The Regulatory Plan

DEPARTMENT OF AGRICULTURE (USDA)

Statement of Regulatory Priorities

The Department of Agriculture will implement the recently enacted Farm Security and Rural Investment Act of 2002 (Farm Bill) through the promulgation of regulations to ensure the viability of the Nation's domestic farm economy and promote and maintain the world's safest, most abundant, and most affordable food supply. USDA is also actively engaged in the Nation's homeland security and will promulgate regulations that protect the food supply from all sources of potential threats.

Farm Bill implementation will be a high priority in 2003 as new regulations are issued and farmers, ranchers, and other USDA customers participate in new and existing Federal farm programs over the next 6 years through direct payments, counter-cyclical payments, and marketing loans. While the Farm Bill and other future legislative initiatives are implemented, the Department is working to reduce the regulatory burden on program participants through focusing as much as possible on outcome-based regulation through implementing more efficient and simplified information collections and the continued migration to efficient electronic services and capabilities.

 USDA will develop new regulations and review existing ones that address the potential threats posed by domestic outbreaks of exotic animal diseases such as Foot-and-Mouth Disease (FMD) and Bovine Spongiform Encephalopathy (BSE).

 In the area of food safety, the Department will continue to refine existing regulations to assist industry in implementing a consistent, science-based process control system that yields the best outcomes. Further, USDA is developing new regulations that address emerging and exotic threats to the safety of the Nation's meat, poultry, and egg products supply.

 The Department is also improving regulations that serve rural communities. Regulations are being streamlined and simplified so that they will be more customer friendly, while providing for more efficient and effective program management.

 Nutrition programs are being improved to strengthen dietary quality for children and low-income participants, while also improving the efficiency and integrity of program operations.

Reducing Paperwork Burden on Farmers

The Department has made substantial progress in implementing the goal of the Paperwork Reduction Act of 1995 to reduce the burden of information collection on the public. The Government Paperwork Elimination Act (GPEA) is leading all agencies in the Department to evaluate how they conduct business and migrate toward electronically oriented methods. The Farm Service Agency, Natural Resources Conservation Service, Rural Development, and Risk Management Agency are also working to implement the Freedom to E-File Act. Freedom to E-File directs the agencies, to the maximum extent practicable, to modify forms into user-friendly formats with user instructions and permits those forms to be downloaded and submitted via facsimile, mail, or similar means. As a result, producers should have the capability to electronically file forms and all other documentation if they so desire. Underlying these efforts will be analyses to identify and eliminate redundant data collections and streamline collection instructions. The end result of implementing both of these pieces of legislation will be better service to our customers so that they can choose when and where to conduct business with USDA.

The Role of Regulations

The programs of the Department are diverse and far reaching, as are the regulations that attend their delivery. Regulations codify how the Department will conduct its business, including the specifics of access to, and eligibility for, USDA programs. Regulations also specify the responsibilities of State and local governments, private industry, businesses, and individuals that are necessary to comply with their provisions.

The diversity in purpose and outreach of our programs contributes significantly to the USDA being near the top of the list of departments that produce the largest number of regulations annually. These regulations range from nutrition standards for the school lunch program, to natural resource and environmental measures governing national forest usage and soil conservation, to regulations protecting American agribusiness (the largest dollar value contributor to exports) from the ravages of domestic or foreign plant or animal pestilence, and they extend from farm to supermarket to ensure the safety, quality, and availability of the Nation's food supply.

Many regulations function in a dynamic environment, which requires their periodic modification. The factors determining various entitlement, eligibility, and administrative criteria often change from year to year. Therefore, many significant regulations must be revised annually to reflect changes in economic and market benchmarks.

Almost all legislation that affects departmental programs has accompanying regulatory needs, often with a significant impact. The Farm Security and Rural Investment Act of 2002, Public Law 107-171, has had considerable regulatory consequences. This key legislation affects most agencies of USDA and resulted in the addition of new programs, the deletion of others, and modification to still others. In addition, the Agricultural Risk Protection Act of 2000, Public Law 106-224, provides further assurances that agricultural programs will continue to achieve long-term improvements, particularly in reforms to the crop insurance programs. This legislation also provides for improvements in market loss and conservation assistance, crop and livestock disease pest protection, marketing program enhancements, child nutrition program measures, pollution control, and research and development for biomass.

