and processes were created with the capability of adjusting to 
changed fees without great cost or effort. Therefore, no actions were 
deemed necessary under the provisions of the Unfunded Mandates Reform 
Act of 1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This proposed rule is not a major rule as defined by section 804 of 
the Small Business Regulatory Enforcement Fairness Act of 1996. This 
proposed rule will not result in an annual effect on the U.S. economy 
of $100 million or more; a major increase in costs or prices; or 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of U.S.-based companies to 
compete with foreign-based companies in domestic and export markets.

List of Subjects in 28 CFR Part 20

    Classified information, Crime, Intergovernmental relations, 
Investigations, Law enforcement, Privacy.

    Accordingly, for the reasons set forth in the preamble, Part 20 of 
Chapter I of Title 28 of the CFR is proposed to be amended as follows:

PART 20--CRIMINAL JUSTICE INFORMATION SYSTEMS

    1. The authority citation for part 20 is revised to read as 
follows:

    Authority:  28 U.S.C. 534; Pub. L. 92-544, 86 Stat. 1115; 42 
U.S.C. 3711, et seq., Pub. L. 99-169, 99 Stat. 1002, 1008-1011, as 
amended by Pub. L. 99-569, 100 Stat. 3190, 3196; Pub. L. 101-515, as 
amended by Pub.

[[Page 34913]]

L. 104-99, set out in the notes to 28 U.S.C. 534.

    2. Amend Sec.  20.31 to add paragraph (e) to read as follows:


Sec.  20.31  Responsibilities.

* * * * *
    (e) The FBI may routinely establish and collect fees for 
noncriminal justice fingerprint-based and other identification services 
as authorized by federal law. These fees apply to federal, state and 
any other authorized entities requesting fingerprint identification 
records and name checks for noncriminal justice purposes.
    (1) The Director of the FBI shall review the amount of the fee 
periodically, but not less than every four years, to determine the 
current cost of processing fingerprint identification records and name 
checks for noncriminal justice purposes.
    (2) Fee amounts and any revisions thereto shall be determined by 
current costs, using a method of analysis consistent with widely 
accepted accounting principles and practices, and calculated in 
accordance with the provisions of 31 U.S.C. 9701 and other federal law 
as applicable.
    (3) Fee amounts and any revisions thereto shall be published as a 
notice in the Federal Register.

    Dated: May 12, 2008.
Robert S. Mueller, III,
Director, Federal Bureau of Investigation.
 [FR Doc. E8-13819 Filed 6-18-08; 8:45 am]
BILLING CODE 4410-02-P