Federal Register / Vol. 89, No. 217 / Friday, November 8, 2024 / Rules and Regulations 88635 

auditor must, as soon as practical, report 

through the methods indicated below, 

all instances of fraud, illegal acts, and 

all indications or instances of 

noncompliance with laws, whether 

material or not, to: 

(1) The president of the auditee’s 

governance board via the auditor’s 

preferred method; 

(2) RUS via email; 

(3) OC–ECD via email; and 

(4) OIG, as follows: 

(i) For all audits performed in 

accordance with § 1773.3(d) (audits 

conducted in accordance with 2 CFR 

part 200), report to the USDA–OIG– 

Audit, National Single Audit 

Coordinator for USDA, 1400 

Independence Ave. SW, Ste. 419, 

Washington, DC 20250, email: OIGUSDAsingleaudit@oig.usda.gov, or 

online at: http://usdaoig.oversight.gov. 

(ii) For all other audits conducted in 

accordance with § 1773.3 report to the 

USDA Office of Inspector General 

online at: https://usdaoig.oversight.gov. 

Subpart C—RUS Requirements for the 

Submission and Review of the 

Reporting Package 

■ 7. Amend § 1773.21 by revising 

paragraph (d) to read as follows: 

§ 1773.21 Auditee’s review and 

submission of the reporting package. 

* * * * * 

(d) The auditee must include a 

complete reporting package as defined 

in § 1773.2. 

* * * * * 

Subpart D—RUS Reporting 

Requirements 

■ 8. Amend § 1773.32 by revising 

paragraph (a) and removing paragraph 

(d). 

The revision reads as follows: 

§ 1773.32 Reports on internal control; 

compliance with provisions of laws, 

regulations, contracts, and grant 

agreements; and instances of fraud. 

(a) As required by GAGAS, the 

auditor must prepare a written report 

describing the scope of the auditor’s 

testing of internal control over financial 

reporting and of compliance with 

provisions of laws, regulations, 

contracts, and grant agreements, and 

state whether the tests provided 

sufficient, appropriate evidence to 

support opinions on the effectiveness of 

internal control and on compliance with 

provisions of laws, regulations, 

contracts, and grant agreements. This 

report must include the manual or 

printed signature of the audit firm and 

must include the following items as 

appropriate: 

(1) Significant deficiencies and 

material weaknesses in internal control; 

(2) Identified or suspected instances 

of noncompliance with provisions of 

laws, regulations, contracts and grant 

agreements that have a material effect 

on the financial statements or other 

financial data significant to the audit 

objectives and any other instances that 

warrant the attention of those charged 

with governance; 

(3) Identified or suspected instances 

of fraud that have a material effect, 

either quantitatively or qualitatively, to 

the financial statements or other 

financial data significant to the audit 

objectives; and 

(4) Identified or suspected instances 

of abuse that have a material effect, 

either quantitatively or qualitatively, to 

the financial statements or other 

financial data significant to the audit 

objectives. 

* * * * * 

■ 9. Revise § 1773.34 to read as follows: 

§ 1773.34 Schedule of findings and 

recommendations. 

The auditor must prepare a schedule 

of findings and recommendations to be 

included with the reports on internal 

control; compliance with laws, 

regulations, contracts, and grant 

agreements; and instances of fraud. The 

report must contain the status of known 

but uncorrected deficiencies from prior 

audits that affect the current audit 

objective. The schedule of findings and 

recommendations shall be developed 

and presented utilizing the elements of 

a finding discussed in GAGAS and shall 

include recommendations for 

remediation. If the schedule does not 

include responses from management, as 

well as any planned corrective actions, 

those items must be submitted directly 

to RUS by management in accordance 

with § 1773.4(j). 

Subpart E—RUS Audit Requirements 

and Documentation 

■ 10. Revise § 1773.40 to read as 

follows: 

§ 1773.40 Regulatory assets. 

The auditor’s audit documentation 

shall support that the auditor tested 

whether all regulatory assets comply 

with the requirements of FASB 

Accounting Standards Codification 

(ASC) 980 or GASB Statement (GASBS) 

62, as appropriate. For Electric auditees 

only, the auditor’s audit documentation 

shall support that all regulatory assets 

have received RUS approval. 

■ 11. Revise § 1773.45 to read as 

follows: 

§ 1773.45 Regulatory liabilities. 

The auditor’s audit documentation 

shall support that all regulatory 

liabilities comply with the requirements 

of FASB Accounting Standards 

Codification (ASC) 980 or GASB 

Statement (GASBS) 62, as appropriate. 

For electric auditees only, the auditor’s 

audit documentation shall document 

whether all regulatory liabilities have 

received RUS approval. 

Andrew Berke, 

Administrator, Rural Utilities Service, Rural 

Development. 

[FR Doc. 2024–25914 Filed 11–7–24; 8:45 am] 

BILLING CODE 3410–15–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Part 80 

[Docket No. FDA–2022–N–1635] 

RIN 0910–AI69 

Color Additive Certification; Increase 

in Fees for Certification Services 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Final rule. 

SUMMARY: The Food and Drug 

Administration is amending the 

regulation setting fees for color additive 

certification services to increase these 

fees. This increase will allow FDA to 

continue to provide, maintain, and 

equip an adequate color additive 

certification program as required by the 

Federal Food, Drug, and Cosmetic Act 

(FD&C Act). 

DATES: This rule is effective December 9, 

2024. 

ADDRESSES: For access to the docket to 

read background documents or 

comments received, go to https://

www.regulations.gov and insert the 

docket number found in brackets in the 

heading of this final rule into the 

‘‘Search’’ box and follow the prompts, 

and/or go to the Dockets Management 

Staff, 5630 Fishers Lane, Rm. 1061, 

Rockville, MD 20852, 240–402–7500. 

