Document ID: FDA-2022-N-1592-0001
Agency: fda
Document Type: Notice
Title: Food Safety Modernization Act ThirdParty Certification Program User Fee
Rate for Fiscal Year 2023
Posted Date: 2022-07-28T04:00Z

[Federal Register Volume 87, Number 144 (Thursday, July 28, 2022)]
[Notices]
[Pages 45319-45323]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-16171]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2022-N-1592]

Food Safety Modernization Act Third-Party Certification Program 
User Fee Rate for Fiscal Year 2023

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing the 
fiscal year (FY) 2023 annual fee rate for recognized accreditation 
bodies and accredited certification bodies, and the initial and renewal 
fee rate for accreditation bodies applying to be recognized in the 
third-party certification program that is authorized by the Federal 
Food, Drug, and Cosmetic Act (FD&C Act), as amended by the FDA Food 
Safety Modernization Act (FSMA). We are also announcing the fee rate 
for certification bodies that

[[Page 45320]]

are applying to be directly accredited by FDA.

DATES: This fee is effective on October 1, 2022, and will remain in 
effect through September 30, 2023.

FOR FURTHER INFORMATION CONTACT: Donald Prater, Office of Food Policy 
and Response, Food and Drug Administration, 10903 New Hampshire Ave., 
Bldg. 1, Rm. 3202, Silver Spring, MD 20993, 301-348-3007.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 307 of FSMA (Pub. L. 111-353), Accreditation of Third-Party 
Auditors, amended the FD&C Act to create a new provision, section 808, 
under the same name. Section 808 of the FD&C Act (21 U.S.C. 384d) 
directs FDA to establish a program for accreditation of third-party 
certification bodies \1\ conducting food safety audits and issuing food 
and facility certifications to eligible foreign entities (including 
registered foreign food facilities) that meet our applicable 
requirements. Under this provision, we established a system for FDA to 
recognize accreditation bodies to accredit certification bodies, except 
for limited circumstances in which we may directly accredit 
certification bodies to participate in the third-party certification 
program.
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    \1\ For the reasons explained in the third-party certification 
final rule (80 FR 74570 at 74578-74579, November 27, 2015), and for 
consistency with the implementing regulations for the third-party 
certification program in 21 CFR parts 1, 11, and 16, this notice 
uses the term ``third-party certification body'' rather than the 
term ``third-party auditor'' used in section 808(a)(3) of the FD&C 
Act.
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    Section 808(c)(8) of the FD&C Act directs FDA to establish a 
reimbursement (user fee) program by which FDA assesses fees and 
requires reimbursement for the work FDA performs to establish and 
administer the third-party certification program under section 808 of 
the FD&C Act. The user fee program for the third-party certification 
program was established by a final rule entitled ``Amendments to 
Accreditation of Third-Party Certification Bodies To Conduct Food 
Safety Audits and To Issue Certifications To Provide for the User Fee 
Program'' (81 FR 90186, December 14, 2016).
    The FSMA FY 2023 third-party certification program user fee rate 
announced in this notice is effective on October 1, 2022, and will 
remain in effect through September 30, 2023.

II. Estimating the Average Cost of a Supported Direct FDA Work Hour for 
FY 2023

    FDA must estimate its costs for each activity in order to establish 
fee rates for FY 2023. In each year, the costs of salary (or personnel 
compensation) and benefits for FDA employees account for between 50 and 
60 percent of the funds available to, and used by, FDA. Almost all the 
remaining funds (operating funds) available to FDA are used to support 
FDA employees for paying rent, travel, utility, information technology, 
and other operating costs.

