Notice2022-16175
Food Safety Modernization Act Voluntary Qualified Importer Program User Fee Rate for Fiscal Year 2023
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Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 28, 2022
Effective
August 1, 2022
Issuing agencies
Health and Human Services DepartmentFood and Drug Administration
Abstract
The Food and Drug Administration (FDA) is announcing the fiscal year (FY) 2023 annual fee rate for importers approved to participate in the Voluntary Qualified Importer Program that is authorized by the Federal Food, Drug, and Cosmetic Act (FD&C Act), as amended by the FDA Food Safety Modernization Act (FSMA).
Full Text
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<title>Federal Register, Volume 87 Issue 144 (Thursday, July 28, 2022)</title>
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[Federal Register Volume 87, Number 144 (Thursday, July 28, 2022)]
[Notices]
[Pages 45328-45331]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-16175]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA-2022-N-1590]
Food Safety Modernization Act Voluntary Qualified Importer
Program User Fee Rate for Fiscal Year 2023
AGENCY: Food and Drug Administration, HHS.
ACTION: Notice.
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SUMMARY: The Food and Drug Administration (FDA) is announcing the
fiscal year (FY) 2023 annual fee rate for importers approved to
participate in the Voluntary Qualified Importer Program that is
authorized by the Federal Food, Drug, and Cosmetic Act (FD&C Act), as
amended by the FDA Food Safety Modernization Act (FSMA).
DATES: This fee is effective on August 1, 2022, and will remain in
effect through September 30, 2023.
FOR FURTHER INFORMATION CONTACT: Donald Prater, Office of Food Policy
and Response, Food and Drug Administration, 10903 New Hampshire Ave.,
Bldg. 1, Rm. 3202, Silver Spring, MD 20993, 301-348-3007.
SUPPLEMENTARY INFORMATION:
I. Background
Section 302 of FSMA (Pub L. 111-353), Voluntary Qualified Importer
Program (VQIP), amended the FD&C Act to create a new provision, section
806, under the same name. Section 806 of the FD&C Act (21 U.S.C. 384b)
directs FDA to establish a program to provide for the expedited review
and importation of food offered for importation by importers who have
voluntarily agreed to participate in such program, and a process,
consistent with section 808 of the FD&C Act (21 U.S.C. 384d), for the
issuance of a facility certification to accompany a food offered for
importation by importers participating in the VQIP.
Section 743 of the FD&C Act (21 U.S.C. 379j-31) authorizes FDA to
assess and collect fees from each importer participating in VQIP to
cover FDA's costs of administering the program. Each fiscal year, fees
are to be established based on an estimate of 100 percent of the costs
for the year. The fee rates must be published in a Federal Register
notice not later than 60 days before the start of each FY (section
743(b)(1) of the FD&C Act). After FDA approves a VQIP application, the
user fee must be paid before October 1, the start of the VQIP FY, to
begin receiving benefits for that VQIP fiscal year.
The FY 2023 VQIP user fee will support benefits from October 1,
2022, through September 30, 2023.
II. Estimating the Average Cost of a Supported Direct FDA Work Hour for
FY 2023
FDA is required to estimate 100 percent of its costs for each
activity in order to establish fee rates for FY 2023. In each year, the
costs of salary (or personnel compensation) and benefits for FDA
employees account for between 50 and 60 percent of the funds available
to, and used by, FDA. Almost all of the remaining funds (operating
funds) available to FDA are used to support FDA employees for paying
rent, travel, utility, information technology (IT), and other operating
costs.
A. Estimating the Full Cost per Direct Work Hour in FY 2023
Full-time Equivalent (FTE) reflects the total number of regular
straight-time hours (not including overtime or holiday hours) worked by
employees, divided by the number of compensable hours applicable to
each fiscal year. Annual leave, sick leave, compensatory time off, and
other approved leave categories are considered ``hours worked'' for
purposes of defining FTE employment.
