20220 Federal Register / Vol. 76, No. 70 / Tuesday, April 12, 2011 / Rules and Regulations 

Authority: 7 U.S.C. 499a–499t. 

■ 2. In § 46.46, paragraph (e)(2) is 

revised, paragraphs (e)(3) and (4) are 

redesignated as paragraphs (e)(4) and 

(5), and a new paragraph (e)(3) is added 

as follows: 

§ 46.46 Statutory trust. 

* * * * * 

(e) * * * 

(2) The maximum time for payment 

for a shipment to which a seller, 

supplier, or agent can agree, prior to the 

transaction, and still be eligible for 

benefits under the trust is 30 days after 

receipt and acceptance of the 

commodities as defined in § 46.2(dd) 

and paragraph (a)(1) of this section. 

(3) If there is a default in payment as 

defined in § 46.46(a)(3), the seller, 

supplier, or agent who has met the 

eligibility requirements of paragraphs 

(e)(1) and (2) of this section will not 

forfeit eligibility under the trust by 

agreeing in any manner to a schedule for 

payment of the past due amount or by 

accepting a partial payment. 

* * * * * 

Dated: April 5, 2011. 

Ellen King, 

Acting Administrator, Agricultural Marketing 

Service. 

[FR Doc. 2011–8718 Filed 4–11–11; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF AGRICULTURE 

Food Safety and Inspection Service 

9 CFR Parts 391, 590, and 592 

[FDMS Docket Number FSIS–2006–0025] 

RIN 0583–AD40 

New Formulas for Calculating the 

Basetime, Overtime, Holiday, and 

Laboratory Services Rates; Rate 

Changes Based on the Formulas; and 

Increased Fees for the Accredited 

Laboratory Program. 

AGENCY: Food Safety and Inspection 

Service, USDA. 

ACTION: Final rule. 

SUMMARY: The Food Safety and 

Inspection Service (FSIS) is amending 

its regulations to establish formulas for 

calculating the rates that it charges meat 

and poultry establishments, egg 

products plants, and importers and 

exporters for providing voluntary, 

overtime, and holiday inspection, and 

identification, certification, and 

laboratory services. The 2011 basetime, 

overtime, holiday, and laboratory 

services rates in this final rule will be 

applied on the effective date. For future 

years, FSIS will use the formulas 

established to calculate the annual rates. 

FSIS will publish the rates annually in 

Federal Register notices prior to the 

start of each calendar year and will 

apply them on the first FSIS pay period 

at the beginning of the calendar year. 

The Agency is also increasing the 

codified flat annual fee for its 

Accredited Laboratory Program for FY 

2012 and FY 2013. 

DATES: This final rule is effective May 

22, 2011. 

FOR FURTHER INFORMATION CONTACT: For 

further information concerning policy 

issues contact Rachel Edelstein, 

Director, Policy Issuances Division, 

Office of Policy and Program 

Development, FSIS, U.S. Department of 

Agriculture, Room 6065 South Building, 

1400 Independence Ave., SW., 

Washington, DC 20250–3700; telephone 

(202) 720–0399, fax (202) 690–0486. 

For further information concerning 

fees contact Michele Torrusio, Director, 

Budget Division, Office of Management, 

FSIS, U.S. Department of Agriculture, 

Room 2159 South Building, 1400 

Independence Avenue, SW., 

Washington, DC 20250–3700; telephone 

(202) 720–8700, fax (202) 690–4155. 

SUPPLEMENTARY INFORMATION: 

Background 

The Federal Meat Inspection Act 

(FMIA) (21 U.S.C. 601 et seq.) and the 

Poultry Products Inspection Act (PPIA) 

(21 U.S.C. 451 et seq.) provide for 

mandatory Federal inspection of 

livestock and poultry slaughtered at 

official establishments and of meat and 

poultry processed at official 

establishments. The Egg Products 

Inspection Act (EPIA) (21 U.S.C. 1031 et 

seq.) provides for mandatory inspection 

of egg products processed at official 

plants. FSIS bears the cost of mandatory 

inspection provided during nonovertime and non-holiday hours of 

operation. Official establishments and 

official egg products plants pay for 

inspection services performed on 

holidays or on an overtime basis. 

Under the Agricultural Marketing Act 

of 1946 (AMA), as amended (7 U.S.C. 

1621 et seq.), FSIS provides a range of 

voluntary inspection, certification, and 

identification services to assist in the 

orderly marketing of various animal 

products and byproducts. These 

services include the certification of 

technical animal fats and the inspection 

of exotic animal products, such as 

antelope and elk products. The AMA 

provides that FSIS may assess and 

collect fees to recover the costs of the 

voluntary inspection, certification, and 

identification services it provides. 

Also under the AMA, FSIS provides 

certain voluntary laboratory services 

that establishments and others may 

request the Agency to perform. 

Laboratory services are provided for 

four types of analytic testing: 

Microbiological testing, residue 

chemistry tests, food composition tests, 

and pathology testing. Again, the AMA 

provides that FSIS may collect fees to 

recover the costs of providing these 

services. 

FSIS also accredits non-Federal 

analytical laboratories under its 

Accredited Laboratory Program. Such 

accreditation allows laboratories to 

conduct analyses of official meat and 

poultry samples. The Food, Agriculture, 

Conservation, and Trade Act of 1990, as 

amended, mandates that laboratory 

accreditation fees cover the costs of the 

Accredited Laboratory Program. This 

same Act mandates an annual payment 

of an accreditation fee on the 

anniversary date of each accreditation. 

Proposed Rule 

On October 8, 2009, FSIS published a 

proposed rule to amend its regulations 

to establish formulas for calculating the 

rates it charges meat and poultry 

establishments, egg products plants, and 

importers and exporters for providing 

voluntary, overtime, and holiday 

inspection, and identification, 

certification, and laboratory services (74 

FR 51800). FSIS also proposed to keep 

the annual fee for its Accredited 

Laboratory Program at $4,500 for FY 

2009, 2010 and 2011, and increase it to 

$5,000 for FY 2012 and FY 2013 (74 FR 

51802). 

As FSIS explained in the proposed 

rule, historically, the Agency amended 

its regulations annually to change the 

rates and fees. However, because the 

rulemaking process is lengthy, the fiscal 

year repeatedly would partially elapse 

before the Agency could publish a final 

rule to amend its rates and fees. As a 

result, the Agency was unable to recover 

the full cost of the services it provided. 

To address the delays in recovering 

the cost of services, in January 2006, 

FSIS amended its regulations to provide 

for multiple annual rate and fee 

increases in one action (71 FR 2135). 

With this rulemaking, the rates and fees 

for 2006–2008 were increased and FSIS 

established criteria for determining the 

rate and fee increases on a multi-year 

basis. While this solution enabled the 

Agency to increase rates and fees each 

year, estimates used to establish the 

annual rates and fees were imprecise 

and have left the Agency collecting too 

little, and thus, not fully recovering its 


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Federal Register / Vol. 76, No. 70 / Tuesday, April 12, 2011 / Rules and Regulations 20221 

costs. Because of the duration of the 

rulemaking process, rate increases have 

not been available until approximately 

three-fourths of the way into the fiscal 

year. This has resulted in a considerable 

monetary loss for FSIS. 

In 2009, the Agency performed a cost 

analysis using actual FY 2008 data. On 

the basis of that analysis, the October 

2009 proposed rule set forth the various 

rates FSIS projected it needed to charge 

in order to recover its costs. FSIS 

developed proposed formulas in 

consultation with a private accounting 

firm to determine the rates for FY 2010 

and future years. FSIS also proposed 

raising its fees for the Accredited 

Laboratory Program to cover its 

increased direct overhead costs, 

including salary increases, employee 

benefits, inflation, and bad debt, and to 

maintain an adequate operating reserve. 

Final Rule 

In this final rule, FSIS is amending its 

regulations to codify, with 

modifications, the proposed formulas 

for calculating and establishing the rates 

for basetime, overtime, holiday, and 

laboratory services set forth in the 

proposed rule. FSIS has also made 

changes to the proposed regulatory text 

to correct inadvertent inconsistencies in 

terminology. For example, the preamble 

to the proposed rule referred to ‘‘fees’’ 

for the basetime, overtime, holiday, and 

laboratory services rates. In this 

preamble, FSIS is consistently using the 

term ‘‘rate’’ for the basetime, overtime, 

holiday, and laboratory services rates, 

and ‘‘fee’’ for the laboratory accreditation 

fee. 

