[Federal Register Volume 75, Number 65 (Tuesday, April 6, 2010)]
[Rules and Regulations]
[Pages 17281-17289]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-7739]



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  Federal Register / Vol. 75, No. 65 / Tuesday, April 6, 2010 / Rules 
and Regulations  

[[Page 17281]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 91

[Document Number AMS-ST-09-0016]
RIN 0581-AC98


Changes in Hourly Fee Rates for Science and Technology Laboratory 
Services--Fiscal Years 2010-2012

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: The Agricultural Marketing Service (AMS) is changing the 
annual standard, appeal, overtime, and holiday hourly fee rates for 
fiscal years 2010-2012 for Science and Technology (S&T) Laboratory 
Services in order to recover anticipated laboratory program costs. The 
Agency is raising these rates to reflect, among other factors, national 
and locality pay increases for Federal employees and inflation, 
operating costs, instrumentation and training, equipment maintenance 
costs, and program and agency administrative overhead costs. The 
regulations are updated to identify existing S&T facility addresses. 
This action also includes changes to provide greater clarity of 
reported test analyses and laboratory determinations.

DATES: Effective April 7, 2010.

FOR FURTHER INFORMATION CONTACT: James V. Falk, Staff Scientist, or Dr. 
Robert L. Epstein, Deputy Administrator, Science and Technology 
Programs, Agricultural Marketing Service, United States Department of 
Agriculture, Mail Stop 0270, 1400 Independence Avenue, SW., Washington, 
DC 20250-0270, telephone number (202) 720-5231; fax (202) 720-6496, or 
Internet: http://www.regulations.gov or e-mail: [email protected] 
or [email protected].

SUPPLEMENTARY INFORMATION: 

Background

    Science and Technology (S&T) Programs has been performing voluntary 
laboratory services under the Agricultural Marketing Act of 1946 (AMA), 
as amended (7 U.S.C. 1621-1627), for the AMS commodity programs (Fruit 
and Vegetable, Cotton and Tobacco, Livestock and Seed, Poultry, and 
Dairy) and applicable stakeholders in these industries since its 
inception on August 17, 1988. Before that time, voluntary laboratory 
testing was provided for on a separate user fee basis under the various 
AMS commodity programs. The current standard hourly rate of $67.00, the 
appeal or overtime hourly rate of $78.00 and the holiday hourly rate of 
$89.00 have been in effect since the March 30, 2007 final rule (72 FR 
15011) was published. The standard fee rate for laboratory services 
will be $78.00 per hour for the remainder of fiscal year 2010, and will 
increase to $81.00 per hour in fiscal year 2011, and $83.00 per hour in 
fiscal year 2012. The appeal and overtime hourly fee rate for 
laboratory services outside the normal business hours will also be 
adjusted to $93 for the remainder of FY 2010, to $96 in FY 2011, and to 
$99 in FY 2012. The holiday hourly fee rate for laboratory services 
during designated federal holidays will be increased to $108 for the 
rest of FY 2010, to $111 in FY 2011, and to $115 in FY 2012. An 
increase in the premium hourly rates over the three fiscal years for 
laboratory services performed on appeal samples, overtime basis, and 
holidays is also needed since Science and Technology laboratory 
personnel may be required to work extended hours of service at the time 
and a half pay or the double hourly pay on legal holidays to 
accommodate clients. This is due to stakeholder demand for immediate 
test results. Generally, the processing of all laboratory samples is 
continuous over a 24/7 timeframe due to the recent introduction of 
automated devices on several sample process equipment and analytical 
instruments. The AMA authorizes the Secretary of Agriculture to provide 
Federal analytical testing services that facilitate domestic marketing 
and international trade. In addition, consumers may be able to 
determine the quality and wholesomeness characteristics of a commodity 
or product through laboratory testing. This allows agricultural 
products to be assigned official AMS grade designations or to meet 
specifications. The AMA also requires that reasonable fees be collected 
from the users of the voluntary services to cover as nearly as possible 
the costs of maintaining the laboratory programs.
    The Agency will recover the actual cost of services for multiple 
fiscal years (FY 2010 through FY 2012) with the new hourly fee rates 
covered by this rule. This rule will amend its regulations to identify 
the updated and existing S&T Programs' facility addresses. It clarifies 
that results of analyses and laboratory determinations provided by AMS 
laboratory services apply only to the submitted samples and do not 
represent the quality; condition or disposition of the lot from which 
each sample was taken.
    Federal salaries with national and locality pay adjustments and 
choices in benefits are made available on an annual basis by the Office 
of Personnel Management (OPM). Operational costs include expenses for 
rents, communications, utilities, medical examinations, safety 
equipment, sample preparation equipment, training, trash and hazardous 
waste disposal, travel and transportation costs. There have been 
certain large capital improvement expenditures in the laboratories in 
recent years due to unfunded legal mandates. These expenditures include 
costs for the counter-terrorism Food Emergency Response Network (FERN) 
and the capital improvements for the Environmental Management Systems 
(EMS) in accordance with the applicable mandates for Federal 
laboratories of Executive Order 13423 of January 24, 2007, 
Strengthening Federal Environmental, Energy, and Transportation 
Management (72 FR 3919). These capital improvement costs are included 
in the normal operations of the Science and Technology field service 
laboratories. In addition, operational costs include expenses for 
office and laboratory supplies, chemicals, reagents, hazardous waste 
removal, and a Laboratory Information Management System (LIMS). 
Infrastructure costs are mainly

