Elimination of Prior Approval Requirements for Establishment Drawings and Specifications, Equipment, and Certain Partial Quality Control Programs

DEPARTMENT OF AGRICULTURE

9 CFR Parts 304, 308, 317, 318, 319, and 381

[Docket No. 95-032P]

RIN 0583-AB93

Elimination of Prior Approval Requirements for Establishment

Drawings and Specifications, Equipment, and Certain Partial Quality

Control Programs

AGENCY: Food Safety and Inspection Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Food Safety and Inspection Service (FSIS) is proposing to

amend the Federal meat and poultry products inspection regulations by

removing current requirements for prior approval by FSIS of

establishment drawings, specifications, and equipment prior to their

use in official establishments. Requirements involving the comparison

of blueprints and specifications with actual facilities and equipment

would end. These amendments would provide the regulated industry with

the flexibility to design facilities and equipment in the manner they

deem best to maintain a sanitary environment for food production. FSIS

would continue to verify through inspection that good sanitation is

being achieved. Similarly, FSIS is proposing to end its prior approval

of most establishment-operated partial quality control programs, which

are used by establishments to control certain kinds of food processing

and product characteristics. This change would make it possible for

establishments to develop and implement quality control programs

without first having to receive permission from FSIS to do so. This

action is being taken to streamline and modernize the meat and poultry

food safety regulations, to separate the roles of Government and the

regulated industry, to encourage innovations that will improve food

safety, and to remove unnecessary regulatory burdens on inspected meat

and poultry establishments. In addition, the proposal represents an

important shift away from FSIS's ``command-and-control'' regulatory

approach and toward a less bureaucratic approach consistent with the

Agency's food safety mission.

DATES: Comments must be received on or before: July 1, 1996.

ADDRESSES: Please send an original and two copies of comments on this

proposed rule to FSIS Docket Clerk, DOCKET #93-032P, Room 4352 South

Agriculture Building, Washington, DC 20250-3700. Oral comments, as

provided under the Poultry Products Inspection Act, should be directed

to the person listed under FOR FURTHER INFORMATION CONTACT. Copies of

FSIS reference materials cited in this proposal are available for

review in the FSIS docket room.

FOR FURTHER INFORMATION CONTACT: Ms. Patricia F. Stolfa, Acting Deputy

Administrator, Science and Technology, FSIS, Room 402 Annex Building,

Washington, DC 20250-3700; (202) 205-0699.

SUPPLEMENTARY INFORMATION:

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.)

direct the Secretary of Agriculture to maintain inspection programs

designed to assure the public that meat and meat food products (meat

products) and poultry and poultry products (poultry products) are safe,

wholesome, not adulterated, and properly marked, labeled, and packaged.

FSIS carries out the mandates of these statutes by administering a

continuous in-establishment inspection program for meat and poultry

products that are shipped in interstate and foreign commerce or in

``designated'' States. A number of the States operate meat and poultry

inspection programs for product shipped intrastate. Under the FMIA and

PPIA, such programs must impose requirements ``at least equal'' to the

Federal requirements.

The FMIA and PPIA require the Secretary to provide, among other

things, for the inspection of establishments to assure that the

conditions under which meat and poultry products are produced are

sanitary. The Acts also require the Secretary to prescribe rules and

regulations governing the sanitary conditions of official

establishments (21 U.S.C. 608 and 456). Pursuant to these provisions,

the meat and poultry inspection regulations currently prescribe ``prior

approval'' or approval-before-use by FSIS of facility drawings and

specifications and of equipment used in official establishments. The

regulations also provide for the prior approval of certain quality

control programs, known as partial quality control (PQC) programs,

before their use by official establishments.

Current Prior Approval Procedures

Currently, applicants seeking Federal inspection must submit to

FSIS blueprints and drawings with specifications that exactly

illustrate the applicant's establishment as it exists or is proposed to

exist (9 CFR 304.2(a), 308.2, and 381.19). Before inspection is

granted, FSIS officials in the field and in Washington, D.C., review

the blueprints and drawings and the facility they represent to

determine whether the facility meets the requirements of the meat and

poultry inspection regulations, which are intended to ensure that

products can be produced in a sanitary environment. Owners or operators

of establishments intending to add structures or remodel their existing

facility must also submit blueprints and drawings with specifications

to FSIS for review before beginning any new construction (9 CFR 404.2,

308.2, and 381.19). During FY 1994, FSIS technical personnel reviewed

about 2,900 sets of blueprints for new or modified facilities.

Federally inspected establishments or equipment manufacturers must

go through a similar process of prior submission for review and

approval of most equipment used in preparing or handling edible meat

and poultry products or ingredients (9 CFR 308.5 and 381.53). FSIS

requires that establishment owners or operators wishing to use new

equipment submit any information FSIS needs to review new equipment,

including assembly-type drawings and a list showing the materials of

which parts are made. The primary objectives of the FSIS review are to

determine whether the equipment can be readily cleaned and inspected

for its sanitary condition. In some instances, FSIS also requires that

the equipment be used on a trial basis before approval is granted (9

CFR 308.5(d) and 381.53(a)(4)). FSIS technical personnel review more

than 2,500 submissions of equipment specifications each year, and

approximately 650 pieces of new equipment require a trial installation

before being accepted for use.

[[Page 19579]]

Also, prior-approval procedures exist for numerous establishment-

operated partial quality control programs. This means that companies

must come to FSIS for permission before they can initiate or modify

processes or controls intended to ensure that products have desired

characteristics and that processes are stable.

The prior-approval process is a feature of FSIS's traditional

``command-and-control'' regulatory approach. While prior approval

provides assurance that equipment, facilities, or processes, as

designed, meet certain requirements that are intended to assure food

safety or quality, they reflect the emphasis of the current system on

closely observing the means by which establishments maintain sanitation

and produce safe food. This feature of the current system is an

inappropriate allocation of responsibility between the Agency and

establishments. It is an obstacle and too often a deterrent to

innovation by establishments seeking to improve operations, and

contributes to unproductive use of FSIS resources both in managing the

approval system and policing establishment compliance with approved

facility and equipment specifications.

In addition, elimination of prior-approval requirements is

consistent with the principles articulated in FSIS's February 3, 1995,

Pathogen Reduction/Hazard Analysis and Critical Control Points (HACCP)

proposal (60 FR 6774). HACCP and the FSIS food safety strategy are

based on the principle that sanitary measures and science-based

preventive process controls should be built into the food production

system to reduce or eliminate food safety hazards. Establishment

management should be responsible for designing and implementing such

process controls, as well as for developing and maintaining standard

operating procedures (SOP's) for its sanitation programs. However, the

current system imposed by FSIS inappropriately allocates responsibility

between the Agency and the industry and impedes the ability of

establishment management to implement innovative food safety

strategies. Establishments conducting their own hazard analyses and

developing the HACCP plans to meet FSIS's food safety objectives will

determine whether facility layouts, equipment operating

characteristics, and other technical components of the manufacturing

process will result in products that meet required standards.

FSIS's reliance on prior approvals also contrasts with both the

practices of the remainder of the food industry as regulated by the

U.S. Food and Drug Administration and the practices of a significant

number of countries that have meat and poultry inspection systems that

provide a level of food safety assurance equivalent to that of the

United States. With the single exception of Canada, whose meat and

poultry regulatory system is intertwined with that of the United

States, none of these other countries relies on prior-approval systems

to ensure that equipment does not adulterate product.

Anticipated Changes in Inspection

The elimination of the prior approval systems proposed here would

change the manner in which FSIS conducts certain aspects of its

inspection. Under the current prior approval system, FSIS focuses

substantial attention on identifying specific design-related conditions

affecting food safety, which should be the responsibility of the

establishment. For example, FSIS not only performs prior approval of

facility blueprints and equipment, but also inspection tasks to verify

that the facility as constructed conforms to the blueprint and that

equipment meets approved design specifications. This reflects the fact

that the FSIS regulatory system has, in effect, taken responsibility

for these matters. Similarly, many establishments currently lack a

written sanitation plan and do not systematically ensure daily

maintenance of good sanitation. In order to compensate for this lack,

FSIS inspectors focus considerable attention on sanitation conditions

and practices that are more appropriately the establishment's

responsibility.

Under this proposal, FSIS would no longer control through prior

approval the design specifications for buildings and equipment.

Instead, FSIS would focus its regulatory and inspectional attention on

determining whether an establishment is successfully meeting sanitation

standards. Establishments would ensure that the design of buildings and

equipment is appropriate for sanitary food production and for

maintaining good sanitary conditions in accordance with broad

sanitation principles. In addition, the FSIS proposal to require

establishments to adopt sanitation SOP's of their own design, requires

establishments to identify the elements of good sanitation required to

prevent direct product contamination, carry out the SOP's on a daily

basis, and achieve acceptable sanitation results. Concurrent with this

action, FSIS inspection activities under SOP's and HACCP would be

restructured to focus not on the building or equipment design, or on

FSIS approval status, but on whether good sanitation is, in fact, being

maintained.

