[Federal Register Volume 68, Number 7 (Friday, January 10, 2003)]
[Rules and Regulations]
[Pages 1359-1360]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-452]



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 Rules and Regulations
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  Federal Register / Vol. 68, No. 7 / Friday, January 10, 2003 / Rules 
and Regulations  

[[Page 1359]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 97

[Docket ST-02-01]
RIN 0581-AC22


Plant Variety Protection Office, Fee Increase

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Agricultural Marketing Service (AMS) is increasing 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 requires that reasonable fees be collected from applicants 
seeking certification of protection in order to maintain the program.

EFFECTIVE DATE: February 10, 2003.

FOR FURTHER INFORMATION CONTACT: Fabian Q. Generao, USDA, AMS, Science 
and Technology, 14th & Independence Avenue, Room 3521-South Bldg., 
Washington, DC 20250, Tel. 202/720-0195, Fax. 202/720-4631

SUPPLEMENTARY INFORMATION:

1. Executive Order 12866

    This 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. 670 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 PVP, 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 (7 U.S.C. 2321 et seq.,), and 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 rule will yield an 
additional $270,000 during fiscal year (FY) 2003. The costs to private 
and public business entities will be proportioned to their use of the 
service, and shared equitably. The costs to individual users will be 
increased by 35 percent, or about $1,059.00 per application. Plant 
Variety Protection is a voluntary service. Any decision by developers 
to discontinue to 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 financial 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 a 
projected loss to the program of $328,000 for FY 2003. 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 rule.

IV. Paperwork Reduction Act

    This 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

    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.). 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.
    On August 2, 2000, AMS published a rule in the Federal Register (65 
FR 47243) that increased Plant Variety Protection fees that became 
effective September 1, 2000.
    In its analysis of projected costs for 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

[[Page 1360]]

expenditures are projected to be $1,041,000 and $1,189,000 
respectively. We estimate this 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 
replenish of seeds will increase by 35 percent. 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 rule makes the minimum changes in the regulations to 
implement the recommended increased fees to maintain the program as a 
fee-funded program.

Summary of Public Comment

    A notice of the proposed rule was published in the Federal Register 
(67 FR 61545) on October 1, 2002. A 30-day comment period was provided 
to allow interested persons the opportunity to respond to the proposal, 
including any regulatory and informational impact of this action on 
small business.
    The only comment received in response to the proposed revised 
regulatory text questioned whether the 35 percent increase of the 
existing fee schedule was truly warranted. Every year, AMS reviews it's 
user fee financed programs 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. We estimate the final rule would yield an 
additional $270,000 during FY 2003, offsetting increased program 
operating costs, salaries and benefits, and technology improvements. 
From October 1, 2001 to September 30, 2002, the PVP program has reduced 
the backlog by 21 percent. With sufficient funds to cover overall 
operating costs, the program will continue to improve the efficiency 
and turnaround time in the processing of plant variety protection 
requests.

List of Subjects in 7 CFR Part 97

    Plants, seeds.


    For reasons set forth in the preamble, 7 CFR part 97 is 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 in this section:
    (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
    (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 in this section will be charged 
for at rates prescribed by the Commissioner, but in no event shall they 
exceed $89.00 per employee-hour.

    Dated: January 6, 2003.
A.J. Yates,
Administrator.
[FR Doc. 03-452 Filed 1-9-03; 8:45 am]
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