Process for Establishing Rates Charged for AMS Services

   In order to provide additional clarity, AMS defines the following terms used throughout this document as follows:

   Bad Debt --Accounts receivable that will likely remain uncollectable and will be written off.

   Benefits --various non-wage compensation provided to employees in addition to their normal wages or salaries. Examples of items included in this category are health and unemployment insurance, retirement, workers compensation, Thrift Savings Plan contributions, and other similar compensation.

   Cost of Living Adjustment --the cost of maintaining a certain standard of living based on the economic assumptions in the Office of Management and Budget (OMB), "Update to Civilian Position Full Fringe Benefit Cost Factor, Federal Pay Raise Assumptions, and Inflation Factors used in OMB Circular A-76, Performance of Commercial Activities".

   Direct Hours --the regular hours worked by employees of the Agency. This does not include overtime or holiday hours.

   Direct Pay --monetary compensation paid to employees of AMS for work performed. Pay is based on the U.S. Office of Personnel Management pay rate tables. It may include night and Sunday differential costs.

   Holiday --the official days of the calendar year established by law (5 U.S.C. 6103) or identified by Executive Order as Federal holidays.

   Hour --measure by which grading, certification, inspection, classification, laboratory or other services cost is based and expenses are charged.

   Indirect Cost --this cost includes program and AMS activities that support the services provided to the industry. Another common term for this cost category is "overhead".

   Operating Reserve --funds above expected obligations required to effectively manage uncertainties in demand and cash flow timing.

   Operating Cost --costs attributed to performing grading, inspection, certification, or laboratory services duties (i.e. training, equipment, and other such costs), plus operating reserve, plus indirect costs.

   Overtime --hours worked in excess of the approved schedule. Work performed after the first 8 hours per day or 40 hours per week is considered overtime.

   Regular Rate --the cost per hour for work provided in accordance with an applicant contract. Under Federal labor laws, this rate applies to the first 8 hours per day, or first 40 hours worked per week by AMS employees.

   Unit --any measurement that there is one of. For example, one bale of cotton or one truck load of vegetables.

Proposed Formulas for Regular, Overtime, and Holiday Rates

   With this rulemaking, AMS proposes to amend its regulations to provide a set of standardized formulas by which fees are calculated. The methodology used to calculate and implement the fees charged by AMS user-funded programs would be specified in 7 CFR parts 27, 28, 29, 51, 52, 54, 56, 58, 62, 70, 75, and 91.

   AMS would use these formulas to calculate annual fee rates starting with the effective date of this rule and for subsequent years. AMS will publish the specific formulas used to calculate service fees. AMS intends to announce the actual annual fee rates in a Federal Register notice by June 1 each year or as required by specific laws. These fees would be effective at the beginning of the following fiscal year, crop year, or as required by specific laws.

   Salary, hours, and most rates used in the formulas would be based on the prior fiscal year's (or applicable accounting period or historical data) actual costs and hours. AMS would round the final rates up to make the amounts divisible by the quarter hour (15 minutes). Fifteen minutes would be the minimum charge for services covered by these rates. /1/ Travel costs may be part of a fee or may be added to the calculated fee.

   FOOTNOTE 1 The current minimum charge for some services covered by these rates is 30 minutes. END FOOTNOTE

   Currently, some fees are charged on a per unit basis and others are charged on a per hour basis. AMS would continue to provide costs based on a per hour and per unit basis to maintain consistency. For cotton and some fruit and vegetable programs, per unit costs are determined after converting the hourly costs to units.

   AMS is proposing the following formulas:

   Regular Rate --The total AMS grading, inspection, certification, classification, audit, or laboratory service program personnel direct pay divided by direct hours for the previous year, which is then multiplied by the next year's percentage of cost of living increase, plus the benefits rate, plus the operating rate, plus the allowance for bad debt rate. If applicable, travel expenses may also be added to the cost of providing the service.

   An example of the calculation would look like this: [FY 2013 Direct Pay divided by Total Direct Hours ($2,663,407/82,985) = $32.10, plus ($32.10 * 1.7% (2014 cost of living increase)) = $32.64 + $10.04 (benefits rate) + $28.90 (operating rate) + $.01 (bad debt allowance rate) = $71.59 (rounded to $71.60); rounding is done to reflect billable quarter hour increments of 15 minutes. If applicable, travel expenses may also be added.

   Overtime Rate --The total AMS grading, inspection, certification, classification, audit, or laboratory service program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 1.5, plus the benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   An example of the calculation will look like this: [FY 2013 Direct Pay divided by Total Direct Hours ($2,663,407/82,985) = $32.10, plus ($32.10 * 1.7% (2014 cost of living increase)) = $32.64, multiplied by 1.5 ($32.64 * 1.5 (overtime rate)) = $48.96 + $10.04 (benefits rate) + 28.90 (operating rate) + $.01 (bad debt allowance rate) = $87.91 (rounded to $87.92); rounding is done to reflect billable quarter hour of 15 minutes. If applicable, travel expenses may also be added.

   Holiday Rate --The total AMS grading, inspection, certification, classification, audit, or laboratory service program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 2, plus benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   An example of the calculation will look like this: [FY 2013 Direct Pay divided by Total Direct Hours ($2,663,407/82,985) = $32.10, plus ($32.10 * 1.7% (2014 cost of living increase)) = $32.64, multiplied by 2 ($32.64 * 2 (double time or Holiday rate)) = $65.28 + $10.04 (benefits rate) + $28.90 (operating rate) + $.01 (bad debt allowance rate) = $104.23 (rounded to $104.24); rounding is done to reflect billable quarter hour increments of 15 minutes. If applicable, travel expenses may also be added.

   Formula calculations are based on prior fiscal year's actual costs or historical costs, workload data, projection of expenses impacting program costs, cost of living increase and inflation. Cost of living increases and inflation factors are based on the economic assumptions from 2013-2023 which have been updated in the Office of Management and Budget's (OMB) FY 2014 Mid-Session Review. Rather than codify a reference to this OMB budget document in the proposed rule, each year AMS intends to use the most recent economic factors released by OMB for budget development purposes to determine cost impacts for these user fee activities.

Proposed Formulas for the Benefits, Operating, and Allowance for Bad Debt Rates

   As proposed, AMS intends to derive the components of proposed formulas above, using previous fiscal year's actual costs/historical costs, as follows:

   Benefits Rate --The total AMS grading, inspection, classification, certification, audit, or laboratory service program direct benefits costs divided by the total hours worked (regular, overtime, and holiday), which is then multiplied by the next calendar year's percentage cost of living increase.

   An example of the calculation will look like this: [2013 Direct Benefits cost/(Total hours + Total Overtime hours + Total Holiday hours) ($819,207/82,985)] = $9.87, plus ($9.87 * 1.7% (2014 Cost of Living)) = $10.04.

   Operating Rate --The total AMS grading, inspection, classification, certification, audit, or laboratory service program operating costs divided by total hours worked (regular, overtime, and holiday), which is then multiplied by the percentage of inflation.

