Cooperative Inspection Programs: Interstate Shipment of Meat and Poultry Products

DEPARTMENT OF AGRICULTURE

Food Safety and Inspection Service

9 CFR Parts 321, 332, and 381

[Docket No. FSIS-2008-0039]

RIN 0583-AD37

Cooperative Inspection Programs: Interstate Shipment of Meat and Poultry Products

AGENCY:

Food Safety and Inspection Service, USDA.

ACTION:

Final rule.

SUMMARY:

The Food Safety and Inspection Service (FSIS) is amending the Federal meat and poultry products inspection regulations to establish a new voluntary cooperative program under which State-inspected establishments with 25 or fewer employees will be eligible to ship meat and poultry products in interstate commerce. In participating States, State-inspected establishments selected to take part in this program will be required to comply with all Federal standards under the Federal Meat Inspection Act (FMIA) and the Poultry Products Inspection Act (PPIA). These establishments will receive inspection services from State inspection personnel that have been trained in the enforcement of the FMIA and PPIA. Meat and poultry products produced under the program that have been inspected and passed by designated State personnel will bear an official Federal mark of inspection and will be permitted to be distributed in interstate commerce. FSIS will provide oversight and enforcement of the program.

DATES:

Effective Date:

July 1, 2011.

FOR FURTHER INFORMATION CONTACT:

Daniel Engeljohn, Assistant Administrator, Office of Policy and Program Development, Room 350-E, Jamie L. Whitten Building, 1400 Independence Avenue, SW., Washington, DC 20250; Telephone (202) 720-2709, Fax (202) 720-2025.

SUPPLEMENTARY INFORMATION:

I. Background

The Federal Meat Inspection Act (FMIA) (21 U.S.C. 601,

et seq.

) and the Poultry Products Inspection Act (PPIA) (21 U.S.C. 451,

et seq.

) (“the Acts”) require that FSIS protect the public by ensuring that meat and poultry products are safe, wholesome, and accurately labeled. The Acts require Federal inspection and provide for Federal regulation of meat and poultry products prepared for distribution in commerce for use as human food.

Cooperative State inspection programs.

Section 661 of the FMIA and 454 of the PPIA authorize FSIS to cooperate with State agencies in developing and administering their own meat or poultry products inspection programs for the inspection and regulation of products that are produced and sold solely within the State (21 U.S.C. 661 & 454). These cooperative State inspection programs are required to operate in a manner and with authorities “at least equal to,” but not necessarily identical to, the provisions set out in the FMIA and PPIA (21 U.S.C. 661 (a)(1) & 454 (a)(1)). The “at least equal to” standard is a concept that requires that State MPI Programs operate in a manner that is at least as effective as those standards adopted for the Federal inspection program. The Acts provide for FSIS to contribute up to 50 percent of the cost of the cooperative State inspection programs, as long as the State programs are effectively enforcing requirements that are “at least equal to” the Federal program (21 U.S.C. 661 (a)(3) & 454 (a)(3)).

Section 11015 of Title XI of The Food, Conservation, and Energy Act of 2008 (“the 2008 Farm Bill”), enacted on June 18, 2008, amended the Acts to establish a new cooperative inspection program under which certain State-inspected establishments will be eligible to ship meat and poultry products in interstate commerce (Pub. L. 110-246, 112 Stat. 1651; 21 U.S.C. 683 and 472). The amendments to the Acts provide that the Secretary of Agriculture (FSIS by delegation), “in coordination with the appropriate State agency of the State in which the establishment is located,” may select State-inspected establishments with 25 or fewer employees to ship meat and poultry products in interstate commerce (21 U.S.C. 683 (b) and 472(b)). Inspection services for these establishments must be provided by State inspection personnel that have “undergone all necessary inspection training and certification to assist the Secretary with the administration and enforcement of [the Acts]” (21 U.S.C. 683(a)(2) and 472(a)(2)). Meat and poultry products inspected and passed by the State inspection personnel would bear a “Federal mark, stamp, tag, or label of inspection” and would be permitted to be shipped in interstate commerce (21 U.S.C. 683(b)(1) and 472(b)(1)).

The law provides for the Secretary to “designate an employee of the Federal government” to “provide oversight and enforcement” of the program (21 U.S.C. 683(d)(1) and 472 (d)(1)). If the Federal employee finds that an establishment selected for the program is in violation of the Acts, he or she is required to “deselect the selected establishment or suspend inspection at the selected establishment” (21 U.S.C. 683(d)(3)(c) and 472(d)(3)(c)). The law requires that any selected establishment that FSIS “determines to be in violation of any requirement of the Act, be transitioned to be a Federal establishment” (21 U.S.C. 683(h) and 472(g)).

The law provides that FSIS is to reimburse a State for costs related to the inspection of establishments in the State selected for the program “in an amount of not less than 60 percent of eligible State costs” (21 U.S.C. 683(c) and 472(c)). The law also states that FSIS “may provide grants to appropriate State agencies to assist the appropriate State agencies in helping establishments covered by this Act to transition to selected establishments” (21 U.S.C. 683(g) and 472(f)). The law is to take effect “on the date on which the Secretary, after providing a period of public comment (including through the conduct of public meetings or hearings), promulgates final regulations to carry out [section 11015]” (21 U.S.C. 683 (j)(1) and 472((i)(1)).

Proposed rule.

On September 16, 2009, FSIS published proposed regulations to implement the new cooperative interstate shipment program (“

Cooperative Inspection Programs: Interstate Shipment of Meat and Poultry Products,”

74 FR 47648).

FSIS held two public meetings by teleconference on October 27, 2009, and November 4, 2009, to solicit comments on the proposed regulations (74 FR 54493). The comment period for the proposed rule was scheduled to close on November 16, 2009, but, in response to comments, was extended to December 16, 2009.

In developing this final rule, FSIS considered all comments submitted in response to the September 2009 proposed rule, as well as those provided at the two teleconferences held in October and November 2009. Based on its analysis of the issues, and on information provided by the comments, FSIS made certain changes to the proposed regulations. Those changes are summarized below and are discussed in detail in the Agency's responses to comments.

For a more detailed discussion of section 11015 of the 2008 Farm Bill and FSIS's proposed implementing regulations, refer to the September 16, 2009, proposed rule.

II. Summary of Amendments to the Proposed Rule To Implement the Cooperative Interstate Shipment Program

In this rulemaking, FSIS is finalizing, with some changes, the provisions in the September 2009 proposed rule. Specifically, the Agency is amending the proposal to:

• Revise the standards for determining an establishment's average number of employees for purposes of the cooperative interstate shipment program to exclude employees whose duties do not involve handling the meat or poultry products produced by the establishment (9 CFR 332.3(b)(1) and (2) and 9 CFR 318.513(b)(1) and (2));

• Revise the standards for determining the average number of employees for purposes of the cooperative interstate shipment program to include uncompensated volunteers who are involved in handling the meat or poultry products produced by the establishment (9 CFR 332.3(b)(6) and 381.515(b)(6));

• Allow States that have existing cooperative agreements for a State MPI program to submit a request to enter into an agreement with FSIS for a cooperative interstate shipment program before the States have identified establishments to recommend for the cooperative interstate shipment program (9 CFR 332.4(b)(1) and 381.514(b)(1));

• Identify factors that will be considered to determine the frequency with which the FSIS selected establishment coordinator (SEC) will visit selected establishments under his or her jurisdiction (9 CFR 332.7(a) and 381.517(a));

• Give establishments that were deselected from the cooperative interstate shipment program because they are located in a State whose agreement for the program was terminated the option to either revert back to operating under the cooperative State MPI program or obtain a Federal grant of inspection (9 CFR 332.11(a) and 381.521(a));

• Allow establishments that were deselected from the cooperative interstate shipment and successfully transitioned to become Federal establishments to revert back to the State MPI program after successfully operating as a Federal establishment for a year (9 CFR 332.11(b) and 381.521(b));

• Allow establishments selected to participate in the cooperative interstate shipment program to operate under both the State MPI program for the State where the establishment is located and the new cooperative interstate shipment program. State-inspected establishments that operate under both programs must maintain an appropriate separation of time or space between operations (9 CFR 332.13 and 381.523);

• Allow selected establishments that are in full compliance with the requirements of the cooperative interstate shipment program to voluntarily end their participation in the program and revert back to the State MPI program (9 CFR 332.14 and 381.514);

• Codify the definition of “eligible State costs” to include those costs that a State has justified and FSIS has approved as necessary for the State to provide inspection services to selected establishments in the State (9 CFR 321.3(b) and 381.187(b)).

III. Comments and Responses

FSIS received approximately 90 separate comment letters in response to the September 2009 proposed regulations and approximately 5000 identical comment letters submitted by a consumer advocacy organization on behalf of private citizens. Comments submitted by consumer advocacy organizations, private citizens, State farm bureaus, trade associations representing meat processors, and a labor union representing food and commercial workers expressed general support for the proposed regulations. Comments submitted by an association of State meat and food inspection directors, an association of State Departments of Agriculture, several State Departments of Agriculture and other State agencies, farm and agriculture advocacy organizations, Congress members providing comments on behalf of the State of Wisconsin, and private citizens expressed support for the concept of a cooperative interstate shipment program but objected to several provisions in FSIS's proposed implementing regulations. Other comments submitted by FSIS inspection personnel, small federally-inspected establishments, and one consumer advocacy organization opposed any program that would permit State-inspected meat and poultry products in interstate commerce.

Following is a discussion of these comments and FSIS's responses.

A. Development of the proposed rule

Comment:

Several comments criticized FSIS for not consulting with State officials during the development of the proposed regulations. The comments stated that several States and organizations of State officials had offered to form an advisory committee to assist FSIS in developing the proposed regulations to implement the cooperative interstate shipment program. As noted by the comments, FSIS determined that such a request was not practical due to the regulatory constraints and the statutory time-line for implementing this program. The comments encouraged FSIS to work closely with State inspection officials to develop final regulations to make the program as workable as possible. One comment said that creating an environment where state regulators and federal regulators work together consistently will provide the stability the program needs to be successful for all involved.

Some comments suggested that FSIS use this rulemaking as an opportunity to encourage more State involvement in addressing the nation's food safety problem. The comments encouraged FSIS to accord considerable weight to comments submitted by States with exemplary food safety inspection histories and State-inspected establishments that likewise have exemplary histories when the Agency finalizes the proposed rule.

Response:

FSIS appreciates the States' willingness to participate in the development and implementation of the new cooperative interstate shipment program. In developing this final rule, FSIS carefully considered the comments and suggestions submitted by the States and, as a result, the Agency made certain revisions to the proposed regulations. FSIS will work closely with the States as the Agency moves forward to implement the cooperative interstate shipment program established in this final rule.

Comment:

A few comments stated that the teleconference format for the two public meetings that were held in October and November of 2009 was not an appropriate way to generate comments on the proposed cooperative interstate shipment program. One comment noted that there were few comments presented during the teleconferences, which the commenter believed may be related to the format of the public meeting. One comment said that both teleconferences occurred on the same dates and times when FSIS was offering webinars for small and very small plant operators, which presented a conflict for those interested in participating in both meetings. Another comment complained that, although the commenter had registered for the teleconference and has a confirmation passcode to participate, the commenter was not allowed to speak during the meeting.

Response:

FSIS chose the teleconference format for the public meetings to provide individuals with

easier access to the meeting, particularly those who may lack the resources or time to attend a meeting in person. FSIS will consider the comments submitted on this issue to determine how it can improve its use of the teleconference format to conduct public meetings in the future.

B. General Support for and General Opposition to the Proposed Rule

1. Support for the Proposed Regulations

Comment:

Comments submitted by consumer advocacy organizations, private citizens, State farm bureaus, trade associations representing meat processors, and a labor union representing food and commercial workers expressed general support for FSIS's proposed regulations to implement the cooperative interstate shipment program. Some of these comments said that the language in Section 11015 of the 2008 Farm Bill reflects an agreement reached through negotiations between various national consumer organizations, the National Association of State Departments of Agriculture, the National Farmers Union, the American Federation of Government Employees, and the United Food and Commercial Workers Union. According to these comments, the language in section 11015 was carefully crafted to meet the desire of some State-inspected meat plants to enlarge their area of sales while assuring that all meat and poultry sold across state lines meet federal inspection standards. The comments commended FSIS for writing proposed regulations that closely adhere to both the intent and specific language of the legislation.

One comment noted that the program established in the proposed regulations builds on existing State inspection programs and includes important enhancements that can lead to stronger State inspection programs. The comment approved of the fact that, like the statute, the proposed regulations would not permit “regulatory forum shopping.”

Response:

FSIS agrees that the proposed regulations are consistent with both the intent and language of the enabling legislation. The Agency also agrees that the program established in the proposed regulations will complement the existing State inspection programs.

2. Support Interstate Shipment but not the Program Proposed by FSIS

Comment:

Comments submitted by an organization of State Agriculture Departments, an organization of State meat inspection program Directors, several State Departments of Agriculture, State agencies, farm and agriculture advocacy organizations, and private citizens expressed support for the concept of a cooperative interstate shipment program but had concerns about FSIS's proposed regulations to implement the program. Many of these comments stated that, instead of allowing for the interstate shipment of state inspected products, FSIS's proposed regulations essentially set up another Federal inspection system under more stringent and inflexible provisions than the current Federal system. According to the comments, FSIS's proposed program fails to remove unnecessary barriers for small establishments to sell their specialty products across State lines. The comments asserted that the proposed regulations will create a regulatory system that is too burdensome for either establishments or State inspection programs, which likely means that few will take advantage of the program.

To support these assertions, the comments noted that, when FSIS issued the proposed rule, the Agency estimated that approximately 60% (16 of 27) of the States with existing State MPI programs and approximately 200-600 establishments were interested in participating in the new cooperative interstate shipment program. The comments stated that after FSIS issued the proposed rule, an internal poll conducted by an organization of State official indicates that only 2 of these 27 States, each with only a handful of establishments, now find the cooperative interstate shipment proposed by FSIS to be even potentially viable. According to the comments, without a drastic revision of the proposed regulations and active FSIS participation in cooperation with the State partners, the program is unlikely to succeed.

