Date="03/22/93" Citation="58 FR 15272" Group="legal" Type="RULE" Department="DEPARTMENT OF JUSTICE" Agency="DRUG ENFORCEMENT ADMINISTRATION (DEA)" Subject="Registration and Reregistration Application Fees"

DEPARTMENT OF JUSTICE Drug Enforcement Administration 21 CFR Parts 1301 and 1311 Registration and Reregistration Application Fees AGENCY: Drug Enforcement Administration (DEA). ACTION: Final rule.

DEPARTMENT OF JUSTICE Drug Enforcement Administration 21 CFR Parts 1301 and 1311 Registration and Reregistration Application Fees AGENCY: Drug Enforcement Administration (DEA). ACTION: Final rule. + ------------------------------------------------------------ SUMMARY: This final rule establishes the application fee schedule for DEA registration to adequately recover the Federal costs associated with the Diversion Control Program as mandated in the Department of Justice and Related Agencies Appropriations Act, 1993. EFFECTIVE DATE: March 22, 1993. The new fee schedule will be in effect for all new applications postmarked on April 21, 1993 or later and on all renewal applications with an expiration date of May 21, 1993 or later. FOR FURTHER INFORMATION CONTACT: Mr. Terrance Woodworth, Chief, Drug Operations Section, Office of Diversion Control, Washington, DC 20537, Telephone (202) 307-8569. SUPPLEMENTARY INFORMATION: A notice of proposed rulemaking was published in the Federal Register on December 18, 1992 (57 FR 60148) to adjust the registration application fees as required by the Department of Justice and Related Agencies Appropriations Act, 1993 (Pub. L. 102-395). The Act 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) of that Act requires that there be established an account in the general fund of the Treasury, and in section 111(b)(1) 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. In addition, section 111(b)(3) requires 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. There were 23 comments received, all objecting to the proposed rule. Twenty of the comments (18 of which were submitted by pharmacies and their associations) centered around four main points: (1) The increase was unreasonable and excessive, (2) DEA should look to violators and traffickers to cover the costs through fines and penalties, (3) DEA should look to administrative efficiencies rather than increased fees, and (4) any fee increase would be passed on to the patient which would add to health care costs in the United States. While the issues raised by the commentors are of concern to DEA, the comments relate to issues which are not within the scope of DEA's discretion in implementing the legislation upon which the rule was based. The legislation specifically provides that fees charged by DEA shall be set at a level that ensures the recovery of the full costs of operating the various aspects of that program. The legislation does not give DEA discretion to set the fees at a lower level than that necessary to recover the full costs of the Diversion Program. Fines and penalties collected as a result of DEA investigations are returned to the U.S. Treasury, not to DEA. Since DEA does not control the disposition of these funds, such an application is not within DEA's jurisdiction. Additionally, DEA is bound by the legislation in which Congress clearly directed DEA to recover the costs specifically through fees. DEA works diligently to achieve administrative efficiencies. Through a scheduled, periodic review process, virtually all aspects of the Diversion Control Program are inspected to detect any waste, fraud or abuse. This process was instituted long before the proposed rule was published, and will continue in the future. Three additional comments challenge the proposed rule on the basis that it imposes an unconstitutional tax on registrants to support activities which are not related to their registrations. One of these comments was submitted on behalf of the American Medical Association, the National Association of Retail Druggists, the National Wholesale Druggists Association, the Pharmaceutical Manufacturers Association and the American Pharmaceutical Association. This comment contended that the rule was arbitrary and capricious because it did not provide adequate information on how DEA arrived at the increased fee figures and what programs the fees would support. The comment called upon DEA to withdraw the proposal until an administrative hearing could be held on a reduced fee schedule. The commentor discusses in great detail the provisions of the Office of Management and Budget (OMB) Circular A-25 regarding "user fees" and the provisions of the Independent Offices Appropriations Act (IOAA) regarding the criteria to be applied when imposing a fee. Regarding the latter comment, Circular A-25 establishes guidelines for Federal agencies to assess fees. The circular was not intended to override statutorily mandated charges. Despite the previous basis for the DEA registration application fee (21 U.S.C. 821) and the 1984 fee increase based on that authority, the current proposal is based upon a new statutory mandate in the Department of Justice and Related Agencies Appropriations Act and must be guided by the specific language of that act. The commentor also represents that the rule imposes an unconstitutional tax on registrants to support activities which are not related to their registrations. The Congress obviously determined otherwise and would not intentionally promulgate unconstitutional legislation. The legislation identifies the funding basis as the "operation of the diversion control program." In light of the comment, DEA re-reviewed the costs associated with the registration and control of the manufacture, distribution and dispensing of controlled substances contained in the budget of the Attorney General as appropriated by Congress under the budget category "Diversion Control Program." Activities frequently associated with the Diversion Control Program, such as the chemical control efforts, clandestine laboratory efforts, overseas efforts, the support by the DEA Office of Chief Counsel and executive direction were also reexamined. This review confirmed that the above items, with the exception of certain chemical control costs, are not included in the Attorney General's budget delineation for the category of "Diversion Control," and were not included in the determination of the fees. Diversion Investigators and other personnel of DEA which staff the Diversion Control Program are responsible for enforcing provisions of the Chemical Diversion and Trafficking