Federal Register, Volume 65 Issue 3 (Wednesday, January 5, 2000)

[Federal Register Volume 65, Number 3 (Wednesday, January 5, 2000)]
[Proposed Rules]
[Pages 391-394]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-218]

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Proposed Rules
Federal Register
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This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 65, No. 3 / Wednesday, January 5, 2000 /
Proposed Rules

[[Page 391]]

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DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

9 CFR Part 130

[Docket No. 98-045-1]

Veterinary Services User Fees; Pet Food Facility Inspection and
Approval Fees

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Proposed rule.

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SUMMARY: We are proposing to amend existing user fees for the
inspection and approval of pet food manufacturing, rendering, blending,
digest, and spraying and drying facilities. Existing user fees require
such facilities to pay user fees based on hourly rates for inspections
and approval. We are proposing to replace the hourly rates for this
specific service with flat rate user fees that would cover the cost of
all inspections required for annual approval. We are taking this action
in order to make it easier for users to know their costs in advance,
while still ensuring we cover our costs.

DATES: We invite you to comment on this docket. We will consider all
comments that we receive by March 6, 2000.

ADDRESSES: Please send your comment and three copies to: Docket No. 98-
045-1, Regulatory Analysis and Development, PPD, APHIS, Suite 3C03,
4700 River Road, Unit 118, Riverdale, MD 20737-1238. Please state that
your comment refers to Docket No. 98-045-1.
You may read any comments that we receive on this docket in our
reading room. The reading room is located in room 1141 of the USDA
South Building, 14th Street and Independence Avenue, SW., Washington
DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through
Friday, except holidays. To be sure someone is there to help you,
please call (202) 690-2817 before coming.
APHIS documents published in the Federal Register, and related
information, including the names of organizations and individuals who
have commented on APHIS rules, are available on the Internet at http://
www.aphis.usda.gov/ppd/rad/webrepor.html.

FOR FURTHER INFORMATION CONTACT: For information concerning program
operations for Veterinary Services, contact Ms. Louise Lothery,
Administrative Officer, Management Support Staff, VS, APHIS, 4700 River
Road Unit 44, Riverdale, MD 20737-1231; (301) 734-7517.
For information concerning rate development of the proposed user
fee, contact Ms. Donna Ford, Section Head, Financial Systems and
Services Branch, Budget and Accounting Service Enhancement Unit, MRPBS,
APHIS, 4700 River Road Unit 54, Riverdale, MD 20737-1232; (301) 734-
8351.

SUPPLEMENTARY INFORMATION:

Background

Facilities that process or manufacture pet food ingredients or
products for export, including manufacturing, rendering, blending,
digest, and spraying and drying facilities, are required by the
European Union and other foreign countries to be inspected and approved
by the Animal and Plant Health Inspection Service (APHIS).
Rendering facilities process slaughter byproducts, animals unfit
for human consumption, and meat scraps by cooking them down into
various types of protein meal that are used as ingredients in pet
foods. Blending facilities take different kinds of protein meal and mix
them according to manufacturers' specifications. Digest facilities
produce enzymatic meals in powdered or liquid form for use as pet food
flavor enhancers. Spraying and drying facilities produce powdered blood
meal, which is also used as a flavor enhancer. Manufacturing facilities
add enzymatic digests and/or blood meal to blended protein meal to
produce the finished pet food, which is then packaged for sale in the
United States or for export to another country.
User fees to reimburse APHIS for the costs of providing veterinary
diagnostic services and import-and export-related services for live
animals and birds and animal products are contained in 9 CFR part 130.
Section 130.8 lists miscellaneous flat rate user fees. Section 130.21
lists the hourly rate user fees charged for APHIS' export services,
which include inspecting and approving pet food facilities under 9 CFR
part 156, ``Voluntary Inspection and Certification Service.''
We are proposing to amend 9 CFR part 130 to establish flat rate
annual user fees to cover the cost of APHIS' inspection and approval of
pet food manufacturing, rendering, blending, digest, and spraying and
drying facilities. Under this proposal, pet food manufacturing,
rendering, blending, and digest facilities would be subject to a user
fee of $404.75 for initial approval and a user fee of $289.00 for
annual renewal of APHIS approval. Pet food spraying and drying
facilities would be subject to a user fee of $275.00 for initial
approval and $162.50 for annual renewal of APHIS approval. The flat
rate user fees would cover all costs of inspection, including airfare
and/or ground travel, lodging, inspection, per diem, and miscellaneous
travel expenses.
We are proposing this action based on a requests from pet food
industry representatives that we modify our user fees to make it easier
for them to know in advance what their costs will be. We have
determined that the most effective way to do this is to establish a
flat rate annual user fee, which would effectively eliminate any
variation in cost that could otherwise result in charging hourly rates
for inspections.
We calculated the proposed flat rate annual user fees to reflect
the average annual cost to APHIS of providing these services. The
average annual cost includes the time to provide the service and travel
time, which are both currently billed at an hourly rate. The total
charge to each facility would not be significantly different from what
each facility currently pays.
We are also proposing to make nonsubstantive changes to 9 CFR part
130, including moving all of the flat rate user fees contained in
Sec. 130.8 that are charged to import/export facilities or
establishments into a new Sec. 130.11, which would also include the
flat rate fees that we are proposing in this document. The following
table shows where the fees for each service currently listed in the
regulations would be located in part 130 if this proposal is adopted.