In concert with this proposal, FSIS would review and revise its

existing regulations and guidelines to avoid real or de facto

prescriptions that are inconsistent with the approach outlined here.

This review is underway and public comments on this process were

invited in an advance notice of proposed rulemaking, the ``FSIS Agenda

for Change,'' published in the December 29, 1995, issue of the Federal

Register (60 FR 67469).

Prior-Approval Requirements To Be Eliminated

A. Establishment Facilities

The demand for Federal inspection of sanitary conditions of

slaughterhouses was one of the principal concerns leading to enactment

of the 1906 Meat Inspection Act. Leading experts of the day in the

field of meat inspection advocated the approval of slaughterhouse plans

by qualified veterinary inspectors. Facilities for slaughtering,

dressing, and meat preparation that were properly designed and built

with sound materials that could be effectively cleaned and not

contaminate product were considered essential to help prevent the

spread of disease and protect the health and safety of the animal and

human populations. While the Meat Inspection Act itself did not mandate

prior approval of drawings as a condition of inspection, early

regulations issued under that law required the submission to the Agency

of plans for new and remodeled establishments for review and approval

before inspection could be granted.

The FMIA, the current law governing meat inspection, continues with

slight modification the provision in the original meat act assigning to

USDA the responsibility for regulating the sanitary conditions of

inspected establishments (see 21 U.S.C. 608). The PPIA contains similar

provisions, but neither of the Acts mandates prior approval of

establishment blueprints.

As a means of assuring sanitary conditions in inspected

establishments, the meat and poultry inspection regulations require

that applicants for inspection submit to FSIS the drawings and

specifications of establishments where inspected operations are to be

conducted for review and approval (9 CFR 304.2, 381.19). The

regulations also require that drawings reflecting any remodeling be

submitted in advance of construction (Secs. 308.2 and 381.18), and

prescribe specifications for facilities of inspected establishments (at

Secs. 307, 308, and 381, subparts G and H). This procedure was required

to help avoid costly changes in construction in the

[[Page 19580]]

event that FSIS determined facilities could create insanitary

conditions that could lead to food adulteration.

To comply with the prior-approval regulations, the applicant

completes a request form and provides a blueprint with specifications

to the FSIS inspector-in-charge. The blueprint and specifications are

then reviewed by the inspection circuit supervisor, the first level of

supervision outside inspected establishments, and sent directly to FSIS

headquarters in Washington, D.C. FSIS's area office--the second level

of supervision in the field organizational structure, which stands

between the circuit supervisors and the five Regional Offices--may also

review plans referred to it by the circuit supervisor before sending

them on to FSIS headquarters. In Washington, FSIS's facilities branch

reviews the information and decides whether to approve or reject the

drawings and specifications, seek further information, or return the

materials to the applicant. When changes are made in the facilities of

an establishment, the changes must be reflected in revised blueprints

for the establishment. The remodeled facilities are then reviewed by

the FSIS inspector-in-charge and the circuit supervisor to assure

compliance with the approved blueprints and that there will be no

product adulteration.

Currently, about 2,900 blueprints (both from new applicants and

from establishments remodeling their facilities) are reviewed each

fiscal year. About 38% of the submissions, or about 1,100 sets, are

rejected due to various deficiencies. Most rejections result from

errors in paperwork rather than design flaws that will compromise food

safety. The Agency works with the submitting establishments to see that

the deficiencies are corrected. Under prior approval, establishments

are urged to delay construction until drawings and specifications have

been approved, in order to avoid costly changes in construction or

remodeling.

Experience has shown that FSIS prior approvals are of limited value

in assuring good sanitation, because they are limited in both scope--

dealing only with establishment facilities as presented in drawings--

and time--they are given once, on the condition that establishments

will maintain a sanitary operating environment after their facilities

are approved. Ultimately, the establishments' implementation of good

sanitation operating procedures on a continuing basis is more critical

than the actual design of a facility. Also, with the elimination of

prior approval requirements, production time that previously was lost

in obtaining FSIS approval of blueprints and specifications would

become available to the industry.

Under the proposal, establishments would continue to be expected to

establish and maintain a sanitary environment for slaughtering and

processing by adhering to the general principles and requirements for

lighting, ventilation, drainage, plumbing, toilets, and condensation

found in Secs. 308.3(a)-(c), 308.4, 308.7, 308.8 (a) and (b), 381.46,

and 381.47 of the meat and poultry inspection regulations.

All official establishments (about 6,200 establishments), would be

affected by the proposal, except food irradiation facilities. There is

no requirement for prior approval of blueprints for food irradiation

facilities, because only prepackaged product is permitted to be

irradiated under current regulations.

Although FSIS's prior-approval procedures for drawings and

specifications would change under the proposal, its sanitation

standards would not. Establishments would be responsible for ensuring

that the design of facilities creates a sanitary environment and that

such an environment can be and is maintained. If field inspectors

carrying out their routine inspection tasks found product to be

adulterated or prepared, packed, or held under insanitary conditions

whereby it may have been contaminated with filth or may have been

rendered injurious to health because of deficient facilities, all

product subject to such conditions would be either retained and

reworked or condemned, and the establishment would be required to take

corrective action or cease operations. As under current regulations,

such corrective action, which might involve repair or reconstruction of

facilities, would be triggered only by an actual finding of product

adulteration or insanitary conditions. Such a finding would constitute

evidence of deviation from regulatory standards. Therefore, FSIS is

proposing to remove the current requirements for prior approval of

facility drawings and specifications. Requirements at 9 CFR 304.2(a),

308.2, and 381.19(a)-(f) for submission of blueprints and drawings

before inspection can be granted or changes made in facilities at

official establishments would be eliminated. Establishments would

initiate and complete construction without prior approval by FSIS.

Although there would no longer be a requirement for an

establishment to submit facility drawings and specifications in

applying for a grant of Federal inspection, FSIS would continue to have

a specific process through which the decision on granting inspection

would be made. This process would still include an on-site review, or

``walk-through,'' of the establishment's facilities by the FSIS circuit

supervisor as part of the predecisional review of the establishment's

capability to produce ``complying'' product. However, the

decisionmaking process would no longer include the review and prior

approval of establishment facility blueprints and specifications by the

Agency. The on-site review would not involve matching items on the

blueprints with the actual facilities represented. Instead, the focus

of the review would be on the extent to which the establishment is able

to maintain a sanitary environment for food production. This change

would be intended to parallel other changes in establishment-inspector

relationships that FSIS is contemplating in its reinvention of meat and

poultry inspection.

If this proposal is adopted, FSIS would plan to:

(1) maintain a small number of personnel who would assist

inspectors in performing in their in-plant roles. These roles would

eventually include the monitoring of establishment-operated sanitation

SOP's and HACCP systems;

(2) provide general guidance regarding establishment layout and

design to assist establishments in meeting food safety standards; and,

(3) publish one final edition of Agriculture Handbook 570, ``U.S.

Inspected Meat and Poultry Packing Establishments: A Guide to

Construction and Layout'', 1 and make it available to industry as

a guidebook to construction of facilities. Handbook 570, an FSIS

reference guide (not a set of regulatory requirements per se), is

provided to assist industry, architects, and inspectors.

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\1\ A copy of Agriculture Handbook 570 is on file for review in

the FSIS Docket Clerk's office, 4352 South Agriculture Building,

Washington DC, 20250.

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A small staff in Washington would maintain FSIS's technical

expertise and capability in this important aspect of food science and

technology. This staff would be responsible for keeping abreast of

developments in the field and updating FSIS's new, HACCP-oriented

guidelines and communicating technical information to Agency personnel.

The Agency will not approve industry decisions in these areas.

In addition, implementation of the proposed Pathogen Reduction/

HACCP rule's sanitation standard operating procedures, would render

prior-approval procedures unnecessary.

[[Page 19581]]

Establishment-operated sanitation procedures and HACCP systems would

accomplish, without prior approval, the same objectives as the FSIS

prior approvals. Thus, under HACCP-based inspection, the FSIS prior

approvals could no longer be considered an efficient and cost-effective

way to achieve sanitation objectives.

B. Equipment Approval

As in the case of the facilities regulations, the regulations

governing equipment (9 CFR 308.5, 381.53) were promulgated with a view

to having the Agency assure sanitation in slaughtering, dressing, and

processing operations. Requirements for sanitary equipment and utensils

have been in force since the 1906 Meat Inspection Act. However, unlike

prior approval of facility blueprints and drawings, the approval of

types of equipment prior to use has not always been a requirement.

Under regulations that have been in force since 1975 (9 CFR 308.5,

and 381.53), the FSIS Equipment Branch formally evaluates equipment and

utensils proposed by manufacturers or suppliers before they can be used

in official establishments to assure they can be maintained in a

sanitary condition. The program focuses on identifying and correcting

problems during the initial development of equipment, instead of

resolving problems after equipment is put into widespread use.