   An example of the calculation will look like this: [2013 Total Operating Costs/(Total hours + Total Overtime hours + Total Holiday hours) ($2,351,857/82,985)] = $28.34, plus ($28.34 * 2% (2014 Inflation)) = $28.90.

   Allowance for Bad Debt Rate --Total AMS grading, inspection, classification, certification, audit, or laboratory service program allowance for bad debt divided by total hours worked (regular, overtime, and holiday).

   An example of the calculation will look like this: [2013 Total Bad Debt cost/(Total hours + Total Overtime hours + Total Holiday hours) ($1,000/82,985) = $0.01.

   As noted above, the proposed formulas reflect that the cost of providing services include both direct and indirect costs. Direct costs include the cost of salaries, employee benefits, and if applicable, travel and some operating costs. Indirect or overhead costs include the cost of program and Agency activities supporting the services provided to the industry. Indirect cost expenditures are allocated across the Agency for each direct hour of grading, inspection, classification, certification, auditing, or laboratory service provided. For purposes of these formulas, indirect costs have been included as part of operating costs.

Executive Order 12866 and Executive Order 13563

   Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This proposed rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563. The Office of Management and Budget has not reviewed this proposal under these Orders.

Executive Order 13175

   This rule has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation would not have substantial and direct effect on Tribal governments and would not have significant Tribal implications.

Executive Order 12988

   This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. This proposed rule: (1) Has no retroactive effect; and (2) does not require administrative proceedings before parties may file suit in court challenging this rule.

Regulatory Flexibility Act

   The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) requires agencies to consider the economic impact of each rule on small entities and evaluate alternatives that would accomplish the objectives of the rule without unduly burdening small entities or erecting barriers that would restrict their ability to compete in the market. The purpose is to fit regulatory actions to the scale of businesses subject to the action. Section 605 of the RFA allows an agency to certify a rule, in lieu of preparing an analysis, if the rulemaking is not expected to have a significant economic impact on a substantial number of small entities.

   Most small agricultural service firms have been defined by the Small Business Administration (SBA) (13 CFR 121.201) as those having annual receipts of less than $7,000,000. For certain types of businesses (e.g., dairy, egg, and meat processing; handlers of produce), the SBA considers a small entity as those that employ less than 500 employees.

   The grading, inspection, certification and auditing services provided under these regulations are voluntary.2 3 The benefits of using grading, inspection, certification, auditing, and laboratory services outpace the costs of obtaining these services. These services are used by meat and poultry establishments, fruit and vegetable handlers and processors, egg processing plants, dairy processors, users of cotton and tobacco program services, importers and exporters of the above commodities, and other interested persons to determine quality and prices of their products.

   FOOTNOTE 2 Currently, there is no mandatory inspection and grading of tobacco under the Tobacco Inspection Act (7 U.S.C. 511-511s). END FOOTNOTE

   FOOTNOTE 3 Fees charged for inspection of fruits, vegetables, and specialty crops subject to the Agricultural Marketing Agreement Act of 1937 also would be affected by this rule. END FOOTNOTE

   AMS estimates that approximately 849 entities use voluntary meat grading and certification services. This estimate includes 413 egg, poultry, and rabbit packing plants that use the USDA grade shield. Of these 413 plants, approximately fifteen percent would be considered a small business under the SBA criteria. The remaining 436 entities includes livestock slaughterers, brokers, meat and other processors, distributors, organic certification companies, trade associations, State and Federal entities, and livestock producers and feeders. Of these 436 entities, approximately 70 percent would be considered a small business under the SBA criteria.

   AMS estimates that 60 cotton merchants use AMS services for cotton futures classification, 20,000 cotton producers and 637 cotton gins use AMS services for normal cotton classification, and 125 tobacco customers use AMS services. Of these entities, approximately 80 percent would be considered a small business under the SBA criteria.

   AMS estimates that, over the last two fiscal years, we provided user fee services to an average of 2,308 fruit and vegetable companies for fresh products. AMS estimates that, over the last two fiscal years, we provided user fee services to an average of 1,087 fruit and vegetable companies for processed products. We estimate that approximately 98 percent of these 3,395 companies would be considered a small business under the SBA criteria. The number of entities referenced above includes those subject to the provisions of the Agricultural Marketing Agreement Act of 1937.

   AMS estimates that 360 dairy plants use AMS' dairy grading and inspection services. We believe that approximately 96 percent of these plants would be considered a small business under the SBA criteria.

   AMS considered the economic impact of this action on these small entities. The proposed formulas would have a minimal impact on entities that request these services. The difference in fee rates would be negligible since the costs used in the formulas to calculate the current and future fees would remain the same. For example, it is expected that the Dairy user fee would change from $76 per hour to $78 per hour under the proposed formulas. AMS has not updated several of its programs' user fees for a number of years. For those fees that have not been updated recently, there may be a change in fees. These possible changes would be the result of using current economic data and cost estimates to calculate the fee rates. AMS would take into consideration, when appropriate, economic and industry conditions before adjusting fees. The process would maintain up-to-date fees.

   By including the formulas used to calculate annual user fee rates in the regulations, the Agency would streamline the rulemaking process to help ensure that fees are effective at the beginning of each fiscal year or other period as required by law. Fees would cover inflation and national and locality pay raises but would not support any new budgetary initiative. Any cost changes are similar to other changes that the industry would experience because of inflation and wage increases.

   The outcome of this proposal would be a transparent system for establishing fee rates for all AMS user fee programs, whereby financial and resource needs for continued operation are reviewed on a pre-determined cycle, using established formulas. This would avoid financial crises that occur when reserve funds are rapidly depleted due to unanticipated business events, and would allow the Agency to more quickly adjust the cost of the services it provides. The information would also greatly benefit AMS customers by allowing them to better plan for the cost of AMS services.

   The total volume of commodities graded, inspected and certified under the associated regulations in 2012 was approximately 91 billion pounds. An overall increase in cost per pound of product associated with the new fees is estimated at $.0002. Even in competitive industries such as fruit and vegetables, meat, poultry, dairy and eggs, this amount of increase in costs would have an insignificant impact on profits and processes. Accordingly, AMS certifies that this rule will not have a significant economic impact on a substantial number of small entities.

Paperwork Reduction Act

   This rule does not contain any new information collection or recordkeeping requirements that are subject to the Office of Management and Budget (OMB) approval under the Paperwork Reduction Act, 44 U.S.C. Chapter 35.

E-Government Act

   AMS and USDA are committed to achieving the purposes of the E-Government Act (44 U.S.C. 3601, et seq.) by, among other things, promoting the use of the Internet and other information technologies and providing increased opportunities for citizen access to Government information and services, and for other purposes.

   Public awareness of all segments of rulemaking and policy development is important. Consequently, in an effort to ensure that all interested parties, including minorities, women, and persons with disabilities are aware of this notice, AMS will announce it online and make copies of this Federal Register publication available through the AMS Web page located at http://www.ams.usda.gov/AMSv1.0/. In addition, AMS offers a subscription service which provides automatic and customized access to selected agricultural commodity news and information. Further, each program will make a concerted effort to inform their respective industries while performing inspections and providing services.

   Finally, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this proposed rule.

