[Federal Register: February 25, 2011 (Volume 76, Number 38)][Rules and Regulations]
[Page 10500-10516]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25fe11-8]
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DEPARTMENT OF LABOR
Occupational Safety and Health Administration
29 CFR Part 1910
[Docket No. OSHA-2007-0031]
Nationally Recognized Testing Laboratories Fees
AGENCY: Occupational Safety and Health Administration (OSHA), Labor.
ACTION: Final rule.
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SUMMARY: The Occupational Safety and Health Administration (OSHA) is
adjusting the approach it uses for calculating the fees the Agency
charges Nationally Recognized Testing Laboratories (NRTLs), and also is
requiring prepayment of these fees. This adjustment increases the fees;
OSHA is phasing in the fee increase over three years for existing NRTLs
and pending NRTL applicants. OSHA began charging NRTLs fees in 2000,
and revised the fee schedule only twice since then (in 2002 and 2007).
DATES: This final rule becomes effective on March 28, 2011.
FOR FURTHER INFORMATION CONTACT: MaryAnn Garrahan, Director, Office of
Technical Programs and Coordination Activities, NRTL Program,
Occupational Safety and Health Administration, U.S. Department of
Labor, 200 Constitution Avenue, NW., Room N-3655, Washington, DC 20210,
or phone (202) 693-2110. OSHA's Web page includes information about the
NRTL Program (see http://www.osha.gov/dts/otpca/nrtl/index.html or see
http://www.osha.gov and select "N" in the site index).
SUPPLEMENTARY INFORMATION:
I. Introduction
II. Background
III. Legal Considerations
IV. Explanation of the Revised Approach for Calculating Fees
V. Basis and Derivation of Fee Amounts
VI. Revised Fee Schedules
VII. Description of Fees
VIII. Major Changes to the Fee Schedule
IX. Changes to 29 CFR 1910.7(f)
X. Final Economic Analysis and Regulatory Flexibility Analysis
XI. Unfunded Mandates Reform Act
XII. Paperwork Reduction Act
XIII. Federalism
XIV. State Plan States
XV. Authority and Signature
I. Introduction
The Occupational Safety and Health Administration (OSHA) is
adjusting the approach it uses to calculate the fees charged to
Nationally Recognized Testing Laboratories (NRTLs). This adjustment
will recoup a larger percentage of the cost of administering the NRTL
Program than the current approach. This adjustment allows OSHA to
continue to charge NRTLs for the core application processing and audit
functions performed under the NRTL Program, while also recouping the
other costs, such as the cost for ancillary activities that provide
special benefits to NRTLs, that currently represent a significant
portion of OSHA's costs of running the NRTL Program.
Because the revised approach results in a large increase in the
fees for existing NRTLs and pending NRTL applicants, OSHA is
instituting a three-year phase-in period for any fee increase that is
greater than $200. OSHA also is revising language in 29 CFR 1910.7(f)
(the OSHA rule implementing the NRTL fee structure) to clarify the cost
basis for the fees. In addition, OSHA will now require advance payment
of all NRTL fees, which complies with instructions to Federal agencies
issued by the Office of Management and Budget (OMB).
In this notice, section II describes the NRTL Program and the prior
fee structure for charging NRTLs for application processing and audits.
In section III, OSHA explains the legal authority for recovering costs
for ancillary activities and leave. The Agency also explains the basis
for advance collection of the fees. Section IV describes how OSHA will
recoup the ancillary and leave costs, and section V shows the
derivation of the fee amounts. Sections VI and VII present the revised
fee schedule and fee descriptions, respectively, and address the sole
comment OSHA received in response to the proposal. Finally, in sections
VIII and IX, respectively, OSHA explains the major revisions to the
fees and to the regulatory text of 29 CFR 1910.7(f).
II. Background
Many of OSHA's safety standards require approval (i.e., tested and
certified) of equipment or products used in the workplace to help
ensure that workers can use them safely. See, e.g., 29 CFR part 1910,
subpart S. In general, an NRTL must approve such equipment and
products. The NRTL Program administered by OSHA ensures that
laboratories perform testing and certification appropriately,
The NRTL Program requirements are set forth in 29 CFR 1910.7,
"Definition and requirements for a nationally recognized testing
laboratory," which specifies that, to receive and maintain recognition
as an NRTL, an organization must: (1) Have the appropriate capability
to test, evaluate, and approve products to assure safe use of the
products in the workplace; (2) be completely independent of the
manufacturers, vendors, and major users of the products for which OSHA
requires certification; (3) have internal programs that ensure proper
control of the testing and certification process; and (4) have
effective reporting and complaint handling procedures. 29 CFR
1910.7(b).
OSHA requires that organizations applying for initial recognition
as an NRTL provide, in writing, detailed and comprehensive information
about their programs, processes, and procedures. To process an
application, OSHA reviews the written information for completeness and
adequacy, and conducts an on-site assessment to determine whether the
organization meets the requirements of 29 CFR 1910.7. OSHA uses a
similar process when an NRTL (i.e., an organization already recognized)
applies for expansion or renewal of its recognition. In addition, the
Agency conducts annual audits primarily to ensure that each NRTL
maintains its programs and continues to meet the recognition
requirements. Currently, there are 15 NRTLs operating 49 recognized
sites in the U.S., Canada, Europe, and the Far East. Application
processing and audits are the core functions that OSHA performs for the
NRTL Program.
To perform these core functions, OSHA also must perform a number of
ancillary activities that support these functions. OSHA investigates
complaints filed against NRTLs to ensure that the laboratories are
performing their testing and certification functions adequately. In
addition, OSHA represents the NRTL Program in a variety of forums
related to conformity assessment \1\ of products used in the workplace.
OSHA also maintains a detailed Web site that both explains the program
and, more importantly for the NRTLs, lists all the laboratories
currently recognized under the NRTL Program, the products each
laboratory can test, and registered certification marks used by each
laboratory.
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\1\ OSHA generally uses the term "approval" to describe the
type of testing or certification activities performed by NRTLs.
Conformity assessment is a term used internationally to describe
such activities, and is defined as "any activity concerned with
determining directly or indirectly that requirements are
fulfilled." (see item 12.2, ISO Guide 2--Standardization and
related activities--General vocabulary.)
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On August 30, 2000, OSHA established a schedule of fees for several
of the services rendered to NRTLs; specifically, the application
processing and audit functions. In the Federal Register notice
announcing the fee schedule (65 FR 46797, July 31, 2000), OSHA found
that laboratories receive "special benefits" from the NRTL Program,
and that charging these laboratories was appropriate under the
Independent Offices Appropriations Act of 1952 (IOAA) (31 U.S.C. 9701),
OMB Circular A-25 "User Charges," and other legal authorities. 65 FR
46803. At 65 FR 46807, OSHA stated:
NRTLs accrue "special benefits" from the services that OSHA
renders to them. These "special benefits" are the product of
OSHA's initial and continuing evaluation of their qualifications to
test and certify products used in the workplace, e.g., the
acknowledgement of their capability as an NRTL. The primary special
benefits of NRTL recognition are the resulting business
opportunities to test and certify products for manufacturers, the
NRTL's clients. These opportunities may be in the form of new,
additional, or continuing revenue and clients. Once the NRTL has
properly certified a product, a manufacturer may then sell this
product to employers, enabling them to comply with product approval
requirements in OSHA standards.
Through that rulemaking, OSHA promulgated 29 CFR 1910.7(f).
Paragraph (f) states that each applicant for NRTL recognition and each
NRTL must pay fees for services provided by OSHA. 29 CFR 1910.7(f)(1).
Specifically, the Agency assesses fees for the following activities:
(1) Processing applications for initial recognition, expansion of
recognition, or renewal of recognition, including on-site reviews;
review and evaluation of the applications; and preparation of reports,
evaluations and Federal Register notices; and (2) audits. The rule also
sets forth that OSHA bases the fees, in part, on the staff costs per
hour of performing application processing and audit activities.
This final rule adjusts the approach that OSHA uses to calculate
the fees charged for the services it provides to NRTLs. OSHA makes this
adjustment because the prior fee schedule only allowed recovery of
about half of the allowable reimbursable costs of the NRTL Program.\2\
For example, the prior approach did not recover the costs of the
ancillary activities that are necessary to the program's functioning.
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\2\ In February 2007, OSHA issued a revision of its fee schedule
to account for increases in program costs (see 72 FR 7468). This
revision, however, did not alter OSHA's method for calculating fees.
OSHA based the increase in the February 2007 fees on cost of living
and time adjustments, but used the same calculation set forth in the
initial Federal Register notice published in July 2000. OSHA
previously updated the initial fees in January 2002 (see 67 FR
5299).
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III. Legal Considerations
This final rule adjusts the approach that the Agency uses to
calculate the fees it charges NRTLs for services performed to the
benefit of the NRTLs by including the costs for benefits shared by all
NRTLs. As described above, these costs include costs associated with
ancillary activities and leave. Although OSHA still does not charge
separate fees for the time spent on ancillary activities and leave, it
adjusted the rate charged for the fee-generating activities to account
for the portion of the program costs attributable to ancillary
activities and leave. This section describes the legal basis for OSHA
recouping these costs from the NRTLs.
A. Legal Authority for Charging Fees
1. Statutory Authority
In Title V of the IOAA, Congress set forth the objective of
collecting fees and charges for services and things of value provided
by an agency. As noted in this statute, "It is the sense of Congress
that each service or thing of value provided by an agency * * * to a
person * * * is to be self-sustaining to the extent possible." 31
U.S.C. 9701(a). Additionally, the Congressional Committee that drafted
the measure indicated, "The Committee is concerned that the Government
is not receiving full return from many of the services which it renders
to special beneficiaries." Nat'l Cable Television Ass'n v. U.S., 415
U.S. 336 (1974), quoting H.R. Rep. No. 82-384, at 2-3 (1951).
Accordingly, Congress enacted the statute to ensure that the specific
individuals and companies that receive benefits from agency programs,
not taxpayers at large, fund the programs.
In addition to establishing a source of funding, Congress also
provided general guidance to agency heads on the establishment of fees.
The fees are to be "fair" and based on the costs to the Government,
the value of the service or thing to the recipient, public policy or
interest served, and other relevant facts. See 31 U.S.C. 9701(b). The
1993 OMB Circular A-25 (discussed in greater detail below) embodies the
authority of the IOAA, and reflects interpretations from the related
case law decisions.
Since 1997, in OSHA's yearly appropriations, Congress specifically
authorized the Secretary of Labor to collect and retain fees charged to
sustain the NRTL Program, stating, "[T]he Secretary of Labor is
authorized * * * to collect and retain fees for services provided to
Nationally Recognized Testing Laboratories, and may utilize such sums *
* * to administer national and international laboratory recognition
programs that ensure the safety of equipment and products used by
workers in the workplace." See, e.g., Consolidated Appropriations Act
for FY 2000, Pub. L. 106-113 (113 Stat. 1501A-222) and Consolidated
Appropriations Act, 2009, Pub. L. 111-117 (123 Stat. 3034).
2. Case Law
The Supreme Court and the Courts of Appeals issued decisions
addressing the application of the IOAA and its interpretation by
Federal agencies. These cases provide guidance that provides specific
information regarding the fee schedules, and the methods of assessing
fees, that agencies may use. These decisions make clear that agencies
may recoup all of the Governmental costs associated with providing
private entities with specific benefits.
