Rules of Practice

DEPARTMENT OF AGRICULTURE

Food Safety and Inspection Service

9 CFR Parts 304, 305, 327, 335, 381, and 500

[Docket No. 95-025F]

RIN 0583-AC34

Rules of Practice

AGENCY: Food Safety and Inspection Service, USDA.

ACTION: Final rule.

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SUMMARY: The Food Safety and Inspection Service (FSIS) is amending its

rules of practice that apply to Agency enforcement actions. FSIS is

defining each type of enforcement action that it may take, the

conditions under which it is likely to take each of these actions, and

the procedures that it will follow in doing so. This rule is part of

FSIS's ongoing effort to consolidate, streamline, and clarify the meat

and poultry product inspection regulations.

EFFECTIVE DATE: This rule is effective January 25, 2000.

FOR FURTHER INFORMATION CONTACT: Daniel Engeljohn Ph.D., Director,

Regulations Development and Analysis Division, Office of Policy,

Program Development and Evaluation, FSIS, Room 112, Cotton Annex

Building, 300 12th Street, SW, Washington, DC 20250-3700; (202) 720-

5627.

SUPPLEMENTARY INFORMATION:

Background

Under the Federal Meat Inspection Act (FMIA) and the Poultry

Products Inspection Act (PPIA), the Secretary of Agriculture is charged

with the responsibility of protecting the public health by assuring

that meat and poultry products distributed in commerce are wholesome,

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

accomplish this objective, the statutes require the Secretary to

administer a comprehensive inspection program which includes examining

live animals prior to slaughter, inspecting all carcasses to be used

for human food, and inspecting facilities where meat and poultry

products are produced or stored. FSIS has broad authority to issue

regulations to carry out the provisions of the FMIA and PPIA, including

authority to prescribe the terms and conditions under which inspection

will be provided and maintained and pursuant to which the marks of

inspection will be applied.

An establishment's failure to comply with regulatory requirements

can result in the Agency's inability to determine that products are not

adulterated as required by the inspection statutes. Accordingly, FSIS

may find it necessary to take action to prevent the production and

shipment of product until the Agency is assured that there is

compliance with the statutes and their implementing regulations. For

example, FSIS can refuse to grant an application for inspection. It can

take regulatory control actions to retain product, to reject equipment

or facilities, to slow or stop lines, or to refuse to allow the

processing of specifically identified product. The Agency may refuse to

allow the marks of inspection to be applied to products or suspend

inspection by interrupting the assignment of program employees to all

or part of an establishment. FSIS also can withdraw inspection or

rescind or refuse to approve markings, labels, or containers.

FSIS takes these types of actions when an establishment fails to:

(1) develop and implement a HACCP plan or operate in accordance with 9

CFR Part 417; (2) develop, implement, and maintain Sanitation Standard

Operating Procedures (Sanitation SOP's) in accordance with 9 CFR Part

416; (3) conduct generic E. coli testing in accordance with 9 CFR

310.25(a) or 381.45(a); (4) comply with the Salmonella performance

standard requirements prescribed in sections 9 CFR 310.25(b) or

381.94(b); (5) maintain sanitary conditions; (6) humanely slaughter

livestock; or (7) destroy condemned product. FSIS also takes these

actions when an applicant for inspection, a recipient of inspection, or

anyone responsibly connected with the applicant or recipient is unfit

to engage in business because of prior criminal convictions, or when

establishment personnel assault, intimidate, or interfere with Federal

inspection service.

When FSIS refuses to grant an application for inspection, seeks to

withdraw inspection, or refuses to approve markings, labels, or

containers, the Agency initiates an administrative action under USDA's

``Rules of Practice Governing Formal Adjudicatory Proceedings

Instituted by the Secretary Under Various Statutes'' (7 CFR subtitle A,

part 1, subpart H), as supplemented by FSIS's own ``Rules of

Practice,'' which have been set out in 9 CFR part 335 for meat or part

381, subpart W, for poultry and are now replaced by 9 CFR part 500.

FSIS's supplemental rules of practice also provide for the withholding

of the marks of inspection and the suspension of inspection.

When public health is a concern, FSIS immediately suspends

inspection until the problem is corrected. FSIS refuses to mark product

as ``inspected and passed'' or retains an establishment's meat or

poultry products if the Agency determines that meat or poultry products

are adulterated or cannot determine, as required by the statutes, that

those products are not adulterated. Such actions typically are

discontinued when the adulterated products have been destroyed or

properly controlled, or when the deficiencies or noncompliances are

corrected satisfactorily. The current supplemental rules also provide

for an opportunity to address and correct problems before the Agency

files a formal administrative complaint to suspend or withdraw an

establishment's grant of inspection.