Major Regulatory Priorities

Seven agencies are represented in this regulatory plan as well as the Rural Development mission area. They include the Farm Service Agency, the Food and Nutrition Service, the Food Safety and Inspection Service, the Animal and Plant Health Inspection Service, the Agricultural Marketing Service, the Natural Resources Conservation Service, and the Rural Housing Service. This document represents summary information on prospective significant regulations as called for in Executive Order 12866. A brief comment on each of the seven agencies and Rural Development appears below, which summarizes the Agency mission and its key regulatory priorities. The Agency summaries are followed by the regulatory plan entries.

Farm Service Agency

Mission: The Farm Service Agency's (FSA) mission is to stabilize farm income; to assist owners and operators of farms and ranches to conserve and enhance soil, water, and related natural resources; to provide credit to new or existing farmers and ranchers who are temporarily unable to obtain credit from commercial sources; and to help farm operations recover from the effects of disaster, as prescribed by various statutes.

Priorities: FSA's priority for 2003 will be to fully implement the new Farm Bill, the Farm Security and Rural Investment Act of 2002. The 2002 Farm Bill, which was enacted on May 13, 2002, governs Federal farm programs for the next 6 years. Among its major provisions is to provide income support for wheat, feed grains, upland cotton, rice, and oilseeds through three programs: Direct payments, counter-cyclical payments, and marketing loans. Support for peanuts is changed from a price support program with marketing quotas to a program with marketing loans, counter-cyclical payments, direct payments, and a quota buyout. These are entirely new programs that require complete revision of the existing program regulations. FSA will develop and issue the regulations and make program funds available to eligible clientele in as timely a manner as possible. As these and future changes required by Administration initiatives and new legislation are made, the Agency's focus will be to implement the changes in such a way as to provide benefits while minimizing program complexity and regulatory burden for program participants. Opportunities will be taken to clarify, simplify, and reduce confusion whenever possible. However, the Agency's ability to promote new policy initiatives when implementing these regulations is limited, due to the need to adhere to legislative intent. Therefore, due to their economic magnitude, they are noted here to acknowledge their significance in the overall USDA regulatory plan but are not further listed in the body of the plan that appears below.

The 2002 Farm Bill exempts most of the new programs from the requirements of the Paperwork Reduction Act of 1995. However, FSA is still committed to the Act's goal of reducing the information collection burden on the public. New information collections are being designed to minimize our customers' time and cost to participate in the programs, while maintaining program integrity. In addition, FSA is streamlining its existing farm loan-making and servicing regulations and reducing the information collection burden associated with the programs. FSA plans to reduce the number of CFR parts containing its farm loan program regulations by approximately 70 percent. FSA also hopes to achieve a significant reduction in the total number of CFR pages by removing administrative provisions and internal policy and eliminating duplicative material. Furthermore, FSA intends to improve the clarity of the farm loan program regulations by following the guidelines established in the Plain Language in Government Writing Initiative.

As part of this project, all farm loan program regulations and internal Agency directives will be completely rewritten.

FSA has completed the streamlining of the Guaranteed Loan Program, the Indian Tribal Land Acquisition Loan Program, the Emergency Loan Program, and portions of the Direct Loan Program. The balance of the Direct Loan Program will be published in two separate rulemaking packages. Two proposed rules, one streamlining the loan-making process for farm ownership and operating loans and servicing of direct loans and another streamlining special loan programs, including boll weevil eradication, drainage and irrigation, and grazing association, will be published by the end of 2002.