[[Page 392]]

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Current Proposed
Service section section
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Germ plasm being exported...................... 130.8 130.8
Germ plasm being imported...................... 130.8 130.8
Import compliance assistance................... 130.8 130.8
Inspection for approval of slaughter 130.8 130.11
establishments................................
Inspection of approved establishments, 130.8 130.11
warehouses, and facilities under 9 CFR parts
94 through 96.................................
Processing VS form 16-3, ``Application for 130.8 130.8
Permit to Import Controlled Material/Import or
Transport Organisms or Vectors................
Release from export agricultural hold.......... 130.8 130.8
Embryo collection center inspection and 130.8 130.11
approval......................................
Inspection for approval of pet food N/A 130.11
manufacturing, rendering, blending, or digest
facilities....................................
Inspection for approval of pet food spraying N/A 130.11
and drying facilities.........................
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We are also proposing to amend Sec. 130.1 to add the following
definitions for ``pet food blending facility,'' ``pet food digest
facility,'' ``pet food manufacturing facility,'' ``pet food rendering
facility,'' and ``pet food spraying and drying facility.''
Pet food blending facility: A facility that blends animal or plant
protein meal for use in pet food.
Pet food digest facility: A facility that produces enzymatic
protein meals in powdered or liquid form for use as pet food flavor
enhancers.
Pet food manufacturing facility: A facility that produces,
processes, or packages pet food for sale in the United States or for
export to another country.
Pet food rendering facility: A facility that processes slaughter
byproducts, animals unfit for human consumption, and meat scraps by
cooking them down into protein meal for use as ingredients in pet food.
Pet food spray/dry facility: A facility that produces powdered
blood meal for use as a flavor enhancer in pet food.

Executive Order 12866 and Regulatory Flexibility Act

This proposed rule has been reviewed under Executive Order 12866.
The rule has been determined to be not significant for the purposes of
Executive Order 12866 and, therefore, has not been reviewed by the
Office of Management and Budget.
User fees to reimburse APHIS for the costs of providing veterinary
diagnostic services and import- and export-related services for live
animals and birds and animal products are contained in 9 CFR part 130.
Currently, we charge hourly rate user fees for inspection and approval
of manufacturing, rendering, blending, digest, and spraying and drying
facilities. We are proposing to amend the regulations by removing these
hourly rate user fees for inspection and approval and replacing them
with two sets of flat rate annual user fees: one for the inspection and
approval of pet food manufacturing, rendering, blending, and digest
facilities, and one for the inspection and approval of pet food
spraying and drying facilities.
We arrived at the flat rate annual user fees that we are proposing
by calculating the average number of hours required for an APHIS
inspector to complete an inspection (including travel time),
multiplying by the average number of inspections performed during a
year (two per center), and adding the average direct labor involved and
proportional shares of support costs, overhead, and departmental
charges.
The resulting proposed flat rate user fees for manufacturing,
rendering, blending, or digest facilities are $404.75 for initial
inspection and approval and $289.00 for renewal of approval; for
spraying and drying facilities, they are $275.00 for initial inspection
and approval and $162.50 for renewal of approval. These fees would not
be significantly different from the amount customers have paid yearly
in the past at hourly rates for initial inspection and approval.
The table below shows the difference between the average cost for
initial and renewed inspection and approval for each of the five
categories of pet food facilities using the current hourly rate user
fees and the cost under the proposed flat rate user fees. Change in
cost of inspection and approval under proposed flat rate user fees

