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[Federal Register: April 13, 2010 (Volume 75, Number 70)]
[Rules and Regulations]               
[Page 18751-18755]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13ap10-2]                         

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DEPARTMENT OF JUSTICE

28 CFR Part 20

[Docket No. FBI 114]
RIN 1110-AA26

 
FBI Criminal Justice Information Services Division User Fees

AGENCY: Federal Bureau of Investigation (FBI), Justice.

ACTION: Final rule.

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SUMMARY: This Final Rule sets out the Director of the FBI's authority 
to establish and collect fees for providing fingerprint-based and name-
based Criminal History Record Information (CHRI) checks and other 
identification services submitted by authorized users for noncriminal 
justice purposes, including employment and licensing. The FBI may set 
such fees at a level to include an amount to establish a fund to defray 
expenses for the automation of fingerprint identification and criminal 
justice information services and associated costs. It further provides 
that future fee adjustments will be made by notice published in the 
Federal Register.

DATES: This final rule is effective May 13, 2010.

FOR FURTHER INFORMATION CONTACT: FBI Criminal Justice Information 
Services Division, 1000 Custer Hollow Road, Module E-3, Clarksburg, 
West Virginia 26306, Attention: Christopher L. Enourato.

SUPPLEMENTARY INFORMATION:

I. Background

    On June 19, 2008, the FBI published a Notice of Proposed Rulemaking 
(NPRM) setting forth the FBI's statutory authority to establish and 
collect fees for noncriminal justice fingerprint-based and name-based 
CHRI checks and other identification services performed by the CJIS 
Division. See 73 FR 34905 (2008) (to be codified at 28 CFR part 20).
    The NPRM explained the methodology used to calculate the FBI's 
revised fees, provided a proposed fee schedule, and advised that the 
current fees would be published concurrently with this Final Rule as a 
Notice in the Federal Register. This Final Rule implements the FBI's 
statutory fee authority. All future fee adjustments will be made by 
Notice published in the Federal Register.

[[Page 18752]]

II. Legal Authority To Collect Fees

    The FBI has collected user fees for fingerprint-based CHRI checks 
since 1982, when the authority to establish and collect fees to process 
fingerprint-based CHRI checks for noncriminal justice purposes, such as 
employment and licensing, was set out in Public Law (Pub. L.) 97-257. 
This statutory authority was renewed annually by subsequent 
appropriations legislation. Under Public Law 101-162, the FBI was also 
authorized to establish and collect fees for name-based checks and to 
set the fees at a level to include an amount to defray expenses for the 
automation of fingerprint identification and associated costs. 
Congress, in Public Law 101-515, subsequently authorized the FBI to 
establish and collect these fees on a continuing basis. This authority 
was further expanded by Public Law 104-99 with insertion of the term 
``criminal justice information services'' so the FBI was authorized to 
use the collected fees to ``defray expenses for the automation of 
fingerprint identification and criminal justice information services 
and associated costs.''

III. Fee Calculation

Standards and Guidelines Used To Calculate the Fees

    Public Law 101-515 links the user fees charged for processing 
fingerprint identification records and name checks to the cost of 
providing these services. This authority also permits the FBI to 
establish user fees at a level to include an amount ``to defray 
expenses for the automation of fingerprint identification and criminal 
justice information services and associated costs.''
    In the absence of express statutory authority, Federal agencies are 
authorized to establish fees by the Independent Offices Appropriation 
Act of 1952, 31 U.S.C. 9701, which is implemented by specific 
guidelines in Office of Management and Budget (OMB) Circular A-25. 
Since the FBI has specific statutory authority to establish and collect 
fees under Public Law 101-515, the FBI is not required to follow 
strictly the mandates of OMB Circular A-25. In establishing the fees 
set out in this rule, the FBI referred to OMB Circular A-25 for 
guidance in calculating fees based on costs. For example, in 
calculating the fees, OMB Circular A-25's definition of full cost ``as 
all direct and indirect costs to any part of the Federal Government of 
providing a good, resource, or service'' was used to include direct and 
indirect personnel costs, physical overhead, and other indirect costs 
such as material costs, utilities, travel, and equipment.
    Congress, in the Volunteers for Children Act (VCA), 42 U.S.C. 
5119a, limited the fee that can be charged to a volunteer to $18, or 
the actual cost of providing the service, whichever is less. The 
statutory term ``actual cost'' does not appear in OMB Circular A-25, 
which uses the term full cost, defined as all direct and indirect costs 
of providing a service. Thus, the FBI defined the actual cost as the 
full cost of providing this service, when calculating the fee for 
checks of volunteers under the VCA.

