[Federal Register: July 15, 2005 (Volume 70, Number 135)]
[Proposed Rules]
[Page 40921-40924]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15jy05-17]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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[[Page 40921]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 97
[Doc. ST-05-02]
RIN 0581-AC42
Plant Variety Protection Office, Fee Increase
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule with request for comments.
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SUMMARY: The Agricultural Marketing Service (AMS) proposes to increase
Plant Variety Protection (PVP) Office application, search, and
certificate issuance fees by 20 percent. The last general fee increase
in February 2003 is no longer adequate to cover current program
obligations for administrative and information technology needs. The
PVP Act of 1970 requires that reasonable fees be collected from
applicants seeking certificates of protection in order to maintain the
program. Also, a technical amendment would allow applicants to send
voucher seed samples directly to the public repository.
DATES: Comments must be received on or before August 15, 2005.
ADDRESSES: Interested persons are invited to submit comments concerning
this proposed rule. Comments should be sent in triplicate to Dr. Paul
Zankowski, Commissioner, PVP Office, Room 401, NAL Building, 10301
Baltimore Boulevard, Beltsville, MD 20705, telephone 301-504-5518, fax
301-504-5291, PVPOmail@usda.gov, and should refer to the docket title
and number located in the heading of this document. Comments received
will be available for public inspection at the same location, between
the hours of 10 a.m. and 4 p.m., Monday through Friday, except Federal
holidays.
FOR FURTHER INFORMATION CONTACT: Janice M. Strachan, USDA, AMS, Science
and Technology (S&T), PVP Office, NAL Building, Room 401, 10301
Baltimore Avenue, Beltsville, MD 20705-2351, telephone 301-504-5518,
fax 301-504-5291, and e-mail Janice.Strachan@usda.gov.
SUPPLEMENTARY INFORMATION:
I. Executive Order 12866
This proposed rule has been determined to be not significant for
the purposes of Executive Order 12866, and therefore, was not reviewed
by the Office of Management and Budget (OMB).
II. Regulatory Flexibility Act
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601 et seq.), the Agricultural Marketing Service
(AMS) has considered the economic impact of this action on small
business entities. There are more than 800 users of the PVP's variety
protection service, of whom about 100 may file applications in a given
year. Some of these users are small business entities under the
criteria established by the Small Business Administration (13 CFR
121.201). The AMS has determined that this action would not have a
significant economic impact on a substantial number of these small
business entities.
The Plant Variety Protection (PVP) Office administers the PVP Act
of 1970, as amended (7 U.S.C. 2321 et seq.), and issues Certificates of
Protection that provide intellectual property rights to developers of
new varieties of plants. A Certificate of Protection is awarded to an
owner of a variety after examination indicates that it is new, distinct
from other varieties, genetically uniform, and stable through
successive generations. This action will raise the fees charged to
users of plant variety protection. The AMS estimates that the rule will
yield an additional $277,200 during fiscal year (FY) 2006. The costs to
private and public business entities will be proportional to their use
of the service, and shared equitably. The costs to individual users
will increase by $816.00 per PVP Certificate issued or by 20 percent
per application. Plant Variety Protection is a voluntary service.
AMS regularly reviews its user fee financed programs to determine
if fees are adequate. The most recent review determined that the
existing fee schedule will not generate sufficient revenue to cover the
program's operating costs, depleting the trust fund reserve balance.
From 1995 and through 2005, federal salaries have increased 43 percent
and inflation has increased the cost of supplies and services by 25
percent. The net effect on the PVP Office is an increase in overall
expenses of 41 percent since 1995, offset by fee increases of 10
percent in September 2000 and 35 percent in February 2003. The income
of the PVP Office is dependent mainly on the number of new applications
filed, which fluctuated between 277 and 354 applications since FY 2000,
while typical operating expenses remain fixed. During this period,
additional funding was needed for continued technological improvements
and office relocation. In FY 2001 through FY 2004, expenses have
exceeded income each year, despite earlier fee increases. Program
operations were maintained by using the trust fund reserves, thus
reducing those reserves. The PVP Office needs to adjust fees to provide
adequate revenue for current program operations and to rebuild an
adequate trust fund reserve. Without a fee increase, FY 2006 revenues
are projected at $1,496,000; costs are projected at $1,614,720 for a
loss of $118,720. The trust fund reserve would be inadequate to satisfy
Agency policy and prudent financial management by the end of fiscal
year 2007.
