[Federal Register Volume 67, Number 190 (Tuesday, October 1, 2002)]
[Proposed Rules]
[Pages 61545-61547]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-24903]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 97

[Doc.  ST-02-01]
RIN  0581-AC22


Plant Variety Protection Office, Fee Increase

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule with request for comments.

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SUMMARY: The Agricultural Marketing Service (AMS) proposes to increase 
Plant Variety Protection (PVP) Office application, search, and 
certificate issuance fees by approximately 35 percent. The last fee 
increase in September 2000 is no longer adequate to cover current 
program obligations for administrative and information technology 
needs. The PVP Act of 1970 requires that reasonable fees be collected 
from applicants seeking certificates of protection in order to maintain 
the program.

DATES: Comments must be received on or before October 31, 2002.

ADDRESSES: Interested persons are invited to submit comments concerning 
this proposed rule. Comments should be sent in triplicate to Dr. Paul 
Zankowski, Commissioner, PVP Office, Room 401, NAL Building, 10301 
Baltimore Boulevard., Beltsville, MD 20705, telephone 301-504-7475, fax 
301-504-5291, and should refer to the docket title and number located 
in the heading of this document. Comments received will be available 
for public inspection at the same location, between the hours of 10 
a.m. and 4 p.m., Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Fabian Q. Generao, USDA, AMS, Science 
and Technology, 14th & Independence Avenue, SW., P.O. Box 96456, Room 
3521-South Bldg., Washington, DC 20090-6456, Tel. 202/720-0195, Fax. 
202/720-1631.

SUPPLEMENTARY INFORMATION: 

I. Executive Order 12866

    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 (OMB).

II. Regulatory Flexibility Act

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601 et seq.), the Agricultural Marketing Service 
(AMS) has considered the economic impact of this action on small 
business entities. There are more than 800 users of the PVPO's variety 
protection service, of whom about 100 may file applications in a given 
year. Some of these users are small business entities under the 
criteria established by the Small Business Administration (13 CFR 
121.201). The AMS has determined that this action would not have a 
significant economic impact on a substantial number of these small 
business entities.
    The Plant Variety Protection (PVP) Office administers the PVP Act 
of 1970, as amended (7 U.S.C. 2321 et seq.), and

[[Page 61546]]

issues Certificates of Protection that provide intellectual property 
rights to developers of new varieties of plants. A Certificate of 
Protection is awarded to an owner of a variety after examination 
indicates that it is new, distinct from other varieties, genetically 
uniform, and stable through successive generations. This action will 
raise the fee charged to users of plant variety protection. The AMS 
estimates that the proposed rule will yield an additional $270,000 
during fiscal year (FY) 2003. The costs to private and public business 
entities will be proportional to their use of the service, and shared 
equitably. The costs to individual users will be approximately 
$1,059.00 per PVP Certificate issued or by 35 percent per application. 
Plant Variety Protection is a voluntary service. Any decision by 
developers to discontinue the use of plant variety protection will not 
hinder private and public entities from marketing their varieties in 
commercial markets.
    Every year, AMS reviews it user fee financed program to determine 
their fiscal condition. In the most recent review of the PVP program, 
the cost analysis indicated that the existing fee schedule will not 
generate sufficient revenues to cover program services and obligations 
while maintaining an adequate program reserve balance. From 1995 and 
through 2002, the PVP Office absorbed accumulated national and locality 
salary increases for Federal employees totaling 36 and 19 percent, 
respectively. These costs were offset by a fee increase of only 10 
percent in September 2000.
    AMS calculated the new fee schedule by projecting FY 2002 revenues 
of $903,000 and program obligations of $1,231,000. This indicates 
projected a loss to the program of $328,000 for the FY. At this rate, 
the trust fund balance would be nearly depleted by the end of FY 2004. 
With a fee increase of 35 percent, FY 2003 revenues and expenditures 
are projected to be $1,041,000 and $1,189,000, respectively. The trust 
fund balance is expected to be maintained at the FY 2003 level of 
$853,000, which satisfies Agency requirements.

III. Civil Justice Reform

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This action is not intended to have retroactive effect, 
nor will it preempt any State or local laws, regulations, or policies, 
unless they present an irreconcilable conflict with the proposed rule. 
There are no administrative procedures that must be exhausted prior to 
any judicial challenge to the provisions of the proposed rule.

IV. Paperwork Reduction Act

    This proposed rule does not contain any information collection or 
record keeping requirements that are subject to the Office of 
Management and Budget approval under the Paperwork Reduction Act of 
1995 (44 U.S.C. Chapter 35).

