Document ID: FDA-2023-N-1007-0001
Agency: fda
Document Type: Notice
Title: Over-the-Counter Monograph Drug User Fee Rates for Fiscal Year 2023
Posted Date: 2023-03-27T04:00Z

[Federal Register Volume 88, Number 58 (Monday, March 27, 2023)]
[Notices]
[Pages 18156-18159]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-06299]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2023-N-1007]

Over-the-Counter Monograph Drug User Fee Rates for Fiscal Year 
2023

AGENCY: Food and Drug Administration, Department of Health and Human 
Services (HHS).

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA or Agency) is announcing 
the fee rates under the over-the-counter (OTC) monograph drug user fee 
program (OMUFA) for fiscal year (FY) 2023. The Federal Food, Drug, and 
Cosmetic Act (FD&C Act) authorizes FDA to assess and collect user fees 
from qualifying manufacturers of OTC monograph drugs and submitters of 
OTC monograph order requests. This notice publishes the OMUFA fee rates 
for FY 2023.

DATES: These fees are effective on October 1, 2022, and will remain in 
effect through September 30, 2023.

FOR FURTHER INFORMATION CONTACT: Brandon Lee, Mitra Ramson, and the 
User Fees Support Staff, Office of Financial Management, Food and Drug 
Administration, 4041 Powder Mill Rd., Rm. 61075, Beltsville, MD 20705-
4304, [email protected], 202-510-1643.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 744M of the FD&C Act (21 U.S.C. 379j-72), as added by the 
Coronavirus Aid, Relief, and Economic Security Act (CARES Act), 
authorizes FDA to assess and collect: (1) facility fees from qualifying 
owners of OTC monograph drug facilities and (2) fees from submitters of 
qualifying OTC monograph order requests. These fees are to support 
FDA's OTC monograph drug activities, which are detailed in section 
744L(6) of the FD&C Act (21 U.S.C. 379j-71(6)) and include various FDA 
activities associated with OTC monograph drugs and inspection of 
facilities associated with such products.
    For OMUFA purposes:
     An OTC monograph drug is a nonprescription drug without an 
approved new drug application that is governed by the provisions of 
section 505G of the FD&C Act (21 U.S.C. 355h) (see section 744L(5) of 
the FD&C Act);
     An OTC monograph drug facility (MDF) is a foreign or 
domestic business or other entity that, in addition to meeting other 
criteria, is engaged in manufacturing or processing the finished dosage 
form of an OTC monograph drug (see section 744L(10) of the FD&C Act);
     A contract manufacturing organization (CMO) facility is an 
OTC monograph drug facility where neither the owner nor any affiliate 
of the owner or facility sells the OTC monograph drug produced at such 
facility directly to wholesalers, retailers, or consumers in the United 
States (see section 744L(2) of the FD&C Act); and
     An OTC monograph order request (OMOR) is a request for an 
administrative order, with respect to an OTC monograph drug, which is 
submitted under section 505G(b)(5) of the FD&C Act (see section 744L(7) 
of the FD&C Act).
    Under section 744M(a)(1)(A) of the FD&C Act, a facility fee for FY 
2023 shall be assessed with respect to each facility that is identified 
as an OTC monograph drug facility during the fee-liable period from 
January 1, 2022, through December 31, 2022.\1\ Consistent with the 
statute, FDA will assess and collect facility fees with respect to the 
two types of OTC monograph drug facilities--MDF and CMO facilities. A 
full facility fee will be assessed to each qualifying person that owns 
a facility identified as an MDF (see section 744M(a)(1)(A) of the FD&C 
Act), and a reduced facility fee of two-thirds will be assessed to each 
qualifying person that owns a facility identified as a CMO facility 
(see section 744M(a)(1)(B)(ii) of the FD&C Act). The facility fees for 
FY 2023 are due on June 1, 2023 (see section 744M(a)(1)(D)(ii) of the 
FD&C Act).\2\
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    \1\ Under section 744M(a)(1) of the FD&C Act, ``Each person that 
owns a facility identified as an OTC monograph drug facility on 
December 31 of the fiscal year or at any time during the preceding 
12-month period shall be assessed an annual fee for each such 
facility''. For purposes of FY 2023 facility fees, that time period 
is January 1, 2022, through December 31, 2022.
    \2\ Assuming that, as we anticipate, the FY 2023 fee 
appropriation will occur prior to June 1, 2023. Under section 
744M(a)(1)(D)(ii), the FY 2023 facility fees are due on the later 
of: (1) the first business day of June 2023 (i.e., June 1, 2023) or 
(2) the first business day after the enactment of an appropriations 
Act providing for the collection and obligation of FY 2023 OMUFA 
fees.