Response:

After careful consideration of all comments submitted in response to the 2009 proposed rule, FSIS modified the proposed regulations to provide some added flexibility for establishments selected to participate in the cooperative interstate shipment program. For example, under this final rule, selected establishments that are in full compliance with the program will be permitted to voluntarily end their participation in the program. This final rule will also permit selected establishments to operate under both the cooperative interstate shipment program and the State's MPI program if they maintain an appropriate separation of time or space between operations. The Agency believes that these modifications, which are discussed in more detail in the Agency's response to comments, will provide additional incentive for some establishments to participate in the program.

3. Oppose any Program That Would Allow Interstate Shipment of State-Inspected Product

Comment:

Comments submitted by FSIS inspection personnel, small federally-inspected meat and poultry processing establishments, and a consumer advocacy organization objected to any program that would permit state-inspected meat and poultry products to be shipped in interstate commerce. According to many of these comments, meat and poultry products produced in State-inspected establishments do not undergo the same level of inspection as products produced in Federal-inspected facilities, and many State MPI programs are not truly “at least equal to” the Federal inspection program. A few comments referenced a 2006 Office of Inspector General Audit Report of State-inspected meat and poultry programs that the comments said found that some State-inspected facilities had failed to operate in a sanitary manner and that FSIS had not provided consistent oversight of existing State MPI programs.

Response:

As required by law, the cooperative interstate shipment program established under this final rule will operate under the same standards imposed under the Federal inspection program. Thus, meat and poultry products produced in State-inspected establishments selected for the cooperative interstate shipment program will undergo the same level of inspection as products produced in federally-inspected facilities.

With respect to the comment that many State MPI programs are not truly “equal to” the Federal inspection program, each year the FSIS OPEER Federal State Audit Branch reviews the State cooperative MPI programs and their requirements to verify that each State program “at least equal to” the Federal program. These comprehensive reviews consist of an annual review of the State MPI program's self assessment submission and an on-site review to verify the State's self-assessment submission. The onsite reviews are scheduled at a minimum, once every three years.

Based on the self assessment documents received during FY 2009, FSIS determined that all of the 27 State MPI programs provided adequate documentation to support that they have implemented and can maintain MPI programs “at least equal to” the Federal program. FSIS determined that

all of the 11 State MPI programs reviewed on-site were enforcing requirements “at least equal to” those imposed under the Federal Acts.

In its 2006 audit of the FSIS's cooperative State MPI programs, the OIG provided recommendations to strengthen FSIS's review of these programs. FSIS provided management decisions in response to the 2006 OIG audit recommendations, which were accepted by OIG. The Agency has implemented the 2006 management decisions.

Comment:

One comment stated that State-inspected establishments should not be allowed to ship products interstate because the States do not have the money or staff to provide the inspection that the Federal government does. Another comment maintained that Federal inspectors undergo more extensive training than State inspection personnel and, therefore, unlike State inspectors, are continuously expanding their knowledge bases.

Response:

As discussed in greater detail below, to qualify for the cooperative interstate shipment program, States with cooperative State MPI programs will need to demonstrate that they have staffing sufficient to conduct the same inspection activities in establishments operating under the cooperative interstate shipment program that FSIS conducts in official Federal establishments. The States will also need to demonstrate that the designated State personnel have been properly trained in Federal inspection methodology. FSIS will not enter into an agreement for a cooperative interstate shipment program with States that are unable to meet these conditions.

Comment:

One comment submitted by a consumer advocacy organization said that while the commenter does not support State-inspected meat and poultry for either intrastate or interstate commerce, it understands that Congress amended the FMIA and PPIA to establish the cooperative interstate shipment program, and that FSIS is required to develop regulations to implement the law. The comment urged the Agency to put into place a system whereby establishments that participate in the program are held to the identical Federal standards and practices as those establishments under Federal inspection and that the Agency maintain strict oversight of such a program.

Response:

The cooperative interstate shipment program established in these final regulations will be a State inspection program under which designated State-personnel enforce Federal food safety standards. As required by law, FSIS will provide oversight and enforcement of the program.

Comment:

Several comments submitted by FSIS inspection personnel and small federally-inspected meat and poultry processors maintained that instead of establishing cooperative interstate shipment program, FSIS should require that State-inspected establishments that desire to ship their meat and poultry products in interstate commerce come under Federal inspection.

One comment submitted by a small federally-inspected establishment explained that as a small company, it decided to obtain a Federal grant of inspection as an investment for the future of its business. The comment noted that the establishment did this to allow for interstate sales of its products and that the same option is available today for any company willing to make a similar investment. The comment asserted that to provide for a level playing field, all small companies that want to sell their products across state lines should be required to go through the same process and obtain a Federal grant of inspection.

Response:

Section 11015 of the 2008 Farm Bill amended the FMIA and PPIA to establish the cooperative interstate shipment program. The amendments require that FSIS issue final regulations to implement the new program. Once the new program becomes effective, small State-inspected establishments that are interested in selling meat or poultry products across State lines will have the option to operate as a selected establishment under the cooperative interstate shipment program or as an official Federal establishment. An establishment that ships products across States lines must comply with all Federal standards regardless of the inspection program that it chooses to operate under.

Comment:

One comment said that the cooperative interstate shipment program is not necessary because the Talmadge/Aiken program serves the same purpose.

Response:

The Talmadge-Aiken program and the cooperative interstate shipment program serve different purposes. Under the Talmadge-Aiken program, FSIS enters into a separate agreement with a State agency for the State program to conduct meat, poultry, or egg products inspection or other regulatory activities on behalf of FSIS. Establishments that participate in the Talmadge-Aiken program operate under a Federal grant of inspection. Under the cooperative interstate shipment program, FSIS enters into a separate agreement with a State agency to enforce Federal food safety standards at State-inspected establishments. Establishments that participate in the cooperative interstate shipment program are not Federal establishments operating under a Federal grant of inspection.

Comment:

Comments submitted by a few FSIS inspection personnel opposed the proposed cooperative interstate shipment stated because the commenters believe that the program will result in a reduction in the Federal inspection force. The comments stated that under such a program, small federally-inspected establishments will want to drop their Federal grant of inspection and produce products under State-inspection, thereby taking jobs that would otherwise belong to Federal employees and giving them to State employees.

Response:

Under the law and implementing regulations, establishments that operate under the Federal inspection program are ineligible to participate in the cooperative interstate shipment program. The new program is limited to certain small and very small State-inspected establishments. Thus, the cooperative interstate shipment program will have little effect on Federal inspection personnel.

Comment:

One comment objected to allowing the interstate shipment of state-inspected products because, according to the comment, FSIS will no longer have control or jurisdiction over some meat and poultry products in interstate commerce. The comment noted that a State's jurisdiction is limited to the State's borders. The comment asked what would happen if product produced by a State-inspected establishment is implicated in a food safety issue resulting in a recall.

Response:

Under the law, FSIS is responsible for providing oversight and enforcement of the cooperative interstate shipment program. Therefore, if an establishment operating under the cooperative interstate shipment program distributes meat or poultry products that present a food safety hazard or that need to be recalled for other reasons, FSIS will coordinate with the State MPI program to ensure that such product is removed from commerce. FSIS will be responsible for the overall coordination of the recall and for verifying that recalled product that has been shipped interstate has been removed from commerce.

C. Establishment Participation—Conditions for Eligibility and Standards for Determining Average Number of Employees

The proposed rule prescribed conditions that State-inspected

establishments would be required to meet to become eligible to participate in the cooperative interstate shipment program. Consistent with the law, among these proposed conditions were that an establishment be in compliance with all Federal inspection requirements under the FMIA, PPIA, and their implementing regulations, and that the establishment employ, on average, no more than 25 individuals. The proposed rule also included proposed standards for determining the average number of employees, which, for the most part, reflect applicable methods used by the Small Business Administration (SBA) to calculate the number of employees for a small business concern. FSIS received several comments on the proposed conditions for establishment eligibility and the proposed standards for determining the average number of employees.

1. Compliance With Federal Standards

Comment:

Some comments agreed that State-inspected establishments should be required to comply with Federal standards to be eligible for the cooperative interstate shipment program. The comments stated that many small and very small establishments have managed to conform to, and operate successfully under, the requirements of the Federal inspection system. Two comments noted that data obtained from FSIS's PBIS in 2007 show that 51 percent (2,878 of 5,603) of all federally-inspected establishments have 10 or fewer employees and 80% have 50 or fewer employees.

The comments also noted that all establishments that prepare or process meat and poultry products have always had the opportunity to ship their products in interstate commerce provided that they apply for and receive a Federal grant of inspection. The comments stated that small and very small establishments now under Federal inspection have invested time and money to comply with all Federal regulations and to operate under Federal standards. The comments asserted that while the new cooperative interstate shipment program is intended to offer establishments operating under their State inspection program an opportunity to broaden their distribution, any establishment that ships meat or poultry products in interstate commerce can and should meet Federal food safety standards.

Other comments stated that requiring that State-inspected establishments comply with Federal food safety standards in order to be eligible for the cooperative interstate shipment program will establish unfair barriers for small plants to participate in the program. The comments urged FSIS to provide small State-inspected establishments with greater flexibility in achieving food safety standards. One comment from a small State-inspected establishment stated that it cannot afford Federal inspection. The comment noted that establishments operating under the State MPI system are required to adhere to very strict food safety standards but, unlike the Federal system, State inspection personnel are also available to help the small and very small establishments with education and training.

Response:

The amendments to the Acts in section 11015 of the 2008 Farm Bill require that State-inspected establishments be in compliance with all Federal standards in order to be eligible for the cooperative interstate shipment program. The provisions in the Acts that establish the cooperative interstate shipment program define an “eligible establishment” as an establishment that is in compliance with both “* * * the State inspection program of the State in which the establishment is located” and “[the FMIA or PPIA], including the rules and regulations issued under [the FMIA or PPIA]” (21 U.S.C. 472(a)(3) and 683(a)(3)).

The Senate Conference Committee report on the bill that established the cooperative interstate shipment program also makes clear that establishments selected for the program “* * * must fully follow [the FMIA or PPIA], its regulations, notices, directives and policies just as would be required of a Federal establishment” (S. Rep. No. 220, 110th Cong., 1st Sess. (2007), pp. 211-214). Thus, requiring that State-inspected establishments comply with Federal food safety standards to become eligible to participate in the cooperative interstate shipment program is consistent with both the language and intent of section 11015 of the 2008 Farm Bill.

FSIS's Office of Outreach, Employee Education, and Training (OOEET) will provide technical resources, information, and guidance to small and very-small State establishments that are interested in becoming eligible to participate in the cooperative interstate shipment program.

2. Determining Average Number of Employees

a.

Proposed standard: All individuals, both supervisory and non-supervisory, employed by the establishment on a full-time, part-time, or temporary basis are to be counted when calculating the total number of employees.

Comment:

Several comments stated that for purposes of the cooperative interstate shipment program, an establishment's average number of employees should be based only on those directly involved in the preparation or processing of meat and poultry products. The comments noted that many small and very small establishments conduct operations other than the processing of meat or poultry products, such as grocery stores, convenience stores, or other retail outlets. According to the comments, employees that do not perform duties related to the meat or poultry processing operations of the business should not be included when calculating the average number of employees.

One comment suggested that FSIS consider basing the “value” associated with the employee on the workers compensation code that the employer designates. The commenter said that it could give FSIS a simple way of determining which workers are associated with the meat processing part of the business and which employees offer other roles for the company, such as administrative workers or retail clerks.

Other comments said that all establishment personnel, including those not involved in the actual production of meat and poultry products, should be counted when calculating the average number of employees. One comment noted that the law specifically states that supervisory and nonsupervisory employees are to be counted when calculating the average number of employees. The comment maintained that this indicates that if Congress had intended to exclude certain employees from the calculation, it would have expressly stated so in the law. The comment urged FSIS to require that temporary and part-time employees, regardless of their position in the establishment, be counted when determining the average number of employees.

Response:

Although the law limits participation in the cooperative interstate shipment program to State-inspected establishments that employ, on average, 25 or fewer employees, it does not distinguish between employees involved in an establishment's meat or poultry processing operations from those that are not. Counting all individuals employed by the establishment would ensure that participation in the cooperative interstate shipment program is limited to very small and certain small establishments. Counting only

employees directly involved in the preparation or processing of meat and poultry products would create a more flexible standard that would expand the number of potentially eligible establishments to include those that have a small number of employees that work in meat or poultry processing but a larger number of employees that work in other areas of their business.

The 2008 amendments to the Acts give FSIS the authority to define “average number of employees” for purposes of the cooperative interstate shipment program, but they also make clear that the program is intended for State-inspected establishments that employ a limited number of individuals. Therefore, FSIS is adopting a standard for calculating the average number of employees that provides some flexibility for establishments that conduct operations other than meat or poultry processing, but that also clearly distinguishes those employees that are to be counted for purposes of the interstate shipment program from those that are not.

Therefore, instead of counting all individuals employed by the establishment as proposed, under this final rule, an establishment's average number of employees will be calculated by counting all individuals employed by the establishment, excluding the employees that do not come into contact with the meat or poultry products produced by the establishment. For example, if the owner of a gas station produces beef jerky and sells it at the gas station, the employees that are involved in producing the jerky, as well as those that work as cashiers and sell the product, will be counted. The mechanics that work on the cars, however, will not be. Employees that perform solely administrative functions and that do not handle meat or poultry products will also not be counted.

When an establishment conducts multiple operations, it is sometimes difficult to distinguish employees associated with the meat or poultry operations from those that are not. For example, an individual employed as a cashier at an establishment's deli operations may also slice and package meat or poultry products produced by the establishment. The standard adopted in this final rule clearly distinguishes employees whose duties are associated with the meat or poultry products produced by an establishment from those that are not. It also ensures that the cooperative interstate shipment program will remain limited to certain small and very small establishments, as intended.

b.

Proposed standard: Part-time and temporary employees are to be counted the same as full-time employees.

Comment:

Several comments, most submitted by consumer advocacy organizations and one submitted by a food and commercial workers union, agreed with the proposed standard to count part-time and temporary workers as full-time workers for purposes of qualifying for the cooperative interstate shipment program. The comments noted that most very small establishments have few full-time employees, and many do not operate every day. The comments maintained that counting part-time and temporary employees the same as full time employees is an effective means to assure the cooperative interstate shipment program serves the entities it was intended to serve. According to the comment, failing to count part-time and temporary employees in the average number of employees would permit substantially larger entities to participate in a program that was designed to serve very small local establishments.