   A 30-day comment period is provided to allow interested persons to respond to this proposal. Thirty days is deemed appropriate because this action needs to be in place no later than March 2015 to allow sufficient time for fees to be published and the industry to be notified. Further, this action does not change the services for which fees are charged. All written comments received in response to this rule by the date specified will be considered prior to finalizing this action.

List of Subjects

   7 CFR Part 27

   Commodity futures, Cotton.

   7 CFR Part 28

   Administrative practice and procedure, Cotton, Reporting and recordkeeping requirements, Warehouses.

   7 CFR Part 29

   Administrative practice and procedure, Advisory committees, Government publications, Imports, Pesticide and pests, Reporting and recordkeeping requirements, Tobacco.

   7 CFR Part 51

   Agricultural commodities, Food grades and standards, Fruits, Nuts, Reporting and recordkeeping requirements, Vegetables.

   7 CFR Part 52

   Food grades and standards, Food labeling, Frozen foods, Fruits, Reporting and recordkeeping requirements, Vegetables

   7 CFR Part 54

   Food grades and standards, Food labeling, Meat and meat products, Poultry and poultry products.

   7 CFR Part 56

   Eggs and egg products, Food grades and standards, Food labeling, Reporting and recordkeeping requirements.

   7 CFR Part 58

   Dairy products, Food grades and standards, Food labeling, Reporting and recordkeeping requirements.

   7 CFR Part 62

   Food grades and standards, Food labeling, and Meat and meat products.

   7 CFR Part 70

   Food grades and standards, Food labeling, Poultry and poultry products, Rabbits and rabbit products, Reporting and recordkeeping requirements.

   7 CFR Part 75

   Administrative practice and procedure, Agricultural commodities, Reporting and recordkeeping requirements, Seeds, Vegetables.

   7 CFR Part 91

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

   For the reasons set forth in the preamble, 7 CFR chapter I is proposed to be amended as follows:

PART 27--COTTON CLASSIFICATION UNDER COTTON FUTURES LEGISLATION

   1. The authority citation for 7 CFR part 27 continues to read as follows:

   Authority: 7 U.S.C. 15b, 7 U.S.C. 473a-b, 7 U.S.C. 1622(g).

   2. Revise SEC 27.80 by adding paragraphs (a) and (b) and removing paragraphs (c) and (d).

   The additions read as follows:

SEC 27.80 Fees; review classification, futures classification and supervision.

* * * * *

   (a) For each calendar year, AMS will calculate the rate for services, per hour per program employee using the following formulas:

   (1) Regular rate. The total AMS grading or classification program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase, plus the benefits rate, plus the operating rate, plus the allowance for bad debt rate. If applicable, travel expenses may also be added to the cost of providing the service.

   (2) Overtime rate. The total AMS grading or classification program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 1.5 plus the benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (3) Holiday rate. The total AMS grading or classification program personnel direct pay divided by direct hours which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 2, plus benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (b) For each calendar year, based on historical costs, AMS will calculate the benefits, operating, and allowance for bad debt components of the regular, overtime and holiday rates as follows:

   (1) Benefits rate. The total AMS grading or classification program direct benefits costs divided by the total hours (regular, overtime, and holiday) worked, which is then multiplied by the next calendar year's percentage cost of living increase. Some examples of direct benefits are health insurance, retirement, life insurance, and Thrift Savings Plan (TSP) retirement basic and matching contributions.

   (2) Operating rate. The total AMS grading or classification program operating costs divided by total hours (regular, overtime, and holiday) worked, which is then multiplied by the percentage of inflation.

   (3) Allowance for bad debt rate. Total AMS grading or classification program allowance for bad debt divided by total hours (regular, overtime, and holiday) worked.

   (c) Basis. The calendar year cost of living expenses and percentage of inflation factors used in the formulas in this section are based on the most current Office of Management and Budget's Presidential Economic Assumptions.

   3. Revise SEC 27.81 to read as follows:

SEC 27.81 Fees; certificates

   For each new certificate issued in substitution for a prior certificate at the request of the holder thereof, for the purpose of business convenience, or when made necessary by the transfer of cotton under the supervision of any exchange inspection agency as provided in SEC 27.73, the person making the request shall pay a fee determined as described in SEC 27.80 of this part.

PART 28--COTTON CLASSING, TESTING, AND STANDARDS

   4. The authority citation for 7 CFR part 28, Subpart A, continues to read as follows:

   Authority: 7 U.S.C. 55 and 61.

   5. Revise SEC 28.116 to read as follows:

SEC 28.116 Amounts of fees for classification; exemption.

   (a) For the classification of any cotton or samples, the person requesting the services shall pay a fee, based on the description that follows, subject to the additional fee provided by paragraph (c) of this section.

   (1) For each calendar year, AMS will calculate the rate for services per hour per program employee using the following formulas:

   (i) Regular rate. The total AMS grading or classification program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase, plus the benefits rate, plus the operating rate, plus the allowance for bad debt rate. If applicable, travel expenses may also be added to the cost of providing the service.

   (ii) Overtime rate. The total AMS grading or classification program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 1.5 plus the benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (iii) Holiday rate. The total AMS grading or classification program personnel direct pay divided by direct hours which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 2, plus benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (2) For each calendar year, based on historical costs, AMS will calculate the benefits, operating, and allowance for bad debt components of the regular, overtime and holiday rates as follows:

   (i) Benefits rate. The total AMS grading or classification program direct benefits costs divided by the total hours (regular, overtime, and holiday) worked, which is then multiplied by the next calendar year's percentage cost of living increase. Some examples of direct benefits are health insurance, retirement, life insurance, and Thrift Savings Plan (TSP) retirement basic and matching contributions.

   (ii) Operating rate. The total AMS grading or classification program operating costs divided by total hours (regular, overtime, and holiday) worked, which is then multiplied by the percentage of inflation.

   (iii) Allowance for bad debt rate. Total AMS grading or classification program allowance for bad debt divided by total hours (regular, overtime, and holiday) worked.

   (3) The calendar year cost of living expenses and percentage of inflation factors used in the formulas in this section are based on the most current Office of Management and Budget's Presidential Economic Assumptions.

   (b) When a comparison is requested of any samples with a type or with other samples, the fees prescribed in paragraph (a) of this section shall apply to every sample involved, including each of the samples of which the type is composed.

   (c) An additional fee based on current shipping rates shall be assessed for returning samples unless the request for service is so worded that the samples become government property immediately after classification.

   (d) For any review of classification or comparison of any cotton, the fees prescribed in paragraph (a) of this section shall apply. The additional fee prescribed in paragraph (c) of this section is not applicable to review of classification if made on the same sample as the original class or comparison.

   6. Revise SEC 28.117 to read as follows:

SEC 28.117 Fee for new memorandum or certificate.

   For each new memorandum or certificate issued in substitution for a prior memorandum or certificate at the request of the holder, thereof, on account of the breaking or splitting of the lot of cotton covered thereby or otherwise for his business convenience, the person requesting such substitution shall pay a fee determined as described in SEC 28.116 of this part. If the memorandum is provided by electronic means, the fee shall be determined using the same provisions.