FOR FURTHER INFORMATION CONTACT: 

With regard to the final rule: Bryan 

Bowes, Office of the Chief Scientist, 

Office of Cosmetics and Colors, Food 

and Drug Administration, 5001 Campus 

Dr., College Park, MD 20740, 240–402– 

1122; or Carrol Bascus, Office of Policy, 

Regulations and Information, Human 

Foods Program, Food and Drug 

Administration, 5001 Campus Dr., 

College Park, MD 20740, 240–402–2378. 


ddrumheller on DSK120RN23PROD with RULES1
88636 Federal Register / Vol. 89, No. 217 / Friday, November 8, 2024 / Rules and Regulations 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Executive Summary 

A. Purpose of the Final Rule 

B. Summary of the Major Provisions of the 

Final Rule 

C. Legal Authority 

D. Costs and Benefits 

II. Background 

A. Need for the Regulation/History of the 

Rulemaking 

B. Summary of Comments to the Proposed 

Rule 

C. General Overview of the Final Rule 

III. Legal Authority 

IV. Comments on the Proposed Rule and FDA 

Response 

A. Introduction 

B. Description of Comments and FDA 

Response 

V. Effective/Compliance Date(s) 

VI. Economic Analysis of Impacts 

A. Introduction 

B. Overview of Benefits, Costs, and 

Transfers 

VII. Analysis of Environmental Impact 

VIII. Paperwork Reduction Act of 1995 

IX. Federalism 

X. Consultation and Coordination With 

Indian Tribal Governments 

XI. References 

I. Executive Summary 

A. Purpose of the Final Rule 

The Food and Drug Administration 

(FDA or we) is amending the regulation 

setting fees for color additive 

certification services to increase these 

fees. This increase will allow FDA to 

continue to provide, maintain, and 

equip an adequate color additive 

certification program as required by the 

FD&C Act. The fees will help to recover 

the full costs of operating FDA’s color 

additive certification program. 

B. Summary of the Major Provisions of 

the Final Rule 

The final rule amends the color 

additive regulation to increase the fees 

for certification services. The fees for 

straight colors including lakes will be 

$0.45 per pound ($0.10 per pound 

increase) with a minimum fee of $288. 

There will be similar increases in fees 

for repacks of certified color additives 

and color additive mixtures. 

C. Legal Authority 

We are issuing the final rule 

consistent with our statutory authority, 

under the FD&C Act, which requires 

fees to provide, maintain, and equip an 

adequate color additive certification 

program, as specified in our regulations. 

D. Costs and Benefits 

The final rule amends existing color 

additive regulations to increase fees for 

certification services. The costs of the 

rule include the cost to read and 

understand the rule. As the increase in 

fees is not associated with any change 

in our certification program, no 

economic benefits are expected to result 

from the final rule. Similarly, the impact 

of the increase in certification fees on 

color additive manufacturers is 

considered a transfer, rather than an 

economic cost. Accordingly, we do not 

estimate economic benefits associated 

with this final rule, and the impact of 

the increase in color certification fees is 

estimated as an ongoing transfer from 

manufacturers of color additives to the 

Federal Government. The economic 

burden of the final rule accrues to color 

additive manufacturers. We estimate a 

one-time cost to read and understand 

the rule for all color additive 

manufacturers. The present value of this 

cost is approximately $5,384 at a 3 

percent rate of discount, and $5,183 at 

a 7 percent rate of discount. The 

annualized value of these costs 

estimates is approximately $631 at a 3 

percent discount rate and $738 at a 7 

percent discount rate. 

II. Background 

A. Need for the Regulation/History of 

the Rulemaking 

In accordance with section 

721(a)(1)(B) of the FD&C Act (21 U.S.C. 

379e(a)(1)(B)), certain color additives 

must be certified for use by FDA in 

food, drugs, cosmetics, and certain 

medical devices. Section 721(e) of the 

FD&C Act provides in relevant part that 

the certification of color additives must 

only be performed upon payment of 

fees, to be specified by regulation, as 

necessary to provide, maintain, and 

equip an adequate service for such 

purpose. When certifying a color 

additive, FDA analyzes samples from 

each batch of color additive received 

from a manufacturer and verifies that it 

meets composition and purity 

specifications. FDA certification is 

necessary before color additives that are 

subject to certification are permitted to 

be used in these FDA-regulated 

products. Under the color additive 

certification fee regulation, 

manufacturers pay fees, based on the 

weight of each batch for certification. 

These fees support the full costs of 

operating FDA’s color additive 

certification program. 

The current fee schedule specified in 

part 80 (21 CFR part 80) became 

effective in 2005 (and was amended in 

2006 to correct a typographical error). 

Since 2005, the costs of the certification 

program have significantly increased 

because of the increase in general 

operating expenses, including the 

purchase and maintenance of critical 

equipment, rent and facility charges, 

and staff payroll. Therefore, in the 

Federal Register of November 2, 2022 

(87 FR 66116), we published a proposed 

rule to amend the color additive 

regulation to increase the fees for 

certification services. The change in fees 

will allow FDA to continue to provide, 

maintain, and equip an adequate color 

additive certification program as 

required by section 721(e) of the FD&C 

Act. We proposed to increase the fees 

for certifying color additives to reflect 

increasing operating costs for the 

certification program. The fee schedule 

for color certification, as provided for in 

our regulations, is designed to cover all 

the costs involved in certifying batches 

of color additives. This includes 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, 

conducting research, inspecting 

establishments, and purchasing and 

maintaining equipment. The current fee 

schedule is insufficient to provide, 

maintain, and equip an adequate color 

additive certification program. As fees 

have not kept pace with inflation, we 

have struggled to recover the full costs 

of operating FDA’s color certification 

program, resulting in a financial 

shortfall for the program. 

Our Color Certification Fee Study (Fee 

Study) (Ref. 1) provides data and 

information about the current financial 

condition of the color additive 

certification program. As noted in our 

Fee Study, in recent years, successful 

operation of color certification activities 

has relied upon prior year carryover 

funding to address a deficit between 

program expenses and annual fee 

collections. This is not sustainable 

because carryover funding and annual 

fee collections are diminishing due to 

increased costs and low collections. 

Therefore, the fee increase will help 

to ensure that collected fees are 

sufficient to fund the full cost of our 

color certification activities. Consistent 

with section 721(e) of the FD&C Act, the 

fee increase in the final rule is necessary 

to cover rising operating costs and 

maintain an adequate color additive 

certification program. 

B. Summary of Comments to the 

Proposed Rule 

The proposed rule provided a 60-day 

comment period. Based on a request 

from stakeholders, we re-opened the 

comment period for an additional 45 

days (88 FR 4117 (January 24, 2023)). In 

April 2024, we reopened the comment 

period a second time to add the Fee 


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Federal Register / Vol. 89, No. 217 / Friday, November 8, 2024 / Rules and Regulations 88637 

Study to the docket (89 FR 32384 (April 

26, 2024)). In May 2024, based on a 

request from stakeholders, we extended 

the comment period again for 30 days 

(89 FR 46042 (May 28, 2024)). We 

received fewer than 15 comments on the 

proposed rule. The comments were from 

individuals and an industry trade 

association. A few comments supported 

the rulemaking. Other comments raised 

questions and concerns about our 

rationale for the $0.10 per pound 

increase. The comments urged FDA to 

provide supporting data to justify the 

need for the fee increase. 

