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Proposed regulation would increase processor fees

Jacob Mulliken


 Kentucky Commissioner of Agriculture Ryan Quarles is questioning the timing of a regulation that would see a “dramatic” increase in permitting fees for small- and large-scale food producers in Kentucky proposed by Gov. Andy Beshear’s administration.

 The proposal, 902 KAR 45:180, falls under the recommendation of the Cabinet for Health and Family Services and would affect permits and fees for food manufacturing plants, food storage warehouses, salvage processors and distributors, cosmetic manufacturers and certificates of free sale.

 Traditionally, the licensing fees for these processors have been based on square feet, but the proposed regulation would shift that structure to a three-tiered “risk-based” one that would tack on food storage houses, like grain elevators, which has not been the case in the past.

 In all, 536 companies statewide would be impacted by the proposed regulation and while some of the bigger companies, like Owensboro Grain, will weather the storm, smaller boutique processors and farmers could see their fees go up as much 2,000%, said Quarles.

 Owensboro Grain declined to comment for this article.

 “The Beshear administration has proposed a dramatic increase of fees in this sector,” Quarles said. “We find this extremely concerning because it would impact a lot of our smaller Kentucky Proud vendors that may not be able in such uncertain times to be able to pay the process fee. It could potentially affect hundreds of small businesses across the state at the worse time possible as some begin to reopen and many struggle to remain open. I believe that these fees need to be re-evaluated and we ask that they work with us and our Kentucky Proud members to come up with a better solution.”

 Risk Level 1 would impact plants engaged in international, statewide or regional distribution of time/temperature controlled, processed ready-to-eat specialized products and would see an increase to $2,400.

 Risk Level 2 would impact plants that process food products that are ready-to-eat or potentially hazardous, but not both, and would see an increase to $1,350.

 Risk Level 3 would impact grain elevators, milling and malting plants, coffee and tea plants, as well as food warehouses. These industries would see a proposed increase to $750.

 On the state level, the proposed regulation is meant to bring Kentucky in line with regulations from the Federal Food and Drug Administration, said Susan Dunlap, Cabinet for Health and Family Services executive director of the office of public affairs.

 “This is an effort to bring Kentucky in line with regulations from the federal Food and Drug Administration and the public health transformation legislation passed by the last General Assembly,” she said. “The inspections help ensure the food is safe for Kentuckians, which helps both our consumers and businesses. These proposed fee changes would help pay for the cost of providing these services to private businesses and, for manufacturers, be based on the risk level with those inspected less paying lower fees. No final decision has been made.”

 For those companies that will be impacted, the proposed regulation is still in the public hearing and comment period.

 A meeting is tentatively scheduled for 8 a.m. CST Aug. 24, 2020, in suites A & B of the Health Services Building, First Floor, 275 E. Main St. in Frankfort. Individuals interested in attending this hearing need to notify the agency in writing by Aug. 17 of their intent to attend.

 For more information, contact Donna Little, Deputy Executive Director, Office of Legislative and Regulatory Affairs, 275 East Main Street 5 W-A, Frankfort, KY 40621; phone 502-564-6746; fax 502-564-7091; email