Requirements for Official Establishments To Notify FSIS of Adulterated or Misbranded Product, Prepare and Maintain Written Recall Procedures, and Document Certain Hazard Analysis and Critical Control Points System Plan Reassessments, 26929-26937 [2012-10917]

Agencies

• DEPARTMENT OF AGRICULTURE
• Food Safety and Inspection Service

[Federal Register Volume 77, Number 89 (Tuesday, May 8, 2012)]
[Rules and Regulations]
[Pages 26929-26937]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-10917]


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DEPARTMENT OF AGRICULTURE

Food Safety and Inspection Service

9 CFR Parts 304, 381, 417 and 418

[FDMS Docket No. FSIS-2008-0025]
RIN 0583-AD34


Requirements for Official Establishments To Notify FSIS of 
Adulterated or Misbranded Product, Prepare and Maintain Written Recall 
Procedures, and Document Certain Hazard Analysis and Critical Control 
Points System Plan Reassessments

AGENCY: Food Safety and Inspection Service, USDA.

ACTION: Final rule.

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SUMMARY: The Food Safety and Inspection Service (FSIS) is implementing 
provisions of the Food, Conservation, and Energy Act of 2008 by 
amending the Federal meat and poultry products inspection regulations 
to require official establishments to promptly notify the appropriate 
District Office that an adulterated or misbranded meat or poultry 
product has entered commerce; require official establishments to 
prepare and maintain written procedures for the recall of all meat and 
poultry products produced and shipped by the establishment; and require 
official establishments to document each reassessment of the 
establishment's Hazard Analysis and Critical Control Point (HACCP) 
plans.

DATES: Effective Date: May 8, 2012.
    Applicability Dates: Amendments to Sec. Sec.  304.3, 381.22, 417.4, 
418.2, and 418.4 are applicable beginning June 7, 2012. For more 
information on applicability dates, see the section titled ``Section 
418.3 Effective Dates'' in the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Dr. Daniel Engeljohn, Assistant 
Administrator, Office of Policy and Program Development, Food Safety 
and Inspection Service, Room 349-E, Jamie L. Whitten Building, 1400 
Independence Avenue SW., Washington, DC 20250; Telephone (202) 205-
0495, Fax (202) 720-2025.

SUPPLEMENTARY INFORMATION: 

I. Section 418.3 Effective Dates

    The regulations in Sec.  418.3 are applicable as follows:
     In large establishments, defined as all establishments 
with 500 or more employees, November 5, 2012.
     In small establishments, defined as all establishments 
with 10 or more employees but fewer than 500, May 8, 2013.
     In very small establishments, defined as all 
establishments with fewer than 10 employees or annual sales of less 
than $2.5 million, May 8, 2013.

II. Background

    The Food Safety and Inspection Service (FSIS) administers a 
regulatory program under 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.) to protect the health and welfare of consumers. The 
Agency is responsible for ensuring that the nation's commercial supply 
of meat and poultry is safe, wholesome, and correctly labeled and 
packaged.
    On June 18, 2008, section 11017 of the Food, Conservation, and 
Energy Act of 2008, Public Law 110-246, 122 Stat 1651, 448-49, 
otherwise known as the 2008 Farm Bill, amended the FMIA and the PPIA to 
require establishments subject to inspection under these Acts that 
believe or have reason to believe that an adulterated or misbranded 
meat or poultry product received by or originating from the 
establishment has entered into commerce to promptly notify the 
Secretary with regard to the type, amount, origin, and destination of 
the meat or poultry product. The 2008 Farm Bill also requires that 
inspected establishments: (1) Prepare and maintain written procedures 
for the recall of all products produced and shipped by the 
establishment; (2) document each reassessment of the process control 
plans of the establishment (i.e., HACCP plans); and (3) upon request, 
make the procedures and reassessed control plans available for 
inspectors appointed by the Secretary to review and copy.
    In the Federal Register of March 25, 2010 (75 FR 14361), FSIS 
proposed regulations to implement the new provisions of the 2008 Farm 
Bill. FSIS proposed to amend 9 CFR 417.4(a)(3) to require official 
establishments to make a written record of each reassessment of the 
adequacy of their HACCP plan, or to document the reasons for not making 
a change to their HACCP plan based on the reassessment. For annual 
reassessments, if an establishment determines that no changes to its

[[Page 26930]]

HACCP plans are necessary, the establishment does not have to document 
the reasons for this determination. Furthermore, FSIS proposed to 
establish a new 9 CFR part 418, Recalls, under which official 
establishments would be required to prepare and maintain procedures for 
the recall of all meat and poultry products produced and shipped by the 
establishment, and to promptly notify FSIS within 48 hours if the 
establishment believes or has reason to believe that an adulterated or 
misbranded product received by or originating from the establishment 
has entered into commerce. Interested persons were invited to submit 
written comments by May 24, 2010.
    After review and consideration of all comments, FSIS is finalizing, 
with three changes, the provisions in the March 2010 proposed rule. 
Specifically, the Agency is amending the proposal to require official 
establishments to promptly notify FSIS within 24 hours if the 
establishment believes or has reason to believe that an adulterated or 
misbranded product received by or originating from the establishment 
has entered into commerce. In addition, the Agency is amending the 
proposal to require new establishments to develop their written recall 
procedures at the same time as their HACCP plans in order to receive a 
Federal Grant of Inspection.
    Also in response to comments, FSIS has decided to stagger the 
applicability date for 9 CFR part 418 based on establishment size. 
Existing large establishments, defined as all establishments with 500 
or more employees, will have six months from the date of publication of 
this final rule in the Federal Register to prepare their written recall 
procedures. Existing small establishments (those with 10 or more 
employees but fewer than 500) and very small establishments (those with 
fewer than 10 employees or annual sales of less than $2.5 million) will 
have one year from publication of this final rule in the Federal 
Register to prepare their written recall procedures. These changes are 
discussed in detail in the Agency's responses to comments.