We address the comments in more 

detail in section IV. 

C. General Overview of the Final Rule 

This final rule revises § 80.10, ‘‘Fees 

for certification services,’’ to: 

• increase the fee for certification 

services from $0.35 to $0.45 per pound 

for straight colors including lakes, and 

change the minimum fee from $224 to 

$288 (§ 80.10(a)); 

• increase the fees for repacks of 

certified color additives and color 

additive mixtures from $35 for 100 

pounds or less to $45 (§ 80.10(b)(1)); 

• increase the fees for repacks of 

certified color additives and color 

additive mixtures over 100 pounds, but 

not over 1,000 pounds, from $35 plus 

$0.06 for each pound over 100 pounds 

to $45 plus $0.08 for each pound over 

100 pounds (§ 80.10(b)(2)); and 

• increase the fees for repacks of 

certified color additives and color 

additive mixtures over 1,000 pounds 

from $89 plus $0.02 for each pound over 

1,000 pounds to $114 plus $0.03 for 

each pound over 1,000 pounds 

(§ 80.10(b)(3)). 

The fee increase will help to ensure 

the continued viability of an adequate 

certification program in accordance 

with section 721(e) of the FD&C Act. 

III. Legal Authority 

FDA is issuing this final rule 

consistent with our authority under 

section 721(e) of the FD&C Act which 

requires that fees necessary to provide, 

maintain, and equip an adequate color 

additive certification program be 

specified in our regulations. FDA is also 

issuing this final rule under section 

701(a) of the FD&C Act (21 U.S.C. 

371(a)), which gives us the authority to 

issue regulations for the efficient 

enforcement of the FD&C Act. 

IV. Comments on the Proposed Rule 

and FDA Response 

A. Introduction 

We received fewer than 15 comments 

on the proposed rule. The comments 

were from individuals and an industry 

trade association. Some comments 

supported the rulemaking, including a 

few that expressed general support 

without focusing on a particular 

provision in the proposed rule. Other 

comments questioned the fee increase 

and asked that we provide additional 

information to support the increase in 

fees. Some comments expressed 

concerns about our rationale for the 

$0.10 per pound increase for straight 

colors including lakes and urged FDA to 

explain the need more thoroughly for 

the fee increase. One comment 

suggested that we consider an 

alternative increase of $0.05 per pound 

instead of the proposed fee of $0.10 per 

pound, which they stated, would 

significantly impact costs for color 

manufacturers. Another comment 

questioned if the color certification fee 

is used only to fund activities that 

support color certification. A comment 

also argued that annual financial 

reserves would be sufficient to allow the 

program to operate with no additional 

fee increase. 

We describe and respond to the 

comments in section B of this 

document. We numbered each comment 

to help distinguish between different 

comments. We grouped similar 

comments together under the same 

number, and, in some cases, we 

separated different issues discussed in 

the same comment and designated them 

as distinct comments for purposes of 

our responses. The number assigned to 

each comment or comment topic is 

purely for organizational purposes and 

does not signify the comment’s value or 

importance or the order in which 

comments were received. 

B. Description of Comments and FDA 

Response 

(Comment 1) A few comments 

expressed general support for FDA’s 

color additive certification program. The 

comments stated that the regulations, 

‘‘particularly for food and cosmetics 

products are necessary to ensure the 

safety and well-being of Americans.’’ 

With respect to the proposed fee 

increase in the proposed rule, one 

comment stated that the proposed rule 

‘‘would aid funding of a federal agency, 

but it would take into account recent 

inflation.’’ Another comment noted that 

‘‘recovering the operational costs will 

provide the FDA with more resources to 

test and evaluate color additives in 

consumer products, which could help 

protect public health.’’ 

(Response 1) We agree that the final 

rule will help FDA’s color additive 

certification program by covering the 

increased costs of certifying the color 

additives. The fee increase will also 

benefit public health by maintaining an 

adequate certification program that 

continues to ensure the safety of the 

color additives used in food and other 

products. 

(Comment 2) One comment stated 

that ‘‘there does not seem to be reason 

for the sudden want to increase the 

fees.’’ It suggests that the process for 

analyzing color additives has not 

changed much and asserts that ‘‘an 

explanation that more thoroughly 

explains the need to spend more on 

analyzing color additives’’ should be 

provided. 

(Response 2) As stated in the 

proposed rule, the current fee schedule 

is insufficient to provide, maintain, and 

equip an adequate color additive 

certification program (87 FR 66116 at 

66117). In our Fee Study, we explain 

that a diminishing prior year carryover 

and reduced collections is placing the 

color certification program in a 

financially precarious position, 

necessitating the fee increase. Further, 

the funding shortfall prevents FDA from 

updating and replacing laboratory 

equipment necessary for color 

certification. The additional funding 

will allow FDA to replace obsolete items 

and invest in new laboratory equipment, 

contributing to the overall efficiency of 

the certification program, and ensure we 

cover all the costs of our color 

certification activities and continue to 

meet our statutory obligation to 

maintain an adequate certification 

program in accordance with section 

721(e) of the FD&C Act. 

(Comment 3) One comment agreed 

with the necessity to adjust fees and our 

goal of maintaining an effective 

certification program. However, the 

comment noted that ‘‘careful 

consideration is warranted to strike a 

balance between covering program costs 

and avoiding undue financial burden on 

manufacturers.’’ It also stated that we 

must ‘‘assess the proposed fee 

adjustment to ensure they are 

reasonable and justified.’’ 

(Response 3) We carefully considered 

the need for the fee increase and 

decided on an amount that would help 

to ensure funding to provide, maintain, 

and equip an adequate color 

certification program. Our Fee Study 

further explains and illustrates the 

funding challenges we are experiencing 

in the color certification program. We 

did not raise color certification fees for 

almost 20 years. As a result, in recent 

years, collections have cumulatively 

lagged behind expenditures by more 

than $3 million (Ref. 1). This is causing 

significant funding shortfalls and 

preventing the color certification 


ddrumheller on DSK120RN23PROD with RULES1
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program from operating efficiently (e.g., 

causing longer batch certification times). 