A. Estimating the Full Cost per Direct Work Hour in FY 2023

    Full-time Equivalent (FTE) reflects the total number of regular 
straight-time hours (not including overtime or holiday hours) worked by 
employees, divided by the number of compensable hours applicable to 
each fiscal year. Annual leave, sick leave, compensatory time off, and 
other approved leave categories are considered ``hours worked'' for 
purposes of defining FTE employment.
    In general, the starting point for estimating the full cost per 
direct work hour is to estimate the cost of an FTE or paid staff year. 
Calculating an Agency-wide total cost per FTE requires three primary 
cost elements: payroll, non-payroll, and rent.
    We have used an average of past year cost elements to predict the 
FY 2023 cost. The FY 2023 FDA-wide average cost for payroll (salaries 
and benefits) is $173,393; non-payroll (including equipment, supplies, 
information technology, general and administrative overhead) is 
$103,078; and rent (including cost allocation analysis and adjustments 
for other rent and rent-related costs) is $23,944 per paid staff year, 
excluding travel costs.
    Summing the average cost of an FTE for payroll, non-payroll, and 
rent, brings the FY 2023 average fully supported cost to $300,416 \2\ 
per FTE, excluding travel costs. FDA will use this base unit fee in 
determining the hourly fee rate for third-party certification user fees 
for FY 2023 prior to including travel costs as applicable for the 
activity.
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    \2\ Total includes rounding.
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    To calculate an hourly rate, FDA must divide the FY 2023 average 
fully supported cost of $300,416 per FTE by the average number of 
supported direct FDA work hours in FY 2021 (the last FY for which data 
are available). See table 1.

Table 1--Supported Direct FDA Work Hours in a Paid Staff Year in FY 2021
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total number of hours in a paid staff year......................   2,080
Less:
  11 paid holidays..............................................     -88
  20 days of annual leave.......................................    -160
  10 days of sick leave.........................................     -80
  12.5 days of training.........................................    -100
  22 days of general administration.............................    -176
  26.5 days of travel...........................................    -212
  2 hours of meetings per week..................................    -104
                                                                 -------
Net Supported Direct FDA Work Hours Available for Assignments...   1,160
------------------------------------------------------------------------

    Dividing the average fully supported FTE cost in FY 2023 ($300,416) 
by the total number of supported direct work hours available for 
assignment in FY 2021 (1,160) results in an average fully supported 
cost of $259 (rounded to the nearest dollar), excluding travel costs, 
per supported direct work hour in FY 2023.

B. Adjusting FY 2021 Travel Costs for Inflation To Estimate FY 2023 
Travel Costs

    To adjust the hourly rate for FY 2023, FDA must estimate the cost 
of inflation in each year for FY 2022 and FY 2023. FDA uses the method 
prescribed for estimating inflationary costs under the Prescription 
Drug User Fee Act (PDUFA) provisions of the FD&C Act (section 736(c)(1) 
(21 U.S.C. 379h(c)(1))), the statutory method for inflation adjustment 
in the FD&C Act that FDA has used consistently. FDA previously 
determined the FY 2022 inflation rate to be 2.2013 percent: this rate 
was published in the FY 2022 PDUFA user fee rates notice in the Federal 
Register (August 16, 2021, 86 FR 45732). Utilizing the method set forth 
in section 736(c)(1) of the FD&C Act, FDA has calculated an inflation 
rate of 2.2013 percent for FY 2022 and 1.6404 percent for FY 2023. FDA 
intends to use this inflation rate to make inflation adjustments for FY 
2023; the derivation of this rate will be published in the Federal 
Register in the FY 2023 notice for the PDUFA user fee rates. The 
compounded inflation rate for FYs 2022 and 2023 is 1.038778 (or 3.8778 
percent) (calculated as 1 plus 2.2013 percent times 1 plus 1.6404 
percent).
    The average fully supported cost per supported direct FDA work 
hour, excluding travel costs, of $259 already takes into account 
inflation as the calculation above is based on FY 2023 predicted costs. 
FDA will use this base unit fee in determining the hourly fee rate for 
third-party certification program fees for FY 2023 prior to including 
travel costs as applicable for the activity. For the purpose of 
estimating