[[Page 17282]]

laboratory instruments and capital equipment with service and 
maintenance contracts and replacement spare parts. Infrastructure 
expenses include consumable supply costs associated directly with the 
proper operation of analytical instruments and laboratory equipment. 
Stakeholders demand that AMS provide cost effective and timely product 
testing requiring modern and sometimes automated instrumentation. These 
instruments are expensive and undergo equipment capitalization for 
determining costs. Equipment capitalization is the determined cost per 
year to replace the equipment after its useful service life has been 
established. Agency overhead is the pro-rated share, attributable to a 
particular service, of the agency's management and support costs. 
Overhead expenditures are allocated across the Agency for each direct 
hour of laboratory service.
    With this rulemaking, there will be essentially three standard 
hourly fee rate increases established for the basic laboratory 
services--$67 to $78 per hour or 16.4 percent for the rest of fiscal 
year 2010, $78 to $81 per hour or 3.8 percent in fiscal year 2011 and 
$81 to $83 per hour or 2.5 percent in fiscal year 2012. The rate 
increases for overtime and appeals will be $78 to $93 per hour or 19.2 
percent, $93 to $96 per hour or 3.2 percent, and $96 to $99 per hour or 
3.1 percent in fiscal years 2010, 2011, and 2012, respectively. The 
rate increases for legal holiday service will be $89 to $108 per hour 
or 21.3 percent, $108 to $111 per hour or 2.8 percent, and $111 to $115 
per hour or 3.6 percent in fiscal years 2010, 2011, and 2012, 
respectively. This is a voluntary program and the costs to each user 
will increase proportionally to their use of laboratory services each 
fiscal year. The increased fees will cover inflation and national and 
locality pay raises but will not support any new budgetary initiative. 
The revised hourly fee rates will apply to voluntary laboratory 
services that are provided for five types of analytical testing: 
microbiological, physical, residue chemistry, proximate analysis for 
composition, and biomolecular (DNA-based) testing. A user fee system, 
using set hourly rates for three fiscal years, will be established by 
this rulemaking to ensure that AMS properly recovers its full costs for 
providing voluntary laboratory services in a timely manner, and that 
all stakeholders have advance notice of their estimated laboratory fees 
so that they can make reasonable cost assumptions when formulating 
their annual budgets.
    The largest cost of operations for the AMS laboratory programs is 
payroll and employee benefits. This obligation is projected to amount 
to $3,848,000 or 57.6 percent of the total laboratory costs for FY 
2010. Recent cross-training of the employees in the laboratories has 
resulted in the reduction of staff from 67 individuals in FY 2007 to 50 
current individuals in FY 2009 as ongoing efforts to limit program 
costs are implemented. AMS calculated its projected increases in 
salaries and inflation in fiscal years 2010 through 2012. The estimate 
for increases in salaries for fiscal year 2009 as the base year and the 
succeeding years are from the Office of Management and Budget's (OMB) 
``Federal Pay Raise Assumptions'' table. The fiscal year pay 
adjustments are increased by 3 percent in the following tables of 
calculated proposed new hourly fee rates for laboratory program 
services for FY 2010 through FY 2012. The OMB Federal pay rise 
assumptions (including geographical pay differentials) state that in 
the development of civilian government personnel costs a yearly 
percentage (3%) increase shall be used. This information comes from the 
table, ``Federal Pay Raise Assumptions'', of the Office of Management 
and Budget's Fiscal Year 2007 Budget and beyond which is available at 
http://www.whitehouse.gov/omb/memoranda/fy2007/m07-02.pdf.
    Inflation for FY 2010 and subsequent years is estimated to be 3.5 
percent. In Tables 2 through 10 below a yearly 3.5 percent inflation 
rate is used in the calculations for hourly fee rate determinations for 
laboratory program services because the 2007 annual average for the 
base Consumer Price Index for all Urban Consumers (CPI-U): U.S. city 
average for service costs is listed as 246.848 in Table 3A. of the 
referenced website and there is a most recent annual average increase 
of 3.5% to 255.498 for the CPI-U provided for the change in service 
costs. This estimate for inflation percent (3.5%) can be obtained from 
Table 3A, ``Consumer Price Index for all Urban Consumers (CPI-U): U.S. 
city average, detailed expenditure categories'', which is available at 
http://www.bls.gov/cpi/cpid08av.pdf.
    The Agency will initiate, when necessary, another rulemaking to 
adjust any fee established, if estimated increases for pay and 
inflation do not adequately cover the Agency's costs of providing the 
services. The cost of providing laboratory services includes both 
direct and not explicit overhead costs. Direct costs include the cost 
of salaries, employee benefits, operation costs, equipment service and 
replacements, security, training needs, and infrastructure cost. The 
Agency is able to estimate the employee benefits attributable to 
overtime work and has included these in the fee rate calculations.
    The current and new fees for standard, appeal, overtime and legal 
holiday voluntary laboratory services are listed by type of service in 
Table 1 below. The first increases ranging from 16.4 to 21.3 percent, 
from the current rates to the fiscal year 2010 rates, are larger than 
the subsequent 2011 and 2012 fiscal year increases (2.5 to 3.8 percent 
range) because these are the first amended hourly rate increases since 
last set on March 30, 2007. Therefore, it includes the actual increases 
in salaries and inflation that have occurred since that date. It also 
reflects changes in personnel numbers and the promotions and within-
grade pay step increases for General Schedule (GS) salaries granted 
worthy employees, and new employee position pay costs.
    With this action, the AMS will amend its regulations to provide for 
three annual differing fee increases in one action. Table 1 shows the 
summary of the current rates and the revised hourly fee rates for 
fiscal years 2010 through 2012 for the four different types of services 
(regular laboratory, appeal, overtime, and legal holiday work) that 
Science and Technology Programs employees perform.