Also, as described in the previous 

response, additional funding will allow 

FDA to replace obsolete items and 

invest in new laboratory equipment. 

Therefore, it is necessary to increase the 

fees to ensure collected fees cover all 

the costs of our color certification 

activities as required by law. In light of 

the increased costs of the color 

certification program, the increase in 

fees is reasonable and justified. 

(Comment 4) One comment disagreed 

with the proposed rule and stated that 

it was ‘‘not sufficiently clear as to the 

accounting or the rationale to warrant a 

$0.10 per pound increase.’’ The 

comment asserted that the last fee 

increase was $0.05 per pound and 

‘‘based on recent account figures, even 

a $0.05 increase would be sufficient.’’ 

(Response 4) Our Fee Study lists the 

costs and the collections for the color 

additive certification program. Color 

certification fees have not kept up with 

inflation and as a result, current 

collections are not sufficient to sustain 

the program. The Fee Study also 

compared the proposed increase to an 

alternate amount of $0.05. The resulting 

estimates show that an increase that is 

50 percent less than the proposed $0.10 

per pound would not be sufficient to 

maintain an adequate color certification 

program. The last color certification fees 

increase was almost 20 years ago. Given 

the current funding shortfall, the 

increase is necessary to sustain and 

maintain an adequate color additive 

certification program. 

(Comment 5) One comment that 

opposed the proposed fee increase 

argued that the proposed rule does not 

‘‘explain or identify with any specificity 

where increases in operating costs’’ may 

warrant the increase. 

(Response 5) We disagree with this 

assertion. In the proposed rule, we 

stated ‘‘since 2005, the costs of the 

certification program have significantly 

increased because of general operating 

expenses, including the purchase and 

maintenance of critical equipment, rent 

and facility charges, and escalating staff 

payroll’’ (87 FR 66116 at 66117). We 

also added a Fee Study to the 

administrative record to explain the 

funding challenges for the certification 

program as well as provide additional 

information to support the fee increase. 

(Comment 6) One comment asserted 

that the proposal to increase the fee by 

$0.10 per pound ‘‘is a more significant 

increase than the agency has proposed 

in the past.’’ 

(Response 6) The comment’s assertion 

is incorrect. In 1982, we also 

implemented a $0.10 per pound 

increase (47 FR 24691, June 8, 1982). 

(Comment 7) One comment suggested 

that if we are not able to justify the need 

for a $0.10 per pound increase, we 

should provide for a $0.05 increase as 

we have done previously. 

(Response 7) We have justified the 

need for a $0.10 per pound increase. 

Our Fee Study provides additional 

information to support this increase. 

The data and information show that 

dwindling carryover balances, coupled 

with reduced collections and high 

inflation, are not sufficient to sustain an 

adequate color additive certification 

program as required by the FD&C Act. 

Without the fee increase, continuing 

shortfalls will limit the operation of the 

color certification program. Therefore, a 

$0.10 per pound increase is necessary to 

provide, maintain, and equip an 

adequate color certification program. 

(Comment 8) One comment 

recommended that FDA establish a 

maximum fee of $1,600 for batches of 

4,000 pounds or more. Further, the 

comment said this would incentivize 

industry to submit larger batches while 

also saving Agency resources. 

(Response 8) We disagree with the 

comment. If implemented, the 

maximum fee proposed by the comment 

would be based on a certification fee of 

$0.40 per pound, a $0.05 increase over 

the current fee. As outlined in our Fee 

Study, an increase of $0.05 per pound 

is not sufficient to maintain an adequate 

color certification program. 

(Comment 9) One comment expressed 

concern about whether color 

certification fees were being used to 

only fund color certification activities. 

Specifically, the comment questioned if 

the lab equipment in the color 

certification lab ‘‘are used solely for the 

certification of color additives.’’ Further, 

the comment questioned if ‘‘all the costs 

accounted for in the Study provided, 

such as payroll costs and equipment 

usage, are specific to color certification 

activities.’’ The comment asserted that 

‘‘equipment used for activities beyond 

color certification should not serve as 

the basis for a fee increase.’’ 

(Response 9): Certification fees are 

used to cover the costs of the color 

certification program and are not used 

to support unrelated activities. To 

ensure the safety of color additives, the 

color certification program engages in 

many functions, including testing, 

research, methods development, 

publication of scientific research, 

subject matter expertise for inspections 

of color additive manufacturers, as well 

as other related administrative and 

operational activities. Fees are collected, 

pooled, and used to support all color 

certification-related activities. As 

outlined in the Fee Study, collected fees 

are used to fund labor (e.g., payroll) and 

nonpayroll operating expenses (e.g., 

equipment usage) because such 

activities are necessary to provide, 

maintain, and equip an adequate color 

additive certification program, as 

required by the FD&C Act. 

(Comment 10) One comment opposed 

the proposed rule and stated that 

‘‘recent account figures provide no basis 

or suggest any financial deficit that 

would require a fee increase.’’ Further, 

the comment asserted that the ‘‘Lab has 

a financial reserve that would allow the 

Lab to operate with no additional fee 

increase.’’ The comment argued that the 

certification program ‘‘does not operate 

on deficit spending and typically has 

carryover from year-to-year.’’ For these 

reasons, the comment questioned the 

need for the proposed fee increase. 

(Response 10) We disagree with the 

comment. Our Fee Study provides data 

and information that describes the 

current financial condition of the color 

additive certification program. The Fee 

Study explains that we previously relied 

upon prior year carryover funding to 

address the deficit between program 

expenses and annual fee collections. 

However, carryover funding and annual 

fee collections are diminishing due to 

low collections and the increased costs 

of maintaining an adequate certification 

program, which make the fee increases 

necessary. Relying on the carryover 

balance is no longer viable to support 

the color certification program. 

(Comment 11) Another comment 

suggested that we ‘‘establish a policy on 

the management of the color 

certification lab’s reserves.’’ The policy 

would ‘‘ensure the agency is 

maintaining an appropriate reserve and 

that future refunds or fee increases are 

based on specific metrics.’’ 

