Cooperative Inspection Programs: Interstate Shipment of Meat and Poultry Products, 47648-47669 [E9-21952]

Agencies

• DEPARTMENT OF AGRICULTURE
• Food Safety and Inspection Service

[Federal Register Volume 74, Number 178 (Wednesday, September 16, 2009)]
[Proposed Rules]
[Pages 47648-47669]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-21952]



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Part II





Department of Agriculture





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Food Safety and Inspection Service



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9 CFR Parts 321, 332, and 381



Cooperative Inspection Programs: Interstate Shipment of Meat and 
Poultry Products; Proposed Rule

Federal Register / Vol. 74, No. 178 / Wednesday, September 16, 2009 / 
Proposed Rules

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DEPARTMENT OF AGRICULTURE

Food Safety and Inspection Service

9 CFR Parts 321, 332, and 381

[Docket No. FSIS-2008-0039]
RIN 0583-AD37


Cooperative Inspection Programs: Interstate Shipment of Meat and 
Poultry Products

AGENCY: Food Safety and Inspection Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Food Safety and Inspection Service (FSIS) is proposing 
regulations to implement a new voluntary cooperative program under 
which State-inspected establishments with 25 or fewer employees will be 
eligible to ship meat and poultry products in interstate commerce. In 
participating States, State-inspected establishments selected to take 
part in this program will be required to comply with all Federal 
standards under the Federal Meat Inspection Act (FMIA) and the Poultry 
Products Inspection Act (PPIA), as well as with all State standards. 
These establishments will receive inspection services from State 
inspection personnel that have been trained in the enforcement of the 
FMIA and PPIA. Meat and poultry products produced under the program 
that have been inspected and passed by designated State personnel will 
bear an official Federal mark of inspection and will be permitted to be 
distributed in interstate commerce. FSIS will provide oversight and 
enforcement of the program.
    FSIS is proposing these regulations in response to the Food, 
Conservation, and Energy Act, enacted on June 18, 2008. Section 11015 
of the law amended the FMIA and PPIA to provide for these cooperative 
programs.

DATES: Submit comments on or before November 16, 2009.

ADDRESSES: FSIS invites interested persons to submit comments on this 
proposed rule. Comments may be submitted by either of the following 
methods:
    Federal eRulemaking Portal: Go to https://www.regulations.gov and 
follow the online instructions at that site for submitting comments.
    Mail, including floppy disks or CD-ROM's, and hand- or courier-
delivered items: Send to Docket Clerk, U.S. Department of Agriculture, 
Food Safety and Inspection Service, Room 2-2127 George Washington 
Carver Center, 5601 Sunnyside Avenue, Beltsville, MD 20705.
    Instructions: All items submitted by mail or electronic mail must 
include the Agency name and docket number FSIS-2008-0039. Comments 
received in response to this docket will be made available for public 
inspection and posted without change, including any personal 
information, to: https://www.regulations.gov.
    Docket: For access to background documents or comments received, go 
to the FSIS Docket Room at the address listed above between 8:30 a.m. 
and 4:30 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Philip Derfler, Assistant 
Administrator, Office of Policy and Program Development, Room 350-E, 
Jamie L. Whitten Building, 1400 Independence Avenue, SW., Washington, 
DC 20250; Telephone (202) 720-2709, Fax (202) 720-2025.

SUPPLEMENTARY INFORMATION: 

I. Background

A. Federal-State Cooperative Inspection Programs

    FSIS has been delegated the authority to carry out the functions of 
the Secretary of Agriculture as provided in 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.). These statutes mandate that FSIS 
protect the public by ensuring that meat and poultry products are safe, 
wholesome, unadulterated, and properly labeled and packaged.
    The FMIA and the PPIA (``the Acts'') provide for FSIS to cooperate 
with State agencies in developing and administering their own meat or 
poultry inspection programs (21 U.S.C. 661 and 454). The FMIA and the 
PPIA restrict each cooperative State meat or poultry products 
inspection program to the inspection and regulation of products that 
are produced and sold within the State (21 U.S.C. 661(a)(1) and 
454(a)(1)). Under section 661 of the FMIA and section 454 of the PPIA, 
cooperative State inspection programs are required to operate in a 
manner and with authorities ``at least equal to'' the provisions set 
out in the Acts (21 U.S.C. 661(a)(1) and 454(a)(1)).
    The Acts provide for FSIS to contribute up to 50 percent of the 
cost of the cooperative State inspection programs, as long as the State 
programs are effectively enforcing requirements that are ``at least 
equal to'' the Federal program (21 U.S.C. 661(a)(3) and 454(a)(3)). 
States that have enacted a mandatory State meat or poultry inspection 
law must apply to FSIS to enter into a cooperative State inspection 
program agreement with the Agency.
    If a State is unable or unwilling to continue to operate a 
cooperative State inspection program on an ``at least equal to'' basis, 
FSIS designates the State as not having an ``at least equal to'' 
program by publishing this designation in the Federal Register. After 
the expiration of thirty days of such publication, the State 
establishments are subject to Federal inspection (21 U.S.C. 661(c)(1) 
and 454(c)(1)).
    The Talmadge-Aiken Act authorizes the Secretary of Agriculture to 
enter into cooperative arrangements with State departments of 
agriculture and other State agencies to assist the Secretary in the 
enforcement of relevant Federal laws and regulations to the extent and 
in the manner appropriate to the public interest (7 U.S.C. 450). 
Pursuant to the Talmadge-Aiken Act, FSIS enters into a separate 
agreement with a State agency for the State program to conduct meat, 
poultry, or egg products inspection or other regulatory activities on 
behalf of FSIS. FSIS provides 50 percent funding to the State programs 
for these services.

B. The Food, Conservation, and Energy Act of 2008

    On June 18, 2008, Congress enacted The Food, Conservation, and 
Energy Act of 2008 (also referred to as ``the 2008 Farm Bill'') (Pub. 
L. 110-246, 112 Stat. 1651). Section 11015 of Title XI of the 2008 Farm 
bill amended the FMIA to add a new title V--``Inspections by Federal 
and State Agencies,'' which contains a new section 501, ``Interstate 
Shipment of Meat Inspected by Federal and State Agencies for Certain 
Small Establishments (122 Stat. 2124; codified at 21 U.S.C. 683). 
Section 11015 also amended the PPIA to add a new section 31, 
``Interstate Shipment of Poultry Inspected by Federal and State 
Agencies for Certain Small Establishments'' (122 Stat. 2127; codified 
at 21 U.S.C. 472). These new sections supplement the existing 
cooperative State meat and poultry inspection programs by establishing 
a new cooperative program under which certain State-inspected 
establishments would be permitted to ship meat and poultry products in 
interstate commerce.
    The new law provides that the Secretary of Agriculture, ``in 
coordination with the appropriate State agency of the State in which 
the establishment is located,'' may select State-inspected 
establishments with 25 or fewer employees to ship meat and poultry 
products interstate (Sec. 501(b) and Sec. 31(b)). Inspection services 
for these establishments must be provided by State inspection personnel 
that have