                     Table 1--Current and New Hourly Fee Rates (Per Hour) by Type of Service
----------------------------------------------------------------------------------------------------------------
                                                                   FY 2010 rate    FY 2011 rate    FY 2012 rate
                     Service                       Current rate         \1\             \2\             \3\
----------------------------------------------------------------------------------------------------------------
Laboratory......................................          $67.00          $78.00          $81.00          $83.00
Appeal..........................................           78.00           93.00           96.00           99.00
Overtime........................................           78.00           93.00           96.00           99.00
Legal Holiday...................................           89.00          108.00          111.00          115.00
----------------------------------------------------------------------------------------------------------------
\1\ \2\ \3\ Hourly values for FY 2010-FY 2012 are rounded off to nearest whole dollar.


[[Page 17283]]

    With this action, the AMS will amend its regulations to provide for 
three annual fee increases in one action. In AMS's analysis of 
projected costs set forth in Tables 2 through 10 below, AMS has 
identified the basis for the increases in the cost of voluntary hourly 
fee rates for laboratory services for fiscal year 2010 through fiscal 
year 2012. These fee increases are essential for the continued sound 
financial management of the Agency's budget. In order to enhance the 
transparency of the hourly fee rates in the aforementioned Tables 2 
through 10 for fiscal year 2010, fiscal year 2011 and fiscal year 2012, 
a description is provided of each fee charge category.

    Table 2--Calculations for the Standard Hourly Rate for Laboratory
              Program Services for the Remainder of FY 2010
------------------------------------------------------------------------
                                                            Apportioned
                   Laboratory services                       fee rate
------------------------------------------------------------------------
Base Time:
    Actual FY 2009 Salaries \1\ @ $3,029,744............          $29.13
    FY 2010 Pay Adjustment \2\ = [Actual FY 2009                    0.87
     Salaries ($29.13)] x 0.03(3%)......................
    Benefits \3\........................................            6.99
    Operational Costs \4\...............................           22.38
    Infrastructure Cost \5\.............................           13.08
    Agency Overhead \6\.................................            4.81
    FY 2010 Inflation \7\ (3.5%) = [Costs excluding                 1.20
     infrastructure and payroll = $34.18] x 0.035.......
                                                         ---------------
        Total Rate Per Hour--Base Time..................           78.46
------------------------------------------------------------------------
\1\ Actual cost of FY 2009 salaries ($3,029,744) / (2,080 program hours
  times 50 program employees) = $29.13 unit cost.
\2\ Actual cost of FY 2010 pay adjustment ($90,892) / (2,080 program
  hours times 50 program employees) = $0.87 unit cost.
\3\ Actual cost of benefits ($727,364) / (2,080 program hours times 50
  program employees) = $6.99 unit cost.
\4\ Actual cost of operational costs ($2,328,000) / (2,080 program hours
  times 50 program employees) = $22.38 unit cost.
\5\ Actual cost of infrastructure ($1,360,000) / (2,080 program hours
  times 50 program employees) = $13.08 unit cost.
\6\ Actual cost of Agency overhead ($500,000) / (2,080 program hours
  times 50 program employees) = $4.81 unit cost.
\7\ Cost of FY 2010 Inflation ($125,000) / (2,080 program hours times 50
  program employees) = $1.20 unit cost.

    In order to project the hourly fee rates for the laboratory program 
services for fiscal years 2010 through 2012, the last fiscal year 2009 
is used as a base. The total base time hourly fee rate calculation 
(Table 2) for fiscal year 2010 begins with the actual salaries for 
fiscal year 2009 ($3,029,744) and adds the fiscal year 2010 projected 
pay adjustments (3 percent) and the fiscal year 2010 cost of employee 
benefits ($727,364). Table 2 contains footnotes 1-7 that provide the 
common mathematical formula used to calculate the apportioned rate for 
each fee charge category for fiscal year 2010. The formula uses the 
actual cost or projected cost in dollars for the applicable fiscal year 
for each individual fee charge category divided by the available 
program hours (2,080 hours) and further divided by the number of 
laboratory service program employees (50 people). The formula derives 
the apportioned fee rate for each fee charge category (salaries with 
pay adjustment, benefits, operational costs, infrastructure cost, 
agency overhead and inflation factor at 3.5 percent rate). The same 
formula that is used in Table 2 and that is indicated in its footnotes 
is also applied in the other tables to derive each category unit rate 
with the different actual costs or variable projected costs to be 
inserted in the formula equation for the applicable fiscal year. See 
Table 3 through Table 10 below for additional new hourly fee rate 
calculations for laboratory program services for the remainder of 
fiscal year 2010 and fiscal years 2011 through 2012 to be rounded off 
to whole number dollar amounts.
    Table 3 through Table 4 shows the calculations of the total 
standard hourly fee rates to be rounded off to $81 and $83 for fiscal 
years 2011 through 2012, respectively.

    Table 3--Calculations for the Standard Hourly Rate for Laboratory
                      Program Services for FY 2011
------------------------------------------------------------------------
                                                            Apportioned
                   Laboratory services                       fee rate
------------------------------------------------------------------------
Base Time:
    Projected FY 2010 Salaries = Actual FY 2009 ($29.13)          $30.00
     + FY 2010 Pay Adjustment ($0.87)...................
    FY 2011 Pay Adjustment = [FY 2010 Salaries ($30.00)]            0.90
     x 0.03(3%).........................................
    Benefits............................................            6.99
    Operational Costs...................................           22.38
    Infrastructure Cost.................................           13.08
    Agency Overhead.....................................            4.81
    FY 2010 Inflation (3.5%) = [Costs excluding                     1.20
     infrastructure and payroll = $34.18] x 0.035.......
    FY 2011 Inflation (3.5%) = [Costs excluding                     1.20
     infrastructure and payroll = $34.18] x 0.035.......
                                                         ---------------
        Total Rate Per Hour--Base Time..................           80.56
------------------------------------------------------------------------


    Table 4--Calculations for the Standard Hourly Rate for Laboratory
                      Program Services for FY 2012
------------------------------------------------------------------------
                                                            Apportioned
                   Laboratory services                       fee rate
------------------------------------------------------------------------
Base Time:
    Projected FY 2011 Salaries = FY 2010 ($30.00) + FY            $30.90
     2011 Pay Adjustment ($0.90)........................