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[[Page 18157]]

    As discussed in greater detail below:
     OTC monograph drug facilities are exempt from FY 2023 
facility fees if they had ceased OTC monograph drug activities, and 
updated their registration with FDA to that effect, prior to December 
31, 2021 (see section 744M(a)(1)(B)(i) of the FD&C Act).
     Entities that registered with FDA during the Coronavirus 
Disease 2019 (COVID-19) pandemic whose sole activity with respect to 
OTC monograph drugs during the pandemic consists (or had consisted) of 
manufacturing OTC hand sanitizer products \3\ are not identified as OTC 
monograph drug facilities subject to OMUFA facility fees.\4\
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    \3\ The term ``hand sanitizer'' commonly refers to consumer 
antiseptic rubs. However, because the Health and Human Services 
(HHS) notice published January 12, 2021, referred to ``persons that 
entered the over-the-counter drug market to supply hand sanitizer 
products in response to the COVID-19 Public Health Emergency'' (86 
FR 2420, https:www.federalregister.gov/documents/2021/01/12/2021-00237/notice-that-persons-that-entered-the-over-the-counter-drug-market-to-supply-hand-sanitizer-during), we are using the same 
terminology--``hand sanitizer products''--to refer to OTC monograph 
drug products intended for use (without water) as antiseptic hand 
rubs or antiseptic hand wipes by consumers or healthcare personnel.
    \4\ See HHS Federal Register notice of January 12, 2021, 86 FR 
2420, https://www.federalregister.gov/documents/2021/01/12/2021-00237/notice-that-persons-that-entered-the-over-the-counter-drug-market-to-supply-hand-sanitizer-during.
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    In addition to facility fees, the Agency is authorized to assess 
and collect fees from submitters of OMORs, except for OMORs that 
request certain safety-related changes (as discussed below). There are 
two levels of OMOR fees, based on whether the OMOR at issue is a Tier 1 
or Tier 2 OMOR.\5\
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    \5\ Under OMUFA, a Tier 1 OMOR is defined as any OMOR that is 
not a Tier 2 OMOR (see section 744L(8) of the FD&C Act). Tier 2 
OMORs are detailed in section 744L(9) of the FD&C Act.
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    For FY 2023, the OMUFA fee rates are: Tier 1 OMOR fees ($517,381), 
Tier 2 OMOR fees ($103,476), MDF facility fees ($26,153), and CMO 
facility fees ($17,435). These fees are effective for the period from 
October 1, 2022, through September 30, 2023.\6\ This document is issued 
pursuant to section 744M(a)(4) and 744M(c)(4)(B) of the FD&C Act and 
describes the calculations used to set the OMUFA facility fees and OMOR 
fees for FY 2023 in accordance with the directives in the statute.
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    \6\ These OMUFA fees are for FY 2023, per section 744M(a) of the 
FD&C Act.
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II. Facility Fee Revenue Amount for FY 2023

A. Base Fee Revenue Amount

    Under OMUFA, FDA sets annual facility fees to generate the total 
facility fee revenues for each fiscal year established by section 
744M(b) of the FD&C Act. The yearly base revenue amount is the starting 
point for setting annual facility fee rates. The base revenue for FY 
2023 is the dollar amount of the total revenue amount for the previous 
fiscal year, without certain adjustments made for that previous year, 
and is $15,112,328 (see section 744M(b)(3)(B) of the FD&C Act).