   7. Revise SEC 28.122 to read as follows:

SEC 28.122 Fee for practical classing examination.

   The fee for the practical classing examination for cotton shall be determined as described in SEC 28.116 of this part. Any applicant who passes the examination may be issued a certificate indicating this accomplishment. Any person who fails to pass the examination may be reexamined. The fee for this practical reexamination will be determined as described in section 28.116.

   8. The authority citation for 7 CFR part 28, Subpart D, continues to read as follows:

   Authority: 7 U.S.C. 51-65; 7 U.S.C. 471-476.

   9. Amend SEC 28.909 by revising paragraph (b) to read as follows:

SEC 28.909 Costs.

* * * * *

   (b) The cost of High Volume Instrument (HVI) cotton classification service to producers will be based on formulas set forth in SEC 28.116 of this part. The proceeds of the sale of cotton samples shall be used to defray the costs of providing the service under this subpart.

* * * * *

   10. Revise SEC 28.910 to read as follows:

SEC 28.910 Classification of samples and issuances of classification data.

   (a)(1) The samples submitted as provided in the subpart shall be classified by employees of the Division and classification memoranda showing the official quality determination of each sample according to the official cotton standards of the United States shall be issued by any one of the following methods at no additional charge:

   (i) Electronic means, or

   (ii) Telecommunications, with all long distance telephone line charges paid by the receiver of data.

   (2) When an additional copy of the classification memorandum is issued by any method listed in paragraph (a)(1) of this section, there will be a charge determined as described in SEC 28.116. If provided as an additional method of data transfer, the minimum fee for each method issued shall also be determined as described in SEC 28.116.

   (b) Owners of cotton, other than producers, may receive classification data showing the official quality determination of each sample by means of telecommunications from a central database to be maintained by the Division. The fee for this service shall be determined as described in SEC 28.116, with all communication charges paid by the receiver of data.

   (c) Upon request of an owner of cotton for which classification memoranda have been issued under the subpart, a new memorandum shall be issued for the business convenience of such owner without the reclassification of the cotton. Such rewritten memorandum shall bear the date of its issuance and the date or inclusive dates of the original classification. The per-hour fee for a new memorandum shall be determined according to SEC 28.116, with a minimum per-sheet fee determined under the same provisions.

   11. Amend SEC 28.911 by revising paragraph (a) and the last sentence in paragraph (b) to read as follows:

SEC 28.911 Review classification.

   (a) A producer may request one review classification for each bale of eligible cotton. The fee for review classification shall be determined based on the formulas in SEC 28.116.

   (b) * * * Producers who request return of their samples after classing will pay a fee determined based on the formulas in SEC 28.116.

PART 29--TOBACCO INSPECTION

   12. The authority citation for part 29 is revised to read as follows:

   Authority: 7 U.S.C. 511-511s.

   13. Amend SEC 29.123 by:

   a. Revising the first sentence of paragraph (a);

   b. Revising paragraph (b);

   c. Redesignating paragraphs (c), (d), and (e) as paragraphs (d), (e), and (f) respectively;

   d. Adding new paragraph (c); and

   e. Revising newly redesignated paragraph (d).

   The revisions and addition read as follows:

SEC 29.123 Fees and charges.

* * * * *

   (a) Mandatory inspection. For each year, AMS will calculate the rate for services, per hour per program employee as described in SEC 29.123(b) and (c). * * *

   (b) Domestic permissive inspection and certification --(1) Regular rate. The total AMS grading, inspection, or sampling program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase, plus the benefits rate, plus the operating rate, plus the allowance for bad debt rate. If applicable, travel expenses may also be added to the cost of providing the service.

   (2) Overtime rate. The total AMS grading, inspection, or sampling program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 1.5 plus the benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (3) Holiday rate. The total AMS grading, inspection, or sampling program personnel direct pay divided by direct hours which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 2, plus benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (4) Applicability. The fees in paragraphs (b)(1) through (3) of this section shall be applicable for hogshead, bale cases, or sample inspections.

   (c)(1) For each calendar year, based on previous fiscal year/historical actual costs, AMS will calculate the benefits, operating, and allowance for bad debt components of the regular, overtime and holiday rates as follows:

   (i) Benefits rate. The total AMS grading, inspection, or sampling program direct benefits costs divided by the total hours (regular, overtime, and holiday) worked, which is then multiplied by the next calendar year's percentage cost of living increase. Some examples of direct benefits are health insurance, retirement, life insurance, and Thrift Savings Plan (TSP) retirement basic and matching contributions.

   (ii) Operating rate. The total AMS grading, inspection, or sampling program operating costs divided by total hours (regular, overtime, and holiday) worked, which is then multiplied by the percentage of inflation.

   (iii) Allowance for bad debt rate. Total AMS grading, inspection, or sampling program allowance for bad debt divided by total hours (regular, overtime, and holiday) worked.

   (2) The calendar year cost of living expenses and percentage of inflation factors used in the formulas in this section are based on the most recent Office of Management and Budget's Presidential Economic Assumptions.

   (d) Export permissive inspection and certification. The inspection and certification fee for export tobacco will be determined as described in SEC 29.123(b) and (c).

* * * * *

   14. Amend SEC 29.500 by revising the first sentence of paragraph (a) and revising paragraphs (b) and (c) to read as follows:

SEC 29.500 Fees and charges for inspection and acceptance of imported tobacco.

   (a) The fee for inspection of imported tobacco will be determined as described in SEC 29.123 and shall be paid by the importer. * * *

   (b) The fee for sampling, accepting, and certification of imported flue-cured and burley tobacco for prohibited pesticide residues will be determined as described in SEC 29.123 and shall be paid by the importer.

   (c) The fee for accepting imported flue-cured and burley tobacco not accompanied by a certification that it is free of prohibited pesticide residues will be determined as described in SEC 29.123. Fees for services rendered shall be remitted by check or draft in accordance with a statement issued by the Director, and shall be made payable to "Agricultural Marketing Service."

PART 51--FRESH FRUITS, VEGETABLES AND OTHER PRODUCTS (INSPECTION, CERTIFICATION, AND STANDARDS)

   15. The authority citation for part 51 continues to read as follows:

   Authority: 7 U.S.C. 1621-1627.

   16. Revise SEC 51.38 to read as follows:

SEC 51.38 Basis for fees and rates.

   (a) For each calendar year, AMS will calculate the rate for services, per hour per program employee using the following formulas:

   (1) Regular rate. The total AMS inspection program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase, plus the benefits rate, plus the operating rate, plus the allowance for bad debt rate. If applicable, travel expenses may also be added to the cost of providing the service.

   (2) Overtime rate. The total AMS inspection program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 1.5 plus the benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (3) Holiday rate. The total AMS inspection program personnel direct pay divided by direct hours which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 2, plus benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (b)(1) For each calendar year, based on previous fiscal year/historical actual costs, AMS will calculate the benefits, operating, and allowance for bad debt components of the regular, overtime and holiday rates as follows:

   (i) Benefits rate. The total AMS inspection program direct benefits costs divided by the total hours (regular, overtime, and holiday) worked, which is then multiplied by the next calendar year's percentage cost of living increase. Some examples of direct benefits are health insurance, retirement, life insurance, and Thrift Savings Plan (TSP) retirement basic and matching contributions.

