[Federal Register Volume 68, Number 32 (Tuesday, February 18, 2003)]
[Proposed Rules]
[Pages 7728-7734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-3765]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR PART 1301

[DEA-232P]
RIN 1117-AA70


Controlled Substances Registration and Reregistration Application 
Fees

AGENCY: Drug Enforcement Administration (DEA), Justice.

ACTION: Notice of Proposed Rulemaking.

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

SUMMARY: DEA is proposing to adjust the current fee schedule for DEA 
controlled substances registration to adequately recover necessary 
costs associated with the Diversion Control Program as mandated by the 
Departments of Commerce, Justice, and State, the Judiciary, and Related 
Agencies Appropriations Act of 1993.

DATES: Written comments must be submitted on or before April 21, 2003.

ADDRESSES: Written comments should be submitted to the Administrator, 
Drug Enforcement Administration, Washington, DC 20537, Attention: DEA 
Federal Register Representative/CCR.

FOR FURTHER INFORMATION, CONTACT: Patricia M. Good, Chief, Liaison and 
Policy Section, Office of Diversion Control, Drug Enforcement 
Administration, Washington, DC 20537; Telephone (202) 307-7297.

SUPPLEMENTARY INFORMATION:

Background

    The Departments of Commerce, Justice, and State, the Judiciary, and 
Related Agencies Appropriations Act of 1993 (Pub. L. 102-395) requires 
that the Drug Enforcement Administration (DEA) collect fees to ensure 
the recovery of the full costs of operating the Diversion Control 
Program. Section 111(b)(3) of the act, codified at 21 U.S.C. 886a(3), 
requires that ``fees charged by the Drug Enforcement Administration 
under its diversion control program shall be set at a level that 
ensures the recovery of the full costs of operating the various aspects 
of that program.'' Section 111(b)(1) of the act also requires that 
``there shall be deposited as offsetting receipts into that account all 
fees collected by the Drug Enforcement Administration, in excess of 
$15,000,000, for the operation of its diversion control program.''
    Since 1970 the Controlled Substances Act (CSA) has authorized the 
Attorney General to ``charge reasonable fees relating to the 
registration and control of the manufacture, distribution, and 
dispensing of controlled substances.'' 21 U.S.C. 821 and 958(f). This 
fee is collected by the Deputy Administrator of DEA for the Attorney 
General and is the only fee collected by DEA to support the Diversion 
Control Program. DEA does collect a user fee to support its listed 
chemical activities. However, this fee does not fall within the scope 
of this notice (see below for a further discussion). The fee schedule 
for the CSA was established in 1971 and was adjusted in 1984 and again 
in 1993. The fees have remained unchanged since that time.

[[Page 7729]]

    Following publication in the Federal Register of the fee adjustment 
in 1993, the American Medical Association (AMA) and others filed a 
complaint in the United States District Court for the District of 
Columbia objecting to the new fees. The district court issued its final 
order granting the government's motion for summary judgment and 
disposing of all claims on July 5, 1994. AMA v. Reno, 857 F. Supp. 80 
(D.D.C. 1994). The AMA appealed, and on July 27, 1995 the United States 
Court of Appeals for the District of Columbia Circuit remanded, without 
vacating, the rule to DEA. Specifically, the court required DEA ``to 
identify the components of the fee-funded diversion control program and 
provide a brief explanation of why it deemed each component to be a 
part of that program.'' AMA v. Reno, 57 F.3d 1129, 1135 (D.C. Cir. 
1995).
    DEA responded to the remand requirement through a notice in the 
Federal Register on December 30, 1996, describing the fee-funded 
components and activities of the DCP with an explanation of how each 
satisfies the statutory requirements for fee-funding. 61 FR 68624-32. 
DEA accepted comments on this final rule and, based on these comments, 
published its final rule on the Drug Diversion Control Fee Account 
(DDCFA) in the Federal Register on August 9, 2002. This rule contains 
information on the Specific DCP activities funded by the DDCFA. Copies 
of both the December 30, 1996 and August 9, 2002 rulemakings may be 
found on the Diversion Control Program Web site: http://www.deadiversion.usdoj.gov.
    This announcement establishes the fee structure under the existing 
registration system to fully support the operations of the Diversion 
Control Program for Fiscal Year 2004 through Fiscal Year 2006. Since 
the last published rule in 1993, the Diversion Control Program has 
experienced significant growth without any associated increase in 
registrant fees to support the growth and increased funding needs. DEA 
is required by law (see below) to collect the full costs of the 
Diversion Control Program. The amount to be recovered is established by 
the Congressional appropriations process. The projected amount required 
to be recovered for Fiscal Year 2004, based on the President's Budget 
Request, will be $133.6 million; the estimated amount required to be 
recovered for Fiscal Year 2005 will be $157.3 million. The estimated 
amount required to be recovered for Fiscal Year 2006 will be $160.3 
million. These figures include required program growth and the 
mandatory annual $15 million transfer to the U.S. Treasury.

