Veterinary Services User Fees; Fees for Permit Applications

AGENCY:

Animal and Plant Health Inspection Service, USDA.

ACTION:

Proposed rule.

SUMMARY:

We are proposing to amend existing user fees for processing applications for permits to import and transport certain animal products, organisms, vectors, and germ plasm. We are also proposing to establish new user fees that would pay the cost of processing applications to import live animals. We are proposing these changes in order to ensure that we recover our costs.

DATES:

We invite you to comment on this docket. We will consider all comments that we receive by January 12, 2001.

ADDRESSES:

Please send your comment and three copies to: Docket No. 99-060-1, Regulatory Analysis and Development, PPD, APHIS, Suite 3C03, 4700 River Road, Unit 118, Riverdale, MD 20737-1238. Please state that your comment refers to Docket No. 99-060-1.

You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue, SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call (202) 690-2817 before coming.

APHIS documents published in the Federal Register, and related information, including the names of organizations and individuals who have commented on APHIS dockets, are available on the Internet at http://www.aphis.usda.gov/ppd/rad/webrepor.html.

FOR FURTHER INFORMATION CONTACT:

For information concerning program operations for Veterinary Services, contact Ms. Louise Lothery, Administrative Officer, Management Support Staff, VS, APHIS, 4700 River Road Unit 44, Riverdale, MD 20737-1231; (301) 734-7517.

For information concerning rate development of the proposed user fees, contact Mrs. Kris Caraher, Accountant, Financial Systems and Services Branch, Budget and Accounting Service Enhancement Unit, MRPBS, APHIS, 4700 River Road Unit 54, Riverdale, MD 20737-1232; (301) 734-8351.

SUPPLEMENTARY INFORMATION:

Background

User fees to reimburse the Animal and Plant Health Inspection Service (APHIS) for the costs of providing veterinary diagnostic services and import- and export-related services for live animals and birds and animal products are contained in 9 CFR part 130. Section 130.8 lists miscellaneous flat rate user fees.

In this document, we are proposing to amend existing user fees for processing applications for permits to import or transport certain animal products, organisms, vectors, and germ plasm. We are also proposing to establish user fees to cover the cost of processing applications for permits to import live animals. These proposed changes are explained in detail below.

Fees for Processing Applications for Permits to Import Certain Animal Products, Organisms, Vectors, and Germ Plasm

Currently, under the regulations in § 130.8, APHIS charges flat rate fees for processing Veterinary Services Form 16-3, “Application for Permit to Import or Transport Controlled Material or Organisms or Vectors.” This form is used to apply for a permit to import materials derived from animals or materials that have been exposed to animal-source materials. Materials that require a permit include animal tissues, blood, cells, or cell lines of livestock or poultry origin, RNA/DNA extracts, hormones, enzymes, monoclonal antibodies, certain polyclonal antibodies, antisera, bulk shipments of test kit reagents, and microorganisms including bacteria, viruses, protozoa, and fungi. Exceptions to this requirement are tissues, serum, and blood from primates. Various other animal materials from countries where certain livestock diseases exist require a permit to be imported into the United States. Such materials include dairy products (except butter and cheese), meat products (e.g., meat pies, prepared foods), and various animal products, including, but not limited to, hides, bones, and carcasses, parts, or products of certain animals that are destined for use as trophies.

Also under § 130.8, APHIS charges a flat fee for processing applications to import germ plasm. APHIS services related to inspecting imported germ plasm and empty germ plasm containers are charged at the hourly rate user fees listed in § 130.30.

The table below lists existing and proposed user fees for the services listed.

On August 28, 2000, we published in the Federal Register a final rule (65 FR 51997-52010, Docket No. 97-058-2) that amended the user fees for the services listed above. When we calculated the fees established by that final rule, we assumed that the fees in place prior to the rule had been calculated to cover all the costs of providing the respective services. Therefore, in calculating the current fees, we simply added cost components for employee pay increases and additional costs for inflation (based on the consumer price index) to the previous fees.

Since the time when we calculated the current fees, we have conducted an in-depth review of the basic costs of providing the services listed above. In that review, we found that the existing fees and fees previously collected for the services listed (1) underestimated the amount of direct labor performed by administrative and professional staff who are involved in the permit application process, and (2) do not cover overhead costs. We are, therefore, proposing to amend the fees accordingly as shown above. The proposed fees will allow us to recover all the costs associated with providing the services listed, including direct labor and overhead costs.