In 1974, the Supreme Court decided the companion cases of Nat'l
Cable Television Ass'n, 415 U.S. 336, and Fed. Power Comm'n v. New
England Power Co., 415 U.S. 345 (1974). In Nat'l Cable, the Court found
that an agency may charge a fee for services, but the agency should
base the fee on "value to the recipient." Nat'l Cable, 415 U.S. at
342-43. In New England Power Co., the Court held that, pursuant to the
IOAA and OMB Circular A-25, agencies can only recoup specific charges
for specific services to specific individuals or companies. Fed. Power
Comm'n, 415 U.S. at 349.
In Nat'l Cable Television Ass'n, Inc. v. FCC, 554 F.2d 1094 (DC
Cir. 1976), the Court of Appeals also made clear that the fees must be
for specific services. The court upheld charging both an application
fee and an annual fee provided that the agency, to prevent charging
twice for the same service, makes clear the activities covered by each
fee. Nat'l Cable Television Ass'n, 554 F.2d at 1105. Furthermore, the
court agreed that fees based on reasonable approximations of costs for
the services are acceptable: "It is sufficient for the Commission to
identify the specific items of direct or indirect cost incurred in
providing each service or benefit for which it seeks to assess a fee,
and then to divide that cost among the members of the recipient class *
* * in such a way as to assess each a fee which is roughly proportional
to the `value' which that member has thereby received." Nat'l Cable
Television Ass'n, 554 F.2d at 1105-1106.
In Elec. Indus. Ass'n v. FCC, 554 F.2d 1109 (DC Cir. 1976), the
Court of Appeals indicated that "expenses incurred to serve some
independent public interest cannot * * * be included in the cost basis
for a fee, although the Commission is not prohibited from charging an
applicant or grantee the full cost of services rendered * * * which
also result in some incidental public benefits." Elec. Indus. Ass'n,
554 F.2d at 1115. Moreover, the court held that the agency can only
include, in the cost basis of the fees, expenses incurred to confer
value upon the recipient. Id. Along similar lines, the same Court of
Appeals clarified in a companion case that "the proper standard is not
value derived by the recipient but rather value conferred on the
recipient. In our view, this standard requires the fee assessed to bear
a reasonable relationship to the cost of the services rendered to
identifiable recipients." Capital Cities Communications, Inc. v. FCC,
554 F.2d 1135, 1138 (DC Cir. 1976).
Lastly, in Miss. Power and Light v. U.S. Nuclear Regulatory Comm'n,
601 F.2d 223 (5th Cir. 1979), the 5th Circuit Court of Appeals upheld
the Nuclear Regulatory Commission's (NRC) fee schedule methodology
because the NRC did not seek to recover the entire cost of regulating.
The NRC charged a fee based only on the costs of providing a specific
benefit to identifiable private parties. Miss. Power and Light, 601
F.2d at 230.
3. OMB Circular No. A-25
OMB issued Circular No. A-25, pursuant to the IOAA, to establish
"Federal policy regarding fees assessed for Government services and
for sale or use of Government goods or resources. * * * [I]t provides
guidance for agency implementation of charges and the disposition of
collections." User Charges, Circular No. A-25, OMB (July 8, 1993). In
section 6 of the Circular, OMB directs agencies to assess user charges
"against each identifiable recipient for special benefits derived from
Federal activities beyond those received by the general public."
Furthermore, user charges "will be sufficient to recover the full cost
to the Federal Government * * * of providing the service, resource, or
good when the Government is acting in its capacity as sovereign."
Finally, the Circular defines full cost to include "all direct and
indirect costs to any part of the Federal Government of providing a
good, resource, or service." Examples of such costs include personnel
costs (including salaries and fringe benefits), physical overhead,
management and supervisory costs, and costs of enforcement and
research. Circular No. A-25, OMB 6(d)(1)(a)-(e).
The legal authorities described above establish several
considerations for determining how an agency can assess fees for
services rendered: (1) The agency must base the fees on special
benefits derived from Federal activities beyond those benefits received
by the general public; (2) the agency must confer the benefits on
identifiable recipients; and (3) the fees must bear a reasonable
relationship to the cost of the services rendered. In addition, the OMB
circular makes clear that agencies can recoup indirect costs of
services rendered to special beneficiaries, and that agencies should
endeavor to make agency programs self-sustaining to the extent that the
programs provide special benefits to identifiable recipients. Assessing
NRTL fees that recover the cost of ancillary activities and leave
satisfies these considerations, which we further discuss below.
B. Explanation for Charging Fees for Ancillary Activities
1. The Agency Must Base Fees on the Costs To Confer Special Benefits
Derived From Federal Activities Beyond Those Benefits Received by the
General Public
OSHA based the implemented fee structure on the costs of providing
services that confer special benefits. As noted earlier, NRTLs and NRTL
applicants accrue special benefits from the services that OSHA renders
for the fees. These special benefits are the product of OSHA's initial
and continuing evaluation of an organization's qualifications to test
and certify products used in the workplace. Primarily, these special
benefits are the business opportunities that result from OSHA
recognition of these organizations as NRTLs, which allows
them to offer their testing and certification services to manufacturers
of products that require NRTL testing and certification when used in
the workplace. These opportunities are "special benefits derived from
Federal activities beyond those received by the general public," as
described in OMB Circular A-25.
Ancillary activities performed by OSHA under the NRTL Program
result in identifiable costs from the provision of those specific
services and benefits to NRTLs. Examples of ancillary activities
include administration of the program, budgetary, and policy matters;
training OSHA personnel to perform program activities; interagency and
international coordination; responses to requests for information
related to the program; handling complaints; Web site development and
maintenance; and participation in meetings with stakeholders and
outside interest groups.
OSHA must recover the costs of these activities because it incurs
such costs solely for the administration of the NRTL Program, from
which NRTLs derive special benefits. The absence of these necessary
activities would severely reduce, if not eliminate, many of the
benefits that NRTLs derive from OSHA recognition. Two examples
illustrate this point. First, through application processing and
audits, OSHA determines which organizations qualify as NRTLs and which
products each NRTL can approve under the NRTL Program. By maintaining a
Web site, OSHA shares this information with the public. This activity
benefits NRTLs by making current and potential clients, as well as
employers, aware that OSHA qualified the NRTLs to approve those
products.
Second, complaint handling is a valuable activity that OSHA relies
upon, especially between audits, to learn of inappropriate or
questionable activities by an NRTL. If, for example, OSHA receives a
complaint that an NRTL is testing equipment made for use in extremely
hazardous environments, but OSHA does not recognize the NRTL to perform
this testing, OSHA would investigate the complaint to determine whether
the testing jeopardizes the safety of the equipment. If so, OSHA could
take steps to prevent accidents from occurring as a result of using
this equipment. Through complaint handling, OSHA reinforces the NRTL
Program's effectiveness, which maintains confidence in the program,
and, thus, assures the benefits derived by NRTLs from participation in
the program.
2. Benefits Are Conferred on Identifiable Recipients
As with the prior schedules, OSHA is assessing fees to identifiable
recipients of the NRTL Program benefits. The ancillary activities
result in benefits shared among all NRTLs, in contrast to the benefits
of the core application and auditing services, which are more easily
attributed to individual NRTLs than ancillary activities. To share the
costs of these benefits equitably, while still ensuring that the fees
charged are specific with regard to the services provided to individual
NRTLs, OSHA is apportioning the costs of the shared benefits in
accordance with the time OSHA spends on core services rendered to each
NRTL. This approach recognizes that an individual NRTL's portion of the
shared benefits relates directly to the core benefits it receives. OSHA
is, therefore, retaining its fee structure of charging the NRTLs fees
involving core actions directed at, or initiated by, an NRTL, while
adjusting the rate used to compute the fee to recoup a greater portion
of the actual program costs than is the case currently.
OSHA will charge an NRTL a fee when the NRTL applies, for example,
for an expansion of its recognition by OSHA. In this situation, the
NRTL is asking OSHA to review its application for expansion so that the
NRTL can increase its scope of recognition. The fee that OSHA would
charge in this instance is related directly to the NRTL seeking the
expansion. The converse is also true: If in any year an NRTL does not
apply to expand its recognition, OSHA will not charge the NRTL an
expansion-application fee. Thus, the new fee schedule would reimburse
OSHA for ancillary activities, but would do so by charging specific
NRTLs only when these NRTLs receive the core services of the program.
3. The Fees Charged Bear a Reasonable Relationship to the Costs of the
Program
OSHA is basing much of the fee schedule on the average documented
cost of specific activities performed to benefit the NRTLs. Through the
revised fee schedule issued by this rule, OSHA will recover a large
percentage of the costs of the NRTL Program. To ensure that it does not
overcharge, OSHA structured this revised fee schedule to capture
approximately 95% of the costs of the NRTL Program.
4. OSHA Is Fully Complying With the IOAA and OMB Circular A-25
Finally, by including the costs of ancillary activities in the
fees, OSHA now is fully compliant with the IOAA and OMB Circular A-25,
both of which require agency programs to be self-sustaining to the
extent that the programs confer special benefits on identifiable
recipients. In fact, until implementation of a revised fee schedule in
February 2007, that allowed recovery of approximately 50% of program
costs, OSHA was recovering only about 30% of the costs of the NRTL
Program; taxpayers were funding the remaining 70% through OSHA's annual
appropriations. This arrangement does not comport with the IOAA and OMB
Circular A-25, and OSHA is correcting this deficiency through this
final rule.
In summary, including the cost of ancillary activities in the fees
comports with the legal framework described in the preceding section.
That is, OSHA based the fees on special benefits to NRTLs, assessed to
identifiable beneficiaries of the NRTL Program, and reasonably related
to OSHA's costs of providing the services to the NRTLs.
OSHA recognizes that its new approach differs from the position it
took in the 2000 rulemaking implementing the initial fee structure. In
that rulemaking, OSHA stated that it would not seek to recover costs
for some ancillary activities such as Web site development and training
compliance officers on the NRTL Program. See, e.g., 65 FR 46802. At the
time of that rulemaking, however, OSHA believed those activities would
use only a small portion of the NRTL Program's resources. Recent
workload reviews show that these activities have become a large part of
the program, and now are critical in supporting the NRTL Program's core
functions. It is, therefore, appropriate for OSHA to include these
costs in the revised fees.
Because work on ancillary activities grew so much faster than
program resources over the last several years, OSHA has less time
available for application processing and audits than was the case in
2000. Moreover, because existing fees only recoup the cost of time
spent on core services, OSHA is recovering a dwindling percentage of
the NRTL Program costs. For OSHA to meet, on a timely basis, the needs
of the NRTLs in application processing and auditing, while recovering
its costs for providing those services, is a significant challenge.
Through this final rule, OSHA will fund the resources to improve its
effectiveness in rendering these core services.
C. Explanation for Assessing Costs for Leave
Although the prior fee structure accounted for some personnel costs
for core NRTL activities, it did not account for all personnel costs;
therefore, it did not account for the total time spent on core activities.
As Federal employees, Department of Labor employees, including OSHA
employees, earn leave as part of their regular compensation.
