Final Regulatory Impact Analysis

DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration

Amendments to Registration of Food Facilities
Docket No. FDA-2002-N-0323

Final Regulatory Impact Analysis
Final Regulatory Flexibility Analysis
Unfunded Mandates Reform Act Analysis

Economics Staff
Office of Planning
Office of Policy, Planning, and Legislation
Office of the Commissioner

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Executive Summary
The food facility registration rule amends FDA’s regulation for registration of food facilities that
requires domestic and foreign facilities that manufacture, process, pack, or hold food for human
or animal consumption in the United States to register with FDA. Total annualized costs are
estimated at $5 million using a seven percent discount rate and $6 million using a three percent
discount rate. We expect that the benefits of the final rule will include aiding FDA’s ability to
deter and limit the effects of foodborne outbreaks and other food-related emergencies, although
we are unable to quantify these and other benefits.

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Contents
Analysis of Economic Impacts ....................................................................................................... 4
I. Summary of Costs and Benefits ............................................................................................. 6
Table 1.—Annualized Cost and Benefit Summary ($ Millions) .......................................... 10
A. Comments on the PRIA and Responses ......................................................................... 12
II. Need for Regulation ............................................................................................................. 16
III. Regulatory Alternatives ...................................................................................................... 16
IV. Costs of the Rule................................................................................................................. 17
A.

Costs of Implementing a VIS ..................................................................................... 17

Table 2.— Difference in Costs to Foreign Facilities of U.S. Agent Information Viewing and
Verification Procedures with and without a Voluntary U.S. Agent Identification System
(VIS) ..................................................................................................................................... 18
B.

Costs of a UFI ............................................................................................................. 18

Table 3.—Difference in One-time Costs to Facilities in Obtaining a UFI in 2016 and in
2020 ($ Millions) .................................................................................................................. 21
C.
Costs Associated with the Electronic Submission Requirement and Waiver from
Electronic Submission Requirement. .................................................................................... 22
D.

Costs of the Requirement to Update Facility Registrations within 60 Calendar Days.
24

E.

Summary of Costs ...................................................................................................... 24

Table 4.— Comparison of Summary Costs of Proposed and Final Food Facility
Registration Rule ($ Millions) .............................................................................................. 25
V. Benefits of the Rule............................................................................................................. 25
Table 5.—Estimated Average Illnesses per Foodborne Outbreak and Costs per Outbreak
Associated with three Pathogens .......................................................................................... 29
VI. Final Regulatory Flexibility Analysis ................................................................................. 30
A. Economic Effects on Small Entities................................................................................ 31
B. Number of Small Entities Affected ................................................................................. 32
Table 6.— Number of Registered Facilities and Number of Registered Facilities with 500 or
Fewer employees. ................................................................................................................ 33
C. Costs to Small Entities .................................................................................................... 33
Table 7.—Average One-time and Average Annualized Costs per Facility .......................... 34
VII. References ......................................................................................................................... 39

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Analysis of Economic Impacts

FDA has examined the impacts of the final rule under Executive Order 12866, Executive
Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct Agencies to
assess all costs and benefits of available regulatory alternatives and, when regulation is
necessary, to select regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety, and other advantages; distributive impacts;
and equity). The Agency believes that this final rule is not a significant regulatory action under
Executive Order 12866.

The Regulatory Flexibility Act requires Agencies to analyze regulatory options that
would minimize any significant impact of a rule on small entities. Because the additional costs
per entity of this rule are small, we do not believe that this final rule will have a significant
economic impact on a substantial number of small entities. However, we have analyzed various
regulatory options to examine the impact on small entities.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that Agencies
prepare a written statement, which includes an assessment of anticipated costs and benefits,
before proposing “any rule that includes any Federal mandate that may result in the expenditure
by State, local, and tribal governments, in the aggregate, or by the private sector, of
$100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold
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after adjustment for inflation is $146 million, using the most current (2015) Implicit Price
Deflator for the Gross Domestic Product. FDA does not expect this final rule to result in any 1year expenditure that would meet or exceed this amount.

This final regulatory impact analysis (RIA) estimates costs for the provisions of the final
rule by revising the estimated costs set forth in the preliminary regulatory impact analysis
(PRIA) for the proposed rule (80 FR 19159, April 9, 2015) (hereinafter referred to as the PRIA).
Specifically, estimated costs of this final rule are similar to costs presented under Option 4 in the
PRIA (Ref. 1). Option 4 of the PRIA included the cost estimates of all of the provisions of the
proposed rule, but with the additional implementation of a U.S. Agent Voluntary Identification
System (VIS or the system). In this final rule, we are not finalizing our proposal to shorten the
time period for submitting updates and cancellations to 30 calendar days from 60 calendar days.
In addition, we are postponing the requirements to submit a unique facility identifier (UFI) and
to submit registrations electronically until the year 2020. Thus, as we explain in detail in section
IV of this RIA, we revise our cost estimates in Option 4 of the PRIA by removing additional
estimated costs associated with updates and also to reflect the discounted present value and
annualized costs from postponing the requirements for both the UFI and mandatory electronic
registration from 2016 to 2020. For a full explanation of the economic impact analysis of Option
4 of the proposed rule, interested persons are directed to the text of the PRIA, available at
http://www.regulations.gov/#!documentDetail;D=FDA-2002-N-0323-0173.

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I. Summary of Costs and Benefits

The food facility registration rule amends FDA’s regulation for registration of food
facilities that requires domestic and foreign facilities that manufacture, process, pack, or hold
food for human or animal consumption in the United States to register with FDA. The final rule
codifies certain already effective, self-implementing requirements authorized by section 102 of
the FDA Food Safety Modernization Act (FSMA), which amends section 415 of the Federal
Food, Drug & Cosmetic Act (FD&C Act) regarding requirements for food facility registration.

The final rule also implements other requirements of section 102 of FSMA, including
mandatory electronic registration submissions (which under the final rule will not begin until
2020) and amendments to the retail food establishment definition. In addition, the final rule
implements other changes to improve the utility of the food facility registration database.
Although FDA is making some generally minor revisions to the final rule, we are finalizing most
of the key aspects of the proposed rule and the overall goals of the proposed rule remain
unchanged. The following four changes are substantial enough to require us to revise our cost
projections: 1) we plan to implement a VIS; 2) we are postponing the requirement to provide a
UFI; 3) we are postponing the requirement to submit electronic registrations (a requirement from
which facilities may obtain waivers); and 4) we will continue to allow 60 calendar days to submit
updates to registrations, instead of shortening the time period to 30 calendar days as we
proposed.

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At the proposed rule stage, we requested comments on whether to implement a VIS, but
we did not settle on plans to do so. As indicated in the preamble to the finale rule, we now plan
to implement a VIS. Because the VIS is voluntary, we will implement the VIS through the
guidance process in accordance with our Good Guidance Practice regulations in 21 CFR 10.115.
Nevertheless, because we have settled on plans to implement the VIS, this final regulatory
impact analysis assesses the effect of the VIS on the estimated costs of the final rule.