AMS calculated the new fee schedule by projecting FY 2007 revenues
of $1,496,000 and program obligations of $1,705,662. This indicates a
projected loss to the program of $209,662 for FY 2007. Without a fee
increase, the reserve balance at the end of FY 2007 is projected to
drop to $756,796, which corresponds to 5 months of operating funds in
the reserve balance. With a fee increase of 20 percent, FY 2007
revenues are projected to be $1,773,200 and the trust fund reserve
balance is expected to be $1,867,018, which corresponds to 13 months of
operating funds in the reserve balance. This level of trust fund
maintenance satisfies Agency requirements.
The proposed action also will amend regulations related to the
voucher seed sample. The voucher seed sample is a supplement to the
Exhibit C description of the variety and is kept for the life of the
certificate. Currently, seed samples are submitted to the PVP Office,
which
[[Page 40922]]
then ships the seed samples to the public repository at the ARS
facility in Ft. Collins, CO. The proposal will permit voucher seed
samples to be submitted directly to the public repository. A small seed
sample (15-25 seeds), which may be needed for the examination of crops
which have distinctive seed characteristics, may be required for some
crops at the discretion of the examiner. Periodically, the germination
rate of the voucher seed sample is tested to verify that it remains a
viable sample for long-term storage. These tests use up the stored seed
sample. A larger initial seed sample is needed to ensure that
germination testing does not deplete the stored sample.
A new section will be added to give stakeholders guidance in how,
when, and where to make the seed deposit. Because the PVP Office was
handling the seed deposit, these regulations were deemed unnecessary in
the past. Now that applicants will be depositing seeds themselves, they
will need additional guidance in how to package the seeds, where to
send them, and when to deposit them in relation to the filing of a PVP
applicant. This proposed section is based on similar regulatory
language present in the U.S. Patent and Trademark Regulations (54 FR
34880, August 22, 1989, effective January 1, 1990). The patent-related
text has been adapted to fit the specific circumstances of the PVP
Office.
III. Civil Justice Reform
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This action is not intended to have retroactive effect,
nor will it preempt any state or local laws, regulations, or policies,
unless they present an irreconcilable conflict with the proposed rule.
There are no administrative procedures that must be exhausted prior to
any judicial challenge to the provisions of the rule.
IV. Paperwork Reduction Act
This rule does not contain any information collection or record
keeping requirements that are subject to the Office of Management and
Budget approval under the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35).
Background Information
The PVP Program is a voluntary, user fee-funded service, conducted
under the Authority of the Plant Variety Protection Act (7 U.S.C. 2321
et seq.). The Act authorizes the Secretary of Agriculture to provide
intellectual property rights that facilitate marketing of new varieties
of seed-propagated crops and tubers. The Act also requires that
reasonable fees be collected from the users of the services to cover
the costs of maintaining the program.
In January 2003, AMS published a rule in the Federal Register (60
FR 17188) that increased Plant Variety Protection Office fees and that
became effective February 2003.
In February 2004, the AMS Budget Office performed a fee analysis
that indicated the need to increase the program fee schedule in order
to recover the administrative and information technology costs and
maintain an adequate program reserve balance. For FY 2006, user fee
revenues and program obligations are projected to be $1,496,000 and
$1,614,720, respectively, resulting in an estimated $118,720 program
deficit. AMS estimates that this proposed rule would yield an
additional $227,100 during FY 2006 that will offset increased program
operating costs. With a fee increase, FY 2007 revenues and expenditures
are projected to be $1,773,200 and $1,705,662, respectively.
