2022 Rate Changes for the Basetime, Overtime, Holiday, Laboratory Services, and Export Application Fees

AGENCY:

Food Safety and Inspection Service, USDA.

ACTION:

Notice.

SUMMMARY:

The Food Safety and Inspection Service (FSIS) is announcing the 2022 rates it will charge meat and poultry establishments, egg products plants, and importers and exporters for providing voluntary, overtime, and holiday inspection and identification, certification, and laboratory services. Additionally, FSIS is announcing that there will be no changes to the fee FSIS assesses to exporters that choose to apply for export certificates electronically through the export component of the Agency's Public Health Information System.

The new rates will be applied on January 2, 2022.

DATES:

FSIS will charge the rates announced in this notice beginning January 2, 2022.

FOR FURTHER INFORMATION CONTACT:

For further information contact Michael Toner, Director, Budget Division, Office of the Chief Financial Officer, FSIS, U.S. Department of Agriculture, Room 2159, South Building, 1400 Independence Avenue SW, Washington, DC 20250-3700; Telephone: (202) 690-8398, Fax: (202) 690-4155.

SUPPLEMENTARY INFORMATION:

Background

On April 12, 2011, FSIS published a final rule amending its regulations to establish formulas for calculating the rates it charges meat and poultry establishments, egg products plants, and importers and exporters for providing voluntary, overtime, and holiday inspection and identification, certification, and laboratory services (76 FR 20220).

In the final rule, FSIS stated that it would use the formulas to calculate the annual rates, publish the rates in Federal Register notices prior to the start of each calendar year, and apply the rates on the first FSIS pay period at the beginning of the calendar year. This notice provides the 2022 rates, which will be applied starting on January 2, 2022.

On September 6, 2017, FSIS published a Federal Register notice, “Public Health Information System (PHIS) Export Component Country Implementation” (FR 82 42056). The notice announced the delayed implementation of the export component to ensure sufficient testing and outreach to stakeholders and that the application fee would be recalculated based on available costs and number of applications, but would not be assessed prior to January 1, 2019. In addition, FSIS announced that it would implement the PHIS Export Component with a limited number of countries and gradually expand implementation to additional countries.

On April 29, 2019, FSIS published a Federal Register notice, “Public Health Information System Export Component Fee” (84 FR 17999). The notice announced that starting June 1, 2019, FSIS would assess a fee of $4.01 to exporters that chose to apply for export certificates electronically through the export component of PHIS. As noted below, that fee remains unchanged since 2019.

On July 15, 2021, FSIS published a Federal Register notice, “Overtime and Holiday Inspection Fee Reductions for Small and Very Small Establishments” (86 FR 37276). The noticed explained that the American Rescue Plan Act provided FSIS with $100 million in budget authority to reduce the costs of overtime inspection for small and very small official meat and poultry establishments and egg products plants. The notice also announced that FSIS implemented this provision by reducing overtime and holiday inspection fees for small establishments by 30 percent and very small establishments by 75 percent. More information on how to apply for the fee reduction is available at: https://www.fsis.usda.gov/policy/federal-register-rulemaking/federal-register-notices/overtime-and-holiday-inspection-fee.

2022 Rates and Calculations

The following table lists the 2022 Rates per hour, per employee, by type of service:

The regulations that cover these fees (other than the export application fee) state that FSIS will calculate the rates using formulas that include the Office of Field Operations (OFO) inspection program personnel's previous fiscal year's regular direct pay and regular hours (9 CFR 391.2, 391.3, 391.4, 590.126, 590.128, 592.510, 592.520, and 592.530).

FSIS determined the 2022 rates using the following calculations:

Basetime Rate = The quotient of dividing the Office of Field Operations (OFO) inspection program personnel's previous fiscal year's regular direct pay by the previous fiscal year's regular hours, plus the quotient multiplied by the calendar year's percentage of cost of living increase, plus the benefits rate, plus the travel and operating rate, plus the overhead rate, plus the allowance for bad debt rate.

The calculation for the 2022 basetime rate per hour per program employee is:

[FY 2021 OFO Regular Direct Pay divided by the previous fiscal year's Regular Hours ($456,808,446/15,032,156)] = $30.39 + ($30.39 * 2.7% (calendar year 2021 Cost of Living Increase)) = $31.21 + $11.86 (benefits rate) + $2.48 (travel and operating rate) + $21.45(overhead rate) + $0.00 (bad debt allowance rate) = $67.00, which is divisible by 4.

Overtime Rate = The quotient of dividing the Office of Field Operations (OFO) inspection program personnel's previous fiscal year's regular direct pay by the previous fiscal year's regular hours, plus that quotient multiplied by the calendar year's percentage of cost of living increase, multiplied by 1.5 (for overtime), plus the benefits rate, plus the travel and operating rate, plus the overhead rate, plus the allowance for bad debt rate.

The calculation for the 2022 overtime rate per hour per program employee is:

[FY 2021 OFO Regular Direct Pay divided by previous fiscal year's Regular Hours ($456,808,446/15,032,156)] = $30.39 + ($30.39 * 2.7% (calendar year 2021 Cost of Living Increase)) = $31.21 * 1.5 = $46.82 + $11.86 (benefits rate) + $2.48 (travel and operating rate) + $21.45 (overhead rate) + $0.00 (bad debt allowance rate) = $82.61, rounded down to $82.60, so that it is divisible by 4.

Holiday Rate = The quotient of dividing the Office of Field Operations (OFO) inspection program personnel's previous fiscal year's regular direct pay by the previous fiscal year's regular hours, plus that quotient multiplied by the calendar year's percentage of cost of living increase, multiplied by 2 (for holiday pay), plus the benefits rate, plus the travel and operating rate, plus the overhead rate, plus the allowance for bad debt rate.