Some of these comments noted that during negotiations with the States, consumer advocacy groups reluctantly agreed to the States' request for a program with a 25 employee limit. According to the comment, none of the groups involved in the negotiations ever agreed to anything larger than 25 employees. The comments said that the primary reason that many consumer advocacy organizations had opposed the House interstate shipment bill was because the bill contained a 50 employee limit, which, according to the comment, would have expanded the number of establishments in the new cooperative program far beyond what was intended. One comment stated that, although the program's 25 employee limit is reasonable, the commenter would have preferred a limit of 10 employees, which is similar to the current FSIS definition for very small establishments.

Several other comments, most submitted by State Departments of Agriculture and other State agencies, disagreed with the proposed standard to count part-time and temporary workers as full time employees. The comments stated that such a standard seems excessive and does not provide an accurate depiction of an establishment's actual number of employees.

The comments noted that many small establishments in small towns hire part-time employees who work as little as a few hours a week. According to the comments, to count such employees as full-time would contradict and undercut the rural development intentions of the enabling legislation. One comment stated that in some rural areas, especially those with small and very small establishments, meat processing has a seasonal component that provides part-time seasonal work for rural residents. The comments noted that during each part of the day, an establishment may have only 25 employees on site, even if the total number of part-time and fulltime employees employed overall during the day exceeds 25.

The comments suggested that part-time and temporary workers be counted on the basis of “full-time equivalents” or “FTEs,”

i.e.,

based on the ratio of their work-hours to those of a full-time year-round employee. The comments said that part-time and temporary employees should be grouped together and counted based on the number of hours they work each week during the year, with 40 hours per week being considered an FTE. Several comments suggested formulas for calculating the number of employees based on FTEs.

Response:

After considering the comments, FSIS has decided to adopt the proposed standard to count temporary and part time employees the same as full-time employees. For purposes of its regulatory programs, FSIS defines small and very small establishments based on SBA criteria. A standard that counts part-time and temporary workers the same as full-time workers reflects the SBA methods for calculating the average number of employees for a small business concern and is thus consistent with FSIS's overall approach for defining small and very small establishments.

1

1

See 13 CFR 121.105 and 121.106 for SBA methods to calculate the number of employees of a business concern where the size standard in number of employees.

As noted by the comments, several very small establishments have few full-time employees, and many do not operate every day. A standard that is based on the SBA criteria that counts part-time and temporary employees the same as full time employees allows these establishments to hire seasonal workers while ensuring that only very small and certain small establishments are eligible to participate in the program.

Comment:

Several comments stated that the standards for determining the average number of employees need to allow for more flexibility in counting temporary seasonal workers. The comments noted that small and very small establishments often have fluctuation in their employees during certain parts of the year, such as during

holiday and hunting seasons, and that the term “seasonal” will have different meanings in different areas of the country. Some comments noted some establishments hire extra employees to help with seasonal activities that are not related to the processing of amenable species, such as processing game meat or for busy times in their retail shops around holidays.

The comments suggested that seasonal employees be counted based on FTE. As an example, the comments explained that a seasonal employee who works full-time for 3 months would be a 25% FTE and should be counted as one quarter of an employee.

One comment asserted that seasonal employees should not be counted at all when calculating the average number of employees. The comment suggested that the final rule define a seasonal employee as an employee that works for the establishment ninety or fewer days in a calendar year.

Response:

When Congress amended the FMIA and PPIA to establish the cooperative interstate shipment program, it intended for FSIS to interpret the term average “…to provide some flexibility to these selected plants that require seasonal employees for certain parts of the year, as long as the increase in employees are [sic] manageable by the establishment and the increase in employees does not undermine food safety standards” (S. Rep. No. 220, 110th Cong., 1st Sess., pp. 211-214 (2007)).

As discussed below, under the proposed rule, selected establishments may temporarily employ more than 25 employees during busy seasons, as long as the average number of employees continues to be 25 and the number of employees does not exceed 35. Thus, a standard that counts temporary seasonal employees the same as full-time employees will allow selected establishments to hire seasonal employees while ensuring that the number of employees remains manageable by the establishment, as Congress intended.

FSIS disagrees with the comment that stated that seasonal employees should not be counted at all. Such an approach would be inconsistent with the language and intent of the statute.

c.

Proposed standard: The total number of employees cannot exceed 35 at any given time, regardless of the average number of employees.

Comment:

Some comments stated that the proposed standard that provides that the total number of employees can never exceed 35 individuals at any given time, regardless of the average number of employees, is a reasonable upper limit for selected establishments to remain eligible to participate in the program. One comment stated that such a limit is reasonable if FSIS does not count part-time and temporary employees the same as full time.

Other comments asserted that FSIS should not limit the number of employees working at a selected establishment at any given time if the establishment maintains an average of 25 employees or fewer. The comments stated that while section 11015 of the 2008 Farm Bill requires that the average number of employees not exceed 25, the law does not prohibit a selected establishment from ever, over the course of a year, having more than 35 employees.

The comments stated that in many small establishments there may be “spikes” in employee numbers during busy periods, but the overall average number of employees is under 25. The comments asserted that, as written, the proposed rule excludes such establishments from participating in the interstate shipment program. According to the comments, section 11015 was not intended to exclude these establishments. The comments suggested that FSIS revise the proposed rule to ensure that these establishments remain eligible for the program.

One comment disagreed with the proposed 35 employees limit because, according to the comment, allowing selected establishment to have 35 employees during seasonal shifts represents, at minimum, a 40% increase in establishment personnel. The comment argued that the higher number of employees represents a huge increase in production that could overwhelm a very small establishment's production systems, which could result in contaminated food entering commerce. The comment noted that if an establishment routinely employs 5 people and then increases this number to 10 or 20 during a certain timeframe, it will have a 100% or 400% increase in employees. The comment maintained that this level of increase is not manageable and is not what Congress intended.

The comment suggested that instead of limiting the total number of employees to 35 at any given time, FSIS should cap at 20% the increase in the number of employees that an establishment may use during a seasonal shift. The comment acknowledged that the commenter does not have data to support this number, but stated that it stands to reason that a sudden increase in production could significantly affect the dynamics within an establishment and overwhelm the system. According to the comment, small and very small establishments have HACCP plans for a production process at a certain level that would not necessarily support a significantly higher level of production. The comment pointed out that FSIS did not provide any data to support the proposed 35 employee cap.

One comment stated that FSIS should not allow more than 25 employees in selected establishments at any given time. The comment noted that section 11015 requires that establishments that consistently employ more than 25 employees but fewer than 35 employees transition to Federal establishments within three years of the enactment date. The comment stated that this provision indicates that Congress recognized that establishments that ship product in interstate commerce and that have more than 25 employees should be under Federal inspection.

Response:

While the 2008 amendments to the Acts do not specifically prohibit selected establishments from ever having more than 35 employees, the Senate report described above indicates that Congress intended that there be some limits on the number of employees working at a selected establishment at any given time.

As explained in the preamble to the proposed rule, FSIS proposed that the number of employees working in a selected establishment never exceed 35 at any given time because the law allows FSIS to select for the cooperative interstate shipment program establishments that employed more than 25 but fewer than 35 employees as of June 18, 2008, the date the law was enacted (21 U.S.C. 683(b)(3)(B) and 472(b)(3)(B)). To remain in the program, these establishments must employ fewer than 25 employees on average 3 years after the effective date of this final rule. Thus, while Congress did not intend to “* * * routinely allow selected establishments to employ above 25 or more employees,” the fact that the law provides for some selected establishments to initially employ up to 35 individuals demonstrates that a temporary increase in the number of employees of up to 35 individuals, as long as the average number of employees remains 25 or fewer, is consistent with the language and intent of the Acts.

As noted above, when Congress established the cooperative interstate shipment program, it intended to provide some flexibility to establishments that require seasonal employees to meet consumer demands for certain parts of the year. The 20%

cap on the increase in the number of employees suggested by one of the comments would greatly restrict the number of temporary workers that a selected establishment would be allowed to hire during busy seasons. For example, an establishment that regularly employs five employees on average would be permitted to hire only one temporary employee during its busy seasons. Many small and very small establishments operate on an intermittent or seasonal basis and are accustomed to adjusting their operations to temporarily increase production without undermining food safety standards. FSIS has concluded that restricting the increase in employees to 20% is unlikely to provide the flexibility that many very small selected establishments will need to meet seasonal demands for their products.

d.

Proposed standards: Volunteers who receive no compensation are not considered employees.

Comment:

One comment disagreed with the proposed standard that provides that volunteers are not considered employees. The comment stated as a food safety measure, uncompensated volunteers who are engaged in meat or poultry product processing should be considered employees for the purpose of the cooperative interstate shipment program.

Response:

FSIS agrees with this comment and has revised the standards for counting employees to include as employees, volunteers that perform duties that involve handling the meat or poultry products produced by the establishment.

D. State Participation: “The Same as” Standard for Inspection Services Provided to Selected Establishments

The proposed regulations provide that States interested in establishing an agreement for a cooperative interstate shipment program are required to submit a request for such an agreement to FSIS through the FSIS district office that covers the State. The proposed rule also provided that, in their requests, States are required to include documentation to demonstrate that they are able to provide the necessary inspection services to selected establishments in the State and conduct any related activities that would be required under a cooperative interstate shipment program. The preamble to the proposed rule explained that to meet this requirement, the statute requires that States demonstrate that the inspection service that they provide to selected establishments in the State will be “the same as,” rather than “at least equal to” those provided under the Federal inspection program. FSIS received a significant number of comments on the proposed “same as” standard.

1. Support for “the same as” Standard

Comments submitted by consumer advocacy organizations, meat processor trade associations whose members mainly operate under the Federal inspection system, a union representing food and commercial workers, two pork producer trade associations, and some private citizens expressed support for the proposed “same as” standard.

Comment:

The comments that supported the proposed “same as” standard agreed that the language and intent of the enabling statute require that the cooperative interstate shipment program operate under standards that are the “same as” the Federal inspection system and not the “at least equal to” standard that applies to State MPI programs. The comments believed that all meat and poultry products shipped in interstate commerce should be required to comply with uniform Federal food safety standards rather then multiple State standards. The comments stated that it is especially important for State-inspected establishments that participate in the new program to be in compliance with all Federal standards because the meat and poultry products produced by these establishments will bear a Federal mark of inspection.

One comment stated that requiring that selected establishments that voluntarily request the opportunity to participate in a cooperative interstate shipment program operate in a manner that is the “same as” federally-inspected establishments is not only consistent with the provisions and intent of the law, but also ensures that the food safety standards established in the FMIA, PPIA, and their implementing regulations are applied uniformly to all meat and poultry products that are distributed in interstate commerce. The comment encouraged FSIS to retain the proposed “same as” standard to first and foremost ensure the safety of meat and poultry products distributed in interstate commerce, but also to ensure equity in the marketplace. The comment added that this fundamental proposition, that the playing field be level for all companies engaging in interstate commerce, was a critical element in securing passage of the statutory provisions that authorized the cooperative interstate shipment program. The comment asserted that the program must not provide an unfair advantage to small companies that will not, or cannot, make the commitments necessary to comply with Federal food safety requirements.

Two comments stated that requiring that State-inspected products produced under the cooperative interstate shipment program comply with all Federal requirements is essential for maintaining domestic and international markets for U.S. meat and poultry products. Other comments said that consumers expect that products carrying the Federal mark of inspection comply with Federal standards for meat and poultry inspection. The comments stated that establishments that are not held to all aspects of the Federal requirements should not be entitled to apply the Federal mark of inspection on their products.

One comment that supported the “same as” standard noted that although establishments operating under a State MPI inspection program receive inspection services that are “at least equal to” the Federal inspection program, the methodology employed by FSIS is a critical part of the effectiveness of the Federal food safety system. The comment asserted that, as such, it is essential for States that participate in the cooperative interstate shipment program to follow Federal inspection methodology when providing inspection services to selected establishments.

Response:

FSIS agrees that the “same as” standard is consistent with the language and intent of the statutes. The issues raised by the comments demonstrate why it is important for the cooperative interstate shipment program to operate under standards that are “the same as” those imposed under the Federal meat and poultry products inspection programs.

2. Opposed to “same as” standard

Several comments submitted by State Departments of Agriculture and other State agencies, as well as organizations representing these entities, objected to the proposed “same as” standard. Some farm and rural community advocacy organizations, cattle producer organizations, a trade association representing small meat processors, and an animal welfare advocacy organization also opposed the proposed standard.

Comment:

Several comments that objected to the proposed “same as” standard claimed that such a standard is not authorized by law. These comments asserted that the Acts, as amended by the 2008 Farm Bill, do not contain any language that would require that the inspection services that States provide to selected establishments be “the same

as” or “identical to” the inspection services provided under the Federal program. The comments maintained that such an interpretation is an extrapolation of the language that does not exist in the statute.

The comments noted that under the 2008 Farm Bill amendments, the term “eligible establishment” refers to an establishment that is “in compliance with” the Acts. The comments also noted that these amendments authorize the SEC to “ensure that selected establishments are operating in a manner that is consistent with * * *” the Acts (21 U.S.C. 472(d)(3)(A), 683(d)(3)(A)). The comments argued that these provisions indicate that if Congress had intended to require that the State program be “the same as” or “identical to” to the Federal program, it would have specifically said so in the statute.

The comments also noted that the 2008 Farm Bill did not amend the provisions in the FMIA and PPIA that provide for cooperative State MPI programs that are “at least equal” to the Federal program. According to the comments, the fact that Congress did not amend these provisions demonstrates that State programs that are “at least equal to” the Federal program are in compliance with the Acts.

Response:

The language in the FMIA and PPIA, as amended by the 2008 Farm Bill, is clear: Congress provided that the cooperative interstate shipment program would operate under standards that are “the same as” those imposed under the Federal program.