On January 12, 1998, FSIS issued a proposed rule (63 FR 1797) to

reorganize and revise its supplemental rules of practice to better

ensure that its enforcement procedures are fair; to eliminate

redundancy; to identify the situations that may lead FSIS to take

enforcement action which may include refusing to grant or withholding

the marks of inspection and suspending or withdrawing inspection; and

to establish the procedures FSIS would follow in taking such actions.

Comments

FSIS received 64 comments in response to the proposed rule.

Although the commenters supported the consolidation and streamlining of

the

[[Page 66542]]

rules of practice, they raised concerns about the actual proposed

revisions to the regulations. The following is a discussion of the

commenters' issues.

1. FSIS Authority

Several commenters asserted that an establishment's failure to meet

the Salmonella performance standards, to carry out and meet generic E.

coli testing requirements, or to prevent a HACCP system failure would

not provide an adequate basis to suspend or seek withdrawal of

inspection. They contend that the FMIA and PPIA authorize FSIS to

remove inspectors only when an establishment fails to follow sanitary

practices, refuses to destroy condemned carcasses, fails to comply with

the Humane Slaughter Act, or is convicted in a criminal proceeding.

FSIS disagrees with this assessment of the Agency's authority.

Under the FMIA and the PPIA, FSIS is charged with the duty and the

responsibility to protect the public health by developing and

implementing an effective, comprehensive, and scientifically valid

inspection system that will ensure that meat and poultry products are

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

FSIS is required by these statutes to carry out continuous inspection

of slaughter and processing operations at Federal establishments and to

make the affirmative determination that the meat and poultry products

produced at those establishments are wholesome and not adulterated

prior to marking the products as ``inspected and passed.''

FSIS has specified, through regulations, the conditions under which

meat and poultry products must be produced [the HACCP/Pathogen

Reduction regulations]. These regulations are essential, integral

components of the FMIA and PPIA inspection system, and the failure,

inability, or unwillingness of an establishment to comply with these

food safety regulations effectively precludes FSIS from making the

statutorily-mandated determination that meat and poultry products are

wholesome, not adulterated, and entitled to bear the legend ``inspected

and passed.'' The inspection system provided for in the FMIA and PPIA

is a continuous and real-time inspection program that, by its very

nature, requires real-time and continuous inspection determinations. It

is clear that the FMIA and the PPIA contemplate and authorize the

Agency to take prompt and, if necessary, immediate action to carry out

its public health responsibility to ensure that only products that are

marked ``inspected and passed'' are shipped in commerce. It is the

Agency view, therefore, that compliance with FSIS's food safety

regulations, including the HACCP/Pathogen Reduction regulations, is a

necessary predicate for inspection services and for the application of

the marks of inspection under the FMIA and the PPIA, and that FSIS has

inherent authority to withhold the marks, to suspend inspection

services, and to withdraw inspection when these requirements are not

satisfied.

In addition, FSIS is required to prescribe the rules and

regulations for sanitation, with which slaughter and processing

establishments must comply. The term ``sanitation'' is comprehensive

and encompasses the array of procedures, practices, and controls

employed by establishments to ensure that the products they produce are

wholesome and not adulterated. Sanitation obviously includes procedures

for the cleaning of equipment and facilities; proper sanitation also

encompasses practices for ensuring the acceptability of incoming

products and ingredients, proper product handling and preparation

practices, controlling condemned product, and properly storing product.

It is also FSIS's view that the SSOP requirements, the HACCP

regulations, the Salmonella performance standards, and the generic E.

coli testing requirements are material components of an effective

sanitation program that is sufficient to meet the requirements of the

FMIA and PPIA. For example, E. coli testing is prescribed in the HACCP/

Pathogen Reduction regulations to verify that the establishment is

employing sanitary dressing procedures to prevent the fecal

contamination of carcasses. Also, the Salmonella performance standards

were adopted to ensure that an establishment's procedures, practices,

and controls, as embodied in its HACCP plans, are working properly. The

Agency has ample statutory authority to withhold, suspend, or seek

withdrawal, in accord with the facts of any particular case, when the

Agency's sanitation requirements are not satisfied.

2. Due Process: Notice and Opportunity To Achieve Compliance

Commenters also raised concerns that the proposed rules did not

provide adequate due process protections for establishments. The

commenters argued, for example, that the taking of withholding actions

by inspectors, and the resulting interruption of plant operations,

without providing the establishment with notice of the deficiencies and

an opportunity to demonstrate or achieve compliance is unreasonable and

contrary to applicable law. Commenters underscored this point with

particular focus on HACCP regulation noncompliances, contending that

notice and opportunity to establish compliance were essential in such

cases before taking withholding or suspension actions.