However, the prior fee structure failed to account for leave earned by
OSHA employees, even though that leave is part of the personnel costs
of rendering NRTL services.\3\ In this respect, the prior fee structure
was not compliant with OMB Circular A-25 and the other legal authorities
described above. Thus, in this revised fee structure, OSHA is adjusting
the personnel costs to include leave earned by all Federal employees performing
services in support of the NRTL Program.
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\3\ A small portion of NRTL fees covers the costs of legal
services performed by attorneys in the Office of the Solicitor of
Labor. OSHA included leave costs in that portion of the fees.
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D. Explanation for Advance Collection of the Fees
Previously, OSHA required that NRTLs and applicants pay an
application review fee when submitting an application, and, for initial
applications, prepay the fee for an on-site assessment. OSHA generally
billed the remainder of the fees to the NRTLs or applicants after it
rendered the services. When OSHA adopted this billing system in the
2000 final rule, it expected the system to "reduce collection activity
of the Agency, since only one bill would need to be sent to the NRTL
for an audit, rather than the two contemplated under the NPRM." 65 FR
46802 (July 31, 2000). It, therefore, predicted a "minimal financial
burden" to the Agency by delaying collection. Id.
However, in recent years this post-collection system resulted in
problems, including the loss of some funds. For example, to ensure that
the Agency retained all fees that were due for audits conducted during
a fiscal year, OSHA requested that NRTLs pay fees in advance for any
audits that it conducted in the last two months of the Federal
Government fiscal year. OSHA requested advance payment because, to
comply with Federal mandates, it could not retain any fees received
after the end of a fiscal year, but would have to forfeit them to a
general Federal Government fund. The current fee-collection system also
made it difficult to ensure that the Agency complied with OMB Circular
A-25. In addition to providing guidance regarding the collection and
retention of user fees, OMB Circular A-25 generally requires agencies
to collect user fees in advance. See OMB Circular A-25, Section
6.a.2.(c) ("User charges will be collected in advance of, or
simultaneously with, the rendering of services unless appropriations
and authority are provided in advance to allow reimbursable
services."); see also OMB Circular A-11, "Preparation, Submission,
And Execution Of The Budget" (June 2008), section 20.13.\4\
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\4\ Section 20.13(a) is a description of revolving funds that
requires that, in the absence of a revolving fund, "advance
payments must accompany orders." Section 20.13(b) specifies that
agencies may use one of two methods to cover obligations by
expenditure accounts, either using "advances collected up to the
amount of accompanying orders" or "[w]orking capital that is
available for this purpose."
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Therefore, while the current program directly benefits NRTLs, OSHA
must advance funds to cover the program costs until the NRTLs or
applicants reimburse OSHA for its program activities. Given the
competing demands on the appropriations from which OSHA draws these
funds, continued use of these general operating funds to pre-fund the
NRTL Program could adversely impact OSHA's ability to perform other
operational functions.
In summary, OSHA will now bill in advance for audits and other fees
to ensure compliance with OMB guidance, and to reduce any financial
impact on OSHA's other functions caused by advancing funds to the NRTL
Program. OSHA will estimate and collect travel costs and other expenses
in advance, and will adjust any difference between actual costs and
estimated costs after completion of the audit or other activity.
IV. Explanation of the Revised Approach for Calculating Fees
Through this final rule, OSHA will continue to calculate the fee
for each of the service activities listed in the fee schedule by
multiplying an equivalent average cost per hour rate (ECR) by the time
it takes to perform that activity: Fee for Activity = ECR x Time for
Activity.
In the July 31, 2000, Federal Register notice, OSHA explained that
it derived the initial fee schedule's ECR by dividing the total
estimated direct and indirect costs of the program, excluding travel,
(TPC),\5\ by the total available annual work hours of the NRTL Program
and legal staff that perform the services (TAW).\6\ Although OSHA did
not illustrate the derivation of the ECR as an equation in the 2000
notice, it does so here for clarification, and refers to it as ECR2000
(to contrast it with the equation for ECR2009, which we explain later
in this notice); accordingly, ECR2000 = TPC2000/TAW2000.\7\ As
discussed above, the approach used in 2000 resulted in fees that
recouped the costs only of the time spent actually performing
individualized audits and application processing, which is only a
portion of TAW, and did not recoup the costs of the time associated
with running the program and providing other benefits shared among all
NRTLs.
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\5\ The TPC includes personnel costs for the NRTL Program and
legal staff (including support and management staff), equipment,
contract, and other costs necessary for the operation of the
program. The ECR does not include travel expenses because OSHA
charges for the actual staff travel expenses for an on-site visit
after the auditor completes the visit.
\6\ In discussing total hours in this notice, we often refer to
"FTEs," which stands for "full-time equivalents." For purposes
of this notice, FTEs equals total work hours divided by 2,080, the
total available annual work hours (TAW) for one full-time Federal
employee (i.e., 1 FTE = 2,080 work hours).
\7\ We use the TPC abbreviation in discussing our calculations
in this final rule, but the total amount shown in the July 2000
notice (i.e., TPC2000) will differ from the total shown in this
final rule (i.e., TPC2009) because of changes in the total costs of
the program.
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To account properly for the costs associated with these shared
benefits, OSHA proposed and requested comment on the following
calculation for the new ECR (ECR2009): Dividing the new estimated total
cost of the NRTL Program (TPC2009) by the total annual service hours
(TAS2009). This latter term is a new figure that equals the total
estimated work hours that the NRTL Program staff spend on the core
service activities for which OSHA will bill NRTLs; accordingly, ECR2009
= TPC2009/TAS2009. By way of comparison with the prior fee schedules,
TAS equals TAW minus estimated hours spent on ancillary activities (AH)
and leave (LH) (i.e., TAS = TAW-AH-LH). By continuing to include the
full program costs in the numerator (TPC2009), but including in the
denominator (TAS2009) only the amount of time spent on providing
"billable" core services, the revised ECR more accurately represents
the total work hours spent on those core activities than the current
2000 equation; OSHA bills these hours to the NRTLs. The Agency did not
receive any comments on this new calculation methodology, and is
including it in the final rule as proposed.
OSHA could achieve the same result by charging each NRTL separately
for its share of the program resources used to produce the shared
benefits. OSHA did not use this method primarily because it would be
impractical to calculate and track these shared costs separately for
each NRTL, and to attribute the costs appropriately to individual NRTLs
through separate fees. As explained above, the new fee approach adopted
in this final rule, in which OSHA charges NRTLs only for core services,
provides a more straightforward and manageable method, in comparison to the
previous approach, of ensuring that OSHA recoups only "specific
charges for specific services to specific individuals or companies."
Fed. Power Comm'n, 415 U.S. at 349. In addition to this methodological
change, the revised fee schedule presented in this notice also includes
updated calculations of the total resources committed to the NRTL
Program (TPC2009), and of the average time spent on some of the service
activities for which OSHA charges fees.
OSHA estimated that TAS2009 = 3.5075 FTEs (7295.6 work hours),
which is 50.11% of total available annual work hours (TAW2009), 7.0
FTE.\8\ Using the TPC2009 of $1,079,090, shown in Table 1 below, the
new rate is: ECR2009 = $1,079,090/7295.6 hours = $147.90.
---------------------------------------------------------------------------
\8\ TAW2009 equals 7.0 FTE (i.e., 7.0 FTE currently working on
OSHA's NRTL Program); AH2009 equals 2.6675 FTE; and LH2009 equals
0.825 FTE. As a result, TAS2009 equals 7.0 minus 2.6675 minus 0.825,
which is equal to 3.5075 FTE. Note: We also can derive the ECR2009
from the ECR2007 ($63.80) using a factor that takes into account the
effects due to leave and ancillary activities, and the use of TAS
instead of TAW. We do not illustrate this derivation here since the
calculation is more involved than, and gives the same result as, the
simple equation above.
---------------------------------------------------------------------------
Table 1 below shows a summary of program costs and value of revised
ECR2009, which OSHA uses later to generate the revised fee schedule in
section VI below.
Table 1--NRTL Program Annual Cost Estimates--New ECR2009 Calculation
------------------------------------------------------------------------
Description Costs
------------------------------------------------------------------------
Direct expenses......................................... $512,342
Indirect expenses *..................................... 566,748
Total program costs (excluding travel) (aka "TPC2009 1,079,090
")....................................................
Travel expenses......................................... 72,600
Overall program costs (includes travel) **.............. 1,151,690
TAS2009 (3.5075 FTE x 2,080 work hours per FTE)......... 7,295.6
ECR2009 = TPC2009/TAS2009............................... 147.90
------------------------------------------------------------------------
* This amount consists of $441,408 for management, ancillary, and
support costs; and $125,340 for equipment and other costs. Note: OSHA
incurs most of these costs, but the costs also include applicable
costs of a division of the Department of Labor's Office of the
Solicitor.
** OSHA estimates the amount of fee collections to be approximately
95.2% of this total, or $1,096,000.
Finally, as mentioned above, the total cost of administering the NRTL
Program increased since the last revision to the fee schedule published
on February 15, 2007. This cost increase is due to two main reasons: an
increase to account for additional program-staff resources, and the
annual salary adjustments for Federal employees. Because of the
increase to the TPC, and the revised approach for calculating ECR2009
described in this notice, OSHA's base rate (ECR) is increasing almost
132%, from $63.80 (in effect since February 15, 2007) to $147.90 shown
above. OSHA estimates that this rate would result in total annual
collections of $1,096,000 beginning three years after this rule's
effective date, provided OSHA's NRTL Program costs remain unchanged. In
fact, due to the three-year phase-in period, the rate and estimated
total annual collections will increase the first year to about $91.80
and $690,000, respectively. Without a change in the fee schedule, but
with the increase in staffing requirements for the NRTL Program, the
first year's rate and estimated total annual collections would increase
to $73.72 and $583,000, respectively. If the program's costs remain
unchanged in the second year of the phase-in period, the rate and total
annual collections resulting from to the new approach would be about
$119.90 and $880,000, respectively.
For existing NRTLs and applicants that submit applications prior to
the effective date of this final rule, OSHA will phase in, over three
years, any fee increase that is greater than $200: a 33% increase for
the first year's fees; a similar increase for the second year's fees;
and the remaining increase in the third year. OSHA uses this $200
threshold because it limits the number of fees that would otherwise
increase 100% for the first year; OSHA will phase in the increase for
the remaining fees, thus reducing the financial impact the increase may
have on any existing NRTL or applicant. As evident from the comparison
of fees shown in VIII of this notice, this approach affects only three
fees, which will increase by a combined total of $510. The $200
threshold and the three-year phase-in period will balance the need for
a period of adjustment for some existing NRTLs against OSHA's
responsibility to recoup the full costs of the NRTL Program as soon as
possible. Although OSHA requested comments on these approaches and
suggested alternatives, it received no comments.
The entire increase is effective immediately for any organization
that submits an application to become a new NRTL if OSHA receives the
application on or after the effective date of this final rule. OSHA is
taking this approach because, unlike currently recognized NRTLs and
pending applicants, new applicants are free to choose whether or not to
participate in the NRTL Program.