The calculation for the 2022 holiday rate per hour per program employee calculation is:

[FY 2021 OFO Regular Direct Pay divided by Regular Hours ($456,808,446/15,032,156)] = $30.39 + ($30.39 * 2.7% (calendar year 2021 Cost of Living Increase)) = $31.21* 2 = $62.42 + $11.86 (benefits rate) + $2.48 (travel and operating rate) + $21.45 (overhead rate) + $0.00 (bad debt allowance rate) = $98.21, rounded down to 98.20, so that it is divisible by 4.

Laboratory Services Rate = The quotient of dividing the Office of Public Health Science (OPHS) previous fiscal year's regular direct pay by the OPHS previous fiscal year's regular hours, plus the quotient multiplied by the calendar year's percentage cost of living increase, plus the benefits rate, plus the travel and operating rate, plus the overhead rate, plus the allowance for bad debt rate.

The calculation for the 2022 laboratory services rate per hour per program employee is:

[FY 2021 OPHS Regular Direct Pay/OPHS Regular hours ($25,641,975/527,590)] = $48.60 + ($48.60 * 2.7% (calendar year 2021 Cost of Living Increase)) = $49.91 + $11.86 (benefits rate) + $2.48 (travel and operating rate) + $21.45 (overhead rate) + $0.00 (bad debt allowance rate) = $85.71, rounded up to 85.72, so that it is divisible by 4.

Calculations for the Benefits, Travel and Operating, Overhead, and Allowance for Bad Debt Rates

These rates are components of the basetime, overtime, holiday, and laboratory services rates formulas.

Benefits Rate: The quotient of dividing the previous fiscal year's direct benefits costs by the previous fiscal year's total hours (regular, overtime, and holiday), plus that quotient multiplied by the calendar year's percentage cost of living increase. Some examples of direct benefits are health insurance, retirement, life insurance, and Thrift Savings Plan basic and matching contributions.

The calculation for the 2022 benefits rate per hour per program employee is:

[FY 2021 Direct Benefits/(Total Regular hours + Total Overtime hours + Total Holiday hours) ($214,717,112/18,590,355)] = $11.55 + ($11.55 * 2.7% (calendar year 2021 Cost of Living Increase)) = $11.86.

Travel and Operating Rate: The quotient of dividing the previous fiscal year's total direct travel and operating costs by the previous fiscal year's total hours (regular, overtime, and holiday), plus that quotient multiplied by the calendar year's percentage of inflation.

The calculation for the 2022 travel and operating rate per hour per program employee is:

[FY 2021 Total Direct Travel and Operating Costs/(Total Regular hours + Total Overtime hours + Total Holiday hours) ($45,098,829/18,590,355)] = $2.43 + ($2.43 * 2.1% (2022 Inflation) = $2.48.

Overhead Rate: The quotient of dividing the previous fiscal year's indirect costs plus the previous fiscal year's information technology (IT) costs in the Public Health Data Communication Infrastructure System Fund plus the provision for the operating balance less any Greenbook costs ( i.e., costs of USDA support services prorated to the service component for which fees are charged) that are not related to food inspection by the previous fiscal year's total hours (regular, overtime, and holiday) worked across all funds, plus the quotient multiplied by the calendar year's percentage of inflation.

The calculation for the 2022 overhead rate per hour per program employee is:

[FY 2021 Total Overhead/(Total Regular hours + Total Overtime hours + Total Holiday hours) ($ 390,615,397/18,590,355)] = $21.01 + ($21.01 * 2.1% (2021 Inflation) = $21.45.

Allowance for Bad Debt Rate = Previous fiscal year's total allowance for bad debt (for example, debt owed that is not paid in full by plants and establishments that declare bankruptcy) divided by previous fiscal year's total hours (regular, overtime, and holiday) worked.

The 2022 calculation for bad debt rate per hour per program employee is:

[FY 2021 Total Bad Debt/(Total Regular hours + Total Overtime hours + Total Holiday hours) = ($249,286/18,590,355)] = $0.01.

2022 Electronic Export Application Fee

The 2022 Electronic Export Application Fee:

As published in the 2016 final rule, the Electronic Export Application Fee Formula is:

FSIS stated in the 2016 final rule (81 FR 42225) and the 2017 Federal Register notice (FR 82 42056) that it would update and recalculate the fee based on the best available estimates for costs and number of applications; however, the number of export applications (the denominator in the formula) cannot be accurately assessed until a majority of countries are included in the export component. Therefore, because a majority of countries are not yet included in the PHIS Export component, the cost estimates and projected export applications in the final rule remain the best estimate for 2022, leaving the electronic export application fee unchanged.

Additional Public Notification

Public awareness of all segments of rulemaking and policy development is important. Consequently, FSIS will announce this Federal Register publication on-line through the FSIS website located at: https://www.fsis.usda.gov/policy/federal-register-rulemaking/federal-register-rules. FSIS will also announce and provide a link to this Federal Register publication through the FSIS Constituent Update, which is used to provide information regarding FSIS policies, procedures, regulations, Federal Register notices, FSIS public meetings, and other types of information that could affect or would be of interest to our constituents and stakeholders. The Constituent Update is available on the FSIS website. Through the website, FSIS can provide information to a much broader, more diverse audience. In addition, FSIS offers an email subscription service which provides automatic and customized access to selected food safety news and information. This service is available at: https://www.fsis.usda.gov/subscribe. Options range from recalls to export information, regulations, directives, and notices. Customers can add or delete subscriptions themselves and have the option to password protect their accounts.

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