The second change includes revised estimated costs associated with our proposal to
require facilities to include D-U-N-S® numbers in their registrations. In the final rule, we do not
require the submission of D-U-N-S® numbers; instead, we require the submission of a unique
facility identifier (“UFI”) recognized as acceptable by FDA. FDA has not yet recognized any
specific facility identifier as acceptable. We anticipate that we will issue guidance specifying
which unique facility identifier or identifiers FDA recognizes as acceptable, and we expect to
recognize D-U-N-S® numbers as acceptable identifiers. In addition, the final rule postpones the
requirement to submit a UFI until 2020. We have revised our estimated costs to account for
these changes and to reflect the present value and annualized cost of obtaining a UFI four years
in the future or the year 2020.

The third change includes revisions to the costs associated with our proposed requirement
for mandatory electronic registration and electronic registration renewals beginning January 4,
2016. In proposing to require electronic submissions, we also proposed to provide the option of
a waiver from that requirement under proposed § 1.245. In the final rule, we are postponing the
mandatory electronic submission requirement until January 2020. In addition, we are finalizing
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our proposal to provide for a waiver from that requirement. In the PRIA, we estimated that
registrants would have to submit waiver requests with each biennial cycle, and therefore
estimated costs accordingly. However, in the preamble to the final rule, we clarify that if a
waiver has been requested and granted, the facility is not required to submit future waiver
requests each time the facility submits a renewal or update. Once FDA grants a waiver, we will
consider the waiver to be in effect for as long as the reasons for the waiver remain unchanged
and the registration has not been cancelled. This final regulatory impact analysis re-assesses the
cost of requesting a waiver to reflect the discounted present value of this one-time cost beginning
in the year 2020 instead of recurring annual costs beginning in 2016.

For the fourth change, we are not finalizing our proposal to shorten the time period for
submitting updates to 30 calendar days from the currently-required time period of 60 calendar
days. In the PRIA, we estimated incremental costs of the requirement to submit an update within
30 days from 60 days. Since we are not making any changes to the time periods from what is
currently required, we remove all costs associated with this requirement from the RIA.

Table 1 presents estimated costs associated with the provisions in this final rule. These
costs are similar to what we estimated the proposed rule would cost, but with the additional
implementation of a VIS and reduced costs to facilities resulting from postponing the
requirements to provide a UFI and to submit registrations electronically. Estimated one-time
costs to domestic and foreign facilities are about $27 million. These estimated costs include a
small reduction from the estimated one-time costs of provisions in the proposed rule. As
explained in the PRIA, one-time costs in the first year stem from the self-implementing FSMA
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provisions that are already effective, including learning costs (i.e., the administrative costs
incurred by domestic and foreign facilities in order to learn how to comply with any new
regulation), first-time biennial registration renewal costs from the 2012 registration renewal
cycle, and costs that stem from requirements for certain data elements in the registration form
such as the email address for a domestic facility’s contact person and the email address for a
foreign facility’s U.S. agent. These costs are approximately $20 million. Estimated one-time
costs to domestic and foreign facilities for the biennial renewal cycle in 2016, by which time
the final rule will be effective, include $46 million in one-time costs for entering additional data
elements in the registration form and costs for U.S. agent verification procedures incurred in
2016 without a Voluntary Identification System (VIS). One-time costs in 2020 include the costs
for the requirement to obtain a UFI plus the reduced costs associated with the mandatory
electronic submission requirement (because the preamble to the final rule clarifies that waivers
will not be required with each biennial registration renewal cycle). These costs are approximately
$3 million.

Recurring biennial costs beginning in 2016 include costs from the requirement for both
domestic and foreign food facilities to renew their registrations every two years and from
requiring additional data elements in the registration form. Recurring costs for 2018 include
costs from implementing a VIS. As was the case under Option 4 in the PRIA, these costs are
based on the supposition that the U.S. agents for all foreign facilities will choose to use the VIS.
In the PRIA (see pages 51 to 53), we estimated that implementing the system by 2018 could
reduce estimated costs for the U.S. agent information viewing and verification provisions in the
proposed rule by one-half. We estimated that this would result in roughly $2 million of savings
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each year or about $4 million every two years. We no longer assess the costs of requiring
updates within 30 calendar days because we are not finalizing our proposal to shorten the time
period for updates. The final rule does not change the currently-required time periods. Thus,
estimated recurring costs of this final rule are now approximately $8.8 million every two years.
The $8.8 million in costs continue to accrue in each subsequent biennial registration renewal
cycle, and include costs associated with registration renewal activities and costs associated with
other provisions of the final rule, such as certain verification procedures.

Annualized costs are calculated using a discount rate of 7 percent and 3 percent over 20
years. Total annualized costs to food facilities, which include annualized one-time costs and
annualized recurring costs, are approximately $4.7 million and $4.9 million per year ($24 and
$25 per facility) using a discount rate of 7 percent and 3 percent, respectively, over a period of
20 years. Annualized recurring costs to FDA are approximately $0.9 and $1.2 million, also
using a discount rate of 7 percent and 3 percent, respectively.

Table 1.—Annualized Cost and Benefit Summary ($Millions)
Total One-time
Costs
Domestic Facilities
Foreign Facilities
Subtotal Facilities
Costs to FDA
Total

Total Annualized
Costs 7%

$9
$18
$27

$1.4
$3.3
$4.7
$0.9
$5.6

$27

(2015 U.S. Dollars)

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Total Annualized
Costs 3%
$1.4
$3.5
$4.9
$1.2
$6.1

Benefits

Not
Quantified

This analysis estimates costs and benefits of the provisions in this final rule only, which
are in addition to the estimated annual costs already incurred due to the implementation of the
provisions in the 2003 interim final rule. 1 Those estimated costs were calculated in an economic
impact analysis that accompanied the interim final rule (68 FR 58893 at 58932). For the final
rule, the economic impact analysis was modified slightly with respect to the costs associated
with the U.S. agent requirement at the final rule stage (70 FR 57505 at 57506). 2

We also expect that at least some foreign food facilities could increase prices as a result
of the costs they would have to incur as a result of the rule. Any such potential price increases
that could occur as a result of compliance costs would likely be very small relative to the total
costs to manufacture, process, pack, and hold foods for sale in the United States. We expect that
the benefits of the final rule would include aiding FDA’s ability to deter and limit the effects of
foodborne outbreaks and other food-related emergencies. Although we are unable to quantify
these and other benefits, we discuss the expected benefits qualitatively. (For a more complete
qualitative discussion of the benefits, see the PRIA.) In addition, we updated in this analysis the
monetized impact associated with different foodborne outbreak scenarios from the PRIA in order
to determine the amount of savings from illness reduction that would be required in order for the
final rule to reduce costs that result from foodborne illness by approximately the same amount
that the compliance costs the final rule will impose on food facilities. We expect the final rule

1

The interim final rule implemented section 305 of the Bioterrorism Act, and required domestic and foreign
facilities to be registered with FDA by December 12, 2003 (68 FR 58894).
2
On October 3, 2005, FDA issued a final rule in the Federal Register (70 FR 57505) that confirmed the interim final
rule entitled "Registration of Food Facilities Under the Public Health Security and Bioterrorism Preparedness and
Response Act of 2002."