In the proposed rule, the Agency 

stated that the basetime, overtime, 

holiday, and laboratory services rates 

would be determined ‘‘For each fiscal 

year and based on previous fiscal year’s 

actual costs and hours’’ (proposed 9 CFR 

391.2(a), 391.3, 391.4(a), 590.126, 

590.128, 592.510(a), 592.520, 592.530). 

Because of the time necessary to obtain 

previous fiscal year data and to 

calculate the formulas, in this final rule 

FSIS is specifying that the rates will be 

determined for each calendar year, as 

opposed to for ‘‘each fiscal year,’’ based 

on the previous fiscal year’s (ending on 

September 30) actual costs and hours 

data, except for the cost of living and 

inflation percentages. FSIS is also 

specifying that the cost of living and 

inflation percentages included in the 

formulas will be based on economic 

assumptions for the calendar year in 

which the rates will apply. 

The proposed provisions for the 

‘‘overhead rate’’ (9 CFR 391.2(b)(3) and 

592.510(b)(3)) stated that the rate is 

based on the ‘‘average information 

technology (IT) costs from the previous 

two years in the Public Health Data 

Communication Infrastructure System 

Fund.’’ The Agency proposed the two 

year average because of excessively high 

2007 IT costs. However, in this final 

rule, to maintain consistency with the 

timeframes used in the other rate 

calculations, the Agency is amending 9 

CFR 391.2(b)(3) and 592.510(b)(3) to 

refer to the ‘‘information technology 

costs from the previous fiscal year.’’ In 

addition, the preamble discussion of the 

overhead rate stated that the rate 

included ‘‘provision for the operating 

balance’’. This language was not 

included in the proposed codified text. 

This final rule corrects the codified text 

to include the addition of the provision 

for the operating balance. 

The proposed regulatory text for the 

‘‘benefits’’ and ‘‘travel and operating 

rates’’ (9 CFR 391.2(b)(1) and (2), and 

592.510(b)(1) and (2)) did not specify 

that the applicable costs would be 

divided by the applicable hours. The 

proposed regulatory text did not clearly 

state that the percentage of the cost of 

living increase (for the basetime, 

overtime, holiday, laboratory services, 

and benefits rate) and the percentage of 

inflation (for the travel and operating 

and overhead rates) adjustments are 

added to the quotients of pay divided by 

hours in the rate formulas. However, 

FSIS did provide examples in the 

preamble which indicated that costs 

would be divided by the hours, and 

demonstrated how the percent of cost of 

living and inflation are calculated, then 

added in the formulas to determine the 

appropriate rates. In this final rule, the 

regulatory text has been modified to 

clearly state that applicable costs would 

be divided by applicable hours and the 

cost of living and inflation percentage 

adjustments are added to the quotients 

in the formulas to determine the rates. 

The proposed rule’s discussion of the 

‘‘Proposed Formulas’’ (FR 74 51801) and 

the codified text (9 CFR 391.2(a), 

391.3(a) and (b), 391.4(a), 590.126, 

590.128, 592.510(a), 592.520, and 

592.530) used the terms ‘‘regular hours’’ 

and ‘‘hours worked’’ interchangeably. In 

this final rule, the Agency is amending 

the codified text to use consistently the 

term ‘‘regular hours.’’ The term ‘‘regular 

hours’’ refers to the hours during regular 

working time (not including holiday or 

overtime hours) that are associated with 

on-site food product inspection. 

In addition, the proposed rule’s 

preamble (74 FR 51801) and codified 

text included the term ‘‘salaries paid’’ (9 

CFR 391.2(a), 391.3(a) and (b), 391.4(a), 

590.126, 590.128, 592.510(a), 592.520, 

and 592.530). In this final rule, for 

clarity, the term ‘‘salaries paid’’ is being 

replaced by ‘‘regular direct pay’’ because 

this is the pay for ‘‘regular hours.’’ 

FSIS intends to announce future 

annual rate changes, using the formulas 

in this final rule, in Federal Register 

notices approximately 30 days prior to 

the start of each new calendar year. FSIS 

will apply the new rates at the start of 

the first FSIS pay period each new 

calendar year. The 2011 rates in this 

final rule will be applied starting May 

22, 2011, the first pay period 30 days 

after the publication of the rule. 

This final rule adopts the proposed 

fees for the accredited laboratory 

program. FSIS will propose changes to 

the laboratory accreditation fees in 

future rulemakings when necessary. 

Recalculated Rates 

The rates published in the October 

2009 proposed rule were calculated 

using the best data and economic 

analyses available at the time. These 

rates were based upon actual FY 2008 

data. The proposed rule stated that the 

rates would be based on the previous 

year’s actual costs and hours. Fiscal 

Year 2010 ended on September 30, 

2010, and the Agency’s FY 2010 actual 

cost data are now available. In addition, 

since the publication of the proposed 

rule, the Office of Management and 

Budget (OMB) released updated 

projected economic assumptions, 

‘‘Analytical Perspectives, Budget of the 

United States Government, Fiscal Year 

2011.’’ The economic assumptions in the 

‘‘Economic and Budget Analyses’’ 

section, http://www.whitehouse.gov/ 

sites/default/files/omb/budget/fy2011/ 

assets/econ_analyses.pdf include the 

projected overall average civilian 

Federal pay raises and locality pay 

adjustments for future calendar years. 

Therefore, the rates for 2011 in this 

final rule have been recalculated based 

on the previous fiscal year costs and 

hours (FY 2010), the calendar year 

percentage of cost of living increase and 

inflation (calendar year 2011), and, as 

discussed above, the IT costs from the 

previous fiscal year (FY 2010). Table 1 

lists the recalculated 2011 rates and the 

projected 2012 rates, Table 2 lists the 

rates FSIS currently assesses, and Table 

3 lists the rates from the October 2009 

proposed rule. 


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20222 Federal Register / Vol. 76, No. 70 / Tuesday, April 12, 2011 / Rules and Regulations 

TABLE 1—2011 ADJUSTED RATE (PER

HOUR PER EMPLOYEE) BY TYPE OF

SERVICE

Service 

2011 rate 

(estimates 

rounded to 

reflect 

billable 

quarters) 

Projected 

2012 rate 

(estimates 

rounded to 

reflect 

billable 

quarters) 

Basetime ........... $53.92 $54.68 

Overtime ........... 67.52 68.64 

TABLE 1—2011 ADJUSTED RATE (PER

HOUR PER EMPLOYEE) BY TYPE OF

SERVICE—Continued 

Service 

2011 rate 

(estimates 

rounded to 

reflect 

billable 

quarters) 

Projected 

2012 rate 

(estimates 

rounded to 

reflect 

billable 

quarters) 

Holiday .............. $81.08 $82.28 

Laboratory ......... 67.08 68.04 

TABLE 2—CURRENT RATES (PER

HOUR PER EMPLOYEE) BY TYPE OF

SERVICE

Service Current rate 

Basetime ................................... $49.93 

Overtime & holiday ................... 58.93 

Laboratory ................................. 70.82 

TABLE 3—OCTOBER 2009 PROPOSED RATES (PER HOUR PER EMPLOYEE) BY TYPE OF SERVICE

Service 

Estimates rounded to reflect billable 

quarters 

2010 rate Projected 

rate 2011 

Projected 

rate 2012 

Basetime .................................................................................................................................................. $51.36 $52.84 $54.64 

Overtime .................................................................................................................................................. 64.88 66.84 68.84 

Holiday ..................................................................................................................................................... 78.44 80.84 83.32 

Laboratory ................................................................................................................................................ 65.08 67.04 69.08 

The ‘‘travel and operating rate’’ and 

the ‘‘overhead rate’’ used in the proposed 

rule calculations were inadvertently 

transposed. In this final rule, the 

Agency has corrected this error in all of 

the preamble calculations below that 

include ‘‘travel and operating rate’’ or 

‘‘overhead rate.’’ 

Formulas for the Basetime, Overtime, 

Holiday, and Laboratory Services Rates 

FSIS is amending its regulations to 

provide the following formulas for the 

basetime, overtime, holiday, and 

laboratory services rates. The rates 

provided in Table 1, ‘‘2011 ADJUSTED 

RATE (PER HOUR PER EMPLOYEE) BY 

TYPE OF SERVICE’’ are based on 

calculations using unrounded numbers 

for the components, e.g., benefits, travel 

and operating, and overhead. The 

calculations provided below are for 

illustration and the components of the 

rates may not appear to be rounded 

correctly. However, the final rates are 

rounded correctly. In addition, all of the 

final rates have been rounded to make 

the amount divisible by the quarter hour 

(15 minutes). Fifteen minutes is the 

minimum charge for the services 

covered by these rates. 