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``undergone all necessary inspection training and certification to 
assist the Secretary with the administration and enforcement of [the 
FMIA or PPIA]'' (Sec. 501(a)(2) and Sec. 31(a)(2)). Meat and poultry 
products inspected and passed by these State inspection personnel would 
bear a ``Federal mark, stamp, tag, or label of inspection'' (Sec. 
501(b)(1) and Sec. 31(b)(1)). The law provides for the Secretary to 
``designate an employee of the Federal government'' to ``provide 
oversight and enforcement'' of the program (Sec. 501(d)(1) and Sec. 
31(d)(1)).
    The law is to take effect ``on the date on which the Secretary * * 
* promulgates final regulations to carry out [section 11015]'' (Sec. 
501(j)(1) and Sec. 31(i)(1)). The law requires that the Secretary 
promulgate final regulations ``not later than 18 months after the date 
of enactment'' (Sec. 501(j)(2) and Sec. 31(i)(2)).
    FSIS is issuing this proposed rule to implement section 11015 of 
the 2008 Farm Bill. Following is a summary of the provisions of section 
11015 that are addressed in this proposed rule.
    Selected establishments. The law applies to certain establishments 
that are already operating under a cooperative State meat or poultry 
inspection program. The law defines an ``eligible establishment'' as 
``an establishment that is in compliance with * * * the State 
inspection program of the State in which the establishment is located'' 
and the Acts, including the rules and regulations issued under the Acts 
(Sec. 501(a)(3) and Sec. 31(a)(3)). A ``selected establishment'' is 
defined as ``an establishment that is authorized by the Secretary, in 
coordination with * * * the appropriate State agency of the State in 
which the establishment is located * * * to ship [meat or poultry] 
items in interstate commerce'' (Sec. 501(a)(5) and Sec. 31(a)(5)).
    The law prohibits the Secretary from selecting an establishment for 
interstate shipment that ``on average, employs more than 25 employees 
(including supervisory and nonsupervisory employees), as defined by the 
Secretary'' (Sec. 501(b)(2)(A) and Sec. 31(b)(2)(A)). The law also 
prohibits the selection of establishments that currently ship 
interstate, as well as certain former and future Federal establishments 
(Sec. 501(b)(2)(B), Sec. 501(b)(2)(C), Sec. 31(b)(2)(B), and Sec. 
31(b)(2)(C)).
    Transition to a Federal establishment. The law permits the 
Secretary to select establishments with ``more than 25 employees but 
less than 35 employees'' to participate in the program (Sec. 
501(b)(3)(B)(i) and Sec. 31(b)(3)(B)(i)). However, if selected, these 
establishments must transition to Federal establishments ``beginning on 
the date that is 3 years after the effective date'' if they 
consistently employ, on average, more than 25 employees (Sec. 
501(b)(3)(B)(ii) and Sec. 31(b)(3)(B)(ii)). The law authorizes the 
Secretary to develop a procedure to transition certain selected 
establishments to a Federal establishment (Sec. 501(b)(3)(A) and Sec. 
31(b)(3)(A)). The law also requires that ``[a]ny selected establishment 
that the Secretary determines to be in violation of any requirement of 
the Act, be transitioned to a Federal establishment'' (Sec. 501(h) and 
Sec. 31(g)).
    Federal-State coordination. Under the law, the Secretary is 
authorized to designate a Federal employee as ``State coordinator'' for 
each State to ``provide oversight and enforcement'' of the interstate 
shipment program and to ``oversee the training and inspection 
activities'' of the State personnel providing inspection services to 
selected establishments (Sec. 501(d)(1) and Sec. 31(d)(1)). The law 
provides that if the State coordinator determines that a selected 
establishment under the State coordinator's jurisdiction is in 
violation of the Acts, the State coordinator must ``immediately notify 
the Secretary of the violation'' and ``deselect the selected 
establishment or suspend inspection at the selected establishment'' 
(Sec. 501(d)(3)(C) and Sec. 31(d)(3(C)).
    This proposed rule refers to the ``State coordinator'' established 
in section 11015 of the 2008 Farm Bill as the FSIS ``selected 
establishment coordinator'' to maintain consistency with the other 
terminology in this proposed rule and to make clear that the ``State 
coordinator'' is a Federal employee. The term ``State coordinator'' is 
often used to refer to a State employee under the Talmadge-Aiken 
program, so FSIS has tentatively decided not to use this term in these 
proposed regulations.
    Federal reimbursement of State costs. The law requires that the 
Secretary ``reimburse a State for costs related to the inspection of 
selected establishments * * * in an amount of not less than 60 percent 
of eligible State costs'' (Sec. 501(c) and Sec. 31(c)).
    Inspection training division. The law amended the FMIA to provide 
that not later than 180 days after the effective date of section 11015 
of the 2008 Farm Bill, the Secretary shall establish in FSIS an 
inspection training division to provide outreach, education, and 
training to, and provide grants to appropriate State agencies to 
provide outreach, technical assistance, education, and training to 
small and very small establishments (as defined by the Secretary) (Sec. 
501(f)). FSIS implemented this provision by establishing an Office of 
Outreach, Education and Training. A substantive part of the program's 
function is to provide training, education, and outreach services to 
small and very small plants.
    Transition grants. The law permits the Secretary to provide grants 
to States to assist them in helping establishments operating under a 
cooperative State meat or poultry inspection program transition to 
selected establishments (Sec. 501(g) and Sec. 31(f)).

II. The Proposed Rule

A. General

    FSIS is proposing to amend 9 CFR part 321 of the Federal meat 
inspection regulations and 9 CFR part 381, subpart R, of the poultry 
products inspection regulations to add new sections that describe the 
cooperative interstate shipment program established in section 11015 of 
the 2008 Farm Bill. FSIS is also proposing to add a new 9 CFR part 332 
to the Federal meat inspection regulations and a new 9 CFR part 381, 
subpart Z, to the poultry products inspection regulations that 
prescribe the conditions under which States and establishments 
operating under a State-inspection program will be permitted to 
participate in a cooperative interstate shipment program.
    When FSIS completes the rulemaking process and issues a final rule, 
the Federal meat and poultry products regulations will provide for 
three separate cooperative State meat and poultry products inspection 
programs: (1) Cooperative State meat or poultry products inspection 
programs under the FMIA and PPIA; (2) cooperative agreements for State 
programs to conduct meat or poultry products inspection or other 
regulatory activities on behalf of the Agency under the Talmadge-Aiken 
Act; and (3) cooperative programs for the interstate shipment of State-
inspected meat and poultry products under the FMIA and PPIA as amended 
by section 11015 of the 2008 Farm Bill.
    The proposed regulations to implement section 11015 are described 
in detail below.