FSIS's acceptance of new, modified, or reconditioned equipment for

use in federally inspected meat and poultry establishments is a two-

step process. First, FSIS Equipment Branch personnel evaluate the

design and construction of equipment by reviewing assembly-type

drawings and corresponding parts and material lists submitted to the

Branch by the equipment manufacturer. Then, if necessary, FSIS

inspectors review the in-establishment operation of the equipment and

report their findings to the Equipment Branch. Commercially available

equipment is accepted and listed in an FSIS reference guide, ``Accepted

Meat and Poultry Equipment,'' \1\ known as the FSIS Equipment Book.

Once equipment is listed in this reference as acceptable, no further

approval is needed on an establishment-by-establishment basis. Certain

categories of equipment, such as simple tools and cleaning equipment,

are exempt from prior approval. Among the types of equipment that are

evaluated through FSIS's prior-approval procedure are clean-in-place

systems, piping used with establishment machinery, automatic

eviscerators, heat exchangers, smokehouses and ovens, air compressors,

and water recycling equipment.

FSIS processes about 2,500 equipment applications, rejections, and

acceptances each year. About 200 equipment applications are rejected on

first review for lack of sufficient information. About 650 acceptance

decisions are based on the results of in-plant trials. About 18

equipment applications are rejected after in-plant trials reveal

deficiencies.

The principal cost of the prior-approval process to the private

sector is considered to be that resulting from lost or delayed

equipment sales caused by delay in obtaining approval. This cost falls

mainly on equipment sellers and manufacturers and can be considerable

if the introduction of promising new technology is delayed. The

productivity of meat and poultry establishments could also be adversely

affected by delays in approving efficient new equipment.

Furthermore, FSIS's one-time approval does not address daily

operational issues such as proper maintenance and adjustment of

equipment to prevent product contamination. Such issues are covered by

the requirement that equipment and utensils be of such material and

construction that they can be easily cleaned to prevent product

adulteration (9 CFR 308.5, 381 subpart H), as well as by other general

requirements, independently of any prior approval.

The prior-approval review for equipment may sometimes involve the

evaluation of machinery, including scientific instrumentation, that

will not itself have contact with a food product or have other direct

effects on health or safety, but that may be part of an innovative

approach to food processing or product safety. The Agency's review may

delay testing or introduction of the innovation by weeks or months. The

delay can be costly to a company in a highly competitive environment.

FSIS is therefore proposing to eliminate the requirement at 9 CFR

308.5 and 381.53 for prior evaluation and approval of equipment and

utensils used in official meat and poultry establishments. The general

principles and requirements for such equipment and utensils provided at

9 CFR 308.5(a) and 381.53(a) would be preserved.

Under this proposal, equipment and utensils would still have to be

constructed so as to facilitate thorough cleaning and operational

cleanliness and not adulterate edible product. Also, they would still

have to be constructed, maintained, and used in a manner that does not

interfere with inspection.

However, FSIS would no longer conduct its acceptance program before

equipment could be used in an official establishment. Establishments

would be able to use equipment based on their own evaluation of their

ability to utilize the equipment in a sanitary way. The general

requirements for equipment already in the regulations (9 CFR 308.5 and

381.53) would not change. In its inspection activities, FSIS would

continue to judge establishment equipment by those same general

standards. Equipment must be cleanable, it must be capable of being

disassembled and inspected, and it must not interfere with inspection

or adulterate product. FSIS inspectors would continue to reject

equipment they find posing a sanitary hazard.

For calendar year 1996, the Agency will separate the general

guidance material from its list of approved equipment and publish the

guidance material separately. The final edition of the equipment list,

which FSIS published in 1995, is available to current subscribers and

to anyone who requests a copy before the effective date of the final

rule.

Operational procedures and appropriate sanitation process controls

would be developed by the inspected establishment. In this area, as in

facilities, official establishments would be required to meet the

general requirements prescribed in the regulations, but would be

allowed the flexibility to determine the specific steps to be taken to

comply with those requirements. The sanitation SOP's proposed for

official establishments in FSIS's Pathogen Reduction/HACCP proposal

would provide plans for applying the general principles for maintaining

sanitary conditions to specific establishment situations. The

establishment would also be required to maintain any controls

appropriate to the HACCP plans for the establishment's products (e.g.,

raw beef), such as making sure the facilities and equipment (structures

and machinery for evisceration) are designed, built, and operated so

that any necessary action (sanitary dressing procedures) can be taken

at critical control points in the HACCP plan.

The equipment prior-approval process proposed here for elimination

is to be distinguished from the program, announced by FSIS last year,

for reviewing experimentation with new technologies (``Guidelines for

Preparing and Submitting Experimental Protocols for In-Plant Trials of

New Technologies and Procedures; 60 FR 27714; May 25, 1995) under

commercial conditions. The purpose of the new program is to

[[Page 19582]]

encourage the adoption by industry of innovative technologies that will

help reduce the risk of foodborne disease. The Agency has established

procedures (see FSIS Directive 10,700.1) for reviewing protocols for

experimentation with new technologies in official establishments if

there is a possibility the experimentation could adversely affect

product, environmental, or worker safety, or interfere with inspection.

For example, in experiments involving the artificial contamination

of carcasses with fecal matter to test the effectiveness of a carcass

cleaning process, any products from these carcasses must be removed

from commercial channels or reconditioned to be wholesome or fit for

sale. Protocols for experiments involving the use of materials that

could pollute the environment or affect worker safety must include

appropriate regulatory citations or be accompanied by written approval

of the Environmental Protection Agency or the Occupational Safety and

Health Administration. Although new technologies can be expected to

include the use of equipment, the FSIS review program is primarily

intended to enable the experimentation to proceed rather than to

approve the equipment used.

Further Regulatory Reform

As stated in FSIS Docket #95-008A, ``FSIS Agenda for Change;

Regulatory Review'' (60 FR 67469; December 29, 1995), FSIS is reviewing

all of its regulations, policies, and inspection procedures, including

those concerning establishment sanitation (as presented in handbooks,

notices, directives, etc.). Although implementation of FSIS's proposal

for sanitation SOP's would not depend on revisions to the Agency's

sanitation regulations, because this is an area where inspectors have

traditionally exercised discretion and provided direct oversight and

direction to establishments, the Agency recognizes the need to more

clearly state its performance standards in this area. The Agency

believes that the regulations can be made much clearer in describing

the establishments' responsibilities, that doing so will relieve

inspectors of much of the routine work they do that should be done by

establishment employees, and that inspection resources can then be

freed up and reapplied in performing new, HACCP-related food safety

functions.

C. Partial Quality Control Programs

Quality control, in general, is a planned, documented system of

activities intended to assure the stability of processes and uniformity

of products. Quality control programs are based on the assumption that

there is normal variation in any process and that the process is under

control if that variation is not exceeded. Quality control is used in

manufacturing to assure that components and products from ball bearings

to microcomputer circuits, which are made in huge quantities, will all

have the same desired characteristics. In the food industry, quality

control systems are used in processing operations to make sure that

each product produced, from TV dinners to hotdogs, will be exactly the

same--will have the same content, flavor, color, texture, and so forth,

no matter how many thousands are made in a production run.

In applications relevant to food safety, quality control programs

can be used to maintain normal process variation around a standard,

such as a time-temperature standard for cooked beef or a moisture-

protein ratio for dry sausage. If the expected variation is exceeded,

corrective action must be taken to restore process stability and ensure

food safety.

Under current FSIS regulations, a company may choose to place all

of the processes and products in an establishment under a comprehensive

quality control system. Such a system, known as total quality control

(TQC), integrates an establishment's quality development, maintenance,

and improvement efforts to enable engineering, production, marketing,

and service to take place at the most efficient levels that meet

consumer expectations. A quality control system for only one process or

product in an establishment is known as a partial quality control

system (PQC). The quality control systems are, in a sense, precursors

of the HACCP system FSIS envisions in that they are establishment-

operated process control systems.

In 1980, FSIS promulgated regulations establishing procedures for

meat and poultry establishments to follow in obtaining Agency approval

of their voluntary TQC and PQC systems. FSIS approved several thousand

PQC programs during the 1980's. Since 1990, FSIS has approved an

additional 4,000 PQC programs and more than 3,000 amendments to those

programs. There are now more than 8,200 approved PQC programs.

An approved quality control program is typically a voluntary

activity in which an establishment is allowed to establish its own

control procedures (provided these conform with the regulations).

Approved PQC programs have provided FSIS with a tool or method for

maintaining assurances that label claims, composition declarations, and

many other standards are met, and that food products are safe. They

also allow FSIS to regulate processes for which specific criteria have

not been prescribed by the regulations. Verification inspection of the

PQC programs enables FSIS to determine whether or not the programs are

functioning. If they are shown to be malfunctioning, the establishment

takes corrective action.

There are several types of FSIS-approved PQC programs; most are

voluntary, some are mandatory. Voluntary PQC's generally fit into two

broad categories. The first type includes those that need not be used

to produce a product. For example, an approved PQC program for

controlling the percentage of fat and water in a product is not

necessary for an establishment to be allowed to make hotdogs. The

establishment could produce the product without the PQC program.