FSIS is amending 9 CFR 391.2 and 

592.510 to establish the following 

formula to calculate the basetime rate 

per hour per program employee: 

Basetime Rate = The quotient of 

dividing the Office of Field Operations 

(OFO) plus Office of International 

Affairs (OIA) inspection program 

personnel’s previous fiscal year’s 

regular direct pay by the previous fiscal 

year’s regular hours, plus the quotient 

multiplied by the calendar year’s 

percentage of cost of living increase, 

plus the benefits rate, plus the travel 

and operating rate, plus the overhead 

rate, plus the allowance for bad debt 

rate. 

The calculation for the 2011 basetime 

rate per hour per program employee is: 

[FY 2010 OFO and OIA Regular Direct 

Pay divided by the previous fiscal year’s 

Regular Hours ($406,663,564/ 

15,164,875)] = $26.82 + ($26.82 * 1.4% 

(calendar year 2011 Cost of Living 

Increase)) = $27.20 + $8.30 (benefits 

rate) + $.89 (travel and operating rate) + 

$17.52 (overhead rate) + $.01 (bad debt 

allowance rate) = $53.92. 

Following the discussion of the 

‘‘Laboratory Services Rate’’ is an 

explanation of how the benefits rate, 

travel and operating rate, overhead rate, 

and bad debt allowance rate were 

calculated. 

FSIS is amending 9 CFR 391.3, 

590.126, 590.128, 592.520, and 592.530, 

to establish the following formulas for 

overtime and holiday rates per hour per 

program employee: 

Overtime Rate = The quotient of 

dividing the Office of Field Operations 

(OFO) plus Office of International 

Affairs (OIA) inspection program 

personnel’s previous fiscal year’s 

regular direct pay by the previous fiscal 

year’s regular hours, plus the quotient 

multiplied by the calendar year’s 

percentage of cost of living increase, 

multiplied by 1.5, plus the benefits rate, 

plus the travel and operating rate, plus 

the overhead rate, plus the allowance 

for bad debt rate. 

The calculation for the 2011 overtime 

rate per hour per program employee is: 

[FY 2010 OFO and OIA Regular Direct 

Pay divided by previous fiscal year’s 

Regular Hours ($406,663,564/ 

15,164,875)] = $26.82 + ($26.82 * 1.4% 

(calendar year 2011 Cost of Living 

Increase)) = $27.20 * 1.5 = $40.79 + 

$8.30 (benefits rate) + $.89 (travel and 

operating rate) + $17.52 (overhead rate) 

+ $.01 (bad debt allowance rate) = 

$67.52. 

Holiday Rate = The quotient of 

dividing the Office of Field Operations 

(OFO) plus Office of International 

Affairs (OIA) inspection program 

personnel’s previous fiscal year’s 

regular direct pay by the previous fiscal 

year’s regular hours, plus the quotient 

multiplied by the calendar year’s 

percentage of cost of living increase, 

multiplied by 2, plus the benefits rate, 

plus the travel and operating rate, plus 

the overhead rate, plus the allowance 

for bad debt rate. 

The calculation for the 2011 holiday 

rate per hour per program employee 

calculation is: 

[FY 2010 OFO and OIA Regular Direct 

Pay divided by Regular Hours 

($406,663,564/15,164,875)] = $26.82 + 

($26.82 * 1.4% (calendar year 2011 Cost 

of Living Increase)) = $27.20 * 2 = 

$54.39 + $8.30 (benefits rate) + $.89 

(travel and operating rate) + $17.52 

(overhead rate) + $.01 (bad debt 

allowance rate) = $81.11 (rounded to 

$81.08). 

FSIS is amending 9 CFR 391.4, to 

establish the following formula for the 


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Federal Register / Vol. 76, No. 70 / Tuesday, April 12, 2011 / Rules and Regulations 20223 

laboratory services rate per hour per 

program employee: 

Laboratory Services Rate = The 

quotient of dividing the Office of Public 

Health Science (OPHS) previous fiscal 

year’s regular direct pay by the OPHS 

previous fiscal year’s regular hours, plus 

the quotient multiplied by the calendar 

year’s percentage cost of living increase, 

plus the benefits rate, plus the travel 

and operating rate, plus the overhead 

rate, plus the allowance for bad debt 

rate. 

The calculation for the 2011 

laboratory services rate per hour per 

program employee is: 

[FY 2010 OPHS Regular Direct Pay/ 

OPHS Regular hours ($21,012,082/ 

527,975)] = $39.80 + ($39.80 * 1.4% 

(calendar year 2011 Cost of Living 

Increase)) = $40.36 + $8.30 (benefits 

rate) + $.89 (travel and operating rate) + 

$17.52 (overhead rate) + $.01 (bad debt 

allowance rate) = $67.08. 

Formulas for the Benefits, Travel and 

Operating, Overhead, and Allowance 

for Bad Debt Rates 

FSIS is amending 391.2 and 592.510 

to provide the formulas for calculating 

the Benefits, Travel and Operating, 

Overhead, and Allowance for Bad Debt 

Rates. These rates are components of the 

basetime, overtime, holiday, and 

laboratory services rates formulas. 

Benefits Rate: The quotient of 

dividing the previous fiscal year’s direct 

benefits costs by the previous fiscal 

year’s total hours (regular, overtime, and 

holiday), plus the quotient multiplied 

by the calendar year’s percentage cost of 

living increase. Some examples of direct 

benefits are health insurance, 

retirement, life insurance, and Thrift 

Savings Plan basic and matching 

contributions. 

The calculation for the 2011 benefits 

rate per hour per program employee is: 

[FY 2010 Direct Benefits/(Total Regular 

hours + Total Overtime hours + Total 

Holiday hours) ($140,660,995/ 

17,171,053)] = $8.19 + ($8.19 * 1.4% 

(calendar year 2011 Cost of Living 

Increase) = $8.30. 

Travel and Operating Rate: The 

quotient of dividing the previous fiscal 

year’s total direct travel and operating 

costs by the previous fiscal year’s total 

hours (regular, overtime, and holiday), 

plus the quotient multiplied by the 

calendar year’s percentage of inflation. 

The calculation for the 2011 travel 

and operating rate per hour per program 

employee is: 

[FY 2010 Total Direct Travel and 

Operating Costs/(Total Regular hours + 

Total Overtime hours + Total Holiday 

hours) ($15,090,489/17,171,053)] = $.88 

+ ($.88 * 1.2% (2011 Inflation) = $.89. 

Overhead Rate: The quotient of 

dividing the previous fiscal year’s 

indirect costs plus the previous fiscal 

year’s information technology (IT) costs 

in the Public Health Data 

Communication Infrastructure System 

Fund plus the previous fiscal year’s 

Office of Management Program cost in 

the Reimbursable and Voluntary Funds 

plus the provision for the operating 

balance less any Greenbook costs (i.e., 

costs of USDA support services prorated 

to the service component for which fees 

are charged) that are not related to food 

inspection by the previous fiscal year’s 

total hours (regular, overtime, and 

holiday) worked across all funds, plus 

the quotient multiplied by the calendar 

year’s percentage of inflation. 

The calculation for the 2011 overhead 

rate per hour per program employee is: 

[FY 2010 Total Overhead/(Total Regular 

hours + Total Overtime hours + Total 

Holiday hours) ($337,861,367/ 

19,521,571)] = $17.31 + ($17.31 * 1.2% 

(2011 Inflation) = $17.52. 

Allowance for Bad Debt Rate = 

Previous fiscal year’s total allowance for 

bad debt (for example, debt owed that 

is not paid in full by plants and 

establishments that declare bankruptcy) 

divided by previous fiscal year’s total 

hours (regular, overtime, and holiday) 

worked. 

The 2011 calculation for bad debt rate 

per hour per program employee is: 

[FY 2010 Total Bad Debt/(Total Regular 

hours + Total Overtime hours + Total 

Holiday hours) = ($222,481/19,521,571)] 

= $.01. 

Laboratory Accreditation Fee 

Consistent with the proposed rule, 

FSIS is also amending 9 CFR 391.5 to 

keep the laboratory accreditation fee at 

$4,500.00 for fiscal year 2011 and to 

increase it to $5,000.00 beginning in 

fiscal year 2012. FSIS will propose 

changes to the laboratory accreditation 

fees through future rulemakings when 

necessary. 

As discussed in the proposed rule (74 

FR 51802), FSIS needs to raise the fee 

for this program to cover its increased 

direct overhead costs, including those 

for salary increases, employee benefits, 

inflation, and bad debt, and to maintain 

an adequate operating reserve. 