Calculation of Fees—Animal Products Permit Applications

We began our calculation of the proposed fees by estimating future annual volumes of each type of application based on the average of the actual volumes of each type of application processed in FY's 1998 and 1999. Those volumes are shown in the table below.

We then estimated that the total annual cost of processing the projected volume of applications would be $282,000. Our estimate includes cost components for the salaries of employees involved in processing applications, along with costs of billings and collections, rent, equipment (such as computer technologies), agency overhead, and departmental charges.

We then estimated, based on our experience processing applications, that processing amended and renewed applications respectively take approximately 50 percent and 65 percent of the time required to process a new application. We used the following equation to determine the proposed fee for a new application. In the equation, “x” represents the fee for new applications.

We then rounded the value for “x” to the nearest whole dollar to arrive at the proposed user fee of $94.00 for a new application for a permit to import animal products. Since processing an amended application takes approximately 50 percent of the time it takes to process a new application, we are proposing a fee of $47.00 for amended applications. Finally, since processing a renewed application takes approximately 65 percent of the time it takes to process a new application, we are proposing a fee of $61.00 for renewed applications.

Calculation of Fees—Fetal Bovine Serum Permit Application

The fee for processing a permit application to import fetal bovine serum when inspection of a facility is required pays the cost of providing two distinct APHIS services. One covers the cost of processing an application to import fetal bovine serum (representing $94.00 of the fee), and the other covers the cost of inspecting the facility where the fetal bovine serum will be housed (representing the remaining $228.00 of the fee). We determined these costs based on the estimated time it takes to process the applications and inspect the facilities. The portion of the fee covering the costs of processing an application is the same as that proposed for processing an application to import other animal products and live animals. The portion of the fee covering the cost of inspecting the facility where fetal bovine serum will be housed is based on the existing hourly rate user fee of $76.00 per hour that is contained in § 130.30 of the regulations. We set this portion of the fee at $228.00 (3 × $76.00) because inspections of this type of facility have averaged 3 hours in recent years.

Fees for Processing Applications to Import Live Animals

Currently, APHIS uses appropriated funds to cover the costs of processing applications and amended applications to import live animals. In this document, we are proposing to establish a flat-rate user fee to recover these costs. APHIS currently charges flat-rate user fees to persons applying for permits to import animal products, organisms, and vectors, as well as animal semen, embryos, and ova. By establishing flat rate user fees for processing applications and amended applications for permits to import live animals, we would make our user fee regulations more consistent and shift the cost of paying for these services away from taxpayers toward the actual users of these services.

Our proposed flat-rate user fees for processing these applications are as follows:

The above fees are the same as those we are proposing to charge for processing applications for permits to import animal products, organisms, vectors, and germ plasm. We believe that these fees will adequately cover the cost of providing these services.

Calculation of Fees—Live Animal Permit Applications

We began our calculation of the proposed fees by estimating future annual volumes of each type of application based on the approximate volumes of each type of application processed in FY 1999. In FY 1999, APHIS processed approximately 7,500 new applications and 1,500 amended applications to import live animals.

We then estimated that the total annual cost of processing new and amended applications to import live animals, based on the expected volume of applications to be processed, would be $775,970. Our estimate includes cost components for the salaries of employees involved in processing applications, along with costs of billings and collections, rent, equipment (such as computer technologies), agency overhead, and departmental charges.

We then estimated, based on our experience processing applications, that it takes approximately half as much time to process an amended application as it takes to process a new application. Given these estimates, we used the following equation to determine the proposed fee for a new application. In the equation, “x” represents the fee for a new application.

We then rounded the value for “x” to the nearest whole dollar to arrive at the proposed user fee of $94.00 for a new application for a permit to import live animals. Since processing an amended application takes approximately half the time it takes to process a new application, we are proposing a fee of $47.00 for amended applications.

All of the proposed fees described in this document would be located in a new § 130.4, and the current fees would be removed from § 130.8. We also would move the fees for import compliance assistance that are currently contained in § 130.8 to the new § 130.4 because those fees are directly associated with the importation of animals and animal products. Import compliance assistance fees are charged to persons who need additional assistance from an APHIS headquarters veterinarian in order to facilitate the processing or completion of particular importations of animals or animal products.