V. Basis and Derivation of Fee Amounts
Tables 2, 3, 4, and 5, below, present the costs of the major
activities for the various fee categories. In general, OSHA calculated
the cost of these activities by multiplying the staff \9\ activity time
by ECR, and adding any applicable average travel costs. However,
because OSHA charges for actual travel, only non-travel costs serve as
the basis for the fees shown later in Tables A and B. In deriving the
fee amounts shown in the fee schedule (Table A or B), OSHA generally
rounded the costs shown in Tables 2, 3, 4, and 5, up or down, to the
nearest $5 or $10 amount.
---------------------------------------------------------------------------
\9\ The term "staff" encompasses Federal employees, as well as
any contract employees retained by OSHA for work on the NRTL
Program.
Table 2--Initial Application Cost Estimates
------------------------------------------------------------------------
Average Average
Major activity Type of cost hours cost *
------------------------------------------------------------------------
Initial application review.... Office and field 120 $17,749
staff time.
Additional review time........ Office staff...... 16 2,367
Limited review time........... Office staff...... 24 3,550
On-site assessment--first day Field staff time 30 4,437
(per site, per assessor). (16 hours
preparation, 6
hours to process
travel documents,
and 8 hours at
site).
Field staff travel NA 800
expense ($700
airfare/other +
$100 per diem).
-----------------------------------------
Total for on-site assessment-- 5,237
first day
------------------------------------------------------------------------
On-site assessment--each Field staff time 8 1,183
additional day ** (per site, (at site).
per assessor).
Field staff travel NA 100
expense (per diem
only).
-----------------------------------------
Total for on-site assessment-- 1,283
each additional day
------------------------------------------------------------------------
On-site assessment travel Field staff....... 8 1,183
time--per day (per site, per
assessor).
Review and evaluation (10 test Office staff time. 2 296
standards).
Final report and Federal Field and office 132 19,524
Register notice. staff time.
Fees invoice processing....... Office staff time. 2 296
------------------------------------------------------------------------
*Average cost for staff time = average hours x equivalent average
direct staff cost/hr. ($147.90).
**Note: 2 additional days estimated for 2 assessors, and 4
additional days estimated for 1 assessor.
See notes to Table A below for more information concerning the
activities listed in this table.
Table 3--Expansion Application (Additional Site) Cost Estimates
------------------------------------------------------------------------
Average Average
Major activity Type of cost hours cost *
------------------------------------------------------------------------
Application review (expansion Office and field 56 $8,283
for site). staff time.
Additional review time........ Office staff...... 8 1,183
On-site assessment--first day Field staff time 40 5,916
(per site, per assessor). (12 hours
preparation, 4
hours to process
travel documents,
and 8 hours at
site).
Field staff travel NA 800
time expense
($700 airfare/
other + $100 per
diem).
-----------------------------------------
Total for on-site assessment-- 6,716
first day
------------------------------------------------------------------------
On-site assessment--additional Field staff time 8 1,183
day ** (per site, per (at site).
assessor).
Field staff travel NA 100
expense (per diem
only).
-----------------------------------------
Total for on-site assessment-- 1,283
each additional day
------------------------------------------------------------------------
On-site assessment travel Field staff....... 8 1,183
time--per day (per site, per
assessor).
Review and evaluation fee (10 Office staff time. 2 296
test standards).
Final report and Federal Field and office 50 7,396
Register notice. staff time.
Fees invoice processing....... Office staff time. 2 296
------------------------------------------------------------------------
*Average cost for staff time = average hours x equivalent average
direct staff cost/hr. ($147.90).
**Note: 2 additional days estimated for 1 assessor.
See notes to Table A below for more information concerning the
activities listed in this table.
Table 4--Renewal or Expansion (Other Than Additional Site) Application
Cost Estimates
------------------------------------------------------------------------
Average Average
Major activity Type of cost hours cost *
------------------------------------------------------------------------
Application review (renewal or Office and field 2 296
expansion other than staff time.
additional site).
Additional review time........ Office staff...... 8 1,183
Renewal application-- Office staff...... 40 5,916
information review.
On-site assessment--first day Field staff time 20 2,958
(expansion) (per site, per (8 hours
assessor). preparation, 4
hours to process
travel documents,
and 8 hours at
site).
Field staff travel NA 800
expense ($700
airfare/other +
$100 per diem).
-----------------------------------------
Total for on-site assessment-- 3,758
first day (expansion)
------------------------------------------------------------------------
On-site assessment--first day Field staff time 28 4,141
(renewal) (per site, per (16 hours
assessor). preparation, 4
hours to process
travel documents,
and 8 hours at
site).
Field staff travel NA 800
expense ($700
airfare/other +
$100 per diem).
-----------------------------------------
Total for on-site assessment-- 4,941
first day (renewal)
------------------------------------------------------------------------
On-site assessment--additional Field staff time 8 1,183
day ** (per site, per (at site).
assessor).
Field staff travel NA 100
expense (covers
per diem only).
-----------------------------------------
Total for on-site assessment-- 1,283
each additional day
------------------------------------------------------------------------
On-site assessment travel Field staff....... 8 1,183
time--per day (per site, per
assessor).
Review and evaluation fee (10 Office staff time. 2 296
test standards) (expansion).
Final report and Federal Office and field 50 7,396
Register notice (with on-site staff time.
assessment).
Final report and Federal Office and field 30 4,437
Register notice (no on-site staff time.
assessment).
Supplemental program review... Office and field 4 592
staff time (per
program
requested,
including
consultation and
assessor's memo).
Fees invoice processing....... Office staff time. 2 296
------------------------------------------------------------------------
*Average cost for staff time = average hours x equivalent average
direct staff cost/hr. ($147.90).
**Note: 2 additional days estimated for renewal assessment; no
additional days for expansion assessment.
See notes to Table A below for more information concerning the
activities listed in this table.
Table 5--On-Site or Office Audit Cost Estimates
------------------------------------------------------------------------
Average Average
Major activity Type of cost hours cost\*\
------------------------------------------------------------------------
On-site audit--first day Field staff time 24 $3,550
(per site, per auditor) **. (12 hours pre-
site review
preparation, 4
hours to
process travel
documents, and
8 hours at
site).
Prepare report/ 26 3,846
contact NRTL
plus office
review staff
time (3 days
for field staff
and 2 hours for
office staff).
-------------------------------------------
Subtotal (first day--regular 7,396
audit)
------------------------------------------------------------------------
Field staff NA 800
travel expense
(700 airfare/
other + 100 per
diem).
-------------------------------------------
Total for on-site audit-- 8,196
first day (regular audit)
------------------------------------------------------------------------
On-site audit--first day Prepare report 6 887
(per site, per auditor)\**\ plus office
(no non con form ances or review staff
observations requiring a time (4 hours
response). for field staff
and 2 hours for
office staff).
-------------------------------------------
Total for on-site audit 5,237
(first day--audit with no
nonconformances)\****\
------------------------------------------------------------------------
On-site audit--additional Field staff time 8 1,183
day\***\ (per site, per (at site).
auditor).
Travel expense NA 100
(covers per
diem only).
-------------------------------------------
Total for on-site audit--each 1,283
additional day
------------------------------------------------------------------------
On-site audit travel time-- Field staff..... 8 1,183
per day (per site, per
auditor); also review of
revised audit response--per
on-site or office audit.
Office audit--per day (per Field staff..... 8 1,183
site, per auditor); no
nonconformances or
observations requiring a
response.
Office audit--per day (per Field staff..... 16 2,367
site, per auditor); with
nonconformances.
Fees invoice processing..... Office staff 2 296
time.
------------------------------------------------------------------------
* Average cost for staff time = average hours x equivalent average
direct staff cost/hr. ($147.90).
** OSHA charges this first-day fee only once if it audits multiple sites
of the NRTL during one trip.
*** Note: One additional day is estimated for one auditor.
**** The 3,550 Field staff time and $800 Field staff travel expense are
identical to those for the regular audit.
See notes to Table A below for more information concerning the
activities listed in this table.
VI. Revised Fee Schedules
A. First Phase Fee Schedule for Existing NRTLs and Pending Applicants
OSHA is implementing the revised fee schedules shown below in
Tables A and B. All existing NRTLs and any initial applicant (i.e., an
entity not presently approved by OSHA as an NRTL) having a pending
application (i.e., received by OSHA before the effective date of this
rule), must pay the fees set forth in Table A during the first year of
the three-year phase-in period. OSHA will publish the revised fee
schedule for the second year at a later date, as explained below. In
this final rule, OSHA revised the audit fees as explained above, and
modified the fee schedule in Table A of the proposal slightly to
clarify that initial NRTL applicants having
applications received by OSHA on or after the effective date of this
rule must pay the fees in Table B, not Table A. The Agency eliminated
the initial-application review fee in Table A, and added a reference to
footnote 7 of the table to explain the fee amount that OSHA charges to
pending applicants (i.e., those applicants having applications received
before the effective date of this rule) that substantially modify their
applications after the effective date of the rule.
The fees in Table A are the fees for the first phase of OSHA's fee
increase, which are applicable to existing NRTLs and pending
applicants. As explained above, for existing NRTLs and pending
applicants, OSHA is phasing in over a period of three years any fee
increase that is greater than 200: 33% of the increased fees specified
in this final rule on the effective date of the rule; another 33%
increase in the second year; and the final 34% increase in the third
year. OSHA will adjust the percentage increase when it performs its
periodic review of the fees during the next two years; it will base the
adjustment on any increase or decrease in fees calculated for each of
those years. During this review, OSHA will determine the amount of time
it actually charged for application processing and audits, and the
actual indirect travel OSHA performed, and adjust the amount in the fee
schedule by the amount over- or underestimated. OSHA then will publish
the second-year fee schedule in the Federal Register.
Table A--Nationally Recognized Testing Laboratory Program Fee Schedule for Existing NRTLS and Applicants When
OSHA Receives the Application Before March 28, 2011
----------------------------------------------------------------------------------------------------------------
Activity or category (fee
Type of service charged per application Fee amount
unless noted otherwise)
----------------------------------------------------------------------------------------------------------------
APPLICATION PROCESSING............... Initial application review 1 See note 7.
8 (this fee is applicable
only as described in note 7
to this table).
Expansion-application review $3,420.
(per additional site) 1 8.
Renewal or expansion (other) $300.
application review \1\.
Renewal information review $1,470.
fee \7\.
Additional review--initial $2,370.
application (if the
application requires
substantial revision, submit
one-half of initial-
application review fee) \7\.
Additional review--renewal or $730.
expansion application \7\.
Limited review--initial $1,170.
application \7\.
Assessment--initial $2,740 + travel expenses.
application (per person, per
site--first day) 2 10.
Assessment--renewal $2,570 + travel expenses.
application (per person, per
site--first day) 3 10.
Assessment--expansion $2,200 + travel expenses.
application (additional
site) (per person, per site--
first day) \3\.
Assessment--expansion $1,830 + travel expenses.
application (other) (per
person, per site--first day)
\3\.
Assessment--each additional $730 + travel expenses.
day or each day on travel
(per person, per site) 2 3.
Review and evaluation \5\ $30 per standard OR $296 per standard.
($30 per standard if already
recognized for NRTLs and
requires minimal review;
otherwise, $296 per
standard).
Final report and Federal $12,080.
Register notice--initial
application 5 9.
Final report and Federal $4,580.
Register notice--renewal or
expansion application (if
OSHA performs on-site
assessment) 5 9.
Final report and Federal $2,740.
