Prior Label Approval System: Generic Label Approval, 66826-66840 [2013-26639]

Agencies

• DEPARTMENT OF AGRICULTURE
• Food Safety and Inspection Service

[Federal Register Volume 78, Number 216 (Thursday, November 7, 2013)]
[Rules and Regulations]
[Pages 66826-66840]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-26639]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Food Safety and Inspection Service

9 CFR Parts 317, 318, 320, 327, 331, 381, 412, and 424

[Docket No. 99-021F; FDMS Docket Number FSIS-2005-0016]
RIN 0583-AC59


Prior Label Approval System: Generic Label Approval

AGENCY: Food Safety and Inspection Service, USDA.

ACTION: Final rule.

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

SUMMARY: The Food Safety and Inspection Service (FSIS) is amending the 
meat and poultry products inspection regulations to expand the 
circumstances in which FSIS will generically approve the labels of meat 
and poultry products. The Agency also is consolidating the regulations 
that provide for the approval of labels for meat products and poultry 
products into a new Code of Federal Regulations (CFR) part.

DATES: This rule is effective January 6, 2014.

FOR FURTHER INFORMATION CONTACT: Jeff Canavan, Deputy Director, 
Labeling and Program Delivery Staff, Office of Policy and Program 
Development, Food Safety and Inspection Service, U.S. Department of 
Agriculture, Stop Code 3784, Patriots Plaza 3, 8-161A, 1400 
Independence Avenue SW., Washington, DC 20250-3700; Telephone (301) 
504-0879; Fax (202) 245-4792.

SUPPLEMENTARY INFORMATION: 

Executive Summary

    The Federal Meat Inspection Act (FMIA) (21 U.S.C. 601 et seq.) and 
the Poultry Products Inspection Act (PPIA) (21 U.S.C. 451 et seq.) 
direct the Secretary of Agriculture to maintain meat and poultry 
product inspection programs designed to assure consumers that meat and 
poultry products distributed to them (including imports) are safe, 
wholesome, not adulterated, and properly marked, labeled, and packaged. 
They also prohibit the sale or offer for sale by any person, firm, or 
corporation of any article in commerce under any name or other marking 
or labeling that is false or misleading or in any container of a 
misleading form or size.\1\ FSIS has interpreted these provisions as 
requiring that the Secretary of Agriculture or his or her 
representative approve all labels used on federally inspected and 
passed, and imported, meat and poultry products before the products are 
distributed in commerce. Without approved labels, meat and poultry 
products may not be sold, offered for sale, or otherwise distributed in 
commerce.
---------------------------------------------------------------------------

    \1\ 21 U.S.C. 607(d); 21 U.S.C. 457(c).
---------------------------------------------------------------------------

    To ensure that meat and poultry products comply with the FMIA and 
PPIA and their implementing regulations, FSIS conducts a prior approval 
program for labels that are to be used on federally inspected meat and 
poultry products and imported products (see 9 CFR 317.4, 317.5, 327.14, 
381.132, 381.133, 381.134, and 381.205). Under the current program, 
FSIS evaluates sketches of labels for approval. A ``sketch label'' is a 
printer's proof or other version that clearly shows all required label 
features, size, location, and indication of final color. To obtain 
sketch label approval, domestic meat and poultry establishments and 
certified foreign establishments, or their representatives, submit 
sketch labels to FSIS for evaluation, except when the label is 
generically approved by the Agency under 9 CFR 317.5 or 381.133.
    Generic label approval refers to the prior approval of labels or 
modifications to labels by the Agency without submitting such labels to 
FSIS for sketch approval. Generic label approval requires that all 
mandatory label features be in conformance with FSIS regulations (9 CFR 
317.5(a)(1) and 381.133(a)(1)). Although such labels are not submitted 
to FSIS for approval, they are deemed to be approved and, therefore, 
may be applied to product in accordance with the Agency's prior label 
approval system. Sections 317.5 and 381.133 also list the types of 
labels and modifications to labels that are deemed to be approved 
without submission to FSIS, as long as the label displays all mandatory 
label features in

[[Page 66827]]

conformance with applicable Federal regulations.
    FSIS is finalizing its proposal to amend the meat and poultry 
products inspection regulations to expand the circumstances in which 
FSIS will generically approve the labels of meat and poultry products. 
The Agency also is consolidating the regulations that provide for the 
approval of labels for meat products (9 CFR 317.4) and poultry products 
(9 CFR 381.132) into a new part 412 in title 9 of the Code of Federal 
Regulations (CFR).

                                Table 1--Summary of Estimated Costs and Benefits
----------------------------------------------------------------------------------------------------------------
                             Estimated quantified benefits, costs, and net benefits
-----------------------------------------------------------------------------------------------------------------
                                                          Annualized                            Annualized net
                                                         benefits  (7%                           benefits  (7%
                       Entity                              discount,       Annualized costs        discount,
                                                          millions $)                           millions $) \a\
----------------------------------------------------------------------------------------------------------------
Establishments......................................              $1.944                  $0              $1.944
Agency..............................................                .640                   0                .640
                                                     -----------------------------------------------------------
    Total...........................................               2.584                   0              2.584
----------------------------------------------------------------------------------------------------------------
\a\ Annualized total net benefits at a 3% discount rate are $2.211 million.

Background

Proposed Rule

    On December 5, 2011, FSIS published a proposed rule to amend the 
meat and poultry products inspection regulations (9 CFR 317.5 and 
381.133) to expand the circumstances under which the labels of meat and 
poultry products would be deemed to be generically approved \2\ by the 
Agency (76 FR 75809). FSIS also proposed to combine the regulations 
that provide for the approval of labels for meat products and for 
poultry products (9 CFR 317.4 and 381.132) into a new part 412.
---------------------------------------------------------------------------

    \2\ Generic label approval refers to the prior approval of 
labels or modifications to labels by the Agency without submitting 
such labels to FSIS for sketch approval.
---------------------------------------------------------------------------

    After review and consideration of all comments, FSIS is finalizing 
the proposed rule with four changes. FSIS proposed to stop evaluating 
the mandatory features on labels that are generically approved but have 
been submitted for review because they contain a special statement or 
claim. In response to comments, however, the Agency has decided 
continue to provide for the review of all labels. However, labels that 
cannot be generically approved will receive first priority. Labels that 
qualify for generic approval will receive second priority and may take 
longer to be reviewed.
    In the preamble to the proposed rule, FSIS said that statements on 
labels that are defined in FSIS's regulations or policy guidance would 
not need to be submitted to FSIS for evaluation. However, the 
accompanying regulatory text only referred to statements that are 
defined in FSIS's regulations as generically approved. Therefore, to 
clarify FSIS's intent in the proposed rule, FSIS has amended 9 CFR 
412.1(e) to provide that claims and statements that are defined in 
FSIS's regulations or in the Food Standards and Labeling Policy Book, 
except for ``natural'' and negative claims, and that comply with those 
regulations and policies, are deemed to be approved by the Agency 
without being submitted for evaluation and approval. The Agency has 
also amended 412.2(b) to require that labels that bear claims and 
statements that are not defined in the Federal meat and poultry 
products inspection regulations or in the Food Standards and Labeling 
Policy Book, including ``natural'' and negative claims, be submitted 
for approval.
    Under the proposed rule, labeling with special statements or claims 
that has been reviewed by other Government agencies could not be 
generically approved under the Agency's regulations. However, in 
response to comments, FSIS has determined that a label bearing a child-
nutrition (CN) box will not be considered to have a special statement 
or claim on it that would require sketch approval by FSIS. The CN 
information in CN boxes is reviewed and evaluated for approval by the 
Agricultural Marketing Service, removing it from the realm of a special 
statement or claim.
    Also in response to comments asking that the Agency update the Food 
Standards and Labeling Policy Book before this final rule is published, 
FSIS has decided to stop adding policy guidance to it. FSIS will 
continue to amend or remove items in the book, as necessary, but it 
will no longer add new material to it beginning on the date that this 
final rule is published. The Agency will convey new labeling policy by 
other means, such as compliance policy guides.

Final Rule

    This final rule is consistent with the proposed rule. The final 
rule provides that establishments are required to submit for evaluation 
only certain types of labeling, e.g., labels for temporary approval, 
labels for products produced under religious exemption, labels for 
products for export with labeling deviations, and labels with claims 
and special statements. FSIS will continue to require the submission of 
such labels because they are more likely to present significant policy 
issues that have health or economic significance. Examples of labels 
that must continue to be submitted for evaluation and approval before 
use under the final rule are: (1) Labels for chicken produced under 
Buddhist exemption; (2) labels for beef intestine produced for export 
to China that identify the product as ``beef casings,'' and (3) labels 
for temporary use that do not list all ingredients in the correct order 
of predominance.
    Examples of special statements and claims for use on labels that 
must also continue to be submitted for evaluation and approval before 
use under the final rule are: (1) Claims relating a product's nutrient 
content to a health or a disease condition; (2) statements that 
identify a product as ``organic'' or containing organic ingredients; 
(3) claims that are undefined in FSIS regulations or the Food Standards 
and Labeling Policy Book, e.g., claims regarding the raising of 
animals, such as ``no antibiotics administered'' or ``vegetarian fed''; 
(4) instructional or disclaimer statements concerning pathogens, e.g., 
``for cooking only'' or ``not tested for E. coli O157:H7;'' and (5) 
statements that identify a product as ``natural.''
    Under this final rule, statements on labels that are defined in 
FSIS's regulations or the Food Standards and Labeling Policy Book, 
except for

[[Page 66828]]

``natural'' and negative claims, may be generically approved by the 
Agency without being submitted for evaluation and approval. Such claims 
include a statement that characterizes a product's nutrient content 
that is consistent with the applicable Agency regulation, such as ``low 
fat;'' that has geographical significance, such as ``Italian Style;'' 
or that makes a country of origin statement on the label of any meat or 
poultry product ``covered commodity.'' Consistent with the proposed 
rule, FSIS will not view the addition of an allergen statement (e.g., 
``contains soy'') applied in accordance with the Food Allergen Labeling 
and Consumer Protection Act (FALCPA) as a special statement or claim 
that requires sketch approval.
    Under this final rule, a label bearing a child-nutrition (CN) box 
will not be considered to have a special statement or claim on it that 
would require sketch approval by FSIS. The CN information in CN boxes 
is reviewed and evaluated for approval by the Agricultural Marketing 
Service, removing it from the realm of special statements or claims. 
Therefore, under this final rule a CN box on a meat or poultry product 
is generically approved.
    When this rule becomes effective, labels that do not qualify for 
generic approval will receive first priority for review. Labels that do 
qualify for generic approval will receive a lower or second priority.
    FSIS is also reorganizing the regulations in this final rule by 
consolidating the labeling approval rules that currently are presented 
separately for meat and poultry products (in 9 CFR 317.4 and 381.132, 
respectively) into a single, new part, 9 CFR Part 412. FSIS believes 
that the public will be better served by having the regulations 
governing label approval consolidated in one part of title 9. Rather 
than searching through two separate parts of title 9, 317 and 381, to 
find the label approval regulations, interested parties will only have 
to survey one, part 412, to be able to apply generically approved 
labels to their meat and poultry products.