Furthermore, FSIS must maintain a 

‘‘carryover’’ amount each year as a 

reserve to cover the contractual costs 

that the Accredited Laboratory Program 

must pay at the beginning of each fiscal 

year. The increases are also necessary to 

cover salaries and other operating 

expenses during the first two to three 

months of the fiscal year. Less than 5% 

of the program’s income is received 

during the first two months of a fiscal 

year. Approximately 75% of the 

program’s income is received in late 

December and early January; the 

remainder of the program’s income is 

received about evenly across the rest of 

the fiscal year. Maintaining an adequate 

reserve is therefore essential for the 

Accredited Laboratory Program to be 

fully functional during the first quarter 

of any fiscal year. 

Responses to Comments 

FSIS received seven comments in 

response to the proposed rule. The 

commenters included meat trade 

associations, private citizens, and a 

meat processor. 

Most commenters acknowledged that 

codified formulas in the regulations for 

these rates would afford the Agency the 

ability to raise rates based on pay 

increases for Federal employees and 

inflation. 

Comments: One comment from a meat 

processor expressed concern that the 

first-year overtime rate increase is above 

the rate of inflation and above the wage 

based increase in the commenter’s 

geographical area. Another comment 

from a trade association expressed 

concern that the overtime rate for the 

first year is approximately a 10% 

increase. 

Response: The existing basetime, 

overtime, holiday, and laboratory 

services rates have not increased for 

more than three years, since October 1, 

2007. FSIS developed the current 

overtime rate in 2005, using an 

estimated Annual General Increase 

(AGI) of 2.3% per year for 2006–2008. 

The actual AGI during 2006–2008 

averaged 2.9%. The Agency absorbed 

the difference between the projected 

and actual increase, including the costs 

of benefits that have increased at an 

average of 4.6% each year. In addition, 

the rates established in the 2006 final 

rule are still being used in calendar year 

2010. The higher rates are necessary 

because of increased salary costs across 

several years and current overhead 

costs. 

Comments: One meat processor and 

two trade associations opposed the 

methodology of adding travel, benefits, 

overhead, and bad debt costs to the 

overtime and holiday inspection rates 

and stated that the proposed formulas 

were not clear. 

Response: The methodology of adding 

travel, benefits, overhead and bad debts 

costs to overtime and holiday inspection 

rates has been used to establish the rates 

for previous years. FSIS has always been 

reimbursed by industry for the salary 


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20224 Federal Register / Vol. 76, No. 70 / Tuesday, April 12, 2011 / Rules and Regulations 

1Establishment numbers obtained from USDA 

FSIS Performance Based Inspection System (PBIS) 

and represent all Federal & Talmadge-Aiken (State 

excluded), Active & Inactive (Withdrawn excluded) 

establishments. Volume data obtained from USDA 

FSIS PBIS, the Animal Disposition Reporting 

System, and USDA Economic Research Service 

Food Availability (Per Capital) Data System. 

and overhead costs for both overtime 

work and work on Federal holidays. 

Contrary to one commenter’s concern, 

the calculations do not multiply travel, 

benefits, overhead, and bad debt costs 

by 1.5 and 2.0 for overtime and holiday 

rates, respectively. As illustrated in the 

calculations, these costs are added to 

the adjusted salary amounts for 

overtime and holiday pay. 

The Agency contracted with a large 

world-wide accounting firm to ensure 

that the methodology for the fee 

calculations was sound and without 

flaws. The accounting firm’s analysis of 

the methodology was performed in 

accordance with the ‘‘Standards for 

Consulting Services,’’ established by the 

American Institute of Certified Public 

Accountants. Consistent with the 

proposed rule, the final rule specifies all 

cost components used to calculate the 

rates. In this final rule, the Agency has 

clarified and made consistent the 

terminology used in the proposal. 

Comments: One trade association 

encouraged the Agency to acknowledge 

the impact that the holiday rate change 

would have on small and very small 

meat processors. Another trade 

association expressed concern that the 

overtime fee increase would 

disproportionately affect small and 

medium sized businesses that are not 

able to run two shifts but rely on 

overtime to meet consumer demand. 

Response: Overtime and holiday 

inspection services are generally sought 

by the 370 large establishments and 

plants that have a large production 

volume of approximately 162,500,000 

pounds of product per year. These 

establishments have greater complexity 

and diversity in the products they 

produce than the 5,140 small and very 

small Federal establishments whose low 

production volume averages 1,400,000 

pounds of product per year.1

Establishments or plants with lower 

production volume are unlikely to use 

a significant amount of overtime and 

holiday inspection services, except on 

those occasions when demand exceeds 

supply for their products. In addition, 

the costs that industry would incur as 

a result of the increase in rates are 

similar to other increases that the 

industry faces because of inflation and 

wage increases. 

Comments: One meat processor 

opposed the holiday inspection service 

rate because establishments do not 

recognize the same holidays as the 

Federal government. 

Response: FSIS follows the schedule 

of Federal holidays identified by the 

Office of Personnel Management, as 

well as any additional Federal holidays 

authorized by the President. FSIS has no 

authority to mandate which days will be 

‘‘holidays’’ for establishments or plants. 

When an establishment chooses to 

remain open and requires reimbursable 

inspection services from FSIS on a 

Federal holiday, then FSIS must pay its 

inspection workforce accordingly. FSIS 

inspectors are paid double time for 

holiday work. Therefore, consistent 

with the proposed rule, the final rule 

provides a holiday rate of two times the 

employee’s hourly rate of base pay. 

Comments: Three trade associations 

expressed concern regarding how the 

Agency assesses overtime inspection 

rates. They contend that, because 

establishments are required to operate 

under Hazard Analysis Critical Control 

Point (HACCP) systems, processing 

establishments should be able to freely 

operate at any appropriate time, with 

FSIS providing a level of inspection to 

fit accordingly. The commenters believe 

this would negate the need for overtime 

inspection. 

Response: This rule establishes the 

rate for overtime inspection service. The 

commenters’ concern relates to a 

separate issue that is whether HACCP 

systems in plants should permit plants 

to freely operate at any time without 

being assessed ‘‘overtime fees.’’ Sections 

9 CFR 307.4(c), 381.37(c), and 590.124 

provide that official establishments 

shall be provided inspection service, 

without charge, for up to 8 consecutive 

hours per shift during the workweek. 

The regulations also provide that the 

workweek is 5 consecutive days. 

Inspection service provided outside of 

these bounds is, by definition, overtime 

service. 

Comment: One trade association 

questioned the 30-day comment period 

for the proposed rule and stated that the 

comment period should have been 

longer. 

Response: The Agency must recover 

the actual cost of these inspection 

services for its continued sound 

financial management. To expeditiously 

solicit comments on the proposed rule 

and make the rulemaking effective so 

that FSIS’s costs can be recovered as 

quickly as possible, the Administrator 

determined that 30 days for public 

comment was sufficient. A 30-day 

comment period is not uncommon 

when the Agency needs timely 

responses. For example, the July 2005 

proposed rule ‘‘Changes in Fees for 

Meat, Poultry, and Egg Products 

Inspection Services Fiscal Years 2005– 

2008,’’ solicited comments within 30 

days (70 FR 41635). 

Executive Order 12866 and Final 

Regulatory Flexibility Act 

This final rule was reviewed by the 

Office of Management and Budget under 

Executive Order 12866 and was 

determined to be significant. The 

proposed rule was determined to be not 

significant. 

This final rule establishes the 

formulas FSIS will use to calculate the 

rates that it charges meat and poultry 

establishments, egg products plants, and 

importers and exporters for providing 

voluntary inspection, identification and 

certification services, overtime and 

holiday inspection services, and 

laboratory services. This final rule also 

increases the annual fee that FSIS 

assesses for its Accredited Laboratory 

Program for FY 2012 and FY 2013. This 

rule is necessary to ensure that FSIS 

recovers its cost of providing these 

voluntary inspection and laboratory 

accreditation services. 

Economic Effects of New Fees 

By codifying formulas to calculate 

future annual rates, the Agency will 

streamline the rulemaking process to 

help ensure that the new rates are 

effective at the beginning of each 

calendar year. The rates will be 

determined for each calendar year, 

based on the previous fiscal year’s 

(ending on September 30) actual costs 

and hours data, and the upcoming year’s 

projected cost of living and inflation 

percentages. The new rates will be 

adjusted to reflect inflation and federal 

pay raises but will not support any new 

budgetary initiatives. If rates increase, 

the costs that industry will experience 

are similar to other increases that the 

industry will experience because of 

inflation and wage increases. 