Some commenters believed that the proposed rules of practice were

inconsistent with other FSIS regulations and policies related to the

suspension of inspection. They cited, for example, the Quality Control

(QC) regulations and the Progressive Enforcement Action program. Under

these regulations and policies, in situations not involving the

preparation and distribution of adulterated product, establishments

were provided an opportunity to achieve compliance before FSIS

terminated a QC program or imposed progressive sanctions.

FSIS is mindful that withholding the marks of inspection and

suspending inspection services are significant enforcement actions to

be taken only after careful evaluation of the facts and circumstances.

At the same time, as discussed above, it is FSIS's statutory

responsibility and duty to protect public health by maintaining an

inspection system that will ensure that meat and poultry products

produced and shipped in commerce are wholesome and not adulterated.

FSIS agrees that fundamental fairness requires that appropriate due

process be accorded establishments in connection with enforcement

actions under the FMIA and PPIA. FSIS believes that the proposed rules

of practice, as modified and specified in this document will, in fact,

protect the due process rights of all establishments.

As we make clear in this final rule, FSIS will continue to provide

notice and an opportunity to demonstrate or achieve compliance in

situations where the violations and deficiencies disclosed by

inspection or investigation do not, in the Agency's view, present a

public health concern that requires immediate action. Where, however,

noncompliance with the requirements of the acts and regulations

indicates that continued production and shipment of product do pose, in

the Agency's view, an imminent threat to public health, FSIS will take

immediate action. Accordingly, section 500.3 of the rules of practice

sets out the conditions under which FSIS may withhold the marks of

inspection or suspend inspection without prior written notification and

section 500.4 sets out the conditions under which FSIS may withhold the

marks of inspection or suspend

[[Page 66543]]

inspection after providing prior written notification.

Commenters also argued that FSIS's noncompliance records (NRs)

should not be deemed adequate to notify an establishment of the

Agency's determination that there has been a ``system failure.''

It is FSIS's view that NRs do constitute valid and effective notice

to an establishment that the establishment has not maintained

regulatory compliance. An NR informs the establishment of the specific

deficiency involved and on its face invites the establishment to

respond to the finding and to present in writing its immediate and

further planned corrective actions. The NR also specifically notes the

right to appeal the inspector's finding and potential regulatory

consequences of the NR.

When an NR is issued, it is incumbent upon the establishment to

evaluate the NR carefully and to act upon and respond to it promptly

and effectively. In particular, it is important that establishments

address the NRs related to a HACCP plan noncompliance because such NRs

may indicate that the plan is not working properly and should be

reassessed. Accordingly, FSIS believes that should the Agency determine

that it is necessary to withhold the marks of inspection or to suspend

inspection because of multiple or recurring noncompliances, evidenced

by NRs, the establishment will have been given appropriate notice as

well as ample opportunity to demonstrate or achieve compliance.

Nonetheless, in cases where FSIS has determined that multiple or

recurring noncompliances warrant the withholding of the marks of

inspection or suspension of inspection, this final rule provides for

written notification to the establishment before withholding or

suspending inspection when the circumstances do not pose an imminent

threat to public health.

Therefore, in response to the comments, FSIS is revising the

regulatory language used in the proposed rule. This final rule lists

the types of enforcement actions that the Agency may take and

identifies the circumstances under which each action may be taken. This

final rule also clarifies the procedures FSIS will follow to provide,

when appropriate, prior notification to establishments.

Section 500.1 defines a ``regulatory control action,''

``withholding action,'' and ``suspension.'' A regulatory control action

is the retention of product, rejection of equipment or facilities,

slowing or stopping of lines, or refusal to allow the processing of

specifically identified product. A withholding action is the refusal to

allow the marks of inspection to be applied to products. A withholding

action may affect all products in the establishment or product produced

by a particular process. A suspension is an interruption of the

assignment of program employees to all or part of an establishment.

Section 500.2 states that FSIS may take a regulatory control action

because of insanitary conditions or practices, product adulteration or

misbranding, conditions that preclude FSIS from determining that

product is not adulterated or misbranded, or inhumane handling or

slaughtering of livestock. These control actions are necessary, indeed

essential, in-plant enforcement tools for inspectors to use in cases

where the noncompliance is willful or involves public health, interest,

or safety. Typically, regulatory control actions involve specific

amounts of product or generally well-defined deficiencies such as

crushed and open cartons or malfunctioning equipment. If FSIS takes a

regulatory control action, it will immediately notify the establishment

orally or in writing of the action and of the basis for the action. An

establishment may appeal a regulatory control action, as provided in 9

CFR 306.5 and 381.35.