Summary of and Response to Comments

    FSIS received 47 separate comments to the proposed regulation from 
consumers (6), students (5), meat and poultry companies (9), trade 
associations (13), label consultants (8), health related sources (5), 
and an agriculture center. Just over half of the comments supported the 
proposal to expand generic approval. Of those, a great majority 
suggested expanding the generic approval system beyond that which the 
Agency proposed. These commenters supported the rule on the grounds 
that it will streamline and modernize the prior label approval system, 
thereby reducing the volume of paperwork and labels that need to be 
filed with FSIS. They also stated that it will decrease costs and 
utilize FSIS and industry resources more effectively. These commenters 
also stated that industry members will be able to devise their own 
approval systems, gaining time that is lost to long Agency approval 
times. Commenters stated that the efficient use of industry resources 
will also lead to faster introduction of innovative products into the 
marketplace and the enhancement of food safety.
    Approximately nineteen commenters opposed the rule. The major 
reason for their opposition was concern about allergen listings on 
labels. Finally, seven of the comments were outside the scope of the 
rule. These commenters addressed issues such as the inclusion of 
Country of Origin Labeling on all labels; the production and sale of 
labels by USDA; developing better definitions of ``gluten free'' and 
``wheat free;'' defining terms like ``natural;'' and reconsidering the 
amenability of flavors. A summary of the relevant issues raised by 
commenters and the Agency's responses follows.

1. Allergens

    Comment: Numerous commenters believe that FSIS review of labels is 
a critical part of ensuring the accuracy of the ingredients statement 
on meat and poultry products. Commenters opposed to the proposal said 
that it would reduce oversight in a critical food safety area and, for 
that reason, would increase the likelihood that meat and poultry 
products containing undeclared allergens would enter the marketplace, 
and that more recalls would occur. One commenter stated that it was 
important to have FSIS review food labels and take steps to be certain 
that labels are clear and accurate.
    Response: FSIS disagrees that the expansion of generic labeling 
will increase the likelihood that meat and poultry products will enter 
the marketplace with undeclared allergens. One of the purposes of prior 
label review is to ensure that the up to eight labeling features 
required by the meat and poultry products inspection regulations are 
present on the label, and that any claims are appropriately supported. 
Another purpose is to identify undefined claims, ad copy, or other 
information that may be false or misleading.
    Prior label review does not, however, involve comparing the 
information on a label directly with the ingredients actually used in 
the food product that is to bear the label--the only way to determine 
whether allergens that have not been declared on the label have 
actually been used in the product. It is for inspection program 
personnel (IPP) to conduct reviews of this kind in the establishment, 
after the relevant label has been approved, whether generically or on a 
per-case basis by label reviewers in Washington, DC. IPP review labels 
and compare them to actual product formulations to verify that that the 
ingredients used in the production of the product are listed accurately 
on the label, that the label is not misleading, and that it is 
otherwise in compliance with all labeling requirements.
    There were 30 allergen-related recalls of meat and poultry products 
during 2012. None of those recalls, however, resulted from changes that 
could have been identified through the Agency label review process. In 
some cases, labeling errors occurred because an establishment switched 
to a different supplier for a spice mix or blend used in product 
production but then did not check the new list of ingredients against 
its label inventory to ensure that they matched. Similarly, in other 
cases ingredient reformulations or product reformulations that changed 
the sub-listing of ingredients were not reflected on a product's label. 
Other labeling errors resulted from production mistakes, such as 
packaging the product in the wrong box.
    More than 85 percent of the allergen-related recalls over the past 
year occurred as a result of something that happened after the label in 
question was approved by FSIS, a situation that prior label approval 
could obviously not change.
    Under 9 CFR 317.2(f) and 381.118, establishments are required to 
list all ingredients used to formulate meat and poultry products in the 
ingredients statement on the product label, including potential 
allergens. FSIS's prior label review is not and cannot be a substitute 
for the careful application of labels to products by the meat and 
poultry industry.
    Comment: Several commenters suggested that the Agency require the 
declaration of major allergens on the labels of FSIS-regulated foods.
    Response: While a separate statement addressing specific allergens 
in the product is not mandatory for meat and poultry products as it is 
with foods regulated under the Food Allergen Labeling and Consumer 
Protection Act of 2004 (FALCPA), Public Law 108-282,

[[Page 66829]]

all ingredients in meat and poultry products must be listed on the 
label in the ingredients statement. As a result, all allergens are 
listed on the product. In addition, through its prior label approval 
system, FSIS is aware that most establishments are voluntarily 
including information consistent with the Food Allergen Labeling and 
Consumer Production Act of 2004 at the end of the ingredients 
statement, such as, ``contains milk and soy.'' FSIS plans to continue 
to monitor allergen statements, which establishments may apply 
voluntarily to labels, and will not initiate rulemaking to make 
allergen statements a required label feature. FSIS intends to continue 
to use its post-market surveillance activities to ensure that labels 
containing statements of this type are not false or misleading and 
comply with all applicable Federal regulations. FSIS also has no plans 
to require the listing of specific allergens on meat and poultry 
product labels.

2. Resource Issues

    Comment: Some commenters said that industry does not understand the 
regulations sufficiently, or have the resources, to produce accurate 
labels without prior review of them by FSIS. A few were concerned that 
small and very small establishments will need to secure expensive legal 
and regulatory expertise to determine compliance with labeling 
requirements. They and others were also troubled by the Agency's 
decision to stop evaluating mandatory features that are generically 
approvable on a label submitted for review because of a special 
statement or claim.
    Response: FSIS will provide labeling guidance so that small and 
very small establishments should not need to hire experts or additional 
staff to comply with FSIS's labeling requirements. In addition to the 
labeling guidance already available on the FSIS Web site, the Agency 
plans to develop additional materials to assist industry when applying 
labeling regulations and policies. While there is a good deal of 
information currently located on the Web site, it is not consolidated 
in one location. FSIS intends to better organize the Web site to make 
it easier for interested parties to find labeling and standards 
information posted there. Furthermore, the new web-based Label 
Submission and Approval System (LSAS) includes a ``generic label 
advisor'' to assist establishments in determining whether labels are 
generically approved or require sketch approval. FSIS also intends to 
develop Webinars and PowerPoint presentations on generic labeling to 
provide information to industry.
    To implement this rule, FSIS will issue instructions to field 
personnel on their responsibilities related to expanded generic label 
approval. In addition, FSIS staff will be available to answer questions 
pertaining to generic approvals of labels.
    In response to comments indicating a desire to continue submitting 
labels to FSIS for guidance, evaluation, and approval, the Agency has 
decided to continue to provide for the review of all labels. However, 
labels that cannot be generically approved will receive first priority. 
Labels submitted that can be generically approved will receive second 
priority and may take longer to be reviewed. While FSIS prioritizes its 
workload, establishments may commence to market their products with 
labels that have already been submitted for review. Reviewing these 
labels on a priority basis will not affect the Agency's projected cost 
savings.
    As a result of its decision to continue providing for the review of 
all labels, FSIS, as a commenter asked, has not revised the regulatory 
text to state that the Agency will review only the special statement or 
claim, and not the rest of the submitted label, unless otherwise 
requested.
    Comment: One commenter asked FSIS to streamline and improve the 
label submission form and the amount of information required to be 
submitted with it, eliminating, for example, the submission of 
processing procedures and the exact level of ingredients.
    Response: While FSIS will consider ways that it can improve the 
label submission form, FSIS will continue to require the submission of 
information on processing procedures under 9 CFR 320.1 and 381.175 to 
assess whether the processing and labeling of the product is consistent 
with Hazard Analysis and Critical Control Point (HACCP) category. FSIS 
needs this information to verify statements or claims on the label. The 
information on processing procedures need not be extensive. FSIS 
accepts information on processing procedures as long as it is 
sufficient to allow the Agency to verify that the label is consistent 
with the product's processing. For example, the processing information 
submitted for a product label needs to be sufficient to justify its 
label description as ``smoked'' or ``cooked.''
    Similarly, it is not necessary for an establishment to submit the 
exact levels of a product ingredient. FSIS will continue to accept a 
range for ingredients in a product formula, except for ingredients with 
regulatory limits established in FSIS or Food and Drug Administration 
regulations, if the establishment maintains the correct order of 
predominance.

3. Claims and Statements Defined in Guidance Documents

    Comment: Several commenters asked what claims and statements 
defined in policy guidance may be considered to be generically 
approved. Several commenters also pointed to an inconsistency between 
the preamble of the proposed rule and its regulatory text. In the 
preamble (76 FR 75814), FSIS wrote:

    . . . statements on labels that are defined in FSIS's 
regulations or policy guidance, e.g., a statement that characterizes 
a product's nutrient content, such as ``low fat''; that has 
geographical significance, such as ``Italian Style''; or that makes 
a country of origin statement on the label of any meat or poultry 
product ``covered commodity,'' will not need to be submitted to FSIS 
for evaluation.