Finally, FSA continues to be a full participant in the USDA Electronic Access Initiative and continues to work with other USDA county-based agencies to implement the Government Paperwork Elimination Act as we migrate to an environment where a greater proportion of information exchange and transaction processing occurs through off-site alternatives. Key components include: Providing farm program information, availability, and eligibility requirements electronically; providing on-line information collection and transaction processing capability; and developing information collection and management partnerships to integrate information collection and sharing mechanisms among service providers. In a continuing effort to accomplish these goals, all FSA information collections, forms, and procedures are reviewed for their applicability to electronic submission and collection. FSA has identified and made accessible on-line approximately 143 forms used by farm program and farm loan program customer groups. Approximately 90 of these forms are available for electronic submission. The agency intends to provide full electronic access and submission capabilities to the commodity operations customer group by October 2003.

Food and Nutrition Service

Mission: FNS increases food security and reduces hunger in partnership with cooperating organizations by providing children and low-income people access to food, a healthful diet, and nutrition education in a manner that supports American agriculture and inspires public confidence.

Priorities: In addition to responding to provisions of legislation authorizing and modifying Federal nutrition assistance programs, FNS' 2003 regulatory plan supports the broad goals and objectives in the Agency's strategic plan, which include:

 Improved nutrition of children and low-income people. This goal represents FNS' efforts to improve nutrition by providing access to program benefits (Food Stamps, WIC food vouchers, school lunch, and other child nutrition programs and commodities), including nutrition education, quality meals, and other benefits. It includes three major objectives: 1) Improve food security, which reflects nutrition assistance benefits issued to program eligibles; 2) improve the healthfulness of program participants' food choices, which represents efforts to improve nutrition knowledge and behavior through nutrition education and breastfeeding promotion; and 3) improve nutritional quality of meals, food packages, commodities, and other program benefits, which represents efforts to ensure that program benefits meet appropriate nutrition standards and help to effectively improve nutritional intakes for program participants.

 In support of this goal, FNS plans to propose rules implementing provisions of the Farm Security and Rural Investment Act of 2002 (Pub. L. 107-171), as well as under other authorities, that will give States additional new flexibility by streamlining complex rules, simplifying program administration, supporting work, and improving access to benefits. This includes provisions to restore food stamp eligibility to certain legal immigrants who have lived in this country for at least 5 years, as well as immigrant children and disabled without a waiting period. Other changes will be implemented to reduce reporting burden on working families.

 The Agency also plans a proposed rule to amend regulations governing food packages provided in WIC to improve their variety and consistency with the Dietary Guidelines for Americans and to increase the nutritional adequacy of food packages for those with special medical needs.

 Improved Stewardship of Federal Funds. This goal represents FNS' ongoing commitment to maximize the accuracy of benefits issued, maximize the efficiency and effectiveness of program operations, and minimize participant and vendor fraud. It includes two major objectives: 1) Improved benefit accuracy and reduced fraud, which represents the Agency's effort to reduce participant and Agency errors and to control Food Stamp and WIC trafficking and participant, vendor, and administrative agency fraud and 2) improved efficiency of program administration, which represents the Agency's efforts to streamline program operations and improve program structures as necessary to maximize their effectiveness.

In support of this goal, FNS plans to propose rules implementing provisions of Public Law 107-171 that give States substantial new flexibility by streamlining some of the Food Stamp Program's complex rules, making it easier to administer, less error prone, and more accessible to those eligible for its benefits. Another proposed rule implementing this law will offer most States some relief from current sanction rules related to Food Stamp payment errors, allowing them to focus on program improvements, and will introduce new incentives to reward States for high performance on a variety of important program outcomes. FNS also plans to publish a final rule making changes in Child and Adult Care Food Program (CACFP) designed to improve management and financial integrity in this important program.

Food Safety and Inspection Service

Mission: The Food Safety and Inspection Service (FSIS) is responsible for ensuring that meat, poultry, and egg products in commerce are safe and not adulterated or misbranded.

Priorities: FSIS is reviewing its regulations to eliminate duplication of and inconsistency with its own and other agencies' regulations and to improve the consistency of the regulations with the Agency's pathogen reduction and hazard analysis and critical control point (PR/HACCP) regulations. HACCP is a science-based process control system for producing safe food products. FSIS-inspected meat and poultry establishments are required to develop and implement HACCP plans incorporating the controls the establishments have determined are necessary and appropriate to produce safe products. Under the HACCP regulations, the establishments are able to tailor their control systems to their particular needs and processes and to take advantage of the latest technological innovations.