Withholding actions are generally more significant than regulatory

control actions and affect a larger part of an establishment or the

establishment's processes. In most cases, in-plant inspection personnel

take these actions because of systemic problems, such as HACCP plan

inadequacies. Typically, the actions necessary to correct the problem

that resulted in a withholding action are more complex than those

necessary to resolve a problem that resulted in a regulatory control

action and are likely to require an establishment to accomplish a HACCP

plan reassessment and make any necessary plan modification or to revise

its Sanitation SOP.

A suspension of inspection is likely to have an even more

significant impact on an establishment than a withholding action.

Typically, an FSIS District Manager or Agency official at a higher

level suspends inspection after an establishment fails to correct a

situation involving a withholding action, or when the nature of the

noncompliances are such that the corrective action, such as HACCP plan

reassessment or changes in the establishment's operation, may take a

significant amount of time to implement.

Section 500.3 states that FSIS may take a withholding or suspension

action without providing the establishment prior notification because

the establishment produced and shipped adulterated or misbranded

product as defined in 21 U.S.C. 453 or 21 U.S.C. 602; the establishment

does not have a HACCP plan as specified in section 417.2 of the

regulations; the establishment does not have Sanitation SOPs as

specified in sections 416.11-416.12 of the regulations; sanitary

conditions are such that any products in the establishment are or would

be rendered adulterated; an establishment operator, officer, employee,

or agent assaulted, threatened to assault, intimidated, or interfered

with an FSIS employee; the establishment violated the terms of a

regulatory control action; or the establishment did not destroy a

condemned meat or poultry carcass, or part or product thereof, in

accordance with 9 CFR part 314 or part 381, subpart L, within three

days of notification. FSIS also may impose a suspension without

providing the establishment prior notification because the

establishment is handling or slaughtering animals inhumanely.

Section 500.4 states that FSIS may take a withholding action or

impose a suspension after the Agency provides an establishment prior

notification and the opportunity to demonstrate or achieve compliance

because the HACCP system is inadequate, as specified in 9 CFR 417.6,

due to multiple or recurring noncompliances; the Sanitation SOPs have

not been properly implemented or maintained as specified in 9 CFR

416.13-16; the establishment has not maintained sanitary conditions as

prescribed in 9 CFR 416.2-416.8 due to multiple or recurring

noncompliances; the establishment did not collect and analyze samples

for Escherichia coli Biotype I and record results in accordance with 9

CFR 310.25(a) or 381.94(a); or the establishment did not comply with

the Salmonella performance standard requirements prescribed in 9 CFR

310.25(b) or 381.94(b).

Section 500.5 states that if FSIS takes a withholding action or

imposes a suspension without prior written notification, the Agency

will notify the establishment orally and, as promptly as circumstances

permit, in writing. The written notification will provide the effective

date of the action, reasons for the action, products or processes

affected by the action, opportunity for the establishment to present

immediate corrective action and further planned preventive action, and

the appeals procedures. This section also addresses the prior

notification provided for in section 500.4. This prior notification

will state the type of action that may be

[[Page 66544]]

taken; describe the reason for the proposed action; identify the

products or processes affected by the proposed action; advise the

establishment of its right to contact FSIS to contest the basis for the

proposed action or to explain how compliance has been or will be

achieved; and advise the establishment that it will have three business

days from receipt of the written notification to respond to FSIS unless

the time period is extended by FSIS.

The provisions in section 500.5 also reiterate that an

establishment may appeal the withholding action or suspension, as

provided in section 9 CFR 306.5 and 381.35. Also, this section provides

that if FSIS suspends inspection and does not hold the suspension

action in abeyance, the establishment may request a hearing pursuant to

the Uniform Rules of Practice, 7 CFR Subtitle A, part 1, subpart H.

Upon such request, the Administrator will file a complaint that will

include a request for an expedited hearing.

Section 500.6 addresses withdrawal of inspection, and section 500.7

addresses refusal of inspection. These provisions are substantially

unchanged from the January 1998 proposal. When FSIS withdraws or

refuses inspection, the Agency initiates an administrative action under

USDA's Rules of Practice Governing Formal Adjudicatory Proceedings

Instituted by the Secretary Under Various Statutes (7 CFR subtitle A,

part 1, subpart H). Also, FSIS made no significant changes, other than

renumbering the sections, to the provisions that relate to rescinding

or refusing approval of marks, labels, and containers, (section 500.8)

and refusing or withdrawing inspection for applicants or recipients

unfit to engage in business (sections 500.6 and 500.7).

