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 Cosmetics
“744L. Registration fee
“(a) Assessment and collection
“(1) In general—Beginning in fiscal year 2020, the Food and Drug Administration shall assess and collect an annual fee from every responsible person (referred to in this section as a “registrant”) who owns or operates any facility (as defined in section 604(3)) engaged in manufacturing or processing, or whose name and address appear on the label of a cosmetic product distributed in the United States, except that this subsection shall not apply to contract manufacturers if a responsible person has already paid the appropriate fee with respect to the cosmetic product, to ensure no double fees are paid.
“(2) Payable date—A fee under this section shall be payable during the period of initial registration and on the date of registration each year thereafter as prescribed in section 605(a)(1).
“(b) Definitions—In this section:
“(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 2019.
“(2) Affiliate—The term affiliate means any business entity that has a relationship with a second business entity if, directly or indirectly—
“(A) one business entity controls, or has power to control, the other business entity; or
“(B) a third party controls, or has the power to control, both of the business entities.
“(3) Cosmetic product—The term cosmetic product has the meaning given such term in section 604(2).
“(4) Cosmetic safety activities—The term cosmetic safety activities—
“(A) means activities related to compliance by registrants under section 605 with the requirements of this Act with respect to cosmetics, including—
“(i) administrative activities, such as information technology support, human resources, financial management, the administration and maintenance of the cosmetic registration system and the cosmetic ingredient statement system under section 605, and fee assessment and collection under this section; and
“(ii) implementation and enforcement activities, such as the establishment of good manufacturing practices, the review of adverse event reports, inspection planning and inspections, and use of enforcement tools; and
“(B) includes activities related to implementation of section 607, regarding the review of cosmetic ingredients and non-functional constituents.
“(5) Gross annual sales—The term gross annual sales means the average United States gross annual sales for the previous 3-year period of cosmetics for a registrant, including the sales of all of its affiliates, as reported in the registration under section 605.
“(c) Fee setting and amounts
“(1) In general—Subject to subsection (d), the Food and Drug Administration shall establish the fees to be collected under this section for each fiscal year after fiscal year 2020, based on the methodology described in paragraph (3), and shall publish such fees in a Federal Register notice not later than 60 days before the beginning of each such fiscal year.
“(2) Fee exemption—Any registrant whose gross annual sales of cosmetic products in the 3-year period immediately preceding the fiscal year for which the annual fee will be paid was not more than $10,000,000, shall be exempt from registration fees under this section for that fiscal year.
“(3) Annual fee setting—For fiscal years 2020 through 2025, to generate a total estimated annual revenue amount of $20,600,000, the amount of the registration fee under subsection (a) shall be as follows:
“(A) Tier I–A—For a registrant that has gross annual sales of $5,000,000,000 or more in 2018, $1,350,000.
“(B) Tier I–B—For a registrant that has gross annual sales of at least $4,000,000,000 per annum but less than $5,000,000,000 in 2018, $850,000.
“(C) Tier II–A—For a registrant that has gross annual sales of at least $3,000,000,000 per annum but less than $4,000,000,000 in 2018, $730,000.
“(D) Tier II–B—For a registrant that has gross annual sales of at least $2,000,000,000 per annum but less than $3,000,000,000 in 2018, $610,000.
“(E) Tier III–A—For a registrant that has gross annual sales of at least $1,000,000,000 per annum but less than $2,000,000,000 in 2018, $500,000.
“(F) Tier III–B—For a registrant that has gross annual sales of at least $500,000,000 per annum but less than $1,000,000,000 in 2018, $395,000.
“(G) Tier IV–A—For a registrant that has gross annual sales of at least $200,000,000 per annum but less than $500,000,000 in 2018, $325,000.
“(H) Tier IV–B—For a registrant that has gross annual sales of at least $100,000,000 per annum but less than $200,000,000 in 2018, $275,000.
“(I) Tier V–A—For a registrant that has gross annual sales of at least $80,000,000 per annum but less than $100,000,000 in 2018, $185,000.
“(J) Tier V–B—For a registrant that has gross annual sales of at least $60,000,000 per annum but less than $80,000,000 in 2018, $95,000.
“(K) Tier VI–A—For a registrant that has gross annual sales of at least $40,000,000 per annum but less than $60,000,000 in 2018, $15,000.
“(L) Tier IV–B—For a registrant that has gross annual sales of at least $20,000,000 per annum but less than $40,000,000 in 2018, $12,000.
“(M) Tier VII–A—For a registrant that has gross annual sales of at least $10,000,000 per annum but less than $20,000,000 in 2018, $500.
“(d) Adjustments
“(1) Inflation adjustment
“(A) In general—For fiscal year 2021 and each subsequent fiscal year, the revenues and fee amounts under subsection (c)(3) shall be adjusted by the Food and Drug Administration in the annual Federal Register notice establishing fees in subsection (c)(1), by an amount equal to the sum of—
“(i) one;
“(ii) 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 of the preceding 4 fiscal years for which data are available, multiplied by the average proportion of personnel compensation and benefits costs to total Food and Drug Administration costs for the first 3 years of the preceding 4 fiscal years for which data are available; and
“(iii) the average annual percent change that occurred in the Consumer Price Index for urban consumers (Washington-Baltimore, DC6 MD–VA–WV; not seasonally adjusted; all items less food and energy; annual index) for the first 3 years of the preceding 4 years for which data are available multiplied by the average proportion of all costs other than personnel compensation and benefits costs to total Food and Drug Administration costs for the first 3 years of the preceding 4 fiscal years for which data are available.