[[Page 45321]]

the fee, we are using the travel cost rate for foreign travel because 
we anticipate that the vast majority of onsite assessments made by FDA 
under this program will require foreign travel. In FY 2020,\3\ the 
Office of Regulatory Affairs (ORA) spent a total of $1,449,058 on 171 
foreign inspection trips related to FDA's Center for Food Safety and 
Applied Nutrition and Center for Veterinary Medicine field activities 
programs, which averaged a total of $8,474 per foreign inspection trip. 
These trips averaged 3 weeks (or 120 paid hours) per trip. Dividing 
$8,474 per trip by 120 hours per trip results in an additional cost of 
$71 (rounded to the nearest dollar) per paid hour spent for foreign 
inspection travel costs in FY 2020. To adjust $71 for inflationary 
increases in FY 2021, FY 2022, and FY 2023, FDA must multiply it by the 
same inflation factor mentioned previously in this document (1.038778 
or 3.8778 percent) and the inflation factor for FY 2021 \4\ (1.013493), 
which results in an estimated cost of $75 (rounded to the nearest 
dollar) per paid hour in addition to $259 for a total of $334 per paid 
hour ($259 plus $75) for each direct hour of work requiring foreign 
inspection travel. FDA will use this rate in charging fees in FY 2023 
when travel is required for the third-party certification program.
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    \3\ FDA will be using FY 2020 numbers for the foreign inspection 
travel costs due to the limited number of inspections done in FY 
2021 due to travel restrictions caused by the COVID-19 Pandemic.
    \4\ FDA previously determined the FY 2021 inflation rate to be 
1.3493 percent; this rate was published in the FY 2021 PDUFA user 
fee rates notice in the Federal Register (August 3, 2020, 85 FR 
46651).

                 Table 2--FSMA Fee Schedule for FY 2023
------------------------------------------------------------------------
                                                               Fee rates
                        Fee category                            for FY
                                                                 2023
------------------------------------------------------------------------
Hourly rate without travel..................................        $259
Hourly rate if travel is required...........................         334
------------------------------------------------------------------------

III. Fees for Accreditation Bodies and Certification Bodies in the 
Third-Party Certification Program Under Section 808(c)(8) of the FD&C 
Act

    The third-party certification program assesses application fees and 
annual fees. In FY 2023, the only fees that could be collected by FDA 
under section 808(c)(8) of the FD&C Act are the initial application fee 
for accreditation bodies seeking recognition, the annual fee for 
recognized accreditation bodies, the annual fee for certification 
bodies accredited by a recognized accreditation body, the initial 
application fee for a certification body seeking direct accreditation 
from FDA, and the renewal application fee for recognized accreditation 
bodies. Table 3 provides an overview of the fees for FY 2023.

Table 3--FSMA Third-Party Certification Program User Fee Schedule for FY
                                  2023
------------------------------------------------------------------------
                                                               Fee rates
                        Fee category                            for FY
                                                                 2023
------------------------------------------------------------------------
Initial Application Fee for Accreditation Body Seeking           $45,040
 Recognition................................................
Annual Fee for Recognized Accreditation Body................       2,088
Annual Fee for Accredited Certification Body................       2,611
Initial Application Fee for a Certification Body Seeking          45,040
 Direct Accreditation from FDA..............................
Renewal Application Fee for Recognized Accreditation Body...      27,441
------------------------------------------------------------------------

A. Application Fee for Accreditation Bodies Applying for Recognition in 
the Third-Party Certification Program Under Section 808(c)(8) of the 
FD&C Act

    Section 1.705(a)(1) (21 CFR 1.705(a)(1)) establishes an application 
fee for accreditation bodies applying for initial recognition that 
represents the estimated average cost of the work FDA performs in 
reviewing and evaluating initial applications for recognition of 
accreditation bodies.
    The fee is based on the fully supported FTE hourly rates and 
estimates of the number of hours it would take FDA to perform relevant 
activities. These estimates represent FDA's current thinking, and as 
the program evolves, FDA will continue to reconsider the estimated 
hours. Based on data we have acquired since starting the program, we 
estimate that it would take, on average, 80 person-hours to review an 
accreditation body's submitted application, 48 person-hours for an 
onsite performance evaluation of the applicant (including travel and 
other steps necessary for a fully supported FTE to complete an onsite 
assessment), and 32 person-hours to prepare a written report 
documenting the onsite assessment.
    FDA employees review applications and prepare reports from their 
worksites, so we use the fully supported FTE hourly rate excluding 
travel, $259 per hour, to calculate the portion of the user fee 
attributable to those activities: $259 per hour multiplied by (80 hours 
(application review) plus 32 hours (written report)) equals $29,008. 
FDA employees will likely travel to foreign countries for the onsite 
performance evaluations because most accreditation bodies are 
anticipated to be located in foreign countries. For this portion of the 
fee, we use the fully supported FTE hourly rate for work requiring 
travel, $334 per hour, to calculate the portion of the user fee 
attributable to those activities: $334 per hour multiplied by 48 hours 
(i.e., two fully supported FTEs per trip ((2 travel days multiplied by 
8 hours) plus (1 day onsite multiplied by 8 hours))) equaling $16,032. 
The estimated average cost of the work FDA performs in total for 
reviewing an initial application for recognition for an accreditation 
body based on these figures would be $29,008 plus $16,032 equals 
$45,040. Therefore, the application fee for accreditation bodies 
applying for recognition in FY 2023 will be $45,040.