B. Description of Cooperative Programs--9 CFR Part 321 and 9 CFR Part 
381, Subpart R

    9 CFR part 321 of the Federal meat inspection regulations and 9 CFR 
part 381, subpart R, of the poultry products inspection regulations 
describe

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cooperative meat and poultry products inspection programs authorized 
under the FMIA, PPIA, and the Talmadge-Aiken Act. These regulations 
reference the legal authority for each cooperative inspection program 
and provide a general description of each program. FSIS is proposing to 
amend part 321 and part 381, subpart R, to add a new Sec.  321.3 and a 
new Sec.  381.187 to describe the cooperative interstate shipment 
program established under section 11015 of the 2008 Farm Bill.
    The amendments to the FMIA in section 501 of section 11015 of the 
2008 Farm Bill have been codified at 21 U.S.C. 683, and the amendments 
to the PPIA in section 31 have been codified at 21 U.S.C. 472 (122 
Stat. 2124, 2127). Therefore, proposed Sec.  321.3(a) provides that 
under 21 U.S.C. 683(b), FSIS is authorized to coordinate with States 
that have cooperative State meat inspection programs to select certain 
establishments operating under these programs to ship carcasses, parts 
of carcasses, meat, and meat food products in interstate commerce. 
Similarly, proposed Sec.  381.187(a) provides that under 21 U.S.C. 
472(b), FSIS is authorized to coordinate with States that have 
cooperative State poultry products inspection programs to select 
certain establishments operating under these programs to ship poultry 
products in interstate commerce. Proposed Sec. Sec.  321.3(a) and 
381.187(a) both explain that this type of cooperative program is called 
a ``cooperative interstate shipment program.''
    Proposed Sec. Sec.  321.3(b) and 381.187(b) contain a general 
description of the cooperative interstate shipment program and make 
clear that the Federal contribution for inspection services provided by 
States that have entered into such a program will be at least 60 
percent of eligible State costs. Under the FMIA and PPIA, FSIS is 
required to contribute up to 50 percent of the cost of a cooperative 
State meat or poultry products inspection program (21 U.S.C. 661(a)(3) 
and 454(a)(3)). Thus, States that participate in the new cooperative 
interstate shipment program will receive additional reimbursement for 
costs related to inspection of selected establishments in the State.
    As required under the statute, the Federal contribution for 
inspection services provided by States that enter into a cooperative 
interstate shipment program under this proposal will be at least 60 
percent of eligible State costs. When the program is implemented, FSIS 
does not intend to reimburse States for more than 60 percent of their 
eligible costs unless Congress directs it, and provides the money for 
it, to do so.
    To be reimbursed under this proposed rule, States will be expected 
to submit their budgets for their cooperative interstate shipment 
programs to FSIS for approval prior to receiving Federal funds. States 
will also be expected to submit a separate justification for any costs 
related to the cooperative interstate shipment program that were not 
included in their initial budget request. FSIS will also need to 
approve a State's request for additional funds before the Agency will 
reimburse the State for not less than 60% of the cost. FSIS has 
tentatively decided that, for purposes of this proposed rule, eligible 
State costs will be those costs that a State has justified and FSIS has 
approved as necessary for the State to provide inspection services to 
selected establishments in the State. The Agency requests comments on 
whether the final rule resulting from this proposal should codify this 
definition or any other requirements related to State reimbursement for 
eligible costs related to inspection of selected establishments.
    Proposed Sec. Sec.  321.3(c) and 381.187(c) identify 9 CFR part 332 
and 9 CFR part 381, subpart Z, as the regulations that prescribe 
conditions under which States and establishments may participate in the 
cooperative interstate shipment program. Proposed Sec. Sec.  321.3(d) 
and 381.187(d) provide that the Administrator will terminate an 
agreement for a cooperative interstate shipment program with a State if 
the Administrator determines that the State is not conducting 
inspection at selected establishments in a manner that complies with 
the Acts and their implementing regulations.

C. Requirements for a Cooperative Interstate Shipment Program--9 CFR 
Part 332 and 9 CFR 381 Subpart Z

1. General
    FSIS is proposing to amend title 9, Chapter III, Subchapter A of 
the Code of Federal Regulations (CFR) to add a new part 332 titled 
``Selected Establishments; Cooperative Program for Interstate Shipment 
of Carcasses, Parts of Carcasses, Meat, and Meat Food Products,'' and 
to add to part 381 a new subpart Z titled ``Selected Establishments; 
Cooperative Program for Interstate Shipment of Poultry Products.'' The 
regulations in the proposed new part 332 and the proposed new subpart Z 
prescribe the requirements for a cooperative interstate shipment 
program.
2. Definitions and Purpose
    Proposed Sec. Sec.  332.1 and 381.511 define the terms 
``cooperative interstate shipment program,'' ``cooperative State meat 
inspection program,'' ``cooperative State poultry products inspection 
program,'' ``selected establishment,'' and ``designated personnel.'' 
Terms used in the proposed regulations that are defined in 9 CFR 301.2 
and 9 CFR 381.1 retain their same meaning.
    Under proposed Sec. Sec.  332.1 and 381.511, ``cooperative 
interstate shipment program,'' ``cooperative State meat inspection 
program,'' and ``cooperative poultry products inspection program'' are 
defined by providing a cross-reference to the description of these 
cooperative programs in 9 CFR part 321 and 9 CFR part 381 subpart R, 
described above. Under this proposal, ``selected establishment'' is 
defined as ``an establishment operating under a State cooperative [meat 
or poultry products] inspection program that has been selected by the 
Administrator, in coordination with the State where the establishment 
is located, to participate in a cooperative interstate shipment 
program.''
    FSIS is proposing to define ``designated personnel'' as ``State 
inspection personnel that have been trained in the enforcement of the 
Acts and any additional State program requirements in order to provide 
inspection services to selected establishments.''
    In addition to proposing new definitions, proposed Sec. Sec.  332.1 
and 381.511 make clear that the term ``interstate commerce,'' as used 
in the proposed regulations has the same meaning as ``commerce'' under 
9 CFR 301.2 and 381.1. The regulations in 9 CFR 301.2 and 381.1 define 
``commerce'' as ``[c]ommerce between any State, any Territory, or the 
District of Columbia, and any place outside thereof * * *.'' Thus, 
under this proposal, State-inspected establishments that are selected 
to participate in a cooperative interstate shipment program will be 
permitted to distribute and sell meat or poultry products across State 
lines and to export these products to foreign countries.
    Proposed Sec. Sec.  332.2 and 381.512 state that the purpose of 
part 332 and part 381, subpart Z, is to prescribe the conditions under 
which States that administer cooperative State meat or poultry products 
inspection programs and establishments that operate under such programs 
may participate in a cooperative interstate shipment program.
3. Requirements for Establishments
    The proposed regulations in Sec. Sec.  332.3 and 381.513 prescribe 
conditions that establishments operating under a