(Response 11) Fees that are collected 

and not obligated at the end of the fiscal 

year are available to support the color 

certification program in future fiscal 

years. We refer to this as ‘‘carryover’’ 

while the comment refers to these funds 

as ‘‘reserves.’’ The FDA color 

certification program maintains a 

modest carryover balance to operate the 

color certification program successfully, 

which enables us to mitigate financial 

risks to the color certification program, 

such as the risk of under collecting fees 

and issues relating to funds availability 

during the transition to a new fiscal 

year. FDA constantly monitors and 

analyzes its carryover balance, but, due 

to the complexity of program 

operations, it is unrealistic to target a 

specific reserve balance as several 

factors outside of our control impact 


ddrumheller on DSK120RN23PROD with RULES1
Federal Register / Vol. 89, No. 217 / Friday, November 8, 2024 / Rules and Regulations 88639 

funds availability, including fee 

collections, inflation, unexpected 

equipment costs, etc. As explained in 

our Fee Study, we cannot rely on 

dwindling carryover balances to sustain 

the color certification program. A fee 

increase is necessary to cover the full 

costs of our color certification activities. 

(Comment 12) Another comment 

stated that a ‘‘manufacturer’s suggested 

end-of-life is not indicative of an 

equipment’s actual lifespan’’ and that 

‘‘the lab should be able to continue to 

utilize any equipment that is still 

operable.’’ The comments speculated if 

there are reasons beyond end-of-life that 

explain why we are seeking new 

equipment and ‘‘would new equipment 

result in a demonstrable benefit to the 

companies receiving certification?’’ 

(Response 12) We agree that the 

manufacturer’s suggested end-of-life 

does not mean that a piece of laboratory 

equipment is no longer useful. However, 

when the manufacturer stops servicing 

the laboratory equipment, it can be 

costly and inefficient to maintain the 

aged items. We require properly 

functioning laboratory equipment to 

conduct color certification activities and 

maintain an adequate color certification 

program. It would not be prudent for us 

to wait for equipment to fail before 

seeking to replace it because this would 

contribute to delays in the color 

certification process and reduce the 

program’s efficiency. Therefore, when a 

manufacturer notifies us that a piece of 

equipment is reaching end-of-life, we 

begin the procurement process to obtain 

new equipment. The procurement 

process is lengthy and can take months. 

In recent years, we were unable to 

purchase new equipment because of 

ongoing budget concerns. 

The fee increase will help to resolve 

budget concerns and enable us to timely 

purchase new, more efficient equipment 

to replace those items that have reached 

end-of life, cannot be maintained, or are 

obsolete. The fee increase will also help 

to address delays in batch certification 

times caused by reduced resources. The 

purchase of new equipment will allow 

FDA to maintain an adequate color 

certification program while supporting 

efficient operations, which, in turn, 

benefits companies that require 

certification. 

(Comment 13) One comment stated 

that our recent decision to stop 

providing bottles for sample submission 

‘‘passes a significant cost to 

manufacturers’’ and required 

‘‘manufacturers to use the same vendor, 

removing a company’s ability to 

negotiate a reasonable price.’’ The 

comment argued that continuing to pass 

the cost on to manufacturers should be 

‘‘factored into any decision to raise 

fees.’’ 

(Response 13) In April 2024, we 

notified color manufacturers that we 

would stop providing bottles for sample 

submission. We previously supplied 

sample bottles to all color certification 

customers. We stopped the service as 

part of our overall effort to conserve 

funds and reduce program costs. While 

this action helped reduce some program 

costs, the fee increase is still necessary 

to cover many other program expenses. 

Contrary to the claim in the comment, 

we are not requiring manufacturers to 

use the same vendor. The notice 

instructs manufacturers to use the same 

type of bottles because of our storage 

limitations; however, the bottles are 

available from multiple vendors. 

(Comment 14) In arguing against the 

fee increase, one comment asserted that 

lower color certification volumes ‘‘can 

most likely be attributed to destocking 

occurring by companies with products 

containing certified colors.’’ Because 

companies are destocking certified 

colors ‘‘that built up during the recent 

COVID pandemic,’’ the comment 

claimed that ‘‘manufacturers expect the 

collection to adjust as companies work 

through their existing stock.’’ 

(Response 14) We appreciate the 

information about destocking, but 

disagree with the suggestion. The color 

certification program is sustained by 

collected fees. Lower certification 

volumes contribute to a reduction in the 

amount of collected fees we receive. 

This directly affects our ability to 

provide, maintain, and equip an 

adequate color certification program. 

Relying on industry’s assertion that 

collections will adjust does not resolve 

the ongoing funding concerns of the 

color certification program. Given that 

collected fees are meant to cover the full 

costs of the color certification program, 

lower certification volumes support the 

need for a fee increase. 

(Comment 15) Using the example of 

FD&C Red No. 3, one comment claimed 

that ‘‘if a certified color suffers a 

downward trend in response to 

regulatory activity’’ by FDA, ‘‘the lab 

should be able to foresee the resulting 

impacts on its activity and cut costs 

accordingly.’’ The comment stated that 

the downward trend ‘‘should not be a 

reason to trigger a fee increase.’’ 

(Response 15) We note that we 

continue to certify batches of FD&C Red 

No. 3 for its listed uses. We disagree 

with the suggestion that FDA activities 

related to certain color additive listings 

triggered FDA’s proposed fee increase. 

As discussed in our Fee Study, 

collections that have not kept pace with 

inflation and a diminishing carryover 

balance explain the need for a fee 

increase. These funding concerns for the 

color certification program predate 

FDA’s filing of the pending color 

additive petition requesting that FDA 

remove the color additive listing for 

FD&C Red No. 3 (88 FR 10245). 

(Comment 16) One comment 

expressed concern about ‘‘the lack of 

communication and transparency’’ by 

our color certification laboratory. 

Specifically, the comment raised 

questions and sought information about 

FDA’s method development and 

publication process. 

(Response 16) This rule does not 

cover methods development and 

publication. These activities are outside 

the scope of this rulemaking. 

(Comment 17) A few comments 

questioned the safety of FD&C Red. No. 

40. They urged FDA to either ban this 

color additive or, alternatively, replace 

the additive in certain products. 

(Response 17) The comments are 

outside the scope of this rulemaking, so 

we decline to address them. 

V. Effective/Compliance Date(s) 

The preamble to the proposed rule 

stated that we would make any final 

rule resulting from this rulemaking 

effective 30 days after its date of 

publication in the Federal Register (87 

FR 66116 at 66117). 