In general, the starting point for estimating the full cost per
direct work hour is to estimate the cost of an FTE or paid staff year.
Calculating an Agency-wide total cost per FTE requires three primary
cost elements: payroll, non-payroll, and rent.
We have used an average of past year cost elements to predict the
FY 2023 cost. The FY 2023 FDA-wide average
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cost for payroll (salaries and benefits) is $173,393; non-payroll
(including equipment, supplies, IT, general and administrative
overhead) is $103,078; and rent (including cost allocation analysis and
adjustments for other rent and rent-related costs) is $23,944 per paid
staff year, excluding travel costs.
Summing the average cost of an FTE for payroll, non-payroll, and
rent, brings the FY 2023 average fully supported cost to $300,416 \1\
per FTE, excluding travel costs. FDA will use this base unit fee in
determining the hourly fee rate for VQIP fees for FY 2023 prior to
including domestic or foreign travel costs as applicable for the
activity.
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\1\ Total includes rounding.
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To calculate an hourly rate, FDA must divide the FY 2023 average
fully supported cost of $300,416 per FTE by the average number of
supported direct FDA work hours in FY 2021 (the last FY for which data
are available). See table 1.
Table 1--Supported Direct FDA Work Hours in a Paid Staff Year in FY 2021
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Total number of hours in a paid staff year.............. 2,080
Less:
11 paid holidays.................................... -88
20 days of annual leave............................. -160
10 days of sick leave............................... -80
12.5 days of training............................... -100
22 days of general administration................... -176
26.5 days of travel................................. -212
2 hours of meetings per week........................ -104
---------------
Net Supported Direct FDA Work Hours Available 1,160
for Assignments................................
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Dividing the average fully supported FTE cost in FY 2023 ($300,416)
by the total number of supported direct work hours available for
assignment in FY 2021 (1,160) results in an average fully supported
cost of $259 (rounded to the nearest dollar), excluding inspection
travel costs, per supported direct work hour in FY 2023.
B. Adjusting FY 2021 Travel Costs for Inflation To Estimate FY 2023
Travel Costs
To adjust the hourly rate for FY 2023, FDA must estimate the cost
of inflation in each year for FY 2022 and FY 2023. FDA uses the method
prescribed for estimating inflationary costs under the Prescription
Drug User Fee Act (PDUFA) provisions of the FD&C Act (section 736(c)(1)
(21 U.S.C. 379h(c)(1)), the statutory method for inflation adjustment
in the FD&C Act that FDA has used consistently. FDA previously
determined the FY 2022 inflation rate to be 2.2013 percent; this rate
was published in the FY 2022 PDUFA user fee rates notice in the Federal
Register (August 16, 2021, 86 FR 45732). Utilizing the method set forth
in section 736(c)(1) of the FD&C Act, FDA has calculated an inflation
rate of 2.2013 percent for FY 2022 and 1.6404 percent for FY 2023. FDA
intends to use these inflation rates to make inflation adjustments for
FY 2023; the derivation of this rate will be published in the Federal
Register in the FY 2023 notice for the PDUFA user fee rates. The
compounded inflation rate for FYs 2022 and 2023 is 1.038778 (or 3.8778
percent) (calculated as 1 plus 2.2013 percent times 1 plus 1.6404
percent).
The average fully supported cost per supported direct FDA work
hour, excluding travel costs, of $259 already takes into account
inflation as the calculation above is based on FY 2023 predicted costs.