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cooperative State meat or poultry products inspection program must 
comply with in order to apply to participate in a cooperative 
interstate shipment program. Proposed Sec. Sec.  332.3 and 381.513 also 
describe establishments that are ineligible to be selected for such a 
program.
    Number of employees. Under proposed Sec. Sec.  332.3(a)(1) and 
381.513(a)(1), an establishment operating under a cooperative State 
meat or poultry products inspection program may apply to participate in 
a cooperative interstate shipment program if the establishment employs, 
on average, no more than 25 employees. Standards for determining the 
average number of employees for purposes of this proposal are described 
in proposed Sec. Sec.  332.3(b) and 381.513(b) below.
    Under proposed Sec. Sec.  332.3(a)(2) and 381.513(a)(2), 
establishments that employed more than 25 but fewer than 35 employees 
as of June 18, 2008, are also permitted to apply for a cooperative 
interstate shipment program. However, Sec. Sec.  332.3(a)(2) and 
381.513(a)(2) provide, reflecting the amended FMIA and PPIA, that if 
selected, these establishments must employ, on average, 25 or fewer 
employees as of the date three years from the date that the final rule 
resulting from this proposal becomes effective. If they do not, 
proposed Sec. Sec.  332.3(a)(2) and 381.513(a)(2) require that they be 
deselected from the program and transition to become official 
establishments.
    Standards for determining number of employees. Proposed Sec. Sec.  
332.3(b) and 381.513(b) establish standards for determining whether an 
establishment employs, on average, 25 or fewer employees for purposes 
of this proposed rule. FSIS developed these proposed standards to carry 
out Congress' intent that ``[t]he term `average' should be interpreted 
to provide some flexibility to these selected establishments that 
require seasonal employees for certain parts of the year, as long as 
the increase in employees are [sic] manageable by the establishment and 
the increase * * * does not undermine food safety standards'' (S. Rep. 
No. 220, 110th Cong., 1st Sess., at 211 (2007)).
    For the most part, the proposed standards in Sec. Sec.  332.3(b) 
and 381.513(b) reflect applicable methods used by the Small Business 
Administration (SBA) to calculate the number of employees of a business 
concern where the size standard is number of employees (13 CFR 121.105 
and 121.106). In addition, as explained below, FSIS is also proposing 
to limit the total number of employees at any given time to 35 
individuals. Under this proposal, the standards developed by FSIS will 
apply to the employees of an individual establishment. The proposed 
standards are as follows:
     All individuals, both supervisory and non-supervisory, 
employed by the establishment on a full-time, part-time, or temporary 
basis are to be counted when calculating the total number of employees;
     All individuals employed from a temporary employee agency, 
professional employee organization, or leasing concern are to be 
counted;
     The average number of employees is calculated for each of 
the pay periods for the preceding calendar year;
     Part-time and temporary employees are to be counted the 
same as full-time employees;
     If an establishment has not been in business for 12 
months, the average number of employees is calculated for the pay 
periods in which the establishment has been in business;
     Volunteers who receive no compensation are not considered 
employees; and
     The total number of employees can never exceed 35 
individuals at any given time, regardless of the average number of 
employees.
    As noted above, the standard that limits the total number of 
employees on any given day to 35 individuals is not derived from SBA's 
methods for calculating the number of employees. FSIS is proposing to 
limit the number of individuals employed by a selected establishment at 
any given time to carry out Congress' intent that any increase in the 
number of employees be ``manageable by the selected establishment'' and 
that the increase ``does not undermine food safety standards.'' FSIS is 
proposing that this number never exceed 35 because section 11015 of the 
2008 Farm Bill permits the Agency to select certain establishments that 
employ as many as 35 employees to participate in a cooperative 
interstate shipment program (Sec. 501(b)(3)(i) and Sec. 31(b)(3)(i)). 
Therefore, FSIS believes that a temporary increase in the number of 
employees of up to 35 individuals is likely to be considered 
``manageable'' under the law, provided that the average number of 
employees remains at 25 or fewer.
    FSIS requests comments on the proposed standards for determining an 
establishment's average number of employees. The Agency specifically 
requests comment on whether part-time and temporary employees should be 
counted the same as full-time employees.
    Ineligible establishments. Proposed Sec. Sec.  332.3(c) and 
381.513(c) describe establishments that are ineligible to participate 
in a cooperative interstate shipment program. For the most part, these 
establishments reflect the ``prohibited establishments'' described in 
section 11015 of the 2008 Farm Bill (Sec. 501(b)(2) and 31(b)(2)). 
These establishments include:
     Establishments that employ more than 25 employees on 
average, with a limited exception for establishments that had between 
25 and 35 employees as of June 18, 2008 and that have 25 or fewer 
employees as of the date three years from the date that the final rule 
resulting from this rule becomes effective;
     Establishments operating under a cooperative inspection 
program under the Talmadge-Aiken Act;
     Official establishments;
     Establishments that were official establishments as of 
June 18, 2008, but that were reorganized on a later date by the person 
that controlled the establishment as of June 18, 2008;
     State-inspected establishments that employed more than 35 
employees as of June 18, 2008, but that were later reorganized by the 
person that controlled the establishment as of June 18, 2008;
     Establishments that are transitioning to become official 
establishments;
     Establishments that are in violation of the FMIA or PPIA; 
and
     Establishments located in a State without a cooperative 
meat or poultry products inspection program.
    In addition, the proposed regulations also include among the 
establishments ineligible to participate in a cooperative interstate 
shipment programs, establishments located in a State whose agreement 
for an interstate shipment program was terminated by the Administrator.
    Proposed Sec. Sec.  332.3(d) and 381.513(d) provide that an 
eligible establishment may apply for selection into a cooperative 
interstate shipment program through the State where the establishment 
is located. FSIS is proposing that establishments apply for selection 
into a cooperative interstate shipment program through the State 
because the State will be responsible for providing inspection services 
to the establishment if the establishment is selected for the program. 
Thus, establishment participation in the cooperative interstate 
shipment program will depend on whether the State is able, and willing, 
to provide the necessary inspection services to the establishment. 
However, if a State enters into an agreement with FSIS for a 
cooperative interstate shipment