Register notice--renewal or
expansion application (if
OSHA performs no on-site
assessment) 5 9.
AUDITS............................... On-site audit (per person, $4,240 + travel expenses.
per site, first day) \6\
($3,260--no nonconformances).
On-site audit--each $730 + travel expenses.
additional day (on-site or
on travel).
(per person, per site); or
review of revised audit
response--per on-site or
office audit \6\.
Office audit (per person, per $730 or $1,120.
site, per day) \6\--$730 if
no nonconformances, $1,120
if nonconformances found.
MISCELLANEOUS........................ Supplemental travel (per $1,000.
site--for sites located
outside the 48 contiguous
U.S. states or the District
of Columbia) \4\.
Supplemental program review $270.
(per program requested) \4\.
Fees invoice processing (per $300.
application or audit) \4\.
Travel document processing (4 $270.
hours, per application or
audit) \4\.
Late payment \11\............ $150.
Compensatory time for travel $56.40.
(per hour) \10\.
----------------------------------------------------------------------------------------------------------------
Notes to Table A ("Nationally Recognized Testing Laboratory Program Fee Schedule"):
1. Must I pay the application-review fees, and when must I pay these fees?
If you are applying for initial recognition as an NRTL, and OSHA receives your application on or after the
effective date of this fee schedule, you must pay the initial-application review fee in Table B when you
submit your initial application. Pay this fee as two payments: one equaling the limited-review fee amount, and
the remainder of the fee as a second payment. (See note 7 to this fee schedule if you submit your initial
application before this schedule's effective date.) If you are an NRTL and applying for an expansion or
renewal of recognition, you must pay the expansion-application review fee or renewal-application review fee,
as appropriate, and submit this fee concurrently with your expansion or renewal application. See note 7 if you
amend or revise your initial or expansion application.
2. What assessment fees do I pay for an initial application, and when must I pay these fees?
If you are applying for initial recognition as an NRTL, and we accept your application, we bill you for the
assessment fee and you must pay it before we perform the assessment. We base the prepaid assessment fee on
estimated staff time and travel costs. After completing the actual assessment, we calculate the assessment fee
based on the actual staff time and travel costs incurred in performing the assessment. The fee for staff time
equals the first-day assessment fee for an initial application, plus the assessment fee for each additional at
the site or on travel. (Note: Days charged for being in travel status are those allowed under government
travel rules. This note applies to any assessment or audit.) We determine actual travel expenses based on
government per diem and other travel rules. We bill or refund the difference between the amount you prepaid
and the actual assessment fee. We reflect this difference in the final bill that we send to you for the
application.
3. What assessment fees do I submit for an expansion or renewal application, and when must I pay these fees?
If you are an NRTL and applying solely for an expansion or renewal of recognition, you do not submit any
assessment fee with your application. If we need to perform an assessment for the expansion or renewal
request, we bill you for this fee and you must pay it before we perform the assessment. We will base the
prepaid fee on estimated staff time and travel costs. Following the assessment, we will calculate the fee
based on the actual staff time and travel costs we incurred in performing the assessment. The fee for staff
time equals the first-day assessment fee for the particular type of application, plus the assessment fee for
each additional at the site or on travel. We determine actual travel expenses based on government per diem and
other travel rules. OSHA charges the NRTL the first-day fee only once if OSHA audits multiple sites of the
NRTL during one trip. We bill or refund the difference between the prepaid amount and the amount of the final
invoice that we send to you for the application.
4. When do I pay the supplemental travel, the supplemental program review, the fees invoice processing fees, or
the travel document processing fee?
You must pay the supplemental travel fee when you submit an initial application for recognition and the site you
identified for recognition is outside the 48 contiguous U.S. states or the District of Columbia. The current
supplemental travel fee is $1,000. We factor in this prepayment when we bill for the actual costs of the
assessment, as described in note 2 to Table A above. See note 8 for possible refund of application or
assessment fees. You must pay the supplemental program-review fee when you apply for approval to use other
qualified parties or facilities to perform specific activities. See Chapter 2 of the NRTL Program Directive
for more information regarding supplemental programs. We will include the invoice-processing fee in the total
for each of our invoices to you. You must pay the travel document processing fee in advance to cover the costs
of arranging and obtaining reimbursement for travel, which we generally include in the first-day fee for
assessments and audits. We charge this fee for additional sites of the NRTL visited during one trip. We also
charge this fee separately for trips to a location when the preparation time for the trip is minimal; for
example, trips to a site that the NRTL qualified to perform specific or limited testing or certification
activities for the NRTL.
5. When do I pay the review and evaluation, and the final report and Federal Register notice, fees?
An applicant or an NRTL also must pay these fees in advance of OSHA performing the assessment for the
application. We calculate the review and evaluation fee at the rate of $30 per test standard requested for
those standards that OSHA previously recognized for any NRTL and that require minimal review or do not
represent a new area of testing for the NRTL. Otherwise, this fee is $296 per standard requested.
6. When do I pay the audit fee?
Each NRTL must pay this fee (on-site or office, as deemed necessary) in advance of OSHA commencing the audit,
and we calculate this prepaid fee based on estimated staff time and travel costs. Following the audit, we will
calculate the fee based on actual staff time and travel costs incurred in performing the audit. We charge the
first-day audit fee at the rate of $4,240 for the first day at the site if the audit finds nonconformances or
observations requiring a response. If the audit finds none, OSHA will credit the NRTL's account to reduce the
fee to $3,260. In addition, we charge $730 for each additional day at the site, and $730 for each day in
travel, plus actual travel expenses for each auditor. We also charge at the rate of $730 per day to review the
NRTL's revised or supplemental response when its original response did not adequately resolve all the
nonconformances documented in OSHA's audit report. OSHA charges the NRTL the first-day fee only once if OSHA
audits multiple sites of the NRTL during one trip. However, see note 4 above. We determine actual travel
expenses based on government per diem and other travel rules. We may add any underpayment(s) or credit any
overpayments to the invoice for a future audit of the NRTL's site. For an office audit, we charge $730, per
site, per person, per day, if the audit finds no nonconformances, and $1,120, if we find nonconformances or
observations requiring a response. When the NRTL's response does not adequately resolve the nonconformances,
the $730 per-day fee also applies to review the NRTL's revised or supplemental response.
7. When do I pay the additional review fee, renewal information review fee, or limited review fee?
The additional review fee covers the staff time required to review new or modified information submitted after
we completed our preliminary review of an application. There is no charge for review of a "minor" revision,
which entails modifying or supplementing less than approximately 10% of the documentation in the application.
You must pay the additional review fee when submitting revisions modifying or supplementing from 10% to 50% of
the documentation. For a new application, the fee represents 16 hours of additional review time, and for a
renewal or expansion application, the fee represents 8 hours of additional review time. If you exceed that 50%
threshold when submitting revised documentation for your application (i.e., you substantially revise your
application), you must pay half of the initial-application review fee ($4,635, if a pending applicant; $8,875
if a new applicant), the expansion-application review fee for adding a site, or the renewal- or expansion
(other)-application fee, as applicable. If this latter fee applies, you also must pay review and evaluation
fee ($296) for each test standard affected by the revision. The renewal information review fee applies when an
NRTL submits updated information to OSHA in connection with a request for renewal of recognition. You must pay
the additional review or renewal information review fee when submitting the additional or updated information.
The limited review fee covers the time to review and return a new application that we find to be substantially
deficient. OSHA deducts this fee from any refund due to the applicant.
8. When and how can I obtain a refund for the fees that I paid?
If you withdraw an initial application, or an expansion application for an additional site, after we commenced
but before completing the full review, we will refund half of the application review fee. If you withdraw your
application before we commence travel to your site to perform the on-site assessment, we will refund any
prepaid assessment fees, or credit your account. We also will credit your account for any amount of the
prepaid assessment or audit fees collected that is greater than the actual cost of the assessment. If the
limited review fee applies (i.e., we return the application), we will refund the balance of the initial-
application review fee (i.e., the amount in excess of the limited review fee). If an organization is no longer
part of the NRTL Program, we will refund any funds collected in excess of all actual costs incurred through
the date of termination. Other than these cases, we do not generally refund or grant credit for any other fees
due or collected.
9. Am I still liable for any fees even if OSHA rejects my application or terminates my recognition?
If we reject your application, we will retain the fees pertaining to tasks we performed. For example, if we
perform an assessment for an expansion application but deny the expansion, we will retain your prepaid
assessment fee. Similarly, we will retain the final report and Federal Register fee if we wrote the report and
published the notice. See note 11 to this Table A for the consequences of nonpayment.
10. What rate does OSHA use to charge for staff time (including Comp Time)?
OSHA estimated an equivalent staff cost per hour that it uses for determining the fees shown in the fee
schedule. This hourly rate takes into account the costs for salary, fringe benefits, equipment, contract
services, supervision and support for each "direct staff" member, that is, the staff that perform the main
activities identified in the fee schedule. The rate is an average of these amounts for each of these direct
staff members. The current estimated equivalent staff costs per hour = $147.90. The hourly rate for Comp Time
is based on the direct staff average salary and fringe costs only ($56.40). OSHA also will charge this rate
for any other OSHA staff travel time in excess of the staff's normal 40-hour work week.
(For more information about Compensatory Time, see additional explanation in section VIII of this notice
("Major Changes to the Fee Schedule").)
11. What happens if I do not pay the fees you bill to me?
As explained above, if you are an applicant, we will send you a final bill (for any assessment and for the fees
related to the review and evaluation, and the final report and Federal Register notice) in advance of the
assessment. If you do not pay the bill by the due date, we will assess the Late Payment fee shown in Table A
of this notice. This late-payment fee represents one hour of staff time at the equivalent staff cost per hour
(see note 10). We also will halt any work on your application. If we do not receive payment within 30 days of
the original due date, we will cancel your application. If you do not pay the prepaid fee for an audit by the
due date, we will assess the late-payment fee shown in Table A of this notice. However, OSHA may decide to
proceed with the audit. If we do not receive payment within 30 days of the original due date for an audit fee,
we will publish a Federal Register notice stating our plan to revoke your NRTL recognition. However, note
that, in either case, you may be subject to collection procedures under U.S. (Federal) law.
12. How do I know whether this is the most current fee schedule?
You may contact OSHA's NRTL Program (202-693-2110 or 2300) or visit the program's Web site to determine the
effective date of the most current fee schedule. Access the site by selecting "N" in the alphabetical Index
at http://www.osha.gov. Any application-review fees are those fees in effect on the date you submit your
application. Other application-processing fees are those fees in effect when we perform the activity covered
by the fee. Audit fees are those fees in effect on the date we begin the audit.
B. Fee Schedule for Applicants When OSHA Receives the Initial
Application on or After March 28, 2011
Table B below is the fee schedule applicable to any applicant
having an initial application received by OSHA on or after the
effective date of this rule. This fee schedule also represents the
projected fee that would apply to all other NRTLs and applicants when
OSHA fully implements the final phase of the fee phase-in beginning in
the third year after this rule's effective date. Table B is based on
current projections, and it is likely that OSHA will adjust these fees
during its periodic fee-review process.
Table B--Nationally Recognized Testing Laboratory Program Fee Schedule for Applicants When OSHA Receives the
Initial Application on or After March 28, 2011
----------------------------------------------------------------------------------------------------------------
Activity or category (fee
Type of service charged per application Fee amount
unless noted otherwise)
----------------------------------------------------------------------------------------------------------------
APPLICATION PROCESSING............... Initial application review $17,750.