The 2008 amendments to the FMIA and PPIA provide that to be eligible for the cooperative interstate shipment, State-inspected establishments must be in compliance with both the State's MPI program and “* * * the requirements of this chapter, including the rules and regulations issued under this chapter” (21 U.S.C. 472(a)(3) and 683(a)(3)). As used in the statutes, the term “this chapter” refers to the FMIA at 21 U.S.C Chapter 12, and the PPIA at 21 U.S.C. Chapter 10. The 2008 amendments also require that the State personnel designated to provide inspection services under the program undergo “* * * all necessary training and certification to assist * * * in the administration and enforcement of this chapter, including the rules and regulations issued under this chapter” (21 U.S.C. 472(a)(2) and 683(a)(2)). The 2008 amendments allow a meat or poultry product inspected by designated State personnel to bear a Federal mark of inspection and be shipped in interstate commerce if the product “* * * qualifies for the mark * * * under the requirements of this chapter” (21 U.S.C. 472(b)(1)(A) and 683(b)(1)(A)).

The Senate Conference Committee report on the bill that established the cooperative interstate shipment program provides that “* * * establishments selected for the [cooperative interstate shipment] program * * * must fully follow [the FMIA or PPIA], its regulations, notices, directives and policies just as would be required of a Federal establishment” (S. Rep. No. 220, 110th Cong., 1st Sess. (2007), pp. 211-214). The report also provides that “* * * [t]he inspection personnel of the State that will inspect the selected establishment must have undergone all the necessary training to carry out the requirement of [the Acts], [their] regulations, notices directives and policies, just as required of a Federal inspector.”

Thus, both the statute and the Committee report make clear that Congress intended for the cooperative interstate shipment program to operate under standards that are “the same as” those imposed under the Federal inspection program.

FSIS agrees with the comments that stated that the 2008 Farm Bill did not amend the provisions in the FMIA and PPIA that provide for cooperative State MPI programs that are “at least equal” to the Federal program. However, FSIS disagrees that this means that State programs that are “at least equal to” the Federal program are in compliance with all requirements of the Acts for purposes of the cooperative interstate shipment program. Under the FMIA and PPIA, establishments operating under an “at least equal to” State MPI program are permitted to produce meat or poultry products solely for distribution within the State where the establishment is located (21 U.S.C. 454(a)(1) and 661(a)(1)). Thus, State programs that are “at least equal to” the Federal program are in compliance with the Acts only if the establishments operating under these programs prepare and ship products solely for use within the State where they are located.

Comment:

One comment asked whether the proposed rule requires that a State's entire MPI program must be “identical to” the Federal program for the State to qualify for the cooperative interstate shipment program.

Response:

No, a State's entire MPI program does not need to be identical to the Federal program for the State to qualify for the cooperative interstate shipment program. To qualify for the program, a State must demonstrate that the inspection services that it will provide to selected establishments in the State will be “the same as” those provided under the Federal inspection program. States that participate in the cooperative interstate shipment program may continue to operate an “at least equal to” State MPI program for establishments that produce meat and poultry products solely for distribution within the State.

Comment:

Several comments stated that the interstate shipment program's legislative history demonstrates that Congress intended for the program to operate under the “at least equal” standard required for the existing cooperative State MPI programs. According to the comments, the conference reports for the House and Senate versions of interstate shipment legislation indicate that Congress adopted the Senate version of the bill because the House version would have required that States implement meat and poultry inspection programs “identical to” the Federal inspection system. The comments maintained that the legislative intent was to provide current State facilities with a viable route to ship State product interstate. The comments said that the requirement for State plants to be “identical to” or “same as” a federal plant radically deviates from this.

Response:

The comments are correct in that Congress did adopt the Senate version of the legislation that established the cooperative interstate shipment program. However, FSIS disagrees that the Senate version was adopted to permit State-inspected establishments operating under an “at least equal to” standard to ship meat and poultry products in interstate commerce.

Section 11103 of the House version of the 2008 Farm Bill would have amended the FMIA and PPIA to replace the existing “at least equal to” cooperative State MPI program with a new program that would have authorized FSIS to approve, and enter into cooperative agreement with, only those State MPI programs that adopt standards identical to those imposed under the Federal program (H. Rep. 110-256, 110th Cong., 1st Session, pp. 184-191). Under the House version, all State-inspected establishments would have been required to comply with Federal standards, the State mark of inspection would have been deemed an official mark, and all State-inspected establishments would have been allowed to ship meat or poultry products in interstate commerce.

The Senate bill, which was the version adopted in the 2008 Farm Bill, supplements, but does not replace, the

existing State MPI programs. The Senate version provides an option under which State-inspected establishments that have, on average, 25 or fewer employees, will be permitted to ship their meat or poultry products in interstate commerce. Under the Senate version, State-inspected establishments are required to comply with all Federal standards to be eligible to participate in the cooperative interstate shipment program, and designated State personnel must be trained to enforce Federal food safety standards. Under the Senate version, State-inspected establishments that choose not to participate in the cooperative interstate shipment program may continue to operate under the “at least equal to” State MPI program and ship their products within the States where they are located.

Comment:

Some comments claimed that in the past, FSIS itself concluded that it was unrealistic for States to maintain MPI programs that are “the same as” or “identical to” FSIS's program. The comments noted that in 2003, the Agency provided an option for the States to claim that their meat and poultry inspection programs were “same as” or “identical to” FSIS inspection as part of the Agency's annual review in which it verifies that State MPI programs are “equal to” the Federal program. The comments said that in 2006, FSIS reached the conclusion that it was logistically impossible for State programs to maintain a true “same as” or “identical to” status, so the Agency removed this option from the State Self Assessment Manual forms. The comments asserted that if only a few years ago FSIS acknowledged that it is impossible for State MPI programs to be the “same as” Federal programs, proposing such a standard now will effectively prevent States from qualifying for a cooperative interstate shipment program.

Response:

FSIS has stated that “at least equal to” does not require that States operate their cooperative MPI programs in a manner that is “the same as” or “identical to” the FSIS program or does not prohibit States from establishing safeguards that the States believe to be more effective than those employed by FSIS. The law does not require that the cooperative State MPI programs operate under standards “identical to” the Federal program.

As noted above, the cooperative interstate shipment program will supplement the existing State MPI programs, not replace them. Thus, while States that participate in the cooperative interstate shipment program will need to provide the same inspection services to selected establishments that FSIS provides to federally-inspected establishments, States may also continue to operate their cooperative State MPI programs in a manner that is “at least equal to” the Federal program.

Comment:

Several comments noted that a foreign country must demonstrate that its inspection system is “equivalent” to the U.S. inspection system before FSIS will permit establishments located in the foreign country to import meat and poultry products into the United States. These comments asserted that requiring that States operate their cooperative interstate shipment programs under standards that are the “same as” those required under the Federal program subjects the States to a stricter and less flexible standard than the standard applied to foreign countries. One comment maintained that while the commenter does not support the equivalent standard for foreign facilities, there is no justification for discriminating against domestic establishments under the jurisdiction of State inspection programs by requiring that they meet more rigid standards than those imposed on foreign establishments.

Response:

The equivalence standard applied to imported meat and poultry products and the “same as” standard applied to meat and poultry products produced under the cooperative interstate shipment program reflect the relevant provision in the FMIA and PPIA. The FMIA and PPIA require that FSIS treat as equivalent to a U.S. requirement alternative measures proposed by an exporting country if the country provides scientific evidence or other information, in accordance with risk assessment methodologies agreed to by FSIS and the exporting country, to demonstrate that the alternative measure achieves the level of protection that is appropriate for the United States (21 U.S.C. 620(e)(1)(B), 466(d)(2)(A)). These provisions reflect the U.S. Government's obligation under the World Trade Organization (WTO) Agreement on the Application of Sanitary and Phytosanitary Measures (the SPS Agreement) to accept the sanitary measures of an exporting Member country as equivalent if the exporting member demonstrates that its sanitary measures attain the same level of protection (Article 4.1, “Agreement on the Application of Sanitary and Phytosanitary Measures). FSIS evaluates foreign food regulatory systems for equivalence through document reviews, on-site audits, and port-of-entry reinspection of products at the time of importation (9 CFR part 327 and 381 subpart T).

Comment:

Several comments asserted that it is unnecessary to require that the inspection services that States provide to selected establishments be the “same as” inspection services provided under the Federal program because most States have incorporated the Federal requirements into their State MPI programs. The comments stated that, according to FSIS's 2008 report on its review of the State MPI programs, these State programs have demonstrated that they can implement the Federal laws and regulations in a manner that is “at least equal to,” and thus, “in compliance with” the Federal standards without operating under a program that is “the same as” the Federal inspection program because of the smaller staff size and other administrative aspects of the State programs.

Response:

As noted throughout this document, the 2008 amendments to the Acts require that the inspection services that States provide to selected establishments be “the same as” those provided under the Federal inspection program. The Senate report also makes clear that State inspection personnel are “* * * to carry out the Federal requirements of the [the Acts], [their] regulations, notices directives and policies, just as required of a Federal inspector” (S. Rep. No. 110-220, 110th Cong., 1st Sess. (2007), pp 211-214). Thus, FSIS disagrees that State programs that have implemented the Federal laws and regulations in a manner that is “at least equal to” the Federal inspection program are “in compliance with” the Federal standard for purposes of the cooperative interstate shipment program. The law clearly requires that the inspection services that designated State personnel provide to selected establishments in States participating in the cooperative interstate shipment program be “the same as” those provided under the Federal program.

Comment:

Several comments claimed that under the “at least equal to” standard, some States have implemented requirements for food safety and consumer protection that are stricter than those provided for under the Federal Acts. According to these comments, many States have processes for the review and evaluation of product labels that do more than FSIS's generic label process to ensure that the labels of meat and poultry products properly inform consumers about the product, its weight and its ingredients. The comments also noted that while FSIS currently does not have the authority to levy civil penalties for violations of the

Federal Acts, many States have the authority to impose civil penalties against violators of State meat and poultry inspection laws. Some comments stated that while FSIS allows the slaughter and sale of up to 20,000 farm raised chickens annually to restaurants and retail markets without benefit of inspection, many State programs do not permit this activity. The comment claimed that requiring States to operate their MPI programs in a manner that is “identical to” the Federal program could force the States to lower their standards.

One comment stated that some states impose humane handling and slaughter requirements that go above and beyond those required by Federal law. Another comment said that some States have stricter cold storage requirements than FSIS.

Response:

As discussed above, the cooperative interstate shipment program established in this final rule supplements rather than replaces the existing State MPI programs. States that participate in the cooperative interstate shipment program may continue to operate their “at least equal to” State MPI programs for meat and poultry products produced and sold solely within the State. Thus, this final rule does not affect requirements for labeling, civil fines, poultry inspection, humane handling, or cold storage that States have adopted as part of their cooperative State MPI programs.

Comment:

In the preamble to the proposed rule, FSIS explained that to qualify for a cooperative interstate shipment program, States will need to demonstrate that they have the authority under State law to provide the necessary inspection services to selected establishments in the State (74 FR 47652). Some comments noted that if the final regulations require that inspection services provided to selected establishments be the “the same as” those provided under the Federal inspection system, many States will not be able to immediately change their laws to make them identical to the Federal inspection laws.

One comment noted that the ability of States interested in the new program to change their rules and adopt FSIS regulations will depend on the process the State program must follow in order to make those changes. Other comments noted that each State has its own legislative process and some State legislatures do not meet every year. One comment noted that, although the State programs are “equal to” the Federal inspection system, the terminology and precise phrasing in the laws and regulations differ, and that State administrative systems vary.

Response:

As discussed above, the cooperative interstate shipment program supplements the existing State MPI programs. Therefore, States are not required to amend all State inspection laws to make them identical to the Federal requirements. States interested in participating in the cooperative interstate shipment program will need to demonstrate that they have the necessary legal authority to enforce Federal food safety standards in selected establishments in the State.

As noted by the comments, State laws and regulations differ, and each State has its own legislative process. Some States may already have the necessary legal authority to participate in the cooperative interstate shipment program, while others may need to make legislative changes to provide for any additional authority that they may need.

Comment:

Some comments asserted that the main focus of any program that provides for the interstate shipment of State-inspected products should be on the safety of the products produced in the selected establishments, not on administrative procedures for the inspection program. According to the comments, if States are required to operate their cooperative interstate shipment programs in a manner that is the “same as” the Federal program, the focus of these programs will be on the administrative procedures of the State instead of food safety. The comments stated that regulatory requirements can be met through different means and that it is not practical or effective for a State program to operate under the exact same procedures prescribed in the Federal system.

The comments suggested that an effective alternative would be to allow States to work within the existing “equal to” framework to develop food safety activities focused on problems specific to their establishments. The comments stated that the “at least equal to” standard is well accepted and has been effective in ensuring that State MPI inspection programs are comparable to the Federal program.

Response:

As explained above, the law does not provide for the cooperative interstate shipment program to operate within the existing “at least equal to” framework. Under the 2008 amendments to the Acts, meat or poultry produced in selected establishments are permitted to bear a Federal mark of inspection and be shipped in interstate commerce only if designated State personnel find that such product qualify for a Federal mark (21 U.S.C. 683(b)(1)(a) and 472(b)(1)(a)). While products that are inspected and passed under a State's “at least equal” MPI program qualify for a State mark, these products are not eligible for a Federal mark.

Comment:

Some comments complained that FSIS's proposed regulations would require that States maintain two separate inspection systems, one that is “identical to” the Federal program and one that is “equal to” the Federal program. The comments said that adding an entirely new State inspection system to comply with the “same as” standard will add an extra layer of cost for the States. According to the comments, many States would need to hire additional laboratory staff to perform different methodology and complete documentation the same as FSIS. The comments also said that States would need funds to train inspectors and purchase Federal computers, and that overall State administrative costs would increase because office staff, accountants, supervisors, and managers would need to manage two systems. One comment urged FSIS to fully consider the impact that the “same as” standard will have on the administrative aspects of the State inspection programs.

Response:

In the Preliminary Regulatory Impact Analysis (PRIA) to the proposed interstate shipment rule, FSIS acknowledged that States that choose to participate in the cooperative interstate shipment program may need to make certain modifications to their inspection program to provide inspection services to selected establishments in the State (74 FR 47657). The Agency also acknowledged that the inspection costs under the new program may differ from the costs of the existing State MPI program. As required by law, if Congress provides the necessary funding for the cooperative interstate shipment program, FSIS will reimburse States for costs related to the inspection of selected establishments in the State in an amount not less than 60 percent of eligible State cost. FSIS has updated its analysis of the State costs in the Final Regulatory Impact Analysis (FRIA) for this final rule.