B. Fee Revenue Adjustment for Inflation

    Under OMUFA, the annual base revenue amount for facility fees is 
adjusted for inflation for FY 2023 and each subsequent fiscal year (see 
section 744M(c)(1) of the FD&C Act). That provision states that the 
dollar amount of the inflation adjustment is equal to the product of 
the annual base revenue for the fiscal year and the inflation 
adjustment percentage. For each of FYs 2022 and 2023, the inflation 
adjustment percentage is equal to the average annual percent change 
that occurred in the Consumer Price Index (CPI) for urban consumers 
(Washington-Baltimore, DC-MD-VA-WV; Not Seasonally Adjusted; All items; 
Annual Index) for the first 3 years of the preceding 4 years of 
available data (section 744M(c)(1)(C) of the FD&C Act). As a result of 
a geographical revision made by the Bureau of Labor and Statistics in 
January 2018, the ``Washington, DC-Baltimore'' index was discontinued 
and replaced with two separate indices (i.e., the ``Washington-
Arlington-Alexandria'' and ``Baltimore-Columbia-Towson'' indices). To 
continue applying a CPI that best reflects the geographic region in 
which FDA is located and that provides the most current data available, 
the ``Washington-Arlington-Alexandria'' index is used in calculating 
the inflation adjustment percentage. Table 1 provides the summary data 
for the percent changes in the specified CPI for the Washington-
Arlington-Alexandria, DC-VA-MD-WV. The data are published by the Bureau 
of Labor Statistics on its website: https://data.bls.gov/pdq/SurveyOutputServlet?data_tool=dropmap&series_id=CUURS35ASA0,CUUSS35ASA0.

 Table 1--Annual and 3-Year Average Percent Change in CPI for Washington-Arlington-Alexandria, DC-VA-MD-WV Area
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                     Year                           2019            2020            2021         3-Year average
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Annual CPI...................................          264.78          267.16          277.73  .................
Annual Percent Change........................         1.2745%         0.8989%         3.9568%            2.0434%
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    Pursuant to the statute, the FY 2023 base revenue of $15,112,328 is 
increased by 2.0434 percent, yielding an inflation adjusted base 
revenue amount of $15,421,133 for FY 2023 (see section 744M(c)(1)(A)).

C. Additional Dollar Amounts

    For FY 2023, the inflation adjusted revenue amount of $15,421,133 
is increased by an additional dollar amount of $6 million as specified 
in the statute (see section 744M(b)(2)(E) of the FD&C Act). This yields 
an adjusted fee revenue subtotal of $21,421,133.

D. Fee Revenue Adjustment for Additional Direct Cost

    Fee revenue is further adjusted for additional direct costs as 
specified in the statute. In FY 2023, $4 million is added to the 
facility fee revenues to account for additional direct costs (see 
section 744M(c)(3)(B) of the FD&C Act). Adding the additional direct 
costs amount of $4 million to $21,421,133 yields an additional direct 
cost adjusted fee revenue of $25,421,133.

E. Fee Revenue Adjustment for Operating Reserve

    Under OMUFA, FDA may further increase the FY 2023 facility fee 
revenue and fees if such an adjustment is necessary to provide up to 10 
weeks of operating reserves of carryover user fees for OTC monograph 
drug activities (see section 744M(c)(2)(B) of the FD&C Act). 
Accordingly, in setting fees for FY 2023, the Agency must estimate its 
carryover for FY 2023 to ensure the Agency has sufficient carryover to 
continue its OTC monograph drug activities, as required under the 
statute, including an

[[Page 18158]]