We did not receive any comments on 

the proposed effective date for the final 

rule. Therefore, the final rule will 

become effective December 9, 2024. 

VI. Economic Analysis of Impacts 

A. Introduction 

We have examined the impacts of the 

final rule under Executive Order 12866, 

Executive Order 13563, Executive Order 

14094, the Regulatory Flexibility Act (5 

U.S.C. 601–612), the Congressional 

Review Act/Small Business Regulatory 

Enforcement Fairness Act (5 U.S.C. 801, 

Pub. L. 104–121), and the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104–4). 

Executive Orders 12866, 13563, and 

14094 direct us to assess all benefits, 

costs, and transfers 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). Rules 

are ‘‘significant’’ under Executive Order 

12866 Section 3(f)(1) (as amended by 

Executive Order 14094) if they ‘‘have an 

annual effect on the economy of $200 

million or more (adjusted every 3 years 

by the Administrator of [the Office of 


ddrumheller on DSK120RN23PROD with RULES1
88640 Federal Register / Vol. 89, No. 217 / Friday, November 8, 2024 / Rules and Regulations 

Information and Regulatory Affairs 

(OIRA)] for changes in gross domestic 

product); or adversely affect in a 

material way the economy, a sector of 

the economy, productivity, competition, 

jobs, the environment, public health or 

safety, or State, local, territorial, or tribal 

governments or communities.’’ OIRA 

has determined that this final rule is not 

a significant regulatory action under 

Executive Order 12866 Section 3(f)(1). 

Because this rule is not likely to result 

in an annual effect on the economy of 

$100 million or more or meet other 

criteria specified in the Congressional 

Review Act/Small Business Regulatory 

Enforcement Fairness Act, OIRA has 

determined that this rule does not fall 

within the scope of 5 U.S.C. 804(2). 

The Regulatory Flexibility Act 

requires us to analyze regulatory options 

that would minimize any significant 

impact of a rule on small entities. 

Because the increase in fees for color 

certification services would not 

significantly increase costs to 

manufacturers, we certify that the final 

rule will not have a significant 

economic impact on a substantial 

number of small entities. 

The Unfunded Mandates Reform Act 

of 1995 (section 202(a)) requires us to 

prepare a written statement, which 

includes estimates of anticipated 

impacts, before issuing ‘‘any rule that 

includes any Federal mandate that may 

result in the expenditure by State, local, 

and tribal governments, in the aggregate, 

or by the private sector, of $100,000,000 

or more (adjusted annually for inflation) 

in any one year.’’ The current threshold 

after adjustment for inflation is $183 

million, using the most current (2023) 

Implicit Price Deflator for the Gross 

Domestic Product. This final rule will 

not result in an expenditure in any year 

that meets or exceeds this amount. 

B. Overview of Benefits, Costs, and 

Transfers 

This final rule amends existing color 

additive regulations by increasing fees 

for certification services. The fee 

schedule for color certification, as 

provided for in this final rule, is 

designed to cover all the costs of 

operating FDA’s color certification 

program. This includes both the cost of 

specific tests required by the regulations 

and the general costs associated with 

the certification program, such as the 

costs of accounting, reviewing data, 

issuing certificates, conducting research, 

inspecting establishments, and 

purchasing and maintaining equipment. 

The fee for certification services of 

straight colors including lakes will 

increase from $0.35 per pound to $0.45 

per pound, with the minimum fee 

increasing from $224 to $288. The fees 

for repacks of certified color additives 

and color additive mixtures will 

increase from $35 for 100 pounds or less 

to $45. The fee for repacks of certified 

color additives and color additive 

mixtures over 100 pounds, but not over 

1,000 pounds will increase from $35 

plus $0.06 for each pound over 100 

pounds to $45 plus $0.08 for each 

pound over 100 pounds. The fee for 

repacks of certified color additives and 

color additive mixtures over 1,000 

pounds will increase from $89 plus 

$0.02 for each pound over 1,000 pounds 

to $114 plus $0.03 for each pound over 

1,000 pounds. 

The economic burdens of this final 

rule accrue to color additive 

manufacturers. We estimate a one-time 

cost to read and understand the rule for 

all color additive manufacturers. The 

present value of this cost is 

approximately $5,384 at a 3 percent rate 

of discount and $5,183 at a 7 percent 

rate of discount. The annualized value 

of these cost estimates are 

approximately $631 at a 3 percent 

discount rate and $738 at a 7 percent 

discount rate. Because the value of these 

impacts is small relative to 

manufacturer revenues, we assume that 

the supply of color additives will not be 

affected by this final rule. Consequently, 

we estimate no other impacts associated 

with this final rule. 

As noted in the preamble, the fees are 

intended to recover the full costs of 

operating FDA’s color certification 

program. Since 2005, the costs of the 

certification program have significantly 

increased as a result of escalating staff 

payroll, rent, and facility charges, as 

well as general operational expenses, 

including purchasing and maintaining 

equipment. As the increase in fees is not 

associated with any change in FDA’s 

certification program, no economic 

benefits are expected to result from this 

final rule. Similarly, the impact of the 

increase in certification fees on color 

additive manufacturers is considered a 

transfer, rather than an economic cost. 

Accordingly, we do not estimate 

economic benefits associated with this 

final rule, and the impact of the increase 

in color certification fees is estimated as 

an ongoing transfer from manufacturers 

of color additives to the Federal 

Government. Our estimates are 

summarized in table 1. 

TABLE 1—SUMMARY OF BENEFITS, COSTS, AND DISTRIBUTIONAL EFFECTS OF THE FINAL RULE

[Thousands of 2023 dollars] 

Category Primary 

estimate 

Low 

estimate 

High 

estimate Dollar year 

Discount 

rate 

(%) 

Time 

horizon 

Notes (e.g., risk 

assumptions; source 

citations; whether 

inclusion of capital 

effects differs across 

low, primary, high 

estimates; etc.) 

Benefits: 

Annualized monetized benefits ...................................... .................. .................. .................. .................. .................. ..................

Annualized quantified, but non-monetized, benefits ...... .................. .................. .................. .................. .................. ..................

Unquantified benefits ..................................................... .................. .................. .................. .................. .................. ..................

Costs: 

Annualized monetized costs .......................................... $0.63 .................. .................. .................. 3 ..................

$0.74 .................. .................. .................. 7 ..................

Annualized quantified, but non-monetized, costs .......... .................. .................. .................. .................. .................. ..................