However, the PQC program helps assure that the establishment produces

the hotdog and other products in accordance with the regulatory

standards. Without a PQC program, an establishment runs a higher risk

of producing noncompliant product subject to retention by the FSIS

inspector.

The second type of voluntary PQC includes product labeling-related

programs intended to ensure production of a product that is in

compliance with a compositional requirement. For example, some PQC's

are designed to meet the requirements of vignette labeling (labeling

that shows an image of the food product either as it is in the

container or as served, such as labeling that shows a specific number

of meatballs in or pepperoni slices on a product); other PQC's are

designed to comply with product composition requirements that must be

met if certain labeling is used (such as the protein-fat-free

requirement for a product labeled ``ham, water added'').

There are also mandatory PQC programs. Some are compulsory for

certain types of food processing or are required to produce certain

products; others are required for an establishment to operate under a

certain inspection system. For example, the PQC for on-line carcass

quality control is a mandatory component of the New Line Speeds (NELS)

poultry inspection system. FSIS also requires approved PQC programs for

the testing of new or not-previously-approved antimicrobial treatments

in slaughtering establishments (to monitor equipment and process

controls for experimental design and safety reasons); for product

[[Page 19583]]

identification and control during slaughter, dressing, and processing

to support labeling statements; and for monitoring chlorine

concentrations in product intended for export to Canada.

There are also PQC programs to control products for so-called

economic factors. These programs are intended to prevent the marketing

of products that are misbranded or that lack the quality or value that

the product standard imposes. These economic PQC's are intended to

serve two main purposes: (1) to take the place of lot inspection of

product (the sampling and testing of a shift's production for certain

characteristics) by the FSIS inspector; and (2) to assure that products

meet requirements associated with their labeling.

Establishments operating the first type of economic PQC generate

data that are subject to random verification by the FSIS inspector.

Examples of these include programs for net weight, fat and water in

frankfurters, and boneless meat (mainly for aesthetic defects). An

establishment operating under a PQC for net weight keeps records of its

checks and corrective actions to avoid lot inspection. Under PQC's for

fat and water in frankfurters, establishments keep ingredient records

by lot and results of laboratory tests for random verification by FSIS

inspectors. An establishment operating a PQC for boneless meat

inspections does its own on-line inspections and keeps records. The

FSIS inspector randomly selects samples of product the establishment

has already inspected to assure that the establishment's records are

accurate.

Examples of the second kind of economic PQC include those for

controlling the amount of added ingredients in corned beef, the amount

of basting or marinating solutions in certain poultry products, and the

truthfulness or accuracy of certain label claims. The PQC programs for

basting or marinating solutions in certain poultry products assure that

the amount of added solution in such products does not exceed the

standards set forth in 9 CFR 381.169. The establishment accomplishes

the objective of these programs by controlling the pumping procedure at

the time of product formulation.

The PQC program for an establishment making a product bearing a

label claim that only sirloin cuts have been used in the meat portion

of the product must include an approved procedure with records for

assuring the veracity of the claim. The PQC's for vignette labeling

assure that product characteristics conform with the graphic display on

the product label, in accordance with 9 CFR 317.8(a) and 381.121. If a

product label shows four meat balls, the PQC for the product would have

to document that each package contains four meat balls. The programs

are carried out through in-plant sampling and visual inspection, with

verification checks by FSIS inspectors.

Although about 70 percent of PQC's are intended to support labeling

claims, not all have this purpose. Some support alternative processing

procedures that have become so routine that very specific guidelines

are followed in preparing the PQC program. FSIS has developed 64

guidelines detailing the essential elements of the most commonly used

PQC programs. Many of these are procedures that substitute for more

direct controls on economic or quality features of products such as

declared count, vignette labeling, or the ``popping'' of pork rinds.

These are not connected with food safety.

Under the current system, no matter how routine the preparation,

review, and subsequent approval of the PQC program, each must be

submitted to either the Washington office or a Regional Office and be

stamped ``approved.'' FSIS has assigned 11 staff-years to the review

and approval of establishment PQC programs. Approximately 1,800 quality

control programs and amendments are handled each year by the Regional

Offices; approximately 50 programs for complex processes or requiring

specialized knowledge (such as programs for thermal processing) are

approved each year by the Washington office. The purpose of the review

is to assure that the programs contain all the necessary elements of a

quality control program and are appropriate for their intended purpose.

The programs must describe the product and process for which they are

intended, and the materials to be used. They must identify any hazards,

define process deviations, indicate the control points to be monitored,

and procedures for checking processes. They must also state the methods

for gathering data and determining results, and the corrective actions

to be taken if process deviations are found. Finally, the programs must

bear the names and locations of responsible establishment quality

control officials and authorized USDA employees must have access to

records generated by the programs. The time for a PQC prior approval to

be obtained is typically 2 weeks.

FSIS considers this administrative burden on the industry and the

Agency to be unnecessary to achieve food safety or nonadulteration

objectives. Under HACCP-based inspection, establishments would assume

responsibility for developing process control procedures in advance

without having to depend on Agency approval for every step in their

procedures. FSIS would evaluate or verify the effectiveness of the

procedures through normal inspection operations and take action when

necessary to prevent product adulteration.

By relying on general requirements for the design of all PQC

programs, but not requiring prior approval of such programs, FSIS could

use its resources (staff-years) more efficiently and effectively than

it does now in its PQC prior-approval activities. This approach would

also provide establishments with ample flexibility to develop their own

process control techniques.

For these reasons, FSIS is proposing to eliminate the requirements

at 9 CFR 318.4(d) and 381.145(d) for prior approval of PQC programs.

Prior approval of most voluntary or ``economic'' PQC programs would be

discontinued and an unnecessary regulatory burden would thus be lifted.

However, the current requirements governing the content of PQC programs

would remain (Secs. 318.4(d)(2)(i) and 381.145(d)(2)(i)), as would

existing mandatory-PQC requirements. Prior approval of PQC programs

would be eliminated for all but a few of the mandatory PQC programs,

such as those required for certain slaughter inspection systems, or

those requiring special expertise, such as PQC's for thermal processing

or other complex processing. The Agency, however, is planning to change

these areas of its regulations to eliminate prior reviews and make them

compatible with HACCP. This proposal would eliminate at least 90

percent of the approximately 1,900 PQC submissions made to FSIS each

year. Cross-references to the existing prior-approval requirement would

also be eliminated (in 9 CFR 318.7(b)(3), 318.7(c)(4), 317.21, 318.19,

318.309, 319.5, 319.104, 381.121d, and 381.309).

In addition, the regulations would be revised to provide (in 9 CFR

318.4(d)(2)(ii) and 381.145(d)(2)(ii)) for the design of PQC programs

to assure, with at least 85 percent statistical confidence, that the

lot or process means do not exceed the product or label limits to which

the PQC programs apply. This requirement, which is already observed in

the design of FSIS-approved PQC programs now in use, would also provide

for control of individual sublot samples to within plus-or-minus 3

standard errors (standard deviations of the sampling distribution) of

the process mean. At least 3 sublot samples representing a

[[Page 19584]]

production lot would have to be drawn for each lot of product subject

to the PQC program. Further, each sublot sample would have to contain

at least 5 samples representing the sublot. No individual sample mean

or sublot-sample mean could be more than 3 standard errors above or

below the process mean. (A lot is ordinarily a shift's production, but

may be defined differently by different establishments. A sublot is a

fraction of a lot, and may represent an hour's production, or a

quarter-hour's production, or other portion of a production lot from

which quality control samples may be drawn.)

For example, a PQC program prepared according to the FSIS guideline

for the injection of corned beef labeled as having 30-percent added

solution would be designed to assure with greater than 85 percent

confidence that the 30-percent limit is not exceeded. In other words,

the lot average must not be above this limit. A batch, a portion of the

lot, must not be more than 1.2 percent above the declared value on the

label. Samples drawn from individual batches of the production lot

would have to show that the 3-standard-errors limit (in this example,

1.2 percent, or 31.2 percent added solution) is not exceeded.

PQC programs thus designed would provide process control, and hence

a degree of food safety or food nonadulteration assurance, that is

comparable to that provided currently by PQC programs individually

approved by FSIS. Official establishments would have a less

prescriptive set of conditions to meet in designing and implementing

their PQC programs, and more latitude for innovation. Because the

unnecessary regulatory burden of prior approval would no longer exist,

establishments would be able to implement their programs sooner than

the current prior-approval process allows.

Establishments would be required to comply with the requirements in

proposed 9 CFR 318.4(d)(2)(ii) and 381.145(d)(2)(ii) in designing their

PQC programs. Prior approval would still be required for quality

control programs and systems referred to elsewhere in the regulations

(e.g., 9 CFR 318.4 (c), (e), (f), and (h); and 381.145 (c), (e), (f),

and (h)), including those associated with, and required for, such

slaughter inspection systems as the NELS and the NTIS (9 CFR

381.76(c)). Proposals addressing these programs and systems will be

published in the near future. This proposed rule would amend paragraphs

9 CFR 318.4(e) and 381.145(e) to delete references to prior approval

requirements for PQC programs.