operating reserve to mitigate certain financial risks, such as under 
collections, unanticipated surges in program costs, or a lapse in 
appropriations. Under the statute, if FDA has carryover for OTC 
monograph drug activities that would exceed 10 weeks of such operating 
reserves, FDA is required to decrease FY 2023 fee revenues and fees to 
provide for not more than 10 weeks of operating reserves of carryover 
user fees (see section 744M(c)(2)(C) of the FD&C Act).
    Per the statute, OMUFA facility fees are not due until the third 
quarter of each fiscal year (i.e., the first business day in June). To 
address this timing of facility fee collections for late in the fiscal 
year, the Agency must set aside additional carryover, beyond that for 
an operating reserve, to sustain the Agency's OTC monograph drug 
activities until the facility fees for the subsequent fiscal year are 
due and payable on the first business day in June (i.e., June 3, 2024). 
Thus, the Agency will require FY 2023 carryover sufficient to cover 
payroll and operating expenses for the first 8 months (i.e., 35 weeks 
rounded) of the following fiscal year (i.e., October 1, 2023, to May 
31, 2024).
    To determine the carryover needed, the Agency starts with the 
additional direct cost adjusted fee revenue of $25,421,133 (calculated 
in section D), divides it by 52 to yield a weekly operating amount of 
$488,868, and then multiplies the weekly operating amount by 35. Based 
on this calculation, FDA requires $17,110,378 to support the program 
until the FY 2024 fees are due. After running analyses on the projected 
collections and obligations for FY 2023, including accounting for 
possible financial risks described above, FDA estimates the FY 2023 
carryover to be $17,113,657 which is the approximate amount required to 
support the program through the 35-week period.
    Therefore, FDA is not applying an operating reserve adjustment for 
FY 2023. As a result of the above calculations, the final FY 2023 OMUFA 
target facility fee revenue is $25,421,000 (rounded to the nearest 
thousand dollars).

III. Determination of FY 2023 OMOR Fees

    Under OMUFA, the FY 2023 Tier 1 OMOR fee is $517,381 and the Tier 2 
OMOR fee is $103,476 (see section 744M(a)(2)(A)(i) and (ii) of the FD&C 
Act, respectively) including an adjustment for inflation. OMOR fees are 
not included in the OMUFA target revenue calculation, which is based on 
the facility fees (see section 744M(b)(1) of the FD&C Act).
    An OMOR fee is generally assessed to each person who submits an 
OMOR (see section 744M(a)(2)(A) of the FD&C Act). OMOR fees are due on 
the date of the submission of the OMOR (see section 744M(a)(2)(B) of 
the FD&C Act). The payor should submit the OMOR fee that applies to the 
type of OMOR they are submitting (i.e., Tier 1 or Tier 2). FDA will 
determine whether the appropriate OMOR fee has been submitted following 
receipt of the OMOR and the fee.
    An OMOR fee will not be assessed if the OMOR seeks to make certain 
safety changes with respect to an OTC monograph drug. Specifically, no 
fee will be assessed if FDA finds that the OMOR seeks to change the 
drug facts labeling of an OTC monograph drug in a way that would add to 
or strengthen: (1) a contraindication, warning, or precaution; (2) a 
statement about risk associated with misuse or abuse; or (3) an 
instruction about dosage and administration that is intended to 
increase the safe use of the OTC monograph drug (see section 
744M(a)(2)(C) of the FD&C Act).

IV. Facility Fee Calculations

A. Facility Fee Revenues and Fees

    For FY 2023, facility fee rates are being established to generate a 
total target revenue amount, as determined under the statute, equal to 
$25,421,000 (rounded to the nearest thousand dollars). FDA used the 
methodology described below to determine the appropriate number of MDF 
and CMO facilities to be used in setting the OMUFA facility fees for FY 
2023. FDA took into consideration that the CMO facility fee is equal to 
two-thirds of the amount of the MDF facility fee (see section 
744M(a)(1)(B)(ii) of the FD&C Act).

