[Federal Register Volume 59, Number 228 (Tuesday, November 29, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29381]
[[Page Unknown]]
[Federal Register: November 29, 1994]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
21 CFR Part 80
[Docket No. 94C-0041]
Color Additive Certification; Increase in Fees For Certification
Services
AGENCY: Food and Drug Administration, HHS.
ACTION: Interim rule; opportunity for public comment.
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SUMMARY: The Food and Drug Administration (FDA) is amending the color
additive regulations by increasing the fees for certification services.
The change in fees will allow FDA to continue to maintain an adequate
color certification program as required by the Federal Food, Drug, and
Cosmetic Act (the act). The fees are intended to recover the full costs
of operation of FDA's color certification program, including the
unfunded liability of the Civil Service Retirement Fund and the
appropriate overhead costs of the Public Health Service (PHS) and the
Department of Health and Human Services (DHHS).
DATES: Effective December 29, 1994; written comments by February 13,
1995.
ADDRESSES: Submit written comments to the Dockets Management Branch
(HFA-305), Food and Drug Administration, rm. 1-23, 12420 Parklawn Dr.,
Rockville, MD 20857.
FOR FURTHER INFORMATION CONTACT: David R. Petak, Accounting Branch
(HFA-120), Food and Drug Administration, 5600 Fishers Lane, Rockville,
MD 20857, 301-443-1766.
SUPPLEMENTARY INFORMATION:
I. Background
FDA is increasing the fees now provided for in its regulations for
certifying color additives. This increase is necessary because of a
general increase in all costs of operating the certification program.
The current fee schedule specified in the regulations became
effective in 1982. While costs of the certification program have
increased through the years, until 1991, the steady growth of the color
additive market and corresponding increase in the batches certified
generated sufficient revenue to cover these increased costs. Since
1991, however, the volume of batches certified has leveled off, while
the costs have continued to rise at approximately 10 percent per year.
Sections 721(e) of the act (21 U.S.C. 379e(e)) requires that fees
necessary to provide, maintain, and equip an adequate color additive
certification program be specified in agency regulations. As is
evidenced by the deficit incurred during fiscal year 1993, the current
fee schedule is insufficient to provide, equip, and maintain an
adequate certification service. Therefore, an immediate increase is
necessary. All cost estimates are described in the ``1993 Color
Certification Fee Study.''A copy of this document is on file at the
Dockets Management Branch (address above).
The fee schedule for color additive certification is designed to
cover all the costs involved in certifying batches of color additives.
This includes both the cost of specific tests required by the
regulations and the general costs associated with the certification
program, such as costs of accounting, reviewing data, issuing
certificates, and conducting research and establishment inspections.
However, previous fees have not reflected all applicable overhead costs
for the program. The new fee schedule reflects these overhead costs,
including costs of management support provided by both PHS and DHHS,
personnel costs for the unfunded liability portion of the Civil Service
Retirement Fund, and ancillary costs of space, equipment, and supplies.
The agency has concluded that it is necessary to include these costs in
the calculation of the fees to ensure that the fees fully cover the
costs of certification. The new fee schedule is consistent with costs
included in the 1991 fee adjustment for certifying insulin (56 FR
50248, October 4, 1991).
The fee for straight colors including lakes is $.30 per pound (a
$.05 per pound increase) with a minimum fee of $192. There are similar
increases in fees for repacks of certified color additives and color
additive mixtures. In addition, the fees will increase at a rate that
is proportional to Federal salary increases, commencing with pay raises
on or after January 1, 1996. This provision permits FDA to set initial
fees lower than they would otherwise be set. Further fee adjustments
based on increased FDA salary costs should permit revenues and expenses
to remain in balance. Before FDA implements the further fee escalation
provision, the agency plans to issue a final rule that will address any
comments that may be submitted on this provision. Also, if the agency
unexpectedly finds itself with substantial retained earnings after the
fee escalation provision is finalized, the agency may make refunds
available to color manufacturers as it has done in the past. The agency
will publish a notice in the Federal Register when there is a fee
adjustment.