The total volume of meat and poultry 

slaughtered under Federal inspection in 

2009 was about 90.9 billion pounds 

(2009–8 Livestock, Dairy, Meat, and 

Poultry Outlook Report, Economic 

Research Service, USDA). The total 

volume in egg product production in 

2009 was about 2.6 billion pounds (2009 

National Agricultural Statistical Service, 

USDA). The increase in cost per pound 

of product associated with the new rates 

is, in general, $.002. Even in 

competitive industries such as meat, 

poultry, and egg products, this amount 

of increase in costs would have an 

insignificant impact on profits and 

processes. 

Even though the increases in the 

basetime, overtime, and holiday rates 


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Federal Register / Vol. 76, No. 70 / Tuesday, April 12, 2011 / Rules and Regulations 20225 

2Overtime and Holiday Rates were the same for 

FY 2009 and 2010. 

3The size standards are for the most part 

expressed in either millions of dollars or number 

of employees. A size standard is the largest that a 

business can be and still qualify as a small business 

for Federal Government programs. 

are negligible, the industry is likely to 

pass along a significant portion of the 

rate increases to consumers because of 

the inelastic nature of the demand curve 

facing consumers. Research has shown 

that consumers are unlikely to reduce 

demand significantly for meat, poultry, 

and egg products when prices increase. 

Huang estimates that quantity 

demanded of meat, poultry, and egg 

products would fall by .36 percent for 

a one percent increase in price (Huang, 

Kao S., A Complete System for Demand 

for Food. USDA/ERS Technical Bulletin 

No. 1821, 1993, p. 24). Because of the 

inelastic nature of demand and the 

competitive nature of the industry, 

individual firms are not likely to 

experience any change in market share 

in response to an increase in inspection 

fees. 

Table 4 (below) represents the 

revenues the Agency collected in FY 

2009 and FY 2010, and the projected 

revenues for FY 2011 and FY 2011. For 

basetime, overtime, holiday, and 

laboratory services, the Agency 

collected $146.5 million in FY 2009 and 

$148.9 million in FY 2010, and based on 

the new rate structure, is projecting to 

collect $164.2 million in FY 2011, and 

$171.9 million in FY 2012. 

For the Accredited Laboratory 

Program, the Agency collected $317,250 

in FY 2009 and $293,000 in FY 2010. 

The fee will increase from $4,500 (the 

current rate) to $5,000 per entity in FY 

2012. The Agency expects to collect 

approximately $270,000 in FY 2011, 

and $300,000 in FY 2012. 

The total revenue amounts for the 

basetime, overtime, holiday, and 

laboratory services rates with the 

Accredited Lab Fees for FY 2009 and FY 

2010 (actual amounts), and FY 2011 and 

FY 2012 (projected amounts) are shown 

in Table 4 (below). 

TABLE 4—TOTAL AMOUNT COLLECTED BY THE AGENCY

Service Actual FY 2009 

amounts 

Actual FY 2010 

amounts 

Projected FY 

2011 amounts 

based on rate 

increase 

January 1, 2011 

Projected 

FY2012 amounts 

based on rate 

increase 

January 1, 2012 

Basetime Rate ................................................................................. $ 7,300,000 $ 6,900,000 $ 7,409,000 $ 7,629,000 

Overtime (OT)/Holiday Rate(H) 2 ..................................................... 126,400,000 

(OT) 

12,800,000 (H) 

131,100,000 

(OT) 

10,900,000 (H) 

N/A N/A 

Overtime Rate .................................................................................. N/A N/A 145,536,000 149,025,000 

Holiday Rate .................................................................................... N/A N/A 11,250,000 15,222,000 

Laboratory Services Rate ................................................................ 530 178 500 500 

Accredited Lab Fee ......................................................................... 317,250 293,000 270,000 300,000 

Grand Total ............................................................................... 146,817,780 149,193,178 164,465,500 172,176,500 

Final Regulatory Flexibility Analysis 

The FSIS Administrator certifies that, 

for the purposes ofthe Regulatory 

Flexibility Act (5 U.S.C. 601–602), the 

final rule will not have a significant 

impact on a substantial number of small 

entities in the United States. As 

explained further below, while this 

action will affect a substantial number 

of small entities, the action will likely 

not have a significant effect on these 

small entities. 

Objective of the Final Rule 

The changes in this final rule will 

affect those entities in the United States 

that slaughter or process meat, poultry, 

and egg products for consumption. 

There are about 2,320 small federally 

inspected establishments (with more 

than 10 but less than 500 employees) 

and 2,720 very small establishments 

(with fewer than 10 employees) based 

on HACCP Classification. Therefore, a 

total of 5,040 small and very small 

establishments (or 83 percent of the 

establishments) could be possibly 

affected by this rule. These small and 

very small establishments are 

categorized in the following North 

American Industry Classification 

System (NAICS) codes: 311611—Animal 

(except Poultry) Slaughtering; 311612— 

Meat Processed from Carcasses; 

311613—Rendering and Meat 

Byproduct Processing; 311615–Poultry 

Processing; and 311999—All other 

Miscellaneous Food Manufacturing (Egg 

products). These codes can be found in 

The U.S. Small Business Administration 

Table of Small Business Size Standards 

Matched to the NAICS 3 as modified by 

the Office of Management and Budget in 

2007(effective August 22, 2008). The 

size threshold for these industries is 500 

employees. All establishments that have 

500 or fewer employees are considered 

small. 

These small and very small 

establishments like the 1,031 large 

establishments would incur the rates 

from 2011–2012 and in perpetuity only 

if they incur voluntary inspection, 

overtime and holiday inspection 

services, identification and certification 

services, or laboratory services. 

Significant Alternatives Considered 

Alternative 1: Amend the regulations 

to publish the basetime, overtime, 

holiday, and laboratory services rates 

and laboratory accreditation fees on a 

multiple year basis (current approach). 

Under this alternative, the Agency 

would continue to publish proposed 

and final rules to establish rates and fees 

for multiple consecutive years. 

However, the projected rates and fees 

are based on economic factors, such as 

inflation and cost of living, and other 

factors such as employee benefits and 

travel and operating costs, that change 

on a yearly basis. While this solution 

has enabled the Agency to increase rates 

and fees on a multiple year basis, the 

estimates used to establish the annual 

rates and fees were imprecise and have 

left the Agency collecting too little, and 

thus, not fully recovering its costs. 

Therefore, the Agency rejects this 

alternative because it would continue to 

create unnecessary uncertainty and 

inflexibility to update fees based on 

economic conditions. 

Alternative 2: Amend the regulations 

to update the rates and fees on an 

annual basis. 

Under this alternative, the Agency 

would amend its regulations annually to 

update the rates and fees using current 


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4There are estimated to be no small entities 

applying for laboratory services. 

5Four of the labs are the states of Illinois, Iowa, 

Louisiana, and Minnesota Department of 

Agriculture Laboratories. 

data and economic factors. This 

alternative was used prior to the current 

approach of establishing the rates and 

fees on a multiple year basis 

(Alternative 1). However, because the 

rulemaking process is lengthy, the fiscal 

year repeatedly elapsed before the 

Agency could publish the final rule to 

amend the rates and fees. As a result, 

the Agency was unable to recover its 

full costs. This action would be the least 

costly to small entities because they 

would not pay the adjusted rates and 

fees until they were published, which 

would in effect cause a shortfall in the 

Agency’s budget. Therefore, the Agency 

rejects this alternative. 

Alternative 3: Establish formulas for 

calculating rates and publish the rates in 

a Federal Register Notice prior to the 

start of the calendar year. 

Under this alternative, FSIS would 

establish formulas for calculating rates 

that it charges for basetime, overtime, 

holiday, and laboratory services, and 

publish the rates annually in a Federal 

Register Notice prior to the start of each 

calendar year. The Agency would 

continue to publish the laboratory 

accreditation fees on an as needed basis. 

This action would enable the Agency to 

recover its costs for providing voluntary 

inspection, overtime and holiday 

inspection services, identification and 

certification services, and laboratory 

services on a yearly basis, and would 

notify small entities of the new rates 

prior to the beginning of the calendar 

year, so that the entities can budget for 

these new fees. Therefore, the Agency 

has selected this alternative. 

Estimating the Impact on Small and 

Very Small Entities 

As discussed in the Economic Effects 

of New Fees section, in 2009, there was 

a total volume of 90.9 billion pounds 

slaughtered of meat and poultry and 2.6 

billion pounds of egg products 

processed. According to the FSIS 

Animal Disposition Reporting System, 

in 2009 the 5,040 small and very small 

Federal establishments’ production 

volume averaged 1,400,000 pounds of 

product per year, or a total of 7.1 billion 

pounds per year or approximately 7 

percent of the total production. 