III. Summary of and Response to Comments

    FSIS received 31 comments from hospitality supply companies, supply 
management companies, trade groups representing meat packing and 
processing establishments, a trade group representing the turkey 
industry, a trade group representing food and beverage companies, a 
trade group representing organic agriculture products, a representative 
from a state department of agriculture, a small processing plant, a 
rancher, a farmer, and 14 consumers.
    A summary of issues raised by commenters and the Agency's responses 
follows.

A. Notification Requirement

    Comment: A few comments addressed whether 48 hours is an 
appropriate time in which to expect official establishments that have 
shipped or received, or have reason to believe that they have shipped 
or received, adulterated or misbranded product, to notify the 
appropriate District Office of that situation. A consumer and a trade 
group representing the turkey industry stated that 48 hours is a 
reasonable timeframe to give establishments to notify District Offices. 
A trade group representing meat packing and processing establishments 
also stated that the proposed time period was reasonable, but was 
concerned that 48 hours may be an arbitrary figure. Three consumer 
groups and an individual consumer argued the proposed timeframe is too 
lax, and that establishments should notify District Offices within 24 
hours if they may have shipped or received adulterated or misbranded 
product. One consumer group argued that allowing official 
establishments to wait as long as 48 hours before reporting this 
information to the appropriate District Office will unnecessarily delay 
efforts to remove adulterated or misbranded product from commerce. 
Another consumer group argued that 24 hours is sufficient time for 
establishments to notify District Offices that they may have shipped or 
received adulterated or misbranded product because establishments may 
notify the District Office by phone.
    Agency's Response: FSIS agreed with commenters that 48 hours may be 
too long. The Agency has concluded that because notification can be 
made with a phone call, 24 hours is an appropriate time in which to 
expect official establishments that have shipped or received, or have 
reason to believe that they have shipped or received, adulterated or 
misbranded product, to notify the appropriate District Office of that 
situation. Therefore, the final rule requires official establishments 
to notify the appropriate District Office within 24 hours of learning 
or determining that an adulterated or misbranded product received by or 
originating from the establishment has entered commerce, if the 
establishment believes or has reason to believe that this has happened.
    Comment: A few comments requested that the Agency provide more 
guidance on when the 48-hour period would officially begin. One comment 
from a consumer group argued that the proposed requirement was vague 
and confusing. The commenter asked that the Agency explain how much 
investigation an establishment owner will be required to make before 
the notification requirement is triggered. Another comment from a trade 
group representing meat packing and processing establishments 
recommended that the Agency work with industry on establishing the 
timeline. They requested that the Agency develop specific guidance that 
outlines a step-by-step reaction process. They also requested that FSIS 
consider factors such as microbial test data recovery, weekends, and 
Federal holidays when deciding when the 48-hour period should 
officially begin.
    Agency's Response: The 24-hour period begins when the establishment 
has reason to believe that a product that is in commerce is adulterated 
or misbranded under the FMIA or PPIA. For example, if the results of a 
laboratory analysis show that raw ground beef contains E. coli O157:H7, 
or that a ready-to-eat product contains Listeria monocytogenes or any 
other pathogen, the product would be adulterated. However, there also 
may be situations in which laboratory results are not available, but, 
based on epidemiological evidence, there may be a probability of harm 
from consuming the product. Under these circumstances, the 
establishment is to consider the strength of the epidemiological 
evidence to determine whether there is reason to believe that the 
product is adulterated or misbranded.
    Comment: Two comments argued that the notification requirement is 
``overly broad,'' and that minor labeling errors do not misbrand 
product and should be excluded from the notification requirement. They 
suggested that the Agency follow the standard established for the U.S. 
Food and Drug Administration's (FDA's) Reportable Food Registry or 
incorporate a de minimis standard. The FDA standard requires 
notification when there is a reasonable probability that the use of, or 
exposure to, the article of food will cause serious adverse health 
consequences or death (21 U.S.C. 350(d)).
    Agency's Response: FSIS did not accept suggestions to follow the 
standard established for the FDA's Reportable Food Registry (RFR) or to 
incorporate a de minimis standard. FSIS assesses the public health 
concern or hazard presented by a product being recalled, or considered 
for recall, and classifies the concern as one of the

[[Page 26931]]

