[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.

-----------------------------------------------------------------------

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.

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------------------------------------------------------------------------
                                                   Current     Proposed
                    Service                        section     section
------------------------------------------------------------------------
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.........................
------------------------------------------------------------------------

    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
----------------------------------------------------------------------------------------------------------------
                                                 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
----------------------------------------------------------------------------------------------------------------
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
----------------------------------------------------------------------------------------------------------------

    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
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      A                                       B                         C          (A*C)        (B*C)
--------------------------------------------------------------------------------------------------------------------------------------------------------
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
                                                                                                                               -------------------------
      Total collections using the                                                                                                $87,921.13   $88,453.13
       two different methods (A
       and B).
--------------------------------------------------------------------------------------------------------------------------------------------------------

    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) * * *

------------------------------------------------------------------------
                  Service                             User fee
------------------------------------------------------------------------
Germ plasm being exported: \1\
    Embryo:
        (up to 5 donor pairs).............  $54.75 per certificate.

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        (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.
------------------------------------------------------------------------
\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.

------------------------------------------------------------------------
                  Service                             User fee
------------------------------------------------------------------------
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).
------------------------------------------------------------------------

* * * * *
    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