   (ii) Operating rate. The total AMS inspection program operating costs divided by total hours (regular, overtime, and holiday) worked, which is then multiplied by the percentage of inflation.

   (iii) Allowance for bad debt rate. Total allowance for bad debt divided by total hours (regular, overtime, and holiday) worked.

   (2) The calendar year cost of living expenses and percentage of inflation factors used in the formulas in this section are based on the most recent Office of Management and Budget's Presidential Economic Assumptions.

   (c) When an inspection is delayed because product is not available or readily accessible, a charge for waiting time shall be determined using the formulas in this section.

PART 52--PROCESSED FRUITS AND VEGETABLES, PROCESSED PRODUCTS THEREOF, AND OTHER PROCESSED FOOD PRODUCTS

   17. The authority citation for part 52 continues to read as follows:

   Authority: 7 U.S.C. 1621-1627.

SEC 52.2 [Amended]

   18. Amend SEC 52.2 by removing the definition of "In-plant sampler".

   19. Revise SEC 52.42 to read as follows:

SEC 52.42 Schedule of fees.

   (a) For each calendar year, AMS will calculate the rate for services, per hour per program employee using the following formulas:

   (1) Regular rate. The total AMS inspection program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase, plus the benefits rate, plus the operating rate, plus the allowance for bad debt rate. If applicable, travel expenses may also be added to the cost of providing the service.

   (2) Overtime rate. The total AMS inspection program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 1.5 plus the benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (3) Holiday rate. The total AMS inspection program personnel direct pay divided by direct hours which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 2, plus benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (b) For each calendar year, based on previous fiscal year/historical actual costs, AMS will calculate the benefits, operating, and allowance for bad debt components of the regular, overtime and holiday rates as follows:

   (1) Benefits rate. The total AMS inspection program direct benefits costs divided by the total hours (regular, overtime, and holiday) worked, which is then multiplied by the next calendar year's percentage cost of living increase. Some examples of direct benefits are health insurance, retirement, life insurance, and Thrift Savings Plan (TSP) retirement basic and matching contributions.

   (2) Operating rate. The total AMS inspection program operating costs divided by total hours (regular, overtime, and holiday) worked, which is then multiplied by the percentage of inflation.

   (3) Allowance for bad debt rate. Total AMS inspection program allowance for bad debt divided by total hours (regular, overtime, and holiday) worked.

   (c) The calendar year cost of living expenses and percentage of inflation factors used in the formulas in this section are based on the most recent Office of Management and Budget's Presidential Economic Assumptions.

   20. Revise SEC 52.50 to read as follows:

SEC 52.50 Travel and other expenses.

   Charges may be assessed to cover the cost of travel time incurred in connection with the performance of any inspection service, including appeal inspections, as described in SEC 52.42 of this part. This includes time spent waiting for transportation as well as time spent traveling, but not to exceed eight hours of travel time for any one person for any one day: And provided further, that if travel is by common carrier, no hourly charge may be made for travel time outside the employee's official work hours.

   21. Amend SEC 52.51 by revising paragraphs (a), (b), (c), and (d) to read as follows:

SEC 52.51 Charges for inspection services on a contract basis.

   (a) The Administrator may enter into contracts with applicants to perform continuous inspection services or other types of inspection services pursuant to the regulations in this part and other requirements as prescribed by the Administrator in such contract, and the charges for such inspection service provided in such contracts shall be based on such basis as will reimburse the Agricultural Marketing Service of the Department for the full cost of rendering such inspection service as described in SEC 52.42 of this subpart.

   (b) The Administrator may enter into a written memorandum of understanding or contract, whichever may be appropriate, with any administrative agency charged with the administration of a marketing agreement or a marketing order effective pursuant to the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601 et seq.) for the making of inspections pursuant to said agreement or order on such basis as will reimburse the Agricultural Marketing Service of the Department for the full cost of rendering such inspection service based on the formulas in SEC 52.42 of this subpart. Likewise, the Administrator may enter into a written memorandum of understanding or contract, whichever may be appropriate, with an administrative agency charged with an administration of a similar program operated pursuant to the laws of any State.

   (c) Charges for year-round in-plant inspection services on a contract basis will be billed to the applicant monthly for all hours worked with a minimum of 40 hours per week for each inspector assigned to perform the inspection services. Charges for work performed in excess of an employee's regular work schedule will be calculated as described in SEC 52.42(a)(2) of this subpart.

   (d) Charges for less than year-round in-plant inspection services (four or more consecutive 40 hour weeks) on a contract basis will be billed to the applicant monthly for all hours with a minimum of 40 hours for each inspector assigned to perform the inspection services and will be calculated based on the formulas in SEC 52.42 of this subpart.

* * * * *

PART 54--MEATS, PREPARED MEATS, AND MEAT PRODUCTS (GRADING, CERTIFICATION, AND STANDARDS)

   22. The authority citation for 7 CFR part 54 continues to read as follows:

   Authority: 7 U.S.C. 1621-1627.

SEC 54.6 [Amended]

   23. Amend SEC 54.6 in paragraph (c)(2), in the first sentence, by removing the phrase "as provided in SEC 54.27(b)" and adding "as provided in SEC 54.27" in its place.

   24. Revise SEC 54.27 to read as follows:

SEC 54.27 Fees and other charges for service.

   (a) Fees and other charges equal as nearly as may be to the cost of the services rendered shall be assessed and collected from applicants in accordance with the following provisions unless otherwise provided in the cooperative agreement under which the services are furnished, or as provided in SEC 54.6 of this subpart. For each calendar year, AMS will calculate the rate for inspection, grading, or certification services, per hour per program employee using the following formulas:

   (1) Regular rate. The total AMS grading, inspection, or certification program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase, plus the benefits rate, plus the operating rate, plus the allowance for bad debt rate. If applicable, travel expenses may also be added to the cost of providing the service.

   (2) Overtime rate. The total AMS grading, inspection, or certification program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 1.5 plus the benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (3) Holiday rate. The total AMS grading, inspection, or certification program personnel direct pay divided by direct hours which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 2, plus benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (b)(1) For each calendar year, based on previous fiscal year/historical actual costs, AMS will calculate the benefits, operating, and allowance for bad debt components of the regular, overtime and holiday rates as follows:

   (i) Benefits rate. The total AMS grading, inspection, or certification program direct benefits costs divided by the total hours (regular, overtime, and holiday) worked, which is then multiplied by the next calendar year's percentage cost of living increase. Some examples of direct benefits are health insurance, retirement, life insurance, and Thrift Savings Plan (TSP) retirement basic and matching contributions.

   (ii) Operating rate. The total AMS grading, inspection, or certification program operating costs divided by total hours (regular, overtime, and holiday) worked, which is then multiplied by the percentage of inflation.

   (iii) Allowance for bad debt rate. Total AMS grading, inspection, or certification program allowance for bad debt divided by total hours (regular, overtime, and holiday) worked.

