Some (small) guys get all the breaks. The Food and Drug Administration is requesting comments about the “burden of Food and Drug Administration Food Safety Modernization Act Fees Amounts on Small Business.”
In an Aug. 1 notice in the Federal Register, the FDA said it will take comments until October 17 on the burdens that new fees authorized by food safety legislation have on small businesses.
The fees are to cover costs related to domestic and foreign facility reinspections, failure to comply with a recall order, and importer reinspections. Here are FDA questions covered in the request for comments:
A. Is a fee reduction or other consideration for small business appropriate? Please explain
1. What is the impact, if any, of fee amounts on small business, in general, or to specific types of small businesses, that FDA should consider in the proposed set of guidelines? Please explain.
2. Should the Agency consider the type of fee collected when considering the burdens to small business? For example, do the types of activities for which a fee is collected for reinspection have a different impact to a small business than those collected based on a failure to comply with a recall order? Please explain.
3. Assuming there is an impact of fee amounts to small business, or certain types of small businesses, should the Agency consider a reduction in the fees for such small businesses in the proposed set of guidelines? If so, should the Agency consider the reduction in fees to all small businesses, or for only those small businesses that have a demonstrated need for reduced fees? Please explain. If the Agency should not consider a reduction in the fees for small business, why not? Please explain.
4. Are there ways to alleviate any burden on small business other than a fee reduction? Please explain.
B. How should small business be defined or recognized for the purpose of the proposed guidelines?
Several provisions in FSMA require FDA to define small and very small business. For example, section 103(a) of FSMA amends the FD&C Act by adding section 418 (21 U.S.C. 350g) regarding ``Hazard Analysis and Risk-Based Preventive Controls.’’ Section 418(n)(1)(B) of the FD&C Act requires FDA to define ``small business’’ and ``very small business’’ for the purpose of the preventive control regulations for facilities.
Similarly, FSMA section 105(a) amends the FD&C Act by adding section 419 (21 U.S.C. 350h) regarding standards for produce safety. Section
419(a)(3)(F) of the FD&C Act requires FDA to define ``small business’’ and ``very small business’’ for the purpose of the produce safety regulations.
FDA seeks comment on how a small business should be defined or recognized for purposes of the proposed set of guidelines in consideration of the burden of fee amounts on small business. More specifically, the Agency requests comment on the following questions.
1. If FDA has defined, by regulation under other FSMA or non-FSMA authorities, an entity as a small or a very small business, should such a definition be considered in the proposed set of guidelines to identify the businesses that may be burdened by the fee amounts under section 743 of the FD&C Act or should the Agency consider a separate definition of small business for purposes of considering the burden of fee amounts? Please explain.
2. If the Agency relies on an existing regulatory definition of small or very small business that the Agency established under other FSMA or non-FSMA authorities, should any such definition apply in any circumstance where a fee is imposed or only where the fee derives from the rule where such business is defined as a small business? For example, if a facility is reinspected for a violation of the preventive controls regulations, should the Agency consider adjustments to the fee only if the facility meets the definition of small business under the preventive controls regulations, or should the Agency consider such adjustments if the facility meets any definition of small business under any FDA regulation? Please explain.
3. There may be circumstances where no regulatory definition of small business exists for a given facility. Under these circumstances, what factors or characteristics should FDA use to identify small businesses for which FDA may consider the burden of fee amounts? Please explain. Factors to consider could include, but are not limited to, the segment of the food supply chain to which the entity belongs (e.g., growers, processors, importers and distributors, retailers, etc.); the sector to which the entity belongs (e.g., seafood, produce, dairy, eggs, juice, dietary supplements, etc.); the number of employees; the gross revenue, net income, net assets, market liquidity, or other financial measures or ratios; and whether the entity has a subsidiary or is a subsidiary of a parent company.
C. If FDA considers reduced fee amounts in the proposed set of guidelines, what factors should FDA consider in establishing the amount by which fees could be reduced?
1. Should FDA consider the following:
A waiver of all of the fees; A percentage reduction of the fees; or a fixed dollar reduction of the fees?
2. Are there circumstances that justify one approach over another? Please explain.
3. Are there other approaches that should be considered? Please explain.
Whew! If Congress has instructed industry at any level, it is that a business must be small to be appreciated. Considering the incentives that Congress has layered into the food safety bill, it will be a “race toward the bottom” for status as a small business entity. Give me local and give me small! And as for the rest of you - pay up!