B. Calculating the Number of Qualifying Facilities and Setting the 
Facility Fees

    For FY 2023, FDA utilized data consisting of the number of 
facilities that were registered in FDA's electronic Drug Registration 
and Listing System (eDRLS) to manufacture human OTC products produced 
under a monograph \7\ during the FY 2022 fee-liable period (i.e., 
January 1, 2021, through December 31, 2021) and the number of 
facilities that paid FY 2022 OMUFA fees, as the primary sources for 
estimating the number of each facility fee type (i.e., MDF and CMO). In 
addition, the Agency considered data provided by firms regarding their 
operation as MDFs and CMOs during FY 2022 (i.e., October 1, 2021, 
through September 30, 2022) when they were submitting OTC Monograph 
User Fee Cover Sheets to pay the FY 2022 fee. These data helped FDA 
estimate the number of firms operating as MDF and CMO facilities during 
the FY 2023 fee-liable period (i.e., January 1, 2022, through December 
31, 2022) \8\ and thus informed FDA's calculation of the number and 
ratio of MDF and CMO facilities used in determining the FY 2023 fee 
rates. FDA's review of data also reflected input received during the 
first three quarters of the FY 2023 fee-liable period from facilities 
whose manufacturing or processing practices meet the definition of fee-
eligible OTC monograph drug facilities, to help capture those 
facilities that are in the market and intend to remain in the market 
for FY 2023.
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    \7\ See section 744M(d) of the FD&C Act. OTC monograph drug 
facilities had selected in the eDRLS the business operation 
qualifiers of ``manufactures human over-the-counter drug products 
produced under a monograph'' or ``contract manufacturing for human 
over-the-counter drug products produced under a monograph'' and 
indicated at least one of the following business operations: 
finished dosage form manufacture, label, manufacture, pack, relabel, 
or repack.
    \8\ Under section 744M(a)(1) of the FD&C Act, ``Each person that 
owns a facility identified as an OTC monograph drug facility on 
December 31 of the fiscal year or at any time during the preceding 
12-month period shall be assessed an annual fee for each such 
facility'' (emphasis added).
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    Those facilities that only manufacture the active pharmaceutical 
ingredient of an OTC monograph drug do not meet the definition of an 
OTC monograph drug facility (see section 744L(10)(A)(i)(II)) of the 
FD&C Act). Likewise, a facility is not an OTC monograph drug facility 
if its only manufacturing or processing activities are one or more of 
the following: (1) production of clinical research supplies; (2) 
testing; or (3) placement of outer packaging on packages containing 
multiple products, for such purposes as creating multipacks, when each 
monograph drug product contained within the overpackaging is already in 
a final packaged form prior to placement in the outer overpackaging 
(see section 744L(10)(A)(iii) of the FD&C Act).
    Consistent with the January 12, 2021 HHS Federal Register notice 
\9\ and FDA's subsequent Federal Register notices published on March 
26, 2021 and March 16, 2022 announcing the FY

[[Page 18159]]

2021 and FY 2022 OMUFA fees (respectively),10 11 facilities 
are not identified as an ``OTC monograph drug facility'' and will not 
be assessed a FY 2023 OMUFA facility fee if they: (1) were not 
registered with FDA as OTC drug manufacturers prior to the HHS 
declaration of the COVID-19 public health emergency on January 27, 
2020; \12\ (2) registered with FDA on or after the declaration of the 
COVID-19 public health emergency; and (3) registered for the sole 
purpose of producing hand sanitizer products during the COVID-19 public 
health emergency. We note, however, that under the FD&C Act, whether an 
entity is subject to OMUFA fees has no bearing on whether the entity or 
the entity's products are subject to other requirements under the FD&C 
Act. FDA will continue to use its regulatory compliance and enforcement 
tools to protect consumers, including from potentially dangerous or 
subpotent hand sanitizers.
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    \9\ See 86 FR 2420, https://www.federalregister.gov/documents/2021/01/12/2021-00237/notice-that-persons-that-entered-the-over-the-counter-drug-market-to-supply-hand-sanitizer-during.
    \10\ See 86 FR 16223, https://www.federalregister.gov/documents/2021/03/26/2021-06361/fee-rates-under-the-over-the-counter-monograph-drug-user-fee-program-for-fiscal-year-2021.
    \11\ See 87 FR 14888, https://www.federalregister.gov/documents/2022/03/16/2022-05542/over-the-counter-monograph-drug-user-fee-rates-for-fiscal-year-2022.
    \12\ See https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx.
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    In undertaking the statutorily directed fee calculations, the 
Agency also made certain assumptions, including that: (1) facilities 
using expired Structured Product Labeling (SPL) codes in eDRLS, that 
did not reregister for calendar year 2023, were no longer manufacturing 
and marketing OTC monograph drugs; (2) facilities that have 
deregistered in eDRLS have exited the market; (3) facilities that FDA 
believes registered incorrectly as OTC monograph drug facilities (for 
example, because the associated drug listings for these facilities did 
not include OTC monograph drugs but instead indicated such products as 
OTC drug products under an approved drug application or OTC animal drug 
products) were not engaged in manufacturing or processing the finished 
dosage form of an OTC monograph drug; (4) facilities that registered 
but did not have an active OTC monograph drug product listing 
associated in their registration profile were not manufacturing or 
processing such drug products; and (5) facilities that, at the close of 
FY 2022, remain on the arrears list for failure to satisfy the FY 2021 
or FY 2022 facility fee are likely to be placed on the FY 2023 arrears 
list as well.
    Based on the above-referenced factors and assumptions, FDA 
estimates there will be 1,122 OMUFA fee-paying units. The Agency 
estimates that 60 percent (1,122 x 0.60 = 673, rounded) will incur the 
MDF fee and 40 percent (1,122 x 0.40 = 449, rounded) will incur the CMO 
fee.
    To determine the number of full fee-paying equivalents (the 
denominator) to be used in setting the OMUFA fees, FDA assigns a value 
of 1 to each MDF (673) and a value of \2/3\ to each CMO (449 x \2/3\ = 
299) for a full facility equivalent of 972 (rounded). The target fee 
revenue of $25,421,000 is then divided by 972 for an MDF fee of $26,153 
and a CMO fee of $17,435.