   (2) The calendar year cost of living expenses and percentage of inflation factors used in the formulas in this section are based on the most recent Office of Management and Budget's Presidential Economic Assumptions.

   (c) Fees for service on commitment basis. Minimum fees for service performed under a commitment agreement or an agreement by memorandum shall be on the basis of 8 hours per day, Monday through Friday, excluding Federal legal holidays occurring Monday through Friday on which no grading and certification services are performed. Fees will be based on the formulas in this section. The Agency reserves the right under such a commitment agreement or agreement by memorandum to use any grader assigned to the plant on a commitment basis to perform service for other applicants, as provided in SEC 54.6(c), crediting the commitment applicant with the number of hours charged to the other applicant, provided the allowable credit hours plus hours actually worked for the applicants do not exceed 8 hours on any day, Monday through Friday, excluding legal holidays.

   (d) Fees for appeal service. Fees for appeal service shall be determined on the basis of the time, of two official graders, required to render the service, including the time required for the preparation of certificates and travel of such graders in connection with the performance of the service. Provided, That when on appeal it is found that there was error in the original determination equal to or exceeding ten percent of the total number of similar units of the products involved, no charge will be made for the appeal service unless a special agreement therefor was made with the applicant in advance.

   (e) Fees for extra copies of certificates. In addition to copies of certificates furnished under SEC 54.14, any financially interested person may obtain not to exceed three copies of any such certificate within one year from its date of issuance upon payment of a fee, and not to exceed three copies of any such certificate at any time thereafter, while a copy of such certificate is on file in the Department. The fee for copies of certificates will be determined using the formulas in this section.

PART 56--VOLUNTARY GRADING OF SHELL EGGS

   25. The authority citation for part 56 continues to read as follows:

   Authority: 7 U.S.C. 1621-1627.

   26. Revise SEC 56.46 to read as follows:

SEC 56.46 On a fee basis.

   (a) Unless otherwise provided in this part, the fees to be charged and collected for any service performed, in accordance with this part, on a fee basis shall be based on the applicable formulas specified in this section. For each calendar year or crop year, AMS will calculate the rate for grading or audit services, per hour per program employee using the following formulas:

   (1) Regular rate. The total AMS grading or audit program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase, plus the benefits rate, plus the operating rate, plus the allowance for bad debt rate. If applicable, travel expenses may also be added to the cost of providing the service.

   (2) Overtime rate. The total AMS grading or audit program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 1.5 plus the benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (3) Holiday rate. The total AMS grading or audit program personnel direct pay divided by direct hours which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 2, plus benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (b)(1) For each calendar year, based on previous fiscal year/historical actual costs, AMS will calculate the benefits, operating, and allowance for bad debt components of the regular, overtime and holiday rates as follows:

   (i) Benefits rate. The total AMS grading or audit program direct benefits costs divided by the total hours (regular, overtime, and holiday) worked, which is then multiplied by the next calendar year's percentage cost of living increase. Some examples of direct benefits are health insurance, retirement, life insurance, and Thrift Savings Plan (TSP) retirement basic and matching contributions.

   (ii) Operating rate. The total AMS grading or audit program operating costs divided by total hours (regular, overtime, and holiday) worked, which is then multiplied by the percentage of inflation.

   (iii) Allowance for bad debt rate. Total AMS grading or audit program allowance for bad debt divided by total hours (regular, overtime, and holiday) worked.

   (2) The calendar year cost of living expenses and percentage of inflation factors used in the formulas in this section are based on the most recent Office of Management and Budget's Presidential Economic Assumptions.

   (c) Fees for grading services will be based on the time required to perform the services. The hourly charges shall include the time actually required to perform the grading, waiting time, travel time, and any clerical costs involved in issuing a certificate.

   (d) Fees for audit services will be based on the time and expenses required to perform the audit. The hourly charge shall include the time actually required to perform the audit, waiting time, travel time, and any clerical costs involved in issuing an audit report.

   27. Amend SEC 56.52 by:

   a. Revising the introductory text;

   b. Revising the second sentence of paragraph (a)(1); and

   c. Revising the first sentence of paragraph (a)(2) introductory text.

   The revisions read as follows:

SEC 56.52 Charges for continuous grading performed on a resident basis.

   Fees to be charged and collected for any grading service, other than for an appeal grading, on a resident grading basis, shall be calculated as described in this part. The fees to be charged for any appeal grading shall be as provided in SEC 56.47.

   (a) * * *

   (1) * * * The costs for completing the plant survey shall be borne by the applicant on a fee basis as described in SEC 56.46. * * *

   (2) Charges for the cost of each grader assigned to a plant will be calculated as described in section 56.46 of this part, except that no charge will be assessed when the assigned grader is temporarily reassigned by AMS to perform grading service for other than the applicant. * * *

* * * * *

   28. Amend SEC 56.54 by revising the introductory text and paragraph (a)(1) introductory text to read as follows:

SEC 56.54 Charges for continuous grading performed on a nonresident basis.

   Fees to be charged and collected for grading service on a nonresident grading basis, shall be calculated as described in this part. The fees to be charged for any appeal grading shall be calculated as provided in SEC 56.47.

   (a) * * *

   (1) A charge for the salary and other costs, calculated as described in SEC 56.46 of this part, for each grader while assigned to a plant, except that no charge will be made when the assigned grader is temporarily reassigned by AMS to perform grading service for other than the applicant. Charges to plants are as follows:

* * * * *

PART 58--GRADING AND INSPECTION, GENERAL SPECIFICATIONS FOR APPROVED PLANTS AND STANDARDS FOR GRADES OF DAIRY PRODUCTS

   29. The authority citation for 7 CFR part 58 continues to read as follows:

   Authority: 7 U.S.C. 1621-1627.

   30. Revise SEC 58.39 to read as follows:

SEC 58.39 Fees for holiday or other nonworktime.

   If an applicant requests that inspection or grading service be performed on a holiday, Saturday, or Sunday or in excess of each 8-hour shift Monday through Friday, the applicant shall be charged for such service at a rate determined using the formulas in SEC 58.43.

   31. Revise SEC 58.43 to read as follows:

SEC 58.43 Fees for inspection, grading, sampling, and certification.

   (a) Unless otherwise provided in this part, the fees to be charged and collected for any service performed, in accordance with this part, on a fee basis shall be based on the applicable formulas specified in this section. For each calendar year, AMS will calculate the rate for grading, certification, or inspection services, per hour per program employee using the following formulas:

   (1) Regular rate. The total AMS grading, certification, or inspection program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase, plus the benefits rate, plus the operating rate, plus the allowance for bad debt rate. If applicable, travel expenses may also be added to the cost of providing the service.

   (2) Overtime rate. The total AMS grading, certification, or inspection program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 1.5 plus the benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (3) Holiday rate. The total AMS grading, certification, or inspection program personnel direct pay divided by direct hours which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 2, plus benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (b) For each calendar year, based on previous fiscal year/historical actual costs, AMS will calculate the benefits, operating, and allowance for bad debt components of the regular, overtime and holiday rates as follows:

   (1) Benefits rate. The total AMS grading, certification, or inspection program direct benefits costs divided by the total hours (regular, overtime, and holiday) worked, which is then multiplied by the next calendar year's percentage cost of living increase. Some examples of direct benefits are health insurance, retirement, life insurance, and Thrift Savings Plan (TSP) retirement basic and matching contributions.