following: (1) Class I, a health-hazard situation where there is a 
reasonable probability that the use of the product will cause serious, 
adverse health consequences or death; (2) Class II, a health-hazard 
situation where there is a remote probability of adverse health 
consequences from the use of the product; or (3) Class III, a situation 
where the use of the product will not cause adverse health 
consequences. If the Agency adopted the RFR standard or a similar de 
minimis standard, establishments may not be required to notify FSIS 
about product that could trigger a Class II or Class III recall. 
Furthermore, the 2008 Farm Bill provisions do not provide for a de 
minimis standard concerning the notification requirements for 
establishments that may have shipped or received adulterated or 
misbranded product. Consistent with the statute, and because the 
notification requirement is a preventive measure that will allow FSIS 
to determine more quickly whether a recall action is necessary 
(including detention and seizure of product by FSIS), thereby 
protecting public health, the final rule requires official 
establishments to notify the appropriate District Office of all product 
that is believed to be adulterated or misbranded.
    FSIS is aware, however, that there can be misbranding situations 
because of minor labeling deficiencies, and that these deficiencies do 
not create health or safety issues or impart an economic advantage. If 
a District Office, when notified by an establishment that it has 
shipped or received or may have shipped or received misbranded product, 
identifies the violation as one that does not create a health or safety 
issue or economic impact, it will contact FSIS's Labeling and Program 
Delivery Division (LPDD) about the misbranding situation. LPDD will 
then contact the establishment and work with it to resolve the 
situation.
    Comment: Two comments submitted by consumer groups requested that 
the final rule require official establishments to notify both the 
appropriate District Office and FSIS headquarters in Washington, DC 
They argued that because the legislation refers to notifying the 
Secretary of Agriculture, and given the potential health impacts of the 
recall information, data should be sent to headquarters in addition to 
the local District Office.
    Agency's Response: The Agency does not believe it is necessary for 
official establishments to contact both the appropriate District Office 
and FSIS headquarters in Washington, DC The Secretary of Agriculture 
has delegated to the Under Secretary for Food Safety the responsibility 
for exercising the functions of the Secretary of Agriculture under 
various statutes (Section 4(a) of Reorganization Plan No. 2 of 1953 (5 
U.S.C. App.) and Section 212(a)(1) of the Department of Agriculture 
Reorganization Act of 1994, Public Law 103-354, 7 U.S.C. 6912(a)(1)), 
while the Under Secretary for Food Safety has delegated that authority 
to the Administrator of the Food Safety and Inspection Service (7 CFR 
2.7, 2.18, and 2.53). In turn, each District Office, under the 
direction of a District Manager, has been given the authority to manage 
a farm-to-table food safety program of regulatory oversight and 
inspection in a district consisting of a State or several States and 
territories. Thus, the District Offices have the authority, and are 
fully competent, to receive and analyze information from official 
establishments about adulterated or misbranded product.
    Comment: A trade group representing meat packing and processing 
establishments and a trade group that represents food and beverage 
companies noted that the proposed rule provides that establishments 
must notify FSIS of the destination of the adulterated or misbranded 
product. The two trade groups suggested that the Agency clearly state 
in the preamble to the final rule that while the statutory language 
specified notification of the ``destination'' of the adulterated or 
misbranded product, shipping establishments only have knowledge of, and 
therefore, need only provide notification about their direct 
consignees.
    Agency's Response: Under this rule, establishments must provide all 
available information about the ``destination'' of adulterated or 
misbranded product. This rule does not create a duty to seek out new 
information; however, if establishments have information about the 
destination of adulterated or misbranded product beyond their direct 
consignees, they must provide it to the Agency.

B. Recall plans

    Comment: Several comments expressed concerns about the security of 
plant recall information and whether recall plans would be subject to 
the Freedom of Information Act (FOIA) (5 U.S.C. 552(b)).
    Agency's Response: FSIS understands the nature of these comments 
and that many meat and poultry establishments view the data in recall 
procedures as confidential commercial information. Pursuant to USDA's 
Freedom of Information Act (FOIA) regulations (7 CFR 1.1 et seq.), FSIS 
is responsible for making the determination with regard to the 
disclosure or nondisclosure of information in records obtained from 
businesses. When, in the course of responding to an FOIA request, FSIS 
cannot readily determine whether the information obtained from a person 
is confidential business information, the Agency seeks to obtain and 
carefully consider the views of the business and provide the business 
an opportunity to object to any decision to disclose the information.
    Under this final rule, establishments are not required to submit 
their recall procedures to FSIS. They must, however, make the written 
recall procedures available for copying. FSIS will verify that all 
establishments maintain the required written recall procedures. FSIS 
will also protect establishments' confidential business information 
from public disclosure to the extent authorized under FOIA and in 
conformity with USDA's FOIA regulations.
    Comment: Two comments questioned whether the language of the 
proposed rule exceeded the provisions of the Farm Bill because it 
requires official establishments to specify in their written recall 
procedures how they will decide whether to conduct a product recall, 
and how the establishment will effect the recall, should it decide that 
one is necessary.
    Agency's Response: FSIS has the authority to require official 
establishments to specify in their written recall procedures how they 
will decide whether to conduct a product recall, and how the 
establishment will effect the recall, should it decide that one is 
necessary.\1\ These requirements are also consistent with the 
legislation and with longstanding Agency guidance on recall plans.\2\
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    \1\ See 21 U.S.C. 621, ``* * * and said Secretary shall, from 
time to time, make sure rules and regulations as are necessary for 
the efficient execution of the provisions of this Act, * * *'' and 
21 U.S.C. 463(b), ``The Secretary shall promulgate such other rules 
and regulations as are necessary to carry out the provisions of this 
chapter.''
    \2\ See ``FSIS Directive 8080.1, Rev. 6, 10/26/10, Recall of 
Meat and Poultry Products, Attachment 1''.
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    Comment: Several comments suggested that the Agency execute the 
rule in incremental stages based on business size, similar to the plan 
used when HACCP was implemented. Two stated that six months to one year 
is a reasonable time to give establishments to develop recall 
procedures. One comment suggested that current establishments should be 
given six months to develop recall procedures,