(submit fee as two payments)
1 8.
Expansion-application review $8,280.
(per additional site) 1 8.
Renewal or expansion (other) $300.
application review \1\.
Renewal Information Review $2,370.
Fee \7\.
Additional review--initial $2,370.
application (if the
application requires
substantial revision, submit
one-half of initial-
application review fee) \7\.
Additional review--renewal or $730.
expansion application \7\.
Limited review--initial $3,550.
application \7\.
Assessment--initial $4,440 + travel expenses.
application (per person, per
site--first day) 2 10.
Assessment--renewal $4,140 + travel expenses.
application (per person, per
site--first day) 3 10.
Assessment--expansion $3,550 + travel expenses.
application (additional
site) (per person, per site--
first day) \3\.
Assessment--expansion $2,960 + travel expenses.
application (other) (per
person, per site--first day)
\3\.
Assessment--each additional $1,180 + travel expenses.
day or each day on travel
(per person, per site) 2 3.
Review and evaluation \5\ $30 per standard OR $296 per standard.
($30 per standard if OSHA
already recognizes the NRTLs
and requires minimal review;
otherwise, $296 per
standard).
Final report and Federal $19,520.
Register notice--initial
application 5 9.
Final report and Federal $7,390.
Register notice--renewal or
expansion application (if
OSHA performs on-site
assessment) 5 9.
Final report and Federal $4,440.
Register notice--renewal or
expansion application (if
OSHA performs no on-site
assessment) 5 9.
AUDITS............................... On-site audit (per person, $7,400 + travel expenses.
per site, first day) \6\.
($4,440--no nonconformances).
On-site audit--each $1,180 + travel expenses.
additional day (on-site or
on travel).
(per person, per site), or
review of revised audit
response--per on-site or
office audit \6\.
Office audit (per person, per $1,180 or $2,370.
site, per day) \6\--$1,180
if no nonconformances,
$2,370 if nonconformances
found.
MISCELLANEOUS........................ Supplemental travel (per $1,000.
site--for sites located
outside the 48 contiguous
U.S. states or the District
of Columbia) \4\.
Supplemental program review $590.
(per program requested) \4\.
Fees invoice processing (per $300.
application or audit) \4\.
Travel document processing (4 $590.
hours, per application or
audit) \4\.
Late payment \11\............ $150.
Compensatory time for travel $56.40.
(per hour) \10\.
----------------------------------------------------------------------------------------------------------------
The notes to Table B are the same as the notes to Table A, except that the corresponding Table B fees apply
instead of the Table A fees shown in these notes.
VII. Description of Fees and Review of Comment
This section describes the major tasks and functions covered
currently by each type of fee category, e.g., application fees, and the
basis used to charge each fee.
Application Fees. This fee is for the technical work performed by
OSHA's office and field staff in reviewing application documents to
determine whether an applicant submitted complete and adequate
information. The application review does not include a determination on
the test standards requested, which OSHA covers in the review and
evaluation fee. OSHA based the application fees on the average cost per
type of application. OSHA uses an average cost because the amount of
time spent on application review does not vary greatly by type of
application, i.e., the number and type of documents submitted generally
will be the same for a specific type of application. Experience shows
that most applicants follow the application guide that OSHA provides to
them.
Assessment Fees. This fee is different for the initial, renewal,
expansion (site), and expansion (other) applications. OSHA based this
fee on the number of days for staff preparatory and on-site work, and
related travel. OSHA uses six types of assessment fees, five of which
involve charges per site and per person. The four assessment fees for
the first day represent charges for office preparation and 8 hours
visiting an applicant's facility. There is one fee covering either
additional days at the facility or additional days in travel. OSHA
assesses additional days in travel for either a half or a full day of
travel. OSHA also assesses a supplemental travel amount for travel
outside the contiguous 48 U.S. states or the District of Columbia. For
initial applications, applicants must submit the amount to cover the
assessment in advance with the application. In addition to the first
day and additional day amounts, the applicant or NRTL must pay actual
travel expenses, based on government per diem and travel rules. For
initial applications, OSHA will adjust the final bill or refund to the
applicant for any difference between actual travel expenses and the
advance travel amount.
Similar to the application fee, the office-preparation time
generally involves the same types of activities. Actual time at the
facility may vary, but the staff spend at least a full day performing
the on-site work. The fee for the additional day reflects time spent at
the facility and the actual travel expenses for that day.
Review and Evaluation Fee. OSHA charges this fee for evaluating
each test standard that an applicant is proposing be part of its scope
of recognition. The fee represents the staff time spent during the
office review of such an application, and varies with the number of
test standards requested by the applicant. In general, OSHA bases the
fee on the estimated time necessary to review test standards to
determine whether each one is "appropriate," as defined in 29 CFR
1910.7, and whether each test standard covers equipment for which OSHA
mandates certification by an NRTL. The fee also covers time required to
determine the current designation and status (i.e., active or
withdrawn) of a test standard, which involves reviewing current
directories of the applicable standards-development organization.
Furthermore, it includes time spent discussing the results of the
application review with the applicant. The actual time spent will vary
depending on whether an applicant requests test standards previously
approved by OSHA for other NRTLs. When the review is minimal, these
activities take approximately 2 hours for 10 standards. When the review
is more substantial, the estimated average review time per standard is
one hour for each standard. Substantial review will occur when OSHA did
not previously recognize the standard for any NRTL, or when the NRTL is
proposing to test in a new area, i.e., for a type of product not
similar to any product currently included under its scope of
recognition.
Final Report/Federal Register Notice Fees. OSHA charges these two
fees for each application. The fee involves the staff time required to
prepare a report of the on-site review of an applicant's or an NRTL's
facility, which includes contacting the applicant or NRTL to discuss
issues or items raised by findings made by OSHA during the on-site
review. The fee also represents the time spent making the final
evaluation of an application, preparing the required Federal Register
notices, and responding to comments received in response to the Federal
Register notice. OSHA bases these fees on average costs per type of
application, since the type and content of documents prepared are
generally the same for each type of applicant. There is a separate fee
when OSHA does not perform an on-site assessment. In these cases, the
NRTL Program staff perform an office assessment and prepare a
recommendation regarding expansion or renewal.
On-site Audit Fees. These fees include the time for office
preparation, time at the NRTL facility and travel, and time to prepare
the report of the on-site audit. OSHA assesses the fee on a per-site
basis, because the amount of preparation time generally does not vary
significantly between sites. The actual time on site will vary
depending on the scope of the audit but, currently, the limit generally
is two days. As previously described, the audit fee includes amounts
for travel based on actual travel expenses.
OSHA received only one comment in response to the proposed rule
(see Ex. OSHA-2007-0031-0002), and the commenter expressed three
concerns regarding the proposed audit fees. First, the commenter had a
concern about the applicability of the first-day fee for an audit
listed in Table 5 of the proposed rule. This table detailed the average
actual costs that the Agency incurred in conducting an audit. The
commenter noted that, under the rule as proposed, each audit would
include a first-day fee, thereby changing OSHA's past practice of
charging this fee only once if it visited multiple sites of an NRTL
during one trip. OSHA will continue this practice, but did not
explicitly note the practice in the proposal. Accordingly, OSHA revised
Table 5 and the applicable note in the fee schedule to state the
practice OSHA will follow. The revision, however, also clarifies that
the fee for making travel arrangements still applies to each site, even
though they may be sites of the same NRTL.\10\
---------------------------------------------------------------------------
\10\ The amount of time spent arranging travel plans for each
site visited during one trip is typically the same regardless of
whether the site is for the same, or a different, NRTL. Therefore,
OSHA will continue to account for this part of the preparation time
through the travel document processing fee. OSHA charges this fee
when the auditor visits more than one NRTL site during one trip. See
note 4 to Table A, below.
---------------------------------------------------------------------------
Second, the commenter asserted that OSHA was charging too much time
for the "prepare report/contact NRTL" portion of the audit fee. The
commenter questioned the number of days of field staff time shown in
Figure 5 of the proposed rule.\11\ These days cover preparation of the
report, any discussion with the NRTL when its response is unclear or
unacceptable, and review and analysis of the NRTL's response to any
nonconformances and observations identified during the audit.\12\ The
proposed rule was unclear regarding this latter task as evidenced by
the commenter's statement that the proposal excluded a charge for this
activity. While OSHA will continuously search for efficiencies in
administering the NRTL Program, it cannot deviate from the actual costs
of the program as would be necessary if it followed the commenter's
recommendation.
---------------------------------------------------------------------------
\11\ This portion of the audit fee was shown as 26 work hours in
the proposed rule, of which 24 hours, i.e., 3 work days, was field
time, and not the 2 days that was shown in the proposed rule. Table
5 of this final rule reflects the correct days. Eight of these 24
hours apply to reviewing the NRTL's response and contacting the
NRTL, if needed.
\12\ In this rule, when the term "nonconformance" is used
alone, it also includes observations for which OSHA requires a
response from the NRTL.
---------------------------------------------------------------------------
The commenter also did not recognize the work done by OSHA auditors
after the site visit, which is part of this item. An OSHA auditor
develops an internal report detailing the auditor's review of each
element of the NRTL's operations, and preparing the final version of
the report detailing the nonconformances found. In addition, the
auditor will be uploading this information into an audit report
database. Three days to accomplish all of these tasks is reasonable,
and represents OSHA's actual experience.
The third concern involved the commenter's belief that OSHA's audit
fee excluded review and analysis of an NRTL's response to determine
whether the corrective or other actions are acceptable. As explained
earlier, the "prepare report/contact NRTL" portion of the audit fee
includes this task. The commenter, believing OSHA omitted this portion
of the audit fee, recommended that OSHA charge a fee based on the
"levels of noncompliance," which OSHA takes to mean the number of
nonconformances found during an audit. In response to this
recommendation, OSHA notes that it calculates each fee based on the
average time taken to complete an activity, and, in the case of the
"prepare report/contact NRTL" part of the audit fee, the time taken
to prepare and record the reports, review the NRTL's response, and
contact the NRTL to address any remaining issues. Therefore, it would
be inappropriate to charge a fee based on the number of nonconformances
because that number does not necessarily correspond to the time spent by
the auditor. In addition, it would be impractical to track, and base a
fee on, the time taken to review the corrective action for each
nonconformance or any response required for an observation.
In practice, the time taken for the auditor's review is simply
the time to review the NRTL's entire response to OSHA's audit report,
which OSHA already included in the 26 work hours shown in Table 5 for the
"prepare report/contact NRTL" part of the audit fee.
The commenter's concern pointed out that the proposed on-site audit
fee calculation inaccurately captures the staff's review time in the
extreme cases, i.e., it is too high when there are no nonconformances,
and too low when the resolution of nonconformances consumes a great
deal of OSHA staff's time. To correct this inaccuracy, OSHA adjusted
the audit fees by: (1) Reducing the fee by 20 work hours when there are
no nonconformances, and (2) charging for extra time when the NRTL must
submit a revised or supplemental response because the original one did
not adequately address all of the nonconformances. In these latter
cases, OSHA will charge the NRTL a daily rate, or a fraction of this
rate, for the actual time OSHA staff spends reviewing the revised
response. OSHA expects that it will rarely need to charge for extra
time. However, in these cases, the program office will alert the NRTL
about the extra charge, and then document the extra time and bill the
NRTL accordingly. Based on its past experience, OSHA expects that the
number of audits without nonconformances will exceed those audits that
will require revised responses. Accordingly, it does not expect the
additional fees to result in a significant increase in the overall cost
impact to NRTLs.