FSIS is continuing to revise its numerous command-and-control regulations, which prescribe the exact means establishments must use to ensure the safety of their products. Some of these regulations specify precise time-and-temperature combinations for processing meat, poultry, or egg products. Others require the prior approval by FSIS of equipment and procedures, in effect assigning to the Agency the responsibility for determining the means used by establishments to comply with the regulations. As a general matter, such command-and-control regulations are incompatible with HAACP because they deprive plants of the flexibility to innovate and they undercut the clear delineation of responsibility for food safety.

In addition to undertaking regulatory amendments based on the results of its review activities, FSIS has been developing regulations for emergency use. Such regulations are an outcome of the Agency's proactive, risk-based policy toward emerging and exotic threats to the safety of the Nation's meat, poultry, and egg product supply.

Following are some of the Agency's recent and planned initiatives to convert command-and-control regulations to performance standards, to streamline and simplify the regulations, and to make the meat, poultry products, and egg products inspection regulations more consistent with the pathogen reduction and HACCP systems final rule:

FSIS has proposed a rule clarifying requirements for meat produced using advanced recovery systems by replacing the compliance program parameters in the current regulations with non-compliance program parameters in the current regulations with non-compliance criteria for bone solids, bone marrow, and neural tissue. Establishments would have to have process control procedures in place before labeling or using the product derived by use of such systems.

FSIS has proposed a rule to establish food safety performance standards for all processed ready-to-eat meat and poultry products and for partially heat-treated meat and poultry products that are not ready-to-eat.

FSIS will propose removing from the poultry products inspection regulations the requirement for ready-to-cook poultry products to be chilled to 40 degrees Fahrenheit or below within certain time periods according to the weight of the dressed carcasses.

In addition, FSIS will be proposing to require shell egg packers and federally inspected egg product plants to develop and implement HACCP systems and sanitation standard operating procedures. The Agency will be proposing pathogen reduction performance standards for pasteurized shell eggs and egg products. Further, the Agency will be proposing to remove requirements for approval by FSIS of egg-product plant drawings, specifications, and equipment prior to use, and to end the system for pre-marketing approval of labels for egg products.

Besides the foregoing initiatives, FSIS has proposed requirements for the nutrition labeling of ground or chopped meat and poultry products and single-ingredient products. This proposed rule would require nutrition labeling, on the label or at the point-of-purchase, for the major cuts of single ingredient, raw products and would require nutrition information on the label of ground or chopped products.

Finally, FSIS is planning to propose stand-by emergency procedures for dealing with any occurrences of bovine spongiform encephalopathy (BSE), known as mad-cow disease, to prevent any meat or meat products of animals affected by BSE from entering commerce. To date, no cases of BSE have been found in the United States herd. Any final rule that may be developed after the proposal would become effective when and if a native case of BSE is detected in the United States.

Post-September 11, 2001, initiatives: FSIS has not proposed new regulations in response to the September 11, 2001, events. The Agency has, however, issued non-regulatory security guidelines for food plants within the Agency's jurisdiction.

Small business concerns: Nearly all FSIS regulations affect small businesses in some way because the majority of FSIS-inspected establishments and other FSIS-regulated entities are small businesses. FSIS makes available to small and very small establishments technical materials and guidance on how to comply with FSIS regulations. The Agency's post-September 11, 2001, security guidance materials were prepared with small food producing establishments in mind.

Animal and Plant Health Inspection Service

Mission: The major part of the mission of the Animal and Plant Health Inspection Service (APHIS) is to protect U.S. animal and plant resources from destructive pests and diseases. APHIS conducts programs to prevent the introduction of exotic pests and diseases into the United States and monitors and manages pests and diseases existing in this country. These activities enhance agricultural productivity and competitiveness and contribute to the national economy and the public health.