[[Page 47652]]

program, FSIS, in coordination with the State, will make the final 
determination on whether to select an establishment to participate in 
the program.
4. State Request for a Cooperative Interstate Shipment Program
    Under this proposed rule, a State that does not have a cooperative 
interstate shipment program, but that is interested in establishing 
one, may submit a request for such a program to FSIS. Proposed 
Sec. Sec.  332.4 and 381.514 prescribe the procedures for States to 
request an agreement for a cooperative interstate shipment program. 
Under this proposal, a State will submit the request through the FSIS 
District Office that covers the State. Proposed Sec. Sec.  332.4(a) and 
381.514(a) make clear that State participation in a cooperative 
interstate shipment program is limited to States that have cooperative 
State meat or poultry products inspection programs.
    Required information. Proposed Sec. Sec.  332.4(b) and 381.514(b) 
describe the information that States will need to include in their 
requests for an agreement for a cooperative interstate shipment 
program. Because a cooperative interstate shipment program requires 
participation from both States and establishments, the State's request 
for an agreement for a cooperative interstate shipment program must 
identify establishments in the State that have requested to be selected 
and that the State recommends for initial selection into the program 
(proposed Sec. Sec.  332.4(b)(1) and 381.514(b)(1)). If FSIS and the 
State enter into an agreement for a cooperative interstate shipment 
program under this proposal, these establishments will be the first to 
be considered for the program. Other establishments operating under the 
State's meat or poultry products inspection program may apply to become 
selected establishments after the cooperative interstate shipment 
program has been implemented within the State.
    A State's request for a cooperative interstate shipment program 
must also include documentation to demonstrate that the State is able 
to provide necessary inspection services to selected establishments in 
the State and conduct any related activities that would be required 
under a cooperative interstate shipment program (proposed Sec. Sec.  
332.4(b)(2) and 381.514(b)(2)). Under this proposal, this documentation 
would be similar to the documentation that States provide when they 
request an agreement for a cooperative State meat or poultry products 
inspection program. However, instead of demonstrating that the State's 
inspection program is ``at least equal to'' the Federal inspection 
program, the statute requires that the State demonstrate that 
inspection services provided to selected establishments will be ``the 
same as'' the inspection services provided under the Federal program.
    Thus, to qualify for a cooperative interstate shipment program 
under this proposal, States will need to demonstrate, among other 
things, that they have the authority under State law to provide the 
same inspection services to selected establishments in the State as the 
inspection services that FSIS provides to official Federal 
establishments. States will also need to demonstrate that they have 
staffing sufficient to conduct the same inspection activities in 
selected establishments that FSIS conducts in official Federal 
establishments, and that designated personnel have been properly 
trained in Federal inspection methodology. FSIS currently offers 
training courses in Federal inspection methodology to State inspection 
personnel. Under this proposal, States that are interested in 
participating in a cooperative interstate shipment program will be 
responsible for making arrangements for their inspection personnel to 
attend these courses. FSIS will also expect States to demonstrate that 
they can provide the necessary equipment for State personnel to provide 
the same inspection services to selected establishments that FSIS 
provides to official Federal establishments, including computers and 
supplies for collecting product samples.
    Because the statute requires compliance with all Federal standards, 
meat and poultry products produced in selected establishments will be 
subject to the same regulatory sampling programs as those established 
in the Federal inspection program. Thus, to be eligible to participate 
in a cooperative interstate shipment program, States will need to 
demonstrate that State personnel will collect the same number and type 
of regulatory product samples from selected establishments as are 
collected under FSIS's inspection sampling program.
    In addition, the State will need to demonstrate that the laboratory 
services that it intends to use to analyze product samples from 
selected establishments are capable of conducting the same chemical, 
microbiological, physical, and pathology testing as are required under 
the Federal meat and poultry products inspection programs. FSIS's 
Office of Public Health Science will provide audit assistance to the 
State to verify that the methodologies used by a State's laboratory 
services to analyze samples from selected establishments are capable of 
producing the same results as the methodologies used by FSIS 
laboratories. FSIS will not enter into an agreement for a cooperative 
interstate shipment program with a State that does not meet the 
conditions described above.
    Additional conditions. Proposed Sec. Sec.  332.4(b)(3) and 
381.514(b)(3) prescribe additional conditions that States applying for 
a cooperative interstate shipment program must agree to in order to 
qualify for the program. These proposed regulations provide that when a 
State submits a request to establish a cooperative interstate shipment 
program, the State must agree that, if it enters into an agreement with 
FSIS for such a program, that the State will:
     Provide FSIS with access to the results of all laboratory 
analyses conducted on product samples from selected establishments in 
the State;
     Notify the selected establishment coordinator (SEC) for 
the State of the results of any laboratory analyses that indicate that 
a product prepared or processed in a selected establishment may be 
adulterated or may otherwise present a food safety concern; and
     If necessary, cooperate with FSIS to transition selected 
establishments in the State that have been deselected from a 
cooperative interstate shipment program to become official 
establishments. FSIS will not enter into an agreement for a cooperative 
interstate shipment program if a State does not agree to these terms.
    Qualified States. Under this proposal, after a State submits a 
request for a cooperative interstate shipment program, the FSIS 
Administrator will review the request and determine whether the State 
qualifies for such a program. If, based on the information submitted in 
the request the Administrator determines that a State is eligible to 
enter into a cooperative agreement for an interstate shipment program, 
the Administrator and the State will sign a cooperative agreement that 
sets forth the terms and conditions under which each party will 
cooperate to provide inspection services to selected establishments in 
the State (proposed Sec. Sec.  331.4(c) and 381.514(c)). After the 
Administrator and a State have signed an agreement for a cooperative 
interstate shipment program, the Administrator will: (1) Appoint an 
FSIS employee as the selected establishment coordinator (SEC) for the 
State and (2) coordinate with the State to select the establishments 
that will participate in the program (proposed Sec. Sec.  332.4(d) and 
381.514(d)).

[[Page 47653]]

