[Federal Register: September 16, 2005 (Volume 70, Number 179)]
[Rules and Regulations]
[Page 54609-54612]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16se05-1]
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Rules and Regulations
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
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to and codified in the Code of Federal Regulations, which is published
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[[Page 54609]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 97
[Doc. No. ST-05-02]
RIN 0581-AC42
Plant Variety Protection Office, Fee Increase
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Agricultural Marketing Service (AMS) is increasing 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 will allow applicants to send voucher seed samples
directly to the public repository.
EFFECTIVE DATE: October 17, 2005.
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 final 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 plant 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). AMS has determined that this action would not have a
significant economic impact on a substantial number of these small
business entities.
The 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 raises the fees charged to users of plant
variety protection. AMS estimates that the rule will yield an
additional $277,200 during fiscal year (FY) 2006. The cost to private
and public business entities will be proportional to their use of the
service, and shared equitably. The cost to individual users will
increase by $816 per PVP Certificate issued or by 20 percent per
application. PVP 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 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 final action also amends 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 then
ships the seed samples to the public repository at USDA's Agricultural
Research Service (ARS) facility in Ft. Collins, CO. The amendment
permits 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
[[Page 54610]]
needed to ensure that germination testing does not deplete the stored
sample.
A new section is 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
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 new 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 final rule will 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 2006. The fees set forth in Sec. 97.175 as of
February 2003 are 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 is 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 is increased 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 late
replenishment of seeds is increased 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 2006. 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
will the application was modified to allow waivers of this requirement.
This final rule will 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 will
increase efficiencies in the PVP Office by removing the necessity for
the Office to routinely handle the samples and forward them to the ARS
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 require that a larger initial seed sample be deposited to
ensure that germination testing does not deplete the stored sample. We
have added of Section 97.7, which provides guidance to applicants in
how, when, and where to deposit their voucher seed samples.
Summary of Public Comment
A notice of the proposed rule was published in the Federal Register
(70 FR 40921) on July 15, 2005. A 30-day comment period was provided to
allow interested persons the opportunity to respond to the proposal,
including any regulatory and informational impact of this action on
organizations considered to be small businesses. The comment period
expired on August 15, 2005, and two comments were received on the
proposed rule.
One comment stated that a fee increase would be accepted if
stakeholders could feel that the PVP Office conducts its business in a
prompt and orderly fashion. Another comment indicated that the fee
increase was insufficient to cover the full costs relating to what the
commenter believed was a negative impact on the United States with
regard to plants and seeds that are introduced into this country. As
previously stated, the PVP Act of 1970 requires that reasonable fees be
collected from applicants seeking certificates of protection in order
to maintain the program. This fee increase will adjust fees to provide
adequate revenue for current program operations and to rebuild an
adequate trust fund reserve. With regard to the PVP Office conducting
its business in a prompt and orderly fashion, the Office continues to
improve the quality of its services. Accordingly, no change to the rule
will be made as a result of the comments.
[[Page 54611]]
List of Subjects in 7 CFR Part 97
Plants, seeds.
0
For reasons set forth in the preamble, 7 CFR part 97 is amended as
follows.
PART 97--PLANT VARIETY AND PROTECTION
0
1. The authority citation for part 97 continues to read as follows:
Authority: Plant Variety Protection Act, as amended, 7 U.S.C.
2321 et seq.
0
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
* * * * *
0
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, ARS,
USDA, 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 Sec. 97.7(d).
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
[[Page 54612]]
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 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 97.7(c).
(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.
0
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. Charges also will be made for materials,
space, and administrative costs.
Dated: September 13, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-18511 Filed 9-15-05; 8:45 am]
BILLING CODE 3410-02-P