Priorities: APHIS is reviewing its existing regulations and developing new regulatory initiatives to ensure that a comprehensive framework is in place to address the threats posed by exotic and endemic animal diseases. Prompted in part by recent outbreaks of foot-and-mouth disease elsewhere in the world, APHIS plans to amend its regulations for the cooperative control and eradication of animal diseases to ensure their adequacy with regard to the valuation of animals and materials, as well as the payment of indemnity, should an outbreak of foot-and-mouth disease occur in the United States. APHIS has also published, or is developing, proposed and final rules pertaining to the group of neurological diseases known as transmissible spongiform encephalopathies, which includes scrapie (a disease of sheep and goats), bovine spongiform encephalopathy (BSE, which affects cattle), and chronic wasting disease (a disease of deer and elk). In addition, APHIS, in coordination with the Department's Food Safety Inspection Service, and with input from the public, is considering various options for addressing the disease risks that may be presented by nonambulatory animals and dead stock should BSE be introduced into the United States. APHIS is also working in conjunction with the Centers for Disease Control and Prevention to establish regulations for the possession, use, and transfer of biological agents and toxins that could pose a severe disease or pest risk to animals and plants or their products. In addition, APHIS plans to strengthen its regulations for the importation of plants and plant products, including unmanufactured wood, in response to new pest detections and the adoption, recently, of an international standard for treatment of solid wood packing material.

APHIS documents published in the Federal Register and related information, including the names of organizations and individuals who have commented on APHIS dockets, are available on the Internet at www.aphis.usda.gov/ppd/rad/webrepor.html.

Agricultural Marketing Service

Mission: The Agricultural Marketing Service (AMS) facilitates the marketing of agricultural products in domestic and international markets, while ensuring fair trading practices and promoting a competitive and efficient marketplace to the benefit of producers, traders, and consumers of U.S. food and fiber products.

Priorities: (A) The recently enacted Farm Security and Rural Investment Act of 2002 (2002 Farm Bill) amended the Dairy Production and Stabilization Act of 1983 (the authorizing legislation for the National Dairy Promotion and Research Program (NDP&RP). The 2002 Farm Bill requires that the NDP&RP be amended to provide for: (1) Implementation of a mandatory 15-cent per hundred weight assessment on dairy products imported into the 48 contiguous States; (2) importer representation on the National Dairy Board; (3) importer voter eligibility during referenda; (4) the definition of imported dairy products to include casin; and (5) the order must be implemented in a manner consistent with the U.S. trade obligations. A proposed rule providing interested parties an opportunity to submit comments on the implementation of the mandatory assessment on imported dairy products will be published fall 2002.

(B) Livestock Mandatory Reporting-Lamb Amendments. These proposed amendments to the lamb reporting requirements are necessary to ensure that consistent, accurate, and easily understood information on the marketing of domestic and imported boxed lamb cuts is available to producers, packers, and other lamb market participants. AMS believes that the lamb industry would be better served by decreasing the lamb importer threshold to 2,500 metric tons of lamb meat products and redefining carlot of boxed lamb cuts to increase the ability to report import product and to reduce the volume of inappropriate or incompatible data submitted. AMS is presently working on burden-related issues placed on importers with the Office of Management and Budget. The Agency expects to have the proposed rule ready for departmental review by late fall.

(C) AMS Program Rulemaking Pages. Most of AMS' rules as published in the Federal Register are available on the Internet at: www.ams.usda.gov/rulemaking. This site also includes commenting instructions and addresses, links to news releases and background material, and comments received on various rules.

Natural Resources Conservation Service

Mission: The Natural Resources Conservation Service (NRCS) mission is to provide leadership in a partnership effort to help people conserve, maintain, and improve our natural resources and environment.

Priorities: NRCS's priority for 2003 will be to implement fully the conservation provisions of the Farm Security and Rural Investment Act of 2002 (the 2002 Farm Bill), while continuing to meet the needs of landowners and land users who participate in non-Farm Bill programs. The 2002 Farm Bill was enacted on May 13, 2002, and governs Federal farm programs for the next 6 years. Title II of the 2002 Farm Bill reauthorized and made amendments to existing conservation programs, authorized new conservation programs, and expanded the overall funding for conservation.