FDA will use this base unit fee in determining the hourly fee rate for
VQIP fees for FY 2023 prior to including domestic or foreign travel
costs as applicable for the activity. In FY 2021, FDA's Office of
Regulatory Affairs (ORA) spent a total of $4,920,033 for domestic
regulatory inspection travel costs and General Services Administration
Vehicle costs related to FDA's Center for Food Safety and Applied
Nutrition (CFSAN) and Center for Veterinary Medicine (CVM) field
activities programs. The total ORA domestic travel costs spent is then
divided by the 4,965 CFSAN and CVM domestic inspections, which averages
a total of $991 per inspection. These inspections average 46.43 hours
per inspection. Dividing $991 per inspection by 46.43 hours per
inspection results in a total and an additional cost of $21 (rounded to
the nearest dollar) per hour spent for domestic inspection travel costs
in FY 2021. To adjust for the $21 per hour additional domestic cost
inflation increases for FY 2022 and FY 2023, FDA must multiply the FY
2022 PDUFA inflation rate adjustor (1.022013) by the FY 2023 PDUFA
inflation rate adjustor (1.038778) times the $21 additional domestic
cost, which results in an estimated cost of $22 (rounded to the nearest
dollar) per paid hour in addition to $259 for a total of $281 per paid
hour ($259 plus $22) for each direct hour of work requiring domestic
inspection travel. FDA will use these rates in charging fees in FY 2023
when domestic travel is required.
In FY 2020,\2\ ORA spent a total of $1,449,058 on 171 foreign
inspection trips related to FDA's CFSAN and CVM field activities
programs, which averaged a total of $8,474 per foreign inspection trip.
These trips averaged 3 weeks (or 120 paid hours) per trip. Dividing
$8,474 per trip by 120 hours per trip results in a total and an
additional cost of $71 (rounded to the nearest dollar) per paid hour
spent for foreign inspection travel costs in FY 2020. To adjust $71 for
inflationary increases in FY 2021, FY 2022, and FY 2023, FDA must
multiply it by the same inflation factors mentioned previously in this
document (1.022013 and 1.038778) and the inflation factor for FY 2021
\3\ (1.013493), which results in an estimated cost of $75 (rounded to
the nearest dollar) per paid hour in addition to $259 for a total of
$334 per paid hour ($259 plus $75) for each direct hour of work
requiring foreign inspection travel. FDA will use these rates in
charging fees in FY 2023 when foreign travel is required.
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\2\ We use FY 2020 numbers for the foreign inspection travel
costs due to the limited number of inspections done in FY2021 due to
travel restrictions caused by the COVID-19 Pandemic.
\3\ FDA previously determined the FY 2021 inflation rate to be
1.3493 percent; this rate was published in the FY 2021 PDUFA user
fee rates notice in the Federal Register (August 3, 2020, 85 FR
46651).
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Table 2--FSMA Fee Schedule for FY 2023
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Fee rates for
Fee category FY 2023
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Hourly rate without travel.............................. $259
Hourly rate if domestic travel is required.............. 281
Hourly rate if foreign travel is required............... 334
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III. Fees for Importers Approved To Participate in the Voluntary
Qualified Importer Program Under Section 743 of the FD&C Act
FDA assesses fees for VQIP annually. Table 3 provides an overview
of the fees for FY 2023.
Table 3--FSMA VQIP User Fee Schedule for FY 2023
------------------------------------------------------------------------
Fee rates for
Fee category FY 2023
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VQIP User Fee.......................................... $12,962
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Section 743 of the FD&C Act requires that each importer
participating in VQIP pay a fee to cover FDA's costs of administering
the program. This fee represents the estimated average cost of the work
FDA performs in reviewing and evaluating a VQIP importer. At this time,
FDA is not offering an adjusted fee for small businesses. As required
by section 743(b)(2)(B)(iii) of the FD&C Act, FDA previously published
a set of guidelines in consideration of the burden of the VQIP fee on
small businesses and provided for a period of public comment on the
guidelines (80 FR 32136, June 5, 2015). While we did receive some
comments in response, they did not address the questions posed, i.e.,
how a small business fee reduction should be structured, what
percentage of fee reduction would be appropriate, or what alternative
structures FDA might consider to indirectly reduce fees for small
businesses by charging different fee amounts to different VQIP
participants. We plan on monitoring costs and collecting data to
determine if, in future fiscal years, we will provide for a small
business fee reduction. Consistent with section 743(b)(2)(B)(iii) of
the FD&C Act, we will adjust the fee schedule for small businesses only
through notice and comment rulemaking.