“(B) Compounded basis—The adjustment made each fiscal year under this subsection shall be added on a compounded basis to the sum of all adjustments made each fiscal year after fiscal year 2020 under this subsection.
“(2) Final year adjustment—For fiscal year 2025, the Food and Drug Administration 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 2026. If such an adjustment is necessary, the rationale for the increase, shall be contained in the annual Federal Register notice establishing fees, in subsection (c)(1), for fiscal year 2025. 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 subparagraph shall not be made.
“(3) Workload adjustment
“(A) In general—For fiscal year 2021 and each subsequent fiscal year, after fee revenues established in subsection (c)(3) are adjusted for a fiscal year for inflation in accordance with paragraph (1), the fee revenues shall be adjusted further for each fiscal year to reflect changes in the workload of the Food and Drug Administration for actual changes in workload volume due to the process of reviewing cosmetic ingredients or non-functional constituents not listed under section 607(b).
“(B) Determination of adjustment—The adjustment shall be determined by the Food and Drug Administration based on the workload in the most recent 1-year period for which workload data is available. The Food and Drug Administration shall publish in the Federal Register the fee revenues and fees resulting from the adjustment and the supporting methodologies.
“(C) Minimum revenues—The adjustment shall not result in fee revenues for a fiscal year that are less than the sum of the amount under subsection (c)(3), as adjusted for inflation under subparagraph (1).
“(e) Limitations
“(1) In general—With respect to the amount that, under the salaries and expenses account of the Food and Drug Administration, is appropriated for a fiscal year for the cosmetics program in the Center for Food Safety and Applied Nutrition and related field activities, fees may not be assessed under subsection (a) for the fiscal year unless the amount so appropriated for the fiscal year (excluding the amount of fees appropriated for the fiscal year), is equal to or greater than that assessed for fiscal year 2019, multiplied by the adjustment factor applicable to the fiscal year involved.
“(2) Authority—If the Food and Drug Administration 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 Food and Drug Administration may assess such fees, the Food and Drug Administration 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 an Act making appropriations through September 30, 2020, for the salaries and expenses account of the Food and Drug Administration, fees authorized by this section for fiscal year 2020 may be collected and shall be credited to such account to remain available until expended. Fees collected under this subparagraph shall be considered discretionary for purposes of the Balanced Budget and Emergency Deficit Control Act of 1985.
“(D) Reimbursement of start-up amounts—Any amounts allocated to establish programs under section 605, prior to collection of fees, may be reimbursed through any appropriated fees collected under this section, in such manner as the Food and Drug Administration determines appropriate. Any amounts reimbursed under this subparagraph shall be available for the programs and activities for which funds allocated to establish the programs were available, prior to such allocation, until the end of the fiscal year in which the reimbursement occurs, notwithstanding any otherwise applicable limits on amounts for such program or activities for a fiscal year.
“(3) Authorization of appropriations—For each of fiscal years 2020 through 2026, there are authorized to be appropriated for fees under this section $20,600,000, as adjusted by subsection (d).
“(4) Offset of overcollections; recovery of collection shortfalls
“(A) Offset of overcollections—If the sum of the cumulative amount of fees collected under this section for the fiscal years 2020 through 2024 exceeds the cumulative amount appropriated pursuant to paragraph (3) for fiscal years 2020 through 2025, the excess amount shall be credited to the appropriation account of the Food and Drug Administration as provided in paragraph (1), and shall be subtracted from the amount of fees that would otherwise be authorized to be collected under this section pursuant to appropriation Acts for fiscal year 2026.
“(B) Recovery of collection shortfalls
“(i) 2022—For fiscal year 2022, the amount of fees otherwise authorized to be collected under this section shall be increased by the amount, if any, by which the amount collected under this section and appropriated for fiscal year 2020 falls below the amount of fees authorized for fiscal year 2020 under paragraph (3).
“(ii) 2023—For fiscal year 2023, the amount of fees otherwise authorized to be collected under this section shall be increased by the amount, if any, by which the amount collected under this section and appropriated for fiscal year 221 falls below the amount of fees authorized for fiscal year 2021 under paragraph (3).
“(iii) 2024—For fiscal year 2024, the amount of fees otherwise authorized to be collected under this section shall be increased by the amount, if any, by which the amount collected under this section and appropriated for fiscal year 2022 falls below the amount of fees authorized for fiscal year 2022 under paragraph (3).
“(iv) 2025—For fiscal year 2025, the amount of fees otherwise authorized to be collected under this section shall be increased by the amount, if any, by which the amount collected under this section and appropriated for fiscal year 2023 falls below the amount of fees authorized for fiscal year 2023 under paragraph (3).
“(v) 2026—For fiscal year 2026, the amount of fees otherwise authorized to be collected under this section shall be increased by the amount, if any, by which the amount collected under this section and appropriated for fiscal year 2024 falls below the amount of fees authorized for fiscal year 2024 under paragraph (3).
“(g) Effect of failure To pay fees—The Food and Drug Administration shall not consider a registration submitted to be complete until such fee under subsection (a) is paid. Until the fee is paid, the registration is incomplete and the registrant is deemed to have failed to register in accordance with section 605.
“(h) False statements—Any statement or representation made to the Food and Drug Administration shall be subject to section 1001 of title 18, United States Code.
“(i) Collection of unpaid fees—In any case where the Food and Drug Administration 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.
“(j) 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 activities, be reduced to offset the number of officers, employees, and advisory committees so engaged.
“(k) Records—Each facility shall retain all records necessary to demonstrate the facility’s gross annual sales for at least 2 fiscal years after such information is reported in the facility’s registration. Such records shall be made available to the Food and Drug Administration for review and duplication upon request of the Food and Drug Administration.”