[Federal Register Volume 89, Number 217 (Friday, November 8, 2024)]
[Rules and Regulations]
[Pages 88635-88642]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-25974]


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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.

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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.

[[Page 88636]]


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

[[Page 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 Sec.  80.10, ``Fees for certification 
services,'' to:
    <bullet> 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 (Sec.  80.10(a));
    <bullet> increase the fees for repacks of certified color additives 
and color additive mixtures from $35 for 100 pounds or less to $45 
(Sec.  80.10(b)(1));
    <bullet> 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 (Sec.  80.10(b)(2)); and
    <bullet> 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 (Sec.  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

[[Page 88638]]

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

[[Page 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

[[Page 88640]]

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]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                       Notes (e.g., risk assumptions;
                                              Primary       Low        High       Dollar     Discount      Time      source citations; whether inclusion
                 Category                    estimate    estimate    estimate      year      rate (%)     horizon     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      $2,507  ..........  ..........  ..........           3  ..........  ....................................
     transfers.
                                                $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                   No effect
     governments.
 
                                           -------------------------------------------------------------------------------------------------------------

[[Page 88641]]

 
    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/regulatory-impact-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

0
1. The authority citation for part 80 continues to read as follows:

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


0
2. In Sec.  80.10, revise paragraphs (a) and (b) 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 (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 Sec.  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.
* * * * *


[[Page 88642]]


    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