As noted by the comments, the cooperative interstate shipment program established in the proposed rule may require that States maintain two separate inspection programs, one that is “the same as” the Federal program and one that is “equal to” the Federal program. States that enter into cooperative agreements under the Talmadge-Aiken program to provide Federal inspection services to Federal establishments on behalf of FSIS are

also required to maintain two separate inspection systems—one under the cooperative State “at least equal to” MPI program and the other under the cooperative Talmadge-Aiken program. Thus, FSIS does not believe that the cost to administer two separate cooperative inspection programs will prevent States that are interested in participating in the cooperative interstate shipment program from doing so.

3. “Same as” Computer Systems and Forms

In the preamble to the proposed rule, FSIS explained that to qualify for a cooperative interstate shipment program, the Agency expects States to demonstrate that they can provide the necessary equipment for State personnel to provide the same inspection services to selected establishment that FSIS provides to official establishments, including computers and supplies for collecting regulatory product samples (74 FR 47652).

Comment:

A number of comments said that this statement could be interpreted to mean that State programs must obtain and use the same computers and computer programs that are used by FSIS personnel. The comments requested that FSIS clarify its expectations with regard to the type of computers and information systems the States will need to have in place to qualify for a cooperative interstate shipment program.

Some of these comments noted that many States currently use State-issued laptops computers and have developed systems that have been determined “equal to” FSIS to track and report inspection activities and other required data. One comment noted that some States have developed their own data-driven systems that mimic the Federal System, but that also allow State program personnel access to State licensing information and to view and conduct other inspection activities in facilities that are not related to meat and poultry. According to the comment, States with their own information systems are able to tailor FSIS inspection activities, which are geared towards use in larger establishments, to be effective in very small establishments.

Response:

To qualify for the cooperative interstate shipment program, States will need to have computer programs and information systems that are “the same as” those used by FSIS to administer the Federal inspection program. Assuming that Congress provides the necessary funding, FSIS will allow States that do not have the necessary information systems to purchase from the Agency federally-procured computers and the necessary computer programs. FSIS will reimburse the States for 60% of their eligible costs to obtain the necessary computers and software. FSIS does not intend to reimburse more than 60% of the States' costs unless Congress directs it, and provides the money for it to do so.

Comment:

Some comments stated that if FSIS expects States to have information systems that are identical to those used under the Federal system, some States will need to maintain two computer systems to participate in the program because the Federal computer system does not allow any State program loads, and the Federal systems cannot be operated on a computer other than a federally-sourced computer. One comment noted that federally-procured computers generally cost more than State-procured ones, and the Federal computers would only be used on a limited basis by State personnel that work in selected establishments.

Response:

As noted above, to provide the necessary inspection services under the cooperative interstate shipment program, States that participate in the program will need to use computer programs that are “the same as” those used by FSIS to administer the Federal inspection program. Thus, if the Federal computer programs cannot be operated on State-sourced computers, the State may need to purchase new computers from FSIS. As a result, some States will need to maintain two computer systems to participate in the cooperative interstate shipment program.

Comment:

One comment asked if states participating in the cooperative interstate shipment program will have access to all of the Federal data programs, like eADRS, Assurance Net and FSIS intranet. Another comment stated that FSIS did not explain how requiring that States have identical computer systems in order to participate in the cooperative interstate shipment program will further food safety and compliance with the Acts.

Response:

States that participate in the cooperative interstate shipment program will have access to the computer programs that are necessary to provide inspection services that are “the same as” those provided under the Federal program. The computer systems used by States to administer the cooperative interstate shipment program need to be “the same as” those used under the Federal program to ensure that selected establishments are meeting all food safety standards that are “the same as” rather than “at least equal to” standards imposed under the Federal program.

Comment:

Some comments asked whether the forms used by States operating under a cooperative interstate shipment need to be identical to the Federal forms that FSIS uses under its inspection program. According to one comment, State inspection programs frequently do not have access to Federal forms and, therefore, most have developed their own forms. The comment stated that, if States are required to maintain forms that are identical to the Federal forms, many States will need to manage two different sets of documentation to participate in the cooperative interstate shipment program.

Response:

To provide the necessary inspection services to selected establishments participating in the cooperative interstate shipment program, States will need to use forms that are the same as those used under the Federal inspection program. FSIS's OOEET will assist the States to obtain the necessary forms.

4. “Same as” Training for Designated State Personnel

The preamble to the proposed rule stated that to qualify for a cooperative interstate shipment program, States will need to demonstrate that designated State personnel have been properly trained in Federal inspection methodology (74 FR 7652). The preamble also explained that FSIS offers training courses in Federal inspection methodology to State inspection personnel and that States that are interested in participating in a cooperative interstate shipment program will be responsible for making arrangements for their inspection personnel to attend these courses.

Comment:

Several comments stated that FSIS-sponsored training is costly, lengthy, and almost always requires travel out of State for extended periods of time. The comments suggested that, instead of requiring designated State personnel to attend FSIS training, the Agency should allow States to provide training that is “equal to” FSIS's training program. The comments explained that such training would include equivalent content as FSIS training but could be administered by the individual States, other State programs, FSIS or other qualified entities.

Response:

The law does not provide for training that is “equal to” FSIS's training program or that includes equivalent content. The 2008 amendments to the Acts require that designated State personnel under go “* * * all necessary inspection training

and certification to assist the [FSIS Administrator] in the administration and enforcement of [the Acts], including rules and regulations issued under [the Acts]” (21 U.S.C. 683(a)(2)and 472(a)(2)). As stated in the Senate Committee report, this means that the designated State personnel “* * * must have undergone all the necessary training to carry out the requirements of [the Acts], [their] regulations, notices, directives and policies, just as required of a Federal inspector” (S. Rep. No. 220, 110th Cong., 1st Sess. (2007), pp. 211-214) Thus, the law clearly requires that the training in Federal inspection methodology provided to designated State personnel be “the same as” the training provided to FSIS inspection personnel.

As noted in the preamble to the proposed cooperative interstate shipment rule, FSIS offers training courses in Federal inspection methodology to State inspection personnel. FSIS's OOEET will coordinate with States participating in the cooperative interstate shipment program to provide the necessary training for designated State personnel.

Comment:

Some comments stated that many States conduct their own training courses, which are subject to oversight by FSIS. The commenters noted that these State courses often present the identical material that FSIS presents in its training courses. The comments suggested that FSIS consider these State courses as acceptable training for designated State personnel.

Response:

Although some States may be providing training that includes the same content as the training provided by FSIS, designated State personnel will need to complete FSIS-sponsored training for the State to qualify for the cooperative interstate shipment program. FSIS-sponsored training courses will ensure that designated State personnel receive the necessary training to carryout the requirements of the Federal Acts, “just as required of a Federal inspector,” as intended by Congress.

Comment:

One comment asked whether State personnel will need to complete their training before the State begins its cooperative interstate shipment program. Some comments stated that State programs cannot afford the travel costs associated with sending already trained state inspectors to additional training. One comment suggested that FSIS make any required training for State inspectors available through on-line courses at no charge to the States. Two comments asked whether FSIS would be covering training and training-related expenses.

Response:

As noted above, the preamble to the proposed rule explained that to qualify for the program, States would need to demonstrate, among other things, that designated State personnel have been properly trained in Federal inspection methodology. This means that when a State submits a request to FSIS for a cooperative interstate shipment program, the State must demonstrate either that its designated State personnel have completed the necessary training in Federal inspection methodology or that such personnel will have completed such training before they begin to provide inspection services to selected establishments in the State.

As previously noted, FSIS currently offers courses in Federal inspection methodology to State inspection personnel. States that are interested in participating in a cooperative interstate shipment program will be responsible for making arrangements for their inspection personnel to attend these courses. FSIS's OOEET will coordinate with the States to help make the necessary training available to designated personnel in the State. For example, if a State has a significant number of designated personnel that need to be trained Federal inspection methodology, FSIS could arrange to conduct training courses at a location within the State so that all designated State personnel can attend.

As it does for training costs associated with the State MPI program, FSIS will reimburse States for any eligible training costs associated with the cooperative interstate shipment program, including necessary travel costs. However, instead of reimbursing the State for 50% of the eligible costs, FSIS will reimburse 60% of a State's eligible costs associated with training designated State personnel.

As discussed above, for a State to qualify for the cooperative interstate shipment program, its designated State personnel will need to attend FSIS-sponsored training in person. Thus, FSIS will not be providing the required training through on-line courses as suggested by the comment. The Agency may, however, make supplemental training materials available on-line.

5. “Same as” Laboratory Testing and Analysis

The preamble to the proposed rule explained that to qualify for an interstate shipment program, States will need to demonstrate that the laboratory services that they intend to use to analyze regulatory product samples from selected establishments are capable of conducting the same chemical, microbiological, physical, and pathology testing as are required under the Federal meat and poultry products inspection programs (74 FR 47652). The preamble also explains that FSIS's Office of Public Health Science (OPHS) will provide laboratory audit assistance to the State to verify that the methodologies used by a State's laboratory services to analyze samples from selected establishments are capable of producing the same results as the methodologies used by FSIS laboratories.

Comment:

Some comments agreed that State-inspected establishments participating in the cooperative interstate shipment program should be subject to the same regulatory sampling programs as those established in the Federal inspection program. One comment stated that positive results on pathogen and residue testing on products produced in selected establishments should lead to the same regulatory actions that federally-inspected establishments are subjected to.

Two comments stated that they were encouraged by the requirements for regulatory sampling and laboratory analysis described in the proposed rule. The comments stated that a robust residue, microbiological, and pathological analysis capability will assure accuracy of these test results, which, according to the comments, is essential for maintaining foreign markets.

Response:

The comments present valid reasons for requiring that the selected establishments participating in the cooperative interstate shipment program be subject to the same regulatory sampling required under the Federal program.

Comment:

Several comments requested that FSIS clarify its expectations with regard to the laboratory services used by States to analyze samples under the cooperative interstate shipment program. Many comments specifically asked whether FSIS expects these laboratories to be (International Organization for Standards) ISO accredited. Several comments expressed concern that if FSIS requires laboratories that analyze samples for the cooperative interstate shipment program to be ISO accredited, some laboratories will have to abandon perfectly acceptable procedures, or possibly more up-to-date procedures, to perform the methodology executed at the FSIS laboratories. The comments also said that some states would need to hire additional personnel to perform the increased paperwork with no additional benefit in the quality or quantity of tests performed.

Response:

The laboratory services that States use to analyze samples collected under the cooperative interstate shipment must be capable of producing the same results as FSIS's laboratories. Therefore, to demonstrate that the laboratory services used by a State are sufficient for the State to qualify for the cooperative interstate shipment program, the State will need to show that the laboratory is accredited by an internationally recognized organization that accredits food testing laboratories against the ISO 17025

“General Requirements for the Competence of Testing and Calibration Laboratories”

and AOAC

“Guidelines for Laboratories Performing Food Microbiological and Chemical Analyses of Food and Pharmaceuticals Testing”

written by the Analytical Laboratory Accreditation Criteria Committee (ALACC). The assessment body that FSIS uses, the American Association for Laboratory Accreditation (A2LA), is the sole organization that incorporates ALACC into their program requirements. State labs would need to use A2LA or another accrediting body that incorporates ALACC and is a signatory and in good standing to the Mutual Recognition Arrangements of the International Laboratory Accreditation Cooperation (ILAC).

The laboratory will also need to use the protocols for analytical tests required for FSIS regulatory activities on meat and poultry products described in the FSIS Chemistry, Microbiological, and Pathology Laboratory Guidebooks. However, if the laboratory that a State intends to use to analyze samples for the cooperative interstate shipment program is unable to follow an FSIS method as written, the State may submit a justification to FSIS that: (1) Explains why the laboratory is unable to follow the FSIS methodology and (2) describes the modifications that the laboratory intends to make to the FSIS methodology. FSIS will evaluate the State's justification to determine whether the modification of FSIS methodology is minimal and supportable through validation or other evidence. FSIS will allow a State to use the modified method if the Agency determines that methodology is consistent with the original FSIS protocol and the State's method is capable of achieving results that are consistent with the corresponding FSIS method.

To assist the States in developing laboratory services that are “the same as” those provided under the Federal inspection program, FSIS is adopting a “phased in” approach for the States to become ISO 17025 accredited. OPHS has developed a Quality Assurance (QA) checklist based on ISO 17025 and ALACC criteria. It is not as extensive as ISO 17025, but contains minimum QA practices that laboratories should follow to be able to defend their results. The checklist is included as an appendix in FSIS's guidance for “at least equal to” State MPI programs. States that use services from laboratories that are not ISO 17025 accredited but that can demonstrate that the laboratories meet the laboratory criteria in the FSIS QA checklist will be permitted to participate in the cooperative interstate shipment program if they agree to actively seek and obtain ISO accreditation within two years. However, if the laboratory fails to actively seek or does not obtain the necessary accreditation, FSIS will terminate the State's cooperative agreement for the interstate shipment program.

FSIS is developing materials to assist States whose laboratory services are pursuing ISO accreditation to meet the requirements to become accredited. States may also use an outside laboratory to analyze samples collected under the cooperative interstate shipment program if the outside laboratory has the necessary accreditation.

States that currently use laboratories with active ISO 17025 accreditations will need to submit the necessary documentation for FSIS to verify that the laboratories are ISO accredited and meet ALACC food laboratory requirements as assessed by an appropriate accreditation body. To remain eligible for the programs, States will need to demonstrate, through documented third-party audits or other appropriate documentation, that their laboratories are maintaining their accreditation and are continuing to use methods described in FSIS Laboratory Guidebooks.

Comment:

One comment asserted that instead of conducting the same number and type of sampling that is conducted under FSIS's sampling programs, the Agency should allow States to develop sampling programs that reflect the same number of samples over the broad spectrum of meat products produced under the cooperative interstate shipment program. According to the comment, States may very well conduct more sampling or more comprehensive sampling than Federal programs. The comment also suggested that FSIS provide States with production data to guide them in selecting the same number or more samples based on the same volumes under FSIS inspection programs.