Statutory Authority to Collect Fees

    DEA's authority to collect registration fees derives from three 
statutory provisions. DEA is authorized by 21 U.S.C. 821 to collect 
``reasonable fees relating to the registration and control of the 
manufacture, distribution and dispensing of controlled substances and 
to the registration and control of regulated persons and of regulated 
transactions.'' Secondly, 21 U.S.C. 958(f) permits DEA to collect 
``reasonable fees relating to the registration of importers and 
exporters of controlled substances or List I chemicals.'' Lastly, the 
1993 Appropriations Act added a provision requiring DEA to set a fee 
schedule ``that ensures the recovery of the full costs of operating the 
various aspects of that program.'' 21 U.S.C. 886a(3). The United States 
Court of Appeals for the District of Columbia Circuit noted that in 
establishing the DDCFA, Congress left intact the fee collection 
requirements of 21 U.S.C. 821, confirming boundaries of the DCP that 
DEA can fund by registration fees. AMA v. Reno, 57 F.3d 1129, 1135 
(D.C. Cir. 1995). Although the court made no specific mention of 21 
U.S.C. 958(f), those same boundaries remain intact as well. The court 
found that the current statutory scheme thus requires DEA to set 
registration fees to recover the full costs of the DCP, while requiring 
DEA to charge ``reasonable'' fees relating to the registration and 
control of the manufacture, distribution and dispensing of controlled 
substances and the registration and control of regulated persons and of 
regulated transactions.
    DEA, therefore, must examine DCP activities in conjunction with the 
nexus requirements of 21 U.S.C. 821 and 958(f) to determine whether it 
can properly fee-fund them while setting fees that recover the full 
cost of these activities.

Diversion Control Program and Responsibilities

    DEA's mission with respect to licit controlled pharmaceuticals is 
to prevent, detect and eliminate the diversion of controlled 
pharmaceuticals from legitimate channels to illegal use, while at the 
same time ensuring their availability for legitimate medical and 
scientific purposes. To facilitate these goals, Congress, through the 
CSA, established a closed system of controlled substance distribution 
encompassing manufacturers, distributors, pharmacies and practitioners; 
that is, within this closed system a controlled substance can be traced 
from the time it is manufactured to the time it is dispensed to the 
ultimate user. This system has proven effective in reducing the 
diversion of these substances from legitimate channels to the illicit 
market. Components of this closed system include scheduling of all 
controlled substances, registration of all controlled substance 
handlers, recordkeeping for accountability, security, and manufacturing 
quotas, all under DEA DCP oversight. (The DCP also possesses similar 
chemical control responsibilities pursuant to the Chemical Diversion 
and Trafficking Act (CDTA) and subsequent legislation.)
    The plain language of the 1993 Appropriations Act requires DEA to 
set and collect registration fees to cover the full costs of operating 
its Diversion Control Program. In its 1993 final rule publication 
setting new registration fees, DEA examined all activities that relate 
to the registration and control of the manufacture, distribution and 
dispensing of controlled substances and to the registration (and 
control) of importers and exporters. DEA determined that ``activities 
contained in the [diversion] program which give rise to the fees 
consist of diversion investigators, analysts, technicians, and clerical 
personnel salaries and expenses; and travel, rent, utilities, supplies, 
equipment and services associated with these positions for the 
registration and control of the manufacture, distribution and 
dispensing of controlled substances.'' 58 FR 15273. DEA determined that 
it would not fee-fund costs associated with chemical control efforts 
(see below), clandestine laboratory efforts, overseas staff 
(specifically diversion investigators assigned to foreign posts), DEA's 
Office of Chief Counsel or executive direction. 58 FR 15273. DEA 
concluded that these activities were excluded from the Attorney 
General's budget delineation for the category of ``Diversion Control'' 
and thus not included in the determination of the fees. Id.
    At the time this initial rule was published on March 22, 1993, 21 
U.S.C. 821 did not extend to chemical control activities (``regulated 
transactions''). Accordingly, there were no registration or fee 
requirements for handlers of List I chemicals, and chemical control 
activities were not included among those to be supported by the DDCFA. 
Congress amended 21 U.S.C. 821 on December 17, 1993 to require 
reasonable fees relating to ``the registration and control of regulated 
persons and of regulated transactions.'' Domestic Chemical Diversion 
Control Act of 1993, 3(a), Pub. L. 103-200, 107 Stat. 2333.