Proposed 9 CFR 318.4(d)(1) and 381.145(d)(1) would retain the

current requirement for official establishments with PQC's to make the

programs and data and information generated by them available to FSIS

inspectors. Formal notification would not be required because

establishment operators typically notify FSIS personnel of the products

and processes operated under establishment-operated PQC programs during

their regular interactions with FSIS personnel. Establishment operators

recognize the advantage of making their quality control programs and

data available to FSIS. FSIS personnel who have not been advised that a

product is being produced under a PQC program would perform traditional

lot inspection procedures, rather than quality control evaluation and

verification tasks. The results of lot inspection may differ

technically from those obtained under a PQC inspection. A product lot

could be subject to retention even though the process for the product

is under control, requiring no corrective action to restore controls.

FSIS, therefore, is not proposing to terminate the use of PQC's as

a mechanism for organizing the collection and review of data which

document outcomes. FSIS is, however, proposing to end its role as the

approver of paperwork describing data collection to support alternative

processing procedures.

Establishments operating under approved PQC programs would continue

to keep the programs on file and available for use by FSIS employees.

FSIS would adjust verification inspection tasks to reflect an approach

that is appropriate to the process control procedure being used by the

establishment.

It is likely that establishments will find the continued use of PQC

programs to be advantageous under the inspection system envisioned by

the Agency in its ``Pathogen Reduction/HACCP'' proposal. Although most

PQC programs currently used by inspected establishments control

products and processes for economic factors, e.g., fat and moisture

content or the amount of marinating solution a product can absorb,

there are some that have public health implications. Such PQC programs

would be compatible with establishment-operated HACCP plans and

establishments would continue to use them under HACCP-oriented

inspection. Moreover, because establishments operating HACCP plans

would be concerned about maintaining stability in all their processes,

they would be likely to continue many of their economic PQC's or

develop new ones. But they would no longer need prior approval from

FSIS before implementing them.

FSIS considers relief from the prior-approval aspect of these PQC's

to be the first in a series of steps to realign inspection and company

responsibilities in the area of process control systems. As FSIS

progresses in its review and adjustment of its inspection regulations,

it will take more steps in this area. Regulations will be rewritten as

performance standards, facilitating innovation. Establishments will be

free to develop establishment-specific approaches as long as the

regulatory objectives are met. Therefore, as FSIS reinvents its

regulations in accordance with its stated plans (see docket #95-008A,

``FSIS Agenda for Change; Regulatory Review''), the need for Agency-

developed guidelines should decrease. Companies will be able to call on

a full range of technical resources to develop alternatives and design

systems to demonstrate their efficacy.

Other Prior Approvals

This proposal addresses the removal of the requirements for prior

approval of facility blueprints, equipment, and PQC programs for

inspected meat and poultry establishments. In addition to the prior

approvals discussed in this proposal, FSIS plans to eliminate its

remaining centralized prior approval procedures. These include the

procedures for: PQC's for water reuse, on-line PQC's used in the NELS

and NTIS poultry inspection systems, nonfood compounds and proprietary

additives, and possibly labeling. FSIS intends to publish proposals on

these topics in the near future.

Like the regulations governing meat and poultry inspection, the egg

products inspection regulations, promulgated under the Egg Products

Inspection Act (21 U.S.C. 1031, et seq.) (EPIA), also contain prior-

approval procedures for facilities and blueprints (7 CFR 59.146,

59.500, 59.506, 59.520, 59.538, 59.540, and 59.550), labels (7 CFR

59.411), equipment and utensils (7 CFR 59.502, 59.506, 59.515, 59.520,

59.522, 59.540, 59.540, 59.547, and 59.552), nonfood compounds (7 CFR

59.504 and 59.552), and various processing procedures for egg products.

FSIS is not prepared to propose to remove these requirements because

FSIS has only recently acquired responsibility for administering the

EPIA and the egg products inspection regulations promulgated under that

Act. FSIS has just begun reviewing the prior-approval requirements in

the egg products regulations to see which, if any, are still necessary

and should be maintained, and which are obsolete or burdensome and

should be amended or

[[Page 19585]]

rescinded. As appropriate, FSIS will propose changes in the egg

products inspection regulations.

Executive Order 12778

This proposed rule has been reviewed under Executive Order 12778,

Civil Justice Reform. States and local jurisdictions are preempted

under the Federal Meat Inspection Act (FMIA) and the Poultry Products

Inspection Act (PPIA) from imposing any marking or packaging

requirements on federally inspected meat and poultry products that are

in addition to, or different than, those imposed under the FMIA or

PPIA. States and local jurisdictions may, however, exercise concurrent

jurisdiction over meat and poultry products that are outside official

establishments for the purpose of preventing the distribution of meat

and poultry products that are misbranded or adulterated under the FMIA

or PPIA or, in the case of imported articles, which are not at such an

establishment after their entry into the United States.

This proposed rule is not intended to have retroactive effect.

If this proposed rule is adopted, administrative proceedings will

not be required before parties may file suit in court challenging this

rule. However, the administrative procedures specified in 9 CFR

Secs. 306.5 and 381.35 must be exhausted prior to any judicial

challenge of the application of the provisions of this rule, if the

challenge involves any decision of an FSIS employee relating to

inspection services provided under the FMIA or PPIA.

Executive Order 12866 and Effect on Small Entities

This proposed rule has been determined to be significant and was

reviewed by OMB under Executive Order 12866.

FSIS is proposing to eliminate prior approval requirements for

establishment drawings and specifications, equipment, and certain

partial quality control programs. Concurrent with this proposal, FSIS

would restructure inspection activities to focus more attention on the

ability of establishments to maintain a sanitary environment. These

actions, in addition to implementation of the sanitary standard

operating procedures, which were proposed by the Agency as part of the

Pathogen Reduction/HACCP proposal, would provide the industry the

flexibility for creating and maintaining a sanitary working environment

without prescriptive command-and-control requirements.

Removing these requirements would affect establishments subject to

official inspection, firms producing and selling equipment currently

subject to prior approval, firms providing expediting services to

businesses seeking prior approval, and consumers. The proposal would

reduce demands on FSIS resources which could be redirected to functions

more critical to improving food safety.

Alternatives to this rulemaking that FSIS considered for facilities

and equipment prior approvals included development by FSIS of detailed

standards to be published in booklets with periodic updates,

recognizing industry organizations as prior approval authorities, and

establishing general performance standards similar to FDA-recognized

good manufacturing practices. Another alternative which would have

provided these services on a voluntary, user-fee basis, was considered

but not adopted. FSIS has chosen the option of eliminating prior

approval requirements while maintaining the general food safety

standards in the existing regulations.

For PQC prior approvals, the alternatives to no rulemaking were

market sampling of finished products, mandating additional in-plant

controls, sampling of finished products for chemical analysis, and

maintaining general requirements and a standard for the design of PQC

programs. The last option was chosen because it would provide official

establishments with the most flexibility in implementing PQC programs.

Benefits of the Rule

Approximately 6,200 federally inspected meat and poultry

establishments would no longer be required to submit blueprints,

drawings, and specifications to FSIS for review and approval. FSIS

reviewed about 2,900 submissions in FY 1994. The cost of receiving FSIS

approval for drawings and specifications and changes they represent

includes the administrative, mailing, and labor costs associated with

preparing the required Agency forms. The labor cost is estimated at 30

minutes for each submission. Assuming an hourly wage or per-hour salary

of $20-$25 for each person submitting blueprints and specifications and

the FSIS form, the annual cost to the industry for making these

submissions is in the range of $30,000 to $40,000. This, then, is an

estimate of the savings accruing to industry from removing the

requirement for prior approval that FSIS is proposing.

As many as 1,500 establishments per year submit for approval PQC

programs or amendments to PQC programs. FSIS receives a total of 1,900

submissions each year. A typical PQC program, prepared according to

FSIS guidelines, can be written up in about 4 hours by an individual

earning $20 to $25 per hour. Thus, removing the requirement for prior

approval of PQC plans is estimated to save the industry $150,000 to

$190,000 per year.

FSIS receives approximately 2,500 submissions for approval of

equipment each year. The costs of these applications generally fall on

equipment manufacturers rather than the meat and poultry firms subject

to inspection, although a few meat and poultry establishments make some

of their own equipment or equipment modifications. FSIS has no estimate

that specifically pertains to the costs to manufacturers of applying

for equipment approval, but these costs are assumed to be comparable to

the costs to official establishments of submitting blueprint and

establishment specification approvals. FSIS recognizes that actual

costs to firms seeking equipment approval may differ and welcomes

comments on this. Based on 30 minutes per submission, a labor cost of

$20-$25 per hour, and 2,500 submissions annually, the annual cost

savings from removing the prior approval requirement for equipment

would be in the range of $25,000 to $32,500. In addition, approximately

650 applications for approval are contingent on in-plant trials. These

trials involve some added costs to manufacturers and meat and poultry

establishments, but the Agency has no estimates of these costs to

include in this analysis. FSIS invites commenters to present

information indicating what these costs are.