Change in Cost of Inspection and Approval Under Proposed Flat Rate User Fees
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Average cost to Cost to facilities Change in user fee
facilities at under proposed flat collections
current hourly rate rate user fees -----------------------
Type of pet food facility user fees ----------------------
---------------------- Initial Renewed
Initial Renewed Initial Renewed approval approval
approval approval approval approval
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Manufacturing............................... $415.00 $353.25 $404.75 $289.00 -$10.25 -$64.25
Rendering................................... 376.75 272.75 404.75 289.00 28.00 16.25
Blending.................................... 436.25 316.00 404.75 289.00 -31.50 27.00
Digest...................................... 390.75 213.75 404.75 289.00 14.00 76.00
Spraying/Drying............................. 275.00 162.50 275.00 162.50 0 0
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As shown in the table, the user fees collected for the inspection
and approval of pet food manufacturing and blending industries are
expected to decrease overall. Pet food spraying and drying facilities
would not be affected by this proposed rule. For the inspection and
approval of the

[[Page 393]]

rendering and digest facilities, user fee collections are expected to
increase.
However, as shown in the table below, the total amount of fees
collected is not expected to change significantly.

Comparison of Total Hourly (A) and Flat (B) Rate User Fee Collections, Based on the Number of Approvals (C) Issued in 1997 for Manufacturing, Rendering,
Blending, and Digest Pet Food Facilities
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A B C (A*C) (B*C)
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Manufacturing facilities......... [(415+353.25)/2]=$384.13 [(404.75+289)/2]=$346.88 88 $33,803.00 $30,525.00
Rendering facilities............. [(376.75+272.75)/2]=$324.75 [(404.75+289)/2]=$346.88 148 $48,063.00 $51,337.50
Blending facilities.............. [(436.25+316)/2]=$376.13 [(404.75+289)/2]=$346.88 7 $2,428.13 $2,428.13
Digest facilities................ [(390.75+213.75)/2]=$302.25 [(404.75+289)/2]=$346.88 12 $3,627.00 $4,162.50
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Total collections using the $87,921.13 $88,453.13
two different methods (A
and B).
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In the table above, columns ``A'' and ``B'' depict the average
charges by APHIS for an initial inspection and a license renewal, using
the current hourly rate average user fee and using the proposed flat
rate user fee. Column ``C'' shows the number of facilities that were
approved by APHIS in 1997 within each of the pet food industries.
The last two columns (``A*C'') and (``B*C'') represent the dollar
amounts collected by APHIS using the two different methods. Column
``A*C'' represents the dollar amount collected by APHIS when it uses an
hourly rate user fee. Column ``B*C'' represents the expected dollar
amount if APHIS uses the proposed flat rate user fee. Based on the
difference between the total collections under the two methods, the
proposed flat rate fee would result in a 0.6 percent increase in total
collections.

Effects on Small Entities

The Regulatory Flexibility Act requires that agencies consider the
economic effects of rules on small business, organizations, and
governmental jurisdictions. The entities that would be affected by this
proposal are pet food manufacturing, rendering, blending, digest, and
spraying and drying facilities. According to Small Business
Administration data, there are 1,100 firms in the United States that
produce cat and dog food or ingredients that go into pet food, 1,030
(over 93 percent) of which would be considered small (employing fewer
than 500 people). However, as shown above, the economic effects of this
proposal on those entities, whether small or large, would be
insignificant.
Under these circumstances, the Administrator of the Animal and
Plant Health Inspection Service has determined that this action would
not have a significant economic impact on a substantial number of small
entities.

Executive Order 12372

This program/activity is listed in the Catalog of Federal Domestic
Assistance under No. 10.025 and is subject to Executive Order 12372,
which requires intergovernmental consultation with State and local
officials. (See 7 CFR part 3015, subpart V.)

Executive Order 12988

This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. If this proposed rule is adopted: (1) All State
and local laws and regulations that are inconsistent with this rule
will be preempted; (2) no retroactive effect will be given to this
rule; and (3) administrative proceedings will not be required before
parties may file suit in court challenging this rule.

Paperwork Reduction Act

This proposed rule contains no new information collection or
recordkeeping requirements under the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.).

List of Subjects in 9 CFR Part 130

Animals, Birds, Diagnostic reagents, Exports, Imports, Poultry and
poultry products, Quarantine, Reporting and recordkeeping requirements,
Tests.