AMS used the fees currently charged as a base for calculating the
new fee schedule for FY 2005. The fees set forth in Sec. 97.175 as of
February 2003 would be increased. The supplemental fees that were
established in May 2005 will not be increased, including the $250.00
portion of the allowance and issuance fee that was implemented to
recover the costs of improving the PVP program's electronic archiving
capabilities. The application fee will be increased from $432 to $518,
the search fee from $3,220 to $3,864, and the original issuance fee
from $432 to $518. The fees for reviving an abandoned application,
correcting or re-issuance of a certificate are increased from $432 to
$518. The charge for granting an extension for responding to a request
is increased from $74 to $89. The hourly charge for any other service
not specified will increase from $89 to $107. The fee for appeal to the
Secretary (refundable if appeal overturns the Commissioner's decision)
is increased from $4,118 to $4,942. Reproduction of records, drawings,
certificates, exhibits or printed materials, late payment, and
replenishment of seeds will increase by 20 percent. These fee increases
are necessary to recover the costs of this fee-funded program.
At the March 2003 annual meeting, the Plant Variety Protection
Advisory Board was informed of the anticipated FY 2005 cost increases
for maintaining program operations and administration. We also
consulted with the Board regarding potential increases to the basic fee
schedule for FY 2005. They recommended that fees be increased. This
rule makes the minimum changes in the regulations to implement the
recommended increased fees to maintain the program as a fee-funded
program.
The Plant Variety Protection Board recommended that internal
processes related to the handling of seed samples be streamlined.
Section 97.6(d) was recently amended to provide that cell cultures for
tuber-reproduced varieties need not be deposited until after the
examination has been completed, rather than at the time the application
is filed. A similar change was made for the establishment of plots of
vegetative material for self-incompatible parents of hybrids. The
requirement that 2,500 seeds of the basic variety must be submitted
while the application was modified to allow waivers of this
requirement. This proposed rule would further simplify this process by
applying the same requirements to seeds and allowing the applicant to
submit a declaration that the seed sample will be deposited, rather
than requiring that the sample be submitted with the application. This
would increase efficiencies in the PVP Office by removing the necessity
for the Office to routinely handle the samples and forward them to the
National Center for Genetic Resources Preservation (NCGRP) facility in
Ft. Collins, Colorado. The NCGRP is the only public depository approved
by the Commissioner at the present time.
We also propose that a larger initial seed sample be deposited to
ensure that germination testing does not deplete the stored sample. We
propose addition of Section 97.7, which will provide guidance to
applicants in how, when, and where to deposit their voucher seed
samples.
A 30-day comment period is provided to allow interested persons the
opportunity to respond to the proposal, including any regulatory and
informational impact of this action on small businesses. Thirty days is
deemed appropriate because present fees are inadequate to properly
cover program costs and additional revenues need to be generated to
effectively operate the program.
List of Subjects in 7 CFR Part 97
Plants, Seeds.
For reasons set forth in the preamble, it is proposed that 7 CFR
part 97 be amended as follows.
[[Page 40923]]
PART 97--PLANT VARIETY AND PROTECTION
1. The authority citation for part 97 continues to read as follows:
Authority: 7 U.S.C. 2321 et seq.
2. Section 97.6(d)(1) is revised to read as follows:
Sec. 97.6 Application for certificate.
* * * * *
(d) * * *
(1) A declaration that at least 3,000 seeds of the viable basic
seed required to reproduce the variety will be deposited in a public
depository approved by the Commissioner and will be maintained for the
duration of the certificate; or
* * * * *
3. Section 97.7 is added to read as follows:
Sec. 97.7 Deposit of Voucher Specimen.