    Summary of actions needed to establish a cooperative interstate 
shipment program under the proposed regulations.
    The proposed regulations discussed above describe conditions that 
both establishments and States must meet to participate in a 
cooperative interstate shipment program. If FSIS adopts these proposed 
regulations in a final rule, the steps for establishing a new 
cooperative interstate shipment program will be the following.
     An establishment that is eligible for the interstate 
shipment program, and that is interested in participating in the 
program, will apply for the program through the State agency that 
administers the State meat and poultry products inspection program 
under which the establishment operates. States will develop their own 
application procedures.
     The State will then evaluate the establishment's 
application to determine whether the State will recommend the 
establishment for selection into the cooperative interstate shipment 
program.
     If the State determines that an establishment qualifies 
for selection into the program, and the State is able, and willing, to 
provide the necessary inspection services to the establishment, the 
State will recommend the establishment for selection into the program. 
The State will need to submit its recommendation through the FSIS 
District Office whose jurisdiction includes the State.
     If the State has not entered into an agreement with FSIS 
for a cooperative interstate shipment program, but is qualified to 
participate in such a program, it will need to submit a request for a 
cooperative agreement for the program to the FSIS District Office that 
covers the State.
     In its request for a cooperative interstate shipment 
program, a State will need to: (1) Identify those establishments that 
have submitted a request for, and that the States recommends for, 
initial selection into the program and (2) demonstrate that it is able 
to provide the necessary inspection services to these establishments if 
they are selected for the program. The State will also need to agree to 
comply with certain conditions associated with FSIS oversight and 
enforcement of the program.
     After a State submits a request for a cooperative 
interstate shipment program, the FSIS Administrator will evaluate the 
request and determine whether the State qualifies for the program.
     If the Administrator determines that the State qualifies 
for the cooperative interstate shipment program, the Administrator and 
the State will sign a cooperative agreement that sets forth the terms 
and conditions under which each party will cooperate to provide 
inspection services to selected establishments in the State.
     The Administrator will then appoint an SEC for the State, 
and the Administrator, in coordination with the State, will begin 
selecting establishments for participation in the program.
5. Selection of Establishments
    As discussed above, under this proposal, State-inspected 
establishments that are interested in participating in a cooperative 
interstate shipment program will apply for selection into the program 
through the State agency that administers the State's meat or poultry 
products inspection program. When, and if, an establishment applies to 
participate in a cooperative interstate shipment program, the State 
will evaluate the establishment to determine whether it qualifies to 
become a selected establishment. Proposed Sec. Sec.  332.5(a) and 
381.515(a) provide that a State-inspected establishment will qualify 
for selection into a cooperative interstate shipment program if the 
establishment:
     Has submitted a request to the State to be selected for 
the program;
     Has the appropriate number of employees;
     Is not ineligible for a cooperative interstate shipment;
     Is in compliance with all requirements under the State 
inspection program; and
     Is in compliance with the all Federal meat or poultry 
products inspection requirements.
    Establishments that do not meet all of these criteria will not 
qualify, and will not be selected, for the program. To participate in a 
cooperative interstate shipment program, an establishment that 
qualifies for such a program must be selected by the Administrator, in 
coordination with the State where the establishment is located 
(proposed Sec. Sec.  332.5(b) and 381.515(b)).
    Thus, under this proposal, if a State determines that an 
establishment operating under the State's meat or poultry products 
inspection program qualifies for selection into a cooperative 
interstate shipment program, and the State is able, and willing, to 
provide the necessary inspection services to the establishment, the 
State is to submit its evaluation of the establishment through the FSIS 
District Office that covers the State. The FSIS Administrator, in 
coordination with the State, will decide whether to select the 
establishment for the program. When deciding whether to select and 
establishment for the program, the Administrator will consider whether 
the establishment meets the criteria needed to qualify for the program 
and whether the Agency has the resources that it needs to provide the 
required oversight of the establishment if it is selected for the 
program.
    As stated above, to qualify to participate in a cooperative 
interstate shipment program, an establishment must be in compliance 
with all Federal inspection requirements under the FMIA, PPIA, and 
their implementing regulations in title 9, chapter III, of the CFR. 
Thus, as part of the selection process, the SEC, in coordination with 
the State, will verify that each establishment that has applied to 
participate in a cooperative interstate shipment program: (1) Meets the 
Federal regulatory performance standards established in 9 CFR 416.1 
through 416.6; (2) has submitted all labeling material to the State for 
approval, and that the materials meet all Federal requirements in 9 CFR 
parts 316, 317, and 319 and Part 381, subparts M, N, and P; (3) has 
obtained the same water source and sewage system approval that FSIS 
requires for official establishments; (4) has developed Sanitation 
Standard Operating Procedures (Sanitation SOPs) that comply with 9 CFR 
416.11-416.17; and (5) has conducted a hazard analysis and developed a 
validated Hazard Analysis and Critical Control Points (HACCP) plan that 
complies with 9 CFR part 417.
    These criteria reflect the standards that meat and poultry products 
establishments are required to meet to obtain a Federal grant of 
inspection under 9 CFR part 304 and 9 CFR part 381. Establishments that 
do not meet all of these requirements are not in compliance with all 
Federal standards and thus will not be selected for the program.
    If an establishment qualifies for, and is selected to participate 
in, a cooperative interstate shipment program under this proposed rule, 
proposed Sec. Sec.  332.5(c) and 381.515(c) provide that the State is 
to assign the establishment an official number that reflects the fact 
that the establishment is a participant in the cooperative interstate 
shipment program. These proposed regulations provide that the State is 
to advise the SEC of the number assigned to each selected establishment 
in the State. Proposed Sec. Sec.  332.5(c) and 381.515(c) go on to 
state that the official numbers

[[Page 47654]]