[[Page 26932]]

but new establishments should be required to prepare their recall 
procedures at the same time as their HACCP plans. Another comment 
recommended that large establishments be required to prepare their 
recall procedures as soon as possible, but that small and very small 
establishments be given more time to comply. Yet another comment 
suggested that the Agency implement the rule for large establishments 
and review the results for one year before requiring small and very 
small establishments develop recall procedures.
    Agency's Response: FSIS has sought to make this rule as fair and 
equitable as possible, regardless of an establishment's size. 
Therefore, the Agency asked for comments on when, after the effective 
date of this final rule, written recall procedures must be completed in 
accordance with proposed 9 CFR 418.3. Based upon the comments received, 
FSIS has determined that existing large establishments will have six 
months from the date of publication of this final rule to implement it 
and prepare recall plans. To minimize the burden on small businesses, 
small and very small establishments will have one year from the date of 
publication to comply.
    FSIS believes that the suggestion to require new establishments to 
have prepared their recall procedures at the same time as their HACCP 
plans in order to receive a Federal Grant of Inspection has merit. 
Therefore, the Agency is amending 9 CFR 304.3 and 9 CFR 381.22 to 
require that before being granted Federal inspection, an establishment 
must have developed written recall procedures as required by part 418 
of Title 9, Chapter III. The Office of Outreach, Employee Education and 
Training has model recall plans available to industry.
Reassessment of HACCP Plans
    Comment: Several comments supported the documenting of HACCP 
reassessments, as proposed. One consumer group argued that 
documentation is vital because it provides a needed safeguard against 
evasion of reassessment requirements. The commenter stated that by 
making records of reassessment available for official review and 
copying, FSIS has the ability to preempt an outbreak by identifying 
overlooked hazards.
    Agency's Response: The Agency agrees with comments that the 
documenting of HACCP reassessments is beneficial. The Agency believes 
that documenting HACCP reassessments will facilitate verification that 
establishments have appropriately reassessed their HACCP plans. It will 
also help FSIS personnel to identify whether there are emerging hazards 
that the establishment has decided not to address.
    Comment: One comment submitted by a trade group representing meat 
packing and processing establishments requested that the Agency clarify 
in the final rule that simple formatting or grammar changes of a HACCP 
plan do not need to be documented as reassessments.
    Agency's Response: While establishments are required to document 
each reassessment of their HAACP plans, the Agency does not consider 
formatting and grammar changes to be reassessments.
Costs
    Comment: The Agency received several comments addressing the cost 
of implementing the proposed rule. One consumer group argued that the 
cost of implementing the proposed rule is reasonable. The commenter 
argued that if the first-year industry costs will be $5 million 
dollars, that cost is far less than the billions of dollars the United 
States incurs as a result of foodborne illnesses per year.
    A few comments from very small processors or supporters of very 
small processors or local processors claimed that additional regulation 
will be an undue financial burden on small and very small 
establishments. One trade group representing meat packing and 
processing establishments believed that FSIS's estimated initial cost 
is already a significant cost to many small and very small 
establishments, and that the actual cost could potentially be much 
higher. The trade group suggested that the initial cost to small and 
very small establishments might be $2,000; however, the trade group did 
not offer any data to support its claim. Another comment submitted by a 
consumer suggested creating waivers or exemptions for small and very 
small establishments.
    Agency's Response: While the Agency agrees with the commenter that 
$2,000 in initial cost for small and very small establishments may be a 
significant cost, FSIS estimates that the average initial (first-year) 
cost of implementing this final rule for these establishments will not 
be $2,000 but would be between $700 and $900, with a midpoint of 
$800,\3\ for each small or very small establishment.
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    \3\ See, Table 2 (columns 7, 8, and 9), which is the updated 
Table 3, Federal Register, Vol. 75, No. 57, March 25, 2010, page 
14365.
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IV. Executive Orders 12866 and 13563 and Regulatory Flexibility Act

    Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has been designated a ``significant regulatory 
action'' under section 3(f) of Executive Order 12866. Accordingly, the 
rule has been reviewed by the Office of Management and Budget.
    FSIS has carefully evaluated the comments submitted in response to 
the proposed rule and has concluded that it is appropriate to adopt the 
Preliminary Regulatory Impact Analysis and the initial Regulatory 
Flexibility Act (RFA) assessment as final. This Final Regulatory Impact 
Analysis (FRIA) and final RFA assessment have changed from the 
Preliminary Regulatory Impact Analysis and the initial RFA assessment 
that were published in the proposed rule on March 25, 2010, though the 
methodology remains the same.

A. Baseline

    FSIS expects that this final rule will affect about 6,300 official 
federally-inspected establishments that slaughter or process meat, meat 
products, poultry, and poultry products, based on FSIS's Performance 
Based Inspection System (PBIS) of 2011. Based on HACCP classification, 
about 400 are large establishments, 3,044 are small, and 2,856 are very 
small.\4\
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    \4\ Very small establishments have fewer than 10 employees or 
generate less than $2.5 million in annual sales; and small 
establishments have 10 or more but fewer than 500 employees and 
generate more than $2.5 million in annual sales.
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B. Expected Costs

    Under the current regulations, the development and maintenance of 
recall procedures and the written documentation of HACCP reassessments 
are voluntary. This final rule will make them mandatory. Costs will be 
incurred because about 6,300 official establishments will need to 
develop recall procedures and maintain written documentation of HACCP 
reassessments. Cost estimates are updated to reflect the most recent 
available data.\5\
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    \5\ This includes USDA, FSIS Performance Based Inspection System 
Volume Database 2011, and USDA, Economic Research Service, Food 
Availability (Per Capita) Data System--Per capita food availability 
data compiled reflect the amount of food available for human 
consumption in the United States, March 2009, https://www.ers.usda.gov/Data/FoodConsumption.