Methodology Used To Calculate the User Fees

    The FBI hired a contractor, BearingPoint, Inc., 1676 International 
Drive, McLean, Virginia 22102 (BearingPoint), to conduct an independent 
analysis of pertinent costs and to recommend a revised fee schedule for 
the fingerprint-based and name-based CHRI checks conducted by the CJIS 
Division. Referencing OMB Circular A-25; the Statement of Federal 
Financial Accounting Standards (SFFAS-4): Managerial Cost Accounting 
Concepts and Standards for the Federal Government; and other relevant 
financial management directives, BearingPoint developed a cost 
accounting methodology and related cost models based upon the concepts 
and principles of activity-based costing (ABC).
    ABC is a business management process that provides information 
about the relationships between inputs (costs) and outputs (products or 
services) by quantifying how work is performed (activities). The ABC 
model used to calculate the user fees was developed using commercially 
available ABC software and followed generally accepted cost accounting 
procedures for cost assignment and unit cost calculation. 
Organizational resources were assigned to activities, and then the 
activities were assigned to services based upon reported patterns of 
consumption. BearingPoint identified the total resources associated 
with the fingerprint-based and name-based CHRI check services and 
assigned these costs to the services using relevant cost drivers. The 
cost drivers were selected primarily for their strong cause-effect 
linkages between the resources and the activities and services that 
consumed them. BearingPoint worked extensively with FBI staff, 
including programmatic subject matter experts and statistical experts, 
to gather the information necessary to devise the cost accounting 
methodology and to construct a representative ABC model. BearingPoint 
developed its cost accounting methodology in six steps for the non-
automation portion of the fee.
    1. Operational labor costs were reviewed and assigned to activities 
and then to services.
    2. Support labor costs were reviewed and assigned to activities and 
then to services.
    3. Nonlabor costs, including unfunded personnel and judgment fund 
costs, were reviewed and assigned to activities and then to services.
    4. Cost estimates were made for FY 2008, when the revised user fees 
are expected to be implemented.
    5. Transaction volumes and trends were analyzed to predict 
appropriate transaction volumes for FY 2008.
    6. Finally, using the projected FY 2008 costs and the projected FY 
2008 transaction volumes, the projected unit costs for each service 
were calculated. The recommended user fees were based on these 
projected unit costs.
    As explained above, under Public Law 101-515, the FBI is also 
authorized to charge an additional amount for the automation of 
fingerprint identification and criminal justice information services 
and associated costs. A similar process was used to develop this 
portion of the fee. It was determined that the most appropriate basis 
for the calculation of this portion of the fee was the capital 
investment and anticipated depreciation costs for automated fingerprint 
identification and other criminal justice information service 
capabilities and enhancements to certain automated systems. The costs 
for these automation efforts were obtained from the FBI's asset 
management and financial management systems and records, and program 
planning documentation. By employing this methodology, users paying the 
fee will pay for services based on the cost of the automation which is 
already in place at the time their request is processed. While the 
funds collected will be used to develop future capabilities, the cost 
basis of the fee will be the automation in place. The projected FY 2008 
volumes were then used to calculate the unit costs for this portion of 
the fee.
    Once the unit costs were calculated, BearingPoint generated the 
revised fee schedule. The FBI then independently reviewed the 
BearingPoint recommendations, compared them to current fee calculations 
and plans for future services, and determined that the revised 
schedules were both objectively reasonable and in consonance with the 
underlying legal authorities.