    However, the accompanying regulatory text only referred to 
statements that are defined in FSIS's regulations as generically 
approved.
    Response: In the final rule, to clarify FSIS's intent in the 
proposed rule, in 9 CFR 412.2(b) FSIS has provided that claims and 
statements that are defined in FSIS's regulations or in the Food 
Standards and Labeling Policy Book, (e.g., a statement that 
characterizes a product's nutrient content, such as ``low fat,'' has 
geographical significance, such as ``German Brand,'' or makes a country 
of origin statement on the label of any meat or poultry product 
``covered commodity''), except for ``natural'' and negative claims, and 
that comply with those regulations and policies, are deemed to be 
approved by the Agency without being submitted for evaluation and 
approval. Similarly, in 9 CFR 412.1(e), FSIS is requiring that labels 
that bear claims and statements that are not defined in the Federal 
meat and poultry products inspection regulations or in the Food 
Standards and Labeling Policy Book, including ``natural'' and negative 
claims, be submitted for approval.
    Therefore, interim policy guidance and other guidance not included 
in the Food Standards and Labeling Policy Book cannot be deemed 
approved without evaluation and review by FSIS. Interim policy 
typically involves novel labeling statements or claims that present 
significant public health or economic issues and that constitute 
special statements or claims. Other guidance not included in the Food 
Standards and Labeling Policy Book includes animal production claims; 
omega fatty acid guidance; allergen claims, such as ``milk free''; and 
whole grain claims. The Agency must approve

[[Page 66830]]

these statements or claims on a case-by-case basis.
    Note that if a special statement or claim has been approved for an 
establishment under the current system, the establishment will not need 
to resubmit the label bearing it under this new final rule. It would 
only have to resubmit the label if it added a new special statement or 
claim to the previously approved label.
    Comment: Several commenters suggested that FSIS make available a 
comprehensive list or guide that outlines what statements or claims 
need prior label approval.
    Response: FSIS agrees that this is a good idea. We intend to 
develop a guidance document concerning claims that can and cannot be 
generically approved.

4. Expansion of Generic Labeling

    Comment: As mentioned earlier, many of the commenters in favor of 
the proposed rule suggested expanding the generic approval system 
beyond that which was proposed.
    Response: Many of the labels that commenters asked be generically 
approved are, under 9 CFR 412.1, which is being added to FSIS's 
regulations by this final rule, specifically required to be submitted 
for evaluation and review by FSIS. Examples of such labels and 
information are sketch labels for products produced under a religious 
exemption, sketch labels for products for foreign commerce whose labels 
deviate from FSIS regulations, special statements and claims, and 
requests for the temporary use of final labeling that is deficient in 
some particular. These labels are discussed later in this document.
    Some of the commenters' suggested changes are not necessary 
because, as proposed and under this final rule, the labeling statements 
raised can be approved without prior submission to FSIS. An example 
would be foreign language labels. One commenter stated that labels 
containing foreign languages on products for sale in the U.S. that do 
not have special statements or claims should not need sketch approval 
from FSIS. While the current meat and poultry inspection regulations do 
not permit the generic approval of a label adding or deleting a direct 
translation of the English language into a foreign language for product 
sold in the U.S.,\3\ this final rule will do so. These types of labels 
do not fall into any of the categories of labels that must be submitted 
to FSIS for evaluation and review. Another suggested change, that 
modifications to product labels reflecting changes made by suppliers 
should be generically approvable, is unnecessary. As in the proposal, 
the final rule will permit these modifications to be generically 
approved, and thus no expansion of the generic approval system is 
needed.
---------------------------------------------------------------------------

    \3\ 9 CFR 317.5(b)(9)(xxiv) and 381.133(b)(9)(xxv).
---------------------------------------------------------------------------

    We were asked by a commenter if we intended to permit the generic 
approval of previously approved labels containing special claims when 
the only modification involves changes unrelated to the special claim. 
The answer is yes. Previously approved labels containing special claims 
may be generically approved if the only modification involves changes 
unrelated to the special claim.
    Comment: Many commenters asked that FSIS allow the generic approval 
of final labels off of temporary labels, as well as the generic 
approval of temporary label extensions. Several more suggested that 
temporary labels that contain minor inaccuracies but present minor 
health risks be deemed generically approved. Others sought generic 
approval for different types of temporary labels on meat and poultry 
products. For example, commenters suggested that FSIS generically 
approve temporary labels when the ingredient list of a meat or poultry 
product changes. Another asked for generic approval of temporary labels 
on secondary products. Other commenters sought generic approval in 
other situations, such as the removal of a non-USDA-regulated 
ingredient from a product formula; a change of place in the order of 
predominance of an ingredient in a food regulated by FDA used in the 
formulation of a meat or poultry food product because of a change in 
suppliers; and a modified ``blanket'' approval based on a single 
temporary approval.
    Response: After reviewing the comments, FSIS has determined that it 
would be inappropriate to allow the following types of labels to be 
deemed approved without Agency evaluation and review:
    Labels bearing negative, ``natural,'' and ``organic'' claims: These 
labels are not generically approvable because they are special claims, 
as defined in 9 CFR 412.1(e) of this final rule.
    The meat and poultry regulations do not define ``negative,'' 
``natural,'' or ``organic.'' ``Negative'' labeling claims are defined 
in the Food Standards and Labeling Policy Book. Negative claims refer 
to statements highlighting the absence of an ingredient or another 
constituent of the food, an example of which, ``gluten free,'' has been 
codified in 9 CFR 412.1(e). ``No milk'' is another example of a 
negative claim that highlights the absence of an ingredient or another 
constituent of a food. A negative claim may also identify the absence 
of certain types of ingredients, e.g., ``no preservatives'' or ``no 
artificial coloring'' based on the product formulation. Consequently, 
negative claims can vary greatly, from a specific ingredient to a class 
of substances, making it difficult to determine whether a label bearing 
this type of claim is compliant.
    ``Natural'' is also a claim that is undefined in FSIS's regulations 
but is defined in the Food Standards and Labeling Policy Book. However, 
natural is a controversial claim which has come under great scrutiny in 
the last several years and for which FSIS is considering rulemaking.\4\
---------------------------------------------------------------------------

    \4\ See ``Product Labeling: Definition of the Term ``Natural'' 
and related materials (71 FR 70503, Dec. 5, 2006) and ``Product 
Labeling: Use of the Voluntary Claim ``Natural'' in the Labeling of 
Meat and Poultry Products'' and related materials (74 FR 46951, Sep. 
14, 2009).
---------------------------------------------------------------------------

    ``Organic'' is not defined in FSIS's regulations. Consequently, 
establishments may not be familiar with the Agency's requirements for 
the support or application of this claim, which could result in 
increased labeling errors and misbranded product. While industry is 
familiar with the requirements for mandatory label features, as noted 
in the proposed rule, the Agency believes that it needs to continue to 
provide pre-market evaluation and approval of ``organic'' claims 
because they present significant and evolving policy issues.
    For the above reasons, FSIS must see the ingredients listing on a 
label containing a negative, ``natural,'' or ``organic'' claim to be 
able to verify its accuracy.
    Labels marked ``for export only'' (previously sketch approved with 
minor modifications): Exports of U.S. meat and poultry products occur 
in the context of U.S. government-foreign government agreements. These 
agreements require U.S. government approval of labels on meat and 
poultry products to be exported. One aspect of this approval is 
ensuring that any changes made to labels on meat and poultry products 
are allowed per the importing country's laws. Therefore, labels marked 
``for export only'' cannot be generically approved.
    Labeling with special statements or claims that has been reviewed 
by other Government agencies: Except for meat and poultry product 
labels that bear child-nutrition (CN) boxes, which are reviewed and 
approved by the Agricultural Marketing Service (AMS),

[[Page 66831]]