The proposal to eliminate blueprint prior approvals would remove a

source of income for approximately 20 small firms that represent

official establishments for the purpose of labeling and blueprint

approval. These firms are known as ``expediters.'' It is estimated that

approximately 20 percent of the annual blueprint submissions (about

600) are made to the Agency using the services of expediters. The

estimated annual total value of blueprint expediting is about $240,000

for the companies involved. While this would be lost income to the

expediters, it would be a transfer to meat and poultry firms, which is

not a social cost of the proposed rule.

The social benefits directly resulting from the elimination of

prior approval requirements as proposed in this rulemaking are

indicated in Table 1. There would be additional but unquantifiable

social benefits from the proposals to eliminate prior approvals.

[[Page 19586]]

These benefits derive from efficiencies arising from fewer demands on

management, greater incentives to adopt innovative practices, and the

enhanced ability to make changes quickly which the prior approval

system and its inherent delays inhibit. Also, the delays inherent in

the prior approval process, which can be translated into lost

production time, would be eliminated.

However, it is unlikely that an inspection finding of adulterated

product or insanitary conditions under the amended regulations would

result in increased costs to the industry for rebuilding or remodeling

facilities. Establishments planning substantial investments in new

construction typically consult with local authorities and experts with

up-to-date knowledge of food establishment construction before

beginning major projects.

In addition to the benefits to firms from elimination of these

prior approval requirements, FSIS could be expected to benefit by

reallocating about $2.3 million to high priority food safety needs.

Currently, the Agency allocates about 15 staff-years ($750,000) to

reviews of equipment, 20 staff-years (about $1 million) to reviews of

drawings and specifications, and 11 staff-years ($550,000) to review

and approval of PQC programs. The true social benefits to be expected

are the improvements in food safety that would logically flow from

reallocating these resources to more important food safety-related

tasks.

Costs of the Proposed Rule

As is currently the practice, inspectors would continue to require

establishments to take corrective action or cease operations if any

product has been adulterated or prepared, packed or held under

insanitary conditions whereby it may have been contaminated with filth

or may have been rendered injurious to health, because of deficient

facilities and equipment. Corrective action, which might include

reconstruction, remodeling, and redesign would only be triggered by an

actual finding of product adulteration or insanitary conditions.

However, it is unlikely that this proposal will increase the level of

inspection findings that result in reconstruction, remodeling, and

redesign of facilities and equipment.

Currently, facility and equipment plans submitted to FSIS for prior

approval are rejected due either to errors in paperwork or to deviation

from specific design criteria developed by FSIS. Under the proposal,

establishments would not have to submit applications for approval.

Instead, establishments would be permitted to initiate and complete

construction or introduce new equipment without submitting any

paperwork to FSIS. In addition, FSIS would eliminate design-related

criteria currently utilized to evaluate the acceptability of facilities

and equipment. Inspectors would no longer require establishments to

incur costs for reconstruction, remodeling, and redesign, because the

actual facility or piece of equipment does not match a specified design

criterion, blueprint, or equipment specification.

In the absence of prior approval, FSIS would focus inspection on

whether establishments are maintaining a sanitary environment. Under

this proposal and the proposed rule on sanitation standard operating

procedures, establishments would assume greater control over their

production practices to ensure that a sanitary environment is

maintained. Currently, many establishments utilize the services of

knowledgeable architects, engineers, and other experts to design

facilities and equipment for use in meat and poultry establishments.

Under prior approval, these experts ensure, among other things, that

FSIS design specifications are met. Without prior approval,

establishments may require these experts to provide more information on

the procedures necessary for maintaining facilities and equipment in a

sanitary condition, which could increase the costs for these services.

However, this is consistent with the need for the industry to assume

greater responsibility for its operations. Any cost increases for these

services would be commensurate with the transfer of responsibility from

FSIS to the industry, and would not be a social cost attributable to

the rule.

Table 1.--Benefits to Firms From Eliminating Prior Approval Requirements

----------------------------------------------------------------------------------------------------------------

Firms with more than Firms with fewer

Action 500 employees than 500 employees All firms

----------------------------------------------------------------------------------------------------------------

Remove blueprint and specification approval... $1,800-$2,400 $28,200-$37,600 $30,000-$40,000

Remove equipment approval..................... $2,500-$3,250 $22,500-$29,250 $25,000-$32,500

Remove PQC approval........................... $9,000-$11,400 $141,000-$178,600 $150,000-$190,000

-----------------------------------------------------------------

Total................................... $13,300-17,050 $191,700-$245,450 $205,000-262,500

----------------------------------------------------------------------------------------------------------------

Regulatory Flexibility Assessment

The Administrator has determined that, for the purposes of the

Regulatory Flexibility Act (5 U.S.C. 601-12), this proposed rule would

not have a significant economic impact on a substantial number of small

entities. The entities that would be affected by this proposal are

inspected meat and poultry establishments, equipment suppliers, and

companies representing official establishments to the Agency for the

purpose of obtaining blueprint approvals. Most of these are small

entities.

The proposed rule is expected to have a beneficial effect on small

and large entities, on both those regulated under the FMIA and PPIA and

some that are not regulated under the inspection laws but which are

affected by the Agency's review of their products, e.g., suppliers of

equipment used in inspected meat and poultry establishments.

There are about 5,800 federally inspected small establishments. In

this analysis, FSIS is using the Small Business Administration (SBA)

business size standards (at 13 CFR 121.601) for meat packing

establishments, establishments that produce sausages and other prepared

meats, and poultry slaughtering and processing establishments. A small

establishment in any of these categories is considered to be one with

500 or fewer employees. Under current regulations, all official

establishments are required, as a condition of receiving inspection

services, to submit blueprints, drawings, and specifications of new or

remodeled facilities to FSIS for review and approval. Under this

proposal, the establishments would, of course, not be spared the cost

of preparing for themselves blueprints and specifications for

construction and major installations. However, they would no longer

bear the cost of submitting these drawings and specifications to the

Agency for review

[[Page 19587]]

because the requirement to do so would be eliminated.

The savings to be obtained by eliminating FSIS approval for

drawings and specifications and the changes they represent includes the

administrative and mailing costs and the time (resources) required to

fill out the required Agency form (``Submission and Approval of Plans

and Specifications,'' FSIS -5200-S), which is estimated at 30 minutes

each submission. As mentioned above, the annual savings to the meat and

poultry products industry from eliminating the requirement of making

the submissions would be in the neighborhood of $30,000-40,000. FSIS

does not consider this savings to be significant. But in addition to

such direct savings, the largest potential savings to the industry

resulting from the prior approval process for blueprints and

specifications would be those associated with the elimination of

delays--of up to several weeks per submission--in obtaining approval.

This estimated delay includes the time needed to resolve disagreements

over plans and specifications, should such disagreements arise between

the Agency and the establishment. This savings could be significant for

some small entities, but there is no information to indicate that it

would be so for a substantial number of them.

The savings would not be significant for at least two reasons.

First, establishments engaged in construction projects plan for the

eventuality of an FSIS review, or at least are advised by knowledgeable

food establishment architects and engineers to build FSIS review time

into their project timelines. Costs are minimized because delays that

do occur are anticipated. Second, under the current prior review and

approval system, the Agency is able to exercise discretion expediting

reviews of blueprints and facilities in specific cases to prevent

economic hardship from occurring. The proposal is intended to eliminate

the costs attributable to the delays associated with prior review and

approval.

While eliminating the cost of blueprint prior approvals to small

establishments producing meat and poultry products, the proposal would

at the same time remove a source of income for about 20 small

expediting firms that represent official establishments for the purpose

of labeling and blueprint approvals. These expediters are frequently

able to shorten the time for these approvals and reduce the rejection

rate on submissions because of their knowledge of Agency requirements

and proximity to Agency offices. As mentioned above, the estimated

annual total value of blueprint expediting is about $240,000 for the

companies involved. This is a small part of the expediters' total

business, which is mainly that of expediting label approvals and

consulting work. These 20 entities, in any event, do not constitute a

substantial number of small entities unfavorably affected by this rule.

By the same reasoning that the Agency used to determine that these

prior approvals do not serve to increase the safety of meat and poultry

products, the expediting activities of these firms that will be reduced

by the rule would no longer be a productive use of resources. These

firms may, however, experience an increased demand for their consulting

services from inspected establishments who depended upon the

Government's prior approval to assure they were in compliance with the

regulations, who now need help from a third party to assure they are in

compliance with the regulations.

The equipment acceptance procedure principally affects

manufacturers or other vendors of equipment. The equipment

manufacturers range in size from small to large concerns and, under the

current regulations, depend on FSIS prior approval to be able to sell

their products to inspected establishments. It is estimated that up to

90 percent of the equipment manufacturers and other applicants for FSIS

equipment acceptance are small entities. According to the SBA business

size standards (13 CFR 121.601), a small food products machinery

manufacturer is one that employs 500 or fewer people.