assigned to selected establishments need to contain the suffix ``SE'' 
to identify the establishments as selected establishments. FSIS is 
proposing this requirement to ensure that establishments participating 
in the cooperative interstate shipment program can be identified by 
reference to their establishment number. It will also ensure that meat 
and poultry products prepared in selected establishments are identified 
as articles produced under a cooperative interstate shipment program.
    Proposed Sec. Sec.  332.5(c) and 381.515(c) also provide that the 
selected establishment numbers must include, as a suffix, the 
abbreviation for the State in which the establishment is located. In 
addition, proposed Sec.  381.515(c) provides that the suffix of the 
number for a selected poultry products establishments needs to contain 
the letter ``P'' to identify the establishment as one that processes 
poultry products. Thus, under this proposal, an official number for a 
selected establishment in Texas that prepares meat products would 
contain the suffix ``SETX,'' while an official number for an 
establishment in North Dakota that process poultry products would 
contain the suffix ``SEPND.''
    As discussed below, articles that have been inspected and passed in 
a selected establishment will bear an official USDA mark, stamp, tag, 
or label of inspection.
    Finally, proposed Sec. Sec.  332.5(d) and 381.515(d) provide that 
failure of a State to comply with Sec. Sec.  332.5(c) and 381.515(c) 
will disqualify that State from participation in a cooperative 
interstate shipment program. Full compliance by a State with these 
provisions is essential if the program is to succeed.
6. Inspection at Selected Establishments, Official Mark, and Interstate 
Shipment
    Proposed Sec. Sec.  332.6(a) and 381.516(a) provide that a 
cooperative interstate shipment program will commence when the 
Administrator, in coordination with a State that has entered into an 
agreement for a cooperative meat or poultry products inspection 
program, have selected establishments in the State to participate in 
the program.
    Proposed Sec. Sec.  332.6(b) and 381.516(b) provide that inspection 
services for selected establishments participating in a cooperative 
interstate shipment program must be provided by designated personnel, 
who will be under the direct supervision of a State employee. As 
discussed below, the FSIS SEC will oversee the inspection activities of 
the designated personnel.
    Proposed Sec. Sec.  332.6(c) and 381.516(c) provide that articles 
prepared or processed in a selected establishment that have been 
inspected and passed by designated personnel must bear an official USDA 
mark, stamp, tag, or label of inspection as specified in 9 CFR 312.2 or 
9 CFR 381.96. 9 CFR 312.2 and 9 CFR 381.96 are the regulations that 
prescribe the appropriate wording and form for use of the official 
Federal inspection legend on meat or poultry products. In addition, the 
establishment number contained in the Federal mark, stamp, tag, or 
label of inspection must comply with all the conditions proposed in 
Sec. Sec.  332.5(c) or 381.515(c).
    Under proposed Sec. Sec.  332.6(d) and 381.516(d) meat or poultry 
products prepared in selected establishments may be shipped in 
interstate commerce if they have been inspected and by selected State 
personnel and bear the Federal mark of inspection.
7. Federal Oversight of Cooperative Interstate Shipment Programs
    Section 11015 of the 2008 Farm Bill requires that the Secretary 
designate an employee of the Federal government as a ``State 
coordinator'' for each State that has a cooperative State meat or 
poultry products inspection program (Sec. 501(d) and Sec. 31(d)). The 
State coordinator is required to ``provide oversight and enforcement'' 
of the program and ``to oversee the training and inspection 
activities'' of State personnel designated to provide inspection 
services to selected establishments (Sec. 501(d)(1) and Sec. 31(d)(1)). 
As noted above, when, and if, a State qualifies to participate in a 
cooperative interstate shipment program, proposed Sec. Sec.  
332.4(c)(1) and 381.514(c)(1) provide that the Administrator will 
appoint an FSIS employee as the FSIS SEC for the State. The SEC is the 
``State coordinator'' prescribed by the statute.
    FSIS has tentatively decided that the SEC will be an employee of 
the FSIS Office of Field Operations (OFO) and will be assigned to an 
FSIS District Office. The SEC will likely be under the direct 
supervision of an FSIS District Manager. The number of States in an 
FSIS district assigned to an SEC will likely depend on several factors, 
including, but not limited to: (1) The number of States and selected 
establishments, if any, that participate in the cooperative interstate 
shipment program; (2) the location of each selected establishment; (3) 
the number of State inspection personnel providing inspection services 
to selected establishments in a State; (4) the complexity of the 
operations conducted at each selected establishment; and (5) the 
schedule of operations for each selected establishment. The number of 
States assigned to an SEC would also need to be based on consideration 
of the most effective allocation of available Agency resources.
    SEC initial responsibilities. One of the SEC's initial 
responsibilities will be, in conjunction with the District Office, to 
coordinate with the State to select establishments to participate in 
the program. The SEC will coordinate with the State to verify that all 
State personnel selected to provide inspection services to these 
establishments have successfully completed the same training in the 
fundamentals of meat and poultry inspection, covering the Sanitation 
Performance Standards, Sanitation Standard Operating Procedures (SOPs), 
HACCP, and enforcement procedures, that is required for FSIS inspection 
personnel. The SEC will also coordinate with the State to verify that 
designated personnel have successfully completed the appropriate 
customized food safety training required for FSIS inspection personnel 
based on the types of products being produced at the establishments 
where designated personnel are assigned.
    SEC's oversight responsibilities. Proposed Sec. Sec.  332.7 and 
381.517 prescribe how the FSIS SEC is to provide Federal oversight of 
the cooperative interstate shipment program.
    Proposed Sec. Sec.  332.7(a) and 381.517(a) provide that the SEC is 
to visit each selected establishment in the State on a regular basis to 
verify that these establishments are operating in a manner that is 
consistent with the Acts and the implementing regulations in title 9, 
chapter III, of the CFR. The SEC's frequency of visits and oversight 
activities for each selected establishment will need to reflect the 
type of operations conducted by a selected establishment, as well as 
the establishment's production processes. FSIS requests comments on how 
frequently the SEC should visit each establishment under his or her 
jurisdiction. Proposed Sec. Sec.  332.7(a) and 381.517(a) also provide 
that if necessary, the SEC, in consultation with the District Manager 
that covers the State, may designate qualified FSIS personnel to visit 
a selected establishment on behalf of the SEC.
    Under proposed Sec. Sec.  332.7(b) and 381.517(b), the SEC, in 
coordination with the State, will verify that selected establishments 
in the State are receiving the necessary inspection services from

[[Page 47655]]