at this time, no other labeling that may be placed on meat and poultry 
products is reviewed by other Government agencies. While agencies such 
as FDA and AMS may have extra-regulatory processing marketing, or 
verification programs, the labels applied to meat and poultry products 
as part of these programs are not reviewed and approved by the other 
agencies. Rather, these agencies are verifying the documented 
production, manufacturing, or service delivery processes of suppliers 
of agricultural products or services. Therefore, because only the 
production, manufacturing, or service delivery process is being 
verified by these agencies, and not the label itself, they may not be 
generically approved under the Agency's regulations. In addition, the 
statements on the labels are considered special statements or claims 
that may not be approved without submission to and evaluation by FSIS.
    Under this final rule, however, a label bearing a child-nutrition 
(CN) box will not be considered to have a special statement or claim on 
it that would require sketch approval by FSIS. The CN information in CN 
boxes is reviewed and evaluated for approval by the Agricultural 
Marketing Service, removing it from the realm of a special statement or 
claim. Therefore, under this final rule, a CN box on a meat or poultry 
product is generically approved.
    Temporary label approvals and extensions: Temporary labels are not 
good candidates for generic approval. Temporary label approvals may not 
be used longer than 180 days. The Agency is concerned that allowing the 
extension of temporary label approvals on a generic basis would result 
in use of the labels well beyond the 180-day limit. Because the 
temporary approval would have been granted generically, FSIS would have 
no way of knowing the limit on the generic approval. In addition, the 
regulations in this final rule that outline the conditions under which 
temporary label approval may be granted are based on FSIS evaluating 
and reviewing the labels, not industry. The regulations are not, in the 
Agency's opinion, specific enough to assist establishments in 
determining when a temporary label may be granted.
    Some of the temporary labels for commenters recommend generic 
approval would require establishments to assess the public health risk 
of the modification at hand, e.g., the non-declaration on the label of 
a particular ingredient. It would not be appropriate for establishments 
to conduct such an assessment. FSIS needs to assess the public health 
risk and potential economic adulteration when deciding to grant 
approval for the use of a temporary label.
    For these reasons, FSIS is not expanding the scope of generic 
labeling approval to include temporary label approvals and extensions.
    Religious exemptions: Generically approved labeling is not 
appropriate for the labeling of religious-exempt product because such 
product does not receive the mark of inspection and, therefore, 
deviates from the general labeling requirements for meat and poultry 
products.
    Front-of-package labeling statements that meet the requirements for 
nutrient content claims, including statements of quantity: FSIS 
considers certain front-of-pack (FOP) labeling statements, such as 
those highlighting select nutrients from the nutrition facts panel 
placed on the principal display panel, to be nutrient content claims. 
However, unlike traditional nutrient content claims, such as ``low 
fat,'' that are defined in FSIS regulations, there are no guidelines 
for the multiple types of FOP labeling statements on labeling. 
Therefore, FSIS needs to continue to require prior evaluation and 
approval by the Agency to ensure these statements are truthful and not 
misleading.
    Claims that may not present public health or economic concerns: 
These labels might include marketing promotions, logos from recognized 
third parties, and general wellness claims.
    FSIS does not agree that labels such as these should be deemed to 
be approved without Agency evaluation and review. As with some of the 
temporary labels for which generic approval is being sought, whether a 
label presents a food safety issue or not requires an assessment of the 
public health risk presented by the label. It is appropriate that FSIS, 
not establishments, conduct such an assessment.
    In addition, the generic approval of labels that include marketing 
promotions, logos from recognized third parties, general wellness 
claims, and other similar features that, in the opinion of industry, do 
not present consumer confusion issues, would still be problematic 
because these labels may include claims that are not addressed in the 
meat and poultry regulations. Some of these labels might also fall into 
the category of implied nutrient content claims as defined in 9 CFR 
317.313(b)(2) and 381.413(b)(2), e.g., a claim that suggests that the 
product, because of its nutrient content, may be useful in maintaining 
healthy dietary practices and is made with an explicit claim or 
statement about a nutrient. Because FSIS does not have any regulations 
that cover the application of implied claims to meat and poultry 
labels, establishments would have great difficulty determining whether 
such labels are generically approved. For these reasons, these labels 
must continue to be submitted to FSIS for evaluation and review under 
this final rule.
    Comment: One commenter asked whether developmental claims or 
messages regarding infants and children could be generically approved.
    Response: No, such claims do not fit into any of the generic 
categories because they are not defined in FSIS regulations or in the 
Food Standards and Labeling Policy Book. They are special statements or 
claims.

5. Elimination of Evaluation and Review

    Comment: Those opposed to the proposal felt that expanding the 
generic approval system will open it up to possible abuse, whether 
intentionally or through establishment ignorance, resulting in harm to 
consumers. Concerns included a lack of sufficient expertise, 
commitment, or money, as well as a lack of trust in the meat and 
poultry industry to police itself, particularly with regard to labeling 
accuracy. Commenters suggested that this would expose consumers to 
hundreds of thousands of adulterated and misbranded products.
    Response: FSIS does not agree with these comments. Special 
statements and claims that are not defined in FSIS regulations or the 
Food Standards and Labeling Policy Book, including negative and 
``natural'' claims, will continue to be evaluated and approved under 
this final rule. The eight required features on labels, product name; 
inspection legend/establishment number; handling statement; net weight; 
ingredients statement; signature line; nutrition facts; and safe-
handling instructions have been required for many years. Establishments 
are required to include these basic labeling features properly on their 
product labels. FSIS inspection program personnel verify that 
establishments' labels comply with these requirements.
    FSIS's decision to provide for the review of all labels, whether or 
not they contain special statements or claims, will assist those 
establishments with insufficient expertise or funds to comply with the 
requirements of this final rule. The reduction in the number of labels 
reviewed by FSIS as of result of this final rule will also allow the 
Agency to respond to labeling questions from the meat and poultry 
industry and to develop the materials needed to

[[Page 66832]]

successfully implement these regulations.
    Comment: One commenter stated that an electronic program to 
automatically scan and review labels would reduce the time spent by 
FSIS reviewing labels and would allow labeling staff to concentrate on 
other food safety regulations.
    Response: While no system can scan and review labels, FSIS has 
recently released an electronic label system to allow for easier label 
submission. Using the Label Submission and Approval System (LSAS), 
establishments are able to submit label applications, supporting 
materials, and appeals to FSIS via the Internet. While the system will 
not check labels automatically for errors, it will scan them for some 
common errors in the label submission process, including illegibility, 
missing information on the transmittal form, and missing support 
documentation. The system also includes a feature that helps submitters 
determine whether a label can be generically approved, or if it must be 
submitted to FSIS for approval. The use of LSAS will have a positive 
impact on the speed and accuracy of label review.
    Comment: Some commenters stated that the rule would harm industry 
through recalls, tagged products, loss of goodwill, and loss of 
valuable label inventories.
    Response: FSIS disagrees with these comments. Industry is familiar 
with the eight mandatory labeling features that have been required for 
many years. Additionally, industry has had 16 years of experience 
applying the current generic labeling regulations.
    FSIS has not observed an increase in loss of product or labels, or 
an increase in meat and poultry product recalls, as a result of 
establishments applying generically approved labels. Labels found to be 
deficient in some particular may be eligible for temporary approval. In 
addition, establishments may submit requests for temporary approval for 
retained product (``tagged'') as an ``extraordinary circumstance'' as 
described in the following compliance policy guide on the Agency's Web 
site: https://www.fsis.usda.gov/wps/portal/fsis/topics/regulatory-compliance/labeling/labeling-procedures/procedures-evaluating-labeling. 
Labels submitted as an extraordinary circumstance are given the highest 
priority for label evaluation to prevent loss of product. Labels 
determined to be ineligible for temporary approval without modification 
may be brought into compliance for use through the use of pressure 
sensitive stickers. Pressure sensitive stickers are used to cover or 
correct inaccurate or misleading information. FSIS has published a 
guidance document for compliance assistance on the use of pressure 
sensitive stickers at: https://www.fsis.usda.gov/wps/portal/fsis/topics/regulatory-compliance/labeling/Labeling-Policies/pressure-sensitive-stickers/pressure-sensitive-stickers. Temporary approval is not 
required to bring labels into compliance through the use of pressure 
sensitive stickers. Moreover, FSIS has regulatory authority to grant 
temporary approval for the use of labels that may lack some particular 
information if use of the labels will not misrepresent the product, 
present a health or safety issue, or provide an unfair economic 
advantage.
    We recognize that this rule is more extensive than the current 
labeling regulations in that it increases the amount of labeling that 
industry can self-declare generically approved and therefore not submit 
to FSIS for prior approval. We therefore acknowledge the need for 
updated labeling information and directions to IPP in appropriately 
assessing the accuracy of the labeling records and whether the label 
has been generically approved. We intend to provide guidance and issue 
instructions to IPP to help them perform their in-plant labeling 
verification activities.

6. Implementation of the Final Rule

    Comment: Many of the commenters that supported the proposed rule 
nonetheless had concerns about implementation of the final rule. One of 
these concerns was ensuring that all parties, that is, industry, the 
FSIS labeling staff located in Washington, DC, and IPP, understand how 
the generic approval program is administered, monitored, and enforced. 
Several commenters asked that FSIS provide an implementation plan and a 
consistent method and process for the clarification and redress of 
issues identified by IPP or establishments, along with a timetable for 
redress. Other implementation issues raised include:
    1. FSIS issuance of a directive that details the role of IPP, 
including when and how to conduct a generic label verification check, 
how the inspector-in-charge should communicate with FSIS labeling 
staff, and how establishments can appeal generic labeling issues 
directly to the FSIS labeling staff, rather than IPP;
    2. Authorizing only FSIS labeling staff, rather than IPP, to decide 
if a label is not eligible for generic approval, and advising IPP to 
contact FSIS labeling staff before taking regulatory control actions; 
and
    3. Prohibiting the interruption of product flow unless the errors 
on the label constitute immediate, genuine situations of public health 
concern, or until it is confirmed that the errors constitute a public 
health concern, economic fraud, or an unfair competitive advantage.
    Commenters also requested greater access to FSIS label staff and 
asked that the FSIS Policy and Labeling Book be updated before the 
final rule is published.
    Response: FSIS intends to issue instructions to IPP that will 
address these and other issues relating to label verification 
activities. The instructions will include specific label tasks 
associated with in-plant labeling verification activities, such as 
verifying that all ingredients are appropriately declared on labeling. 
If labels are determined to be out of compliance, the instructions will 
provide guidance to IPP on how to document the noncompliance in the 
Public Health Inspection System (PHIS), and what actions are to be 
taken. In addition, the Agency will provide training to Agency 
personnel and guidance materials to industry on labeling regulations 
and policies, including generic labeling.
    FSIS plans to provide outreach assistance to companies producing 
and submitting meat and poultry labels so that they may take full 
advantage of this time and cost saving measure. The Agency will develop 
compliance policy guides, webinars, and PowerPoint presentations for 
industry. FSIS also intends to better organize the information on its 
Web site to make it easier for interested parties to find labeling and 
standards information posted there. FSIS believes that these actions 
will reduce the number of label submissions to FSIS headquarters, thus 
increasing the availability of FSIS labeling staff.
    Upon publication of this final rule, FSIS will cease adding new 
items to the Food Standards and Policy Labeling Book. FSIS will 
continue to amend or remove items in the book, as necessary, but it 
will no longer add new material to it beginning on the date that this 
final rule is published. The Agency will convey new labeling policy by 
other means, such as compliance policy guides.