Office Audit Fees. OSHA charges a separate fee for an office audit
conducted instead of an on-site visit. OSHA provides a per-day rate,
and the description in the schedule now makes this clear. Originally,
this type of audit was to apply to an NRTL that regularly has little or
no nonconformances during OSHA's on-site audit of the NRTL's site(s).
Accordingly, the fee for the office audit, $730 per day under Table A,
reflects the time to perform the audit and prepare a relatively short
report. However, while addressing the sole comment to the Docket, OSHA
also determined that a clarification was necessary regarding the fee
for an office audit. OSHA adjusted the fee schedule to include a fee
for office audits that find nonconformances, $1,120 under Table A. This
fee reflects 16 hours for preparation of the audit report and review of
the NRTL's response. This fee is lower than the similar fee for an on-
site audit because office audits generally require less auditor review
time than for on-site audits. As in the case of the on-site, an
additional per-day fee also applies to an office audit when the NRTL
must submit a revised or supplemental response.
Miscellaneous Fees. The fee schedule shows the average cost for one
full day of staff time. OSHA uses this fee primarily when refunding the
assessment fee. OSHA will also charge a fee for late payment of the
audit fee. OSHA bases the amount for the late fee on 1 hour of staff
time charged at the fully implemented rate shown in Table B above. OSHA
also charges a supplemental program-review fee, which represents the
time OSHA needs to review the documents that an NRTL submits to justify
its proposed use of a supplemental program. Supplemental programs allow
NRTLs to use other qualified parties or facilities to perform the
specific tasks covered by the program, and that are necessary for
product testing and certification.
VIII. Major Changes to the Fee Schedule
The following table shows the major adjustments (i.e., increases or
decreases of $100 or more) that OSHA made to the fee schedule in Table
A compared to the prior 2007 fee schedule.\13\
---------------------------------------------------------------------------
\13\ See 73 FR 7468 (February 15, 2007) for the 2007 fee
schedule.
----------------------------------------------------------------------------------------------------------------
New fee amount--
Description of activity or Prior fee amount first year New fee amount--full
category increase increase
----------------------------------------------------------------------------------------------------------------
Initial application review...... $5,100...................... $17,750............ $17,750.
Expansion-application review.... $1,020...................... $3,420............. $8,280.
Additional review--initial $1,020...................... $2,370............. $2,370.
application.
Renewal application--information $1,020...................... $1,470............. $2,370.
review.
Additional review--renewal or $510........................ $730............... $1,180.
expansion application.
Limited review--initial $0.......................... $3,550............. $3,550.
application.
Assessment--initial application $1,910...................... $4,440............. $4,440.
(per person, per site--first
day).
Assessment--renewal application $1,790...................... $2,570............. $4,140.
(per person, per site--first
day).
Assessment--expansion $1,530...................... $2,200............. $3,550.
(additional site) (per person,
per site--first day).
Assessment--expansion (other) $1,280...................... $1,830............. $2,960.
(per person, per site--first
day).
Assessment--each additional day, $510........................ $1,180 (new $1,180.
or travel time--each day (per applications); 730
person, per site). other applications.
Review and evaluation........... $13 per standard............ $30 per standard... $30 per standard.
Final report and Federal $8,420...................... $19,520............ $19,520.
Register notice--initial
application.
Final report and Federal $3,190...................... $4,580............. $7,390.
Register notice--renewal or
expansion application (if OSHA
performs on-site assessment).
Final report and Federal $1,910...................... $2,740............. $4,440.
Register notice--renewal or
expansion application (if OSHA
performs no on-site assessment).
On-site audit (first day)....... $2,680...................... $4,240............. $7,400.
On-site audit (first day) (no $0.......................... $3,260............. $4,400.
nonconformances).
On-site audit--each additional $510........................ $730............... $1,180.
day.
Office audit--nonconformances $0.......................... $1,120............. $2,370.
found.
Supplemental program review..... $260........................ $270............... $590.
Invoice processing.............. $130........................ $300............... $300.
----------------------------------------------------------------------------------------------------------------
Clarification of Travel Expenses Fee. The fee schedule states that
OSHA will charge for time on travel following government travel rules.
Those rules permit a traveler to earn a special type of leave called
"compensatory time for travel," or simply "travel comp time." The
traveler generally earns this time when in transit for a duration of
time that exceeds the traveler's regular work schedule. Travel comp
time is earned time off, as opposed to receiving overtime pay. The
amount of travel comp time varies depending on the specific
circumstances of the travel. In general, it is greater for trips
outside the contiguous 48 U.S. states and the District of Columbia than
for trips within the U.S. Travel comp time is for travel time that
exceeds an employee's regular work hours, i.e., the total available
work hours (TAW) discussed under section III above. Because this time
is specific to a particular trip, OSHA will include it in the travel
fee that OSHA charges for a trip. OSHA does not include travel comp
time in the total time used to develop the ECR, i.e., the TAS. Instead,
OSHA will charge travel comp time at the average rate for direct OSHA
staff time, which will be $56.40 under the revised fee schedule.
Although this discussion focuses on travel comp time, OSHA also will
charge this rate for any other OSHA staff travel time in excess of the
staff's regular work hours.
IX. Changes to 29 CFR 1910.7(f)
As noted earlier, 29 CFR 1910.7(f) specifies the conditions for
assessing and determining fees. This rule states that OSHA will assess
fees for processing applications for initial recognition, expansion of
recognition, or renewal of recognition, review and evaluation of the
applications, and preparation of reports, evaluations, publishing
Federal Register notices, and audits of sites. It further states that
OSHA will calculate the fees based on either the average or actual time
required to perform the work necessary, the staff costs per hour, and
the average or actual costs for travel for on-site reviews. 29 CFR
1910.7(f)(1) and (2). In addition, this rule states that OSHA will
review costs annually, and will propose a revised fee schedule if
warranted. In this final rule, OSHA is replacing the reference to an
"annual review" with a "periodic review" to allow it more
flexibility in adjusting fees as appropriate. OSHA does not expect to
review the fee schedule more than once annually, but anticipates
situations in which it may not complete the cost review within a
single-year period.
OSHA also is revising the language in paragraph (f) to clarify the
basis used for calculating fees, consistent with OMB Circular A-25.
Specifically, this revision makes clear that the term "costs" means
the full costs of performing the activities that benefit the NRTLs.
Thus, as revised, paragraph (f)(2) reads: "The fee schedule
established by OSHA reflects the full cost of performing the activities
for each service listed in paragraph (f)(1) of this section."
(Emphasis added.) Similarly, OSHA is revising paragraph (f)(3)(i) to
clarify that the two references to the cost of the program mean the
full cost of the program.
OSHA also is revising the language in paragraphs 29 CFR
1910.7(f)(1) and (f)(4) to require advance payment of the fees. In this
regard, OSHA is revising the first sentence of 29 CFR 1910.7(f)(1) to
specify that NRTLs and applicants must pay all applicable fees in
advance. In addition, OSHA is revising the table in 29 CFR
1910.7(f)(4), which establishes important billing periods and related
actions, to provide information on the new advanced-billing process.
One of the revisions to this table reduces the amount of time OSHA must
wait before publishing its plan to revoke recognition of NRTLs that do
pay audit fees. Accordingly, OSHA revised the current provision of "60
days after the bill date" to "30 days after due date." OSHA
requested comment on this revision in the proposal, but received none.
X. Final Economic Analysis and Final Regulatory Flexibility Analysis
Executive Order 12866 and the Regulatory Flexibility Act (RFA), as
amended in 1996, require each Federal agency to analyze the costs, and
other consequences and impacts, including small business impacts, of
its rules. Consistent with these requirements, OSHA analyzed the costs
of this final rule and the impacts of this rule on affected
laboratories and small businesses.
The Agency received one comment on the proposal (Ex. OSHA 2007-
0031-0002). The commenter suggested revisions to the unit costs used to
determine NRTLs' fees. As noted above in this preamble, OSHA revised
the unit costs in response to this comment; however, the average cost
of NRTLs' fees remains unchanged from the proposal. The Agency updated
information on revenue for the affected industry and laboratories;
otherwise, this final economic analysis changed little from the
preliminary economic analysis (PEA) accompanying the proposed
regulation.
Affected Industries
When the Agency established its NRTL fee schedule in 2000, there
were 17 NRTLs with 42 operational sites. Today, there are 15 NRTLs
(including two foreign-owned and -operated NRTLs) with 49 sites (see
the following table for a list of current NRTLs).
------------------------------------------------------------------------
Number of
NRTL name sites
------------------------------------------------------------------------
Canadian Standards Association (CSA)......................... 6
Communication Certification Laboratory, Inc. (CCL)........... 1
Curtis-Straus LLC (CSL)...................................... 1
FM Global Technologies LLC (FM).............................. 2
Intertek Testing Services NA, Inc. (ITSNA)................... 13
MET Laboratories, Inc. (MET)................................. 1
National Technical Systems, Inc. (NTS)....................... 1
NSF International (NSF)...................................... 1
SGS U.S. Testing Co., Inc. (SGSUS)........................... 1
Southwest Research Institute (SwRI).......................... 1
TUV America, Inc. (TUVAM).................................... 3
TUV Product Services GmbH (TUVPSG)........................... 1
TUV Rheinland of North America, Inc. (TUV)................... 1
Underwriters Laboratories Inc. (UL).......................... 15
Wyle Laboratories, Inc. (WL)................................. 1
----------
Total (15 NRTLs)......................................... 49
------------------------------------------------------------------------
Source: OSHA Directorate of Technical Support and Emergency Management.
Costs
The Agency estimated in 2000 that it would collect approximately
$239,000 in fees annually (65 FR 46815). OSHA updated its fee schedule
in February, 2007, and showed total estimated program costs of
approximately $755,000 (72 FR 7469), estimating that these updated fees
would enable it to collect only about half of these costs (i.e.,
$380,000). As Table 1 above shows, the revisions made in this final
rule, including revisions to calculating OSHA costs and updating
Federal employee salary levels, could increase the fees collected to
about $1,096,000. In comparison, if OSHA updated costs using the
original calculation method (without adjustment for ancillary
activities and leave), and included the increase in staff resources,
the total fees collected would only increase to about $583,000. The
impact of the increase, when fully implemented, will be $513,000
($1,096,000 minus $583,000). Because OSHA's analysis evaluates the
impact of the final rule as if the full increase during the third year
was in effect, the impact will actually be less during the first two years
after the rule's effective date because OSHA is phasing in the fee
increase. In addition, OSHA's analysis evaluates the total impact on
existing NRTLs and on new applicants. Accordingly, the actual impact on
existing NRTLs will be less because new applicants will pay some of the
increased fees.