In FY 2009, there were a total of 

146,000 hours charged from voluntary 

inspection (basetime) service, 2.1 

million hours charged from 

reimbursable overtime, 218,000 hours 

charged from holiday inspection 

services, and 7 hours charged for 

laboratory services.4 There are not 

enough data to definitively determine 

the number of these hours that were 

incurred by small and very small 

entities, and therefore their direct cost 

as a result of this rule. However, if we 

used the 7 percent from the total 

production and apply it to the hours, 

small and very small entities would 

incur 147,000 hours out of 2.1 million 

hours of reimbursable overtime and 

15,300 hours of holiday inspection 

services, and at a rate of $58.93, per 

hour (2009 rate), the total cost will be 

$9.6 million ((15,300 + 147,000)* 

$58.93), compared to $127 million for 

large entities. 

For the voluntary inspection 

(basetime), if we used the 7 percent 

from the total production and apply it 

to the hours, small and very small 

entities would incur 10,200 hours out of 

146,000 hours and at a rate of $49.93, 

the total cost would be $510,000 dollars 

compared to $6.8 million for the large 

entities. Dividing the total cost of $10.1 

million ($9.6 million plus $510,000) by 

5,040 small and very small entities 

would incur a cost of an average of 

$2,000 per small and very small entity. 

Likewise, if we apply the 2011 rates, 

the 5,040 small and very small entities 

would incur a cost of $10.5 million 

(155,800 hours * $67.52) for overtime, 

$787,000 (9,712 hours * $81.08) for 

holiday, and $528,000 (9,800 hours * 

$53.92) for voluntary services 

(basetime). The total cost incurred by 

small and very small entities for the 

2011 year would be $11.8 million ($10.5 

million plus $787,000 plus $528,000) or 

$2,341 ($11.8 million/5,040 entities) per 

entity. 

Comparing the average cost of $2,000 

per small and very small entity (2009) 

to $2,341 per entity (2011 rate), the total 

increase in fees and impact of the final 

rule on small and very small entities 

would be about $341 per entity. 

The Accredited Laboratory program 

has a total of 60 labs 5 participating, of 

which an estimated 40 labs are 

considered small. The Accredited Lab 

fee for each lab will increase by $500, 

from $4,500 in FY 2011 to $5,000 in FY 

2012. This fee is necessary to have a 

carry over amount each year as a reserve 

to cover the contractual costs that the 

Accredited Laboratory Program must 

pay at the beginning of each fiscal year 

and to cover salaries and other operating 

expenses during the first two to three 

months of the fiscal year. Without this 

fee, the Agency would not have enough 

funds to cover the cost incurred during 

this period. The laboratory fee is a 

mandatory cost of doing business with 

FSIS and without the FSIS accreditation 

the labs would not be permitted to 

analyze official meat and poultry 

samples for establishments. These small 

entities would likely recover this cost by 

passing it along to the establishments, 

who pay for their services. 

Therefore, the Agency believes that 

the final rule will not have a significant 

economic impact on a substantial 

number of small entities, whether 

establishments or laboratories. 

Paperwork Reduction Act 

This rule does not contain any new 

information collection or record keeping 

requirements that are subject to the 

Office of Management and Budget 

(OMB) approval under the Paperwork 

Reduction Act, 44 U.S.C. 3501 et seq. 

E-Government Act 

FSIS and USDA are committed to 

achieving the purposes of the 

E-Government Act (44 U.S.C. 3601, et 

seq.) by, among other things, promoting 

the use of the Internet and other 

information technologies and providing 

increased opportunities for citizen 

access to Government information and 

services, and for other purposes. 

Executive Order 12988 

This rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. This rule: (1) Has no retroactive 

effect; and (2) does not require 

administrative proceedings before 

parties may file suit in court challenging 

this rule. However, the administrative 

procedures specified in 9 CFR 306.5, 

381.35, and 590.300 through 590.370, 

respectively, must be exhausted before 

any judicial challenge may be made of 

the application of the provisions of the 

final rule, if the challenge involves any 

decision of an FSIS employee relating to 

inspection services provided under the 

FMIA, PPIA, or EPIA. 

Executive Order 13175 

This final rule has been reviewed in 

accordance with the requirements of 

Executive Order 13175, Consultation 

and Coordination with Indian Tribal 

Governments. The review reveals that 

this regulation will not have substantial 

and direct effects on Tribal governments 

and will not have significant Tribal 

implications. 

Additional Public Notification 

Public awareness of all segments of 

rulemaking and policy development is 

important. Consequently, in an effort to 

ensure that minorities, women, and 

persons with disabilities are aware of 

this rule, FSIS will announce it online 

through the FSIS Web page located at 


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Federal Register / Vol. 76, No. 70 / Tuesday, April 12, 2011 / Rules and Regulations 20227 

http://www.fsis.usda.gov/regulations_&_

policies/Federal_Register_Publications_

&_Related_Documents/index.asp. 

FSIS will also make copies of this 

Federal Register publication available 

through the FSIS Constituent Update, 

which is used to provide information 

regarding FSIS policies, procedures, 

regulations, Federal Register notices, 

FSIS public meetings, and other types of 

information that could affect or would 

be of interest to constituents and 

stakeholders. The Update is 

communicated via Listserv, a free 

electronic mail subscription service for 

industry, trade and farm groups, 

consumer interest groups, allied health 

professionals, and other individuals 

who have asked to be included. The 

Update is also available on the FSIS 

Web page. Through the Listserv and 

Web page, FSIS is able to provide 

information to a much broader and more 

diverse audience. In addition, FSIS 

offers an e-mail subscription service 

which provides automatic and 

customized access to selected food 

safety news and information. This 

service is available at http:// 

www.fsis.usda.gov/News_&_Events/ 

Email_Subscription/. 

Options range from recalls to export 

information to regulations, directives 

and notices. Customers can add or 

delete subscriptions themselves, and 

have the option to password protect 

their accounts. 

USDA Nondiscrimination Statement 

The U.S. Department of Agriculture 

(USDA) prohibits discrimination in all 

its programs and activities on the basis 

of race, color, national origin, gender, 

religion, age, disability, political beliefs, 

sexual orientation, and marital or family 

status. (Not all prohibited bases apply to 

all programs.) 

Persons with disabilities who require 

alternative means for communication of 

program information (Braille, large 

print, audiotape, etc.) should contact 

USDA’s Target Center at 202–720–2600 

(voice and TTY). 

To file a written complaint of 

discrimination, write USDA, Office of 

the Assistant Secretary for Civil Rights, 

1400 Independence Avenue, SW., 

Washington, DC 20250–9410 or call 

202–720–5964 (voice and TTY). USDA 

is an equal opportunity provider and 

employer. 

List of Subjects 

9 CFR Part 391 

Fees and charges, Government 

employees, Meat inspection, Poultry 

products. 

9 CFR Part 590 

Eggs and egg products, Exports, Food 

labeling, Imports. 

9 CFR Part 592 

Eggs and egg products, Exports, Food 

labeling, Imports. 

For the reasons set forth in the 

preamble, FSIS is amending 9 CFR 

Chapter III as follows: 

PART 391—FEES AND CHARGES FOR 

INSPECTION AND LABORATORY 

ACCREDITATION 

■ 1. The authority citation for part 391 

continues to read as follows: 

Authority: 7 U.S.C. 138d; 7 U.S.C. 1622, 

1627 and 2219a 21 U.S.C. 451 et seq.; 21 

U.S.C. 601–695; 

■ 2. Section 391.2 is revised to read as 

follows: 

§ 391.2 Basetime rate. 

(a) For each calendar year, FSIS will 

calculate the basetime rate for 

inspection services, per hour per 

program employee, provided pursuant 

to §§ 350.7, 351.8, 351.9, 352.5, 354.101, 

355.12, and 362.5 of this chapter, using 

the following formula: The quotient of 

dividing the Office of Field Operations 

plus Office of International Affairs 

inspection program personnel’s 

previous fiscal year’s regular direct pay 

by the previous fiscal year’s regular 

hours, plus the quotient multiplied by 

the calendar year’s percentage of cost of 

living increase, plus the benefits rate, 

plus the travel and operating rate, plus 

the overhead rate, plus the allowance 

for bad debt rate. 