[[Page 7730]]

Despite this amendment, to date DEA's chemical control activities have 
continued to be supported by appropriated funds and not by the DDCFA.
    In its December 1996 Federal Register notice, DEA further excluded 
from fee-funding those activities that incidentally support the DCP but 
are funded elsewhere in the DEA Salaries Budget (and thus not fee-
funded). Specific examples listed in the notice include ``support 
provided by the Attorneys in DEA's office of Chief Counsel Division 
Regulatory Section; certain laboratory service support; DEA Automated 
Data Processing Systems support (except ARCOS and CSA); Office of 
Training staff; DEA Management and Administrative Support; Office of 
Congressional and Public Affairs; Intelligence Support and Diversion 
Investigators assigned overseas.'' 61 FR 68631.
    In summary, to date fee-fundable DCP activities have included: 
scheduling, registration, investigation, inspection, data collection 
and analysis, training, establishing production quotas, cooperative 
efforts with state, local and other federal agencies, cooperative 
efforts with the regulated industry, international activities relating 
to the registration and control of the manufacture, distribution and 
dispensing of controlled substances, and attendant management, 
personnel, administrative and clerical oversight for the DCP because 
they too relate to the fee-funding criteria of 21 U.S.C. 821 and 
958(f). Fee-fundable activities also have included travel, rent, 
utilities, supplies, equipment and services associated with the above-
listed activities. Fee-fundable activities also have included 
activities related to the control of licit controlled substances in the 
United States in which the initial source is foreign. For example, 
smuggling a controlled substance into or introducing it into the United 
States is importation, albeit illegal, and constitutes an activity for 
which DEA registration and controls are required under the CSA and its 
implementing regulations; therefore activities to prevent smuggling 
fall under the purview of the DCP. Foreign-source substances 
potentially threaten the integrity of the closed system of distribution 
and undermine other diversion control efforts by DEA. They also may 
pose a public health threat and/or unlawful competition to legal, 
registered U.S. manufacturers and suppliers. The advance of the 
Internet in particular has made foreign-source substances more 
accessible in the United States and the diversion of these substances a 
greater problem. The DCP now will address the activities that will be 
funded by the DDCFA as part of its programmatic responsibilities.
    A more detailed description of the activities funded through the 
DDCFA is included in DEA's 1996 final rule (61 FR 68631) and amended 
final rule published on August 9, 2002 (67 FR 51988).