The changes made by title II necessitate the revisions of existing regulations and the promulgation of proposed and final regulations to implement new programs. The 2002 Farm Bill exempts administration of title II from the requirements of the Paperwork Reduction Act of 1995. However, NRCS is still committed to the Act's goal of reducing the information collection burden on the public. New information collections are being designed to minimize program participants' time and cost to participate in the programs, while maintaining program integrity. NRCS is also committed to compliance with the Government Paperwork Elimination Act and the Freedom to E-File Act, which require Government agencies in general and NRCS in particular to provide the public the option of submitting information or transacting business electronically to the maximum extent possible. NRCS is designing its program forms to allow the public to conduct business with NRCS electronically.

The NRCS plans to publish the following proposed or final rules during FY 2003:

1.Conservation of Private Grazing Land (CPGL) Final Rule

2.Environmental Quality Incentives Program (EQIP) Proposed Rule and Final Rule

3.Technical Service Provider Assistance (TSPA) Interim Final Rule and Final Rule

4.Conservation Security Program (CSP) Proposed Rule and Final Rule

5.Farmland Protection Program (FPP) Proposed Rule and Final Rule

6.Emergency Watershed Protection (EWP) Program Proposed Rule and Final Rule

7.Highly Erodible Land and Wetland Conservation (HEL/WC) Final Rule

8.Categorical Minimal Effects (CME) Final Rule

The rulemaking for EQIP, EWP, and HEL/WC consist of changes being made to current regulations. The remainder of the rulemaking involves the creation of new regulatory provisions. NRCS will develop and issue the regulations and make program funds available to program participants in as timely a manner as possible. Opportunities will be taken to clarify, simplify, and reduce confusion whenever possible.

Rural Development

Mission: Enhance the ability of rural communities to develop, to grow, and to improve their quality of life by targeting financial and technical resources in areas of greatest need through activities of greatest potential.

Priorities: Rural Development priorities for 2003 will include timely implementation of the 2002 Farm Bill sections for which it is responsible. In addition to the regulations identified in the regulatory agenda, there are several sections of titles VI and IX of the Farm Bill for which work plans are being developed for future regulatory action.

Rural Housing Service

Mission: As part of USDA Rural Development, Rural Housing Service (RHS) works to improve the quality of life in rural areas. RHS helps rural communities and individuals by providing loans and grants for housing and community facilities. The Agency provides funding for single-family homes, apartments for low-income persons or the elderly, housing for farm laborers, childcare centers, fire and police stations, hospitals, libraries, nursing homes, and schools.

Priorities: A key priority for RHS is to identify ways to improve customer service, ensure borrower accountability and performance, and streamline the administration of its Multi-Family Housing (MFH) programs. These programs include the section 515 Rural Rental Housing (RRH) loan program, the section 514/516 Farm Labor Housing loan and grant programs, and the section 521 Rental Assistance (RA) program.

The new regulation substantially updates the current regulations and programs to current industry practices. Many of the current regulations had not been substantially updated for over 15 years. The new regulation consolidates the 13 current regulations that govern the programs. The new regulation and three handbooks substantially reduce the number of pages published in the Code of Federal Regulations.

Prior USDA Office of Inspector General (OIG) program audits identified weaknesses in the regulations that let some program participants commit program fraud, waste, and abuse. The new regulation was developed to correct such problems.

Significant automation initiatives have been implemented since the current regulations were written. The regulation addresses the permanent implementation of several pilot automation projects along with other innovative e-Government improvements.

The regulation focuses on the challenge of the Agency's aging portfolio. Areas such as conducting comprehensive needs analyses, reserve account administration, financial statement standards, and tenant quality of life issues are addressed.

As part of the regulatory process, RHS has solicited input from MFH program stakeholders, including borrowers (who are also owners of the projects), management agents, tenant representatives, State housing finance agencies, accounting firms, and the USDA, Office of Inspector General (OIG). The Agency has held several stakeholders meetings on issues that needed to be considered before proposing to revise the regulations. Stakeholders concurred with RHS that the MFH regulations were in need of a substantial revision, particularly with regard to asset management, housing preservation, and financial reporting.