B. Annual Fee for Accreditation Bodies Participating in the Third-Party 
Certification Program Under Section 808(c)(8) of the FD&C Act

    To calculate the annual fee for each recognized accreditation body, 
FDA takes the estimated average cost of work FDA performs to monitor 
performance of a single recognized accreditation body and annualizes 
that over the average term of recognition. At this time, we assume an 
average term of recognition of 5 years. We also assume that FDA will 
monitor 10 percent of recognized accreditation bodies onsite. As the 
program proceeds, we will adjust the term of recognition as 
appropriate. We estimate that for one performance evaluation of a 
recognized accreditation body, it would take, on average (taking into 
account that not all recognized accreditation bodies would be monitored 
onsite), 22 hours for FDA to conduct records review, 8 hours to prepare 
a report detailing the records review and onsite performance 
evaluation, and 8 hours of onsite performance evaluation. Using the 
fully supported FTE hourly rates in table 2, the estimated average cost 
of the work FDA performs to monitor performance of a single recognized 
accreditation body would be $7,770 ($259 per hour multiplied by (22 
hours (records review) plus 8 hours (written report))) plus $2,672 
($334 per hour multiplied by 8 hours (onsite evaluation)), which is 
$10,442. Annualizing this amount over 5 years would lead to an annual 
fee for recognized accreditation bodies of $2,088 for FY 2023.

[[Page 45322]]

C. Annual Fee for Certification Bodies Accredited by a Recognized 
Accreditation Body in the Third-Party Certification Program Under 
Section 808(c)(8) of the FD&C Act

    To calculate the annual fee for a certification body accredited by 
a recognized accreditation body, FDA takes the estimated average cost 
of work FDA performs to monitor performance of a single certification 
body accredited by a recognized accreditation body and annualizes that 
over the average term of accreditation. At this time, we assume an 
average term of accreditation of 4 years. This fee is based on the 
fully supported FTE hourly rates and estimates of the number of hours 
it would take FDA to perform relevant activities. We estimate that FDA 
would conduct, on average, the same activities, for the same amount of 
time to monitor certification bodies accredited by a recognized 
accreditation body as we would to monitor an accreditation body 
recognized by FDA. Using the fully supported FTE hourly rates in table 
2, the estimated average cost of the work FDA performs to monitor 
performance of a single accredited certification body would be $7,770 
($259 per hour multiplied by (22 hours (records review) plus 8 hours 
(written report))) plus $2,672 ($334 per hour multiplied by 8 hours 
(onsite evaluation)), which is $10,442. Annualizing this amount over 4 
years would lead to an annual fee for accredited certification bodies 
of $2,611 for FY 2023.