The fee is based on the fully supported FTE hourly rates and
estimates of the number of hours it would take FDA to perform relevant
activities. These estimates represent FDA's current thinking, and as
the program evolves, FDA will reconsider the estimated hours. We
estimate that it would take, on average, 39 person-hours to review a
new VQIP application (including communication provided through the VQIP
Importer's Help Desk), 28 person-hours to review a returning VQIP
application (including communication provided through the VQIP
Importer's Help Desk), 16 person-hours for an onsite performance
evaluation of a domestic VQIP importer (including travel and other
steps necessary for a fully supported FTE to complete and document an
onsite assessment), and 34 person-hours for an onsite performance
evaluation of a foreign VQIP importer (including travel and other steps
necessary for a fully supported FTE to complete and document an onsite
assessment). Additional costs include maintenance and support costs of
IT of administering benefits of the program. These costs are estimated
to be $2,600 per VQIP importer.
Based on updated data, FDA anticipates that there may be up to four
returning VQIP applicants and up to two new applicants this fiscal
year. FDA employees are likely to review new VQIP applications from
their worksites, so we use the fully supported FTE hourly rate
excluding travel, $259 per hour, to calculate the portion of the user
fee attributable to those activities: $259/hour multiplied by 39 hours
equaling $10,101. FDA employees are likely to review returning VQIP
applications from their worksites, so we use the fully supported FTE
hourly rate excluding travel, $259 per hour, to calculate the portion
of the user fee attributable to those activities: $259/hour multiplied
by 28 hours equaling $7,252.
FDA employees will conduct a VQIP inspection to verify the
eligibility criteria and full implementation of the food safety and
food defense systems established in the Quality Assurance Program. A
VQIP importer may be located inside or outside of the United States.
However, this fiscal year, all VQIP importers will be located inside
the United States. Three VQIP applicants may have an associated VQIP
inspection.
FDA employees are likely to prepare for and report on the
performance evaluation of a domestic VQIP importer at an FTE's
worksite, so we use the fully supported FTE hourly rate excluding
travel, $259 per hour, to calculate the portion of the user fee
attributable to those activities: $259 per hour multiplied by 8 hours
equaling $2,072. For the portion of the fee covering onsite evaluation
of a domestic VQIP importer, we use the fully supported FTE hourly rate
for work requiring domestic travel, $281 per hour, to calculate the
portion of the user fee attributable to those activities: $281 per hour
multiplied by 8 hours (i.e., one fully supported FTE for 1 day onsite
amounting to 8 hours) equaling $2,248. Therefore, the total cost of
conducting the domestic performance evaluation of a VQIP importer is
determined to be $2,072 plus $2,248 equaling $4,320.
Coordination of the onsite performance evaluation of a foreign VQIP
importer is estimated to take place at an FTE's worksite, so we use the
fully supported FTE hourly rate excluding travel, $259 per hour, to
calculate the portion of the user fee attributable to those activities:
$259 per hour multiplied by 10 hours equaling $2,590. For the portion
of the fee covering onsite evaluation of a foreign VQIP importer, we
use the fully supported FTE hourly rate for work requiring foreign
travel, $334 per hour, to calculate the portion of the user fee
attributable to those activities: $334 per hour multiplied by 24 hours
(i.e., one fully supported FTE for travel ((2 travel days for 8 hours
each day) plus (1 day onsite for 8 hours))) equaling $8,016. Therefore,
the total cost of conducting the foreign performance evaluation of a
VQIP importer is determined to be $2,590 plus $8,016 equaling $10,606.