Unquantified costs ......................................................... .................. .................. .................. .................. .................. ..................

Transfers: 

Annualized monetized Federal budgetary transfers ...... $2,507 .................. .................. .................. 3 ..................

$2,507 .................. .................. .................. 7 ..................

Bearers of transfer gain and loss? ................................ Bearer of transfer loss: Manufacturers 

of color additives 

Bearer of transfer gain: Federal Government 

Category Effects Notes 

Effects on State, local, or Tribal governments .............. No effect 


ddrumheller on DSK120RN23PROD with RULES1
Federal Register / Vol. 89, No. 217 / Friday, November 8, 2024 / Rules and Regulations 88641 

TABLE 1—SUMMARY OF BENEFITS, COSTS, AND DISTRIBUTIONAL EFFECTS OF THE FINAL RULE—Continued 

[Thousands of 2023 dollars] 

Category Primary 

estimate 

Low 

estimate 

High 

estimate Dollar year 

Discount 

rate 

(%) 

Time 

horizon 

Notes (e.g., risk 

assumptions; source 

citations; whether 

inclusion of capital 

effects differs across 

low, primary, high 

estimates; etc.) 

Category Effects Notes 

Effects on small businesses .......................................... This final rule generates costs to 

small businesses, as well as transfers from small businesses to FDA 

that we treat as costs from the perspective of the small business. On 

average, these costs amount to approximately 0.25% of annual average revenues of the small firms in 

the affected industry 

 

Effects on wages ........................................................... No Effect 

Effects on growth ........................................................... No Effect 

We have developed a comprehensive 

Economic Analysis of Impacts that 

assesses the impacts of the final rule. 

The full analysis of economic impacts is 

available in the docket for this final rule 

(docket number FDA–2022–N–1635) 

(Ref. 2) and at https://www.fda.gov/ 

about-fda/economics-staff/regulatoryimpact-analyses-ria. 

VII. Analysis of Environmental Impact 

We have determined under 21 CFR 

25.30(h) 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. 

VIII. Paperwork Reduction Act of 1995 

This final rule contains no collection 

of information. Therefore, clearance by 

the Office of Management and Budget 

under the Paperwork Reduction Act of 

1995 is not required. 

IX. Federalism 

We have analyzed this final rule in 

accordance with the principles set forth 

in Executive Order 13132. We have 

determined that the rule does not 

contain policies that have substantial 

direct effects on the States, on the 

relationship between the National 

Government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. Accordingly, we 

conclude that the rule does not contain 

policies that have federalism 

implications as defined in the Executive 

order and, consequently, a federalism 

summary impact statement is not 

required. 

X. Consultation and Coordination With 

Indian Tribal Governments 

We have analyzed this rule in 

accordance with the principles set forth 

in Executive Order 13175. We have 

determined that the rule does not 

contain policies that have substantial 

direct effects on one or more Indian 

Tribes, on the relationship between the 

Federal Government and Indian Tribes, 

or on the distribution of power and 

responsibilities between the Federal 

Government and Indian Tribes. 

Accordingly, we conclude that the rule 

does not contain policies that have 

tribal implications as defined in the 

Executive order and, consequently, a 

tribal summary impact statement is not 

required. 

XI. References 

The following references are on 

display at the Dockets Management Staff 

(see ADDRESSES) and are available for 

viewing by interested persons between 

9 a.m. and 4 p.m. Monday through 

Friday; they are also available 

electronically at https://

www.regulations.gov. Although FDA 

verified the website addresses in this 

document, please note that websites are 

subject to change over time. 

1. FDA, ‘‘Color Certification Fee Study,’’ 

March 2024. 

2. FDA, ‘‘Color Additive Certification; 

Increase in Fees for Certification 

Services’’ Final Regulatory Impact 

Analysis, Final Regulatory Flexibility 

Analysis, Unfunded Mandates Reform 

Act Analysis. Available at https://

www.fda.gov/AboutFDA/

ReportsManualsForms/Reports/

EconomicAnalyses/default.htm. 

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 part 80 

continues to read as follows: 

Authority: 21 U.S.C. 371, 379e. 

■ 2. In § 80.10, revise paragraphs (a) and 

(b) to read as follows: 

§ 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 

§ 80.21(j)(1) and (2) shall be $0.45 per 

pound of the batch covered by such 

requests, but no such fee shall be less 

than $288. 

(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 

§ 80.21(j)(3) and (4) shall be: 

(1) 100 pounds or less—$45. 

(2) Over 100 pounds but not over 

1,000 pounds—$45 plus $0.08 for each 

pound over 100 pounds. 

(3) Over 1,000 pounds—$114 plus 

$0.03 for each pound over 1,000 

pounds. 

* * * * * 


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88642 Federal Register / Vol. 89, No. 217 / Friday, November 8, 2024 / Rules and Regulations 

1ERISA section 518 and Code section 7508A(b) 

generally provide that, in the case of an employee 

benefit plan, sponsor, administrator, participant, 

beneficiary, or other person with respect to such a 

plan affected by a federally declared disaster (as 

defined in section 162(i)(5) of the Code), a 

terroristic or military action, or a public health 

emergency declared by the Secretary of Health and 

Human Services pursuant to section 319 of the 

Public Health Service Act, notwithstanding any 

other provision of law, the Secretaries of Labor and 

the Treasury may prescribe (by notice or otherwise) 

a period of up to 1 year that may be disregarded 

in determining the date by which any action is 

required or permitted to be completed. Section 518 

of ERISA and section 7508A(b) of the Code further 

provide that no plan shall be treated as failing to 

be operated in accordance with the terms of the 

plan solely as a result of complying with the 

postponement of a deadline under those sections. 

2See, e.g., Hurricane Helene Recovery: Brief 

Overview of FEMA Programs and Resources, 

(October 3, 2024), available at https://

crsreports.congress.gov/product/pdf/IN/IN12429; 

89 FR 84908 (October 24, 2024); 89 FR 84923 

(October 24, 2024); 89 FR 84919 (October 24, 2024); 

89 FR 84914 (October 24, 2024); 89 FR 84912 

(October 24, 2024); 89 FR 84920 (October 24, 2024). 