II. Effective Date and Opportunity for Public Comment
The agency is issuing this amendment as an interim rule effective
December 29, 1994. The establishment of fees necessary to provide,
equip, and maintain an adequate certification service for colors has
been mandated by Congress under section 721(e) of the act. As
certification services are provided to industry directly by FDA, the
setting of a fee schedule to pay for these services is a matter
particularly within the purview and expertise of the agency. The fees
established by this regulation have been based on cost accounting
methods using data compiled by the agency. The fees reflect the charges
for overhead and unfunded liability of the Civil Service Retirement
System. If the new fee schedule is not put in place soon, FDA will not
be able to respond to the industry demands for color certification
services as described above, with resulting delays and added costs to
industry. Moreover, money to operate the color certification program is
being drawn from retained earnings pending revision of the basis on
which fees are calculated. For all of these reasons, under 5 U.S.C.
553(b)(B) FDA finds that providing for notice and public comment prior
to the establishment of these fees, and for revising the basis on which
these fees are calculated, is contrary to the public interest.
The agency believes, however, that it is appropriate to invite and
consider public comments on these requirements. Therefore, under
Sec. 10.40(e) (21 CFR 10.40(e)), interested persons may, on or before
February 13, 1995, submit to the Dockets Management Branch (address
above) written comments regarding this document. The agency will use
any comments received to determine whether the interim rule should be
modified. Two copies of any comments are to be submitted, except that
individuals may submit one copy. Comments are to be identified with the
docket number found in brackets in the heading of this document.
Received comments may be seen in the Dockets Management Branch between
9 a.m. and 4 p.m., Monday through Friday.
III. Analysis of Impacts
FDA has examined the impacts of the proposed rule under Executive
Order 12866 and the Regulatory Flexibility Act (Pub. L. 96-354).
Executive Order 12866 directs agencies to assess all costs and benefits
of available regulatory alternatives and, when regulation is necessary,
to select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity). The agency believes that
this proposed rule is consistent with the regulatory philosophy and
principles identified in the Executive Order. In addition, the proposed
rule is not a significant regulatory action as defined by the Executive
Order and so is not subject to review under the Executive Order.
The Regulatory Flexibility Act requires agencies to analyze
regulatory options that would minimize any significant impact of a rule
on small entities. The entire cost of this fee increase would be
approximately $450,000 per year and would be distributed amongst
approximately 40 companies who would pay an increased fee that is
proportional to the number of pounds of color that they certify. The
great majority of these costs will be borne by a few firms that have a
dominate share of the market. Thus, the agency certifies that the
proposed rule will not have a significant economic impact on a
substantial number of small entities. Therefore, under the Regulatory
Flexibility Act, no further analysis is required.
IV. Environmental Impact
The agency has determined under 21 CFR 25.24(a)(8) that this action
is of a type that does not individually or cumulatively have a
significant effect on the human environment. Therefore, neither an
environmental assessment nor an environmental impact statement is
required.
List of Subjects in 21 CFR Part 80
Color additives, Cosmetics, Drugs, Reporting and recordkeeping
requirements.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, 21 CFR part
80 is amended as follows:
PART 80--COLOR ADDITIVE CERTIFICATION
1. The authority citation for 21 CFR part 80 continues to read as
follows:
Authority: Secs. 701, 721 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 371, 379e).
2. Section 80.10 is amended by revising paragraphs (a) and (b), by
redesignating paragraphs (c) through (e) as (d) through (f), and by
adding new paragraph (c) to read as follows:
Sec. 80.10 Fees for certification services.
(a) Fees for straight colors including lakes. The fee for the
services provided by the regulations in this part in the case of each
request for certification submitted in accordance with Sec. 80.21(j)(1)
and (j)(2) shall be 30 cents per pound of the batch covered by such
requests, but no such fee shall be less than $192.
(b) Fees for repacks of certified color additives and color
additive mixtures. The fees for the services provided under the
regulations in this part in the case of each request for certification
submitted in accordance with Sec. 80.21(j)(3) and (j)(4) shall be:
(1) 100 pounds or less--$30.
(2) Over 100 pounds but not over 1,000 pounds--$30 plus 6 cents for
each pound over 100 pounds.
(3) Over 1,000 pounds--$84 plus 2 cents for each pound over 1,000
pounds.
(c) The fees established in paragraphs (a) and (b) of this section
will increase as Federal salary costs increase, commencing with pay
raises on or after January 1, 1996.
* * * * *
Dated: September 26, 1994,
William K. Hubbard,
Interim Deputy Commissioner for Policy.
[FR Doc. 94-29381 Filed 11-28-94; 8:45 am]
BILLING CODE 4160-01-F