3. Appropriateness of Other Aspects of the Regulations

Some commenters suggested that FSIS should better explain the

Agency's practice of allowing an establishment to operate while under a

suspension if the establishment presents adequate written assurances

that corrective actions are being implemented.

It has been FSIS's experience that some establishments, upon being

notified that the Agency intends to suspend inspection, offer a plan to

address the circumstances that caused FSIS to issue the notification.

In these cases, FSIS has concluded that, even though the basis for a

suspension existed, it was appropriate to hold the suspension in

abeyance and to allow the establishment to continue to operate under

its proposed corrective and preventive actions.

Section 500.5(e) states that FSIS may hold a suspension in abeyance

and allow the establishment to operate under the conditions agreed to

by FSIS and the establishment.

Some commenters suggested that there should be a third-party review

of an establishment's response to the notification of the Agency's

intent to take an enforcement action, and that this third party should

make the decision on whether the enforcement action is warranted.

FSIS concluded that such third-party review is not appropriate

under the meat and poultry inspection statutes. The Agency is required

to make the determination that the statutes and regulations have been

complied with, and that the products produced meet the statutory

requirements. The suggested procedure is clearly inconsistent with the

statutory authority and plan embodied in the FMIA and PPIA and would be

impractical and contrary to the public interest.

A number of commenters raised concerns about FSIS's appeal policy.

Some recommended provisions for alternative dispute resolution instead

of an administrative hearing before an Administrative Law Judge in

cases where there is a scientific dispute. Under the provisions

submitted by the commenters, the Agency would create a standing panel

of expert advisors to be called upon on an as needed basis. The

establishment and the Agency would be permitted to call witnesses and

present relevant evidence, especially scientific evidence, to the

panel. The panel's decision along with any dissenting views would be

written and shared with the establishment and the Agency. The

Administrator, as the ultimate decisionmaker for the government, would

give the panel's decision due consideration. Other commenters suggested

that FSIS establish a special appeals resolution team in the Technical

Service Center to which all appeals from inspection decisions would

automatically be sent. Some commenters urged FSIS to specify how long

it will take to resolve appeals, to allow establishments to continue

operating while an appeal of an FSIS decision to suspend or withdraw

inspection is pending, except in the event of an ``imminent hazard to

health,'' and to reimburse regulated establishments for losses during

``down time'' when they win an appeal from an inspection decision.

As stated in the proposed rule, FSIS is committed to providing

establishments with appropriate notice and an effective opportunity to

appeal withholding actions and suspensions of inspection. It recognizes

the need for timely resolution of all such appeals. The Agency intends

to develop regulations to address how appeals are handled. However,

since there were no proposed regulations on appeals included in the

proposed rules of practice, establishing such rules in this document is

outside the scope of this rulemaking. FSIS plans to issue a proposed

rulemaking related to the appeals process at a later date.

Until new regulations on appeals are in place, appeals will

continue to be heard through the ``chain-of-command'' process, which is

incorporated into FSIS's existing regulations (9 CFR 306.5 and 381.35).

In an attempt to ensure the timely review of appeals, FSIS issued FSIS

Notice 14-98 on April 20, 1998. This notice explains FSIS's policy

regarding the appeal of inspection findings and decisions. It also

established the Inspection Appeals Tracking System (IATS) report which

the Agency uses to help ensure a timely response to appeals.

Some commenters stated that FSIS should not delete the provisions

in section 335.13. In this regulation, FSIS stated that it will notify

an establishment of what actions are necessary to correct an insanitary

condition and of the time within which corrections must be made.

It is an establishment's responsibility to identify problems and to

determine how best to correct them. Section 335.13 appeared by its

terms to place the burden for devising and correcting insanitary

conditions on the Agency. Such regulations are not consistent with the

Pathogen Reduction/HACCP approach. The Agency will identify problems

when an establishment fails to do so, but it is the establishment's

responsibility to identify problems on a continuing basis and to

identify, select, and implement effective action to correct

noncompliances. FSIS will verify that establishments have taken the

necessary corrective actions. Accordingly, FSIS is removing section

335.13.

Commenters also questioned the elimination of section 335.40,

``Present Your Views (PYV)'' provisions, which allow establishments

believed to have violated the FMIA an opportunity to present their

views to the Agency regarding an alleged criminal violation before FSIS

refers the violation to the Department of Justice for prosecution. The

commenters pointed out that the PYV provisions are a statutory

entitlement for poultry processors, and that by rescinding the

regulations, the

[[Page 66545]]

Agency is backing away from equity between meat and poultry.

After consideration of these comments, FSIS has reconsidered its

proposal and will not remove Part 335, Subpart E.