Executive Order 12866 and Regulatory Flexibility Act

This proposed rule has been reviewed under Executive Order 12866. The rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget.

In accordance with 5 U.S.C. 603, we have performed an initial regulatory flexibility analysis, which is set out below, regarding the economic effects of this proposed rule on small entities. Based on the information we have, there is no basis to conclude that this rule will result in any significant economic effect on a substantial number of small entities. However, we do not currently have all of the data necessary for a comprehensive analysis of the effects of this proposed rule on small entities. Therefore, we are inviting comments on potential effects.

User fees to reimburse APHIS for the costs of providing veterinary diagnostic services and import- and export-related services for live animals and birds and animal products are contained in 9 CFR part 130. Section 130.8 lists the user fees APHIS charges for processing applications for permits to import germ plasm and to import or transport certain animal products, organisms, and vectors.

We are proposing to amend existing user fees for processing applications for permits to import and transport certain animal products, organisms, vectors, and germ plasm. We are also proposing to establish new user fees that would pay the cost of processing applications to import live animals. We are proposing these changes in order to ensure that we recover our costs.

User Fees for the Importation of Germ Plasm

APHIS currently charges a fee of $55.00 for processing applications to import germ plasm. This proposed rule would establish two separate fees: One for processing initial applications for permits, and one for processing amended applications. The fee for processing each new permit application would be $94.00, and the fee for processing each amended permit application would be $47.00.

The effect of the proposal would be to increase revenues for APHIS, since the fees for new applications would exceed the existing fee of $55.00. At a minimum, importers would be charged $47.00 for applying for an amended permit.

In FY 1999, APHIS processed 448 applications for permits to import germ plasm (semen and embryos), generating total revenues of $17,696. We estimate that 90 of those applications represent amended applications, and the rest represent new applications.

Had the proposed fee schedule been in effect during FY 1999 , APHIS would have generated approximately $37,882 from processing those applications, an increase of $20,186 over actual revenues for that year. Further, as a result of increased world trade, it is likely that APHIS' annual revenues from processing product applications would increase over time.

The number of different entities that submitted applications in FY 1999 and the number of applications submitted by each are not available. However, because approximately 90 entities submitted amended applications during the year, we know that the number of different entities is significantly less than the total application count of 448. The economic effect on individual entities would vary, depending on the size of the entity and the number of permits required. For an entity that requires only a few permits each year, as is likely to be the case with the smaller entities that are affected, the proposed fees are not likely to have a significant economic impact. However, even an entity that requires a large number of permits might not be significantly affected if it is large enough to easily absorb the increased fees.

User Fees for Processing Applications for Permits to Import Animal Products

APHIS currently charges applicants a fee for processing their applications for permits to import animal products (including byproducts, organisms, and vectors). The fees vary, depending on such factors as the type of application and the type of product.

Under the proposal, all fees would be increased from their current levels, as shown earlier in this document.

The proposed fee amounts have been set so as to allow APHIS to recover the full costs of processing the applications. The current fee levels do not allow for full cost recovery, especially given the additional staffing needed to provide applicants with a quick turnaround of their permit requests.

In FY 1999, APHIS processed 2,575 applications for permits to import animal products. Of that total, 2 were fetal bovine serum (with facility inspection) applications, 856 were initial applications to import animal products or import or transport organisms or vectors, 241 were amended applications, and 1,476 were renewed applications.

APHIS generated revenues of $48,868.50 from processing the 2,575 applications in FY 1999. Had the proposed fee schedule been in effect during FY 1999, APHIS would have generated $182,351 from processing those applications, an increase of $133,482.50 over actual revenues for that year. Further, as a result of increased world trade, it is likely that APHIS' annual revenues from processing product applications would increase over time.

The number of different entities that submitted applications in FY 1999 and the number of applications submitted by each are not available. However, because 241 entities submitted amended applications and 1,476 entities submitted renewed applications during the year, we know that the number of different entities is significantly less than the total application count of 2,575. The economic effect on individual entities would vary, depending on the size of the entity and the number of permits required. For an entity that requires only a few permits each year, as is likely to be the case with the smaller entities that are affected, the proposed fees are not likely to have a significant economic impact. However, even an entity that requires a large number of permits might not be significantly affected if it is large enough to easily absorb the increased fees.

