Document ID: FDA-2011-N-0529-0001
Agency: fda
Document Type: Notice
Title: Burden of Food and Drug Administration Food Safety Modernization Act Fee Amounts on Small Business
Posted Date: 2011-08-01T04:00Z

[Federal Register Volume 76, Number 147 (Monday, August 1, 2011)]
[Notices]
[Pages 45818-45820]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-19333]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2011-N-0529]

Burden of Food and Drug Administration Food Safety Modernization 
Act Fee Amounts on Small Business; Request for Comments

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice; Request for comments and information.

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SUMMARY: The Food and Drug Administration (FDA) is announcing the 
establishment of a docket to obtain information that will be used to 
formulate a proposed set of guidelines in consideration of the burden 
of fee amounts on small business, as set forth in the FDA Food Safety 
Modernization Act (FSMA). FSMA provides the Agency with authority under 
the Federal Food, Drug, and Cosmetic Act (the FD&C Act) to assess and 
collect user fees, including those for costs associated with certain 
domestic and foreign facility reinspections, failure to comply with a 
recall order, and importer reinspections. The Agency is seeking public 
comment on what burdens these fees impose on small business, and 
whether and how the Agency should alleviate such burdens. In 
particular, the Agency is seeking public comments on whether a 
reduction of fees or other consideration for small business is 
appropriate, and if so, what factors the Agency should consider for 
each. In addition, the Agency is seeking public comment on how small 
business should be defined or recognized. FDA is establishing this 
docket in order to provide an opportunity for interested parties to 
provide data and share views that will inform future Agency actions 
with respect to these matters.

DATES: Submit either electronic or written comments by October 17, 
2011.

ADDRESSES: Submit electronic comments to http://www.regulations.gov. 
Submit written comments to the Division of Dockets Management (HFA-
305). Food and Drug Administration, 5630 Fishers Lane, rm. 1061, 
Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Alexis Nazario-Negron, Office of 
Financial Management, Food and Drug Administration, 1350 Piccard Dr., 
rm. 210E,Rockville, MD 20850, 301-796-7223, Alexis.Nazario-Negron@fda.hhs.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

    Each year about 48 million people (1 in 6 Americans) are sickened, 
128,000 are hospitalized, and 3,000 die from food borne diseases, 
according to recent data from the Centers for Disease Control and 
Prevention (Refs. 1 and 2). This is a significant public health burden 
that is largely preventable.
    FSMA (Pub. L. 111-353), signed into law by President Obama on 
January 4, 2011, enables FDA to better protect public health by helping 
to ensure the safety and security of the food supply. It enables FDA to 
focus more on preventing food safety problems rather than reacting to 
problems after they occur. The law also provides FDA with new 
enforcement authorities to help it achieve higher rates of compliance 
with prevention- and risk-based food safety standards and to better 
respond to problems when they do occur. The law also gives FDA 
important new tools to better ensure the safety of imported foods and 
directs FDA to build an integrated national food safety system in 
partnership with State and local authorities.
    Among the new authorities Congress provided in FSMA, the Secretary 
of Health and Human Services (and by delegation, FDA) is to assess and 
collect fees from industry for FDA's costs associated with certain 
activities. Section 107(a) of FSMA (which amends the FD&C Act by adding 
section 743 (21 U.S.C. 379j-31)) mandates that FDA assess and collect 
fees for costs associated with certain domestic and foreign facility 
reinspections, failure to comply with a recall order under sections 423 
and 412(f) of the FD&C Act (21 U.S.C. 350l and 350a(f)), and certain 
importer reinspections (section 743(a)(1) of the FD&C Act).\1\
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    \1\ FDA is not soliciting comments, in this Federal Register 
notice, on the burdens to small businesses that participate in the 
voluntary qualified importer program (VQIP) under section 
743(a)(1)(C) of the FD&C Act. FDA intends to consider such burdens 
at the time the VQIP is established.
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    Section 743(b)(2)(A) of the FD&C Act specifies that the Agency must 
base these fees on an estimation of 100 percent of the costs of the 
various activities which are described in section 743(a)(1), for the 
fiscal year. These fees must be published in the Federal Register not 
later than 60 days before the start of each fiscal year. Elsewhere in 
this issue of the Federal Register, FDA is publishing notice of these 
fees.
    Congress directed FDA to publish, within 180 days of enactment of 
FSMA, a proposed set of guidelines in consideration of the burden of 
fee