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[[Page 26933]]

    The cost of notifying FSIS, with a few phone calls, facsimiles, or 
emails about possibly adulterated or misbranded products in commerce is 
negligible. FSIS has determined that there will be no impact on the 
Agency's operational costs resulting from this final rule, because the 
Agency will not need to add any staff or incur any additional non-labor 
expenditure when the final rule is adopted.
    In addition to the extra establishment labor cost, FSIS estimates 
that the extra establishment material cost would be about 1 percent of 
the labor cost of the development of the recall procedures and the 
documentation of each reassessment of the HACCP plan. The first year 
estimated average total costs to the industry are about $5.2 million 
for labor (shown in Table 1) and $52 thousand (0.01 x $5.2M = $52,000) 
for materials.
    FSIS believes that the estimated cost of developing recall 
procedures is an overestimate because: (1) Some unknown number of 
establishments already have plans that could likely be adequate with 
little or no change, (2) establishments in the meat and poultry 
industries have differing levels of expertise in writing HACCP plans, 
(3) the Agency makes model recall plans available to the industry, and 
(4) establishments have a range of different processes for producing 
meat and poultry products. Given the uncertainty of incurred labor cost 
in different regions and with various experience levels, FSIS assumes a 
20% range, plus and minus 10%, of the estimated average-compliance 
cost. The estimated cost summary is shown in Table 1.
    FSIS expects that in the first year of the final rule, one-time 
costs for developing recall procedures would cost the industry of 
approximately 6,300 establishments $4.6 million, in an estimated range 
of $4.1 and $5.0 million, 10% lower and upper bound, respectively. 
Furthermore, the final rule would have first year costs of 
approximately $0.5 million for documenting periodic reassessments of 
HACCP plans, and $0.1 million for records backup and storage, although 
these costs may well be overstated. The recurring costs of developing 
and updating recall procedures, documenting periodic reassessments of 
HACCP plans, and records backup and storage for the second through the 
tenth year are estimated at $610,000, $66,000, and $11,000, 
respectively (see Table 3).
    The total cost for the first year is $5.2 ($4.6 + $0.5 +$0.1) 
million, in an estimated range of $4.7 and $5.7 million, 10% lower and 
upper bound, respectively. Considering the subsequent years cost of 
$687,000, the annualized cost over ten years using 3% and 7% discount 
rates is $1.20 million ($1.08 million and $1.31 million, 10% lower and 
upper bound), and $1.28 million ($1.15 million and $1.41 million, 10% 
lower and upper bound), respectively (Table 3).
    The present value of total costs with a 3% discount rate for 10 
years would be $10.2 million, in an estimated range of $9.2 and $11.2 
million. The present value of total costs with a 7% discount rate for 
10 years would be $9.0 million, in an estimated range of $8.1 and $9.9 
million.
    Table 2 shows the first year total costs by establishment size, of 
which $0.3 million is attributed to large, $2.5 million to small, and 
$2.3 million to very small establishments. The first year cost per 
official establishment is between $700 and $900, 10% lower and upper 
bound, respectively.
    Table 3 gives the estimated annualized cost and the present value 
of total cost by establishment size classes for ten years. Table 3, 
column 4, shows all cost categories of the first year (assumed to be 
2013) and comes from Table 2, column 6, distributed by the counts of 
establishment size classes. The costs for years 2--10 are based on 
constant dollar assumption and are shown in Table 3, column 5.

                             Table 1--First Year Cost Breakdwon, in Dollars, for 6,300 Establishments (Labor and Materials)
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                                                                                                      Material
                                                                                     Factor for      (paper, ink                Low range (-  High range
              Cost component                  Response     Required    Wage rate   paper, ink and    and media)     Total cost    10%) of     (+10%) of
                                                rate      man-hours                  media cost       cost  (x      (x $1,000)   total cost   total cost
                                                                                                       $1,000)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Recall-Procedures Development (one-time)..            1           20           36            1.01              46        4,582        4,124        5,040
Document Reassessment (First Year)........            5         0.25           63            1.01               5          501          451          551
Records Backup and Storage (First Year)...            1         0.25           36            1.50              28           85           77           94
                                           -------------------------------------------------------------------------------------------------------------
    Total.................................  ...........  ...........  ...........  ..............              79        5,168        4,651        5,685
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                                      Table 2--Number of Establishments, Total and Average Costs in Size (x$1,000)
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                                                               Recall
                                               Number of     procedures   Documenting    Records                    Cost per        Low          High
                HACCP Class                 establishments  development      HACCP      backup and   Total cost  establishment  estimate (-    estimate
                                                             (one-time)  reassessment    storage                                    10%)        (+10%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Very Small................................          2,856         2,077           227           39        2,343           0.8           0.7          0.9
Small.....................................          3,044         2,214           242           41        2,497           0.8           0.7          0.9
Subtotal..................................          5,900         4,291           469           80        4,840           0.8           0.7          0.9
Large.....................................            400           291            32            5          328           0.8           0.7          0.9
                                           -------------------------------------------------------------------------------------------------------------
    Total.................................          6,300         4,582           501           85        5,168           0.8           0.7          0.9
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[[Page 26934]]