[[Page 17284]]

 
    FY 2012 Pay Adjustment = [FY 2011 Salaries ($30.90)]            0.93
     x 0.03(3%).........................................
    Benefits............................................            6.99
    Operational Costs...................................           22.38
    Infrastructure Cost.................................           13.08
    Agency Overhead.....................................            4.81
    FY 2010 Inflation (3.5%) = [Costs excluding                     1.20
     infrastructure and payroll = $34.18] x 0.035.......
    FY 2011 Inflation (3.5%) = [Costs excluding                     1.20
     infrastructure and payroll = $34.18] x 0.035.......
    FY 2012 Inflation (3.5%) = [Costs excluding                     1.20
     infrastructure and payroll = $34.18] x 0.035.......
                                                         ---------------
        Total Rate Per Hour--Base Time..................           82.69
------------------------------------------------------------------------

    Table 5 through Table 7 shows the calculations of the total appeal 
and total overtime hourly fee rates to be rounded off to whole dollar 
amounts for the remainder of fiscal year 2010 and fiscal years 2011 
through 2012. These tables incorporate the differentials in costs 
associated with the necessity of laboratory personnel to work extended 
hours of service at the time and a half pay carrying out either 
overtime or appeal sample testing. Federal employee rates of premium 
pay are described in part 551 of Title 5 of the Code of Federal 
Regulations (CFR) for the Office of Personnel Management (OPM). Section 
551.512(a) specifies that Federal employees are entitled to receive 
overtime premium pay, when overtime work is performed, at one and one-
half times the employee's hourly rate of basic pay.

   Table 5--Calculations for the Appeal and Overtime Hourly Rates for
        Laboratory Program Services for the Remainder of FY 2010
------------------------------------------------------------------------
                                                            Apportioned
                   Laboratory services                       fee rate
------------------------------------------------------------------------
Appeal and Overtime Rates: Projected Salaries @ 1.5
 (time and a half)
    FY 2009 Salaries @ 1.5 = [Actual 2009 Salaries                $43.70
     ($29.13)] x 1.5....................................
    FY 2010 Pay Adjustment = FY 2009 Salaries @ 1.5                 1.31
     ($43.70) x 0.03 (3%)...............................
    Benefits............................................            6.99
    Operational Costs...................................           22.38
    Infrastructure Cost.................................           13.08
    Agency Overhead.....................................            4.81
    FY 2010 Inflation (3.5%) = [Costs excluding                     1.20
     infrastructure and payroll = $34.18] x 0.035.......
                                                         ---------------
        Total Rate Per Hour--Appeal and Overtime........           93.47
------------------------------------------------------------------------


   Table 6--Calculations for the Appeal and Overtime Hourly Rates for
                 Laboratory Program Services for FY 2011
------------------------------------------------------------------------
                                                            Apportioned
                   Laboratory services                       fee rate
------------------------------------------------------------------------
Appeal and Overtime Rates: Projected Salaries @ 1.5
 (time and a half)
    FY 2010 Salaries @ 1.5 = [Actual FY 2009 Salaries             $45.00
     ($29.13) + FY 2010 Pay Adjustment ($0.87)] x 1.5...
    FY 2011 Pay Adjustment = FY 2010 Salaries @ 1.5                 1.35
     ($45.00) x 0.03 (3%)...............................
    Benefits............................................            6.99
    Operational Costs...................................           22.38
    Infrastructure Cost.................................           13.08
    Agency Overhead.....................................            4.81
    FY 2010 Inflation (3.5%)............................            1.20
    FY 2011 Inflation (3.5%) = [Costs excluding                     1.20
     infrastructure and payroll = $34.18] x 0.035.......
                                                         ---------------
        Total Rate Per Hour--Appeal and Overtime........           96.01
------------------------------------------------------------------------


   Table 7--Calculations for the Appeal and Overtime Hourly Rates for
                 Laboratory Program Services for FY 2012
------------------------------------------------------------------------
                                                            Apportioned
                   Laboratory services                       fee rate
------------------------------------------------------------------------
Appeal and Overtime Rates: Projected Salaries @ 1.5
 (time and a half)
    FY 2011 Salaries @ 1.5 = [Projected FY 2010 Salaries          $46.35
     ($30.00) + FY 2011 Pay Adjustment ($0.90)] x 1.5...
    FY 2012 Pay Adjustment = FY 2011 Salaries @ 1.5                 1.39
     ($46.35) x 0.03 (3%)...............................
    Benefits............................................            6.99

[[Page 17285]]

 
    Operational Costs...................................           22.38
    Infrastructure Cost.................................           13.08
    Agency Overhead.....................................            4.81
    FY 2010 Inflation (3.5%)............................            1.20
    FY 2011 Inflation (3.5%)............................            1.20
    FY 2012 Inflation (3.5%) = [Costs excluding                     1.20
     infrastructure and payroll = $34.18] x 0.035.......
                                                         ---------------
        Total Rate Per Hour--Appeal and Overtime........           98.60
------------------------------------------------------------------------

    Table 8 through Table 10 shows the calculations of the total legal 
holiday hourly fee rates to be rounded off to whole dollar amounts for 
the remainder of fiscal year 2010 and fiscal years 2011 through 2012. 
These tables incorporate the differentials in costs associated with the 
necessity of laboratory personnel to work extended hours of service at 
the double hourly pay rate doing sample testing on a Federal holiday or 
a designated day for the Federal holiday. Accordingly, 5 CFR, part 532, 
section 532.507(a) specifies that Federal employees are entitled to 
receive holiday premium pay, which is not overtime work, at double the 
employee's hourly rate of basic pay.

