Food Safety Legislation Moves Forward In House With Lower Fees

A House subcommittee cleared a version of the Food Safety Enhancement Act with lower registration fees, which could make the bill more palatable to companies.

The bill retains some elements unpopular with industry, such as country-of-origin labeling. Also the type of fees remains a volatile element, especially if the bill goes to the Senate.

At a June 10 markup, the Energy and Commerce Committee's health subcommittee approved by voice vote the version of the FSEA authored by Chairman Frank Pallone, D-N.J., with bi-partisan input and industry collaboration.

Pallone's bill, H.R. 2749, is a substitute for a bill Rep. John Dingell, D-Mich., introduced June 8, two weeks after he and other key committee Democrats floated a draft.

The substitute retains Dingell as the lead sponsor. The full Energy and Commerce Committee scheduled the bill for a June 17 markup.

A noteworthy change in Pallone's substitute is that food firms will be required to pay annual registration fees of $500, down from $1,000 proposed in the original FSEA.

The amendment also sets a $175,000 cap on annual registration fees for businesses that operate multiple facilities. The original bill did not set a limit.

Further, Pallone said, "in response to some concerns we heard during the hearing on how the revenue generated from fees would be allocated, we changed the fee section to include a consultation in the form of a public meeting so that stakeholders will be able to weigh in on how the fee revenue will be spent."

While industry historically and predominantly has not been on board with annual registration fees, trimming the fees by half lessens the blow and likely will garner more support for the legislation.

Energy and Commerce Chairman Henry Waxman, D-Calif., said the fee agreement is the result of Democrats conferring with Republicans on the committee and the Grocery Manufacturers Association.

GMA supported FSEA, but lobbied to remove or lower the registration fees. Supplement industry trade groups suggest setting fees proportional to firm size and assure that funds collected from supplement firms will be used for inspections in the supplement industry.

To the Natural Products Association, a $500 fee is "more rational," particularly in a recession economy, VP of Regulatory and Scientific Affairs Daniel Fabricant said.

"People will have an easier time," Fabricant added in an interview. "Reducing the registration fees is going to make [the bill] a lot more palatable," particularly to small businesses.

The nature and structure of the fees could be revisited - if the bill's momentum continues - when it goes to the Senate.

Illinois Democrat Sen. Dick Durbin said general user fees, as opposed to targeted fees, are an impediment to bipartisan support for food safety in the Senate (¹ (Also see "Durbin Food Safety Bill Emphasizes Targeted Fees, Industry Responsibility" - Pink Sheet, 9 Mar, 2009.), p. 6).

Durbin's S. 510, the FDA Food Safety Modernization Act, takes a targeted approach to fees. However, the Senate version is currently in the Health committee's queue, where health care reform is a far greater priority.

Provisions Beyond Fees

Other issues Pallone said were ironed out in the amended FSEA include the addition of language that accommodates small businesses, particularly with regards to establishing preventive plans. Pallone said the new version has language that requires the agency "to issue guidance specifically for small businesses on how to implement preventive controls in accordance with the bill."

"Over the next week, I want to make this bill even better, and I'm confident that we can come to agreement on other issues," Waxman said.

Republicans still have some concerns. Ranking Energy and Commerce member Joe Barton, R-Texas, said Pallone's substitute was "a good starting point," but not the end of the discussion.

One recurring question among Republicans is that the bill allows FDA to set civil penalties for firms' unintended violations, even when an event does not cause harm.

Further, Republican members objected to the accelerated inspection timelines set up in the risk-based schedules proposed in both versions.

They pointed out FDA Commissioner Margaret Hamburg in her June 3 testimony before the subcommittee said the schedule would be difficult to fulfill (² (Also see "House Food Safety Price Tag Exceeds Budget Request – Hamburg" - Pink Sheet, 8 Jun, 2009.), p. 12).

Hamburg also told the subcommittee FDA would need more money than what the bill provides to implement its provisions.

Alliance for a Stronger FDA President Steven Grossman said the advocacy group is "very concerned whether enough money will be available to implement" the bill. Grossman added it is "not good if monies to strengthen the agency are used for new responsibilities."

While not mentioned in either the House or Senate bill, supplement firms likely would be subject because their products are regulated as food.

Supplement firms' primary concern is to avoid a redundant layer of requirements by keeping FDA's good manufacturing practices for supplements as the regulatory standard (³ (Also see "Food Safety Bills’ “Belt And Suspenders” Approach Is Costly – Trade Groups" - Pink Sheet, 1 Jun, 2009.), p. 17).

Under FSEA, firms would follow the Hazard Analysis and Critical Control Point model now used for some foods, such as orange juice and seafood. Under HACCP, a firm will identify the greatest risk and create an approach to reduce that risk.

FSEA contains fees for recalls, reinspections and domestic firms requesting export certificates.

The bill also includes country-of-origin labeling provisions, something the supplement industry historically opposed. The Senate bill does not contain COOL provisions.

FSEA would also provide FDA with mandatory recall authority and establish a traceback system for food so the agency can determine illnesses caused by contamination outbreaks.

- Katie Stevenson ([email protected])