7. Survey Data

    Comment: A few commenters opposed the rule on the grounds that the 
Generic Label Audit System (GLAS) data supporting the proposal are not 
valid because of the age of the information, the manner in which labels 
were selected for review, and the lack of

[[Page 66833]]

a final report. Furthermore, commenters stated that FSIS did not 
complete or publish a final GLAS report. These commenters stated that a 
new survey needs to be conducted to determine the effects of the 
current rules on label compliance, public safety and health, and 
competition within the industry.
    Response: As stated in the preamble to the proposed rule, FSIS 
recognizes that the data from the survey referenced in the 2011 
proposed rule are over 13 years old. The Agency concluded, however, 
that the survey showed that the great majority of establishments 
surveyed could effectively use generic approval without first 
submitting sketch labels to FSIS for evaluation and approval. The 
survey results also confirmed that the gradual implementation of the 
generic label provisions promulgated in 1995 \5\ was effective. The 
Agency is not aware of any reason why this situation does not continue 
to prevail today. In addition, FSIS has developed a significant amount 
of policy guidance, including labeling compliance guideline tools such 
as a suggested label submission checklist and a list of the 10 most 
common mistakes and ways to avoid them, for industry use since the 
survey was done. https://www.fsis.usda.gov/wps/portal/fsis/topics/regulatory-compliance/labeling/labeling-procedures.
---------------------------------------------------------------------------

    \5\ ``Prior Label Approval System,'' (60 FR 67334, Dec. 29, 
1995).
---------------------------------------------------------------------------

8. Miscellaneous Comments

    Comment: One commenter believed that it would be illegal to expand 
the current generic approval regulations without Congress amending the 
Acts to relieve the Secretary of Agriculture of the responsibility of 
prior approval.
    Response: FSIS does not agree with this comment. FSIS has 
administered a generic label approval program since 1996 without 
requiring modification of the Acts.
    Comment: One commenter asked whether 9 CFR 500.8, Procedures for 
rescinding or refusing of marks, labeling or containers, applies when 
IPP dispute an establishment's decision to generically approve a label 
but do not allege that the label is false or misleading.
    Response: No. Section 500.8 of 9 CFR is for rescinding or refusing 
approval of labeling. IPP do not approve or rescind labeling. If IPP 
dispute an establishment's decision to generically approve a label but 
do not allege that the label is false or misleading, IPP retain the 
product in question in accordance with 9 CFR 500.2(a)(3) and issue a 
noncompliance record (NR) stating that the label requires sketch 
approval. The NR also indicates why sketch approval is required. The 
procedures in 9 CFR 500.8 are not usually invoked until after IPP have 
denied an establishment's appeal of an NR written for incorrectly 
generically approving a label, and the appeal has moved to the District 
Office for resolution.
    Comment: One commenter stated that the proposed records regulations 
are unclear, unnecessary, and will invite disputes about records.
    Response: Establishments are required to keep records of all 
labeling, along with the product formulation and processing procedures, 
as prescribed in 9 CFR 317.4, 317.5, 381.132, and 381.133. The proposal 
added the requirement that any additional documentation needed to 
support that the labels are consistent with the Federal meat and 
poultry regulations and policies on labeling also be kept. For example, 
in a situation where an establishment makes a ``no MSG'' claim, such 
documentation would include a sketch approval from the Agency. 
Furthermore, the product formulation is included on the application to 
verify the product is absent of the ingredient, which substantiates the 
validity of the claim.
    Comment: One commenter asked about the use of generic approval with 
egg products labels.
    Response: The use of generic approval with egg products labels is 
being considered in a separate rulemaking action.
    Comment: One commenter stated that the Cost Benefit Analysis (CBA) 
demonstrates that other types of agency cost-saving measures should be 
considered instead of generic label approval expansion, and that the 
costs of recalls to manufacturers and, especially, harm to consumers 
need to be calculated and considered for accurate analysis of the 
proposal.
    Response: The analysis summarized the likely reduction in the 
number of labels submitted to FSIS for evaluation because the proposed 
rule will enable the Agency to reallocate the staff hours from 
evaluating labels towards the development of labeling policy, the 
evaluation of new and novel labeling policy issues, and involvement in 
other food safety and consumer protection activities. There is no basis 
to believe that this action will either increase the number of recalls 
or harm consumers. Hence, there is no basis to include these costs in 
the CBA.

Executive Orders 12866 and 13563

    Executive Orders (EOs) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if a 
regulation is necessary, to select the regulatory approach that 
maximizes net benefits (including potential economic, environmental, 
public health and safety, and other advantages, 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 action has been reviewed for 
compliance with EOs 12866 and 13563.
    This rule has been designated a ``significant regulatory action,'' 
although not economically significant, under section 3(f) of EO 12866. 
Accordingly, the rule has been reviewed by the Office of Management and 
Budget.
    The Agency has estimated that this final rule will result in net 
benefits to consumers and establishments by expanding the types of 
labels that are approved generically under the FMIA and the PPIA.
    This final rule is consistent with regulatory retrospective efforts 
and E.O. 13563. The rule will be beneficial because it will streamline 
the generic labeling process, while imposing no additional cost burden 
on establishments. Consumers will benefit because industry will have 
the ability to introduce products to the marketplace more quickly. 
Moreover, the change will make better use of FSIS resources because it 
will reduce the number of labels required to be reviewed by the Agency.
    This final rule will expand the circumstances in which the labels 
of meat and poultry products will be deemed to be generically approved 
by FSIS and to combine the regulations that provide for the generic 
approval of labels for meat products into a new part 412 in Title 9, 
Chapter III, of the CFR. It is the next step in the Agency's gradual 
streamlining and modernizing of the prior label approval system.
    This final rule will reduce the number of labels evaluated by FSIS 
that only bear basic features (e.g., product name, ingredients 
statement, net weight) and the amount of paperwork filed by 
establishments with FSIS. These actions will improve the efficiency of 
the label approval system by streamlining the evaluation process for 
specific types of labels and making the label approval system more 
convenient and cost-effective for industry. As for consumers, this new 
process will enhance market efficiency by promoting a faster

[[Page 66834]]

introduction of new products into the marketplace to meet demand while 
not negatively affecting consumer protection from misbranded product.
    The analysis of benefits and costs below is the analysis from the 
proposed rule. FSIS received no updates suggesting that concrete 
modifications to the analysis were needed, and there have been no major 
data changes since the proposed rule was published in December 2011. 
However, data were updated for the discounted cost savings to reflect 
the corrected discount rate calculations at 7 percent and added the 
discounted rate calculations at 3 percent. In addition, the total 
number of labels developed and applied by establishments that do not 
require FSIS evaluation was updated to reflect a 1 percent growth 
factor. After reviewing the analysis from the proposed rule, FSIS has 
determined that it is still accurate.

I. Baseline

    Based on the Agency's Performance Based Inspection System 
databases, in 2011, there were about 6,099 Federal establishments. FSIS 
estimates that there were approximately 266,000 approved meat and 
poultry product labels used by these establishments. FSIS evaluated 
about 66,000 of them in 2010; the remaining 200,000 were approved under 
the Prior Label Approval System because they met the standards for 
generic approval.

II. Benefits

A. Industry

    This final rule will permit establishments to realize an estimated 
cost savings of a minimum of $10.1 million (discounted at 7 percent 
over a 10-year period) for generically approving about 584,486 
additional labels over a 10-year period at about $25 per label 
submission,\6\ or about $12.4 million (discounted at 3 percent over a 
10-year period. FSIS considers this estimate to be an upper bound, 
since some establishments may continue to submit generic labels, as 
defined by this final rule, for review. The annualized cost savings 
will be $1.9 million at 7 percent over 10 years, or $1.7 million at 3 
percent over 10 years. In the absence of this rule, establishments will 
not realize any cost savings because Federal regulations will continue 
to require establishments to submit a significant number of labels to 
the Labeling and Policy Development Staff (LPDS) for evaluation.\7\ 
Establishments will also realize an increase in the number of 
generically approved labels over a 10-year period under the final rule.
---------------------------------------------------------------------------

    \6\ The cost per label is the cost of submitting a label for 
review to FSIS, which averages about $25.00 per submission. This 
amount will be used as a proxy to estimate the cost savings to 
establishments that prepare their labels for review using FSIS Form 
7234-1 ``Application for approval of Labels, Markings, or Device'' 
and preparing a printer's proof of the label for evaluation and 
approval by LPDS.
    \7\ See Table 2.

                                                      Table 2--Estimated Establishment Cost Savings
                                                                    [In 2010 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Total number     Increase in    Total number
                                                           of labels       number of      of  labels      Total cost
                                                         developed and      labels       developed and      savings
                                                          applied by    developed  and    applied by    Col.(C) x *$25     To apply     Discounted total
                         Year                           establishments    applied by    establishments   from reduced   discount rate     cost savings
                                                          that do not   establishments  that would not   need for FSIS     of 7.00%     Col. (E) x Col.
                                                         require FSIS   that would not   require FSIS        label                            (F)
                                                          evaluation      require FSIS    evaluation      evaluation
                                                          before rule     evaluation      after rule
(A)                                                                (B)             (C)             (D)             (E)       (F)                     (G)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.....................................................         200,000               0         200,000              $0         1.00                   $0
1.....................................................         202,000          50,985         252,985       1,274,625         0.9346          1,191,265
2.....................................................         204,020          52,515         256,535       1,312,864         0.8734          1,146,655
3.....................................................         206,060          54,090         260,150       1,352,250         0.8163          1,103,841
4.....................................................         208,121          55,713         263,833       1,392,817         0.7629          1,062,580
5.....................................................         210,202          57,384         267,586       1,434,602         0.7130          1,022,871
6.....................................................         212,304          59,106         271,410       1,477,640         0.6663            984,551
7.....................................................         214,427          60,879         275,306       1,521,969         0.6227            947,730
8.....................................................         216,571          62,705         279,276       1,567,628         0.5820            912,359
9.....................................................         218,737          64,586         283,323       1,614,657         0.5439            878,212
10....................................................         220,924          66,524         287,448       1,663,097         0.5083            845,352
                                                       -------------------------------------------------------------------------------------------------
    Total.............................................       2,313,367         584,486       2,897,853      14,612,147  .............        10,095,417
--------------------------------------------------------------------------------------------------------------------------------------------------------
Description:
Col A: Estimate is for a 10-year period. Year ``0'' is the year before the enactment of the rule.
Col B: Total number of labels developed and applied by official establishments that do not currently require FSIS evaluation.
Col C: Increase in the number of labels generically developed and applied by establishments as a result of the rule (i.e., would not need FSIS
  evaluation.
Col D: Total number of labels developed and applied by establishments after the rule was enacted.
Col E: Total cost savings realized to establishments, using an estimated $25 as the cost per label submission to LPDS.
Col F: Discount rate of 7 percent.
Col G: Discount cost savings over 10 years.
Source: FSIS Policy Analysis Staff Calculations.