[[Page 18753]]

Overview of the Costs Included in the Fee Calculation

    The fee calculation was made by gathering the labor and nonlabor 
costs of those divisions of the FBI that directly or indirectly support 
the provision of the fingerprint-based and name-based CHRI check 
services, and then using various drivers to assign those costs to the 
identified activities. The activities were then assigned to the 
specific fingerprint-based and name-based CHRI check services or to a 
general category for all other costs. The ABC model examined in detail 
only those costs which were related to the fingerprint-based and name-
based CHRI check services. These services included both the criminal 
justice and law enforcement and the noncriminal justice identification 
services performed by the CJIS Division of the FBI. The discussion 
below is limited to those costs in the ABC model which were assigned to 
the fingerprint-based and name-based CHRI check services that are 
supported by the user fees. In other words, even though the ABC model 
calculated unit costs for various criminal justice fingerprint-based 
CHRI check services, these costs will not be discussed in this 
regulation since they are funded with appropriations and not with user 
fees.
    The costs for providing the fee-supported fingerprint-based and 
name-based CHRI check services include the personnel costs for both 
direct and indirect support, as well as nonlabor costs such as travel, 
training, rent, equipment, utilities, printing, contract support, and 
supplies. In addition, depreciation for existing nonautomation assets 
was included per OMB Circular A-25 guidance. Finally, portions of the 
FBI's costs for workers compensation, unemployment compensation, and 
the judgment fund, used to pay judgments against the United States 
where appropriations have not otherwise been provided, were included.
    These costs were derived from the FBI's financial systems and 
audited financial statements. The FY 2008 predicted costs were obtained 
by recalculating the depreciation and adding an inflation factor for 
labor and other nonlabor expenses. The OMB pay raise and inflation 
factors provided in OMB Circular A-11, Preparation, Submission, and 
Execution of an Agency Budget, were used. The costs associated with 
providing the services do not include any of the automation costs which 
instead were captured in the capital investment and depreciation costs 
for the automation portion of the fee described below.
    The automation costs are divided into those which support 
fingerprint identification services currently in operation and those 
which support other criminal justice information services. Both types 
of automation costs are authorized by Public Law 101-515. The FBI chose 
to separate these costs to facilitate calculation of the cost of 
providing fingerprint-based CHRI checks for volunteers, since the VCA 
limits the fee to the actual cost or $18.00, whichever is less. The FBI 
is interpreting the actual cost of providing the service to include 
only the costs for the automation of fingerprint services currently in 
operation; the actual cost does not include the costs for the 
automation of other criminal justice information services.
    The costs for the automation of the fingerprint identification 
services include depreciation costs for the fingerprint identification 
infrastructure and the costs for developing a disaster recovery 
capability which would allow the FBI's essential fingerprint 
identification services to continue in all circumstances as required by 
OMB Circular A-130, Management of Federal Information Resources (OMB 
Circular A-130).
    The costs for the automation of other criminal justice information 
services are based on the depreciation of assets already in place and 
the costs of enhancements which have passed through the approval gates 
for the planning stages of system development under the FBI's life 
cycle management directive. These enhancements include the Next 
Generation Identification program, which will increase the speed, 
capacity, and functionality of the FBI's fingerprint identification 
process, and the Biometric Interoperability Program which will provide 
two-way access to information in other major fingerprint databases such 
as the Department of Homeland Security's database of nonimmigrant 
visitors to the United States. The costs also include the automation of 
certain aspects of the National Crime Information Center (NCIC), the 
Law Enforcement National Data Exchange (N-DEx) program, and the Uniform 
Crime Reporting (UCR) program.
    There is one additional component of cost which was considered when 
determining the fees. Federal agencies, certain State agencies, and 
approved nongovernmental entities that submit fingerprint-based CHRI 
checks function as de facto centralized billing service providers 
(CBSPs) by collecting the appropriate fee from individuals or 
subordinate agencies and submitting a consolidated payment. It is more 
cost-effective for the FBI to bill a CBSP than to process individual 
direct payments for single fingerprint-based CHRI check submissions.
    The FBI employs this centralized billing methodology to collect 
payment for more than 9.8 million fingerprint-based CHRI checks each 
year. Under the fee schedule proposed in this rule, the FBI will 
continue the practice of allowing approved CBSPs to retain a portion 
(currently $2.00) of the fee for fingerprint-based CHRI checks for 
performing this centralized billing service. In order to allow the 
CBSPs to retain this portion of the fee, it is necessary to include 
this cost when determining the full costs which the fee must cover. At 
this time, this cost is calculated by multiplying the amount the CBSPs 
are allowed to retain by the volume of billed transactions. The 
centralized billing process will be subject to further analysis and, 
consequently, may be revised in the future.