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will have additional benefits that we are similarly unable to quantify, including providing for the
more efficient use of FDA’s inspectional resources.

A. Comments on the PRIA and Responses

(Comment 1) Several comments state that obtaining a D-U-N-S® number will generate
costs that we did not capture in our analysis. Specifically, comments state that the requirement
will result in delays of registration submissions due to the time required to obtain a D-U-N-S®
number once requested.

(Response 1) This final rule no longer requires facilities to use D-U-N-S® numbers.
Instead, the final rule requires the use of a unique facility identifier recognized as acceptable by
FDA. Because FDA has not yet recognized any specific facility identifier as acceptable, it is not
possible to estimate whether this change in the final rule will affect costs. However, as stated in
the preamble to the final rule, we plan to issue guidance that will recognize a unique facility
identifier or identifiers as acceptable, and we anticipate that the guidance will recognize D-U-NS® numbers as acceptable. Because we anticipate that our guidance will recognize D-U-N-S®
numbers as acceptable, for purposes of estimating costs in the RIA, we estimate the costs of
obtaining a UFI as the costs of obtaining a D-U-N-S® number. Based on an FDA analysis of
Dun & Bradstreet data, we estimate that about 71 percent of domestic food facilities currently
have a D-U-N-S® number and about 64 percent of foreign food facilities have one, meaning that
about 24,000 or 29 percent of domestic food facilities and about 41,000 or 36 percent of foreign
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food facilities that are required to register with FDA would need to obtain a D-U-N-S® number
(Ref. 2). In the PRIA, we expressed the cost of obtaining and using a D-U-N-S® number in
Table 13, First Year Costs to Domestic and Foreign Facilities of Obtaining a D-U-N-S® Number
under the Proposed Rule, as well as in Table 14, Costs to Domestic and Foreign Facilities from
Entering a D-U-N-S® Number onto the Food Facility Registration Form (Ref. 1). As reflected
in the PRIA, we estimate that during the first year, the time required to request a D-U-N-S®
number would be one hour, and that the time required to enter the number onto the registration
form would be 1 minute, at an estimated cost of $3 Million. There is no fee to obtain a D-U-NS® number unless an expedited service is requested. We also noted that Dun & Bradstreet
usually requires 30 days to provide a D-U-N-S® number upon receiving a complete request. For
businesses that are willing to pay a fee of about $250, Dun & Bradstreet is able to provide a
number within 5 days (Ref. 3). In the PRIA, we stated that we did not know how many facilities
will wait 30 days to obtain a D-U-N-S® number for free, or how many will pay $250 for an
expedited number.

Although comments did not provide an estimate of the number of facilities likely to pay
$250 for the expedited service, we believe that the PRIA did not adequately account for the
possibility that, under the proposed rule, at least some facilities would have been likely to pay for
the expedited service. We believe that this would have been likely under the proposed rule in
part because of the narrow window of time between when this rule would have been finalized
and when facilities would have been required under the proposed rule to provide a D-U-N-S®
number for their registrations. As explained in section IV. B of this analysis, we revise our
original premise in the PRIA that, under the proposed rule, facilities would not pay the $250 fee
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for expedited service. Instead, we estimate that, under the proposed rule, all (41,000) foreign
facilities and half (12,000) of domestic facilities (or a total of 53,000 facilities) that currently do
not have a D-U-N-S® number would choose to pay the $250 fee to expedite receiving their D-UN-S® number. This is a conservative estimate. Based on this revised premise for the proposed
rule, we adjust our one-time cost of obtaining a D-U-N-S® number under the proposed rule from
$3 to $16 million, which represents $13 million in costs in addition to the estimated costs in the
PRIA. 3

However, as stated in the preamble of this final rule, in response to the comments, we are
delaying the requirement to submit a UFI recognized as acceptable to FDA until the registration
renewal period beginning October 1, 2020. By postponing this requirement by 4 years, facilities
will be allowed significantly more time to obtain a UFI. With this additional time provided
under the final rule, we believe that facilities will be less likely to pay the fee to expedite
obtaining a D-U-N-S® number. We therefore do not incorporate the $16 million upward
adjustment of the one-time cost of obtaining a D-U-N-S® number under the proposed rule into
the cost of the final rule. The upward adjustment to $16 million is only an upward adjustment
for the costs of the proposed rule. Given that the final rule delays the UFI requirement until
2020, for the final rule we do not estimate that facilities will need to pay fees for expedited
service.

3

53,000 facilities x $250 (expedited fee) = $13,250,000.
Total costs = $ 3 million from PRIA + $ 13 million in fees = $16 million.

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Therefore, our estimated one-time (undiscounted) cost of obtaining a D-U-N-S® number
is $3 million.

Since $3 million represents a cost as if incurred in 2016, we revise this cost to reflect the
present value of the estimated $3 million as incurred 4 years in the future or otherwise 2020. We
revise our one-time cost using a discount rate of 7 and 3 percent over 20 years to calculate a
present value cost of obtaining a D-U-N-S ® to a respective $2 to $2.5 million.

(Comment 2) Comments express concern that public health benefits from this rule are not
commensurate with the costs of this rule. Other comments expressed concern over the
uncertainty about benefits.

(Response 2) FDA does not have the data to quantify the benefits of the final rule, and we
therefore discuss the benefits qualitatively. Although we are unable to quantify the benefits, we
believe that they are substantial and that the benefits of the final rule justify the costs. We expect
that the final rule will increase the utility of FDA’s registration database, enabling the agency to
more effectively and efficiently respond to outbreaks from accidental and deliberate
contamination from food and deter deliberate contamination. The requirements in the final rule
will make registration information more accurate and more up-to-date. More accurate
registration information will allow FDA to use the registration database more effectively and
efficiently, including to deter and limit the effects of foodborne outbreaks. In addition, certain
new information required by the final rule, including activity type information, will assist FDA
in more efficiently and effectively deploying the agency’s limited inspectional resources.
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One type of registration information that we think will be more accurate as a result of the
requirements in the final rule is information about the location of food facilities. We expect that
this will enable us to better locate food facilities for inspections. In some cases, this should help
us more efficiently enforce certain other requirements that apply to food facilities that are
required to register under section 415 of the FD&C Act, such as the preventive controls
requirements for human and animal food. See Current Good Manufacturing Practice and Hazard
Analysis and Risk-Based Preventive Controls for Human Food (80 FR 55908, September 17,
2015); and Current Good Manufacturing Practice and Hazard Analysis and Risk-Based
Preventive Controls for Food for Animals (80 FR 56170, September 17, 2015).

II. Need for Regulation

We have not revised the need for regulation from the PRIA. For a detailed discussion of
the need for regulation, see the PRIA (Ref. 1).

III. Regulatory Alternatives

We have not revised the regulatory alternatives from the PRIA. For a detailed discussion
of the feasible regulatory alternatives, see the PRIA.

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IV. Costs of the Rule

In this section we provide a detailed description of the estimated cost revisions of this
rule. These costs differ from the PRIA as a result of the four changes in the final rule discussed
above that are substantial enough to require us to revise our cost projections.

A. Costs of Implementing a VIS

In the preamble to the proposed rule, we requested comments on whether we should issue
a future guidance document to provide for the creation of a VIS, or otherwise provide for the
creation of such a system. In the PRIA we estimated the costs of the provisions in the proposed
rule with the additional implementation of a VIS under option 4 of the analysis. As stated in the
preamble to the final rule, we now plan to implement a VIS through guidance. As we envision
the VIS, the system will enable U.S. agents to independently identify the facility or facilities for
which the agent has agreed to serve. We also expect that the system will allow agents to provide
their name, full mailing address, phone number, email address, and an emergency contact phone
number, as well as the name of the facility or facilities for which they agree to serve. By
providing U.S. agents with more control over the U.S. agent information that is required for food
facility registration, we anticipate that a VIS will reduce the time that we anticipate foreign
facilities will spend corresponding with U.S. agents as a result of the provision in the final
revised § 1.227 specifying that the U.S. agent of a foreign facility may view the information
submitted in the foreign facility’s registration. In addition, we expect that a VIS would also
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reduce the costs that we estimate in association with the U.S. agent verification procedures in
final §§ 1.231(a) (5) and (b) (7).

As explained in the PRIA, we estimate that implementing the system could reduce the
costs to foreign facilities that we estimated for the U.S. agent information viewing and
verification provisions in the PRIA by one-half, resulting in roughly $2 million of (undiscounted)
savings each year. Table 2 below summarizes the difference between the costs of the U.S. agent
information viewing and verification procedures with and without a VIS.

Table 2.—Difference in Costs to Foreign Facilities of U.S. Agent Information Viewing and
Verification Procedures with and without a Voluntary U.S. Agent Identification System (VIS)
Facilities
Without
VIS
With VIS

Frequenc
y
0.5

Hours/
Year
57,070

Wage

Costs

114,139

Time
(Hours)
1.00

$ 72.86

$ 4,157,909

Cost/
Facility
$ 36.43

114,139

0.50

0.5

28,535

$ 72.86

$ 2,078,954

$

$ 2,078,954

$ 18.21

Difference

0.50

28,535

18.21

(2015 U.S. Dollars)

B. Costs of a UFI

In the PRIA, we explained that there is no cost to obtain a D-U-N-S® number (a data
element that the proposed rule would have required) and that Dun & Bradstreet usually requires
30 days to provide a D-U-N-S® number upon receiving a complete request. As reflected in the
PRIA, we estimate that during the first year, the time required to request a D-U-N-S® number
would be one hour, and that the time required to enter the number onto the registration form
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would be 1 minute, at an estimated cost of $3 Million. We also explained that, for businesses that
are willing to pay a fee of about $250, Dun & Bradstreet is able to provide a D-U-N-S® number
within 5 days (Ref. 2). In our original cost estimate, we estimated that facilities would choose
not to pay the fee to expedite receipt of their D-U-N-S® number. Consequently, the PRIA does
not account for costs associated with such fees under the proposed rule. In the PRIA, we
requested comments on the number of facilities who would most likely wait 30 days to obtain a
D-U-N-S® number for free, and on how many would pay $250 for an expedited number.
Although comments did not specifically estimate the number of facilities that might choose to
pay the expedited fee, we agree with comments that this requirement, as proposed, would
generate costs that we did not capture in the PRIA. In the PRIA, we did not adequately account
for the possibility that, under the proposed rule, at least some facilities would have been likely to
pay for the expedited service. We believe that this would have been likely under the proposed
rule in part because of the narrow window of time between when this rule would have been
finalized and when facilities would have been required under the proposed rule to provide a DU-N-S® number for their registrations.

As the time between requesting a D-U-N-S® number and receiving the D-U-N-S®
number approaches the time the registration renewal period ends, the risk that a facility might
miss the deadline to submit a complete registration renewal is greater. If a facility fails to
complete a registration or registration renewal, the facility may incur costs related to an invalid
registration, such as shipments from the facility being delayed at the port (for foreign facilities).

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These port delays may occur because food from an unregistered foreign facility that is
imported or offered for import into the United States is subject to being held under section 801(l)
of the FD&C Act [21 USC 381(l)] and 21 CFR 1.285, and such holds are not resolved until the
foreign facility registers with FDA. Potential costs associated with port delays include costs
such as lost value of perishables, storage costs, lost revenue in sales and other transaction costs.
Given the incentive in such cases for food facilities to complete the registration or registration
renewal process promptly, we now believe that, under the proposed rule, most facilities that
currently do not have a D-U-N-S ® would opt for paying the $250 fee to expedite receipt of their
number.

If this requirement as proposed became final, we conservatively estimate that 12,000 of
24,000 domestic facilities that currently do not have a D-U-N-S® number would choose to pay
the $250 fee to expedite obtaining their D-U-N-S® number in order to comply with the
requirement by 2016, for a total of $3 million. In a similar manner, we also estimate that, under
the proposed rule, all of the 41,000 foreign facilities that currently do not have a D-U-N-S®,
would also choose to pay the fee in order to comply with the requirement by 2016, totaling $10
million. We adjust one-time costs of this proposed requirement from $3 million, as set forth in
the PRIA, to $16 million (approximately a $13 million more than originally estimated in the
PRIA).

However, as stated in section II, FDA is postponing the requirement for providing a UFI
from 2016 to 2020. By allowing 4 more years for facilities to obtain a UFI in the final rule, we
estimate that, under the final rule, no facilities will choose to expedite the process of obtaining a
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D-U-N-S® number in order to meet the requirements of this rule. Thus, for the final rule, we do
not believe that there will be costs associated with expediting D-U-N-S® numbers. The upward
adjustment to $16 million is only applicable to the proposed rule, because the proposed rule did
not provide for any delay in the proposed D-U-N-S® number requirement.

For the final rule, our estimated one-time (undiscounted) cost of obtaining a D-U-N-S®
number is $3 million. This $3 million cost estimate is the same as originally estimated in the
PRIA (i.e., without the $13 million cost adjustment from fees that we now believe would have
resulted from paying fees to expedite D-U-N-S® numbers in order to meet the requirements in
the proposed rule)).

Table 3 below summarizes the difference between adjusted one-time cost to facilities of
obtaining a D-U-N-S® beginning in 2016, and the present value of the one-time cost of the UFI
provision in the final rule beginning in 2020. By postponing the requirement to obtain a UFI to
the year 2020 in the final rule, the reduction in costs to facilities of this requirement ranges
between $14 and $13 million (using a discount rate of 7 and 3 percent respectively).

Table 3.—Difference in One-time Costs to Facilities in Obtaining a UFI in 2016 and in 2020 ($
Millions)
Year
PRIA (2016) plus
fees
RIA (2020)
Difference

$
$
$

7%
16
2.2
14

3%
$

16

$
$

2.5
13

(2015 U.S. Dollars)

Page 21

C. Costs Associated with the Electronic Submission Requirement and Waiver from
Electronic Submission Requirement

Under the proposed rule, registrants would be required to submit registrations and
registration renewals electronically beginning January 4, 2016, absent the granting of a waiver
under proposed § 1.245. The proposed rule would have also required the electronic submission
of updates and cancellations beginning January 4, 2016. The proposed rule proposed that
facilities would be permitted to request a waiver from the electronic registration requirement by
submitting a written request to FDA explaining why it is not reasonable to submit a registration
or registration renewal electronically to FDA. FDA tentatively concluded that reasons for why it
may not be reasonable for a registrant to submit a registration or registration renewal to FDA
electronically may include conflicting religious beliefs or where a registrant does not have
reasonable access to the Internet (80 FR at 19177-78).

As of February 7, 2014, FDA’s Food Facility Registration Module (FFRM) database
listed 1,925 domestic and 196 foreign food facility registrations that were active and that were
not submitted electronically. In the PRIA, the costs of mandatory electronic submission are the
costs of requesting and submitting a request for a waiver from this requirement. The PRIA
estimated that 1,925 domestic and 196 foreign food facility managers will prepare and send
requests for waivers once every other year, during the registration renewal cycle. We estimated
annual costs of submitting a waiver to be $12,500 per year, or $25,000 every biennial cycle.

Page 22

In the preamble of the proposed rule, we requested comment on the proposed
requirements for mandatory electronic registration and registration renewals to begin in the year
2016 and the proposal to allow for a waiver from these requirements. We also requested
comment and data on the number of facilities that believe they would be unable to register or
renew their registrations electronically, and the reasons for such belief. Although comments did
not provide data on the number of affected facilities, one comment stated that small overseas
facilities may not be able to submit registrations electronically by 2016 because there might not
be reliable nationwide Internet. The comment also requested that paper registrations remain an
option. In the final rule, we make a number of changes to the requirements related to electronic
submissions. First, we are delaying the electronic submission requirement to January 2020. The
January 2020 date applies to electronic registrations, registration renewals, updates, and
cancellations. In addition, we are also revising § 1.245 of the final rule to provide that a waiver
is available not only from the requirement to submit registrations and registration renewals
electronically, but also from the requirement to submit updates and cancellations electronically
and certain other electronic requirements such as certain e-mail address requirements. In
addition, the preamble to the final rule clarifies that if a waiver has been requested and granted,
the facility is not required to submit future waiver requests each time the facility submits a
renewal or update. Once FDA grants a waiver, we will consider the waiver to be in effect for as
long as the reasons for the waiver remain unchanged and the registration has not been cancelled.
As stated in the PRIA, in 2014 about 2,000 facilities submitted paper registrations. We therefore
estimated that 2,000 facilities would incur about $25,000 in recurring biennial costs requesting
waivers, or $12 per facility that requests a waiver, every two years, for annualized costs of
$7,000 to $10,000 ($3 to $5 per facility) over 20 years using a 7 and 3 percent discount rate. By
Page 23

delaying the electronic submission requirement until January 2020 and by further clarifying that
facilities may need only request a waiver one-time, we revise our cost estimate to a one-time cost
of $26,000, or $12 per facility that requests a waiver. Using a discount rate of 7 and 3 percent
over 20 years, we revise estimated annualized costs of this requirement as $2,000 to $1,500 ($1
per facility).

D. Costs of the Requirement to Update Facility Registrations within 60 Calendar Days

In the PRIA, we estimated incremental costs associated with our proposal to shorten the
time period for updating registrations. Specifically, we proposed to shorten the time period from
the 60 calendar days allowed in the current registration regulation to 30 calendar days. Since we
are not finalizing the proposal to shorten the time period, the final rule will keep the current 60day requirement unchanged. As a result, cost estimates of this final rule no longer include costs
associated with this proposed requirement.

E. Summary of Costs

Total annualized costs of this final rule include revisions to estimated costs for
implementing a VIS. The revised costs also reflect our decision to postpone the requirements for
providing a UFI and for mandatory electronic registration. We further revise our cost estimates
for requesting a waiver as a one-time cost (once a waiver is granted) instead of a recurring cost
every biennial registration cycle. Finally, we no longer include costs associated with the
Page 24

proposed requirement to shorten the time period to update registrations. The changes made in
this final rule will result in a reduction of annualized costs to facilities of about $2.3 to $2.5
million each year using a respective discount rate of 7 and 3 percent.

Table 4 compares total annualized costs (at 3% and 7%) of both the proposed rule (as
revised to include fees in the costs of obtaining a D-U-N-S®) and the final rule.
Table 4.—Comparison of Summary Costs of Proposed and Final Food Facility Registration Rule
($ Millions)
Domestic
Facilities
Proposed
Rule
(Revised)
Final Rule
Difference

Foreign
Facilities

Costs to
FDA

Total

Costs discounted at 3%
Costs discounted at 7%

$
$

1.8
1.9

$
$

5.6
5.1

$
$

1.2
0.9

$
$

8.6
7.8

Costs discounted at 3%
Costs discounted at 7%
Costs discounted at 3%
Costs discounted at 7%

$
$
$
$

1.4
1.4
0.4
0.5

$
$
$
$

3.5
3.3
2.1
1.8

$
$
$
$

1.2
0.9
-

$
$
$
$

6.1
5.6
2.5
2.3

(2015 U.S. dollars)

V. Benefits of the Rule

As stated in the PRIA, we expect that the benefits of the final rule will include aiding
FDA’s ability to deter and limit the effects of foodborne outbreaks and other food-related
emergencies and will help us respond to such emergencies efficiently.

As explained in more depth in the PRIA, we also expect that the rule will allow the
agency to use its inspectional resources more efficiently. The already-effective, FSMA-related
Page 25

provisions in the final rule do much to address the accuracy and reliability concerns with the
food facility registration data. We expect that the new requirements in the final rule will further
enhance the ability of registration renewal to rid the registration database of outdated
registrations and will further increase the accuracy and reliability of the food facility registration
database. One means by which we expect the final rule to accomplish this is through 21 CFR
1.241(b), which specifies that FDA will consider a registration for a food facility to be expired if
the registration is not renewed and cancel a registration that is expired for failure to renew if the
facility has failed to renew its registration in accordance with the renewal requirements. We also
believe the UFI requirement and associated verification process will increase the accuracy of
registrations, as will the process for verifying certain U.S. agent information and registration
submissions not made by the owner, operator, or agent in charge. The database is also likely to
become more accurate and up-to-date as a result of the requirement to immediately update any
previously-submitted incorrect information and the provision that FDA will cancel a registration
if the agency independently verifies that the facility is not required to register, if information
about the facility’s address was not updated in a timely manner, or if the registration was
submitted to the agency by a person not authorized to submit the registration. More accurate and
up-to-date registration information will allow FDA to use the registration database more
effectively and efficiently, including responding to outbreaks and other food-related
emergencies. We also expect that the new facility contact information required in the final rule
will allow us to more efficiently and effectively respond to such emergencies. Further, we
anticipate that the requirement for electronic registration will have additional efficiency benefits,
improving the timeliness and accuracy of submissions and making the transmission of
information easier and more efficient.
Page 26

Although we are unable to quantify these and other benefits, we discuss the expected
benefits qualitatively in more depth in the PRIA.

In addition, we monetize the impact associated with different foodborne outbreak
scenarios in order to determine the amount of savings from illness reduction that would be
required in order for the final rule to reduce costs that result from foodborne illness by
approximately the same amount that the compliance costs the final rule would impose on food
facilities (i.e. a breakeven analysis).

Since the publication of the proposed rule, new studies on the valuation of foodborne
illness and the value of statistical life have published. We revise our break even analysis in the
PRIA to include this new information. We update our analysis with the most current information
available.

For this rule to break even as measured by cost savings from fewer illnesses, the rule
would have to result in about $5 million in savings each year. By breaking even in terms of cost
savings from fewer illnesses, we mean that the rule would reduce costs that result from
foodborne illness by approximately the same amount as the compliance costs the rule would
impose on food facilities. (We anticipate that the rule will have additional benefits such as the
more efficient deployment of FDA inspectional resources, but we do not consider such benefits
in analyzing the narrower question of when the rule would break even in terms of cost savings
from fewer illnesses). We lack sufficient data to determine whether the rule will achieve healthPage 27

related cost savings sufficient to break even with the cost that the rule will impose on food
facilities. But to understand what kind of health savings will be required to achieve that breakeven point, we examine the cost of several foodborne illnesses.

We start by estimating the costs of a single outbreak. To do this, we use the estimated
average number of illnesses per outbreak, using numbers from the Centers for Disease Control
and Prevention (CDC) (Ref.4). We adjust these estimates to account for potential underreporting and underdiagnoses using factors from Scallan, et al, (2011), in which the authors used
data from active and passive surveillance and other sources to estimate the number of foodborne
illness episodes caused by 31 major pathogens in the United States (Ref. 5). This allows us to
account not only for identified illnesses, but also for those illnesses that are never reported or
were missed by health officials. We then multiply the total number of illnesses from a single
outbreak by the individual cost per illness. For the individual cost per illness, we use the amount
identified by Minor, et al (2015) (Ref. 6). We use this estimate because it represents a pathogen
specific estimate of dollar burden a typical case of this particular foodborne illness places on an
individual. Although the authors estimate the costs of various foodborne illnesses, we focus this
analysis on three different pathogens: E. coli (non-O157 STEC), Salmonella spp. (non-typhoid)
and Listeria monocytogenes, and the estimated average cost per illness for those pathogens. We
also revise this cost per illness estimate to reflect a more recent Value of Statistical Life (VSL) of
$9 million, and a higher Quality Adjusted Life Day (QALD) estimate of $1,260, for all

Page 28

pathogens (Ref. 7). Table 5 summarizes the updated average cost per illness based on the
estimated average number of illnesses per outbreak. 4

Table 5.—Estimated Average Illnesses per Foodborne Outbreak and Costs per Outbreak
Associated with three Pathogens
Pathogen

Average
Illnesses/
Outbreak

Salmonella
E. Coli
Listeria

21.09
21.09
21.09

Under
Reporting

1
1
1

Under
Diagnosis

26.1
29.3
2.1

Illnesses/
Outbreak

550
618
44

Cost/ Case

Total Cost/
Outbreak

$6,190
$2,318
$1,620,423

$ 3,406,345
$ 1,432,324
$ 71,749902

(2015 U.S. Dollars)

We estimate the average costs per illness due to Salmonella spp. (non-typhoid) to be
about $6,190 (Ref. 7). Reducing the cost of illness by $6 million (i.e. the lower-end estimate for
compliance costs of this proposed rule) based on this pathogen alone would require reducing the
number of illnesses attributed to Salmonella spp. (non-typhoid) by at least 750 illnesses each
year, which is roughly about 1 outbreak per year. In a similar manner, we estimate the costs of a
case of foodborne illness caused by E. coli non-O157 STEC to be about $2,318 (Ref. 7).
Breaking even with compliance costs for this rule based on reductions in E. coli non-O157 STEC
alone would require reducing the number of cases due to this pathogen by 2,004 illnesses, or by
3 average-sized outbreaks per year. Outbreaks due to the pathogen Listeria monocytogenes
cause, on average, 44 illnesses. The annual cost for each foodborne outbreak from listeriosis is
about $72 million, or $1.6 million per case. For compliance costs to break even based on a
4

The updated values for illnesses are updated from the article in Minor, et al (2015) (Ref. 6) using a QALD= $603
and a VSL of $8.1 Million to a QALD=$1,260 and a VSL of $9 Million from Robinson, et al (Ref.7).

Page 29

reduction in listeriosis alone, the rule would have to reduce about 6 percent of a single listeriosis
outbreak, or about 3 cases per year.

In Table 6, we provide CDC estimates for the number of foodborne outbreaks of E. coli
(non-O157 STEC), Salmonella spp. (non-typhoid) and Listeria monocytogenes for 2014
alongside the number of foodborne outbreaks for each of the three pathogens that would have to
be prevented in order to break even with the costs of this final rule (Ref. 8) due to a reduction in
outbreaks caused by each pathogen alone. For example, in 2014 there were 149 foodborne
outbreaks caused by Salmonella spp. (non-typhoid). Reducing the cost of illness by $5 million
(i.e. the lower-end estimate for compliance costs of this proposed rule) based on this pathogen
alone would require reducing the number of illnesses attributed to Salmonella spp. (non-typhoid)
by at least 750 illnesses each year, which is roughly about 1 outbreak per year of 149 outbreaks.
In a similar manner for E- Coli (non-O157 STEC), the cost of illness reduction in 2014 needed in
order to break even with compliance costs of this rule would be equivalent to 4 out of 24
outbreaks per year, and the CDC estimates that there are 24 outbreaks caused by this pathogen
each year. Finally for Listeria monocytogenes, the costs of illness reduction needed in order to
break even with compliance costs would be about one half of an outbreak per year, or one
outbreak every other year. The CDC estimates that there are 9 outbreaks caused by this
pathogen per year.

Page 30

Table 6. —Foodborne outbreaks required for breaking even with compliance costs
Number of Outbreaks
Percent of 2014
Number of
Needed to be
Outbreaks Needed to be
Outbreaks in
Prevented to Break
Prevented to Break
Pathogen
2014
Even, Annually
even, Annually
Salmonella spp.
E. Coli (non-O157
STEC)
Listeria
monocytogenes

149

1

1%

24

4

15%

9

0.4

4%

VI. Final Regulatory Flexibility Analysis

The Regulatory Flexibility Act requires agencies to analyze regulatory options that would
minimize any significant impact of a rule on small entities. At an average annualized cost per
facility of about $24 and $25 (using a respective 7 and 3 percent discount rate over 20 years), we
believe the costs to all businesses, including small businesses, will be insignificant. Because
average costs per facility are small, we believe that the final rule will not have a significant
economic impact on a substantial number of small entities. However, we have analyzed various
regulatory options to examine the impact on small entities. The following analysis, together with
other relevant sections of this document, serves as the agency’s final regulatory flexibility
analysis under the Regulatory Flexibility Act.

A. Economic Effects on Small Entities

Page 31

The Small Business Regulatory Flexibility Act requires agencies to analyze regulatory
options that would minimize any significant impact of a rule on small entities. Small entities
have fewer resources to devote to regulatory compliance and, therefore, may be more affected by
regulatory compliance costs. This final rule will impact a substantial number of small
businesses, but because costs per facility of this final rule are small, we believe that this final rule
will not have a significant economic impact on a substantial number of small entities. However,
we have analyzed various regulatory options to examine the impact on small entities.

B. Number of Small Entities Affected

The Small Business Administration (SBA) publishes size standards for small businesses.
The SBA defines food manufacturers as “small” according to their number of employees. For
the most part, food manufacturers employing 500 or fewer persons are considered small
businesses. However, there are some particular food manufacturing industry segments where the
employee maximum is higher (750 or 1,000 employees). For purposes of this analysis, FDA has
defined a small business as a business having 500 or fewer employees, consistent with the SBA
definition for most food manufacturers. About an estimated 99.5 percent of all food
manufacturers, warehouses, and wholesalers that are covered by the proposed rule employ 500
employees or less and are therefore considered small businesses for purposes of this analysis
(Table 7). Of the approximately 81,627 domestic facilities affected by this rule, we estimate that
about 99.5 percent (81,228) employ 500 or fewer employees. In a similar manner, we estimate
that 99.5 percent of 114,139 (or 113,581) foreign facilities employ 500 or fewer employees.
Page 32

Table 7.—Number of Registered Facilities and Number of Registered Facilities with 500 or
Fewer Employees
Registered
facilities

Facilities with
500 employees
or less

Domestic Facilities
81,627

81,228

114,139

113,581

195,766

194,810

Foreign Facilities
Total

The number of facilities in Table 7 represents a snapshot in time as of February 2014 of
all active registrations in FDA’s food facility registration database. Because this figure only
captures those facilities that took the step to register with FDA, the number of facilities in the
database could be an underestimate of the number of food facilities that are in fact required to
register. Also, the food industry has traditionally been characterized by substantial entry of small
businesses and also by substantial exit. As a result, over time we can expect the number of
future food facility registrations to vary.

C. Costs to Small Entities

FDA estimates that this final rule will result in total one-time costs to domestic facilities
of approximately $9 million, which is about $116 per facility. Total domestic (one-time and
recurring) annualized costs are about $1.4 million (using a 7 and 3 percent discount rate over 20
years), which translates to about $17 in annualized costs per facility. Total foreign annualized
one-time costs and recurring costs are about $ 3.3 and 3.5 million (7 and 3 percent over 20
Page 33

years), or $29 to $31 in annualized costs per facility. Table 8 shows the total average annualized
costs for both domestic and foreign facilities.

Table 8.—Average One-time and Average Annualized Costs per Facility
One-time Costs
per Facility
Domestic Facilities
Foreign Facilities
Total Facilities

Annualized Costs
per Facility (7%)

Annualized Costs
per Facility (3%)

$
$

116
155

$
$

17
29

$
$

17
31

$

139

$

24

$

25

(2015 U.S. Dollars)

Because such a large percentage of domestic food facilities are small businesses, we
considered options that would lessen the economic effect of the rule on small entities in the Cost
and Benefits Analysis in section I.E of the PRIA analysis of regulatory options. In the PRIA, we
considered the option of taking no new regulatory action (Option 1) as the least burdensome of
all options so that small entities would not incur any new costs (Ref. 1). FDA did not pursue this
option because it is not legally viable. A number of proposed changes to 21 CFR part 1, subpart
H that are included in this rulemaking codify provisions of FSMA that were self-implementing
and became effective upon enactment of FSMA or became effective in October 2012, when FDA
issued a guidance entitled “Guidance for Industry: Necessity of the Use of Food Product
Categories in Food Facility Registrations and Updates to Food Product Categories.”

The next least-costly option identified in the PRIA was Option 3, under which FDA
would codify only the already-effective, self-implementing FSMA provisions of the proposed
rule, and would also implement mandatory electronic registration without the availability of a
Page 34

waiver. Under this option, FDA would not have implemented Congress’s direction in section
102(c) of FSMA to amend the definition of retail food establishment or take any additional steps
to improve the utility of the food facility registration database. FDA did not pursue Option 3
because doing so would have been inconsistent with Congress’s direction in section 102(c) of
FSMA with regards to amending the definition of retail food establishments. In addition, we
believe that the additional requirements in the final rule are important tools for increasing the
accuracy of FDA’s food facility registration database and will improve the agency’s ability to
respond to foodborne outbreaks and other threats. Further, we believe that the final rule will
allow FDA to more efficiently prepare for and conduct inspections.

FDA is finalizing and implementing most of the proposals under Option 4, which is more
costly than Option 3 but less costly than the proposed rule (Option 2). Under this final rule, FDA
has made final most of the requirements in Option 2 of the proposed rule but with the additional
implementation of a U.S. agent Voluntary Identification System (VIS). In addition to
implementing the VIS, we are postponing the requirements to provide a UFI and to make
registration submissions electronically (or otherwise request a waiver). We are also clarifying
that waivers may only need to be sought and obtained a single time. Finally, we are not
finalizing our proposal to shorten time periods for submitting updates from 60 calendar days to
30 calendar days.

As discussed in Option 4 in the PRIA (Ref.1), we estimated that the VIS would save
foreign facilities time and money in connection with U.S. agent communications (about $1

Page 35

million in annualized costs (discounted for 20 years at 7% and 3%). As such, we estimated that
the VIS would lessen the economic effects of the rule on small entities

Another way FDA is reducing the burden on small entities is by postponing the
requirements for providing a UFI and for making registration submissions electronically (or
otherwise requesting a waiver). We provide a detailed discussion for the reasons for these
changes in the preamble to the final rule.

In addition, our clarification that facilities may need to only request a waiver from the
electronic submission requirement once should also reduce the burden of the final rule on small
entities.

Finally, FDA is reducing the burden on small entities by amending the retail food
establishment definition. As we stated in the preliminary regulatory flexibility analysis, we
expected that our proposed amendment, which would have addressed off-farm sales by
establishments located on a farm, would expand the number of establishments that meet that
definition and that would therefore be exempt from the requirements of food facility registration.
However, we were not able to quantify the number of establishments that we anticipated would
be affected by the proposed amendment to the retail food establishment definition. According to
data from USDA ERS, there are about 70,000 farms that only use Direct to Consumer Marketing
(DTC) channels such as farmers markets, road side stands, and Community Supported
Agriculture (CSA’s), all of which the USDA describes as small to medium-sized based on
revenue. We noted that a subset of these 70,000 establishments would probably meet FDA’s
Page 36

proposed definition of a retail food establishment and would be exempt from registration under
the proposal.

The final rule expands on our proposed definition by also addressing direct-to-consumer
sales by establishments not located on farms. Specifically, we are changing the final rule to also
address direct-to-consumer sales by “farm-operated businesses.” By “farm-operated business,”
we mean a business that is managed by one or more farms and that conducts
manufacturing/processing off of the farm(s). As such, the final rule addresses sales by
establishments that are either (1) located on farms, or (2) similar to farms because they are
managed by one or more farms. Under the final rule, both categories of establishments may
consider sales directly to consumers at farmers’ markets, roadside stands, CSAs, and other such
direct-to-consumer platforms in determining their primary function and whether they would meet
the requirements to be considered retail food establishments.

We anticipate that our changes in the final rule will further reduce the burden on small
business because it will further expand the number of establishments that are exempt from the
food facility registration requirements. We expect that many of these establishments are likely
small businesses. We do not have sufficient data on how many establishments will be affected
because we do not have data on how establishments manufacture/process RACs grown,
harvested, raised, packed, or held by a farm under the same management.

In addition, we note that the existing food facility registration regulation has considerable
flexibility for small businesses--flexibility that was built into the food facility registration system
Page 37

by the Bioterrorism Act. In particular, the Bioterrorism Act exempts retail food establishments
and farms from food facility registration requirements. Many retail food establishments and
farms are small entities.

We have concluded that other options, besides the proposed option, that would lessen the
economic effect of the rule on small entities would not be appropriate. For instance, we have
concluded that it would not be legally viable to exempt small entities from the requirements of
the rule. In addition, we have concluded that it would be inconsistent with the Bioterrorism Act
and FSMA to provide small entities with a staggered compliance date. In enacting the
Bioterrorism Act, it appeared that Congress intended for all food facilities to be subject to food
facility registration requirements and the registration deadline established in section 305 of the
Bioterrorism Act. Indeed, although the recordkeeping provision of the Bioterrorism Act directed
FDA to take into account the size of a business when issuing implementing regulations, the
registration provision contained no such language. Accordingly, FDA concluded that it would
be inconsistent with section 305 of the Bioterrorism Act to allow small entities more time to
register (68 FR 5413). In enacting FSMA, Congress included a number of provisions to reduce
the burden on small businesses that are food facilities.

With regards to the rulemaking for preventive controls for human food authorized by
section 103 of FSMA, Congress provided for modifications and exemptions for facilities engaged
only in specific types of on-farm activities that involve foods determined to be low risk (§
103(c)(1)(D) of FSMA). In addition, Congress provided that small businesses would have an
additional six months to comply (§ 103(i) of FSMA) and very small businesses would have an

Page 38

additional 18 months. Further, Congress provided that very small businesses could be deemed
“qualified” and therefore qualify for the exemptions from many of the provisions of the regulations
(§ 418(l)(1)(B)) of the FD&C Act.

The registration provisions of FSMA, however, contain no such provisions. Further,
exempting small entities from the rule or providing them with a staggered compliance date
would thwart many of the key objectives of the rule. Those objectives include providing FDA
with the tools to respond efficiently and effectively to food-related emergencies and plan
efficiently for inspections. To achieve those objectives, FDA requires complete and up-to-date
information about food facilities that manufacture, process, pack or hold food for consumption in
the United States. An exemption for small entities or a staggered compliance date would mean
that FDA’s food facility registration database would be neither complete nor up-to-date.

VII. References

1. FDA. 4-9-2015. Preliminary Regulatory Impact Analysis for the Proposed Rule on
Amendments to Registration of Food Facilities (Docket No. FDA-2002-N-0323)
http://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/U
CM444325.pdf
2. Memorandum to file Subject: D-U-N-S ® and Registered Facilities. July, 9th, 2014 from John
Gardner, MD, MPH Senior Technical Advisor, Medical Informatics, Office of Informatics and
Technology Innovation, Office of Information Management and Technology, Office of
Operations, U.S. Food and Drug Administration.

3. D& B website. http://www.dnb.com/get-a-duns-number.html viewed on 2/19/2014

Page 39

4. Centers for Disease Control (CDC) and Prevention – Tracking and Reporting Foodborne
Disease Outbreaks- http://www.cdc.gov/features/dsfoodborneoutbreaks retrieved on March 12,
2015.

5. Scallan E, Hoekstra RM, Angulo FJ, Tauxe RV, Widdowson M-A, Roy SL, et al. (2011)
“Foodborne illness acquired in the United States—major pathogens” Emerg Infect Dis, Vol. 17,
No. 1.

6. Minor, T., Lasher, A., Klontz, K., Brown, B., Nardinelli, C. and Zorn, D. (2015), The Per
Case and Total Annual Costs of Foodborne Illness in the United States. Risk Analysis. doi:
10.1111/risa.12316

7. Robinson, L.A., and Hammitt, J.K. (2015) “Valuing Reductions in Fatal Illness Risks:
Implications of Recent Research. Health Econ., doi: 10.1002/hec.321.
8. Centers for Disease Control and Prevention (CDC). Surveillance for Foodborne Disease
Outbreaks, United States, 2014, Annual Report. Atlanta, Georgia: US Department of Health and
Human Services, CDC, 2016 - http://www.cdc.gov/foodsafety/pdfs/foodborne-outbreaks-annualreport-2014-508.pdf- retrieved on May 18, 2016

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