    Because fewer labels will need to be submitted to the Agency for 
evaluation, establishments will realize a cost savings because they 
will no longer need to incur costs to have certain types of labels 
evaluated by FSIS. Establishments have the option to continue 
submitting labels for review. FSIS believes that large and some small 
establishments will voluntarily use generic labeling. Some small and 
very small establishments will continue to

[[Page 66835]]

submit labels without a special statement or claim for review. FSIS 
believes that the number of labels that will continue to be submitted 
for review will be minimal.

B. Agency

    The final rule will reduce the number of labels submitted to FSIS 
for evaluation and enable the Agency to reallocate the staff hours from 
evaluating labels towards the development of labeling policy, the 
evaluation of new and novel labeling policy issues, and involvement in 
other food safety and consumer protection activities. The final rule 
will streamline the approval process by amending the regulations to 
provide that, except in certain specified circumstances, the label of a 
meat or poultry product is deemed to be approved generically.

                                                          Table 3--Estimated FSIS Cost Savings
                                                                    [In 2010 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Total number    Total number
                                           of labels       of labels     Annual salary   Annual salary
                                         evaluated and   evaluated and    cost ($) of     cost ($) of    Annual salary     To apply     Discounted cost
                 Year                     approved by     approved by      LPDS \1\        LPDS \2\       difference    discount rate   savings (F)*(G)
                                         LPDS  before     LPDS  after     before rule     after rule        (D)-(E)        of 7.00%
                                             rule            rule
(A)                                                (B)             (C)             (D)             (E)             (F)        (G)                    (H)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.....................................          66,061          66,061         538,710         538,710               0          1.00                  $0
1.....................................          68,980          16,995         554,871         134,677         420,194          0.935            392,705
2.....................................          70,019          17,505         571,517         138,717         432,800          0.873            378,024
3.....................................          72,120          18,030         588,663         142,879         445,784          0.816            363,893
4.....................................          74,284          18,571         606,323         147,165         459,158          0.763            350,289
5.....................................          76,512          19,128         624,513         151,580         472,932          0.713            337,194
6.....................................          78,807          19,702         643,248         156,128         487,120          0.666            324,589
7.....................................          81,172          20,293         662,545         160,811         501,734          0.623            312,455
8.....................................          83,607          20,902         682,422         165,636         516,786          0.582            300,774
9.....................................          86,115          21,529         702,894         170,605         532,290          0.544            289,530
10....................................          88,698          22,175         723,981         175,723         548,258          0.508            278,707
                                       -----------------------------------------------------------------------------------------------------------------
    Total.............................         845,315         260,829       6,899,688       2,082,631       4,817,057  .............          3,328,160
--------------------------------------------------------------------------------------------------------------------------------------------------------
Description:
Col A: Estimate is for a 10 year period. Year ``0'' is the year before the enactment of the rule.
Col B: Total number of labels evaluated and approved by LPDS prior to rule enactment assuming a 3 percent growth factor.
Col C: Total number of labels evaluated and approved by LPDS after rule enactment, assuming a 3 percent growth factor.
Col D: Annual salary cost of LPDS staff who evaluate labels, prior to enactment of rule, assuming a 3 percent growth factor.
Col E: Annual salary cost of LPDS personnel who evaluates labels, after rule enactment, assuming a 3 percent growth factor.
Col F: Annual salary difference between salary before rule enactment and after rule enactment, assuming a 3 percent growth factor.
Col G: Discount rate of 7 percent.
Col H: Discount cost savings.
Footnotes:
\1\ Total salary is based on a staff of 11 personnel paid at the average rate of a GS-13, step 4 of $47.09 per hour: 11 staff persons would review
  labels at a cost of $538,710 per year ($47.09 an hour x 4 hours a day x 11 persons x 5 days a week = $10,359.80. $10,359.80 x 52 weeks = $538,710).
\2\ Total salary is based on a staff of 11 personnel paid at the average rate of a GS-13, step 4 at $47.09 per hour: 11 staff persons would review
  labels at a cost of $134,677.40 per year ($47.09 an hour x 1 hour a day x 11 persons x 5 days a week = $2,589.95 x 52 weeks = $134,677.40.
Source: FSIS Policy Analysis Staff calculations.

    Currently (represented as year 0), FSIS reviews 66,000 labels. In 
years 1-10 (with year 1 representing the beginning of implementation), 
FSIS is expected to experience a 69 percent reduction in the volume of 
labels submitted for evaluation. Small and very small establishments 
may continue to send labels in for review for minor changes. While FSIS 
prioritizes its workload, establishments may commence to market their 
products with the labels that are submitted for review, which will not 
affect the Agency projected cost savings. FSIS will evaluate labels and 
labeling for one hour per day, five days a week, as a result of the 
reduction in the volume of labels or labeling submitted to FSIS due to 
this final rule. Thus, it will permit the Agency to realize an 
estimated discounted cost savings of $3.3 million over 10 years,\8\ at 
a 7 percent discount rate or $4.1 million over 10 years at a 3 percent 
discount rate. FSIS also considers this estimate to be an upper bound 
because, as mentioned before, some establishments may continue to 
submit labels to FSIS for review that would qualify as generic under 
this final rule. The annualized cost savings will be $641 thousand at 7 
percent over 10 years and $548 thousand at 3 percent over 10 years. 
FSIS is expected to review a total of 260,890 labels under the rule as 
compared with 845,315 under the current system.\9\ This cost savings 
from fewer staff hours being allocated towards label evaluation can be 
redirected towards other food safety and consumer protection 
activities.
---------------------------------------------------------------------------

    \8\ See Table 3.
    \9\ Ibid.
---------------------------------------------------------------------------

III. Costs

    This final rule will not impose any new costs on meat and poultry 
establishments that submit labels for review to FSIS and it minimizes 
the regulatory burden on establishments that submit labels for review. 
The final rule does not change the requirement that establishments 
maintain copies of all labeling records, along with the product 
formulations and a description of the processing procedures used to 
formulate the products in accordance with 9 CFR 320.2 and part 381, 
subpart Q. These labeling records must be made available to any 
authorized Agency official within 24 hours upon request.

[[Page 66836]]

    The final rule also does not impose any additional cost burden on 
establishments because first, establishments are already applying 
generically approved labels and maintaining all labeling records, and 
second, establishments are experienced in submitting labels to FSIS for 
evaluation. The cost of label design and products is not a part of this 
final rule.

IV. Overview

    This final rule is beneficial because it streamlines the generic 
label approval process, while imposing no additional cost burden on 
establishments or the Agency. FSIS estimates that establishments will 
realize a discounted cost savings of $10.1 million as a result of their 
ability to generically approve an additional 584,486 labels over a 10-
year period (discounted at 7 percent) or $12.4 million over a 10-year 
period (discounted at 3 percent). Furthermore, the Agency will realize 
a discounted cost savings of $3.3 million for evaluating 584,486 fewer 
labels over a 10-year period (discounted at 7 percent) or 4.1 million 
over 10 years (discounted at 3 percent). This cost savings in fewer 
staff hours being spent evaluating labels can be redirected towards 
other Agency initiatives. The annualized cost savings will be $2.58 
million ($1.9 million for establishment + $641 thousand for the Agency) 
at 7 percent over 10 years or $2.21 million ($1.7 million + $548 
thousand) at 3 percent over 10 years. These costs savings estimates 
should be considered an upper bound, as described earlier. Therefore, 
the net benefit derived from the final rule is $13.4 million ($10.1 
million in establishment savings plus $3.3 million in Agency savings), 
discounted at 7 percent over a 10-year period or $16.5 million ($12.4 
million in establishment savings plus $4.1 million, in Agency savings), 
discounted at 3 percent, over a 10-year period.

Regulatory Flexibility Analysis

    The FSIS Administrator certifies that for the purpose of the 
Regulatory Flexibility Act (5 U.S.C. 601-602), the final rule will not 
have a significant economic impact on a substantial number of small 
entities. The final changes will affect those entities in the United 
States that submit labels for review to FSIS. There are 6,099 meat and 
poultry establishments that could possibly be affected by this rule 
since all are eligible to submit labels for review and 12 small label 
consulting firms that are involved in various labeling activities, such 
as submitting labels to FSIS for evaluation on the behalf of meat and 
poultry establishments. Of the 6,099 establishments, there are about 
2,616 small federally inspected establishments (with more than 10 but 
less than 500 employees) and 3,103 very small establishments (with 
fewer than 10 employees) based on HACCP Classification. Therefore, a 
total of 5,719 small and very small establishments could be affected by 
this rule. These small and very small establishments, like the large 
establishments, will be able to generically approve labels as long as 
there are no special claims on the labels. Small entities will not be 
disadvantaged because the final rule will minimize the regulatory 
burden on all establishments. The final rule will not have a 
significant impact on a substantial number of label consulting firms. 
Since the expanded use of generically approved labels in 1995, these 
firms have modified their consulting services to specialize in certain 
policy areas, e.g., the production and labeling of organic products and 
animal production raising practices. Therefore, the Agency believes 
that the final rule will not have a significant economic impact on a 
substantial number of small entities (establishments and labeling 
consulting firms).