(a) Voucher specimen types. As regards the deposit of voucher
specimen material for purposes of plant variety protection applications
under 7 U.S.C. 2321 et seq., the term voucher specimen shall include
material that is capable of self-replication either directly or
indirectly. Representative examples include seeds, plant tissue cells,
cell lines, and plots of vegetative material of self-incompatible
parental lines of hybrids. Seed samples should not be treated with
chemicals or coatings.
(b) Need to make a deposit. Applications for plant variety
protection require deposit of a voucher specimen of the variety. The
deposit shall be acceptable if made in accordance with these
regulations. Sample packages shall meet the packaging and deposit
requirements of the depository. Samples and correspondence about
samples shall be identified, minimally, by:
(1) The application number assigned by the Office;
(2) The crop kind, genus and species, and variety denomination; and
(3) The name and address of the depositor.
(c) Acceptable depository. A deposit shall be recognized for the
purposes of these regulations if made in:
(1) The National Center for Genetic Resources Preservation, USDA,
ARS, 1111 South Mason Street, Fort Collins, CO 80521-4500; or
(2) Any other depository recognized to be suitable by the Office.
Suitability will be determined by the Commissioner on the basis of the
administrative and technical competence, and agreement of the
depository to comply with the terms and conditions applicable to
deposits for plant variety protection purposes. The Commissioner may
seek the advice of impartial consultants on the suitability of a
depository. The depository must:
(i) Have a continuous existence;
(ii) Exist independent of the control of the depositor;
(iii) Possess the staff and facilities sufficient to examine the
viability and quantity of a deposit, and store the deposit in a manner
which ensures that it is kept viable and uncontaminated;
(iv) Provide for sufficient safety measures to minimize the risk of
losing biological material deposited with it;
(v) Be impartial and objective;
(vi) Refrain from distributing samples while the application is
being examined and during the term of protection but, after control of
the sample is transferred by the Office to the depository, furnish
samples of the deposited material in an expeditious and proper manner;
(vii) Have the capability to destroy samples or return samples to
the Office when requested by the Office; and
(viii) Promptly notify the Office of low viability or low quantity
of the sample.
(3) A depository seeking status under paragraph (c)(2) of this
section must direct a communication to the Commissioner which shall:
(i) Indicate the name and address of the depository to which the
communication relates;
(ii) Contain detailed information as to the capacity of the
depository to comply with the requirements of paragraph (c)(2) of this
section, including information on its legal status, scientific
standing, staff, and facilities;
(iii) Indicate that the depository intends to be available, for the
purposes of deposit, to any depositor under these same conditions;
(iv) Where the depository intends to accept for deposit only
certain kinds of biological material, specify such kinds; and
(v) Indicate the amount of any fees that the depository will, upon
acquiring the status of suitable depository under paragraph (c)(2) of
this section, charge for storage, viability statements and furnishings
of samples of the deposit.
(4) A depository having status under paragraph (c)(2) of this
section limited to certain kinds of biological material may extend such
status to additional kinds of biological material by directing a
communication to the Commissioner in accordance with paragraph (c)(3)
of this section. If a previous communication under paragraph (c)(3) of
this section is of record, items in common with the previous
communication may be incorporated by reference.
(5) Once a depository is recognized to be suitable by the
Commissioner or has defaulted or discontinued its performance under
this section, notice thereof will be published in the Official Journal
of the Plant Variety Protection Office or by other methods typically
used for dissemination of information related to the procedures of the
Office.
(d) Time of making an original deposit. An original deposit of
materials for seed-reproduced plants shall be made within three months
of the filing date of the application or prior to issuance of the
certificate, whichever occurs first. A waiver may be granted for good
cause, such as delays in obtaining a phytosanitary certificate for the
importation of voucher sample materials. When the original deposit is
made, the applicant must promptly submit a statement from a person in a
position to corroborate the fact, stating that the voucher specimen
material which is deposited is the variety specifically identified in
the application as filed. Such statement must be filed in the
application and must contain the identifying information listed in
paragraph (b) of this section and:
(1) The name and address of the depository;
(2) The date of deposit;
(3) The accession number given by the depository; and
(4) A statement that the deposit is capable of reproduction.