V. Fee Schedule for FY 2023

    The fee rates for FY 2023 are displayed in table 2.

                    Table 2--Fee Schedule for FY 2023
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                                                            FY 2023 fee
                      Fee category                             rates
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OMOR:
  Tier 1................................................        $517,381
  Tier 2................................................         103,476
Facility Fees:
  MDF...................................................          26,153
  CMO...................................................          17,435
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VI. Fee Payment Options and Procedures

    The new fee rates are for the period from October 1, 2022, through 
September 30, 2023. To pay the OMOR, MDF, and CMO fees, complete an OTC 
Monograph User Fee Cover Sheet, available at: https://userfees.fda.gov/OA_HTML/omufaCAcdLogin.jsp.
    A user fee identification (ID) number will be generated. Payment 
must be made in U.S. currency by electronic check or wire transfer, 
payable to the order of the Food and Drug Administration. The preferred 
payment method is online using electronic check (Automated Clearing 
House (ACH) also known as eCheck) or credit card for payments under 
$25,000 (Discover, VISA, MasterCard, American Express).
    FDA has partnered with the U.S. Department of the Treasury to use 
Pay.gov, a web-based payment application, for online electronic 
payment. The Pay.gov feature is available on the FDA website after 
completing the OTC Monograph User Fee Cover Sheet and generating the 
user fee ID number. Secure electronic payments can be submitted using 
the User Fees Payment Portal at https://userfees.fda.gov/pay. (Note: 
Only full payments are accepted through https://userfees.fda.gov/pay. 
No partial payments can be made online). Once an invoice is located, 
``Pay Now'' should be selected to be redirected to Pay.gov. Electronic 
payment options are based on the balance due. Payment by credit card is 
available for balances that are 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.
    For payments made by wire transfer, include the unique user fee ID 
number to ensure that the payment is applied to the correct fee(s). 
Without the unique user fee ID number, the payment may not be applied, 
which could result in FDA not filing an OMOR request, or other 
consequences of nonpayment. The originating financial institution may 
charge a wire transfer fee. Applicable wire transfer fees must be 
included with payment to ensure fees are fully paid. Questions about 
wire transfer fees should be addressed to the financial institution. 
The account information for wire transfers is as follows: U.S. 
Department of the Treasury, TREAS NYC, 33 Liberty St., New York, NY 
10045, Acct. No.: 75060099, Routing No.: 021030004, SWIFT: FRNYUS33. If 
needed, FDA's tax identification number is 53-0196965.
    If you are assessed an FY 2023 OMUFA facility fee and believe your 
facility is not an OTC monograph drug facility as described in this 
notice, please contact [email protected].

    Dated: March 22, 2023.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2023-06299 Filed 3-24-23; 8:45 am]
BILLING CODE 4164-01-P