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule: (1) Preempts State and local laws and 
regulations that are inconsistent with this rule; (2) has no 
retroactive effect; and (3) does not require administrative proceedings 
before parties may file suit in court challenging this rule except as 
discussed below.

Executive Order 13175

    This final rule has been reviewed in accordance with the 
requirements of Executive Order 13175, Consultation and Coordination 
with Indian Tribal Governments. The review reveals that this regulation 
will not have substantial and direct effects on Tribal governments and 
will not have significant Tribal implications.

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, or audiotape) 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 final rule online through the FSIS Web page 
located at https://www.fsis.usda.gov/wps/portal/fsis/topics/regulations/federal-register/interim-and-final-rules.
    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/wps/portal/fsis/programs-and-services/email-subscription-service. 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.

Paperwork Requirements

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501, et seq.), the information collection requirement associated with 
this final rule on generic label approval has been submitted for 
approval to OMB.
    FSIS is expanding the circumstances in which FSIS will generically 
approve the labels of meat and poultry products. Under this final rule, 
more official and foreign establishments will be able to use the 
generic approval of product labels. As a result, fewer sketch labels 
will need to be submitted and evaluated by FSIS.
    This information collection, after it is approved by OMB, will be 
merged with 0583-0092, Marking, Labeling, and Packaging. The merged 
information collection will result in a net reduction of 34,971 burden 
hours because of the

[[Page 66837]]

increased use of generic labeling resulting in fewer label submissions 
to FSIS.

E-Government Act

    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.
    Having proceeded with this rulemaking, the Agency is now able to 
accept the electronic submission of requests for the evaluation of 
claims or special statements, which will significantly streamline the 
approval process.

List of Subjects in 9 CFR Parts 317, 318, 320, 327, 331, 381, 412, 
and 424

    Food labeling, Food packaging, Meat inspection, Poultry and poultry 
products, Reporting and recordkeeping requirements.
    For the reasons discussed in the preamble, FSIS is amending 9 CFR 
Chapter III, as follows:

PART 317--LABELING, MARKING DEVICES, AND CONTAINERS

0
1. The authority citation for part 317 continues to read as follows:

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


Sec. Sec.  317.4 and 317.5  [Removed and Reserved]


0
2. Sections 317.4 and 317.5 are removed and reserved.


0
3. In Sec.  317.8, revise paragraph (b)(32)(ii) to read as follows:


Sec.  317.8  False or misleading labeling or practices generally; 
specific prohibitions and requirements for labels and containers.

* * * * *
    (b) * * *
    (32) * * *
    (ii) Immediately adjacent to the calendar date there must be a 
phrase explaining the meaning of the date, in terms of ``packing'' 
date, ``sell by'' date, or ``use before'' date, with or without a 
further qualifying phrase, e.g., ``For Maximum Freshness'' or ``For 
Best Quality.''
* * * * *

PART 318--ENTRY INTO OFFICIAL ESTABLISHMENTS; REINSPECTION AND 
PREPARATION OF PRODUCTS

0
4. The authority citation for part 318 continues to read as follows:

    Authority:  7 U.S.C. 138, 450, 1901-1906; 21 U.S.C. 601-695; 7 
CFR 2.18, 2.53.


0
5. In Sec.  318.4, revise paragraph (f) introductory text to read as 
follows:


Sec.  318.4  Preparation of products to be officially supervised; 
responsibilities of official establishments; plant operated quality 
control.

* * * * *
    (f) Labeling Logo. Owners and operators of official establishments 
having a total plant quality control system approved under the 
provisions of paragraph (c) of this section may only use, as a part of 
any label, the following logo.
* * * * *

PART 320--RECORDS, REGISTRATION, AND REPORTS

0
6. The authority citation for part 320 continues to read as follows:

    Authority:  21 U.S.C. 601-695; 7 CFR 2.7, 2.18, 2.53.


0
7. In Sec.  320.1, revise paragraph (b)(11) to read as follows:


Sec.  320.1  Records required to be kept.

* * * * *
    (b) * * *
    (11) Records of labeling, product formulas, processing procedures, 
and any additional documentation needed to show that the labels are 
consistent with the Federal meat and poultry regulations and policies 
on labeling, as prescribed in Sec.  412.1 of this chapter.

PART 327--IMPORTED PRODUCTS

0
8. The authority citation for part 327 continues to read as follows:

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


0
9. In Sec.  327.14, revise paragraph (c) to read as follows:


Sec.  327.14  Marking of products and labeling of immediate containers 
thereof for importation.

* * * * *
    (c) All marks and other labeling for use on or with immediate 
containers, as well as private brands on carcasses or parts of 
carcasses, must be approved by the Food Safety and Inspection Service 
in accordance with part 412 of this chapter before products bearing 
such marks, labeling, or brands will be entered into the United States. 
The marks of inspection of foreign systems embossed on metal containers 
or branded on carcasses or parts thereof need not be submitted to the 
Food Safety and Inspection Service for approval, and such marks of 
inspection put on stencils, box dies, labels, and brands may be used on 
such immediate containers as tierces, barrels, drums, boxes, crates, 
and large-size fiberboard containers of foreign products without such 
marks of inspection being submitted for approval, provided the markings 
made by such articles are applicable to the product and are not false 
or misleading.

PART 331--SPECIAL PROVISIONS FOR DESIGNATED STATES AND TERRITORIES; 
AND FOR DESIGNATION OF ESTABLISHMENTS WHICH ENDANGER PUBLIC HEALTH 
AND FOR SUCH DESIGNATED ESTABLISHMENTS

0
10. The authority citation for part 331 is revised to read as follows:

    Authority:  21 U.S.C. 601-695; 7 CFR 2.17, 2.53.


0
11. Amend Sec.  331.3 by revising paragraphs (e) introductory text, 
(e)(1), and (e)(3) to read as follows:


Sec.  331.3  States designated under paragraph 301(c) of the Act; 
application of regulations.

* * * * *
    (e) Sections 316.7, 317.3, and 412.1 of this chapter apply to such 
establishments, except as provided in this paragraph (e).
    (1) The operator of each such establishment will, prior to the 
inauguration of inspection, identify all labeling and marking devices 
in use, or proposed for use, (upon the date of inauguration of 
inspection) to the Front Line Supervisor of the circuit in which the 
establishment is located. Temporary approval, pending formal approval 
under Sec. Sec.  316.7, 317.3, and 412.1 of this chapter, will be 
granted by the Front Line Supervisor for labeling and marking devices 
that he determines are neither false nor misleading, provided the 
official inspection legend bearing the official establishment number is 
applied to the principal display panel of each label, either by a 
mechanical printing device or a self-destructive pressure sensitive 
sticker, and provided the label shows the true product name, an 
accurate ingredient statement, the name and address of the 
manufacturer, packer, or distributor, and any other features required 
by section 1(n) of the Act.
* * * * *
    (3) The operator of the official establishment shall promptly 
forward a copy of each item of labeling and a description of each 
marking device for which temporary approval has been granted by the 
Front Line Supervisor (showing any modifications required by the Front 
Line Supervisor) to the FSIS Labeling and Program Delivery Staff,

[[Page 66838]]

accompanied by the formula and details of preparation and packaging for 
each product. Within 90 days after inauguration of inspection, all 
labeling material and marking devices temporarily approved by the Front 
Line Supervisor must receive approval as required by Sec. Sec.  316.7, 
317.3, and 412.1 of this chapter, or their use must be discontinued.
* * * * *

PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS

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

    Authority:  7 U.S.C. 138f, 450, 1901-1906; 21 U.S.C. 451-470; 7 
CFR 2.18, 2.53.


0
13. Amend Sec.  381.129 by revising paragraphs (b)(6)(i) and (c)(2) to 
read as follows:


Sec.  381.129  False or misleading labeling or containers.

* * * * *
    (b) * * *
    (6)(i) A raw poultry product whose internal temperature has ever 
been below 26[emsp14][deg]F may not bear a label declaration of 
``fresh.'' A raw poultry product bearing a label declaration of 
``fresh'' but whose internal temperature has ever been below 
26[emsp14][deg]F is mislabeled. The temperature of individual packages 
of raw poultry product within an official establishment may deviate 
below the 26[emsp14][deg]F standard by 1 degree (i.e., have a 
temperature of 25[emsp14][deg]F) and still be labeled ``fresh.'' The 
temperature of individual packages of raw poultry product outside an 
official establishment may deviate below the 26[emsp14][deg]F standard 
by 2 degrees (i.e., have a temperature of 24[emsp14][deg]F) and still 
be labeled ``fresh.'' The average temperature of poultry product lots 
of each specific product type must be 26[emsp14][deg]F. Product 
described in this paragraph is not subject to the freezing procedures 
required in Sec.  381.66(f)(2) of this subchapter.
* * * * *
    (c) * * *
    (2) Immediately adjacent to the calendar date will be a phrase 
explaining the meaning of such date in terms of ``packing'' date, 
``sell by'' date, or ``use before'' date, with or without a further 
qualifying phrase, e.g., ``For Maximum Freshness'' or ``For Best 
Quality.''
* * * * *


Sec. Sec.  381.132 and 381.133  [Removed and Reserved]


0
14. Sections 381.132 and 381.133 are removed and reserved.


0
15. In Sec.  381.145, revise paragraph (f) introductory text to read as 
follows:


Sec.  381.145  Poultry products and other articles entering or at 
official establishments; examination and other requirements.

* * * * *
    (f) Labeling Logo. Owners and operators of official establishments 
having a total plant quality control system approved under the 
provisions of paragraph (c) of this section may only use, as a part of 
any label, the following logo.
* * * * *


0
16. In Sec.  381.175, revise paragraph (b)(6) to read as follows:


Sec.  381.175  Records required to be kept.

* * * * *
    (b) * * *
    (6) Records of all labeling, along with the product formula, 
processing procedures, and any additional documentation needed to 
support that the labels are consistent with the Federal meat and 
poultry regulations and policies on labeling, as prescribed in Sec.  
412.1 of this chapter.