Table 8--Calculations for the Federal Holiday Hourly Rate for Laboratory
              Program Services for the Remainder of FY 2010
------------------------------------------------------------------------
                                                            Apportioned
                   Laboratory services                       fee rate
------------------------------------------------------------------------
Holiday Rate: Projected Salaries @ 2.0 (double time)
    FY 2009 Salaries @ 2.0 = [Actual 2009 Salaries                $58.26
     ($29.13)] x 2.0....................................
    FY 2010 Pay Adjustment = FY 2009 Salaries @ 2.0                 1.75
     ($58.26) x 0.03 (3%)...............................
    Benefits............................................            6.99
    Operational Costs...................................           22.38
    Infrastructure Cost.................................           13.08
    Agency Overhead.....................................            4.81
    FY 2010 Inflation (3.5%) = [Costs excluding                     1.20
     infrastructure and payroll = $34.18] x 0.035.......
                                                         ---------------
        Total Rate Per Hour--Holidays...................          108.47
------------------------------------------------------------------------


Table 9--Calculations for the Federal Holiday Hourly Rate for Laboratory
                      Program Services for FY 2011
------------------------------------------------------------------------
                                                            Apportioned
                   Laboratory services                       fee rate
------------------------------------------------------------------------
Holiday Rate: Projected Salaries @ 2.0 (double time)
    FY 2010 Salaries @ 2.0 = [Actual FY 2009 Salaries             $60.00
     ($29.13) + FY 2010 Pay Adjustment ($0.87)] x 2.0...
    FY 2011 Pay Adjustment = FY 2010 Salaries @ 2.0                 1.80
     ($60.00) x 0.03 (3%)...............................
    Benefits............................................            6.99
    Operational Costs...................................           22.38
    Infrastructure Cost.................................           13.08
    Agency Overhead.....................................            4.81
    FY 2010 Inflation (3.5%)............................            1.20
    FY 2011 Inflation (3.5%) = [Costs excluding                     1.20
     infrastructure and payroll = $34.18] x 0.035.......
                                                         ---------------
        Total Rate Per Hour--Holidays...................          111.46
------------------------------------------------------------------------


     Table 10--Calculations for the Federal Holiday Hourly Rate for
                 Laboratory Program Services for FY 2012
------------------------------------------------------------------------
                                                            Apportioned
                   Laboratory services                       fee rate
------------------------------------------------------------------------
Holiday Rate: Projected Salaries @ 2.0 (double time)
    FY 2011 Salaries @ 2.0 = [Projected FY 2010 Salaries          $61.80
     ($30.00) + FY 2011 Pay Adjustment ($0.90)] x 2.0...
    FY 2012 Pay Adjustment = FY 2011 Salaries @ 2.0                 1.85
     ($61.80) x 0.03 (3%)...............................
    Benefits............................................            6.99
    Operational Costs...................................           22.38
    Infrastructure Cost.................................           13.08
    Agency Overhead.....................................            4.81
    FY 2010 Inflation (3.5%)............................            1.20

[[Page 17286]]

 
    FY 2011 Inflation (3.5%)............................            1.20
    FY 2012 Inflation (3.5%) = [Costs excluding                     1.20
     infrastructure and payroll = $34.18] x 0.035.......
                                                         ---------------
        Total Rate Per Hour--Holidays...................          114.51
------------------------------------------------------------------------

Proposed Rule and Comments

    AMS published a proposed rule on October 26, 2009 (74 FR 54920), 
stating that it was proposing changing fees for laboratory services for 
fiscal years 2010 through 2012. AMS provided for a 30 day comment 
period, ending November 25, 2009. The proposed rule included the 
required economic analysis for determining the fee schedule and 
regulatory flexibility analysis. AMS received no comments.

Executive Order 12866

    This rule has been determined to be not significant for purposes of 
Executive Order 12866; and, therefore, has not been reviewed by the 
Office of Management and Budget (OMB).

Civil Justice Reform (Executive Order 12988)

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. It is not intended to have retroactive effect. There 
are no administrative procedures which must be exhausted prior to any 
judicial challenge to this rule or the application of its provisions.