User Fees for Processing Applications for Permits to Import Animals

Under APHIS' rules, importers must, under certain circumstances, apply for and obtain an import permit from the agency prior to importing live animals. Currently, APHIS does not charge applicants a fee for processing their permit applications.

Under the proposed rule, APHIS would charge applicants $94.00 for each new application, and $47.00 for each amended application to import live animals. The proposed rule is designed to shift the cost of processing the applications from the general taxpayer (via appropriated funds) to the users of those services, i.e., the permit applicants. The proposed rule would also serve to remove an existing inequity, since APHIS currently charges applicants a fee for processing their applications for permits to import animal products and germ plasm.

In FY 1999, APHIS processed approximately 9,000 applications for permits to import animals. Of that total, approximately 7,500 were initial applications and 1,500 were amended applications. Had the proposed fee schedule been in effect during FY 1999, APHIS would have generated additional revenues of $775,500 from processing those applications. Further, as a result of increased world trade, it is likely that APHIS' annual revenues from processing applications for permits to import live animals will increase over time.

The number of different entities that submitted applications in FY 1999 and the number of applications submitted by each are not available. However, because some entities submitted amended applications and some entities submitted more than one new application during the year, we know that the number of different entities is less than the total application count of 9,000.

Data on the types of entities who submit applications is not available, but they are believed to be varied, and include breeders, commercial researchers, universities, zoos, and private individuals. At least some of the commercial entity applicants are believed to be brokers acting on behalf of their client customers. Even though they do not submit permit applications to APHIS, the client customers of brokers are likely to be affected by this proposed rule, since the application fees incurred by the brokers are likely to be passed on to them. The economic effect on individual entities would vary, depending on the size of the entity and the number of permits required. For an entity that requires only a few permits each year, as is likely to be the case with the smaller entities that are affected, the proposed fees are not likely to have a significant economic effect. However, even an entity that requires a large number of permits might not be significantly affected, if it is large enough to easily absorb the proposed fees.

Effects on Small Entities

The Regulatory Flexibility Act (RFA) requires that agencies consider the economic effects of their rules on small entities, i.e., small businesses, organizations, and governmental jurisdictions. The proposed changes discussed above would affect those entities in the United States that import live animals, animal products, and germ plasm. They would be affected because they would have to pay new fees, or higher fees, to have APHIS process their permit applications and, when required, inspect their facilities or products.

The types of entities that may be affected vary widely, and include breeders, commercial researchers, universities, zoos, and private individuals. At least some of the commercial entities are likely to be brokers acting on behalf of their client customers. Even though they themselves do not submit permit applications to APHIS, the client customers of brokers would be affected by the proposed changes if the increased fees incurred by the brokers are passed on to them.

The number of different entities that would be affected by the proposed changes, if they are adopted, and the extent of the effect on each, is unknown. In FY 1999, APHIS processed approximately 12,023 live animal, animal product, and germ plasm permit applications, but that figure overstates the number of affected entities, because some entities submitted more than one application during the year. Furthermore, the total application count of 12,023 includes an unknown number of private individuals in the United States who import live animals, animal products or germ plasm for nonbusiness reasons. These private individuals are not “entities” for purposes of this regulatory flexibility analysis.

It is reasonable to assume that most businesses affected by this proposed rule are small in size. This is because most U.S. businesses in general are small, based on the standards of the U.S. Small Business Administration (SBA). In 1996, for example, there were 1,197 U.S. firms in SIC 0751, a classification comprised of firms primarily engaged in performing certain services, including breeding, for cattle, hogs, sheep, goats, and poultry. Of those 1,197 firms, 97 percent had less than $5.0 million in sales that year, the SBA's small entity threshold. Similarly, in 1996, there were 7,408 U.S. firms in SIC 0752, a classification comprised of firms primarily engaged in performing certain services for pets, equines, and other animal specialties, including breeding services. Of those 7,408 firms, over 99 percent had less than $5.0 million in sales that year, the SBA's small entity threshold for firms in that SIC category. Accordingly, most of the businesses affected by this proposed rule are likely to be small in size.