0
17. In Sec.  381.205, revise paragraph (c) to read as follows:


Sec.  381.205  Labeling of immediate containers of poultry products 
offered for entry.

* * * * *
    (c) All marks and other labeling for use on or with immediate 
containers must be approved for use by the Food Safety and Inspection 
Service in accordance with part 412 of this chapter before products 
bearing such marks and other labeling will be permitted for entry into 
the United States.


0
18. In Sec.  381.222, revise paragraph (d) to read as follows:


Sec.  381.222  States designated under paragraph 5(c) of the Act; 
application of regulations.

* * * * *
    (d) Subpart N of this part shall apply to such establishments 
except as provided in this paragraph (d).
    (1) The operator of each such establishment shall, prior to the 
inauguration of inspection, identify all labeling and marking devices 
in use, or proposed for use (upon the date of inauguration of 
inspection) to the Front Line Supervisor in which the establishment is 
located. Temporary approval, pending formal approval under Sec.  412.1 
of this chapter, will be granted by the Front Line Supervisor for 
labeling and marking devices that he determines are neither false nor 
misleading, provided the official inspection legend bearing the 
official establishment number is applied to the principal display panel 
of each label, either by a mechanical printing device or a self-
destructive pressure sensitive sticker, and provided the label shows 
the true product name, an accurate ingredient statement, the name and 
address of the manufacturer, packer, or distributor, and any other 
features required by section 4(h) of the Act.
    (2) The Front Line Supervisor will forward one copy of each item of 
labeling and a description of each marking device for which he has 
granted temporary approval to the FSIS Labeling and Program Delivery 
Staff and will retain one copy in a temporary approval file for the 
establishment.
    (3) The operator of the official establishment shall promptly 
forward a copy of each item of labeling and a description of each 
marking device for which temporary approval has been granted by the 
Front Line Supervisor (showing any modifications required by the Front 
Line Supervisor) to the FSIS Labeling and Program Delivery Staff at 
headquarters, accompanied by the formula and details of preparation and 
packaging for each product. Within 90 days after inauguration of 
inspection, all labeling material and marking devices temporarily 
approved by the Front Line Supervisor must receive approval as required 
by Sec.  412.1 or their use must be discontinued.
    (4) The Front Line Supervisor will also review all shipping 
containers to ensure that they do not have any false or misleading 
labeling and are otherwise not misbranded. Modifications of 
unacceptable information on labeling material by the use of pressure 
sensitive tape of a type that cannot be removed without visible 
evidence of such removal, or by blocking out with an ink stamp will be 
authorized on a temporary basis to permit the maximum allowable use of 
all labeling materials on hand. All unacceptable labeling material 
which is not modified to comply with the requirements of the 
regulations must be destroyed or removed from the official 
establishment.
* * * * *

0
19. Add part 412 to subchapter E to read as follows:

PART 412--LABEL APPROVAL

Sec.
412.1 Label approval.
412.2 Approval of generic labels.

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

[[Page 66839]]

Sec.  412.1  Label approval.

    (a) No final label may be used on any product unless the label has 
been submitted for approval to the FSIS Labeling and Program Delivery 
Staff, accompanied by FSIS Form 7234-1, Application for Approval of 
Labels, Marking, and Devices, and approved by such staff, except for 
generically approved labels authorized for use in Sec.  412.2. The 
management of the official establishment or establishment certified 
under a foreign inspection system, in accordance with parts 327 and 
381, subpart T, must maintain a copy of all labels used, in accordance 
with parts 320 and 381, subpart Q, of this chapter. Such records must 
be made available to any duly authorized representative of the 
Secretary upon request.
    (b) All labels required to be submitted for approval as set forth 
in paragraph (a) of this section will be submitted to the FSIS Labeling 
and Program Delivery Staff. A parent company for a corporation may 
submit only one label application for a product produced in other 
establishments that are owned by the corporation.
    (c) The Food Safety and Inspection Service requires the submission 
of labeling applications for the following:
    (1) Sketch labels as defined in paragraph (d) of this section for 
products which are produced under a religious exemption;
    (2) Sketch labels for products for foreign commerce whose labels 
deviate from FSIS regulations, with the exception of printing labels in 
foreign language or printing labels that bear a statement of the 
quantity of contents in accordance with the usage of the country to 
which exported as described in Sec.  317.7 and part 381, subpart M of 
this chapter.
    (3) Special statements and claims as defined in paragraph (e) of 
this section and presented in the context of a final label.
    (4) Requests for the temporary use of final labels as prescribed in 
paragraph (f) of this section.
    (d) A ``sketch'' label is the concept of a label. It may be a 
printer's proof or equivalent that is sufficiently legible to clearly 
show all labeling features, size, and location. The Food Safety and 
Inspection Service will accept sketches that are hand drawn or computer 
generated, or other reasonable facsimiles that clearly reflect and 
project the final version of the label.
    (e) ``Special statements and claims'' are claims, logos, 
trademarks, and other symbols on labels that are not defined in the 
Federal meat and poultry products inspection regulations or the Food 
Standards and Labeling Policy Book, (except for ``natural'' and 
negative claims (e.g., ``gluten free'')), health claims, ingredient and 
processing method claims (e.g., high-pressure processing), structure-
function claims, claims regarding the raising of animals, organic 
claims, and instructional or disclaimer statements concerning pathogens 
(e.g., ``for cooking only'' or ``not tested for E. coli O157:H7''). 
Examples of logos and symbols include graphic representations of hearts 
and geographic landmarks. Special statements and claims do not include 
allergen statements (e.g., ``contains soy'') applied in accordance with 
the Food Allergen Labeling and Consumer Protection Act.
    (f)(1) Temporary approval for the use of a final label that may be 
deemed deficient in some particular may be granted by the FSIS Labeling 
and Program Delivery Staff. Temporary approvals may be granted for a 
period not to exceed 180 calendar days, under the following conditions:
    (i) The proposed label would not misrepresent the product;
    (ii) The use of the label would not present any potential health, 
safety, or dietary problems to the consumer;
    (iii) Denial of the request would create undue economic hardship; 
and
    (iv) An unfair competitive advantage would not result from the 
granting of the temporary approval.
    (2) Extensions of temporary approvals may also be granted by the 
FSIS Labeling and Program Delivery Staff provided that the applicant 
demonstrates that new circumstances, meeting the above criteria, have 
developed since the original temporary approval was granted.


Sec.  412.2  Approval of generic labels.

    (a)(1) An official establishment, or an establishment certified 
under a foreign inspection system in accordance with part 327, or part 
381, subpart T of this chapter, is authorized to use generically 
approved labels, as defined in paragraph (b) of this section, and thus 
is free to use such labels without submitting them to the Food Safety 
and Inspection Service for approval, provided the label, in accordance 
with this section, displays all mandatory features in a prominent 
manner in compliance with part 317 or part 381, and is not otherwise 
false or misleading in any particular.
    (2) The Food Safety and Inspection Service will select samples of 
generically approved labels from the records maintained by official 
establishments and establishments certified under foreign inspection 
systems, in accordance with part 327 or part 381, subpart T, to 
determine compliance with label requirements. If the Agency finds that 
an establishment is using a false or misleading label, it will 
institute the proceedings prescribed in Sec.  500.8 of this chapter to 
revoke the approval for the label.
    (b) Generically approved labels are labels that bear all applicable 
mandatory labeling features (i.e., product name, safe handling 
statement, ingredients statement, the name and place of business of the 
manufacturer, packer or distributor, net weight, legend, safe handling 
instructions, and nutrition labeling) in accordance with Federal 
regulations. Labels that bear claims and statements that are defined in 
FSIS's regulations or the Food Standards and Labeling Policy Book 
(except for natural and negative claims), such as a statement that 
characterizes a product's nutrient content, such as ``low fat,'' has 
geographical significance, such as ``German Brand,'' or makes a country 
of origin statement on the label of any meat or poultry product 
``covered commodity'',\1\ and that comply with those regulations are 
also deemed to be generically approved by the Agency without being 
submitted for evaluation and approval. Allergen statements (e.g., 
``contains soy'') applied in accordance with the Food Allergen Labeling 
and Consumer Protection Act are also deemed generically approved.
---------------------------------------------------------------------------

    \1\ See 9 CFR 317.8(b)(40) and 381.129(f).
---------------------------------------------------------------------------

PART 424--PREPARATION AND PROCESSING PROCEDURES

0
20. The authority citation for part 424 continues to read as follows:

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


0
21. In Sec.  424.21, revise footnote 3 in the table in paragraph (c) to 
read as follows:


Sec.  424.21  Use of food ingredients and sources of radiation.

* * * * *
    (c) * * *
    \3\ Provided that its use is functional and suitable for the 
product and it is permitted for use at the lowest level necessary to 
accomplish the desired technical effect as determined in specific cases 
prior to label approval under part 412 of this chapter.
* * * * *


0
22. In Sec.  424.22, revise paragraph (c)(4)(i) introductory text to 
read as follows:


Sec.  424.22  Certain other permitted uses.

* * * * *
    (c) * * *
    (4) * * *

[[Page 66840]]

    (i) The labels on packages of meat food and poultry products 
irradiated in their entirety, in conformance with this section and with 
21 CFR 179.26(a) and (b), must bear the logo shown at the end of this 
paragraph. Unless the word ``Irradiated'' is part of the product name, 
labels also must bear a statement such as ``Treated with radiation'' or 
``Treated by irradiation.'' The logo must be placed in conjunction with 
the required statement, if the statement is used. The statement is not 
required to be more prominent than the declaration of ingredients 
required under Sec.  317.2(c)(2) of this chapter.
* * * * *

    Done in Washington, DC on: November 1, 2013.
Alfred V. Almanza,
Administrator.
[FR Doc. 2013-26639 Filed 11-6-13; 8:45 am]
BILLING CODE 3410-DM-P