D. Initial Application Fee for Certification Bodies Seeking Direct 
Accreditation From FDA in the Third-Party Certification Program Under 
Section 808(c)(8) of the FD&C Act

    Section 1.705(a)(3) establishes an application fee for 
certification bodies applying for direct accreditation from FDA that 
represents the estimated average cost of the work FDA performs in 
reviewing and evaluating initial applications for direct accreditation 
of certification bodies.
    The fee is based on the fully supported FTE hourly rates and 
estimates of the number of hours it would take FDA to perform relevant 
activities. These estimates represent FDA's current thinking, and as 
the program evolves, FDA will reconsider the estimated hours. We 
estimate that it would take, on average, 80 person-hours to review a 
certification body's submitted application, 48 person-hours for an 
onsite performance evaluation of the applicant (including travel and 
other steps necessary for a fully supported FTE to complete an onsite 
assessment), and 32 person-hours to prepare a written report 
documenting the onsite assessment.
    FDA employees are likely to review applications and prepare reports 
from their worksites, so we use the fully supported FTE hourly rate 
excluding travel, $259 per hour, to calculate the portion of the user 
fee attributable to those activities: $259 per hour multiplied by (80 
hours (application review) plus 32 hours (written report)) equals 
$29,008. FDA employees will likely travel to foreign countries for the 
onsite performance evaluations because most certification bodies are 
anticipated to be located in foreign countries. For this portion of the 
fee we use the fully supported FTE hourly rate for work requiring 
travel, $334 per hour, to calculate the portion of the user fee 
attributable to those activities: $334 per hour multiplied by 48 hours 
(i.e., two fully supported FTEs for travel ((2 travel days of 8 hours 
each) plus (1 day onsite for 8 hours))) equaling $16,032. The estimated 
average cost of the work FDA performs in total for reviewing an initial 
application for direct accreditation of a certification body based on 
these figures would be $29,008 plus $16,032 equaling $45,040. 
Therefore, the application fee for certification bodies applying for 
direct accreditation from FDA in FY 2023 will be $45,040.

E. Renewal Fee for Accreditation Bodies Participating in the Third-
Party Certification Program Under Section 808(c)(8) of the FD&C Act

    Section 1.705(a)(2) establishes a renewal application fee for 
recognized accreditation bodies that represents the estimated average 
cost of the work FDA performs in reviewing and evaluating renewal 
applications for recognition of accreditation bodies.
    The fee is based on the fully supported FTE hourly rates and 
estimates of the number of hours it would take FDA to perform relevant 
activities. These estimates represent FDA's current thinking, and as 
the program evolves, FDA will reconsider the estimated hours. We 
estimate that it would take, on average, 43 person-hours to review an 
accreditation body's submitted renewal application, 24 person-hours for 
an onsite performance evaluation of the applicant (including travel and 
other steps necessary for a fully supported FTE to complete an onsite 
assessment), and 32 person-hours to prepare a written report 
documenting the onsite assessment.
    FDA employees are likely to review renewal applications and prepare 
reports from their worksites, so we use the fully supported FTE hourly 
rate excluding travel, $259 per hour, to calculate the portion of the 
user fee attributable to those activities: $259 per hour multiplied by 
(43 hours (application review) plus 32 hours (written report)) equaling 
$19,425. FDA employees will likely travel to foreign countries for the 
onsite performance evaluations because most certification bodies are 
anticipated to be located in foreign countries. For this portion of the 
fee we use the fully supported FTE hourly rate for work requiring 
travel, $334 per hour, to calculate the portion of the user fee 
attributable to those activities: $334 per hour multiplied by 24 hours 
(i.e., fully supported FTE multiplied by travel ((2 travel days for 8 
hours each) plus (1 day onsite for 8 hours))) equaling $8,016. The 
estimated average cost of the work FDA performs in total for reviewing 
a renewal application for recognition of an accreditation body based on 
these figures would be $19,425 plus $8,016 equals $27,441. Therefore, 
the renewal application fee for recognized accreditation bodies in FY 
2023 will be $27,441.

IV. Estimated Fees for Accreditation Bodies and Certification Bodies in 
Other Fee Categories for FY 2023

    Section 1.705(a) also establishes application fees for 
certification bodies applying for renewal of direct accreditation. 
Section 1.705(b) also establishes annual fees for certification bodies 
directly accredited by FDA.
    Although we will not be collecting these other fees in FY 2023, for 
transparency and planning purposes, we have provided an estimate of 
what these fees would be for FY 2023 based on the fully supported FTE 
hourly rates for FY 2023 and estimates of the number of hours it would 
take FDA to perform relevant activities as outlined in the Final 
Regulatory Impact Analysis for the Third-Party Certification 
Regulation. Table 4 provides an overview of the estimated fees for 
other fee categories.