Economic Impacts
The fee increase will have only a minor impact on industry revenues
and profits. NAICS 54138 ("Testing Laboratories") had $12.3 billion
in revenues in 2007 (updated from the PEA) (U.S. Census Bureau, 2007
Economic Census). In the 2000 rulemaking, as here, the Agency estimated
that net before-tax profits were 5.7 percent of revenues (Robert Morris
Associates, Annual Statement Studies, Reference 2). The Agency,
therefore, estimates 2007 industry before-tax profits as $701 million
(5.7% of $12.3 billion). The entire $1,096,000 million in user fees
represents 0.00009, or 0.009 percent, of industry revenues ($1.09
million/$12.3 billion) and 0.00155, or 0.155 percent, of industry
profits (1.09/701). Thus, the impact of the additional new user fees of
$513,000 will be even less. The Agency concludes that the changes to
the fee calculation, and the resulting increase in fees, are
economically feasible for the industry.
Average cost per affected firm of the increase in NRTL fees is
about $73,067 ($1,096,000/15); while average cost per affected NRTL
establishment (site) is about $22,367 ($1,096,000/49). As a result,
OSHA expects larger firms with multiple recognized sites to have higher
total user fees. The Agency believes that the increase in NRTL user
fees will have little, if any, impact on the affected firms because
demand for NRTL services continues to grow, and there was no apparent
adverse affect from increasing NRTL fees in 2000 and 2007.
Any impact on the NRTLs depends on whether the NRTLs can raise
prices to their customers. The Agency concludes that there are no good
substitutes for the certification supplied by NRTLs, and it is likely
that the NRTLs will pass the higher user fees on to the large number of
NRTL customers via small price increases. The Agency concludes that the
new, higher NRTL fees will have little economic impact on the affected
firms and establishments.
Regulatory Flexibility Act Certification
Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), each
Federal agency must assess the impact of its rules on small entities,
and prepare a final regulatory flexibility analysis unless the head of
the agency certifies that the rule will not, if promulgated, have a
significant economic impact on a substantial number of small entities.
Thus, the Agency also estimated in this final rule the relative effect
of the new user fees on small businesses. In the original fees
rulemaking in 2000, OSHA defined small businesses as those businesses
with less than $5 million in sales (the Small Business Administration
(SBA) criterion for the industry, see SBA Web site Reference 3 below).
These businesses have fewer than 100 employees and average revenue of
about $2.4 million. In the 2000 rulemaking, OSHA estimated user fees to
be about $6,000 per "small" testing laboratory, which was less than
0.3 percent of average small-business revenues, and less than 5 percent
of before-tax profits (Table 6, 65 FR 46817). The February 15, 2007,
revision (73 FR 7468) raised the average establishment's fee to about
$7,700 ($380,000/49). The higher user fees adopted by the Agency herein
increased the expected average user fee for a small testing laboratory
to about $22,367.
Revenues for the industry also increased, from $5 billion in 1992,
to an estimated $12.3 billion in 2007 (1992 and 2007 Economic Census).
Similarly, the SBA size criterion of a small business in the testing-
laboratory industry increased to $11 million in annual revenues (SBA
Web site; see link under "References" below). The Agency estimates
that the new user fees still represent less than 1 percent of revenues
and 5 percent of profits for small businesses in this industry. The
marginal increase in user fees, which is about $14,667 per testing
laboratory (to $22,367 from $7,700), is a small fraction of current
revenues and profits. The economic costs are less than 1 percent of
revenues and 5 percent of before-tax profits, and the Agency concludes
that these NRTLs will pass the costs on to the firms' customers. The
Agency, therefore, certifies that the higher NRTLs fees will not have a
significant impact on a substantial number of small entities. The
Agency concludes that 13 of the 15 affected NRTLs are small entities,
as defined by current SBA criterion. Finally, as noted in the 2000
rulemaking (65 FR 46797), the collection of user fees from NRTLs is not
a new cost to society, but represents a transfer of the governmental
cost of the NRTL Program from taxpayers to an industry directly
consuming government services.
OSHA did not receive any comments on the initial regulatory
flexibility analysis or the economic analysis published in the
proposal.
References
1. U.S. Department of Commerce, Bureau of the Census, 1992 Census of
Service Industries: Industry Series: SC92-S-1, -4, -5. Washington,
DC, February 1995.
2. Risk Management Associates (formerly Robert Morris Associates),
Annual Statement Studies, September 1995.
3. U.S. Small Business Administration Web site http://www.sba.gov.
Table of Small Business Size Standards Matched to North American
Industry Classification System Codes
http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf.
XI. Unfunded Mandates Reform Act
For the purposes of the Unfunded Mandates Reform Act of 1995 (2
U.S.C. 1501, et seq.), this rule does not include any Federal mandate
that may result in increased expenditures by State, local, or tribal
governments, or an increased expenditure by the private sector of more
than $100 million.
XII. Paperwork Reduction Act
This rule does not impose or remove any information collection
requirements for the purposes of the Paperwork Reduction Act of 1995,
44 U.S.C. 3501-30. Under the Office of Management and Budget (OMB)
control number 1218-0147, OSHA has authority to collect information for
purposes of NRTL Program activities.
XIII. Federalism
OSHA reviewed this final rule in accordance with Executive Order
13132. This final rule only sets fees for services provided by the
Federal government to private entities and has no impact on Federalism.
The rule does not limit or restrict State policy options.
XIV. State Plan States
This final rule will not affect the 27 States and Territories that
have OSHA-approved occupational safety and health plans. Twenty-two of
these States and Territories operate OSHA-approved State Plans covering
both private- and public-sector employees: Alaska; Arizona; California;
Hawaii; Indiana; Iowa; Kentucky; Maryland; Michigan; Minnesota; Nevada;
New Mexico; North Carolina; Oregon; Puerto Rico; South Carolina;
Tennessee; Utah; Vermont; Virginia; Washington; and Wyoming. Four
States (Connecticut, Illinois, New Jersey, and New York) plus the
Virgin Islands have OSHA-approved State Plans that apply to State and
local government employees only.
XV. Authority and Signature
David Michaels, PhD, MPH, Assistant Secretary of Labor for
Occupational Safety and Health, 200 Constitution Avenue, NW.,
Washington, DC 20210, authorized the preparation of this notice.
Accordingly, the Agency is issuing this notice pursuant to Sections
6(b) and 8(g) of the Occupational Safety and Health Act of 1970 (29
U.S.C. 655 and 657), Secretary of Labor's Order No. 4-2010 (75 FR
55355), and 29 CFR part 1911.
Signed at Washington, DC, on February 16, 2011.
David Michaels,
Assistant Secretary of Labor for Occupational Safety and Health.
List of Subjects in 29 CFR Part 1910
Fees, Occupational safety and health, Product testing and
certification, Safety, Testing laboratories.
For the reasons stated in the preamble of this final rule, OSHA
amends subpart A of 29 CFR part 1910 as follows:
PART 1910--OCCUPATIONAL SAFETY AND HEALTH STANDARDS
Subpart A--General [Amended]
0
1. Revise the authority citation for subpart A to read as follows:
Authority: Sections 4, 6, and 8 of the Occupational Safety and
Health Act of 1970 (29 U.S.C. 653, 655, 657); Secretary of Labor's
Order No. 12-71 (36 FR 8754), 8-76 (41 FR 25059), 9-83 (48 FR
35736), 1-90 (55 FR 9033), 6-96 (62 FR 111), 3-2000 (65 FR 50017),
5-2002 (67 FR 65008), 5-2007 (72 FR 31159), and 4-2010 (75 FR
55355), as applicable.
Sections 1910.6, 1910.7, 1910.8 and 1910.9 also issued under 29
CFR part 1911. Section 1910.7(f) also issued under 31 U.S.C. 9701,
29 U.S.C. 9a, 5 U.S.C. 553; Pub. L. 106-113 (113 Stat. 1501A-222);
Pub. L. 111-8 and 111-317; and OMB Circular A-25 (dated July 8,
1993) (58 FR 38142, July 15, 1993).
0
2. In Sec. 1910.7:
0
a. Revise paragraph (f)(1) introductory text;
0
b. Revise the first sentence of paragraph (f)(2) introductory text;
0
c. Revise paragraph (f)(3)(i); and
0
d. Revise paragraph (f)(4).
The revisions read as follows:
Sec. 1910.7 Definition and requirements for a nationally recognized
testing laboratory.
* * * * *
(f) * * *
(1) Each applicant for NRTL recognition and each NRTL must pay fees
for services provided by OSHA in advance of the provision of those
services. OSHA will assess fees for the following services:
* * * * *
(2) The fee schedule established by OSHA reflects the full cost of
performing the activities for each service listed in paragraph (f)(1)
of this section. * * *
* * * * *
(3)(i) OSHA will review the full costs periodically and will
propose a revised fee schedule, if warranted. In its review, OSHA will
apply the formula established in paragraph (f)(2) of this section to
the current estimated full costs for the NRTL Program. If a change is
warranted, OSHA will follow the implementation shown in paragraph
(f)(4) of this section.
* * * * *
(4) OSHA will implement periodic review, and fee assessment,
collection, and payment, as follows:
------------------------------------------------------------------------
Milestones/Dates Action required
------------------------------------------------------------------------
I. Periodic Review of Fee Schedule
------------------------------------------------------------------------
When review completed........ OSHA will publish any proposed new fee
schedule in the Federal Register if OSHA
determines that costs warrant changes in
the fee schedule.
Fifteen days after Comments due on the proposed new fee
publication. schedule.
When OSHA approves the fee OSHA will publish the final fee schedule
schedule. in the Federal Register, making the fee
schedule effective on a specific date.
------------------------------------------------------------------------
II. Application Processing Fees
------------------------------------------------------------------------
Time of application.......... Applicant must pay the applicable fees in
the fee schedule that are due when
submitting an application; OSHA will not
begin processing the application until
it receives the fees.
Before assessment performed.. Applicant must pay the estimated staff
time and travel costs for its assessment
based on the fees in effect at the time
of the assessment. Applicant also must
pay the fees for the final report and
Federal Register notice, and other
applicable fees, as specified in the fee
schedule. OSHA may cancel an application
if the applicant does not pay these
fees, or any balance of these fees, when
due.
------------------------------------------------------------------------
III. Audit Fees
------------------------------------------------------------------------
Before audit performed....... NRTL must pay the estimated staff time
and travel costs for its audit based on
the fees in effect at the time of the
audit. NRTL also must pay other
applicable fees, as specified in the fee
schedule. After the audit, OSHA adjusts
the audit fees to account for the actual
costs for travel and staff time.
On due date.................. NRTL must pay the estimated audit fees,
or any balance due, by the due date
established by OSHA; OSHA will assess a
late fee if NRTL does not pay audit fees
(or any balance of fees due) by the due
date. OSHA may still perform the audit
when an NRTL does not pay the fees or
does not pay them on time.
Thirty days after due date OSHA will begin processing a notice for
or, if earlier, date NRTL publication in the Federal Register
refuses to pay. announcing its plan to revoke
recognition for NRTLs that do not pay
the estimated audit fees and any balance
of audit fees due.
------------------------------------------------------------------------
Note: For the purposes of 29 CFR 1910.7(f)(4), "days" means "calendar
days," and "applicant" means "the NRTL" or "an applicant for
NRTL recognition."
* * * * *
[FR Doc. 2011-3937 Filed 2-24-11; 8:45 am]
BILLING CODE 4510-26-P