Current Fee-Funding

    Since the last published rule in 1993, the Budget Authority for the 
Diversion Control Program has doubled without any associated increase 
in registrant fees. Currently, the fees established in 1993 are no 
longer adequate to recover the ``full costs'' of operating the DCP as 
required by law.
    The Congressional appropriation for the DCP for Fiscal Year 1994 
was $57.1 million. For Fiscal Year 2004, the expected Budget Authority 
will be $118,561,000 (this figure does not include the mandatory $15 
million transfer to the U.S. Treasury). The growth in the DCP has been 
driven by a number of factors some of which have been reflected in DEA 
budget submissions such as the creation of Tactical Diversion Squads in 
Fiscal Year 1997. Other DCP expansions include DEA's response to the 
diversion of OxyContin[reg], involving the opening of 247 cases from 
October 1999 through March 2002 (including 159 cases in Fiscal Year 
2001 alone, a 270 percent increase from Fiscal Year 2000). These cases 
have led to a total of 328 arrests. DEA is also expending increasing 
time and resources on implementing its initial response to internet-
based drug diversion, for which it has opened a number of cases leading 
to arrests and convictions. DEA has also seen an increase in the number 
of drug diversion cases leading to arrests. (The number of diversion 
arrests more than doubled in just five years, from 444 arrests in 
Fiscal Year 1995 to 941 diversion arrests relating to drug cases alone 
in Fiscal Year 2000. DEA made 871 diversion arrests relating to drug 
cases in Fiscal Year 2001, and 341 arrests in the first six months of 
Fiscal Year 2002. The slight decrease in arrests in Fiscal Year 2001 
and the first half of Fiscal Year 2002 is attributable to a greater 
emphasis on chemical investigative activities.) These additional 
programmatic needs and responsibilities have required additional 
investigators, headquarters staff and increased financial resources to 
support these staff and their efforts to prevent the diversion of licit 
controlled substances
    The following table shows the annual growth in Budget Authority for 
the DCP from Fiscal Year 1994 through Fiscal Year 2006 (expected Budget 
Authority for FY03 and estimated Budget Authority for FY04, FY05, and 
FY06). The Budget Authority is based on the President's Budget Request. 
Note, these figures do not include the required annual $15 million 
transfer to the U.S. Treasury.

------------------------------------------------------------------------
                                                  Budget authority  (In
                  Fiscal year                           millions)
------------------------------------------------------------------------
FY94...........................................                    $57.1
FY95...........................................                     58.4
FY96...........................................                     62.2
FY97...........................................                     67.8
FY98...........................................                     73.2
FY99...........................................                     76.7
FY00...........................................                     80.3
FY01...........................................                     83.5
FY02...........................................                     86.2
FY03 (est).....................................                       89
FY04 (est.)....................................                    118.6
FY05 (est.)....................................                    142.3
FY06 (est.)....................................                    145.3
------------------------------------------------------------------------

    In reviewing the activities currently supported by the DDCFA and 
the relevant legislation and regulatory actions governing the DCP and 
fee funding, DEA identified several elements of DEA operations that, 
though not part of the DCP, incidentally support the activities of the 
DCP and which to date have been funded through Congressional 
appropriations rather than through the DDCFA. Examples of such elements 
include two sections within the Office of Chief Counsel that (a) 
litigate administrative actions related to DEA registrants and (b) 
provide legal support on regulatory policy matters; a section within 
the Office of Training that is specifically dedicated to the DCP; a 
portion of the Office of Forensic Sciences Special Testing Laboratory 
that supports authentic sample analyses for licit drugs; and a portion 
of the budget for DEA's agency-wide computer network, ``Firebird'', 
related to the work of the DCP. As was discussed more fully in previous 
rulemakings regarding the DDCFA, while these elements incidentally 
support diversion control efforts, because their overall function is 
not primarily devoted to diversion control, they have been included 
elsewhere in the DEA budget and not as part of fee-fundable activities. 
In the absence of specific guidance in the 1993 Appropriations Act as 
to which activities were encompassed within the DCP and thus fee-
fundable, DEA has followed the plain language of the act and used the 
budget categories that had historically been included in the DCP budget 
request of the Attorney General. As described in DEA's 1996 Federal 
Register notice, for the purposes of

[[Page 7731]]

budget formulation and appropriation, DEA historically has identified 
only those resources (with their overhead costs) that were specifically 
devoted to diversion control efforts as part of the DCP in its annual 
budget submission to Congress. Other resources which support a broad 
range of DEA activities, including diversion control, therefore have 
been included in the budget formulation and appropriation process and 
not funded through the DDCFA. 61 FR 68631. At this time these 
activities will continue to be funded through appropriated funds as DEA 
considers how to better comply with the applicable laws in the future.