[[Page 45819]]

amounts on small business (section 743(b)(2)(B)(iii) of the FD&C Act). 
Such consideration may include reduced fee amounts for small 
businesses. However, FDA would like to gather additional information 
before publishing such guidelines. Therefore, the Agency is publishing 
this notice to request public input to help the Agency understand what 
factors should be taken into account when drafting the proposed 
guidelines. The Agency intends to consider the comments received and 
then publish for comment a proposed set of guidelines on the 
considerations of the burden of fee amounts on small business.
    Any adjustment to the fee schedule for small business must be done 
through notice and comment rulemaking (section 743(b)(2)(B)(iii) of the 
FD&C Act). Thus, the Agency would consider the proposed set of 
guidelines, and comments on such guidelines, in any future rulemaking 
should it decide to propose to adjust the fee schedule for small 
business.

II. Request for Comments and Information

    In order to better inform the Agency, the Agency seeks comment on 
the following questions, although any additional comments that can 
inform the guidelines are welcome.

A. Is a fee reduction or other consideration for small business 
appropriate? Please explain

    Section 743(b)(2)(B)(iii) of the FD&C Act states that the proposed 
set of guidelines may include consideration of reduced fee amounts for 
small business, but consideration of reduced fee amounts is not 
required.
    1. What is the impact, if any, of fee amounts on small business, in 
general, or to specific types of small businesses, that FDA should 
consider in the proposed set of guidelines? Please explain.
    2. Should the Agency consider the type of fee collected when 
considering the burdens to small business? For example, do the types of 
activities for which a fee is collected for reinspection have a 
different impact to a small business than those collected based on a 
failure to comply with a recall order? Please explain.
    3. Assuming there is an impact of fee amounts to small business, or 
certain types of small businesses, should the Agency consider a 
reduction in the fees for such small businesses in the proposed set of 
guidelines? If so, should the Agency consider the reduction in fees to 
all small businesses, or for only those small businesses that have a 
demonstrated need for reduced fees? Please explain. If the Agency 
should not consider a reduction in the fees for small business, why 
not? Please explain.
    4. Are there ways to alleviate any burden on small business other 
than a fee reduction? Please explain.