Also favorably affected by the approval process are inspected

establishments that may require machinery or other equipment to improve

or continue their operations. As is the case in the blueprint review

process for inspected facilities, the savings from avoiding a delay

before installation and operation of a newly developed piece of

equipment, although it could be significant for a few entities, large

or small, but will not be significant for most establishments.

Finally, FSIS has determined that the proposal to eliminate prior

approval of most voluntary PQC programs would not have a significant

economic impact on a substantial number of small entities. Both large

and small establishments subject to FSIS inspection would be permitted

to continue to develop and implement PQC programs for their products

and processes but would no longer be required to submit the PQC's to

FSIS for review and approval in advance of use. Accordingly, the

administrative delay for review that occurs under the present system

would be eliminated.

It takes a minimum of 2 weeks for the Agency to review a typical

PQC program, and as many as 1,500 establishments per year submit such

programs or amendments to programs--a total of nearly 1,900 submissions

per year--and about 90 percent of these establishments could be

regarded as small entities. Therefore, roughly 1,100 establishments

would avoid the costs associated with having to wait a minimum of 2

weeks for PQC approval, but it is not possible to identify what costs

would be saved under these circumstances.

For these reasons, the Administrator has determined that this

proposal would not result in a significant economic impact on a

substantial number of small entities. The economic impact on such

entities would in most cases involve the elimination of certain costs--

some quantifiable, some not quantifiable--associated with doing

business subject to Federal regulation and hence would be beneficial to

those entities. Though non-quantifiable, increasing the benefits that

come from reducing an establishment's dependence on Government

decisions is an important objective of the proposed rule.

Paperwork Requirements

FSIS has reviewed the paperwork and recordkeeping requirements in

this proposed rule in accordance with the Paperwork Reduction Act. This

proposed rule would substantially reduce ``reporting'' requirements for

official establishments and other entities. FSIS estimates the total

reduction in reporting to be 4,291 burden hours. The reductions would

occur in the following information collection reports:

0583-0082, ``Meat and Poultry Inspection; Application for

Inspection, Sanitation, and Equipment Requirements and Exemptions'':

Establishments subject to inspection would no longer have to submit

blueprints and specifications along with Form FSIS-5200-5. The response

time is estimated to be 30 minutes, and there are 701 total burden

hours approved by the Office of Management and Budget (OMB) for this

activity. Therefore, FSIS would request OMB to remove the 701 approved

burden hours.

0583-0082, ``Meat and Poultry Inspection; Application for

Inspection, Sanitation, and Equipment Requirements and Exemptions'':

FSIS prior approval would no longer be required for the products of

these companies that are used in official establishments. The response

time is

[[Page 19588]]

estimated to be 30 minutes for the prior approval of equipment. There

are 2,990 total burden hours approved by OMB for this activity.

Therefore, FSIS would request OMB to remove the 2,990 approved burden

hours.

0583-0089, ``Processing Procedures and Quality Control

Systems'': Establishments could continue to develop and implement PQC

programs according to Agency guidelines. These establishments, with the

exception of poultry irradiation facilities, would no longer be

required to submit a letter requesting approval of a proposed PQC

program and a copy of the program to the Agency for approval prior to

implementation. The response time is estimated to be 30 minutes for

writing the request letter and sending the PQC program to FSIS. There

are 600 total burden hours approved by OMB for this activity. In

consideration of poultry irradiation facilities 60 hours of burden

would remain. FSIS does not foresee more than two irradiation

facilities requesting FSIS approval of PQC programs. Therefore, FSIS

would request OMB to remove 540 approved burden hours. The burden hours

for PQC program development and reporting would remain the same.

Copies of this information collection assessment can be obtained

from Lee Puricelli, Paperwork Specialist, Food Safety and Inspection

Service, USDA, South Agriculture Building, Room 3812, Washington, DC

20250.

Comments are invited on: (a) whether the proposed collection of

information is necessary for the proper performance of the functions of

the Agency, including whether the information will have practical

utility; (b) the accuracy of the Agency's estimate of the burden of the

proposed collection of information including the validity of the

methodology and assumptions used; (c) ways to enhance the quality,

utility, and clarity of the information to be collected; and (d) ways

to minimize the burden of the collection of information on those who

are to respond, including through the use of appropriate automated,

electronic, mechanical, or other technological collection techniques or

other forms of information technology. Comments may be sent to Lee

Puricelli, Paperwork Specialist (see address above), and to the Desk

Officer for Agriculture, Office of Information and Regulatory Affairs,

Office of Management and Budget, Washington, DC 20253.

Comments are requested by July 1, 1996. To be most effective,

comments should be sent to OMB within 30 days of the publication date

of this proposed rule.

List of Subjects

9 CFR 304

Drawings, Information to be furnished, Grant or refusal of

inspection, Meat inspection.

9 CFR 308

Meat inspection, Sanitation.

9 CFR 317

Meat inspection, Reporting and recordkeeping requirements.

9 CFR 318

Meat inspection, Establishment-operated quality control.

9 CFR 319

Food grades and standards, food labeling.

9 CFR 381

Poultry and poultry products.

For the reasons set forth in the preamble, FSIS is proposing to

amend 9 CFR Chapter III, the Federal meat and poultry inspection

regulations, as follows:

PART 304--APPLICATION FOR INSPECTION; GRANT OR REFUSAL OF

INSPECTION

1. The authority citation for Part 304 would be revised to read as

follows:

Authority: 21 U.S.C. 601-695; 7 CFR 2.18, 2.53.

2. The heading of section 304.2 would be revised to read as

follows:

Sec. 304.2 Information to be furnished; grant or refusal of

inspection.

* * * * *

3. Section 304.2 would be amended by removing paragraph (a) and

redesignating paragraphs (b) through (f) as paragraphs (a) through (e),

respectively.

PART 308--SANITATION

4. The authority citation for Part 308 would be revised to read as

follows:

Authority: 21 U.S.C. 601-695; 7 CFR 2.18, 2.53.

Sec. 308.2 [Removed]

5. Section 308.2 would be removed and reserved.

6. Section 308.5 would be amended by removing ``, in the judgment

of the Administrator,'' from the first and third sentences of paragraph

(a); removing paragraphs (b) through (f); redesignating paragraph (g)

as (b); and revising the section heading to read as follows:

Sec. 308.5 Equipment and utensils to be easily cleaned; those for

inedible products to be so marked; PCB-containing equipment.

* * * * *

PART 317--LABELING, MARKING DEVICES, AND CONTAINERS

7. The authority citation for part 317 would continue to read as

follows:

Authority: 21 U.S.C. 601-695; 7 CFR 2.18, 2.53.

8. Section 317.21 would be amended by removing the words ``or

Partial Quality Control Program'' from paragraph (b).

PART 318--ENTRY INTO OFFICIAL ESTABLISHMENTS; REINSPECTION AND

PREPARATION OF PRODUCTS

9. The authority citation for part 318 would be revised to read as

follows:

Authority: 7 U.S.C. 138f, 450, 1901-1906; 21 U.S.C. 601-695; 7

CFR 2.18, 2.53.

10. Paragraph (d) of Sec. 318.4 would be revised to read as

follows:

Sec. 318.4 Preparation of products to be officially supervised;

responsibilities of official establishments; plant operated quality

control.

* * * * *

(d) Partial Quality Control Programs. (1) Any owner or operator of

an official establishment preparing meat food products who is using a

quality control program for a product, operation, or part of an

operation shall make the written program and data and information

generated by the program available to Program employees.

(2) (i) Such quality control program shall include, as appropriate

for the product, operation, or part of an operation which the program

concerns, detailed information on: raw material control, the critical

check or control points, the nature and frequency of tests to be made,

the charts and records that will be used, the length of time such

charts and records will be maintained in the custody of the official

establishment, the limits which will be used and the points at which

corrective action will be taken to prevent recurrence of a loss of

control, and the nature of the corrective action--ranging from the

least to the most severe.

(ii) Such quality control program shall be designed so as to

provide, with at least 85 percent statistical confidence, that the lot

mean (process mean) is within the product or label limit used and that,

of a minimum of 3 sublot samples representing the lot, with each sublot

sample containing at least 5 samples representing the sublot, no

[[Page 19589]]

individual sample mean or sublot-sample mean shall be greater than

three standard errors above, nor less than three standard errors below,

the process mean.

* * * * *

11. Paragraph (e) of Sec. 318.4 would be amended by removing the

words ``or Partial Quality Control'' from the paragraph heading, the

words ``or (d)'' from the first sentence of paragraph (e)(1) and both

occurrences of the words ``or partial quality control program'' from

the second sentence of the same paragraph (e)(1); by removing the words

``or program'' from the first and second sentences of paragraph (e)(2);

by removing the words ``or partial quality control program'' from

paragraph (e)(3); and by revising the heading of paragraph (g) and

removing the words ``or partial quality control program'' from

paragraphs (g)(1) and the introductory text of (g)(2) and revising

paragraph (g)(3) to read as follows:

Sec. 318.4 Preparation of products to be officially supervised;

responsibilities of official establishments; establishment operated

quality control.