                 Table 3--Estimate Annualized and Present Value of the Total Cost by Establishment Size Class, Assuming Constant Dollars
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                                                                                                                                     Present    Present
                                                                                                  2nd-10th                           value of   value of
              HACCP class                 Number of              Activities            1st year    years    Annualized  Annualized    total      total
                                        establishment                                    2013     2014-22   cost at 3%  cost at 7%   cost at    cost at
                                                                                                                                        3%         7%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Very Small............................         2,856   Recall-Procedures development      2,077        278         483         517      4,118      3,634
                                                        & updating.
                                        .............  Documenting HACCP                    227         30          52          56        447        395
                                                        Reassessment.
                                        .............  Records backup and storage...         39          5           9          10         76         67
                                                                                     -------------------------------------------------------------------
                                        .............    Subtotal...................      2,343        313         544         583      4,641      4,096
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small.................................         3,044   Recall-Procedures development      2,214        296         514         551      4,387      3,872
                                                        & updating.
                                        .............  Documenting HACCP                    242         32          56          60        477        421
                                                        Reassessment.
                                        .............  Records backup and storage...         41          5           9          10         78         69
                                                                                     -------------------------------------------------------------------
                                        .............    Subtotal...................      2,497        333         579         621      4,942      4,361
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small and Very Small..................         5,900   Subtotal of Small & Very           4,480        646       1,123       1,204      9,582      8,457
                                                        Small.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Large.................................           400   Recall-Procedures development        291         36          65          70        555        491
                                                        & updating.
                                        .............  Documenting HACCP                     32          4           7           8         61         54
                                                        Reassessment.
                                        .............  Records backup and storage...          5          1           1           2         12         11
                                                                                     -------------------------------------------------------------------
                                        .............    Subtotal...................        328         40          74          79        628        556
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total.................................         6,300   Recall-Procedures development      4,582        610       1,062       1,139      9,060      7,997
                                                        & updating.
                                        .............  Documenting HACCP                    501         66         116         124        985        870
                                                        Reassessment.
                                        .............  Records backup and storage...         85         11          19          21        166        146
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Total                                             5,168        687       1,197       1,283     10,211      9,013
--------------------------------------------------------------------------------------------------------------------------------------------------------

C. Expected Benefits

    The expected benefits likely to result from this final rule are 
improvements in the effectiveness of the nation's food safety system 
for meat and poultry products and improved protection of public health. 
These benefits are not monetized because quantified data on benefits 
attributable to this final rule are not available to FSIS. The expected 
benefits include:
HACCP Reassessment and Documentation of Reassessments
    Under this final rule, establishments must document each 
reassessment, the reasons for any changes to the HACCP plan, or the 
reasons for not changing the HACCP plan. For annual reassessments, if 
the establishment determines that no changes are necessary, 
documentation of this determination is not necessary. These provisions 
will allow FSIS personnel to better verify and track that 
establishments are, in fact, reassessing those plans at least annually, 
as required by 9 CFR 417.4(a)(3), and that they are appropriately 
responding to their findings.
Notification Requirement
    This final rule is a preventive measure that will result in FSIS 
being alerted to potential meat and poultry recall situations earlier 
than would otherwise be the case. Under this rule, establishments will 
be required to notify the local FSIS District Office within 24 hours of 
learning or determining that an adulterated or misbranded product 
received by or originating from the establishment has entered commerce. 
This notification, in turn, will allow FSIS to initiate its preliminary 
inquiries more quickly and to determine more quickly whether a recall 
is necessary.
Improve Recall Effectiveness With Documented Procedures
    FSIS expects that this final rule will assist meat and poultry 
establishments during recalls. By requiring these establishments to 
prepare and maintain recall procedures for all products they produce, 
FSIS expects that establishments that do not currently have such plans 
will be able to act more effectively to remove adulterated or 
misbranded products from commerce. This added efficiency and 
effectiveness will help establishments to move quickly to disseminate 
information about the need to return the product to it and thus 
maximize the amount of recalled product they will actually recover. 
Table 4 gives a summary of the benefits discussed above.

                      Table 4--Summary of Benefits
------------------------------------------------------------------------
     Benefit related to:        Required actions:    Expected benefits:
------------------------------------------------------------------------
Document Reassessment.......                 Improved
                               Establishments are    HACCP systems for
                               to document all       establishments.
                               reassessments of
                               HACCP plans.
                              
                               Establishments are
                               to make
                               documentation of
                               the HACCP plans
                               available to
                               inspection program
                               personnel.
Notification Requirement....                 FSIS will
                               Establishments are    be alerted to
                               to notify local       potential meat or
                               FSIS District         poultry recall
                               Office within 24      situations earlier
                               hours of having       than otherwise is
                               reason to believe     the case today.
                               that an adulterated   FSIS will
                               or misbranded         be able to begin
                               product received or   more rapidly
                               originating from      preliminary
                               the official          inquiries to
                               establishment has     determine whether a
                               entered commerce.     recall is
                                                     necessary.

[[Page 26935]]

 
Improve Recall Effectiveness                
                               Establishments are    Establishments will
                               to prepare and        be able to act more
                               maintain recall       effectively to
                               procedures for all    remove adulterated
                               products they         or misbranded
                               produce.              products from
                                                     consumers.
                                                    
                                                     Establishments will
                                                     be able to move
                                                     quickly to
                                                     disseminate
                                                     information about
                                                     the need to return
                                                     product to it.
                                                    
                                                     Establishments will
                                                     be able to maximize
                                                     the amount of
                                                     product they will
                                                     be able to receive.
------------------------------------------------------------------------