  Table 4--Estimated Fee Rates for Other Fee Categories Under the FSMA
                    Third-Party Certification Program
------------------------------------------------------------------------
                                                               Estimated
                                                               fee rates
                        Fee category                            for FY
                                                                 2023
------------------------------------------------------------------------
Renewal application fee for directly accredited                  $27,441
 certification body.........................................
Annual fee for certification body directly accredited by FDA      21,648
------------------------------------------------------------------------

[[Page 45323]]

V. How must the fee be paid?

    Accreditation bodies seeking initial recognition must submit the 
application fee with the application. For recognized accreditation 
bodies and accredited certification bodies, an invoice will be sent 
annually. Payment must be made within 30 days of the receipt invoice 
date. The payment must be made in U.S. currency from a U.S. bank by one 
of the following methods: wire transfer, electronically, check, bank 
draft, or U.S. postal money order made payable to the Food and Drug 
Administration. The preferred payment method is online using an 
electronic check (Automated Clearing House (ACH), also known as eCheck) 
or credit card (Discover, VISA, MasterCard, American Express). Secure 
electronic payments can be submitted using the User Fees Payment Portal 
(Pay.gov) at https://userfees.fda.gov/pay. (Note: only full payments 
are accepted. No partial payments can be made online.) Once you have 
found your invoice, select ``Pay Now'' to be redirected to Pay.gov. 
Electronic payment options are based on the balance due. Payment by 
credit card is available only for balances less than $25,000. If the 
balance exceeds this amount, only the ACH option is available. Payments 
must be made using U.S. bank accounts as well as U.S. credit cards. 
When paying by check, bank draft, or U.S. postal money order, please 
include the invoice number. Also write the FDA post office box number 
(P.O. Box 979108) on the enclosed check, bank draft, or money order. 
Mail the payment including the invoice number on the check stub to: 
Food and Drug Administration, P.O. Box 979108, St. Louis, MO 63197-
9000.
    When paying by wire transfer, it is required that the invoice 
number is included; without the invoice number, the payment may not be 
applied. The originating financial institution may charge a wire 
transfer fee. If the financial institution charges a wire transfer fee, 
it is required to add that amount to the payment to ensure that the 
invoice is paid in full. For international wire transfers, please 
inquire with the financial institutions prior to submitting the 
payment. Use the following account information when sending a wire 
transfer: U.S. Department of the Treasury, TREAS NYC, 33 Liberty St., 
New York, NY 10045, Account Name: Food and Drug Administration, Account 
No.: 75060099, Routing No.: 021030004, Swift No.: FRNYUS33.
    To send a check by a courier such as Federal Express, the courier 
must deliver the check to: U.S. Bank, Attn: Government Lockbox 979108, 
1005 Convention Plaza, St. Louis, MO 63101. (Note: this address is for 
courier delivery only. If you have any questions concerning courier 
delivery, contact U.S. Bank at 314-418-4013. This phone number is only 
for questions about courier delivery.) The tax identification number of 
FDA is 53-0196965. (Note: invoice copies do not need to be submitted to 
FDA with the payments.)

VI. What are the consequences of not paying this fee?

    The consequences of not paying these fees are outlined in 21 CFR 
1.725. If FDA does not receive an application fee with an application 
for recognition, the application will be considered incomplete and FDA 
will not review the application. If a recognized accreditation body 
fails to submit its annual user fee within 30 days of the due date, we 
will suspend its recognition. If the recognized accreditation body 
fails to submit its annual user fee within 90 days of the due date, we 
will revoke its recognition. If an accredited certification body fails 
to pay its annual fee within 30 days of the due date, we will suspend 
its accreditation. If the accredited certification body fails to pay 
its annual fee within 90 days of the due date, we will withdraw its 
accreditation.

    Dated: July 22, 2022.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2022-16171 Filed 7-27-22; 8:45 am]
BILLING CODE 4164-01-P