Response:

To qualify for the cooperative interstate shipment program States must, at a minimum, collect and analyze the same number and type of regulatory product samples from selected establishments as are collected and analyzed under FSIS's inspection sampling program. If they have met the sampling requirements provided for in FSIS's regulatory sampling programs, States may collect additional samples or conduct additional analyses if they choose to do so. FSIS will provide guidance to States in determining the appropriate number of samples that they will need to collect to be the same as the Federal regulatory sampling program.

Comment:

Some comments noted that establishing a national laboratory program to analyze samples collected under the cooperative interstate shipment program would be more economically viable than requiring that each State program conduct a laboratory program that is “the same as” FSIS's. According to the comments, it is economically unreasonable for States to set up and maintain equipment necessary for running extremely rare samples.

Response:

States that do not have the laboratory capability to conduct the necessary sampling and analyses required under the cooperative interstate shipment program are permitted to submit samples collected under the cooperative interstate shipment program to an outside laboratory that does. The States may rely on the sample results obtained from an outside laboratory if the State, in coordination with FSIS's OPHS, has verified that the laboratory has the necessary accreditation and is capable of producing the same results obtained by FSIS's laboratories.

Comment:

One comment stated that the level of oversight that FSIS intends to have over State laboratories under the cooperative interstate shipment program is unnecessary. The comment suggested that, if FSIS intends to oversee the analysis of samples collected from selected establishments, it should offer to analyze all samples from eligible establishments at FSIS laboratories at no cost to the State program.

Response:

FSIS does not intend to oversee the analysis of samples collected from selected establishments. The Agency intends to consult with the States to verify that the laboratories that States use to analyze samples from selected establishments are capable of producing the same results as FSIS's laboratories.

Comment:

One comment included a number of questions that the commenter requested FSIS address before the

Agency issues the final rule to implement the cooperative interstate shipment program. The questions are as follows:

• Will the kidney inhibition swab (KIS) test for detecting antimicrobial drug residues be required in establishments selected for the program, or will other tests be acceptable?

• If KIS is necessary, will every facility be required to have an incubator, or can samples be sent to the state laboratory, requiring only one incubator?

• If an establishment decides to participate in both the cooperative program and the state inspection program, would the sampling program required by FSIS be sufficient, or would they also have to participate in the State's sampling program?

• Could the selected establishments be put into the FSIS sampling program, with FSIS sending sample requests and supplies, and the samples analyzed at Federal labs?

• What process must be followed if a state's laboratory wants to request audit help?

• Will the recommendations of the auditor be the official required adjustments the lab must make to allow the state to participate in the program?

Response:

As noted above, the laboratory services that a State uses to analyze samples under the cooperative interstate shipment program must use methods that are capable of producing results that are “the same as” those obtained from the methods used by FSIS's laboratories. Therefore, the KIS test for detecting antimicrobial drug residues used by FSIS is the acceptable test. Samples may be sent to and analyzed by the State laboratory if FSIS has evaluated and approved any minor modifications to the procedures described in the FSIS Laboratory Guidebooks.

If an establishment participates in both the cooperative interstate shipment program and the cooperative State MPI program, the sampling conducted under the cooperative interstate shipment program must be “the same as” the sampling conducted under the Federal program, while the samples collected under the State MPI program must meet standards that are “at least equal to” the Federal program.

States that participate in the cooperative interstate shipment program are responsible for scheduling, collecting and analyzing samples required under the program. FSIS will not collect or analyze regulatory samples for the cooperative interstate shipment program.

The SEC assigned to the State will facilitate the process for the State to obtain the necessary audit assistance from FSIS's OPHS. As noted above, OPHS will provide guidance and advice on laboratory accreditation requirements. However, the laboratories themselves will be responsible for obtaining the necessary ISO accreditation.

6. Related Activities

Comment:

Some comments requested that FSIS clarify what States need to do to demonstrate they are able to “conduct any related activities that would be required under a cooperative interstate shipment program,” as required under the proposed regulations. The comments said that the final rule must specifically describe the “related activities” required under the cooperative agreement or else the Agency should remove this statement.

One comment said that requiring that States conduct “related activities” adds requirements for a State program that are outside of what is authorized by the enabling statute, and is both unclear and unnecessary. The comment said that FSIS should not be attempting to impose ancillary requirements on the States through the cooperative agreement process. According to the comment, the State's ability to provide inspection service to selected establishments in accordance with the statute is all that is authorized and, therefore, all that is necessary.

Response:

The term “related activities” refers to any activities that are necessary to ensure that the inspection services provided to selected establishments are “the same as” the inspection services provided to Federal establishments. Such activities include, but are not limited to, scheduling, collecting and analyzing regulatory samples, issuing export certificates for establishments that will be exporting products to foreign countries, and verifying that selected establishments are humanely handling livestock in connection with slaughter.

E. Additional Conditions for State Participation

In addition to requiring that a State's requests for an interstate shipment program include documentation to demonstrate that it is capable of providing the necessary inspection services to selected establishments in the State, the proposed regulations also require that, in its request, the State must agree to: (1) Provide FSIS with access to the results of all laboratory analyses conducted on product samples from selected establishments in the State; (2) inform the SEC for the State of any laboratory results that indicate that a product produced in a selected establishment may be adulterated or may otherwise present a food safety concern; and (3) if necessary, cooperate with FSIS to transition selected establishments in the State that have been deselected from a cooperative interstate shipment program to become official establishments (proposed 9 CFR 332.4(b)(3) and 381.187(b)(3)).

The proposed regulations also provide that when States submit their requests for an interstate shipment program, they must include a list of establishments that have requested to participate in the program and that the State recommends for initial selection into the program (proposed 9 CFR 332.4(b)(1) and 381.187(b)(1)).

Comment:

Two comments suggested that FSIS remove the provision in the proposed regulations that requires that States give FSIS access to the results of all laboratories analyses conducted at selected establishments. The comments stated that such a requirement is unnecessary because the States are also required to notify the SEC of results that indicate that a product produced in a selected establishment may be adulterated or may otherwise present a food safety hazard.

Response:

Although the States are required to notify the SEC of laboratory results that indicate that a product produced in a selected establishment may be adulterated or present a food safety hazard, the SEC or other FSIS personnel also need to have access to the results of the laboratory analyses conducted on products produced in selected establishments to verify that these establishments are operating in a manner that complies with the Acts.

Comment:

One comment stated that, as written, the proposed requirement that States give FSIS “access” to all laboratory results could be interpreted as requiring that FSIS have electronic access, via a particular system, to the results of testing conducted by State programs. According to the comment, when an integrated electronic system for data sharing is developed, funded, and implemented, State programs will share laboratory results with FSIS electronically. The comment maintained that the cooperative interstate shipment program should not unintentionally limit the methods by which analytical results are shared with FSIS before an electronic system is fully operational.

Response:

The regulations do not prescribe the methods by which States are required to share their analytical results with FSIS. States may share analytical results with FSIS

electronically or they may provide hard copies. The only requirement is that they give FSIS access to these results upon request.

Comment:

One comment said that the proposed requirement that the State notify the SEC when laboratory results indicate that a product from a selected establishment may be “adulterated or may otherwise present a food safety concern” is overly broad and redundant. The comment asserted that any product that presents a food safety concern is, by definition, adulterated. The comment suggested that FSIS delete the phrase “may otherwise present a food safety concern” in the final regulations.

Response:

There may be instances in which a product presents a food safety concern but it is unclear as to whether the product is adulterated under the FMIA or PPIA. For example, a preliminary laboratory result may indicate that a product that has been distributed in commerce is contaminated with a pathogen but the laboratory needs to complete the analysis to confirm these results. The SEC needs to be made aware of these situations to verify that the establishment and States have responded to the preliminary result in a manner that complies with the Federal Acts and implementing regulations.

Comment:

One comment stated that, instead of requiring that a State's request for a cooperative interstate shipment program include a list of establishments that have submitted requests to participate in the program and that the State recommends for the program, the final regulations should permit States to submit a request for a cooperative interstate shipment program before they have identified establishments interested in being selected for the program. According to the comment, this would allow the State and Federal programs to work out any issues with their relationship before offering the program to establishments.

Response:

FSIS agrees with this comment. The Agency has modified the regulations to require that a State's request for a cooperative interstate shipment program include a list of establishments that have submitted a request to participate in the program, if any. This will allow States to request an agreement for a cooperative interstate shipment program before they have identified establishments interested in participating in the program. However, FSIS will only reimburse States for 60% of their eligible costs to administer the program if, after entering into a cooperative agreement, establishments in the State are selected for, and participate in, the program.

Comment:

A few comments stated that, in addition to verifying that States have sufficient authority, resources, personnel, training, sampling capability and laboratory capacity to provide the necessary inspection services to selected establishments in the State, FSIS will also need to monitor budget issues in participating States on an ongoing basis to ensure that States continue to have sufficient resources to participate in the program. The comments noted that many State governments are under financial duress and have had to make budget cuts in their State inspection programs. One comment said that even though FSIS is required to reimburse States for at least 60% of their eligible costs associated with the cooperative interstate shipment program, the Agency will need to verify that States interested in participating in the new program will be able to meet Federal inspection regulatory requirements during these hard economic times.

Response:

States that enter into an agreement with FSIS for a cooperative interstate shipment program will be required to prepare annual budgets to cover the costs for the cooperative interstate shipment program, maintain complete accounting records, and conduct all other financial accountability activities just as they do for the State MPI program. FSIS will terminate a State's agreement for a cooperative interstate shipment program if the State does not have sufficient finances to comply with all aspects of the cooperative interstate shipment program.

F. Selection Process

Under the proposed regulations, State-inspected establishments that are interested in participating in the cooperative interstate shipment program must apply for the program through their State (proposed 9 CFR 332.5(a)(1) and 381.515(a)(1)). If a State determines that an establishment operating under the State's meat or poultry products inspection program qualifies for selection into a cooperative interstate shipment program, and the State is able and willing to provide the necessary inspection services to the establishment, the State is to submit its evaluation of the establishment through the FSIS District Office that covers the State (74 FR 47653). The proposed rule provides that the FSIS Administrator, in coordination with the State, will decide whether to select the establishment for the program (proposed 9 CFR 332.5(b) and 381.151(b)).

Comment:

Some comments said that the State inspection program is the government entity best suited to begin the process of selecting establishments for the cooperative interstate shipment program. According to the comments the States, not the FSIS Administrator, should be responsible for selecting establishments to participate in the program. The comments suggested that after initiating the selection process, the State program could collaborate with the FSIS SEC, who can visit the establishments that are under consideration for selection into the cooperative interstate shipment program.

Response:

FSIS agrees that the States are best suited to begin the process of determining which establishments in the State are eligible for selection to the cooperative interstate shipment program. Therefore, the proposed rule requires that establishments interested in participating in the cooperative interstate shipment program apply for the program through the State in which they are located (proposed 9 CFR 332.5(a) and 381.515(a). After the State recommends establishments for the program, the law requires that the FSIS Administrator coordinate with the State to select establishments for the program (21 U.S.C. 683(b)(1) and 472(b)(1)).

Comment:

One comment argued that the regulations do not need to include a process for selecting establishments to participate in the cooperative interstate shipment program because establishments operating under the State MPI programs are already under an inspection system that provides for food safety in a manner that is “at least equal to” the Federal inspection program. According to the comment, there is no need for selection because the entire State program has already been approved.

Response:

The law requires that the FSIS Administrator, in coordination with the State, select establishments to participate in the new cooperative interstate shipment program (21 U.S.C. 683(b) and 472(b)). There is nothing in the law to indicate that establishments operating under the existing State MPI programs have already been approved for the cooperative interstate shipment program. Therefore, these final regulations include procedures for selecting establishments for the program.

Comment:

One comment suggested that the final rule require that selected establishments undergo an on-site review by FSIS at least 30 days before they become eligible to participate in the cooperative interstate shipment program. The comment noted that such a review would help to guarantee that selected establishments that wish to ship their meat products in interstate

commerce are in compliance with Federal law.

Response:

The preamble to the proposed rule explained that, as part of the selection process, the SEC assigned to a State, in coordination with the State, will verify that each establishment in the State that has applied to participate in a cooperative interstate shipment program is in compliance with all Federal standards (74 FR 47653). To verify such compliance, the SEC will coordinate with the State to conduct on-site reviews of each establishment that has applied, and that the State recommends, for selection into the program.

Comment:

One comment said that FSIS should better explain how establishments may be selected for the cooperative interstate shipment program.

Response:

The preamble to the proposed rule provides a detailed description of the proposed selection process. FSIS is adopting that process in this final rule.

As proposed, State-inspected establishments that are interested in participating in a cooperative interstate shipment program will be required to apply for the program through the State agency that administers the State MPI program. States are responsible for establishing their own application procedures. The State will then evaluate the establishment to determine whether it qualifies for selection. To qualify for selection to the cooperative interstate shipment program, an establishment must:

• Have the appropriate number of employees;

• Not be ineligible for a cooperative interstate shipment program

2

;

2

Examples of establishments that are ineligible for the cooperative interstate shipment program include official Federal establishments, establishments located in a State that has a State MPI program, establishments in violation of the FMIA or PPIA, establishments that are the subject of a transition to become a Federal plant, and establishments located in a State without a State MPI program.

• Be in compliance with all requirements under the State inspection program; and

• Be in compliance with all Federal meat or poultry products inspection requirements.

If a State determines that an establishment operating under the State's MPI program qualifies for selection into a cooperative interstate shipment program, and the State is able and willing to provide the necessary inspection services to the establishment, the State is to submit its evaluation of the establishment through the FSIS District Office that covers the State. The FSIS Administrator, in coordination with the State, will then decide whether to select the establishment for the program.

In deciding whether to select an establishment that the State has recommended for the cooperative interstate shipment program, the Administrator will consider whether the establishment qualifies for the program and whether the Agency has the resources that it needs to provide the required oversight of the establishment if it is selected for the program. Before an establishment can be selected, the SEC, in coordination with the State, must verify, through record reviews and on-site visits, that the establishment is in compliance with all Federal inspection requirements under the FMIA, PPIA, and their implementing regulations in title 9, chapter III, of the CFR.