Background Information and Proposed Changes

    The PVP Program is a voluntary, user fee-funded service, conducted 
under the Authority of the Plant Variety Protection Act (7 U.S.C. 2321 
et seq.) of 1970, as amended. The Act authorizes the Secretary of 
Agriculture to provide intellectual property rights that facilitate 
marketing of new varieties of seed-propagated crops and potatoes. The 
act also requires that reasonable fees be collected from the users of 
the services to cover the costs of maintaining the program.
    In September 2000, AMS published a rule in the Federal Register (60 
FR 17188) that increased Plant Variety Protection Office fees pursuant 
to amendments to the Plant Variety Protection Act that became effective 
September 2000.
    In its analysis of projected costs for fiscal year (FY) 2002, AMS 
identified administrative and information technology support as well as 
a 10 percent decrease in the number of applications submitted to the 
office. For FY 2002, user fee revenues and program obligations are 
projected to be $903,000 and $1,231,000, respectively, resulting in an 
estimated $328,000 program deficit. With a fee increase, FY 2003 
revenues and expenditures are projected to be $1,041,000 and 
$1,189,000, respectively. We estimate this proposed rule would yield an 
additional $270,000 during FY 2003 that will offset increased program 
operating costs. The program will take additional cost cutting measures 
to eliminate the remaining deficit.
    AMS used the fees currently charged as a base for calculating the 
new fee schedule for FY 2003. The fees set forth in Sec. 97.175 would 
be increased. The application fee will be increased from $320 to $432, 
the search fee from $2,385 to $3,220, and the issuance fee from $320 to 
$432. The fees for reviving an abandoned application, correcting or re-
issuance of a certificate are increased from $320 to $432. The charge 
for granting an extension for responding to a request is increased from 
$55 to $74. The hourly charge for any other service not specified will 
increase from $66 to $89. The fee for appeal to the Secretary 
(refundable if appeal overturns the Commissioner's decision) is 
increased from $3,050 to $4,118. Reproduction of records, drawings, 
certificates, exhibits or printed materials, late payment, and 
replenishment of seeds will increase by 35%. These fee increases are 
necessary to recover the costs of this fee-funded program.
    The Plant Variety Protection Advisory Board has been informed of 
cost increases, including anticipated salary increases, and consulted 
on a fee increase in November 2001. The Board recommended that fees be 
increased. This proposed rule makes the minimum changes in the 
regulations to implement the recommended increased fees to maintain the 
program as a fee-funded program.
    A 30-day comment period is provided to allow interested persons the 
opportunity to respond to the proposal, including any regulatory and 
informational impact of this action on small businesses. Thirty days is 
deemed appropriate because present fees are inadequate to properly 
cover program costs and additional revenues need to be generated to 
effectively operate the program.

List of Subjects in 7 CFR Part 97

    Plants, seeds.

    For reasons set forth in the preamble, it is proposed that 7 CFR 
part 97 be amended as follows.

PART 97--PLANT VARIETY AND PROTECTION

    1. The authority citation for part 97 continues to read as follows:

    Authority: 7 U.S.C. 2321 et seq.

    2. Section 97.175 is revised to read as follows:


Sec.  97.175  Fees and charges.

    The following fees and charges apply to the services and actions 
specified below:
    (a) Filing the application and notifying the public of filing--
$432.00.
    (b) Search or examination--$3,220.00.
    (c) Allowance and issuance of certificate and notifying public of 
issuance--$432.00.
    (d) Revive an abandoned application--$432.00.
    (e) Reproduction of records, drawings, certificates, exhibits, or 
pointed material (copy per page of material)--$1.50.
    (f) Authentication (each page)--$1.50.
    (g) Correcting or re-issuance of a certificate--$432.00.
    (h) Recording assignments (per certificate/application)--$38.00.
    (i) Copies of 8 x 10 photographs in color--$38.00.

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    (j) Additional fee for reconsideration--$432.00.
    (k) Additional fee for late payment--$38.00.
    (l) Additional fee for late replenishment of seed--$38.00.
    (m) Appeal to Secretary (refundable if appeal overturns the 
Commissioner's decision)--$4,118.00.
    (n) Granting of extensions for responding to a request--$74.00.
    (o) Field inspections by a representative of the Plant Variety 
Protection Office, made at the request of the applicant, shall be 
reimbursable in full (including travel, per diem or subsistence, and 
salary) in accordance with Standardized Government Travel Regulation.
    (p) Any other service not covered above will be charged for at 
rates prescribed by the Commissioner, but in no event shall they exceed 
$89.00 per employee-hour.

    Dated: September 25, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-24903 Filed 9-30-02; 8:45 am]
BILLING CODE 3410-02-P