Therefore, the estimated average cost of the work FDA performs in
total for approving an application for a VQIP importer in FY 2023 based
on these figures would be $2,600 plus ($10,101 multiplied by one-third)
plus ($7,252 multiplied by two-thirds) plus ($4,320 multiplied by one-
half) equaling $12,962.
IV. How must the fee be paid?
An invoice will be sent to VQIP importers approved to participate
in the program. Payment must be made prior to October 1, 2022, to be
eligible for VQIP participation for the benefit year beginning October
1, 2022. FDA will not refund the VQIP user fee for any reason.
The payment must be made in U.S. currency from a U.S. bank by one
of the following methods: wire transfer, electronically, check, bank
draft, or U.S. postal money order made payable to the Food and Drug
Administration. The preferred payment method is online using an
electronic check (Automated Clearing House (ACH), also known as eCheck)
or credit card (Discover, VISA, MasterCard, American Express). Secure
electronic payments can be submitted using the User Fees Payment Portal
at <a href="https://userfees.fda.gov/pay">https://userfees.fda.gov/pay</a>. (Note: only full payments are
accepted. No partial payments can be made online.) Once you have found
your invoice, select
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``Pay Now'' to be redirected to <a href="http://Pay.gov">Pay.gov</a>. Electronic payment options are
based on the balance due. Payment by credit card is available only for
balances less than $25,000. If the balance exceeds this amount, only
the ACH option is available. Payments must be made using U.S. bank
accounts as well as U.S. credit cards. When paying by check, bank
draft, or U.S. postal money order, please include the invoice number.
Also write the FDA post office box number (P.O. Box 979108) on the
enclosed check, bank draft, or money order. Mail the payment including
the invoice number on the check stub to: Food and Drug Administration,
P.O. Box 979108, St. Louis, MO 63197-9000.
When paying by wire transfer, it is required that the invoice
number is included; without the invoice number the payment may not be
applied. The originating financial institution may charge a wire
transfer fee. If the financial institution charges a wire transfer fee,
it is required to add that amount to the payment to ensure that the
invoice is paid in full. For international wire transfers, please
inquire with the financial institutions prior to submitting the
payment. Use the following account information when sending a wire
transfer: U.S. Department of the Treasury, TREAS NYC, 33 Liberty St.,
New York, NY 10045, Account Name: Food and Drug Administration, Account
No.: 75060099, Routing No.: 021030004, Swift No.: FRNYUS33.
To send a check by a courier such as Federal Express, the courier
must deliver the check to: U.S. Bank, Attn: Government Lockbox 979108,
1005 Convention Plaza, St. Louis, MO 63101. (Note: This address is for
courier delivery only. If you have any questions concerning courier
delivery, contact U.S. Bank at 314-418-4013. This phone number is only
for questions about courier delivery.) The tax identification number of
FDA is 53-0196965. (Note: Invoice copies do not need to be submitted to
FDA with the payments.)
V. What are the consequences of not paying this fee?
The consequences of not paying these fees are outlined in Section J
of ``FDA's Voluntary Qualified Importer Program; Guidance for
Industry'' document (available at <a href="https://www.fda.gov/media/92196/download">https://www.fda.gov/media/92196/download</a>). If the user fee is not paid before October 1, a VQIP
importer will not be eligible to participate in VQIP. For the first
year a VQIP application is approved, if the user fee is not paid before
October 1, 2022, you are not eligible to participate in VQIP. If you
subsequently pay the user fee, FDA will begin your benefits after we
receive the full payment. The user fee may not be paid after December
31, 2022. For a subsequent year, if you do not pay the user fee before
October 1, FDA will send a Notice of Intent to Revoke your
participation in VQIP. If you do not pay the user fee within 30 days of
the date of the Notice of Intent to Revoke, we will revoke your
participation in VQIP.
Dated: July 22, 2022.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2022-16175 Filed 7-27-22; 8:45 am]
BILLING CODE 4164-01-P
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