G. Mark of Inspection and Official Number

The proposed regulations require that inspection services for selected establishments be provided by designated State personnel, and that articles prepared or processed in a selected establishment that have been inspected and passed by designated personnel bear an official Federal mark of inspection (proposed 9 CFR 332.6(c) and 381.516(c)). The proposed regulations also require that the Federal mark contain a selected establishment number assigned to the establishment by the State. The proposal provides that the number must include, as a suffix, the abbreviation for the State in which the establishment is located, as well as the abbreviation “SE” for selected establishment (

e.g.

“38SETX” as a number for a selected establishment in Texas). If the establishment processes poultry products, the suffix must also contain a “P,” (e.g., 38 SEPND for a selected poultry establishment in North Dakota) (proposed 9 CFR 332.5(c) and 381.515(c)). The proposed regulations also state that States that fail to assign an establishment number to selected establishments in the State and report the number to the SEC for the State will not qualify to participate in the program (proposed 9 CFR 332.5(d) and 381.515(d)).

Comment:

Some comments expressed concern that allowing State-inspected meat and poultry products to bear a Federal mark of inspection will make it difficult to maintain the integrity of the Federal mark. One comment stated that the integrity of the Federal mark will be diminished if a State-inspected product distributed in interstate commerce is recalled or found to be adulterated. Another comment said that allowing State-inspected products to bear a Federal mark of inspection is misleading because consumers that see a Federal mark of inspection on the label of a meat or poultry product will think that the product is the same as all other federally-inspected products. The comment noted that the FMIA and PPIA both prohibit labeling that is false or misleading.

Response:

Under the 2008 amendments to the Acts, meat and poultry products produced under the cooperative interstate shipment that designated State personnel have determined are in compliance with all Federal standards are required to bear a “Federal mark, stamp, tag, or label of inspection” (21 U.S.C. 472(b)(1) and 683(b)(1)). Thus, requiring that articles prepared or processed in a selected establishment that have been inspected and passed by designated personnel bear an official Federal mark is consistent with the law. Such a requirement will not diminish the integrity of the Federal mark or be misleading to consumers, as suggested by the comments, because all meat and poultry products that bear the Federal mark will have been produced under Federal standards.

Comment:

Some comments maintained that it is not necessary to require that the meat and poultry products produced under the cooperative interstate shipment program bear a Federal mark of inspection because States that have MPI cooperative agreements already provide State marks. A State Department of Agriculture and a State agency commented that many State-inspected establishments prefer that their products bear the State mark of inspection. The comments claimed that requiring that selected establishments apply a Federal mark and identify the State in the establishment number is unacceptable to most plant owners. Another comment argued that requiring that a Federal mark of inspection be applied to products that have been inspected by a State inspector under a cooperative State meat inspection program is counterintuitive and does not accomplish the goal of providing for interstate shipment of State-inspected products.

Response:

The 2008 amendments to the Acts require that meat and poultry products produced under the cooperative interstate shipment program bear a Federal mark of inspection.

As noted above, under the proposed regulations, the Federal mark is required to contain a selected establishment

number assigned to the establishment by the State. The selected establishment number is required to include, as a suffix, the abbreviation for the State in which the establishment is located, as well as the abbreviation “SE” for selected establishment (

e.g.

“38SETX” as a number for a selected establishment in Texas). If the establishment processes poultry products, the suffix must also include a “P” before State abbreviation (

e.g.,

38 SEPND for a selected poultry establishment in North Dakota). Thus, although meat and poultry products produced in selected establishments will not bear a State mark of inspection, the State in which the product was produced can be readily identified by referencing the selected establishment number that is required to appear inside the Federal mark.

Comment:

Some comments agreed that products produced in selected establishments should bear a Federal mark of inspection but also suggested that such products be allowed to bear a State mark if the establishment so chooses. According to the comments, many State-inspected establishments believe that compliance with their State inspection program requirements along with the Federal standards provides a marketing advantage and that appearance of the State mark may add value to State-inspected products sold in interstate commerce. One comment noted that because their State mark of inspection is an outline of the State, selected establishments in the State could use the State mark to promote their products interstate.

Response:

It is not necessary for meat or poultry products that have been processed or prepared in selected establishments to bear both a State and Federal mark because the product's State-of-origin can be identified by the selected establishment number that is required to appear in the Federal mark. Moreover, allowing products produced under Federal standards to bear both a Federal and State mark of inspection may be misleading to consumers and foreign trade partners because the law prohibits interstate shipment of products produced under State MPI programs. Allowing both Federal and State marks could also be confusing to consumers and make it difficult for them to identify products potentially implicated in outbreaks or subject to recall.

Selected establishments that were interested in using the State mark to market meat or poultry products produced under the cooperative interstate shipment program could use labeling statements information to identify where the product was produced instead, provided that the statement is truthful and not misleading. For example, the label of a meat product produced in a selected establishment in Texas, could contain the statement “prepared in Texas,” if the statement is presented in a manner that is truthful and not misleading to consumers.

Comment:

Some comments suggested that instead of requiring that States assign a new official State establishment number to selected establishment, FSIS should allow establishments that participate in the cooperative interstate shipment program to retain their official State number in conjunction with the suffix “SE.”

Response:

There is nothing in the proposed rule that would prevent a State from allowing establishments selected for the cooperative interstate shipment program to retain their official State number, provided that the suffix “SE” is added to original State establishment number. The “SE” suffix is necessary to make clear that the establishment associated with the number is a selected establishment.

Comment:

One comment noted that the proposed regulations identify the “SE” that is required to appear as part of a selected establishment's official State number as a suffix. The comment stated that the “SE” designation is, in fact, a prefix.

Response:

FSIS refers to the “SE” along with the State abbreviation as a “suffix” because these abbreviations follow the number assigned to the selected establishment.

Comment:

One comment objected to the provision in the proposed regulations that provide that a State that fails to assign an official State number to the selected establishments in the State and inform the SEC will be disqualified from participating in the cooperative interstate shipment program. The comment believed that disqualification is an overly harsh penalty for what may be a simple omission. The comment suggested that in the final rule, FSIS replace the statement that failure to assign an official number “will disqualify the State” to “may disqualify the State.”

Response:

As explained in the preamble to the proposed rule, full compliance by a State with the requirements for assigning official establishment numbers to establishments selected for the cooperative interstate shipment program is essential if the program is to succeed (74 FR 57654). FSIS will give States that inadvertently fail to assign a proper establishment number to a selected establishment an opportunity to take corrective actions to comply with the regulations. However, failure to comply with the establishment number requirements in this final rule will disqualify a State from participating in the cooperative interstate shipment program.

Comment:

Several comments submitted by State Departments of Agriculture and State agencies requested that in the final rule FSIS make clear that it will permit selected establishments to produce products under both the cooperative interstate shipment program and the State MPI program. The comments noted that FSIS allows establishments with both a Federal grant and State grant of inspection to operate as both a Federal plant and a State plant if they maintain an appropriate separation by time or space between the State and Federal operations and that the products are appropriately marked. The comments noted that in a letter to the National Association of State Departments of Agriculture (NASDA) dated September 15, 2009, the Deputy Secretary of Agriculture said that FSIS expects to apply a similar policy to selected establishments that are interested in continuing to produce certain products solely for distribution in the State under the State MPI program. The comments maintained that allowing for this type of flexibility will benefit rural America and is necessary for the success of the new program.

One comment said that if the final rule permits selected establishments to produce products under both the State MPI program and the cooperative interstate shipment program, FSIS should allow these establishments to continue to apply the State mark to products that are not produced under the cooperative interstate shipment program.

Response:

FSIS has considered these comments and has decided to revise the proposed regulations to allow selected establishments to conduct operations under both the cooperative interstate shipment program and the State MPI program if those establishments implement and maintain written procedures for complete physical separation of product and process for each operation by time or space. An establishment may provide for separation by space by conducting its State MPI operations in an area that is physically separate from the area in which it conducts operations under the cooperative interstate shipment program. Alternatively, an establishment may conduct each operation in the same area provided that the separation in space is sufficient to

ensure that potential food safety hazards, such as microbiological pathogens, if present, are not likely spread from one area to another through aerosolization, air ducts, air currents, employees, or other means and that there is no co-mingling of product. Establishments that chose to conduct both operations in the same area must clearly identify and distinguish the State MPI operation from the cooperative interstate shipment operation. For example, the establishment might designate certain employees on a given day to work exclusively on the State MPI operations and have these employees wear white clothing, and designate other employees to work exclusively on the cooperative interstate shipment operations and have these employees wear yellow clothing. The establishment could also color-code knives and other equipment associated with each operation.

In addition to separation by space, an establishment may conduct the State MPI operations and cooperative interstate shipment operations at separate times if the establishment's procedures for separation address clean-up between operations. Establishments that conduct both operations in the same facility and on the same equipment, and that separate the operations by time, will need to fully clean and sanitize the facilities and equipment in between operations as set out in their Sanitation SOPs.

Establishments that conduct operations under both the State MPI program and the cooperative interstate shipment program will also need to establish written procedures to ensure that product produced under the State MPI program will not become co-mingled with product produced under the cooperative interstate shipment program. The procedures will need to ensure that products produced under each program are appropriately identified as State MPI product or cooperative interstate shipment products, and that each product bears the appropriate mark of inspection.

Establishment will also need to maintain physical separation of product produced under the State MPI program from products produced under the cooperative interstate shipment program throughout the process, either through the use of separate facilities or by designated areas for holding or storing products produced under separate operations.

The meat or poultry products produced when the establishment is operating under the State MPI program will be required to bear the State mark of inspection and will only be permitted to be distributed within the State. Meat or poultry products produced when the establishment is operating under the cooperative interstate shipment program will be required to bear a Federal mark and may be shipped in interstate commerce.

H. Oversight and Enforcement—Selected Establishment Coordinator

The preamble to the proposed rule explained that the statute requires that FSIS appoint a “state coordinator” to “provide oversight and enforcement” of the cooperative interstate shipment program and “to oversee the training and inspection activities” of State personnel designated to provide inspection services to selected establishments (74 FR 47654). When FSIS issued the proposed rule, the Agency explained that the “state coordinator” required by statute would be referred to as the “selected establishment coordinator” (SEC) in the proposed regulations to avoid confusion with the “State coordinator” under the Talmadge-Aiken program, which is a State employee. In the preamble to the proposed rule, FSIS also explained that the Agency had tentatively decided that the SEC would be an employee of the FSIS Office of Field Operations (OFO) and would be assigned to an FSIS district office.

1. SEC Definition and FSIS Program Area

Comment:

One comment stated that the codified text in the final rule should clarify that the term “selected establishment coordinator” as used in the implementing regulations is synonymous with the term “state coordinator” under the statute. The comment said that there should not be both a State coordinator and an SEC.

Response:

As noted in the preamble to the proposed rule, the term “State coordinator” is often used to refer to a State employee under the Talmadge-Aiken program. Therefore, to make clear that the “State coordinator” for the cooperative interstate shipment program is an FSIS employee, this final rule identifies that employee as the FSIS “selected establishment coordinator” in the codified text. The codified text in the final rule does not provide for both a State coordinator and an SEC.

Comment:

Some comments stated that, instead of being under the direct supervision of an FSIS District Manager, as FSIS tentatively decided in the proposed rule, the SEC should be under the direct supervision of the Secretary of Agriculture as provided under the statute.

Other comments agreed with FSIS's tentative determination that the SECs operate out of the district offices. One comment noted that the SEC is a Federal employee. The comment stated that, as such, it is appropriate that the SEC be stationed at the district office and report to a District Manager and ultimately, FSIS headquarters. The comment asserted that the SEC should not be stationed at the State meat and poultry inspection agency, but should maintain frequent communication with State agency officials.

Response:

The Secretary of Agriculture has delegated the administration and enforcement of the cooperative interstate shipment program to FSIS. Since the SEC will be an FSIS employee that operates out of the FSIS district office, it is appropriate for the SEC to be under the direct supervision of the FSIS District Manager.

Comment:

Several comments were concerned about the Agency's tentative decision to assign the SEC to an FSIS district office. According to the comments, FSIS district offices are not always consistent in their interpretation and enforcement of the Agency's policies. The comments stated that administering the cooperative interstate shipment program from different district offices will make it difficult for FSIS to implement and enforce the program in a consistent manner. The comment suggested that, instead of assigning SECs to multiple district offices, FSIS should designate a single entity within the Agency to implement and enforce the cooperative interstate shipment program.

Some comments suggested that FSIS create a branch in OPEER, similar to the Federal/State Audit Branch (FSAB), or assign the FSAB to administer, review, and enforce the cooperative interstate shipment program. The comments noted that the OPEER/FSAB is already responsible for verifying that the State MPI programs are operating in a manner that is “equal to” the Federal standards, and States now spend a considerable amount of time providing information to OPEER/FSAB. The comments stated that allowing a centralized Agency branch, such as the OPEER/FSAB, to administer and enforce the cooperative interstate shipment program will promote consistency in the program by providing the FSIS SECs, the State programs, and selected establishments with a single point of contact for guidance, policy implementation, and enforcement.

Response:

The FSIS SEC is required to provide “oversight and enforcement” of the cooperative interstate shipment program and “to oversee the training

and inspection activities” of State personnel designated to provide inspection services to selected establishments (21 U.S.C. 683(d)(1) and 472(d)(1)). As noted above, when FSIS issued the proposed rule, it had tentatively decided that the SEC would be an employee of the FSIS Office of Field Operations (OFO) assigned to an FSIS District Office. Because OFO has expertise in management and enforcement of Federal inspection standards, FSIS is affirming that decision. The SEC will be an OFO employee assigned to an FSIS district office as proposed.

As noted by the comments, the OPEER/FSAB is responsible for conducting comprehensive audits of Federal and State MPI programs. OPEER/FSAB verifies that State MPI programs are operating in a manner that is “at least equal to” the Federal program. Although OPEER/FSAB will not have direct oversight and enforcement of the cooperative interstate shipment program, once the cooperative interstate shipment program is fully implemented, the OPEER/FSAB will be responsible for auditing that program to verify that it is operating in a manner that is “the same as” the Federal inspection program.