(b) FSIS will calculate the benefits, 

travel and operating, overhead, and 

allowance for bad debt rate components 

of the basetime rate, using the following 

formulas: 

(1) Benefits rate. The quotient of 

dividing the previous fiscal year’s direct 

benefits costs by the previous fiscal 

year’s total hours (regular, overtime, and 

holiday), plus the quotient multiplied 

by the calendar year’s percentage cost of 

living increase. Some examples of direct 

benefits are health insurance, 

retirement, life insurance, and Thrift 

Savings Plan basic and matching 

contributions. 

(2) Travel and operating rate. The 

quotient of dividing the previous fiscal 

year’s total direct travel and operating 

costs by the previous fiscal year’s total 

hours (regular, overtime, and holiday), 

plus the quotient multiplied by the 

calendar year’s percentage of inflation. 

(3) Overhead rate. The quotient of 

dividing the previous fiscal year’s 

indirect costs plus the previous fiscal 

year’s information technology (IT) costs 

in the Public Health Data 

Communication Infrastructure System 

Fund plus the previous fiscal year’s 

Office of Management Program cost in 

the Reimbursable and Voluntary Funds 

plus the provision for the operating 

balance less any Greenbook costs (i.e., 

costs of USDA support services prorated 

to the service component for which the 

fees are charged) that are not related to 

food inspection, by the previous fiscal 

year’s total hours (regular, overtime, and 

holiday) worked across all funds, plus 

the quotient multiplied by the calendar 

year’s percentage of inflation. 

(4) Allowance for bad debt rate. 

Previous fiscal year’s allowance for bad 

debt (for example, debt owed that is not 

paid in full by plants and 

establishments that declare bankruptcy) 

divided by the previous fiscal year’s 

total hours (regular, overtime, and 

holiday) worked. 

(c) The calendar year’s cost of living 

increases and percentage of inflation 

factors used in the formulas in this 

section are based on the Office of 

Management and Budget’s Presidential 

Economic Assumptions. 

■ 3. Section 391.3 is revised to read as 

follows: 

§ 391.3 Overtime and holiday rates. 

For each calendar year, FSIS will 

calculate the overtime and holiday rates, 

per hour per program employee, 

provided pursuant to §§ 307.5, 350.7, 

351.8, 351.9, 352.5, 354.101, 355.12, 

362.5, and 381.38 of this chapter, using 

the following formulas: 

(a) Overtime rate. The quotient of 

dividing the Office of Field Operations 

plus Office of International Affairs 

inspection program personnel’s 

previous fiscal year’s regular direct pay 

by the previous fiscal year’s regular 

hours, plus the quotient multiplied by 

the calendar year’s percentage of cost of 

living increase, multiplied by 1.5, plus 

the benefits rate, plus the travel and 

operating rate, plus the overhead rate, 

plus the allowance for bad debt rate. 

(b) Holiday rate. The quotient of 

dividing the Office of Field Operations 

plus Office of International Affairs 

inspection program personnel’s 

previous fiscal year’s regular direct pay 

by the previous fiscal year’s regular 

hours, plus the quotient multiplied by 

the calendar year’s percentage of cost of 

living increase, multiplied by 2, plus the 

benefits rate, plus the travel and 

operating rate, plus the overhead rate, 

plus the allowance for bad debt rate. 

(c) FSIS will calculate the benefits 

rate, the travel and operating rate, the 

overhead rate, and the allowance for bad 

debt rate using the formulas set forth in 


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20228 Federal Register / Vol. 76, No. 70 / Tuesday, April 12, 2011 / Rules and Regulations 

§ 391.2(b), and the cost of living 

increases and percentage of inflation 

factors set forth in § 391.2(c). 

■ 4. Section 391.4 is revised to read as 

follows: 

§ 391.4 Laboratory services rate. 

(a) For each calendar year, FSIS will 

calculate the laboratory services rate, 

per hour per program employee, 

provided pursuant to §§ 350.7, 351.9, 

352.5, 354.101, 355.12, and 362.5 of this 

chapter, using the following formula: 

The quotient of dividing the Office of 

Public Health Science (OPHS) previous 

fiscal year’s regular direct pay by OPHS 

previous fiscal year’s regular hours, plus 

the quotient multiplied by the calendar 

year’s percentage cost of living increase, 

plus the benefits rate, plus the travel 

and operating rate, plus the overhead 

rate, plus the allowance for bad debt 

rate. 

(b) FSIS will calculate the benefits 

rate, the travel and operating rate, the 

overhead rate, and the allowance for bad 

debt rate using the formulas set forth in 

§ 391.2(b), and the cost of living 

increases and percentage of inflation 

factors set forth in § 391.2(c). 

■ 5. Paragraph (a) of § 391.5 is revised 

to read as follows: 

§ 391.5 Laboratory accreditation fee. 

(a) The annual fee for the initial 

accreditation and maintenance of 

accreditation provided pursuant to 

§ 439.5 of this chapter shall be $4,500.00 

for fiscal year 2011; and $5,000.00 for 

fiscal years 2012 and 2013. 

* * * * * 

PART 590—INSPECTION OF EGGS 

AND EGG PRODUCTS (EGG 

PRODUCTS INSPECTION ACT) 

■ 6. The authority citation for part 590 

continues to read as follows: 

Authority: 21 U.S.C. 1031–1056. 

■ 7. In § 590.126, remove the second 

sentence and add three sentences in its 

place to read as follows: 

§ 590.126 Overtime inspection service. 

* * * The official plant must give 

reasonable advance notice to the 

inspector of any overtime service 

necessary and must pay for such 

overtime. For each calendar year, FSIS 

will calculate the overtime rate for 

inspection service, per hour per 

program employee, using the following 

formula: The quotient of dividing the 

Office of Field Operations plus Office of 

International Affairs inspection program 

personnel’s previous fiscal year’s 

regular direct pay by the previous fiscal 

year’s regular hours, plus the quotient 

multiplied by the calendar year’s 

percentage of cost of living increase, 

multiplied by 1.5, plus the benefits rate, 

plus the travel and operating rate, plus 

the overhead rate, plus the allowance 

for bad debt rate. FSIS calculates the 

benefits rate, the travel and operating 

rate, the overhead rate, and the 

allowance for bad debt rate using the 

formulas set forth in § 592.510(b) and 

the cost of living increases and 

percentage of inflation factors set forth 

in § 592.510(c) of this chapter. 

■ 8. In § 590.128(a), remove the second 

sentence and add three sentences in its 

place to read as follows: 

§ 590.128 Holiday inspection service. 

(a) * * * The official plant must, in 

advance of such holiday work, request 

the inspector in charge to furnish 

inspection service during such period 

and must pay the Agency for such 

holiday work at the hourly rate. For 

each calendar year, FSIS calculates the 

holiday rate for inspection service, per 

hour per program employee, using the 

following formula: The quotient of 

dividing the Office of Field Operations 

plus Office of International Affairs 

inspection program personnel’s 

previous fiscal year’s regular direct pay 

by the previous fiscal year’s regular 

hours, plus the quotient multiplied by 

the calendar year’s percentage of cost of 

living increase, multiplied by 2, plus the 

benefits rate, plus the travel and 

operating rate, plus the overhead rate, 

plus the allowance for bad debt rate. 

FSIS will calculate the benefits rate, the 

travel and operating rate, the overhead 

rate, and the allowance for bad debt rate 

using the formulas set forth in 

§ 592.510(b), and the cost of living 

increases and percentage of inflation 

factors set forth in § 592.510(c) of this 

chapter. 

* * * * * 

PART 592—VOLUNTARY INSPECTION 

OF EGG PRODUCTS 

■ 9. The authority citation for part 592 

continues to read as follows: 

Authority: 7 U.S.C. 1621–1627. 

■ 10. Section 592.510 is revised to read 

as follows: 

§ 592.510 Basetime rate. 

(a) For each calendar year, FSIS will 

calculate the basetime rate for 

inspection services, per hour per 

program employee, using the following 

formula: The quotient of dividing the 

Office of Field Operations plus Office of 

International Affairs inspection program 

personnel’s previous fiscal year’s 

regular direct pay by the previous fiscal 

year’s regular hours, plus the quotient 

multiplied by the calendar year’s 

percentage of cost of living increase, 

plus the benefits rate, plus the travel 

and operating rate, plus the overhead 

rate, plus the allowance for bad debt 

rate. 

(b) FSIS will calculate the benefits, 

travel and operating, overhead, and 

allowance for bad debt rate components 

of the basetime rate, using the following 

formulas: 

(1) Benefits rate. The quotient of 

dividing the previous fiscal year’s direct 

benefits costs by the previous fiscal 

year’s total hours (regular, overtime, and 

holiday), plus the quotient multiplied 

by the calendar year’s percentage cost of 

living increase. Some examples of direct 

benefits are health insurance, 

retirement, life insurance, and Thrift 

Savings Plan basic and matching 

contributions. 