Accordingly, we propose to amend 9 CFR part 130 as follows:

PART 130--USER FEES

1. The authority citation for part 130 continues to read as
follows:

Authority: 5 U.S.C. 5542; 7 U.S.C. 1622; 19 U.S.C. 1306; 21
U.S.C. 102-105, 111, 114, 114a, 134a, 134c, 134d, 134f, 136, and
136a; 31 U.S.C. 3701, 3716, 3717, 3719, and 3720A; 7 CFR 2.22, 2.80,
and 371.2(d).

2. In Sec. 130.1, definitions for ``pet food blending facility,''
``pet food digest facility,'' ``pet food manufacturing facility,''
``pet food rendering facility,'' and ``pet food spraying and drying
facility'' would be added in alphabetical order to read as follows:

Sec. 130.1 Definitions.

* * * * *
Pet food blending facility. A facility that blends animal or plant
protein meal for use in pet food.
Pet food digest facility. A facility that produces enzymatic
protein meals in powdered or liquid form for use as pet food flavor
enhancers.
Pet food manufacturing facility. A facility that produces,
processes, or packages pet food for sale in the United States or for
export to another country.
Pet food rendering facility. A facility that processes slaughter
byproducts, animals unfit for human consumption, and meat scraps by
cooking them down into protein meal for use as ingredients in pet food.
Pet food spraying and drying facility. A facility that produces
powdered blood meal for use as a flavor enhancer in pet food.
* * * * *
3. In Sec. 130.8, paragraph (a), the table would be revised to read
as follows:

Sec. 130.8 User fees for other services.

(a) * * *

[[Page 394]]

(each additional group of donor $24.75 per group of donor
pairs, up to 5 pairs per group, pairs.
on the same certificate).
Semen................................. $33.50 per certificate.
Germ plasm being imported: \2\
Embryo................................ $39.50 per load.
Semen................................. $39.50 per load.
Import compliance assistance:
Simple (2 hours or less).............. $51.25 per release.
Complicated (more than 2 hours)....... $131.75 per release.
Processing VS form 16-3, ``Application for
Permit to Import Controlled Material/
Import or Transport Organisms or
Vectors'':
For permit to import fetal bovine $208.50 per application.
serum when facility inspection is
required.
For all other permits................. $27.50 per application.
Amended application................... $11.50 per amended
application.
Application renewal................... $15.00 per application.
Release from export agricultural hold:
Simple (2 hours or less).............. 51.25 per release.
Complicated (more than 2 hours)....... $131.75 per release.
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\1\ This user fee includes a single inspection and resealing of the
container at the APHIS employee's regular tour of duty station or at a
limited port. For each subsequent inspection and resealing required,
the applicable hourly rate user fee would apply.
\2\ For inspection of empty containers being imported into the United
States, the applicable hourly rate user fee would apply, unless a user
fee has been assessed under 7 CFR 354.3.

* * * * *
4. A new Sec. 130.11, would read as follows:

Sec. 130.11 User fees for inspecting and approving import/export
facilities and establishments.

(a) User fees for the inspection of various import and export
facilities and establishments are listed in the following table. The
person for whom the service is provided and the person requesting the
service are jointly and severally liable for payment of these user fees
in accordance with Secs. 130.50 and 130.51.

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Service User fee
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Embryo collection center inspection and $278.50 for all inspections
approval. required during the year
for facility approval.
Inspection for approval of pet food
manufacturing, rendering, blending, or
digest facilities:
Initial approval...................... $404.75 for all inspections
required during the year.
Renewal............................... $289.00 for all inspections
required during the year.
Inspection for approval of pet food
spraying and drying facilities:
Initial approval...................... $275.00 for all inspections
required during the year.
Renewal............................... $162.50 for all inspections
required during the year.
Inspection for approval of slaughter
establishment:
Initial approval...................... $246.50 for all inspections
required during the year.
Renewal............................... $213.50 for all inspections
required during the year.
Inspection of approved establishments,
warehouses, and facilities under 9 CFR
parts 94 through 96:
Initial approval...................... $262.75 for first year of 3-
year approval (for all
inspections required during
the year).
Renewal............................... $152.00 per year for second
and third years of 3-year
approval (for all
inspections required during
the year).
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* * * * *
Done in Washington, DC, this 21st day of December 1999.
Craig A. Reed,
Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 00-218 Filed 1-4-00; 8:45 am]
BILLING CODE 3410-34-U