B. How should small business be defined or recognized for the purpose 
of the proposed guidelines?

    Several provisions in FSMA require FDA to define small and very 
small business. For example, section 103(a) of FSMA amends the FD&C Act 
by adding section 418 (21 U.S.C. 350g) regarding ``Hazard Analysis and 
Risk-Based Preventive Controls.'' Section 418(n)(1)(B) of the FD&C Act 
requires FDA to define ``small business'' and ``very small business'' 
for the purpose of the preventive control regulations for facilities. 
Similarly, FSMA section 105(a) amends the FD&C Act by adding section 
419 (21 U.S.C. 350h) regarding standards for produce safety. Section 
419(a)(3)(F) of the FD&C Act requires FDA to define ``small business'' 
and ``very small business'' for the purpose of the produce safety 
regulations.
    In addition, the Agency has issued a number of final rules where 
the Agency considered business size when considering the regulatory 
impact of the rule to industry, including the following final rules:
     ``Procedures for the Safe and Sanitary Processing and 
Importing of Fish and Fishery Products'' (60 FR 65096, December 18, 
1995) (Docket No. FDA-1993-N-0065 (formerly Docket No. 1993N-0195));
     ``Hazard Analysis and Critical Control Point (HAACP); 
Procedures for the Safe and Sanitary Processing and Importing of 
Juice'' (66 FR 6138, January 19, 2001) (Docket No. FDA-1997-N-0505 
(formerly Docket No. 1997N-0511));
     ``Current Good Manufacturing Practice in Manufacturing, 
Packaging, Labeling, or Holding Operations for Dietary Supplements'' 
(72 FR 34752, June 25, 2007) (Docket No. FDA-1996-N-0028 (formerly 
Docket No. 1996N-0417 or 97N-0417));
     ``Food Labeling, Safe Handling Statements, Labeling of 
Shell Eggs; Refrigeration of Shell Eggs Held for Retail Distribution'' 
(65 FR 76092, December 5, 2000) (Docket No. FDA-1998-N-0087 (formerly 
Docket No. 1998N-1230); Docket No. FDA-1996-P-0025 (formerly Docket No. 
96P-0418); and Docket No. FDA-1997-P-0017 (formerly Docket No. 1997P-
0197));
     ``Prevention of Salmonella Enteritidis in Shell Eggs 
During Production, Storage, and Transportation'' (74 FR 33030, July 9, 
2009) (Docket No. FDA-2000-N-0190 (formerly Docket No. 2000N-0504)).
    FDA seeks comment on how a small business should be defined or 
recognized for purposes of the proposed set of guidelines in 
consideration of the burden of fee amounts on small business. More 
specifically, the Agency requests comment on the following questions.
    1. If FDA has defined, by regulation under other FSMA or non-FSMA 
authorities, an entity as a small or a very small business, should such 
a definition be considered in the proposed set of guidelines to 
identify the businesses that may be burdened by the fee amounts under 
section 743 of the FD&C Act or should the Agency consider a separate 
definition of small business for purposes of considering the burden of 
fee amounts? Please explain.
    2. If the Agency relies on an existing regulatory definition of 
small or very small business that the Agency established under other 
FSMA or non-FSMA authorities, should any such definition apply in any 
circumstance where a fee is imposed or only where the fee derives from 
the rule where such business is defined as a small business? For 
example, if a facility is reinspected for a violation of the preventive 
controls regulations, should the Agency consider adjustments to the fee 
only if the facility meets the definition of small business under the 
preventive controls regulations, or should the Agency consider such 
adjustments if the facility meets any definition of small business 
under any FDA regulation? Please explain.
    3. There may be circumstances where no regulatory definition of 
small business exists for a given facility. Under these circumstances, 
what factors or characteristics should FDA use to identify small 
businesses for which FDA may consider the burden of fee amounts? Please 
explain. Factors to consider could include, but are not limited to, the 
segment of the food supply chain to which the entity belongs (e.g., 
growers, processors, importers and distributors, retailers, etc.); the 
sector to which the entity belongs (e.g., seafood, produce, dairy, 
eggs, juice, dietary supplements, etc.); the number of employees; the 
gross revenue, net income, net assets, market liquidity, or other 
financial measures or ratios; and whether the entity has a subsidiary 
or is a subsidiary of a parent company.

[[Page 45820]]

C. If FDA considers reduced fee amounts in the proposed set of 
guidelines, what factors should FDA consider in establishing the amount 
by which fees could be reduced?

    1. Should FDA consider the following:
     A waiver of all of the fees;
     A percentage reduction of the fees; or
     A fixed dollar reduction of the fees?
    2. Are there circumstances that justify one approach over another? 
Please explain.
    3. Are there other approaches that should be considered? Please 
explain.

III. Comments

    Interested persons may submit to the Division of Dockets Management 
(see ADDRESSES) either electronic or written comments regarding this 
document. It is only necessary to send one set of comments. It is no 
longer necessary to send two copies of mailed comments. Identify 
comments with the docket number found in brackets in the heading of 
this document. Received comments may be seen in the Division of Dockets 
Management between 9 a.m. and 4 p.m., Monday through Friday.

IV. References

    The following references have been placed on display in the 
Division of Dockets Management (see ADDRESSES) and may be seen by 
interested persons between 9 a.m. and 4 p.m., Monday through Friday. 
(FDA has verified the Web site addresses, but FDA is not responsible 
for any subsequent changes to the Web sites after this document 
publishes in the Federal Register.)

1. Scallan E., R.M. Hoekstra, F.J. Angulo, R.V. Tauxe, M-A. Widdowson, 
S.L. Roy, et al., ``Foodborne Illness Acquired in the United States--
Major Pathogens,'' Emerging Infectious Diseases, 17(1):7-15, 2011. 
Available at http://www.cdc.gov/EID/content/17/1/7.htm.
2. Scallan E., P.M. Griffin, F.J. Angulo, R.V. Tauxe, R.M. Hoekstra, 
``Foodborne Illness Acquired in the United States--Unspecified 
Agents,'' Emerging Infectious Diseases, 17(1):16-22, 2011. Available at 
http://www.cdc.gov/EID/content/17/1/16.htm.

    Dated: July 26, 2011.
Leslie Kux,
Acting Assistant Commissioner for Policy.
[FR Doc. 2011-19333 Filed 7-29-11; 8:45 am]
BILLING CODE 4160-01-P