IV. Proposed Changes to the Fee Schedule

Fingerprint-Based CHRI Checks

    The FBI utilized categories or fee classes to set the charges for 
fingerprint-based CHRI checks. Fee classes are determined by the:
     Type of transaction--manual, electronic, or electronic 
submission with manual response, or
     Volunteer status under the VCA.

Name-Based CHRI Checks

    The name-based CHRI checks are available only to authorized Federal 
agencies for purposes specifically authorized by statute, e.g., 
pursuant to the Security Clearance Information Act, 5 U.S.C. 9101. The 
fee classes for name-based CHRI checks differentiate between manual and 
electronic submissions.

New Services

    If the FBI offers a new service or otherwise requires a new fee 
class in the future, the charge for this new fee class will be based 
upon the closest existing fee class until such time as a new fee class 
can be established. Authorized users will be advised of the new service 
or new fee class by CJIS Information Letter or other CJIS 
communication. The FBI will calculate a fee for the new fee class using 
the methodology discussed in the NPRM and will publish a revised fee 
schedule as a notice in the Federal Register. See 73 FR 34906-07 
(2008).

[[Page 18754]]

V. Discussion of Comments

    Comments on the proposed rule were received from two individuals 
and one professional association.
    The comments from the professional association and an individual 
were fully supportive of the proposed rule. The letter from the 
professional association stated, ``We appreciate the importance of 
maintaining rigorous personnel security practices, and believe the 
FBI's support of non-criminal CHRI checks, whether fingerprint or name-
based, is necessary to the success of these programs.'' The final 
comment, from an individual, concerned the need for increased 
regulation of hazardous materials transportation, rather than the NPRM. 
After reviewing the comments, the FBI has determined that no changes to 
the proposed rule are necessary.

VI. Regulatory Certifications

Regulatory Flexibility Act

    When an agency issues a rulemaking proposal, the Regulatory 
Flexibility Act (RFA) requires the agency to ``prepare and make 
available for public comment an initial regulatory flexibility 
analysis'' which will ``describe the impact of the proposed rule on 
small entities.'' (5 U.S.C. 603(a)). Section 605 of the RFA allows an 
agency to certify, in lieu of preparing an analysis, that the proposed 
rulemaking is not expected to have significant economic impact on a 
substantial number of small entities. Small entities are defined by the 
RFA to include small businesses, small organizations, and small 
governmental jurisdictions.
    The fees for providing fingerprint-based and name-based CHRI 
background checks for noncriminal justice purposes normally are imposed 
upon the individual subject of the background check, rather than upon 
small entities. In addition, under the new fee schedule that became 
effective October 1, 2007, the fee imposed on nonfederal users 
submitting electronic fingerprint-based CHRI dropped nearly 20 percent 
per request. This lower fee is applicable to more than 90 percent of 
the total nonfederal fingerprint-based checks. However, the fee for 
manual searches was increased, reflecting comparatively higher 
processing costs for those services. As a result of these different 
fees, the FBI expects that users will seek the lower costs associated 
with providing electronic fingerprint submissions.
    State and Federal agencies and certain private entities serve as 
CBSPs, or entities that collect and submit an individual's fingerprints 
to the FBI and remit the fee charged to the individual. There are no 
small businesses, organizations or governmental jurisdictions currently 
providing billing services as CBSPs.
    With regard to name-based CHRI checks, there is no direct or 
indirect impact on small entities, as only Federal agencies are 
authorized to request name-based CHRI background checks, and Federal 
agencies do not fall within the definition of a ``small entity.'' 
Accordingly, the Director of the FBI hereby certifies that this rule 
will not have a significant economic impact on a substantial number of 
small entities.

Executive Order 12866 (Regulatory Planning and Review)

    This regulation has been drafted and reviewed in accordance with 
Executive Order 12866, Regulatory Planning and Review, section 1(b), 
Principles of Regulation. The FBI has determined that this rule is a 
significant regulatory action under Executive Order 12866, Regulatory 
Planning and Review, section 3(f) and accordingly this rule has been 
reviewed by the OMB.