Executive Order 12866 and Regulatory Flexibility Act

This final rule has been determined to be not significant, and

therefore, has not been reviewed by the Office of Management and

Budget.

The Administrator has made a determination that this final rule

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

small entities, as defined by the Regulatory Flexibility Act (5 U.S.C.

601).

There are no direct costs or benefits associated with this final

rule. Costs and benefits are related to the regulatory actions, not the

proceedings. At the present time, there is no way to predict whether

industry ``down time'' will increase or decrease under these revised

rules of practice. To the extent that resolution of disputes in a

timely and efficient manner will be facilitated by these rules, there

are potential benefits to consumers, industry, and the government. When

disputes are related to public health issues, FSIS may reduce health

risks to consumers by stopping an establishment's operations until the

problem has been resolved.

There are also costs to industry associated with actions that

suspend production operations.

Executive Order 12988

This final rule has been reviewed under Executive Order 12988,

Civil Justice Reform. When this rule becomes final: (1) all state and

local laws and regulations that are inconsistent with this rule would

be preempted; (2) no retroactive effect would be given to this rule;

and (3) administrative proceedings would not be required before parties

may file suit in court challenging this rule.

Paperwork Requirements

This final rule does not include any new paperwork requirements.

Additional Public Notification

In an effort to better ensure that minorities, women, and persons

with disabilities are made aware of this final rule, FSIS will announce

it and provide copies of this Federal Register publication in the FSIS

Constituent Update.

FSIS provides a weekly FSIS Constituent Update, which is

communicated via fax to over 300 organizations and individuals. In

addition, the update is available on line through the FSIS web page

located at http://www.fsis.usda.gov. The update is used to provide

information regarding FSIS policies, procedures, regulations, Federal

Register Notices, FSIS public meetings, recalls, and any other types of

information that could affect or would be of interest to our

constituents/stakeholders. The constituent fax list consists of

industry, trade, and farm groups, consumer interest groups, allied

health professionals, scientific professionals and other individuals

that have requested to be included. Through these various channels,

FSIS is able to provide information with a much broader, more diverse

audience. For more information and to be added to the constituent fax

list, fax your request to the Office of Congressional and Public

Affairs, at (202) 720-5704.

List of Subjects

9 CFR Part 304

Meat inspection.

9 CFR Part 305

Meat inspection.

9 CFR Part 327

Imports, Meat inspection.

9 CFR Part 381

Poultry and poultry products.

9 CFR Part 500

Rules of practice.

For the reasons set forth in this preamble, 9 CFR chapter III would

be amended as follows:

PART 304--APPLICATION FOR INSPECTION; GRANT OF INSPECTION

1. The authority citation for part 304 continues to read as

follows:

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

2. Part 304 is amended by revising the heading to read as set forth

above, and amending Sec. 304.2 by removing paragraphs (c) and (e),

redesignating paragraph (d) as paragraph (c), and revising the last

sentence of paragraph (b) to read as follows:

* * * * *

Sec. 304.2 Information to be provided.

* * * * *

(b) * * * Any application for inspection may be refused in

accordance with the rules of practice in part 500 of this chapter.

* * * * *

PART 305--OFFICIAL NUMBERS; INAUGURATION OF INSPECTION; WITHDRAWAL

OF INSPECTION; REPORTS OF VIOLATION

3. The authority citation for part 305 continues to read as

follows:

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

Sec. 305.5 [Removed]

4. Part 305 is amended by removing Sec. 305.5.

PART 327--IMPORTED PRODUCTS

5. The authority citation for part 327 continues to read as

follows:

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

6. Section 327.6 is amended by removing the last four sentences in

paragraph (f) and adding in their place one sentence to read as

follows:

Sec. 327.6 Products for importation; program inspection, time and

place; application for approval of facilities as official import

inspection establishment; refusal or withdrawal of approval; official

numbers

* * * * *

(f) * * * Any application for inspection under this section may be

denied or refused in accordance with the rules of practice in part 500

of this chapter.

PART 335--RULES OF PRACTICE GOVERNING PROCEEDINGS UNDER THE FEDERAL

MEAT INSPECTION ACT

Secs. 335.1-335.32 (Subparts A--D [Removed]

7. Part 335 Subparts A through D (Secs. 335.1-335.32) are removed.

Subpart E--Criminal Violations is redesignated as Subpart A.

PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS

8. The authority citation for part 381 continues to read as

follows:

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

2.18, 2.53.

9. Section 381.21 is amended by removing paragraphs (a), (b), and

(c); redesignating paragraph (d) as (b); and adding a new paragraph (a)

to read as follows:

Sec. 381.21 Refusal of inspection.