D. Regulatory Flexibility Act Analysis

    The FSIS Administrator has certified that this final rule will not 
have a significant impact on a substantial number of small entities, as 
defined by the Regulatory Flexibility Act (5 U.S.C. 601).
    These small entities number about 5,900 federally-inspected 
establishments. The average cost to small and very small businesses 
will be in the range of $700 to $900 (Table 2).
    Based on data recorded in the PBIS (2011) \6\ volume database, and 
slaughter volume recorded in the FSIS Animal Disposition Reporting 
System (ADRS, 2008) \7\ database, and volume estimates of the USDA 
Economic Research Service (ERS, 2009) \8\, these 5,900 small entities 
process about 12 percent or about 8 billion pounds of the U.S. meat and 
poultry food supply per annum. Further, FSIS estimated that the average 
processing volume per establishment of 5,900 small entities was about 
1.4 million pounds (8,000,000,000/5,900) per annum. Thus, the average 
cost for the first year of this final rule to small entities will be 
less than one tenth of one cent (e.g., $0.0006 = $800/1,400,000) of 
meat and poultry food products per pound. This is a relatively 
insignificant cost to the small entities because most of their meat and 
poultry food products are valued at more than $1.50 per pound. The 
average cost for the following years, based on annual recurring costs, 
decreases to less than one hundredth of one cent per pound.
---------------------------------------------------------------------------

    \6\ USDA, FSIS Performance Based Inspection System Volume 
Database 2011. The number of establishments is the number of 
Federally-inspected processing and slaughter establishments.
    \7\ USDA, FSIS Animal Disposition Reporting System Database 
2008.
    \8\ USDA, Economic Research Service, Food Availability (Per 
Capita) Data System--Per capita food availability data compiled 
reflect the amount of food available for human consumption in the 
United States. March 2009, https://www.ers.usda.gov/Data/FoodConsumption.
---------------------------------------------------------------------------

E. Alternatives

    The option of no rulemaking is unavailable. FSIS was directed to 
conduct this rulemaking by Congress. As discussed above, FSIS 
considered a longer time period (48 hours) for establishments to notify 
FSIS when they have reason to believe that adulterated or misbranded 
products of theirs may have entered commerce. This option was rejected 
in response to comments received. Also in response to comments, FSIS is 
providing a phased-in implementation period, with more time allowed for 
small and very small establishments than for larger establishments, 
rather than a uniform implementation period. This latter amendment 
should lessen the burden on smaller entities.
Executive Order 12988
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. When this final rule is adopted: (1) All State and 
local laws and regulations that are inconsistent with this rule will be 
preempted; (2) no retroactive effect will be given to this rule; and 
(3) administrative proceedings will not be required before parties may 
file suit in court challenging this rule.
Paperwork Requirements
    In accordance with section 3507(j) of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), the information collection and 
recordkeeping requirements included in this rule have been submitted 
for approval to OMB.
    Title: Requirements for Official Establishments to Notify FSIS of 
Adulterated or Misbranded Product, Prepare and Maintain Written Recall 
Procedures, and Document Certain HACCP Plan Reassessments.
    Type of Collection: New.
    Abstract: Under this final rule, FSIS is requiring three 
information collection activities. First, FSIS requires that official 
establishments notify the appropriate District Office that an 
adulterated or misbranded product received by or originating from the 
establishment has entered commerce, if the establishment believes or 
has reason to believe that this has happened. FSIS is requiring that 
this notification occur as quickly as possible, but within 24 hours of 
the establishment learning or determining that an adulterated or 
misbranded product received by or originating from it has entered 
commerce. Second, FSIS is requiring that establishments prepare and 
maintain written procedures for the recall of meat and poultry products 
produced and shipped by the establishment for use should it become 
necessary for the establishment to remove product from commerce. These 
written recall procedures have to specify how the establishment will 
decide whether to conduct a product recall and how the establishment 
will effect the recall, should it decide that one is necessary. 
Finally, FSIS is requiring that establishments document each 
reassessment of the establishment's HACCP plans. FSIS requires 
establishments to reassess their HACCP plans annually and whenever any 
changes occur that could affect the hazard analysis or alter the HACCP 
plan. Under this rule, establishments must document each reassessment, 
the reasons for any changes to the HACCP plan, or the reasons for not 
changing the HACCP plan. For annual reassessments, if the establishment 
determines that no changes are necessary, documentation of this 
determination is not necessary. The recall procedures and reassessment 
documentation will have to be made available for official review and 
copying.
    Estimate of Burden of Average Hours per Response: 1.159.
    Respondents: Official meat and poultry products establishments.
    Estimated Number of Respondents: 6,300.
    Estimated Number of Responses: 40,960.
    Estimated Number of Responses per Respondent: 6.5.
    Estimated Total Annual Burden on Respondents: 47,475.
    Copies of this information collection assessment can be obtained 
from John O'Connell, Paperwork Reduction Act Coordinator, Food Safety 
and Inspection

[[Page 26936]]