Development of the New Fee Schedule

    DEA set the current fee schedule for the Diversion Control Program 
(DCP) through publication in the Federal Register on March 22, 1993. 
This announcement outlined the general categories of cost to be borne 
by the resulting Drug Diversion Control Fee Account (DDCFA) and 
delineated the fee categories indicated below:

------------------------------------------------------------------------
                      Registrant class                       Annual cost
------------------------------------------------------------------------
Manufacturers..............................................         $875
Distributors, Importers/Exporters..........................          438
Dispensers/Practitioners...................................           70
Researchers, Narcotic Treatment Programs...................           70
------------------------------------------------------------------------

    Since this announcement, the fees, which as required by law support 
the full cost of the Diversion Control Program, have not changed 
despite growth in the program and additional costs borne by the program 
(see the previous section). To recover the full costs of the DCP as 
required by law, DEA plans to incrementally raise the fees in 
accordance with its existing fee structure as follows:

------------------------------------------------------------------------
                      Registrant class                       Annual cost
------------------------------------------------------------------------
Manufacturers..............................................       $1,605
Distributors, Importers/Exporters..........................          804
Dispensers/Practitioners...................................          131
Researchers, Narcotic Treatment Programs...................          131
------------------------------------------------------------------------

    These increases in fees will go into effect 30 days after the 
publication of the final rule.
    The determination of fees for the Fiscal Year 2004-2006 period 
covered by this notice is based on the expected Budget Authority for 
Fiscal Year 2004 (based on the President's Budget Request) and the 
estimated budget request and appropriation for each subsequent year 
plus the annual $15 million transfer to the U.S. Treasury. In addition 
to covering with fee funds all program elements and activities related 
to the registration and control of the manufacture, distribution and 
dispensing of controlled substances, DEA must transfer the first $15 
million of fee revenue to the General Fund of the Treasury each year. 
21 U.S.C. 886a(1). For each fiscal year between Fiscal Year 1993 
through Fiscal Year 1998, Congress appropriated an additional $15 
million to offset this requirement (a total infusion to the DDCFA of 
$90 million). However, beginning in Fiscal Year 1999, Congress 
discontinued this additional appropriation.
    The expected Budget Authority for Fiscal Year 2004 is $118,561,000, 
which accounts for increases in program costs due to inflation, 
increases in federal staff salaries, and additional funds to undertake 
a number of new initiatives to prevent, detect and eliminate the 
diversion of controlled substances while ensuring an adequate supply 
for legitimate medical and scientific purposes. Funds include 
$12,518,000 for diversion investigation (for 93 positions), including 
OxyContin[reg] diversion control and implementation of a system to 
detect Internet sites that may divert controlled substances and 
investigation of those sites, as warranted. This will permit DEA to 
conduct additional and more complex investigations into the diversion 
of pharmaceutical controlled substances. Other funds accounted for 
include $12,098,000 (for 40 positions) to develop a system to permit 
the electronic transmission of controlled substances prescriptions from 
prescriber to pharmacy and to develop an electronic order form for 
Schedule I and II controlled substances. These electronic alternatives 
will provide a similar or higher degree of security/integrity than 
current paper-based systems and will help DEA to meet its legal 
mandates under the Government Paperwork Elimination Act. The total cost 
of program enhancements for Fiscal Year 2004 is $24,873,000. Including 
the mandatory transfer to Treasury of $15 million, the total amount 
required to be recovered for Fiscal Year 2004 is $133,561,000.
    The anticipated President's Budget Request for Fiscal Year 2005 is 
$142,265,000. This figure accounts for increases in program costs due 
to inflation (including such items as postage rate increase, increases 
in cost of employee health benefits, increases in GSA rent, etc.), 
costs of federal staff pay increases, and an additional $20,578,000 
(for 39 positions). This figure includes costs to support the systems 
to permit the electronic transmission of controlled substances 
prescriptions and electronic orders of Schedule I and II controlled 
substances, the support and operation of DEA's Internet investigations, 
a major upgrade to the Automation of Reports and Consolidated Orders 
System (ARCOS), and significant improvements to registration customer/
forms service. Other funds accounted for include liaison, policy, 
regulatory, and analytical activities of the Diversion Control Program. 
Including the mandatory transfer to Treasury of $15 million, the total 
amount required to be recovered for Fiscal Year 2005 is $157,265,000.
    The anticipated President's Budget Request for Fiscal Year 2006 is 
$145,307,000 which accounts for inflationary growth from the previous 
fiscal year estimate and increases in Federal staff salaries. Including 
the mandatory transfer to Treasury of $15 million, the total amount 
required to be recovered for Fiscal Year 2006 is $160,307,000.
    To calculate inflationary growth, DEA used inflation figures of 1.5 
percent for Fiscal Year 2004, 1.6 percent for Fiscal Year 2005 and 1.7 
percent for Fiscal Year 2006 and salary increase assumptions of 2.0 
percent for Fiscal Year 2004 and 3.4 percent for both Fiscal Year 2005 
and Fiscal Year 2006, based on the President's Economic Assumptions. 
The total amount necessary to collect through fee funds for the Fiscal 
Year 2004-2006 period is $451,133,000. Based on the amounts required to 
be collected for the 2004-2006 period to comply with the law, DEA 
developed the specific fee levels for each registrant category 
reflected in the previous table. To calculate these fees, DEA first 
estimated the number of paying registrants for this period and then 
used this figure combined with the amount required to be collected to 
set the new fee rate. To calculate the number of paying registrants, 
DEA used logarithmic regression analysis to project the yearly 
registrant figures based on historical registrant data for the period 
of Fiscal Year 1994 through Fiscal Year 2001.
    DEA then estimated the number of registrants for each registrant 
category since different registrant categories pay different fees. 
Because there were insufficient data for some activities to perform 
regression analysis, DEA used the percentage for each category using 
data from the corresponding cycle years in the past.
    Finally, based on the analyses conducted, DEA developed the fees 
for each registrant category consistent with