(a) Any application for inspection in accordance with this part may

be denied or refused in accordance with the rules of practice in part

500 of this chapter.

* * * * *

[[Page 66546]]

Sec. 381.29 [Removed]

10. Part 381 is amended by removing Sec. 381.29.

Secs. 381.230-381.236 (Subparts VI) [Removed]

11. Part 381 is amended by removing Subpart W (Secs. 381.230--

381.236).

SUBCHAPTER E--REGULATORY REQUIREMENTS UNDER THE FEDERAL MEAT INSPECTION

ACT AND THE POULTRY PRODUCTS INSPECTION ACT

12. Subchapter E is amended by adding a new Part 500 to read as

follows:

PART 500--RULES OF PRACTICE

Sec.

500.1 Definitions.

500.2 Regulatory control action.

500.3 Withholding or suspension of inspection without prior

notification.

500.4 Withholding action or suspension of inspection with prior

notification.

500.5 Notification, appeals, and actions held in abeyance.

500.6 Withdrawal of inspection.

500.7 Refusal to grant inspection.

500.8 Procedures for rescinding or refusing approval of marks,

labels, sizes, and containers.

Authority: 21 U.S.C. 451-470, 601-695; 7 U.S.C. 450, 1901-1906;

7 CFR 2.18, 2.53.

Sec. 500.1 Definitions.

(a) A ``regulatory control action'' is the retention of product,

rejection of equipment or facilities, slowing or stopping of lines, or

refusal to allow the processing of specifically identified product.

(b) A ``withholding action'' is the refusal to allow the marks of

inspection to be applied to products. A withholding action may affect

all product in the establishment or product produced by a particular

process.

(c) A ``suspension'' is an interruption in the assignment of

program employees to all or part of an establishment.

Sec. 500.2 Regulatory control action.

(a) FSIS may take a regulatory control action because of:

(1) Insanitary conditions or practices;

(2) Product adulteration or misbranding;

(3) Conditions that preclude FSIS from determining that product is

not adulterated or misbranded; or

(4) Inhumane handling or slaughtering of livestock.

(b) If a regulatory control action is taken, the program employee

will immediately notify the establishment orally or in writing of the

action and the basis for the action.

(c) An establishment may appeal a regulatory control action, as

provided in sections 306.5 and 381.35 of this chapter.

Sec. 500.3 Withholding action or suspension without prior

notification.

(a) FSIS may take a withholding action or impose a suspension

without providing the establishment prior notification because:

(1) The establishment produced and shipped adulterated or

misbranded product as defined in 21 U.S.C. 453 or 21 U.S.C. 602;

(2) The establishment does not have a HACCP plan as specified in

Sec. 417.2 of this chapter;

(3) The establishment does not have Sanitation Standard Operating

Procedures as specified in Secs. 416.11-416.12 of this chapter;

(4) Sanitary conditions are such that products in the establishment

are or would be rendered adulterated;

(5) The establishment violated the terms of a regulatory control

action;

(6) An establishment operator, officer, employee, or agent

assaulted, threatened to assault, intimidated, or interfered with an

FSIS employee; or

(7) The establishment did not destroy a condemned meat or poultry

carcass, or part or product thereof, in accordance with part 314 or

part 381, subpart L, of this chapter within three days of notification.

(b) FSIS also may impose a suspension without providing the

establishment prior notification because the establishment is handling

or slaughtering animals inhumanely.

Sec. 500.4 Withholding action or suspension with prior notification.

FSIS may take a withholding action or impose a suspension after an

establishment is provided prior notification and the opportunity to

demonstrate or achieve compliance because:

(a) The HACCP system is inadequate, as specified in Sec. 417.6 of

this chapter, due to multiple or recurring noncompliances;

(b) The Sanitation Standard Operating Procedures have not been

properly implemented or maintained as specified in Secs. 416.13 through

416.16 of this chapter;

(c) The establishment has not maintained sanitary conditions as

prescribed in Sec. Sec. 416.2 through 416.8 of this chapter due to

multiple or recurring noncompliances;

(d) The establishment did not collect and analyze samples for

Escherichia coli Biotype I and record results in accordance with

Secs. 310.25(a) or 381.94(a) of this chapter;

(e) The establishment did not meet the Salmonella performance

standard requirements prescribed in Secs. 310.25(b) or 381.94(b) of

this chapter.