designated personnel, and that these establishments are eligible, and 
remain eligible, to participate in the cooperative interstate shipment 
program. These proposed regulations provide that the SEC's verification 
activities may include:
     Verifying that each selected establishment in the State 
employs, and continues to employ, 25 or fewer employees on average, 
unless the establishment is transitioning to become an official 
establishment;
     Verifying that the designated personnel are providing 
inspection services to selected establishments in an manner that 
complies with the Acts and implementing regulations;
     Verifying that the State staffing levels for each selected 
establishment are appropriate to carry out the required inspection 
activities; and
     Assessing each selected establishment's compliance with 
the Acts and implementing regulations under title 9, chapter III, of 
the CFR.
    To verify that designated personnel are providing inspection 
services in compliance with the Acts, the SEC for the establishment, in 
coordination with the State, will verify that the designated personnel 
are correctly applying Federal inspection methodology, making decisions 
based upon the correct application of this methodology, accurately 
documenting their findings, and, when authorized to do so, implementing 
enforcement actions in accordance with the FSIS Rules of Practice in 9 
CFR part 500.
    To assess each selected establishment's compliance with Federal 
food safety standards, the SEC will observe the condition of the 
establishment, observe establishment employees performing their duties, 
review the establishment's records, and submit product samples for 
analysis to determine that product produced by the establishment meets 
Federal food safety standards.
    The SEC will have discretion to increase the frequency of visits to 
a selected establishment if the SEC, in consultation with the District 
Manager for the State where the selected establishment is located, 
determines that such action is necessary to ensure that the 
establishment is operating in a manner consistent with the Acts. The 
SEC will also be authorized to conduct a comprehensive food safety 
assessment (FSA) for a selected establishment, or to request that an 
FSIS Enforcement, Investigation, and Analysis Officer (EIAO) conduct an 
FSA, if the SEC, in consultation with the District Manager, determines 
that such action would help determine whether the establishment is 
operating in compliance with the Acts. A comprehensive food safety 
assessment is an assessment that considers all the food safety aspects 
that relate to an establishment and all the products the plant 
produces.
    If the SEC determines that designated personnel are not providing 
inspection services to selected establishments in a manner that 
complies with the Acts, proposed Sec. Sec.  332.7(c) and 381.517(c) 
provide that FSIS will provide an opportunity consistent with these 
regulations for the State to develop and implement a corrective action 
plan to address inspection deficiencies identified by the SEC. These 
proposed regulations also provide that if the State fails to develop a 
corrective action plan, or if the SEC determines that the State's 
corrective action plan is inadequate, the Administrator will terminate 
the cooperative agreement with the State.
    As discussed above, selected establishments in a State whose 
agreement for a cooperative interstate shipment program has been 
terminated by the Administrator are among the establishments that are 
ineligible to participate in the program. As such, these establishments 
will be deselected from the program and transitioned to become Federal 
establishments as described below.
    Quarterly reports. As required under section 11015 of the 2008 Farm 
Bill (Sec. 501(d)(3)(b) and Sec. 31(d)(3)(b)), the SEC is to prepare a 
report on a quarterly basis that describes the status of each selected 
establishment under the SEC's jurisdiction (proposed Sec. Sec.  
332.8(a) and 381.518(a)).
    The SEC's quarterly report will include the SEC's assessment of the 
performance of the designated personnel in conducting inspection 
activities (proposed Sec. Sec.  332.8(b)(1) and 381.518(b)(1)). The 
quarterly report will also identify the selected establishments that 
the SEC has verified are in compliance with all Federal requirements, 
those that have been deselected, and those that are transitioning to 
become Federal establishments (proposed Sec. Sec.  332.8(b)(1) and 
381.518(b)(1)). The SEC will submit the report to the Administrator 
through the District Manager for the State in which the selected 
establishments identified in the report are located (proposed 
Sec. Sec.  332.8(c) and 381.518(c)).
    Enforcement. Section 11015 of the 2008 Farm Bill provides that if 
the SEC determines that any selected establishment is in violation of 
any requirement of the Acts, the SEC is required to: (1) Immediately 
notify the Secretary (the FSIS Administrator by delegation) of the 
violation and (2) ``deselect'' the establishment or suspend inspection 
at the establishment (Sec. 501(d)(3)(C) and Sec. 31(d)(3)(C)). In 
adopting this language, Congress intended that the SEC ``* * * shall be 
provided all the tools necessary under the Secretary to prevent or 
control any food safety issue that would harm human health'' (S. Rep. 
No. 220, 110th Cong., 1st Sess., at 211 (2007)).
    Because many of the SEC's verification and enforcement activities 
require that the SEC have access to a selected establishment's records, 
proposed Sec. Sec.  332.9(a) and 381.519(a) provide that to facilitate 
oversight and enforcement of the cooperative interstate shipment 
program, selected establishments must, upon request, give SECs or other 
FSIS officials access to all establishment records required under the 
FMIA, PPIA, and the implementing regulations in title 9, chapter III, 
of the CFR. These proposed regulations go on to state that FSIS will 
move to deselect an establishment that does not comply with this 
requirement.
    Under proposed Sec. Sec.  332.9(b) and 381.519(b), the SEC is 
authorized to initiate any appropriate enforcement action provided for 
in the FSIS rules of practice in 9 CFR part 500 if he or she determines 
that a selected establishment under his or her jurisdiction is 
operating in a manner that is inconsistent with the Acts or their 
implementing regulations. Such actions include, among others, 
regulatory control actions, withholding actions, and suspensions. The 
proposed regulations provide that selected establishments participating 
in a cooperative interstate shipment program are subject to the 
notification and appeal procedures set out in part 500 (proposed 
Sec. Sec.  332.9(b) and 381.519(b)).
    Proposed Sec. Sec.  332.9(c) and 381.519(c) provide that if 
inspection at a selected establishment is suspended for any of the 
reasons specified in 9 CFR 500.3 or 9 CFR 500.4, FSIS will provide an 
opportunity for the establishment to implement corrective actions and 
remain in the cooperative interstate shipment program, or the Agency 
will move to deselect the establishment. The decision to deselect a 
selected establishment under a suspension will be made on a case-by-
case basis (proposed Sec. Sec.  332.9(d) and 381.519(d)). In making 
this decision, the Administrator, in consultation with the State where 
the selected establishment is located, will consider, among other 
factors: (1) The non-compliance that led to the suspension; (2) the 
selected establishment's compliance history, which will be documented 
in non-compliance reports prepared by the designated personnel and the 
SEC's

[[Page 47656]]

quarterly reports; and (3) the corrective actions proposed by the 
establishment (proposed Sec. Sec.  332.9(d) and 381.519(d))
    The Administrator will have the discretion to allow a selected 
establishment that has been suspended to remain in the program if the 
establishment implements corrective actions to address any non-
compliance. The Administrator will consider the criteria described 
above in determining whether to provide an opportunity for corrective 
actions. Establishments that are given an opportunity to take 
corrective actions but that are unable to effectively implement these 
actions will be deselected.
    FSIS will also consider the State's recommendation as to whether a 
selected establishment in the State should be deselected. However, the 
final decision to deselect an establishment for violations of the FMIA 
or PPIA will be made by FSIS. As discussed below, consistent with the 
law, this proposed rule requires that deselected establishments be 
transitioned to become official establishments.
8. Deselection
    There may be circumstances in which an establishment that initially 
qualifies to be selected to participate in a cooperative interstate 
shipment program later acquires characteristics that would cause it to 
become ineligible for the program. For example, an establishment may 
hire additional employees after it has been selected, or, as discussed 
above, FSIS may determine that a selected establishment is in violation 
of the Acts. Therefore, proposed Sec. Sec.  332.10(a) and 381.520(a) 
provide that the Administrator will deselect an establishment that 
becomes ineligible to participate in a cooperative interstate shipment 
program. Proposed Sec. Sec.  332.10(b) and 381.520(b) provide that an 
establishment that has been deselected from a cooperative interstate 
shipment program must be transitioned to become an official 
establishment.
    FSIS is proposing to require that deselected establishments be 
transitioned to become official Federal establishments as provided for 
in the law. Section 11015 of the 2008 Farm Bill allows the Agency to 
establish a procedure to transition selected establishments that 
employ, on average, more than 25 employees to become Federal 
establishments, and it requires that selected establishments that the 
Administrator determines to be in violation of any provision of the 
Acts, be transitioned to Federal establishments in accordance with the 
procedure developed for establishments that employ more than 25 
employees (Sec. 501(b)(3), 501(h), 31(b)(3) and 31(g)).
    Thus, as required by the law, under this proposal, establishments 
that become ineligible to participate in the cooperative interstate 
shipment program because they violated Federal food safety standards 
will not permitted to avoid implementing appropriate corrective actions 
by withdrawing from the cooperative interstate shipment program and 
reverting back to the State inspection program. In addition, requiring 
that deselected establishments transition to become official Federal 
establishments will help to ensure that the resources that FSIS and the 
States provide to establish and maintain a cooperative interstate 
shipment program are used most effectively to provide inspection 
services to establishments that are committed to maintaining Federal 
food safety standards.
9. Transition Procedures for Deselected Establishments
    As discussed above, under the law, FSIS is authorized to develop a 
procedure to transition selected establishments to become official 
establishments if they employ more than 25 employees on average, or if 
the Agency determines that they are in violation of any provision of 
the Acts (Sec 501(b), Sec. 501(h), Sec. 31(b) and Sec. 31(g)). At a 
minimum, a procedure to transition a selected establishment to an 
official establishment would include: (1) Adding the establishment to 
an FSIS circuit within the FSIS District that covers the State where 
the