3Section 104 of Title I of the Health Insurance 

Portability and Accountability Act of 1996 (HIPAA) 

requires that the Secretaries of Labor, the Treasury, 

and Health and Human Services (the Departments) 

ensure through an interagency Memorandum of 

Understanding (MOU) that regulations, rulings, and 

interpretations issued by each of the Departments 

relating to the same matter over which two or more 

departments have jurisdiction, are administered so 

as to have the same effect at all times. Under section 

104 of HIPAA, the Departments, through the MOU, 

are to provide for coordination of policies relating 

to enforcement of the same requirements in order 

to have a coordinated enforcement strategy that 

avoids duplication of enforcement efforts and 

assigns priorities in enforcement. See section 104 of 

HIPAA and Memorandum of Understanding 

applicable to Title XXVII of the PHS Act, Part 7 of 

ERISA, and Chapter 100 of the Code, published at 

64 FR 70164, December 15, 1999. 

4The applicable PHS Act provisions are (1) the 

30-day period (or 60-day period, if applicable) to 

request special enrollment under PHS Act section 

2704(f); (2) the 60-day election period for COBRA 

continuation coverage under PHS Act section 2205; 

(3) the date for making COBRA premium payments 

pursuant to PHS Act section 2202(2)(C) and (3); (4) 

the date for individuals to notify the plan of a 

qualifying event or determination of disability 

under PHS Act section 2206(3); (5) the date within 

which individuals may file a benefit claim under 

the plan’s claims procedure pursuant to 45 CFR 

147.136(b) (incorporating 29 CFR 2560.503–1); (6) 

the date within which claimants may file an appeal 

of an adverse benefit determination under the 

plan’s claims procedure pursuant to 45 CFR 

147.136(b) (incorporating 29 CFR 2560.503–1(h)); 

(7) the date within which claimants may file a 

request for an external review after receipt of an 

adverse benefit determination or final internal 

adverse benefit determination pursuant to 45 CFR 

147.136(c)(2)(vi) and (d)(2)(i), and (8) the date 

within which a claimant may file information to 

perfect a request for external review upon a finding 

that the request was not complete pursuant to 45 

CFR 147.136(d)(2)(ii). 

Dated: October 30, 2024. 

Robert M. Califf, 

Commissioner of Food and Drugs. 

[FR Doc. 2024–25974 Filed 11–7–24; 8:45 am] 

BILLING CODE 4164–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 54 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

29 CFR Parts 2560 and 2590 

Extension of Certain Timeframes for 

Employee Benefit Plans, Participants, 

Beneficiaries, Qualified Beneficiaries, 

and Claimants Affected by Hurricane 

Helene, Tropical Storm Helene, or 

Hurricane Milton 

AGENCIES: Employee Benefits Security 

Administration, Department of Labor; 

Internal Revenue Service, Department of 

the Treasury. 

ACTION: Extension of timeframes. 

SUMMARY: This document announces the 

extension of certain timeframes under 

the Employee Retirement Income 

Security Act and the Internal Revenue 

Code for group health plans, disability 

and other welfare plans, pension plans, 

and participants, beneficiaries, qualified 

beneficiaries, and claimants of these 

plans affected by Hurricane Helene, 

Tropical Storm Helene, or Hurricane 

Milton. 

DATES: November 8, 2024. 

FOR FURTHER INFORMATION CONTACT: 

Department of Labor, Elizabeth 

Schumacher or David Sydlik, Office of 

Health Plan Standards and Compliance 

Assistance, Employee Benefits Security 

Administration, at 202–693–8335, and 

Thomas Hindmarch, Office of 

Regulations and Interpretations, 

Employee Benefits Security 

Administration, at 202–693–8500; or 

William Fischer, Internal Revenue 

Service, Department of the Treasury at 

202–317–5500. 

SUPPLEMENTARY INFORMATION: 

I. Purpose 

In this document, the Employee 

Benefits Security Administration, 

Department of Labor, Internal Revenue 

Service, and Department of the Treasury 

(the Agencies) are extending certain 

timeframes otherwise applicable to 

group health plans, disability and other 

welfare benefit plans, pension plans, 

and their participants, beneficiaries, 

qualified beneficiaries, and claimants 

under the Employee Retirement Income 

Security Act of 1974 (ERISA) and the 

Internal Revenue Code of 1986 (the 

Code), under the authority of section 

518 of ERISA and section 7508A(b) of 

the Code.1 2 In order to ensure that 

plans, participants, beneficiaries, 

qualified beneficiaries, and claimants in 

disaster areas are not further adversely 

affected by Hurricane Helene, Tropical 

Storm Helene, and Hurricane Milton 

with respect to their employee benefit 

plans, certain timeframes are extended 

during the Relief Period established by 

this document, as explained in further 

detail below. 

As a result of Hurricane Helene, 

Tropical Storm Helene, and Hurricane 

Milton, participants, beneficiaries, 

qualified beneficiaries, and claimants 

covered by group health plans, 

disability or other employee welfare 

benefit plans, and employee pension 

benefit plans may encounter problems 

in exercising their health coverage 

portability and continuation coverage 

rights, or in filing or perfecting their 

benefit claims. Recognizing the 

numerous challenges such individuals 

already face as a result of these natural 

disasters, it is important that the 

Agencies take steps to minimize the 

possibility of such individuals losing 

benefits because of a failure to comply 

with certain pre-established timeframes. 

Similarly, the Agencies recognize that 

affected group health plans may have 

difficulty in complying with the timing 

of certain notice obligations. 

The Agencies believe the relief 

established by this document is 

immediately needed to preserve and 

protect the benefits of participants, 

beneficiaries, qualified beneficiaries, 

and claimants in affected plans. 

Accordingly, the Agencies have 

determined, pursuant to section 553 of 

the Administrative Procedure Act, 5 

U.S.C. 553(b)(A), (B) and 553(d), that 

there is good cause for granting the 

relief provided by this document 

effective immediately upon publication, 

and that notice and public participation 

may result in undue delay and, 

therefore, be contrary to the public 

interest. 

This document has been reviewed by 

the Department of Health and Human 

Services (HHS), which has advised the 

Agencies that HHS concurs with the 

relief specified in this document in the 

application of the laws under its 

jurisdiction.3

HHS has advised the Agencies that 

HHS encourages plan sponsors of nonFederal governmental plans and health 

insurance issuers offering group or 

individual health insurance coverage to 

extend otherwise applicable timeframes 

under titles XXII and XXVII of the 

Public Health Service Act (PHS Act) 4

for participants, beneficiaries, and 


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