Sec. 500.5 Notification, appeals, and actions held in abeyance

(a) If FSIS takes a withholding action or imposes a suspension, the

establishment will be notified orally and, as promptly as circumstances

permit, in writing. The written notification will:

(1) State the effective date of the action(s),

(2) Describe the reasons for the action(s),

(3) Identify the products or processes affected by the action(s),

(4) Provide the establishment an opportunity to present immediate

and corrective action and further planned preventive action; and

(5) Advise the establishment that it may appeal the action as

provided in Secs. 306.5 and 381.35 of this chapter.

(b) The prior notification provided for in Sec. 500.4 of this part

will:

(1) State the type of action that FSIS may take;

(2) Describe the reason for the proposed action;

(3) Identify the products or processes affected by the proposed

action;

(4) Advise the establishment of its right to contact FSIS to

contest the basis for the proposed action or to explain how compliance

has been or will be achieved; and

(5) Advise the establishment that it will have three business days

from receipt of the written notification to respond to FSIS unless the

time period is extended by FSIS.

(c) An establishment may appeal the withholding action or

suspension, as provided in Secs. 306.5 and 381.35 of this chapter.

(d) If FSIS suspends inspection and does not hold the suspension

action in abeyance as provided in paragraph (e) of this section, the

establishment may request a hearing pursuant to the Uniform Rules of

Practice, 7 CFR Subtitle A, part 1, subpart H. Upon such request, the

Administrator will file a complaint that will include a request for an

expedited hearing.

(e) FSIS may hold a suspension in abeyance and allow the

establishment to operate under the conditions agreed to by FSIS and the

establishment.

Sec. 500.6 Withdrawal of inspection.

The FSIS Administrator may file a complaint to withdraw a grant of

Federal inspection in accordance with the Uniform Rules of Practice, 7

CFR Subtitle A, part 1, subpart H because:

(a) An establishment produced and shipped adulterated product;

(b) An establishment did not have or maintain a HACCP plan in

accordance with part 417 of this chapter;

[[Page 66547]]

(c) An establishment did not have or maintain Sanitation Standard

Operating Procedures in accordance with part 416 of this chapter;

(d) An establishment did not maintain sanitary conditions;

(e) An establishment did not collect and analyze samples for

Escherichia coli Biotype I and record results as prescribed in

Secs. 310.25(a) or 381.94(a) of this chapter;

(f) An establishment did not comply with the Salmonella performance

standard requirements as prescribed in Secs. 310.25(b) and 381.94(b) of

this chapter;

(g) An establishment did not slaughter or handle livestock

humanely;

(h) An establishment operator, officer, employee, or agent

assaulted, threatened to assault, intimidated, or interfered with an

FSIS program employee; or

(i) A recipient of inspection or anyone responsibly connected to

the recipient is unfit to engage in any business requiring inspection

as specified in section 401 of the FMIA or section 18(a) of the PPIA.

Sec. 500.7 Refusal to grant inspection.

(a) The FSIS Administrator may refuse to grant Federal inspection

because an applicant:

(1) Does not have a HACCP plan as required by part 417 of this

chapter;

(2) Does not have Sanitation Standard Operating Procedures as

required by part 416 of this chapter;

(3) Has not demonstrated that adequate sanitary conditions exist in

the establishment as required by part 308 or part 381, subpart H, and

part 416 of this chapter;

(4) Has not demonstrated that livestock will be handled and

slaughtered humanely; or

(5) Is unfit to engage in any business requiring inspection as

specified in section 401 of the FMIA or section 18(a) of the PPIA.

(b) If the Administrator refuses to grant inspection, the applicant

will be provided the opportunity for a hearing in accordance with the

Uniform Rules of Practice, 7 CFR Subtitle A, part 1, subpart H.

Sec. 500.8 Procedures for rescinding or refusing approval of marks,

labels, and containers.

(a) FSIS may rescind or refuse approval of false or misleading

marks, labels, or sizes or forms of any container for use with any meat

or poultry product under section 7 of the FMIA or under section 8 of

the PPIA.

(b) FSIS will provide written notification that:

(1) Explains the reason for rescinding or refusing the approval;

(2) Provides an opportunity for the establishment to modify the

marking, labeling, or container so that it will no longer be false or

misleading; and

(3) Advises the establishment of its opportunity to submit a

written statement to respond to the notification and to request a

hearing.

(c) If FSIS rescinds or refuses approval of false or misleading

marks, labels, or sizes or forms of any container for use with any meat

or poultry product, an opportunity for a hearing will be provided in

accordance with the Uniform Rules of Practice, 7 CFR Subtitle A, part

1, subpart H.

Done at Washington, DC on: November 17, 1999.

Thomas J. Billy,

Administrator.

[FR Doc. 99-30603 Filed 11-26-99; 8:45 am]

BILLING CODE 3410-DM-P