(2) Travel and operating rate. The 

quotient of dividing the previous fiscal 

year’s total direct travel and operating 

costs by the previous fiscal year’s total 

hours (regular, overtime, and holiday), 

plus the quotient multiplied by the 

calendar year’s percentage of inflation. 

(3) Overhead rate. The quotient of 

dividing the previous fiscal year’s 

indirect costs plus the previous fiscal 

year’s information technology (IT) costs 

in the Public Health Data 

Communication Infrastructure System 

Fund plus the previous fiscal year’s 

Office of Management Program cost in 

the Reimbursable and Voluntary Funds 

plus the provision for the operating 

balance less any Greenbook costs (i.e., 

costs of USDA support services prorated 

to the service component for which fees 

are charged) that are not related to food 

inspection, by the previous fiscal year’s 

total hours (regular, overtime, and 

holiday) worked across all funds, plus 

the quotient multiplied by the calendar 

year’s percentage of inflation. 

(4) Allowance for bad debt rate. 

Previous fiscal year’s allowance for bad 

debt (for example, debt owed that is not 

paid in full by plants and 

establishments that declare bankruptcy) 

divided by the previous fiscal year’s 

total hours (regular, overtime, and 

holiday) worked. 

(c) The calendar year’s cost of living 

increases and percentage of inflation 

factors used in the formulas in this 

section are based on the Office of 

Management and Budget’s Presidential 

Economic Assumptions. 

■ 11. In § 592.520, remove the second 

sentence and add three sentences in its 

place to read as follows: 

§ 592.520 Overtime rate. 

* * * The official plant must give 

reasonable advance notice to the 

inspector of any overtime service 


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Federal Register / Vol. 76, No. 70 / Tuesday, April 12, 2011 / Rules and Regulations 20229 

necessary. For each calendar year, FSIS 

will calculate the overtime rate for 

inspection service, per hour per 

program employee, using the following 

formula: The quotient of dividing the 

Office of Field Operations plus Office of 

International Affairs inspection program 

personnel’s previous fiscal year’s 

regular direct pay by previous fiscal 

year’s regular hours, plus the quotient 

multiplied by the calendar year’s 

percentage of cost of living increase 

multiplied by 1.5, plus the benefits rate, 

plus the travel and operating rate, plus 

the overhead rate, plus the allowance 

for bad debt rate. FSIS calculates the 

benefits rate, the travel and operating 

rate, the overhead rate, and the 

allowance for bad debt using the 

formulas set forth in § 592.510(b), and 

the cost of living increases and 

percentage of inflation factors set forth 

in § 592.510(c). 

■ 12. In § 592.530, remove the second 

sentence and add three sentences in its 

place to read as follows: 

§ 592.530 Holiday rate. 

* * * The official plant must, in 

advance of such holiday work, request 

that the inspector in charge furnish 

inspection services during such period 

and must pay the Agency for such 

holiday work at the hourly rate. For 

each calendar year, FSIS will calculate 

the holiday rate for inspection service, 

per hour per program employee, using 

the following formula: The quotient of 

dividing the Office of Field Operations 

plus Office of International Affairs 

inspection program personnel’s 

previous fiscal year’s regular direct pay 

by previous fiscal year’s regular hours, 

plus the quotient multiplied by the 

calendar year’s percentage of cost of 

living increase, multiplied by 2, plus the 

benefits rate, plus the travel and 

operating rate, plus the overhead rate, 

plus the allowance for bad debt rate. 

FSIS calculates the benefits rate, the 

travel and operating rate, the overhead 

rate, and the allowance for bad debt 

using the formulas set forth in 

§ 592.510(b), and the cost of living 

increases and percentage of inflation 

factors set forth in § 592.510(c). 

Done in Washington, DC, on April 7, 2011. 

Alfred V. Almanza, 

Administrator. 

[FR Doc. 2011–8699 Filed 4–11–11; 8:45 am] 

BILLING CODE 3410–DM–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2011–0233; Directorate 

Identifier 98–ANE–10–AD; Amendment 

39–16660; AD 2011–08–10] 

RIN 2120–AA64 

Airworthiness Directives; Rolls-Royce 

plc (RR) RB211–Trent 768–60 and 

Trent 772–60 Turbofan Engines 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule; request for 

comments. 

SUMMARY: We are superseding an 

existing airworthiness directive (AD) for 

RR RB211–Trent 700 series turbofan 

engines. That AD currently requires, for 

the step aside gearbox (SAGB), 

repositioning of the oil metering jet up 

into the oil distributor within the bevel 

gearshaft, followed by initial and 

repetitive visual inspections of the 

magnetic chip detector (MCD). Since we 

issued that AD, RR has demonstrated 

that the repositioning of the oil metering 

jet eliminates the need for the repetitive 

inspections. This AD changes the 

applicability from RB211–Trent 700 

series turbofan engines, to RB211–Trent 

768–60 and Trent 772–60 turbofan 

engines. This AD also eliminates the 

visual inspections of the MCD from the 

AD requirements. This AD was 

prompted by RR demonstrating that the 

repositioning of the oil metering jet 

eliminates the need for the repetitive 

inspections, by the need to correct the 

AD applicability, and by the need to 

eliminate the visual inspections of the 

MCD. We are issuing this AD to prevent 

in-flight engine shutdowns caused by 

SAGB driving bevel gearshaft ball 

bearing failure. 

DATES: This AD is effective April 27, 

2011. 

The Director of the Federal Register 

previously approved the incorporation 

by reference of a certain publication 

listed in this AD as of October 1, 1998 

(63 FR 49416, September 16, 1998). 

We must receive any comments on 

this AD by May 27, 2011. 

ADDRESSES: You may send comments by 

any of the following methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

instructions for submitting comments. 

• Fax: 202–493–2251. 

• Mail: U.S. Department of 

Transportation, Docket Operations, 

M–30, West Building Ground Floor, 

Room W12–140, 1200 New Jersey 

Avenue, SE., Washington, DC 20590. 

• Hand Delivery: U.S. Department of 

Transportation, Docket Operations, 

M–30, West Building Ground Floor, 

Room W12–140, 1200 New Jersey 

Avenue, SE., Washington, DC 20590, 

between 9 a.m. and 5 p.m., Monday 

through Friday, except Federal holidays. 

For service information identified in 

this AD, contact Rolls-Royce plc, P.O. 

Box 31, Derby, DE24 8BJ, United 

Kingdom; telephone 44 1332 242424; 

fax 44 1332 249936; e-mail: 

tech.help@rolls-royce.com. You may 

review copies of the referenced service 

information at the FAA, Engine & 

Propeller Directorate, 12 New England 

Executive Park, Burlington, MA. For 

information on the availability of this 

material at the FAA, call 781–238–7125. 

Examining the AD Docket 

You may examine the AD docket on 

the Internet at http:// 

www.regulations.gov; or in person at the 

Docket Management Facility between 9 

a.m. and 5 p.m., Monday through 

Friday, except Federal holidays. The AD 

docket contains this AD, the regulatory 

evaluation, any comments received, and 

other information. The street address for 

the Docket Office (phone: 800–647– 

5527) is in the ADDRESSES section. 

Comments will be available in the AD 

docket shortly after receipt. 

FOR FURTHER INFORMATION CONTACT: 

Alan Strom, Aerospace Engineer, Engine 

Certification Office, FAA, Engine & 

Propeller Directorate, 12 New England 

Executive Park, Burlington, MA 01803; 

telephone 781–238–7143; fax 781–238– 

7199; e-mail: alan.strom@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Discussion 

On September 8, 1998, we issued AD 

98–19–12, Amendment 39–10754 (63 

FR 49416, September 16, 1998), for RR 

RB211–Trent 700 series turbofan 

engines. That AD requires, for the 

SAGB, repositioning of the oil metering 

jet up into the oil distributor within the 

bevel gearshaft, followed by initial and 

repetitive visual inspections of the 

MCD. That AD resulted from reports of 

uncommanded engine shutdowns 

caused by failure of the SAGB driving 

bevel gearshaft ball bearing due to oil 

starvation. We issued that AD to prevent 

in-flight engine shutdowns caused by 

SAGB driving bevel gearshaft ball 

bearing failure. 

Actions Since AD Was Issued 

Since we issued AD 98–19–12, RR has 

demonstrated that the repositioning of 

the oil metering jet eliminates the need 

for the repetitive inspections. Also, 

since we issued that AD, Rolls Royce 

put into service, its RB211–Trent 772B– 


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