The potential economic effect on individual entities would vary, depending on the number of permits required by each. For an entity that requires only a few permits each year, as is likely to be the case with the smaller entities that are affected, the proposed fees are not likely to have a significant economic effect. For an entity that submits five new live animal applications per year, the additional annual cost would be $470.

Alternatives Considered

One alternative to this proposed rule would be to make no changes to the user fee regulations. We rejected this alternative for several reasons. First, it would not allow us to recover the full cost of providing the import services for which user fees have already been established, i.e., the germ plasm and animal product services. APHIS cannot charge user fees that recover less than the full cost of providing the service. Second, it would not allow us to shift the cost of providing live animal import services from the general taxpayer to the user of those services. (This shifting also serves to remove an existing inequity, since APHIS currently charges a fee for providing animal product and germ plasm import services.)

Another alternative would be to either exempt small businesses from the user fees or establish a different user fee structure for small businesses. This alternative was also rejected, because APHIS cannot exempt certain classes of users, such as small businesses. Nor, as indicated above, can APHIS charge user fees that recover less than the full cost of providing the service.

This proposed rule contains information collection requirements, which have been submitted for approval to the Office of Management and Budget (see “Paperwork Reduction Act” below).

Executive Order 12988

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. If this proposed rule is adopted: (1) All State and local laws and regulations that are inconsistent with this rule will be preempted; (2) no retroactive effect will be given to this rule; and (3) administrative proceedings will not be required before parties may file suit in court challenging this rule.

Paperwork Reduction Act

In accordance with section 3507(d) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the information collection or recordkeeping requirements included in this proposed rule have been submitted for approval to the Office of Management and Budget (OMB). Please send written comments to the Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for APHIS, Washington, DC 20503. Please state that your comments refer to Docket No. 99-060-1. Please send a copy of your comments to: (1) Docket No. 99-060-1, Regulatory Analysis and Development, PPD, APHIS, suite 3C03, 4700 River Road Unit 118, Riverdale, MD 20737-1238, and (2) Clearance Officer, OCIO, USDA, room 404-W, 14th Street and Independence Avenue, SW., Washington, DC 20250. A comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication of this proposed rule.

In this document, we are proposing to amend existing user fees for processing applications for permits to import and transport certain animal products, organisms, vectors, and germ plasm. We are also proposing to establish new user fees that would pay the cost of processing applications to import live animals. We are proposing these changes in order to ensure that we recover our costs.

We are soliciting comments from the public (as well as affected agencies) concerning our proposed information collection and recordkeeping requirements. These comments will help us:

(1) Evaluate whether the proposed information collection is necessary for the proper performance of our agency's functions, including whether the information will have practical utility;

(2) Evaluate the accuracy of our estimate of the burden of the proposed information collection, including the validity of the methodology and assumptions used;

(3) Enhance the quality, utility, and clarity of the information to be collected; and

(4) Minimize the burden of the information collection on those who are to respond (such as through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses).

Estimate of burden: Public reporting burden for this collection of information is estimated to average .0166 hours per response.

Respondents: Importers and brokers of live animals, animal products, germ plasm, organisms, and vectors.

Estimated annual number of respondents: 8100.

Estimated annual number of responses per respondent: 1.111.

Estimated annual number of responses: 9000.

Estimated total annual burden on respondents: 149.4 hours.

Copies of this information collection can be obtained from: Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at (301) 734-7477.

List of Subjects in 9 CFR Part 130

• Animals
• Birds
• Diagnostic reagents
• Exports
• Imports
• Poultry and poultry products
• Quarantine
• Reporting and recordkeeping requirements
• Tests

Accordingly, we propose to amend 9 CFR part 130 as follows:

PART 130—USER FEES

1. The authority citation for part 130 would continue to read as follows:

Authority: 5 U.S.C. 5542; 7 U.S.C. 1622; 19 U.S.C. 1306; 21 U.S.C. 102-105, 111, 114, 114a, 134a, 134c, 134d, 134f, 136, and 136a; 31 U.S.C. 3701, 3716, 3717, 3719, and 3720A; 7 CFR 2.22, 2.80, and 371.4.

2. Section 130.4 would be added to read as follows: