Subchapter C of chapter VII of the Federal Food, Drug, and Cosmetic Act (
21 U.S.C. 379f et seq.) is amended by adding at the end the following:
“10 Fees Relating to Cosmetic Products
“744L. Definitions
“For the purposes of this part:
“(1) Adjustment factor—The term adjustment factor applicable to a fiscal year means the Consumer Price Index for all urban consumers (all items; United States city average) for October of the preceding fiscal year divided by such index for October 2018.
“(2) Cosmetic formulation—The term cosmetic formulation has the meaning given to such term in section 604.
“(3) Contract manufacturer—The term contract manufacturer means a cosmetic manufacturer where neither the owner, operator, or agent in charge of such entity nor any affiliate of such owner, operator, or agent in charge sells the cosmetic ingredient, cosmetic formulation, or cosmetic product unless there is a specific contractual agreement in place.
“(4) Cosmetic product—The term cosmetic product has the meaning given to such term in section 604.
“(5) Cosmetic safety activities—The term cosmetic safety activities—
“(A) means activities of the Secretary related to compliance by responsible persons required to register under section 605 with respect to cosmetics, including administrative activities, such as—
“(i) information technology acquisition, management, maintenance, and support;
“(ii) the acquisition, administration, and maintenance of the cosmetic registration system under section 605 and the cosmetic ingredient statement system under section 606;
“(iii) fee assessment and collection under this part; and
“(iv) the acquisition, leasing, maintenance, renovation, and repair of facilities, fixtures, furniture, scientific equipment, and other necessary materials and supplies for purposes of clauses (i) through (iii);
“(B) includes activities of the Secretary related to implementation of section 608, regarding the review of cosmetic ingredients and nonfunctional constituents;
“(C) includes activities of the Secretary related to implementation of section 606;
“(D) includes activities of the Secretary related to implementation and enforcement, such as the establishment of good manufacturing practices, the review of adverse event reports, inspection planning and inspections, and use of enforcement tools; and
“(E) includes activities of the Secretary related to meetings with regulated industry regarding determinations under section 608.
“(6) Gross annual sales—The term gross annual sales means the average United States gross annual sales for the previous 3 fiscal years of cosmetic products for a responsible person, including the sales of cosmetic products of all of its affiliates, as reported in the registration under section 605.
“(7) Large manufacturer—The term large manufacturer means any entity that manufactures cosmetic products or cosmetic formulations for sale or distribution in the United States and has gross annual sales of over $500,000,000.
“(8) Midsize manufacturer—The term midsize manufacturer means any entity that manufactures cosmetic products or cosmetic formulations for sale or distribution in the United States and has gross annual sales that are not more than $500,000,000 and over $30,000,000.
“(9) Small manufacturer—The term small manufacturer means any entity that manufactures cosmetic products or cosmetic formulations for sale or distribution in the United States and has gross annual sales that are not more than $30,000,000 and over $1,000,000.
“(10) Responsible person—The term responsible person means the owner, operator, agent in charge, or affiliate that owns the brand under which a cosmetic product is sold.
“744M. Registration fee
“(a) Assessment and collection
“(1) In general—Beginning in fiscal year 2020, the Secretary shall in accordance with this section assess and collect an annual fee from every responsible person that manufactures or distributes cosmetic products or cosmetic formulations in the United States.
“(2) Payable date—Fees under this section shall be due and payable—
“(A) for fiscal year 2020, with respect to responsible persons as described in paragraph (1) for such first program year, on the date that is 180 days after the identification in subsection (b); and
“(B) for fiscal year 2021 and each subsequent fiscal year, on the later of—
“(i) the date of registration or registration renewal, as applicable, under section 605; or
“(ii) the date of enactment of an appropriations Act providing for the collection and obligation of fees under this section for the fiscal year involved.
“(b) One-Time identification of responsible persons for purposes of apportioning fees
“(1) Required identification of responsible persons—Not later than 120 days after enactment of the Cosmetic Safety Enhancement Act of 2019, each responsible person that markets or sells a cosmetic product shall submit to the Secretary the information required under this subsection.
“(2) Information required to be submitted—At a minimum, the submission required by paragraph (1) shall include for each such responsible person—
“(A) the gross annual sales of cosmetic products or cosmetic formulations for the previous 3 fiscal years as will be reported in the first registration under section 605 for such responsible person, and an assessment of whether such responsible person qualifies as a small, midsize, or large manufacturer for the purposes of subsection (c)(3)(A);
“(B) identification of facilities where such responsible person’s cosmetic products or cosmetic formulations are manufactured, which cosmetic products or cosmetic formulations are manufactured there, and any other products regulated under this Act that the facility manufactures;
“(C) the location of all such facilities identified in subparagraph (B); and
“(D) whether the facility is owned and operated by a contract manufacturer.
“(3) Notice—The Secretary may, by notice published in the Federal Register, specify the means and format for submission of the information under paragraph (2) and may specify, as necessary for purposes of this section, any additional information relevant to setting the annual fee under this section to be submitted.
“(c) Fee setting and amounts
“(1) In general—Subject to subsection (d), the Secretary shall establish the fees to be collected under this section for each fiscal year beginning in fiscal year 2020, based on the methodology described in paragraph (3)(A), and shall publish such fees in each fiscal year after fiscal year 2020 in a Federal Register notice not later than 60 days before the beginning of each such fiscal year. For fiscal year 2020, the Secretary shall publish the fees 150 days after the date of enactment of the Cosmetic Safety Enhancement Act of 2019.
“(2) Fee exemption—Any facility required to register under section 605 whose average gross annual sales of cosmetic products in the 3 fiscal years immediately preceding the fiscal year for which the annual fee will be paid was not more than $1,000,000, shall be exempt from registration fees under this section for that fiscal year.
“(3) Annual fee setting
“(A) Fee setting—For fiscal years 2020 to 2027, the amount of the registration fee under subsection (a) shall be apportioned as follows:
“(i) Seventy percent shall be derived from fees from large manufacturers.
“(ii) Twenty percent shall be derived from fees from midsize manufacturers.
“(iii) Ten percent shall be derived from fees from small manufacturers.
“(B) Total revenue—The Secretary shall establish the fee amounts for each fiscal year in accordance with subparagraph (A), in order to generate a total estimated revenue of—
“(i) $10,000,000 for fiscal year 2020;
“(ii) $20,000,000 for fiscal year 2021;
“(iii) $35,000,000 for fiscal year 2022; and
“(iv) $46,000,000 for each of fiscal years 2023 through 2027.
“(d) Adjustments
“(1) Inflation adjustments
“(A) Adjustment to total revenue amounts—For fiscal year 2020 and each subsequent fiscal year, the Secretary shall adjust the total revenue amount specified in subsection (c)(3) for such fiscal year by multiplying such amount by the applicable inflation adjustment under subparagraph (B) for such year.
“(B) Applicable inflation adjustment—The applicable inflation adjustment for fiscal year 2022 and each subsequent fiscal year is the product of—
“(i) the base inflation adjustment under subparagraph (C) for such fiscal year; and
“(ii) the product of the base inflation adjustment under subparagraph (C) for each of the fiscal years preceding such fiscal year, beginning with fiscal year 2020.
“(C) Base inflation adjustment
“(i) In general—Subject to further adjustment under clause (ii), the base inflation adjustment for a fiscal year is the sum of one plus—
“(I) the average annual percent change in the cost, per full-time equivalent position of the Food and Drug Administration, of all personnel compensation and benefits paid with respect to such positions for the first 3 fiscal years of the preceding 4 fiscal years, multiplied by 0.60; and
“(II) the average annual percent change that occurred in the Consumer Price Index for urban consumers (Washington-Arlington-Alexandria; Not Seasonally Adjusted; All items; Annual Index) for the first 3 fiscal years of the preceding 4 years of available data multiplied by 0.40.
“(ii) Limitations—For purposes of subparagraph (B), if the base inflation adjustment for a fiscal year under clause (i)—
“(I) is less than 1, such adjustment shall be considered to be equal to 1; or
“(II) is greater than 1.04, such adjustment shall be considered to be equal to 1.04.
“(2) Final year adjustment—For fiscal year 2027, the Secretary may, in addition to adjustments under paragraph (1), further increase the fee revenues and fees established in subsection (c) if such an adjustment is necessary to provide for not more than 3 months of operating reserves of carryover fees for cosmetic safety activities for the first 3 months of fiscal year 2028. If such an adjustment is necessary, the rationale for the increase shall be contained in the annual Federal Register notice establishing fees for fiscal year 2027. If the Food and Drug Administration has carryover balances for such activities in excess of 3 months of such operating reserves, the adjustment under this paragraph shall not be made.
“(e) Limitations
“(1) In general—With respect to the amount that is appropriated for a fiscal year for the cosmetics program of the Center for Food Safety and Applied Nutrition of the Food and Drug Administration and related field activities, fees may not be assessed under subsection (a) for the fiscal year unless the amount so appropriated (excluding the amount of fees appropriated for the fiscal year), is equal to or greater than the amount that is appropriated for such program for fiscal year 2019, multiplied by the adjustment factor applicable to the fiscal year involved. If the amount so appropriated prevents the Secretary from assessing fees under subsection (a), the Secretary is not required to carry out any activities described in section 608 during that fiscal year.
“(2) Authority—If the Secretary does not assess fees under subsection (a) during any portion of a fiscal year because of paragraph (1) and if at a later date in such fiscal year the Secretary may assess such fees, the Secretary may assess and collect such fees, without any modification in the rate, for registration under section 605 at any time in such fiscal year.
“(f) Crediting and availability of fees
“(1) In general—Fees authorized under subsection (a) shall be collected and available for obligation only to the extent and in the amount provided in advance in appropriations Acts. Such fees are authorized to remain available until expended. Such sums as may be necessary may be transferred from the Food and Drug Administration salaries and expenses appropriation account without fiscal year limitation to such appropriation account for salaries and expenses with such fiscal year limitation. The sums transferred shall be available solely for cosmetic safety activities.
“(2) Collections and appropriations Acts
“(A) In general—Subject to subparagraphs (C) and (D), the fees authorized by this section shall be collected and available in each fiscal year in an amount not to exceed the amount specified in appropriation Acts, or otherwise made available for obligation, for such fiscal year.
“(B) Use of fees and limitation—The fees authorized by this section shall be collected and available only to defray the costs of cosmetic safety activities.
“(C) Fee collections during first program year—Until the date of enactment of discretionary appropriations through September 30, 2020, for the “Food and Drug Administration—Salaries and Expenses” account, fees authorized by this section for fiscal year 2020 may be collected, and any fees so collected shall be credited to such account, to remain available until expended.
“(D) Startup costs—Until one year after the Secretary begins collecting user fees under subsection (a), any amounts available for the Center for Food Safety and Applied Nutrition and related field activities (excluding user fees) shall be available and allocated as needed to pay the costs of any cosmetic safety activities not authorized before enactment of the Cosmetic Safety Enhancement Act of 2019.
“(E) Reimbursement of startup amounts
“(i) In general—Any amounts allocated for the startup period pursuant to subparagraph (D) shall be reimbursed through any appropriated fees collected under subsection (a), in such manner as the Secretary determines appropriate to ensure that such allocation results in no net change in the total amount of funds otherwise available, for a period not to exceed two years after the Secretary begins collecting user fees under subsection (a), for the Center for Food Safety and Applied Nutrition and related field activities (other than cosmetic safety activities and related field activities funded through such allocation) for such period.
“(ii) Treatment of reimbursed amounts—Amounts reimbursed under clause (i) shall be available for the programs and activities for which funds allocated for the startup period were available, prior to such allocation, until 1 year after the Secretary begins collecting user fees under subsection (a), notwithstanding any otherwise applicable limits on amounts for such programs or activities for a fiscal year.
“(3) Authorization of appropriations—There are authorized to be appropriated for fees under this section the following:
“(A) $10,000,000 for fiscal year 2020;
“(B) $20,000,000 for fiscal year 2021;
“(C) $35,000,000 for fiscal year 2022; and
“(D) $46,000,000 for each of fiscal years 2023 through 2027.
“(g) Effect of failure To pay fees—The Secretary shall not consider a registration by a responsible person submitted under section 605 to be complete until all fees owed by such person under subsection (a) are paid. Until the fees are paid, the registration is incomplete and the responsible person is deemed to have failed to register in accordance with section 605.
“(h) Collection of unpaid fees—In any case where the Secretary does not receive payment of a fee assessed under subsection (a), such fee shall be treated as a claim of the United States Government subject to subchapter II of chapter 37 of title 31, United States Code.
“(i) Construction—This section may not be construed to require that the number of full-time equivalent positions in the Department of Health and Human Services, for officers, employees, and advisory committees not engaged in cosmetic safety activities, be reduced to offset the number of officers, employees, and advisory committees so engaged.
“(j) Records—Each responsible person that is required to register under section 605 shall retain all records necessary to demonstrate gross annual sales for at least 2 fiscal years after such information is reported in its registration. Such records shall be made available to the Secretary for review and duplication upon request of the Secretary.
“(k) Limitation—This part does not authorize the assessment or collection of a fee for registration under section 605 occurring after fiscal year 2027.”