It’s that time of year again … for the third time, FDA has announced its fiscal year FSMA User Fees for domestic and foreign facility reinspections. These fees focus on failures to comply with a recall order and reinspection fees, as authorized by the Act. The fees are effective October 1, 2013, through September 30, 2014. The challenge around the fees is that, so far, FDA does not appear to have collected any, and for an Agency that needs resources, this is an odd disconnect.
The focus of the fees is in two areas:
Reinspection Fee – This fee will be assessed when FDA must conduct a reinspection, subsequent to an inspection which identified non-compliance materially related to a food safety requirement of the FD&C Act, to determine whether corrective actions have been implemented and are effective and compliance has been achieved. In such cases, FDA will assess and collect fees from the responsible party for each domestic facility and the U.S. agent for each foreign facility subject to a reinspection to cover reinspection-related costs. The fiscal year in which a reinspection occurs dictates the fee rate to be applied.
Non-compliance with Recall Order – This fee will be assessed for not complying with an FDA recall order and would cover food recall activities associated with such order Non-compliance may include: (1) not initiating a recall as ordered by FDA; (2) not conducting the recall in the manner specified by FDA in the recall order; or (3) not providing FDA with requested information regarding the recall, as ordered by FDA.
The user fees were initially introduced for the 2012 fiscal year to help pay for the implementation of FSMA, with the FY 2013 user fees for food reinspection and recall non-compliance intended to generate $15.367M and $12.925M respectively, none of which has been collected as far as we are aware.
Not a lot has changed since these fees were first introduced in 2013. The fee is based on an hourly rate, including not just the FDA’s time for the reinspection, but any preparations, arrangements, travel, reports, or other activity associated with the reinspection; or the hours spent on taking action in response to a firm’s failure to comply with a recall order.
Although the hourly rates actually decreased from FY 2012 to FY 2013, they will increase for FY 2014, but the foreign travel rate is still below that of FY 2012.
FSMA Fee Schedule
Fee category FY 2014
Fee rates FY 2013
Fee rates FY 2012
Hourly rate if domestic travel is required $237 $221 $224
Hourly rate if foreign travel is required $302 $289 $335
So the catch here is that, with all the talk of budget woes, as far as we know, FDA has not yet collected any user fees. If they have, we’ve not heard talk of it, or heard talk from anyone who has had to pay. This is most likely because a process has not yet been established to do so – which could, in fact, be a Catch 22 … FDA needs the user fees to pay for resources, but it doesn’t have the resources to develop the process by which to collect the user fees.
FDA does intend to consider reducing fees for some small businesses for whom the full cost could impose severe economic hardship, and the Agency is developing a guidance document on the process by which firms may request a reduction. FDA’s current publication also notes that it does not intend to issue invoices for reinspection or recall order fees until this guidance document has been published—supporting our notion that fees have not yet been collected.
Which brings us full circle to our February 2012 newsletter: Get Ready to Pay New Registration Fees – FDA FY2013 Budget Request Relies Heavily on Establishment of User Fees, in which we stated:
What impact will that have on FSMA implementation? As we have said before, writing regulations is cheap; enforcing them is expensive, so we should expect enforcement and inspections to stay at current levels and not meet the goals outlined in FSMA. Overall I see FDA as being in for a tough ride since a flat line budget is, in reality, quite a hefty cut in operating budget.
And without the user fee income that makes up a significant portion of the Agency’s FSMA budget, I don’t see this changing in the near future.
This is all very unfortunate for FDA – they need resources and appear to be held up on collecting $10 million+ each year through lack of a guidance document and a process to collect the fees. Makes me wonder if Congress can “lend” the cash to FDA to get this program going rather than continue to allow the current lack of progress on this front. But I guess Congress does not work that way!
Thus, as with much of FSMA, headway continues to be made, but with the pace of that headway, it is incumbent on the industry to do all it can for food safety – with or without regulation.
Did You Know…?
Don’t miss Melanie Neumann and David Acheson on Food Safety Tech.com’s FoodFlix – How Much Gets Recalled Don’t Make Me Mad
You can also catch an interview with David Acheson after his Keynote address at IAFP 2013 by Food Safety News
New User Fee Assessment – But It Creates Catch 22 for FDA by David Acheson is licensed under a Creative Commons Attribution 3.0 Unported License.
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