   (2) Operating rate. The total AMS grading, certification, or inspection program operating costs divided by total hours (regular, overtime, and holiday) worked, which is then multiplied by the percentage of inflation.

   (3) Allowance for bad debt rate. Total AMS grading, certification, or inspection program allowance for bad debt divided by total hours (regular, overtime, and holiday) worked.

   (c) The calendar year cost of living expenses and percentage of inflation factors used in the formulas in this section are based on the most recent Office of Management and Budget's Presidential Economic Assumptions.

   32. Revise SEC 58.45 to read as follows:

SEC 58.45 Fees for continuous resident services.

   Charges for the inspector(s) and grader(s) assigned to a continuous resident program shall be calculated using the formulas in SEC 58.43 of this part.

PART 62--LIVESTOCK, MEAT AND OTHER AGRICULTURAL COMMODITIES (QUALITY SYSTEMS VERIFICATION PROGRAMS)

   33. The authority citation for part 62 continues to read as follows:

   Authority: 7 U.S.C. 1621-1627.

   34. Revise SEC 62.300 to read as follows:

SEC 62.300 Fees and other costs of service.

   (a) For each calendar year, AMS will calculate the rate for quality systems verification services, per hour per program employee using the following formulas:

   (1) Regular rate. The total AMS quality systems verification program (QSVP) personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase, plus the benefits rate, plus the operating rate, plus the allowance for bad debt rate. If applicable, travel expenses may also be added to the cost of providing the service.

   (2) Overtime rate. The total AMS QSVP personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 1.5 plus the benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (3) Holiday rate. The total AMS QSVP personnel direct pay divided by direct hours which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 2, plus benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (b)(1) For each calendar year, based on previous fiscal year/historical actual costs, AMS will calculate the benefits, operating, and allowance for bad debt components of the regular, overtime and holiday rates as follows:

   (i) Benefits rate. The total AMS QSVP direct benefits costs divided by the total hours (regular, overtime, and holiday) worked, which is then multiplied by the next calendar year's percentage cost of living increase. Some examples of direct benefits are health insurance, retirement, life insurance, and Thrift Savings Plan (TSP) retirement basic and matching contributions.

   (ii) Operating rate. The total AMS QSVP operating costs divided by total hours (regular, overtime, and holiday) worked, which is then multiplied by the percentage of inflation.

   (iii) Allowance for bad debt rate. Total AMS QSVP allowance for bad debt divided by total hours (regular, overtime, and holiday) worked.

   (2) The calendar year cost of living expenses and percentage of inflation factors used in the formulas in this section are based on the most recent Office of Management and Budget's Presidential Economic Assumptions.

   (c) Transportation costs. Applicants are responsible for paying actual travel costs incurred to provide QSVP services including but not limited to: Mileage charges for use of privately owned vehicles, rental vehicles and gas, parking, tolls, and public transportation costs such as airfare, train, and taxi service.

   (d) Per diem costs. The applicant is responsible for paying per diem costs incurred to provide QSVP services away from the auditor's or USDA officials' official duty station(s). Per diem costs shall be calculated in accordance with existing travel regulations (41 CFR, subtitle F--Federal Travel Regulation System, chapter 301).

   (e) Other costs. When costs, other than those costs specified in paragraphs (a), through (c) of this section, are involved in providing the QSVP services, the applicant shall be responsible for these costs. The amount of these costs shall be determined administratively by the Chief. However, the applicant will be notified of these costs before the service is rendered.

PART 70--VOLUNTARY GRADING OF POULTRY AND RABBIT PRODUCTS

   35. The authority citation for part 70 continues to read as follows:

   Authority: 7 U.S.C. 1621-1627.

   36. Revise SEC 70.71 to read as follows:

SEC 70.71 On a fee basis.

   Unless otherwise provided in this part, the fees to be charged and collected for any grading or audit service performed in accordance with this part, on a fee basis shall be based on the applicable formulas specified in this section.

   (a) For each calendar year, AMS will calculate the rate for grading and audit services, per hour per program employee using the following formulas:

   (1) Regular rate. The total AMS grading or audit program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase, plus the benefits rate, plus the operating rate, plus the allowance for bad debt rate. If applicable, travel expenses may also be added to the cost of providing the service.

   (2) Overtime rate. The total AMS grading or audit program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 1.5 plus the benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (3) Holiday rate. The total AMS grading or audit program personnel direct pay divided by direct hours which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 2, plus benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (b)(1) For each calendar year, based on previous fiscal year/historical actual costs, AMS will calculate the benefits, operating, and allowance for bad debt components of the regular, overtime and holiday rates as follows:

   (i) Benefits rate. The total AMS grading or audit program direct benefits costs divided by the total hours (regular, overtime, and holiday) worked, which is then multiplied by the next calendar year's percentage cost of living increase. Some examples of direct benefits are health insurance, retirement, life insurance, and Thrift Savings Plan (TSP) retirement basic and matching contributions.

   (ii) Operating rate. The AMS grading or audit program total operating costs divided by total hours (regular, overtime, and holiday) worked, which is then multiplied by the percentage of inflation.

   (iii) Allowance for bad debt rate. Total AMS grading or audit program allowance for bad debt divided by total hours (regular, overtime, and holiday) worked.

   (2) The calendar year cost of living expenses and percentage of inflation factors used in the formulas in this section are based on the most recent Office of Management and Budget's Presidential Economic Assumptions.

   (c) Fees for grading services will be based on the time required to perform the services. The hourly charges shall include the time actually required to perform the grading, waiting time, travel time, and any clerical costs involved in issuing a certificate.

   (d) Fees for audit services will be based on the time and expenses required to perform the audit. The hourly charge shall include the time actually required to perform the audit, waiting time, travel time, and any clerical costs involved in issuing an audit report.

   37. Revise SEC 70.72 to read as follows:

SEC 70.72 Fees for appeal grading or review of a grader's decision.

   The costs of an appeal grading, or review of a grader's decision, shall be borne by the appellant on a fee basis at rates determined based on the formulas in SEC 70.71 of this part. If the appeal grading, or review of a grader's decision discloses that a material error was made in the original determination, no fee or expenses will be charged.

   38. Amend SEC 70.76 by revising the introductory text and the first sentence of paragraph (a)(1) introductory text to read as follows:

SEC 70.76 Charges for continuous poultry grading performed on a nonresident basis.

   Fees to be charged and collected for grading service on a nonresident grading basis shall be based on the formulas provided in this part. The fees to be charged for any appeal grading shall be as provided in SEC 70.72.

   (a) * * *

   (1) A charge for the salary and other costs, based on SEC 70.71 of this part, for each grader while assigned to a plant, except that no charge will be made when the assigned grader is temporarily reassigned by AMS to perform grading service for other than the applicant. * * *

* * * * *

   39. Amend SEC 70.77 by revising the introductory text and paragraphs (a)(1) and (2) to read as follows:

SEC 70.77 Charges for continuous poultry or rabbit grading performed on a resident basis.