Regulatory Flexibility Act

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601-612) AMS has considered the 
economic impact of this action on small entities and has determined 
that its implementation will not have a significant economic impact on 
a substantial number of small businesses. The purpose of the RFA is to 
fit regulatory actions to the scale of businesses subject to such 
actions so that small businesses will not be disproportionately 
burdened. There are 499 current stakeholders who voluntarily use the 
AMS laboratory services annually. Such users of services include food 
processors, handlers, growers, government agencies, and exporters. The 
majority of these firms, organizations, and individuals are small 
businesses under the criteria established by the Small Business 
Administration (13 CFR 121.201). The increases in annual hourly fee 
rates as stated will not significantly affect these small businesses as 
defined in the RFA because this is a voluntary program and the costs to 
each user will increase proportionally to their use of laboratory 
services each fiscal year. Any decision by the current stakeholders to 
discontinue the use of the AMS laboratory services because of the 
increased fees will not hinder the food processors or industry members 
from marketing their products, since stakeholders may contract for 
services with other government agencies or private laboratories. The 
AMS laboratory testing programs are voluntary, user fee services, 
conducted under the authority of the AMA.
    The AMA authorizes the Secretary of Agriculture to provide Federal 
analytical testing services that facilitate marketing and trade with 
the financial necessity that reasonable fees be collected from the 
users of the services to cover as nearly as possible the costs of 
maintaining the programs. AMS regularly reviews its user-fee-supported 
laboratory service programs to determine if the voluntary fees are 
adequate and reasonable to cover expenses. The most recent review 
determined that the existing hourly fee rates, which have been in place 
since March 30, 2007, will not generate sufficient revenue to recover 
annual operating costs of laboratory programs and will not maintain 
adequate end-of-year operating reserve balances in FY 2010, FY 2011, 
and FY 2012. This decline in revenues is due to lower numbers of 
samples and a reduction in the number of clients by 312 that is 
attributable mainly to a shift in usage patterns on the part of 
applicants for testing services and change to government programs. For 
example, several federal commodity purchasing programs are now relying 
heavily on vendor certification rather than government laboratory 
testing; a larger percentage of aflatoxin analyses and microbiological 
testing are performed by approved or designated private laboratories; 
and food and fiber product testing is decreasing due to changing 
importer country requirements. For analytical purposes, projected 
collections are based on calculations using an effective date of 
October 1, 2009 for the new fiscal year 2010 user fees. Without the fee 
increase in this rule, FY 2010 revenues are projected at $6,421,000; 
obligations are projected at $6,676,000, for a fiscal year loss of 
$256,000 and a depleted trust fund to an 8.0 month end-of-year reserve 
balance of $4,449,000. In fiscal years 2011 and 2012 additional 
operating losses for the laboratories are projected. If there are no 
hourly rate changes as reflected in this rule, the FY 2011 and FY 2012 
end-of-year reserve balances will decline from $4,449,000 to $3,984,000 
(6.9 months operating reserve), and $3,568,000 (6.0 months operating 
reserve), respectively. However, a minimum operating reserve of 11.1 
months or an end-of-year trust fund balance amount of $6,173,000 is 
needed for FY 2010 based on the current shut down analysis and prior 
experiences, including the permanent closing of the S&T Midwestern 
Laboratory in Chicago, Illinois on June 30, 2000. The AMS estimates 
that the raised hourly fee rates in this rule will yield $1,228,000 
overall in additional laboratory testing program revenues during FY 
2010. This will increase the end-of-year available capital assets in 
the trust fund from $4,704,000 or 8.8 months of permitted operations in 
FY 2009 to $5,677,000 or 10.2 months of permitted operations in FY 
2010. By forgoing the purchase of new models of analytical equipment 
and instruments employing up to date technology to replace aging ones 
in the laboratories, a $500,000 savings in the costs of operations 
could take place in FY 2010. This will enable AMS to replenish program 
reserves to an 11 month level, $6,177,000, for FY 2010 that is called 
for by Agency policy and prudent financial management. With increased 
revenue from the hourly rate changes in this rule, program reserves 
will be maintained at this level in subsequent fiscal years 2011 and 
2012.
    With this action, the Agency expects to collect $7,649,000 in FY 
2010, $7,986,000 in FY 2011, and $8,211,000 in FY 2012 attributable to 
the increased fee changes, to cover the full cost of routine laboratory 
services, appeal requests, overtime, and legal holiday

[[Page 17287]]

services for Science and Technology customers and other program 
stakeholders. This action will allow AMS to continue to offer 
laboratory testing services under the Agricultural Marketing Act of 
1946 as amended, to facilitate marketing and allow products to obtain 
grade designations or meet marketing standards. As such, the program 
provides a viable option for a wide variety of stakeholders by 
delivering scientific and analytical support services to the 
diversified agricultural and food processing community and provides a 
valuable resource for those businesses and industries that wish to use 
a USDA shield. By establishing a three year fee increase over FYs 2010, 
2011, and 2012 the Agency will help ensure that the fee increases are 
effective at the beginning of each fiscal year from FY 2011 to FY 2012. 
This increase over three fiscal years will permit customers and other 
program stakeholders an opportunity to plan for annual changes in costs 
of laboratory service and to incorporate them into their budgetary 
plans.
    Finally, this rule will update and identify Science and Technology 
Programs' existing facility addresses. It will also clarify that test 
results of analyses and laboratory determinations provided by AMS 
laboratory program only apply to the submitted samples and do not 
represent the quality, condition or disposition of the lot from which 
each sample was taken.

Paperwork Reduction Act

    This rule contains no new information collection or recordkeeping 
requirements that are subject to the Office of Management and Budget 
(OMB) approval under the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3520). AMS is committed to implementation of the Government 
Paperwork Elimination Act which provides for the use of information 
resources to improve the efficiency and effectiveness of governmental 
operations, including providing the public with the option of 
submitting information or transacting business electronically to the 
extent practicable. USDA has not identified any relevant Federal rules 
that duplicate, overlap, or conflict with this rule.

Unfunded Mandate Analysis

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

Comments and Effective Date

    A thirty day comment period was provided for interested persons to 
comment on the proposed rule published in the Federal Register (74 FR 
54920) regarding changes in user fees for voluntary laboratory testing 
services. No comments were received by the end of the comment period on 
November 25, 2009. The existing hourly fee rates have been in place 
since March 30, 2007. AMS regularly reviews its user-fee-supported 
programs to determine if the current fees are adequate to cover 
expenses. The agency is unable to recover the full cost of its present 
laboratory testing services. With this regulation, AMS is establishing 
three annual hourly fee rate increases for standard, overtime and 
appeals, and holiday services for fiscal years 2010-2012. Accordingly, 
for these reasons, pursuant to 5 U.S.C. 553, and because of initiation 
of the Federal fiscal year 2010 already, it is found and determined 
that good cause exists for not postponing the effective date of this 
rule until 30 days after publication in the Federal Register. 
Therefore, this final rule is effective one day after the date of 
publication in the Federal Register.

List of Subjects in 7 CFR Part 91

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

0
For the reasons set forth in the preamble, the Agricultural Marketing 
Service under the authority of 7 U.S.C. 1622, 1624 amends part 91 of 
Title 7, chapter I, subchapter E, of the Code of Federal Regulations as 
follows:

PART 91--SERVICES AND GENERAL INFORMATION

0
1. The authority citation for part 91 continues to read as follows:

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

0
2. Section 91.5 is revised to read as follows:


Sec.  91.5  Where services are offered.

    (a) Services are offered to applicants at the Science and 
Technology laboratories and facilities as listed below.
    (1) Science and Technology Programs National Science Laboratory. A 
variety of proximate for composition, chemical, physical, 
microbiological and biomolecular (DNA-based) tests and laboratory 
analyses performed on fruits and vegetables, poultry, dairy and dairy 
products, juices, fish, vegetative seed and oilseed, honey, meat and 
meat products, fiber products and processed foods are performed at the 
Science and Technology Programs (S&T) laboratory located at: USDA, AMS, 
Science and Technology Programs, National Science Laboratory (NSL), 801 
Summit Crossing Place, Suite B, Gastonia, North Carolina 28054-2193.
    (2) Science and Technology (S&T) Programs Science Specialty 
Laboratories. The Science specialty laboratories performing aflatoxin 
and other testing on peanuts, peanut products, dried fruits, grains, 
edible seeds, tree nuts, shelled corn products, oilseed products, olive 
oil, vegetable oils, juices, citrus products, and other commodities are 
located as follows:
    (i) USDA, AMS, Science & Technology, Citrus Laboratory, 98 Third 
Street, SW., Winter Haven, Florida 33880-2905.
    (ii) USDA, AMS, Science & Technology, Science Specialty Laboratory, 
6567 Chancey Mill Road, Blakely, Georgia 39823-2785.
    (3) Program laboratories. Laboratory services are available in all 
areas covered by cooperative agreements providing for this laboratory 
work and entered on behalf of the Department with cooperating Federal 
or State laboratory agencies pursuant to authority contained in Act(s) 
of Congress. Also, services may be provided in other areas not covered 
by a cooperative agreement if the Administrator determines that it is 
possible to provide such laboratory services.
    (4) Other alternative laboratories. Laboratory analyses may be 
conducted at alternative Science and Technology Programs laboratories 
and can be reached from any commodity market in which a laboratory 
facility is located to

[[Page 17288]]

the extent laboratory personnel are available.
    (5) The Plant Variety Protection (PVP) Office. The PVP office and 
plant examination facility of the Science and Technology programs 
issues certificates of protection to developers of novel varieties of 
plants which reproduce sexually. The PVP office is located as follows: 
USDA, AMS, Science & Technology Programs, Plant Variety Protection 
Office, National Agricultural Library Building, Room 401, 10301 
Baltimore Boulevard, Beltsville, MD 20705-2351.
    (6) Science and Technology Programs headquarters offices. The 
examination, licensure, quality assurance reviews, laboratory approval/
certification and consultation services are provided by headquarters 
staff located in Washington, DC. The main headquarters office is 
located as follow: USDA, AMS, Science and Technology Programs, Office 
of the Deputy Administrator, Room 1092 South Agriculture Bldg., Mail 
Stop 0270, 1400 Independence Ave., SW., Washington, DC 20250-0270.
    (7) Statistics Branch Office. The Statistics Branch office of 
Science and Technology Programs (S&T) provides statistical services to 
the Agency and other agencies within the USDA. In addition, the 
Statistics Branch office generates sample plans and performs consulting 
services for research studies in joint efforts with or in a leading 
role with other program areas of AMS or of the USDA. The Statistics 
Branch office is located as follows: USDA, AMS, S&T Statistics Branch, 
Room 0603 South Agriculture Bldg., Mail Stop 0223, 1400 Independence 
Ave., SW., Washington, DC 20250-0223.
    (8) Technical Services Branch Office. The Technical Services Branch 
office of Science and Technology (S&T) provides technical support 
services to all Agency programs and other agencies within the USDA. In 
addition, the Technical Services Branch office provides certification 
and approval services of private and State government laboratories as 
well as oversees quality assurance programs; import and export 
certification of laboratory tested commodities. The Technical Services 
Branch mailing address is as follows: USDA, AMS, S&T Technical Services 
Branch, South Agriculture Bldg., Mail Stop 0272, 1400 Independence 
Ave., SW., Washington, DC 20250-0272. The Technical Services Branch 
office is located as follows: USDA, AMS, Science and Technology 
Technical Services Branch, Room 0604 South Agriculture Bldg., 1400 
Independence Ave., SW., Washington, DC 20250.
    (9) Monitoring Programs Office. Services afforded by the Pesticide 
Data Program (PDP) and Microbiological Data Program (MDP) are provided 
by USDA, AMS, Science and Technology Monitoring Programs Office, 8609 
Sudley Road, Suite 206, Manassas, VA 20110-8411.
    (10) Pesticide Records Branch Office. Services afforded by the 
Federal Pesticide Record Keeping Program for restricted-use pesticides 
by private certified applicators are provided by USDA, AMS, Science and 
Technology, Pesticide Records Branch, 8609 Sudley Road, Suite 203, 
Manassas, VA 20110-8411.
    (b) The addresses of the various laboratories and offices appear in 
the pertinent parts of this subchapter. A prospective applicant may 
obtain a current listing of addresses and telephone numbers of Science 
and Technology Programs laboratories, offices, and facilities by 
addressing an inquiry to the Administrative Officer, Science and 
Technology Programs, Agricultural Marketing Service, United States 
Department of Agriculture (USDA), 1400 Independence Ave., SW., Room 
0725 South Agriculture Building, Mail Stop 0271, Washington, DC 20250-
0271.

0
3. Sections 91.24 and 91.25 are revised to read as follows:


Sec.  91.24  Reports of test results.

    (a) Results of analyses are provided, in writing, by facsimile, by 
e-mail or other electronic means to the applicant.
    (b) Results of test analyses and laboratory determinations provided 
by AMS laboratory services only apply to the submitted samples and do 
not represent the quality, condition or disposition of the lot from 
which each sample was taken.
    (c) Applicants may call the appropriate Science and Technology 
laboratory for interim or final results prior to issuance of the formal 
report. The advance results may be telegraphed, e-mailed, telephoned, 
or sent by facsimile to the applicant. Any additional expense for 
advance information shall be borne by the requesting party.
    (d) A letter report in lieu of an official certificate of analysis 
may be issued by a laboratory representative when such action appears 
to be more suitable than a certificate: Provided, that, issuance of 
such report is approved by the Deputy Administrator.


Sec.  91.25  Certificate requirements.

    Certificates of analysis and other memoranda concerning laboratory 
service and the reporting of results should have the following 
requirements:
    (a) Certificates of analysis shall be on standard printed forms 
approved by the Deputy Administrator;
    (b) Shall be printed in English;
    (c) Shall have results typewritten, computer generated, or 
handwritten in ink and shall be clearly legible;
    (d) Shall show the results of laboratory tests in a uniform, 
accurate, and concise manner with abbreviations identified on the form;
    (e) Shall show the information required by Sec. Sec.  91.26 through 
91.29; and
    (f) Show only such other information and statements of fact as are 
provided in the instructions authorized by the Deputy Administrator.

0
4. Sections 91.37 through 91.39 are revised to read as follows:


Sec.  91.37  Standard hourly fee rate for laboratory testing, analysis, 
and other services.

    (a) The standard hourly fee rate in this section for the individual 
laboratory analyses cover the costs of Science and Technology 
laboratory services, including issuance of certificates and personnel 
and overhead costs other than the commodity inspection fees referred to 
in 7 CFR 52.42 through 52.46, 52.48 through 52.51, 55.510 through 
55.530, 55.560 through 55.570, 58.38 through 58.43, 58.45 through 
58.46, 70.71 through 70.72, and 70.75 through 70.78. The hourly fee 
rates in this part 91 apply to all commodity and processed commodity 
products. The new fiscal year for Science and Technology Programs 
commences on October 1 of each calendar year. The rate for laboratory 
services is $78.00 per hour in fiscal year 2010, $81.00 per hour in 
fiscal year 2011, and $83.00 per hour in fiscal year 2012.
    (b) Printed updated schedules of the laboratory testing fees for 
processed fruits and vegetables (7 CFR part 93), poultry and egg 
products (7 CFR part 94), and meat and meat products (7 CFR part 98) 
will be available for distribution to Science and Technology's 
constituents and stakeholders by the individual Laboratory Directors of 
Science and Technology laboratories listed in Sec.  91.5. These single 
test laboratory fee schedules are based upon the applicable hourly fee 
rate stated in paragraph (a) of this section.
    (c) Except as otherwise provided in this section, charges will be 
made at the applicable hourly rate stated in paragraph (a) of this 
section for the time required to perform the service. A charge will be 
made for service pursuant to each request or certificate issued.

[[Page 17289]]

    (d) When a laboratory test service is provided for AMS by a 
commercial or State government laboratory, the applicant will be 
assessed a fee which covers the costs to the Science and Technology 
program for the service provided.
    (e) When Science and Technology staff provides applied and 
developmental research and training activities for microbiological, 
physical, chemical, and biomolecular analyses on agricultural 
commodities the applicant will be charged a fee on a reimbursable cost 
to AMS basis.


Sec.  91.38  Additional fees for appeal of analysis.

    (a) The applicant for appeal sample testing will be charged a fee 
at the hourly rate for laboratory service that appears in this 
paragraph. The new fiscal year for Science and Technology Programs 
commences on October 1 of each calendar year. The appeal rate for 
laboratory service is $93.00 per hour in fiscal year 2010, $96.00 per 
hour in fiscal year 2011, and $99.00 per hour in fiscal year 2012.
    (b) The appeal fee will not be waived for any reason if analytical 
testing was completed in addition to the original analysis.


Sec.  91.39  Premium hourly fee rates for overtime and legal holiday 
service.

    (a) When analytical testing in a Science and Technology facility 
requires the services of laboratory personnel beyond their regularly 
assigned tour of duty on any day or on a day outside the established 
schedule, such services are considered as overtime work. When 
analytical testing in a Science and Technology facility requires the 
services of laboratory personnel on a Federal holiday or a day 
designated in lieu of such a holiday, such services are considered 
holiday work. Laboratory analyses initiated at the request of the 
applicant to be rendered on Federal holidays, and on an overtime basis 
will be charged fees at hourly rates for laboratory service that appear 
in this paragraph. The new fiscal year for Science and Technology 
Programs commences on October 1 of each calendar year. The laboratory 
analysis rate for overtime service is $93.00 per hour in fiscal year 
2010, $96.00 per hour in fiscal year 2011, and $99.00 per hour in 
fiscal year 2012. The laboratory analysis rate for Federal holiday or 
designed holiday service is $108.00 per hour in fiscal year 2010, 
$111.00 per hour in fiscal year 2011, and $115.00 per hour in fiscal 
year 2012.
    (b) Information on legal holidays or what constitutes overtime 
service at a particular Science and Technology laboratory is available 
from the Laboratory Director or facility manager.

    Dated: April 1, 2010.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. 2010-7739 Filed 4-5-10; 8:45 am]
BILLING CODE P