[[Page 7732]]

its current fee structure. In doing so, DEA opted to set the fee level 
for a three-year period (FY 2004-2006) to avoid the heavy burden on 
registrants and the additional administrative expenses to DEA that 
resetting the fee each year would impose. Accordingly, the fees above 
reflect the total amount necessary to be collected for the full three-
year period (FY 2004-2006) divided by projected registrants and 
accounting for projected registrant growth by category for each fiscal 
year. Because different categories of registrants pay different 
amounts, DEA weighted the number of registrants in each category to 
ensure the appropriate reflection in the fee schedule. Because the fees 
reflect the total amount necessary to be collected for the Fiscal Year 
2004-2006 period, DEA may accumulate additional funds beyond those 
necessary for actual program operations in the initial year (Fiscal 
Year 2004), but in the final year of the period (Fiscal Year 2006) fee 
collections are anticipated to fall short of the amount necessary to 
cover expenditures in that year, so DEA will then draw down the 
previously collected surplus. The alternatives to this approach would 
be to reset the fee each year or to set a different fee for each fiscal 
year; both of these options would cause unnecessary confusion and would 
impose greater administrative burdens on DEA and registrants.

Regulatory Analyses

Regulatory Flexibility Act

    The Deputy Administrator hereby certifies that this rulemaking has 
been drafted in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed this regulation, and by approving it 
certifies that this regulation will not have a significant economic 
impact on a substantial number of small entities. While DEA recognizes 
that this regulation will have a financial effect on registrants with 
the increase in fees, the change in fees is not significant. Moreover, 
the fees have not been changed in nine years, and DEA is legally 
mandated to collect fees to cover the full costs of the Diversion 
Control Program. The appropriations process was used to determine the 
budget on which the fees are based. The increase in fees after nine 
years covers both inflation and enhancements to address additional 
responsibilities assumed by the Diversion Control Program.
    In considering options for collecting the full costs of the 
Diversion Control Program as mandated by law (21 U.S.C. 886a(3)), DEA 
considered several alternatives to the approach proposed in this 
regulation. One alternative would be to reset the fee each year for 
each category of registrant according to the Budget Authority. Another 
alternative would be to set a different fee for each fiscal year. DEA 
determined that both of these options would cause unnecessary confusion 
with fee changes each year and would impose greater administrative and 
financial burdens on DEA and registrants than the approach proposed in 
this regulation.

Executive Order 12866

    The Deputy Administrator further certifies that this rulemaking has 
been drafted in accordance with the principles in Executive Order 12866 
Section 1(b). DEA has determined that this is not a significant 
regulatory action, but this action has been reviewed by the Office of 
Management and Budget.

Executive Order 12988

    This regulation meets the applicable standards set forth in 
Sections 3(a) and 3(b)(2) of Executive Order 12988 Civil Justice 
Reform.

Executive Order 13132

    This rulemaking does not preempt or modify any provision of state 
law; nor does it impose enforcement responsibilities on any state; nor 
does it diminish the power of any state to enforce its own laws. 
Accordingly, this rulemaking does not have federalism implications 
warranting the application of Executive Order 13132.

Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by State, local, and 
tribal governments, in the aggregate of $100,000,000 or more in any one 
year, and will not significantly or uniquely affect small governments. 
While it will affect the private sector in excess of $100,000,000 per 
year, the effect on individual entities and practitioners is minimal. 
The majority of the affected entities will pay $131 per year (or $391 
for a three year registration period). Moreover, this rule is 
promulgated in compliance with Congressional mandate that the full cost 
of operating the DCP be collected through registrant fees as stipulated 
in the 1993 Departments of Commerce, Justice, and State, the Judiciary, 
and Related Agencies Appropriations Act (Pub. L. 102-395) and codified 
in 21 U.S.C. 886a(3). Detailed estimates and analyses, including 
specific fee amounts for individual registrants, are included in the 
text of the proposed rule.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by Section 804 of the 
Small Business Regulatory Enforcement Fairness Act of 1996. While this 
rule will result in an annual effect on the economy of $100,000,000 or 
more, it will not result in a major increase in costs or prices or 
cause significant adverse effects on competition, employment, 
investment, productivity, innovation, or on the ability of United 
States-based companies to compete with foreign-based companies in 
domestic and export markets. This rule is not a discretionary action 
but rather responds to the Congressional mandate that the full 
operating costs of the DCP be collected through registrant fees as 
described above. The individual effect on small business registrants is 
minimal ranging from $131 to $1,605 per year with the majority of 
affected registrants paying an annual fee of $131 (or $391 for three 
years).

List of Subjects in 21 CFR Part 1301

    Administrative practice and procedure, Drug traffic control, 
Security measures. For the reasons set out above, 21 CFR part 1301 is 
proposed to be amended as follows:

PART 1301--[AMENDED]

    1. The authority citation for part 1301 continues to read as 
follows:

    Authority: 21 U.S.C. 821, 822, 823, 824, 871(b), 875, 877.

    2. Section 1301.13 is proposed to be amended by revising paragraph 
(e)(1) to read as follows:


Sec.  1301.13  Application for registration; time for application; 
expiration date; registration for independent activities; application 
forms, fees, contents and signature; coincident activities.

* * * * *
    (e) * * *
    (1)

[[Page 7733]]