Executive Order 12988 (Civil Justice Reform)

    This rule meets the applicable standards set forth in sections 3(a) 
and 3(b)(2) of Executive Order 12988.

Executive Order 13132 (Federalism)

    This rule will not have a substantial direct effect on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government. The fees for providing fingerprint-based and 
name-based CHRI background checks for noncriminal justice purposes are 
imposed upon the individual subject of the background check, rather 
than on the State. Some States serve as CBSPs by collecting and 
submitting an individual's fingerprints to the FBI and remitting the 
fee charged to the individual. The proposed rule does not alter the 
amount the FBI allows CBSPs to retain for providing these services, but 
merely makes small adjustments to the fee schedule already in place. 
The proposed rule does not alter any of the policy set out at 28 CFR 
part 20, or 28 CFR parts 901-906. Therefore, in accordance with 
Executive Order 13132, it is determined that this rule does not have 
sufficient federalism implications to warrant the preparation of a 
Federalism Assessment.

Unfunded Mandates Reform Act of 1995

    This rule does not contain a mandate that will result in the 
expenditure by State, local, and Tribal governments (in the aggregate) 
or by the private sector of $100 million or more in any one year, and 
it will not significantly or uniquely affect small governments. While 
CBSPs may need to adjust their internal automated systems and 
processes, the change in fee amount is a foreseeable and expected 
eventuality and therefore, it is expected that these internal systems 
and processes were created with the capability of adjusting to changed 
fees without great cost or effort. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This final rule is not a major rule as defined by section 804 of 
the Small Business Regulatory Enforcement Fairness Act of 1996. This 
final rule will not result in an annual effect on the U.S. economy of 
$100 million or more; a major increase in costs or prices; or 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of U.S.-based companies to 
compete with foreign-based companies in domestic and export markets.

IX. Conclusion

    After careful consideration, the Department does not believe that 
any change to the rule is necessary based on these comments. 
Accordingly, pursuant to the authority set forth in Public Law 101-515, 
as amended by Public Law 104-99, set out in the notes to 28 U.S.C. 534, 
part 20 of chapter I of Title 28 of the CFR is amended as follows.

List of Subjects in 28 CFR Part 20

    Classified information, Crime, Intergovernmental relations, 
Investigations, Law enforcement, Privacy.

0
Accordingly, pursuant to the authority set forth in Public Law 101-515, 
as amended by Public Law 104-99, set out in the notes to 28 U.S.C. 534, 
part 20 of chapter 1 of Title 28 of the CFR is amended as follows:

PART 20--CRIMINAL JUSTICE INFORMATION SYSTEMS

0
1. The authority citation for Part 20 is revised to read as follows:

    Authority: 28 U.S.C. 534; Pub. L. 92-544, 86 Stat. 1115; 42 
U.S.C. 3711, et seq., Pub. L. 99-169, 99 Stat. 1002, 1008-1011, as 
amended by Pub. L. 99-569, 100 Stat. 3190, 3196; Pub. L. 101-515, as 
amended by Pub. L. 104-99, set out in the notes to 28 U.S.C. 534.


[[Page 18755]]



0
2. Amend Sec.  20.31 to add paragraph (e) to read as follows:


Sec.  20.31  Responsibilities.

* * * * *
    (e) The FBI may routinely establish and collect fees for 
noncriminal justice fingerprint-based and other identification services 
as authorized by Federal law. These fees apply to Federal, State and 
any other authorized entities requesting fingerprint identification 
records and name checks for noncriminal justice purposes.
    (1) The Director of the FBI shall review the amount of the fee 
periodically, but not less than every four years, to determine the 
current cost of processing fingerprint identification records and name 
checks for noncriminal justice purposes.
    (2) Fee amounts and any revisions thereto shall be determined by 
current costs, using a method of analysis consistent with widely 
accepted accounting principles and practices, and calculated in 
accordance with the provisions of 31 U.S.C. 9701 and other Federal law 
as applicable.
    (3) Fee amounts and any revisions thereto shall be published as a 
notice in the Federal Register.

    Dated: March 15, 2010.
Robert S. Mueller, III,
Director, Federal Bureau of Investigation.
[FR Doc. 2010-8385 Filed 4-12-10; 8:45 am]
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