Service, USDA, Room 6081, South Agriculture Building, 1400 Independence 
Avenue SW., Washington, DC 20250.
E-Government Act Compliance
    FSIS and USDA are committed to achieving the purposes of the E-
Government Act (44 U.S.C. 3601, et seq.) by, among other things, 
promoting the use of the Internet and other information technologies 
and providing increased opportunities for citizen access to government 
information and services, and for other purposes.
Executive Order 13175
    This final rule has been carefully evaluated for potential tribal 
implications in accordance with Executive Order 13175, Consultation and 
Coordination with Indian Tribal Governments. FSIS has concluded based 
on its evaluation that this final rule will not have any direct or 
substantial effects on Indian Tribes, on the relationship between the 
Federal Government and Indian Tribes, or on the distribution of power 
or responsibilities between the Federal Government and Indian Tribes 
because there are currently no federally-inspected meat or poultry 
establishments owned or operated by Indian Tribes in tribal areas or on 
tribal reservations.
USDA Nondiscrimination Statement
    The U.S. Department of Agriculture (USDA) prohibits discrimination 
in all its programs and activities on the basis of race, color, 
national origin, gender, religion, age, disability, political beliefs, 
sexual orientation, and marital or family status. (Not all prohibited 
bases apply to all programs.)
    Persons with disabilities who require alternative means for 
communication of program information (Braille, large print, audiotape, 
etc.) should contact USDA's Target Center at 202-720-2600 (voice and 
TTY).
    To file a written complaint of discrimination, write USDA, Office 
of the Assistant Secretary for Civil Rights, 1400 Independence Avenue 
SW., Washington, DC 20250-9410 or call 202-720-5964 (voice and TTY). 
USDA is an equal opportunity provider and employer.
Additional Public Notification
    FSIS will announce this rule online through the FSIS Web page 
located at https://www.fsis.usda.gov/regulations_&_policies/Interim_&_Final_Rules/index.asp.
    FSIS will also make copies of this Federal Register publication 
available through the FSIS Constituent Update, which is used to provide 
information regarding FSIS policies, procedures, regulations, Federal 
Register notices, FSIS public meetings, and other types of information 
that could affect or would be of interest to constituents and 
stakeholders. The Update is communicated via Listserv, a free 
electronic mail subscription service for industry, trade groups, 
consumer interest groups, health professionals, and other individuals 
who have asked to be included. The Update is also available on the FSIS 
Web page. In addition, FSIS offers an electronic mail subscription 
service which provides automatic and customized access to selected food 
safety news and information. This service is available at https://www.fsis.usda.gov/News_&_Events/Email_Subscription/. Options range 
from recalls to export information to regulations, directives and 
notices. Customers can add or delete subscriptions themselves, and have 
the option to password protect their accounts.

List of Subjects in 9 CFR Parts 304, 381, 417 and 418

    Hazard Analysis and Critical Control Point (HACCP) Systems, Meat 
inspection, Poultry and poultry products inspection, Reporting and 
recordkeeping requirements, Recalls.
    For the reasons discussed in the preamble, FSIS is amending 9 CFR 
Chapter III, as follows:

PART 304--APPLICATION FOR INSPECTION; GRANT OF INSPECTION

0
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


0
2. In Sec.  304.3, paragraph (a) is revised to read as follows:


Sec.  304.3  Conditions for receiving inspection.

    (a) Before being granted Federal inspection, an establishment must 
have developed written sanitation Standard Operating Procedures, as 
required by part 416 of this chapter, and written recall procedures as 
required by part 418 of this chapter.
* * * * *

PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS

0
3. The authority citation for part 381 continues to read as follows:

    Authority:  7 U.S.C. 138f, 450; 21 U.S.C. 451-470; 7 CFR 2.7, 
2.18, 2.53


0
4. In Sec.  381.22, paragraph (a) is revised to read as follows:


Sec.  381.22  Conditions for receiving inspection.

    (a) Before being granted Federal inspection, an establishment must 
have developed written sanitation Standard Operating Procedures, as 
required by part 416 of this chapter, and written recall procedures as 
required by part 418 of this chapter.
* * * * *

PART 417--HAZARD ANALYSIS AND CRITICAL CONTROL POINT (HACCP) 
SYSTEMS

0
5. The authority citation for part 417 continues to read as follows:

    Authority:  7 U.S.C. 450; 21 U.S.C. 451-470, 601-695; 7 U.S.C. 
1901-1906; 7 CFR 2.18, 2.53.


0
6. In Sec.  417.4, paragraph (a)(3) is redesignated as paragraph 
(a)(3)(i) and a new paragraph (a)(3)(ii) is added to read as follows:


Sec.  417.4  Validation, Verification, Reassessment.

* * * * *
    (a) * * *
    (3) Reassessment of the HACCP plan.
    (i) * * *
    (ii) Each establishment must make a record of each reassessment 
required by paragraph (a)(3)(i) of this section and must document the 
reasons for any changes to the HACCP plan based on the reassessment, or 
the reasons for not changing the HACCP plan based on the reassessment. 
For annual reassessments, if the establishment determines that no 
changes are needed to its HACCP plan, it is not required to document 
the basis for this determination.
* * * * *

0
7. A new part 418 is added to read as follows:

PART 418--RECALLS

Sec.
418.1 [Reserved]
418.2 Notification.
418.3 Preparation and maintenance of written recall procedures.
418.4 Records.

    Authority: 7 U.S.C. 450; 21 U.S.C. 451-470, 601-695; 7 CFR 2.18, 
2.53.


Sec.  418.1  [Reserved]


Sec.  418.2  Notification.

    Each official establishment must promptly notify the local FSIS 
District Office within 24 hours of learning or determining that an 
adulterated or misbranded meat, meat food, poultry, or poultry product 
received by or

[[Page 26937]]

originating from the official establishment has entered commerce, if 
the official establishment believes or has reason to believe that this 
has happened. The official establishment must inform the District 
Office of the type, amount, origin, and destination of the adulterated 
or misbranded product.


Sec.  418.3  Preparation and maintenance of written recall procedures.

    Each official establishment must prepare and maintain written 
procedures for the recall of any meat, meat food, poultry, or poultry 
product produced and shipped by the official establishment. These 
written procedures must specify how the official establishment will 
decide whether to conduct a product recall, and how the establishment 
will effect the recall, should it decide that one is necessary.


Sec.  418.4  Records.

    All records, including records documenting procedures required by 
this part, must be available for official review and copying.

    Done in Washington, DC, on May 1, 2012.
Alfred V. Almanza,
Administrator.
[FR Doc. 2012-10917 Filed 5-7-12; 8:45 am]
BILLING CODE 3410-DM-P