* * * * *

(g) Termination of Total Establishment Quality Control.

* * * * *

(3) If approval of the total establishment quality control system

has been terminated in accordance with the provisions of this section,

an application and request for approval of the same or a modified total

establishment quality control system will not be evaluated by the

Administrator for at least 6 months from the termination date.

* * * * *

12. Paragraphs (b)(3)(i) and (b)(3)(ii) of Sec. 318.7 would be

revised to read as follows:

Sec. 318.7 Approval of substances for use in the preparation of

products.

* * * * *

(b) * * *

(3) * * *

(i) 100 ppm ingoing (potassium nitrite at 123 ppm ingoing); and 500

ppm sodium ascorbate or sodium erythorbate (isoascorbate) shall be

used; provided that the establishment has a partial quality control

program as provided in Sec. 318.4(d) such as to result in compliance

with this provision, or

(ii) A predetermined level between 40 and 80 ppm (potassium nitrite

at a level between 49 and 99 ppm); 550 ppm sodium ascorbate or sodium

erythorbate (isoascorbate); and additional sucrose or other similar

fermentable carbohydrate at a minimum of 0.7 percent and an inoculum of

lactic acid producing bacteria such as Pediococcus acetolactii or other

bacteria demonstrated to be equally effective in preventing the growth

of botulinum toxin at a level sufficient for the purpose of preventing

the growth of botulinum toxin; provided that the establishment has a

partial quality control program as provided in Sec. 318.4(d) such as to

result in compliance with this provision.

* * * * *

13. In the table in Sec. 318.7(c)(4) under the Class of substance

``Miscellaneous,'' the entry under the Substance ``Ascorbic Acid,

erythorbic acid, citric acid, sodium ascorbate, and sodium citrate''

would be revised to read as follows:

Sec. 318.7 Approval of substances for use in the preparation of

products.

* * * * *

(c) * * *

(4) * * *

----------------------------------------------------------------------------------------------------------------

Class of substance Substance Purpose Product Amount

----------------------------------------------------------------------------------------------------------------

* * * * * *

Miscellaneous................ Ascorbic acid, To delay Fresh beef Not to exceed, singly or in

erythorbic discoloration. cuts, fresh combination, 500 ppm or 1.8

acid, citric lamb cuts, and mg/sq inch of product surface

acid, sodium fresh pork of ascorbic acid (in

ascorbate and cuts. accordance with 21 CFR

sodium 182.3013), erythorbic acid

citrate, (in accordance with 21 CFR

singly or in 182.3041), or sodium

combination ascorbate (in accordance with

under quality 21 CFR 182.3731); and/or not

control. to exceed, singly or in

combination, 250 ppm or 0.9

mg/sq inch of product surface

of citric acid (in accordance

with 21 CFR 182.6033), or

sodium citrate (in accordance

with 21 CFR 182.6751).

* * * * * *

*

----------------------------------------------------------------------------------------------------------------

14. Section 318.19 would be amended by removing the words ``or

partial quality control program'' from paragraph (e).

15. Paragraph (a) of Sec. 318.309 would be amended by removing the

words ``an approved'' and ``program'' and paragraphs (b) and (c) of

Sec. 318.309 would be amended by removing ``and submitted to the

Administrator for approval''.

PART 319--DEFINITIONS AND STANDARDS OF IDENTITY OR COMPOSITION

16. The authority citation for Part 319 would continue to read as

follows:

Authority: 7 U.S.C. 450, 1901-1906; 21 U.S.C. 601-695; 7 CFR

2.18, 2.53.

17. Section 319.5 would be amended by removing the second sentence

of paragraph (e)(2) and revising the first sentence to read as follows:

Sec. 319.5 Mechanically Separated (Species).

* * * * *

(e) * * *

(2) A prerequisite for label approval for products consisting of or

containing ``Mechanically Separated (Species)'' is that such

``Mechanically Separated (Species)'' shall have been produced by an

establishment under a establishment quality control system. * * *

18. The last sentence in footnote 3 to the chart in Sec. 319.104

would be amended by removing the words ``approved by the Administrator

under Sec. 318.4 of this subchapter.''

PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS

19. The authority citation for Part 381 would be revised to read as

follows:

Authority: 7 U.S.C. 138f, 450; 21 U.S.C. 451-470; 7 CFR 2.18,

2.53.

20. Section 381.19 would be revised to read as follows:

Sec. 381.19 Application for inspection; irradiation facilities.

All applicants for inspection whose operations include irradiation

and other processing would submit, to the Administrator, a proposed

quality control system as specified in Sec. 381.149.

Sec. 381.20 [Amended]

21. Section 381.20 would be amended by removing ``the approved

drawings,

[[Page 19590]]

specifications, and'' from the first sentence.

22. Section 381.53 would be amended by removing paragraph (b);

redesignating paragraphs (c) through (m) as paragraphs (b) through (l),

respectively; and revising paragraph (a) to read as follows:

Sec. 381.53 Equipment and utensils.

(a) Equipment and utensils used for processing or otherwise

handling any edible poultry product or ingredient thereof, in any

official establishment, shall comply with any applicable provisions of

paragraphs (b) through (l) of this section and otherwise shall be of

such material and construction as will facilitate their thorough

cleaning, insure cleanliness in the preparation and handling of all

edible poultry products, and avoid adulteration and misbranding of such

products. In addition to these requirements, equipment and utensils

shall not in any way interfere with or impede inspection procedures.

Receptacles used for handling inedible products shall be of such

material and construction that their use will not result in

adulteration of any edible product or in unsanitary conditions at the

establishment, and they shall bear conspicuous and distinctive marking

to identify them as only for such use and shall not be used for

handling any edible poultry products.

* * * * *

Sec. 381.121d [Amended]

23. Section 381.121d would be amended by removing the words ``or

Partial Quality Control Program'' from paragraph (b).

24. The section heading and paragraph (d) of Sec. 381.145 would be

revised to read as follows:

Sec. 381.145 Preparation of products to be officially supervised;

responsibilities of official establishments; establishment operated

quality control.

* * * * *

(d) Partial Quality Control Programs. (1) Any owner or operator of

an official establishment preparing meat food products who is using a

quality control program for a product, operation, or part of an

operation shall make the written program and data and information

generated by the program available to Program employees.

(2) (i) Such quality control program shall include, as appropriate

for the product, operation, or part of an operation which the program

concerns, detailed information on: raw material control, the critical

check or control points, the nature and frequency of tests to be made,

the charts and records that will be used, the length of time such

charts and records will be maintained in the custody of the official

establishment, the limits which will be used and the points at which

corrective action will be taken to prevent recurrence of a loss of

control, and the nature of the corrective action--ranging from the

least to the most severe.

(ii) Such quality control program shall be designed so as to

provide, with at least 85 percent statistical confidence, that the lot

mean (process mean) is within the product or label limit used and that,

of a minimum of 3 sublot samples representing the lot, with each sublot

sample containing at least 5 samples representing the sublot, no

individual sample mean or sublot-sample mean shall be greater than

three standard errors above, nor less than three standard errors below,

the process mean.

* * * * *

25. Paragraph (e) of Sec. 381.145 would be amended by removing the

words ``Programs or'' from the paragraph heading, the words ``or (d)''

from the first sentence of paragraph (e)(1) and both occurrences of ``,

partial quality control program,'' from the second sentence of the same

paragraph (e)(1); by removing the words ``or program'' from the first

and second sentences of paragraph (e)(2); by removing ``, partial

quality control program,'' from paragraph (e)(3); by revising the

heading of paragraph (g) and removing the words ``or a partial quality

control program'' from paragraph (g)(1); by removing ``, partial

quality control program,'' from paragraph (g)(2) introductory text and

the words ``or program'' from the first sentence of paragraph

(g)(2)(ii); and by revising paragraph (g)(3) to read as follows:

Sec. 381.145 Preparation of products to be officially supervised;

responsibilities of official establishments; establishment operated

quality control.

* * * * *

(g) Termination of Total Establishment Quality Control.

* * * * *

(3) If approval of the total establishment quality control system

has been terminated in accordance with the provisions of this section,

an application and request for approval of the same or a modified total

establishment quality control system will not be evaluated by the

Administrator for at least 6 months from the termination date.

* * * * *

Sec. 381.309 [Amended]

26. Paragraph (a) of Sec. 381.309 would be amended by removing the

words ``an approved'' and ``program'' and paragraphs (b) and (c) of

Sec. 381.309 would be amended by removing ``and submitted to the

Administrator for approval''.

Done, at Washington, DC April 25, 1996.

Michael R. Taylor,

Acting Under Secretary for Food Safety.

[FR Doc. 96-10795 Filed 5-1-96; 8:45 am]

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