--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                 Registration
         Business activity               Controlled substances           DEA application forms      Application     period       Coincident activities
                                                                                                      fee ($)       (years)             allowed
--------------------------------------------------------------------------------------------------------------------------------------------------------
(i) Manufacturing.................  Schedules I-V.................  New--225......................       1,605             1   Schedules I-V: May
                                                                    Renewal--225a.................       1,605                  distribute that
                                                                                                                                substance or class for
                                                                                                                                which registration was
                                                                                                                                issued; may not
                                                                                                                                distribute or dispose
                                                                                                                                any substance or class
                                                                                                                                for which not
                                                                                                                                registered. Schedules II-
                                                                                                                                V: Except a person
                                                                                                                                registered to dispose of
                                                                                                                                any controlled substance
                                                                                                                                may conduct chemical
                                                                                                                                analysis and preclinical
                                                                                                                                research (including
                                                                                                                                quality control
                                                                                                                                analysis) with
                                                                                                                                substances listed in
                                                                                                                                those schedules for
                                                                                                                                which authorization as a
                                                                                                                                mfg. Was issued.
(ii) Distributing.................  Schedules I-V.................  New--225......................         804             1   .........................
                                                                    Renewal--225a.................         804
(iii) Dispensing or instructing     Schedules II-V................  New--224......................         391             3   May conduct research and
 (includes Practitioner, Hospital/                                  Renewal--224a.................         391                  instructional activities
 Clinic, Retail Pharmacy, Teaching                                                                                              with those substances
 Institution).                                                                                                                  for which registration
                                                                                                                                was granted, except that
                                                                                                                                a mid-level practitioner
                                                                                                                                may conduct such
                                                                                                                                research only to the
                                                                                                                                extent expressly
                                                                                                                                authorized under state
                                                                                                                                statute. A pharmacist
                                                                                                                                may manufacture an
                                                                                                                                aqueous or oleaginous
                                                                                                                                solution or solid dosage
                                                                                                                                form containing a
                                                                                                                                narcotic controlled
                                                                                                                                substance in Schedule II-
                                                                                                                                V in a proportion not
                                                                                                                                exceeding 20% of the
                                                                                                                                complete solution,
                                                                                                                                compound or mixture.
(iv) Research.....................  Schedule I....................  New--225......................         131             1   A researcher may
                                                                    Renewal--225a.................         131                  manufacture or import
                                                                                                                                the basic class of
                                                                                                                                substance or substances
                                                                                                                                for which registration
                                                                                                                                was issued, provided
                                                                                                                                that such manufacture or
                                                                                                                                import is set forth in
                                                                                                                                the protocol required in
                                                                                                                                Section 1301.18 and to
                                                                                                                                distribute such class to
                                                                                                                                persons registered or
                                                                                                                                authorized to conduct
                                                                                                                                research with such class
                                                                                                                                of substance or
                                                                                                                                registered or authorized
                                                                                                                                to conduct chemical
                                                                                                                                analysis with controlled
                                                                                                                                substances.
(v) Research......................  Schedules II-V................  New--225......................         131             1   May conduct chemical
                                                                    Renewal--225a.................         131                  analysis with controlled
                                                                                                                                substances in those
                                                                                                                                schedules for which
                                                                                                                                registration was issued;
                                                                                                                                manufacture such
                                                                                                                                substances if and to the
                                                                                                                                extent that such
                                                                                                                                manufacture is set forth
                                                                                                                                in a statement filed
                                                                                                                                with the application for
                                                                                                                                registration or
                                                                                                                                reregistration and
                                                                                                                                provided that the
                                                                                                                                manufacture is not for
                                                                                                                                the purposes of dosage
                                                                                                                                form development; import
                                                                                                                                such substances for
                                                                                                                                research purposes;
                                                                                                                                distribute such
                                                                                                                                substances to persons
                                                                                                                                registered or authorized
                                                                                                                                to conduct chemical
                                                                                                                                analysis, instructional
                                                                                                                                activities or research
                                                                                                                                with such substances,
                                                                                                                                and to persons exempted
                                                                                                                                from registration
                                                                                                                                pursuant to Section
                                                                                                                                1301.24; and conduct
                                                                                                                                instructional activities
                                                                                                                                with controlled
                                                                                                                                substances.
(vi) Narcotic Treatment Program     Narcotic Drugs in Schedules II- New--363......................         131             1   .........................
 (including compounder).             V.                             Renewal--363a.................         131
(vii) Importing...................  Schedules I-V.................  New--225......................         804             1   May distribute that
                                                                    Renewal--225a.................         804                  substance or class for
                                                                                                                                which registration was
                                                                                                                                issued; may not
                                                                                                                                distribute any substance
                                                                                                                                or class for which not
                                                                                                                                registered.
(viii) Exporting..................  Schedules I-V.................  New--225......................         804             1   .........................
                                                                    Renewal--225a.................         804
(ix) Chemical Analysis............  Schedules I-V.................  New--225......................         131             1   May manufacture and
                                                                    Renewal--225a.................         131                  import controlled
                                                                                                                                substances for
                                                                                                                                analytical or
                                                                                                                                instructional
                                                                                                                                activities; may
                                                                                                                                distribute such
                                                                                                                                substances to persons
                                                                                                                                registered or authorized
                                                                                                                                to conduct chemical
                                                                                                                                analysis, instructional
                                                                                                                                activities, or research
                                                                                                                                with such substances and
                                                                                                                                to persons exempted from
                                                                                                                                registration pursuant to
                                                                                                                                section 1301.24; may
                                                                                                                                export such substances
                                                                                                                                to persons in other
                                                                                                                                countries performing
                                                                                                                                chemical analysis or
                                                                                                                                enforcing laws related
                                                                                                                                to controlled substances
                                                                                                                                or drugs in those
                                                                                                                                countries; and may
                                                                                                                                conduct instructional
                                                                                                                                activities with
                                                                                                                                controlled substances.

[[Page 7734]]

 
(x) Disposer......................  Schedules I-V.................  New--225......................         131             1
                                                                    Renewal--225a.................         131
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* * * * *

    Dated: February 5, 2003.
John B. Brown III,
Deputy Administrator.
[FR Doc. 03-3765 Filed 2-14-03; 8:45 am]
BILLING CODE 4410-09-P