   Fees to be charged and collected for any grading service on a resident grading basis and for an appeal grading shall be determined based on the formulas in section 70.71.

   (a) * * *

   (1) When a signed application for service has been received, the State supervisor or the supervisor's assistant shall complete a plant survey pursuant to SEC 70.34. The costs for completing the plant survey shall be borne by the applicant on a fee basis based on the formulas in SEC 70.71. No charges will be assessed when the application is required because of a change in name or ownership. If service is not installed within 6 months from the date the application is filed, or if service is inactive due to an approved request for removal of a grader(s) for a period of 6 months, the application will be considered terminated, but a new application may be filed at any time. In addition, there will be a charge of $300 if the application is terminated at the request of the applicant for reasons other than for a change in location within 12 months from the date of the inauguration of service.

   (2) A charge for the salary and other costs, as specified in this part, for each grader while assigned to a plant, except that no charge will be made when the assigned grader is temporarily reassigned by AMS to perform grading service for other than the applicant.

* * * * *

PART 75--REGULATIONS FOR INSPECTION AND CERTIFICATION OF QUALITY OF AGRICULTURAL AND VEGETABLE SEEDS

   40. The authority citation for part 75 continues to read as follows:

   Authority: 7 U.S.C. 1622, 1624.

   41. Revise SEC 75.41 to read as follows :

SEC 75.41 General.

   Fees and charges for inspection or certification services performed by Federal employees shall cover the cost of performing the service. Fees shall be for actual time required to render the service. For each calendar year, AMS will calculate the rate for inspection or certification services, per hour per program employee using the following formulas:

   (1) Regular rate. The total AMS inspection or certification program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase, plus the benefits rate, plus the operating rate, plus the allowance for bad debt rate. If applicable, travel expenses may also be added to the cost of providing the service.

   (2) Overtime rate. The total AMS inspection or certification program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 1.5 plus the benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (3) Holiday rate. The total AMS inspection or certification program personnel direct pay divided by direct hours which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 2, plus benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (b) For each calendar year, based on previous fiscal year/historical actual costs, AMS will calculate the benefits, operating, and allowance for bad debt components of the regular, overtime and holiday rates as follows:

   (1) Benefits rate. The total AMS inspection or certification program direct benefits costs divided by the total hours (regular, overtime, and holiday) worked, which is then multiplied by the next calendar year's percentage cost of living increase. Some examples of direct benefits are health insurance, retirement, life insurance, and Thrift Savings Plan (TSP) retirement basic and matching contributions.

   (2) Operating rate. The total AMS inspection or certification program operating costs divided by total hours (regular, overtime, and holiday) worked, which is then multiplied by the percentage of inflation.

   (3) Allowance for bad debt rate. Total AMS inspection or certification program allowance for bad debt divided by total hours (regular, overtime, and holiday) worked.

   (c) The calendar year cost of living expenses and percentage of inflation factors used in the formulas in this section are based on the most recent Office of Management and Budget's Presidential Economic Assumptions.

   42. Amend SEC 75.42 by revising paragraph (b) to read as follows:

SEC 75.42 Sampling and sealing.

* * * * *

   (b) When onsite inspection services are performed by Federal employees at the request of the applicant charges will be based on the formulas in SEC 75.41 of this part.

   43. Amend SEC 75.43 by revising paragraphs (a) and (c) to read as follows :

SEC 75.43 Laboratory testing.

* * * * *

   (a) Fees assessed based on the formulas in section 75.41 of this part.

* * * * *

   (c) The fee for a preliminary report issued prior to completion of testing shall be assessed in accordance with paragraph (a) of this section.

PART 91--SERVICES AND GENERAL INFORMATION (SCIENCE AND TECHNOLOGY)

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

   Authority: 7 U.S.C. 1622, 1624.

   45. Amend SEC 91.37 by:

   a. Revising paragraphs (a) and (b);

   b. Removing paragraph (c); and

   c. Redesignating paragraphs (d) and (e) as paragraphs (c) and (d), respectively.

   The revisions read as follows:

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

   (a) For each fiscal year, AMS will calculate the rate for laboratory testing, analysis, and other services, per hour per program employee using the following formulas:

   (1) Regular rate. The total AMS laboratory service program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase, plus the benefits rate, plus the operating rate, plus the allowance for bad debt rate. If applicable, travel expenses may also be added to the cost of providing the service.

   (2) Overtime rate. The total AMS laboratory service program personnel direct pay divided by direct hours, which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 1.5 plus the benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (3) Holiday rate. The total AMS laboratory service program personnel direct pay divided by direct hours which is then multiplied by the next year's percentage of cost of living increase and then multiplied by 2, plus benefits rate, plus the operating rate, plus an allowance for bad debt. If applicable, travel expenses may also be added to the cost of providing the service.

   (b)(1) For each calendar year, based on previous fiscal year/historical actual costs, AMS will calculate the benefits, operating, and allowance for bad debt components of the regular, overtime and holiday rates as follows:

   (i) Benefits rate. The total AMS laboratory service program direct benefits costs divided by the total hours (regular, overtime, and holiday) worked, which is then multiplied by the next calendar year's percentage cost of living increase. Some examples of direct benefits are health insurance, retirement, life insurance, and Thrift Savings Plan (TSP) retirement basic and matching contributions.

   (ii) Operating rate. The total AMS laboratory service program operating costs divided by total hours (regular, overtime, and holiday) worked, which is then multiplied by the percentage of inflation.

   (iii) Allowance for bad debt rate. Total AMS laboratory service program allowance for bad debt divided by total hours (regular, overtime, and holiday) worked.

   (2) The calendar year cost of living expenses and percentage of inflation factors used in the formulas in this section are based on the most recent Office of Management and Budget's Presidential Economic Assumptions.

* * * * *

   46. Amend SEC 91.38 by revising paragraph (a) to read as follows:

SEC 91.38 Additional fees for appeal of analysis.

   (a) The applicant for appeal sample testing will be charged a fee based on the formulas in SEC

* * * * *

   47. Amend SEC 91.39 by revising paragraph (a) to read as follows:

SEC 91.39 Hourly fee rates for overtime and legal holiday service.

   (a) When analytical testing in a Science and Technology facility requires the services of laboratory personnel beyond their regularly assigned tour of duty on any day or on a day outside the established schedule, such services are considered as overtime work. When analytical testing in a Science and Technology facility requires the services of laboratory personnel on a Federal holiday or a day designated in lieu of such a holiday, such services are considered holiday work. Laboratory analyses initiated at the request of the applicant to be rendered on Federal holidays, and on an overtime basis will be charged fees based on the formulas in SEC 91.37 of this part.

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   Dated: August 29, 2014.

Rex A. Barnes,

Associate Administrator, Agricultural Marketing Service.

[FR Doc. 2014-21188 Filed 9-9-14; 8:45 am]

BILLING CODE 3410-02-P