(e) Replacement or supplement of deposit. If the depository
possessing a deposit determines either that the sample viability is low
or that the sample quantity is low, and if this finding is made during
the pendency of an application or during the term of protection of the
certificate, the Office shall notify the depositor of the need for
making a replacement or supplemental deposit. Such deposits will be
governed by the same considerations governing the need for making an
original deposit under the provisions set forth in paragraph (d) of
this section. Notification to the Office concerning deposit of the
replacement or supplemental sample shall contain a statement from a
person in a position to corroborate the fact, stating that the
replacement or supplemental deposit is of a biological material which
is identical to that originally deposited.
(f) Term of deposit. A voucher specimen deposit made in support of
an application for plant variety protection shall be made for a term of
at least twenty (20) years. In any case, samples must be stored under
agreements that would make them available to the Office
[[Page 40924]]
during the enforceable life of the certificate for which the deposit
was made.
(g) Viability of deposit. A deposit of biological material that is
capable of self-replication either directly or indirectly must be
viable at the time of deposit and during the term of deposit. Viability
may be tested by the depository periodically. The test must conclude
only that the deposited material is capable of reproduction. No
evidence necessarily is required regarding the ability of the deposited
material to perform any function described in the application. If a
viability test indicates that the deposit is not viable upon receipt or
that the quantity of material is insufficient, the examiner shall
proceed as if no deposit was made. The examiner will accept the
conclusion set forth in a viability statement issued by a depository
recognized under paragraph (c) of this section.
(h) Furnishing of samples. A deposit must be made under conditions
that assure that:
(1) Public access to the deposit will not be available during
pendency of the application or during the term of protection; and
(2) All restrictions on the availability to the public of the
deposited material will be irrevocably removed upon the abandonment,
cancellation, expiration, or withdrawal of the certificate.
(i) Examination procedures. The examiner shall determine, prior to
issuance of the certificate, in each application if a voucher sample
deposit actually made is acceptable for plant variety protection
purposes.
4. Section 97.175 is revised to read as follows:
Sec. 97.175 Fees and charges.
The following fees and charges apply to the services and actions
specified below:
(a) Filing the application and notifying the public of filing--
$518.00.
(b) Search or examination--$3,864.00.
(c) Submission of new application data, after notice of allowance,
prior to issuance of certificate--$432.00.
(d) Allowance and issuance of certificate and notifying public of
issuance--$768.00.
(e) Revive an abandoned application--$518.00.
(f) Reproduction of records, drawings, certificates, exhibits, or
printed material (cost per page of material)--$1.80.
(g) Authentication (each page)--$1.80.
(h) Correcting or re-issuance of a certificate--$518.00.
(i) Recording an assignment, any revision of an assignment, or
withdrawal or revocation of an assignment (per certificate or
application)--$41.00.
(j) Copies of 8 x 10 photographs in color--$41.00.
(k) Additional fee for reconsideration--$518.00.
(l) Additional fee for late payment--$41.00.
(m) Fee for handling replenishment seed sample (applicable only for
certificates issued after June 20, 2005)--$38.00.
(n) Additional fee for late replenishment of seed--$41.00.
(o) Filing a petition for protest proceeding--$4,118.00.
(p) Appeal to Secretary (refundable if appeal overturns the
Commissioner's decision)--$4,942.00.
(q) Granting of extensions for responding to a request--$89.00.
(r) Field inspections by a representative of the Plant Variety
Protection Office, made at the request of the applicant, shall be
reimbursable in full (including travel, per diem or subsistence, and
salary) in accordance with Standardized Government Travel Regulation.
(s) Any other service not covered above will be charged for at
rates prescribed by the Commissioner, but in no event shall they exceed
$107.00 per employee-hour.
Dated: July 11, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-13946 Filed 7-14-05; 8:45 am]
BILLING CODE 3410-02-P