2. Number of SECs per State

In the preamble to the proposed rule, FSIS explained that the number of States in an FSIS district assigned to an SEC will likely depend on several factors, including, but not limited to: (1) The number of States and selected establishments, if any, that participate in the cooperative interstate shipment program; (2) the location of each selected establishment; (3) the number of State inspection personnel providing inspection services to selected establishments in a State; (4) the complexity of the operations conducted at each selected establishment; and (5) the schedule of operations for each selected establishment (74 FR 47654). The preamble also noted that the number of States assigned to an SEC would also need to be based on consideration of the most effective allocation of available Agency resources.

In the PRIA to the proposed rule, FSIS also estimated that 13 full-time equivalent FSIS employees would be needed to perform the SEC functions for the 16 States expected to participate in the cooperative interstate shipment program (74 FR 47660). If 400 establishments participate in the new program, the Agency estimated each SEC will be responsible for 31 establishments in a geographically-limited area.

Comment:

Several comments, most submitted by consumer advocacy organizations, stated that 13 SECs to oversee cooperative interstate shipment programs in 16 States is not sufficient to provide adequate oversight of the new program. The comments urged FSIS to assign a separate SEC to each State that participates in the program. The comments asserted that to effectively verify that selected establishments operating in a manner consistent with the Acts, the SECs need to be spending most of their time in these establishments rather than driving from state-to-state. One comment said that when the provisions of the law were negotiated, the parties understood that there was to be one SEC per State.

Other comments questioned whether the Agency's estimate of one SEC for 31 establishments is adequate to ensure that these establishments are operating in a manner that complies with the Acts. The comments stated that FSIS must provide enough flexibility to reduce the number of establishments covered by an SEC if circumstances warrant.

One comment expressed concern over the statement in the proposed rule that “[t]he number of States assigned to an SEC would also need to be based on consideration of the most effective allocation of available Agency resources.” The comment stated this sentence demonstrates that there is reason to be concerned that the new program may not receive adequate resources to best protect public health and safety. The comment maintained that there should be at minimum one SEC per participating State and that the SEC's sole function should be oversight and enforcement of the program, unless the State has so few participating establishments that a full-time SEC is not warranted.

Response:

As noted in the preamble to the proposed rule, the number of SECs needed to provide effective oversight of the cooperative interstate shipment program will depend on several factors, all of which are intended to ensure that there is sufficient Federal oversight of the program. FSIS agrees with the comments that stated that the SECs should be spending most of their time overseeing activities in selected establishments, and the Agency intends to structure the SEC's assignment in a manner that will, to the greatest extent possible, limit the time spent traveling between selected establishments. In some instances, this will require that an SEC cover selected establishments located in different States, particularly in States with selected establishments located near the State borders.

As noted above, FSIS estimated that there would be one SEC for 31 establishments in a geographically-limited area. This number is an estimate and assumes a certain level of participation by State-inspected establishments that employed fewer than 35 employees when the 2008 Farm Bill was enacted. The actual number of establishments assigned to an SEC will depend on a number of factors, including the complexity of the operations conducted at the selected establishments and the schedule of operations for each selected establishment.

3. Frequency of SEC Visits

As required under the statute, the proposed regulation provided that the FSIS SEC is to visit each selected establishment in the State on a regular basis to verify that these establishments are operating in a manner that is consistent with the Acts and the implementing regulations (proposed 9 CFR 332.7(a) and 318.517(a)). In the preamble to the proposed rule, FSIS noted that the SEC's frequency of visits and oversight activities for each selected establishment will need to reflect the type of operations conducted by a selected establishment, as well as the establishment's production processes (74 FR 47654). The Agency requested comments on how frequently the SEC should visit each establishment under his or her jurisdiction.

Comment:

Several comments said that, since the law requires that the SECs file quarterly reports on the status of the selected establishment under their jurisdiction, they should visit each selected establishment at least quarterly. Some comments stated that requiring that the SEC visit selected establishments more often than once a quarter would seem overly burdensome and ineffective. One comment suggested that FSIS modify the proposed regulation to read that the SEC will visit, “each selected establishment in the State on a regular basis, but no less frequently than quarterly, to verify that the establishment is operating in a manner that is consistent with the Act.”

One comment stated that requiring quarterly or bi-annual visits will allow the SECs to both cover their assigned establishments and conduct the day-to-day operations of managing the program for their region. The comment said that if a problem arises, the SEC can visit the establishment more frequently. The comment suggested that SECs also rely on State inspection personnel to advise them if additional visits are needed.

Many comments stated that the frequency of the SEC's visits should be based on the performance of the establishment. The comments noted that the number of visits may need to be higher when the program is first implemented while the State inspection personnel gain experience with the program's regulatory requirements. Two comments suggested that initially, the visits should be weekly and that subsequent visits should be based on the establishment's performance.

One comment said that the final regulations should clearly state that the frequency of the SEC's visits shall be based on the performance of the establishment's food safety control systems. The comment maintained that such a statement will ensure judicious use of FSIS resources and create an additional incentive for the establishment to effectively operate their food safety control systems.

One comment stated that the SEC should visit selected establishments no more frequently than FSIS front line supervisors typically visit federally-inspected establishments in their circuit. Another comment said that the SECs will need to visit selected establishments quite frequently to ensure that they are in compliance with Federal standards. One comment stated the goal in determining how frequently SECs should visit establishments under their jurisdiction should be to provide a statistically relevant sample to check on the level of compliance and performance of inspections by state inspectors.

One comment suggested that in addition to prescribing the frequency of SEC visits, the final regulations should specify that the SEC's visits to selected establishments are to occur at different times and be unannounced.

Response:

The comments submitted on this issue indicate that there is a general lack of consensus on how frequently the SEC should visit selected establishments in the States. As noted above, some comments suggested that the SEC conduct quarterly or even bi-annual visits, while others suggested that the SEC visit each selected establishment at least weekly.

The 2008 amendments to the Acts do not specify how frequently the SECs are to visit selected establishments, but they do provide that the SEC “* * *shall visit selected establishments with a frequency that is appropriate to ensure that selected establishments are operating in a manner that is consistent with this Chapter (including regulations and policies under this Chapter (21 U.S.C. 683(d)(3)(a) and 472(d)(3)(a)). The Senate Committee report that explains this provision states that “[i]t is the Committee's intent that the [SEC] inspect selected establishments frequently each month” (S. Rep. No. 110-20, 110th Cong., 1st Sess. (2007), pp 211-214)).

Therefore, after considering the comments on this issue, as well as the language in both the statute and the Senate Committee report, FSIS has decided not to prescribe how frequently SECs are to visit selected establishments under their jurisdiction. Instead, the Agency is revising the proposed rule to clarify that the frequency with which the SEC will visit selected establishments under the SEC's jurisdiction will be based on a number of factors, including the complexity of the operations conducted at the selected establishment, the establishment's schedule of operations, and the establishment's performance under the cooperative interstate shipment program. The Agency has concluded that such an approach will ensure that the number of SEC visits reflects the appropriate level of oversight needed for each selected establishment.

FSIS agrees with the comments that noted that the number of SEC visits may need to be higher when the program is first implemented in order for the State personnel to gain experience in enforcing Federal food safety standards. FSIS also intends to schedule some unannounced SEC visits to selected establishments, as suggested by the comments. However, the SEC will also conduct scheduled visits to selected establishments to give State personnel the opportunity to prepare to discuss issues related to their role in enforcing Federal standards.

Although FSIS is not prescribing a specific minimum number of SEC visits, based on the statement in the Senate Committee report, FSIS has concluded that bi-annual or quarterly visits to selected establishments, as suggested by some comments, are most likely not frequent enough to carry out the intent of the statutes.

Comment:

One comment stated that the provision in the proposed rule that allows the SEC, in consultation with the District Manager, to designate qualified FSIS personnel to visit a selected establishment on behalf of the SEC is an appropriate use of Agency resources. The comment said that assigning other designated FSIS personnel to visit establishments on behalf of the SEC makes sense from a practical and financial standpoint. The comment stated that FSIS could use inspection personnel who are already out in the field to conduct visitations to check compliance on a more frequent basis than sending the SEC into the field.

Response:

FSIS agrees that providing for qualified FSIS personnel to visit selected establishment on behalf of the SEC is an appropriate use of Agency resources.

4. SEC Duties—Oversight

Comment:

Some comments supported the level of Federal oversight provided for in the proposed regulations as necessary to maintain the safety and security of all meat and poultry products distributed in interstate commerce. One of the comments stated that any cooperative interstate shipment program must be federally driven and that FSIS must be in charge.

Other comments complained that the proposed rule would give the SEC an excessive and unnecessary level of Federal oversight over the cooperative interstate shipment program. The comments stated that FSIS currently evaluates “at least equal to” State MPI programs through reviews of State self-assessment and through an on-site evaluation of the State's program every three years. The comments asserted that this evaluation methodology has proven effective for assuring that State programs are in compliance with Federal requirements. The comments said that FSIS should, to the extent allowed by statute, consider using this same method for evaluating a State's performance under the new cooperative interstate shipment program.

Response:

FSIS disagrees with the comments that stated that the proposed rule would give the SEC an excessive and unnecessary level of Federal oversight over the cooperative interstate shipment program. As noted throughout this document, under the Acts, as amended by the 2008 Farm Bill, the FSIS Administrator is required to designate an FSIS employee as an SEC for each State to “provide oversight and enforcement of the program” and to “oversee the training and inspection activities” of the designated State personnel providing inspection services to a selected establishment. (21 U.S.C. 683(d)(1) and 472(d)(1)). The Acts also require that the SEC visit selected establishments as frequently as necessary to ensure that these establishments are operating in a manner consistent with the Federal Acts (21 U.S.C. 683(d)(3) and 472(d)(3)). Thus, the level of Federal oversight that the proposed rule provides for the cooperative interstate shipment program reflects the level of oversight that is required by law.

FSIS disagrees with the comments that suggested that the Agency use

OPEER/FSAB's evaluation methodology to oversee a State's performance under the new cooperative interstate shipment program. As noted by the comments, the OPEER/FSAB conducts comprehensive audits of the State MPI programs to verify that States are enforcing laws and regulations that “are at least equal to” to requirements of the Federal Acts. The evaluation methodology used by the OPEER/FSAB is designed to provide a comprehensive annual assessment of the State MPI programs rather than continuous Federal oversight and enforcement of these programs. Thus, this methodology would not provide the necessary level of oversight that the Acts require for the cooperative interstate shipment program.

Comment:

Some comments expressed concern that the proposed rule would give “de facto constant regulatory oversight authority” to the FSIS SEC. The comments stated that this would basically give State personnel working in selected establishments two supervisors. According to the comments, this chain-of-command will create confusion and needless redundancy.

One comment said that the SEC needs to work with the States to coordinate Federal oversight of the program to reduce the burden on the selected establishments to the extent possible. The comments stated that the program should not become one in which both Federal and State officials are routinely inspecting the same facilities.

Another comment agreed with the provision in the proposed rule that stated that the SEC's role is limited to oversight and enforcement of the program. The comment also agreed that the State program should continue to be responsible for the direct supervision of designated State personnel.

Response:

The proposed rule makes clear that inspection services for selected establishments participating in the cooperative interstate shipment program must be provided by designated personnel, who will be under the direct supervision of a State employee (proposed 9 CFR 332.6(b) and 381.516(b)). Although the SEC will be responsible for overseeing the inspection activities of the designated personnel, the State program will continue to be responsible for the direct supervision of all designated State personnel. Thus, the comment that stated that the proposed rule would give State personnel working in selected establishments two supervisors is inaccurate.

5. SEC Duties—Enforcement

The proposed regulation gave the SEC the authority to initiate any appropriate enforcement action provided for in the FSIS rules of practice in 9 CFR part 500 if the SEC determines that a selected establishment under his or her jurisdiction is operating in a manner that is inconsistent with the Acts (proposed 9 CFR 332.9(b) and 381.189(b)). As noted in the preamble, such actions include regulatory control actions, withholding actions, and suspensions (74 FR 47655).

Comment:

Some comments supported the proposed enforcement provisions. One comment stated that it is appropriate for the SECs to have the same authority to initiate enforcement actions with respect to selected establishments as FSIS inspection personnel are authorized to do with federally-inspected establishment. The comment also supported the proposed requirement that selected establishments provide FSIS officials with “access to all establishment records required under the Act and the implementing regulations in this chapter.”

Some comments said that the proposed rule's enforcement provisions go beyond what is authorized under the statute and will result in duplicative efforts. The comments asserted that the designated State personnel, not the SEC, should be responsible for initiating enforcement action in selected establishments.

Response:

Under the proposed rule, designated State personnel are responsible for providing the necessary inspection services to selected establishments in the State. The SEC is responsible for verifying that the designated personnel are providing inspection services in compliance with the Acts.

In the preamble to the proposed rules, FSIS explained that to verify that designated personnel are providing the necessary inspection services, the SEC for the establishment, in coordination with the State, will verify that the designated personnel are correctly applying Federal inspection methodology, making decisions based upon the correct application of this methodology, accurately documenting their findings, and, when authorized to do so, implementing enforcement actions in accordance with the FSIS Rules of Practice in 9 CFR part 500 (74 FR 47655). Thus, the proposed rule makes clear that, as part of their inspection activities, designated State personnel are responsible for initiating enforcement actions in selected establishments if such personnel determine that an enforcement action is authorized under 9 CFR part 500.

The 2008 amendments to the Acts provide that if the SEC determines that any selected establishment is in violation of any requirement of the Acts, the SEC is required to: (1) Immediately notify the Administrator and (2) “deselect” the establishment or suspend inspection at the establishment (21 U.S.C. 683(d)(3)(C) and 472(d)(3)(C)). As explained in the preamble to the proposed rule, in adopting this language, Congress intended that the SEC “* * * shall be provided all the tools necessary * * * to prevent or control any food safety issue that would harm human health” (S. Rep. No. 220, 110th Cong., 1st Sess., at 211 (2007)). Therefore, to ensure that the SEC has the appropriate authority to address any food safety issues as required by the statutes, the proposed rule authorizes the SEC to initiate any appropriate enforcement action provided for in 9 CFR part 500 if he or she determines that a selected establishment under his or her jurisdiction is oper

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