Act (CDTA), and additional resources for this program have been proposed and adopted in the 1994 Department of Justice budget process. In the implementation of the domestic chemical control program, Diversion Control Program resources devoted to the registration and control of pharmaceutical controlled substances were assigned these additional investigative tasks. Although, in general, these resources were originally authorized for the control of pharmaceutical controlled substances, there is an identifiable segment of the current and 1994 resources which are now conducting reassigned duties separate from the control of controlled substances. This shift, although clearly established and documented in DEA internal policy and tracking systems, was not specifically addressed in the Congressionally adopted use of the Department of Justice budget category "Diversion Control Program." Upon consideration of the comments, DEA determined that it was Congress' intention that DEA implement the legislatively mandated fee account in a Constitutionally consistent manner, i.e., that Congress did not intend for DEA to include the costs associated with the enforcement of the CDTA which had been reassigned within the budget category "Diversion Control Program" from activities associated with the registration and control of controlled substances. Therefore, DEA has conducted a review of all investigative work hours, support staff hours, and management hours related to the enforcement of the CDTA and their associated costs, i.e., rent, utilities, and equipment, for the current and 1994 projected efforts. It has been determined that the current costs associated with the enforcement of the CDTA are not funded through registration application fees. The amount associated with the 1994 projected efforts has been deducted from the calculation for the Diversion Control Program fee account and will not be included in the future. This amount is $8.1 million. The activities contained in the 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. The commentor was concerned that DEA did not provide adequate information on how it arrived at the increased fee figures. As stated in the proposed rule, the amount to be recovered is established by the Congressional appropriation process. The legislation specifically mandates that the amount to be recovered shall be in accordance with estimates made in the budget request of the Attorney General. Within that budget request, the budget category "Diversion Control Program" is clearly delineated. The budget figures are those listed in that category of the budget for the activities outlined above, minus the CDTA activities mentioned previously. This final rule establishes the fee structure under the existing registration system to recover the costs mandated by the Justice Appropriation Act. The amount required to be recovered for fiscal year 1993 will be $12 million, and $57.1 million will be required for fiscal year 1994. A correction is also being made to sec1301.11(d) to include reregistration which was inadvertently omitted in a previous change to the section. Pursuant to sections 3(c)(3) and 3(e)(2)(C) of E.O. 12291, this action has been submitted for review to the Office of Management and Budget, and approval of that office has been requested pursuant to the provisions of the Paperwork Reduction Act of 1980, 44 U.S.C. et seq. This rule is not a major rule for purposes of Executive Order (E.O.) 12291 of February 17, 1981. The vast majority of DEA registrants are considered to be small entities whose interests are to be considered under the provisions of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. However, these registrants are predominantly practitioners and pharmacies whose individual registration fees would be increased by $150 once every three years. Therefore, the Administrator has concluded that the fee increase will have no significant impact on small entities. This action has been analyzed in accordance with the principles and criteria contained in E.O. 12612, and it has been determined that the rule has no implications which would warrant the preparation of a Federalism Assessment. List of Subjects 21 CFR Part 1301 Administrative practice and procedure, Drug traffic control, Security measures. 21 CFR Part 1311 Administrative practice and procedure, Drug traffic control, Exports, Imports. For reasons set out above, 21 CFR part 1301 and 21 CFR part 1311 are 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 1301.11 is revised to read as follows: sec1301.11 Fee amounts. (a) For each registration or reregistration to manufacture controlled substances, the registrant shall pay an application fee of $875 for an annual registration. (b) For each registration or reregistration to distribute controlled substances, the registrant shall pay an application fee of $438 for an annual registration. (c) For each registration or reregistration to dispense, or to conduct instructional activities with, controlled substances listed in Schedules II through V, the registrant shall pay an application fee of $210 for a three-year registration equating to an annualized fee of $70 per annum. (d) For each registration or reregistration to conduct research or instructional activities with a controlled substance listed in Schedule I, or to conduct research with a controlled substance in Schedules II through V, the registrant shall pay an application fee of $70 for an annual registration. (e) For each registration or reregistration to conduct chemical analysis with controlled substances listed in any schedule, the registrant shall pay an application fee of $70 for an annual registration. (f) For each registration or reregistration to engage in a narcotic treatment program, including a compounder, the registrant shall pay an application fee of $70 for an annual registration. PART 1311-[AMENDED] 1. The authority citation for part 1311 continues to read as follows: Authority: 21 U.S.C. 952, 956, 957, 958, unless otherwise noted. 2. Section 1311.11 is revised to read as follows: sec1311.11 Fee amounts. (a) For each registration or reregistration to import controlled substances, the registrant shall pay an application fee of $438 for an annual registration. (b) For each registration or reregistration to export controlled substances, the registrant shall pay an application fee of $438 for an annual registration. Dated: February 22, 1993. Robert C. Bonner, Administrator of Drug Enforcement. [FR Doc. 93-6437 Filed 3-19-93; 8:45 am] BILLING CODE 4410-09-M