USDA—Agricultural Marketing Service (AMS)

PROPOSED RULE STAGE

1. LIVESTOCK MANDATORY REPORTING PROGRAM—LAMB AMENDMENT (LS-01-08)

Agency:

USDA—Agricultural Marketing Service (AMS)

Priority:
Other Significant

Legal Authority:
7 USC 1621

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
7 CFR 59

Legal Deadline:
None

Abstract:
The Agricultural Marketing Service is amending the Livestock Reporting Act of 1999 regulations. The amendments would: (1) Amend regulations requiring lamb packers to report negotiated purchases of live lamb and sales of carcass lamb; (2) adjust requirements for reporting of imported and domestic boxed lamb sales; and (3) make adjustments to input data collection forms. The Act was implemented April 2, 2001, and requires packers to report purchase and sales transactions for cattle, swine, sheep, boxed beef, and lamb meat.

Statement of Need:
These proposed amendments and adjustments to the lamb reporting requirements of the Livestock Mandatory Reporting (LMR) regulations are necessary to ensure that consistent, accurate, and easily understood information on the marketing of domestic and imported boxed lamb cuts is available to producers, packers, and other lamb market participants. The amendment is intended to address problems that have occurred in the collection and publishing of lamb market information in the period since the implementation of the LMR on April 2, 2001.

Summary of Legal Basis:
The Livestock Mandatory Act of 1999 (Act) was enacted into law on October 22, 1999 (Pub. L. 106-78; 113 Stat. 1188; 7 U.S.C. 1635-1636(h)) as an amendment to the Agricultural Marketing Act of 1946, as amended (7 U.S.C. 1621 et seq.). The Act gives the Secretary of Agriculture (Secretary) the latitude to require mandatory reporting of market information on lamb transactions.

Alternatives:
None.

Anticipated Cost and Benefits:
The Agricultural Marketing Service believes that the lamb industry would be better served by decreasing the lamb importer threshold to 2,500 metric tons of lamb meat products and redefining carlot of boxed lamb cuts to increase the ability to report import product and reduce the volume of inappropriate or incompatible data.

Risks:
None.

Timetable:
Action Date FR Cite
NPRM 11/00/02

Regulatory Flexibility Analysis Required:
Yes

Small Entities Affected:
Businesses

Government Levels Affected:
State

Federalism:
This action may have federalism implications as defined in EO 13132.

Agency Contact:
John Edward Van Dyke
Chief, Livestock and Grain Market News Branch
Department of Agriculture
Agricultural Marketing Service
Stop 0252, Room 2619-South
Washington, DC 20250
Phone: 202 720-6231
Fax: 202 690-3732
Email: john.vandyke@usda.gov

RIN:

0581-AB98


USDA—AMS

2. NATIONAL DAIRY PROMOTION AND RESEARCH PROGRAM (DA-02-03)

Agency:

USDA—AMS

Priority:
Other Significant

Legal Authority:
7 USC 450 et seq

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
7 CFR 1150

Legal Deadline:
NPRM, Statutory, November 2002, Proposed Rule necessary for industry input.
Final, Statutory, February 2003, Final Rule to be issued after 60-day comment period.

Abstract:
Recently enacted Farm Security and Rural Investment Act of 2002 (2002 Farm Bill) amended the Dairy Production and Stabilization Act of 1983 (the authorizing legislation for the National Dairy Promotion and Research Program) concerning implementation of mandatory 15-cent per hundred weight assessment on dairy products imported into the 48 contiguous States and other related amendments.

Statement of Need:
The National Dairy Promotion and Research Program must be amended to conform with the recently enacted Farm Security and Rural Investment Act of 2002 (2002 Farm Bill), which amended the Dairy Promotion and Research Programs. The amendments relate to implementation of a mandatory 15-cent per hundred weight assessment on dairy products imported into the 48 contiguous States and other related amendments.

Summary of Legal Basis:
The Farm Security and Rural Investment Act of 2002 (2002 Farm Bill) mandated changes to the National Dairy Promotion and Research Program.

Alternatives:
None.

Anticipated Cost and Benefits:
The incremental costs associated with the assessments collection on imported dairy products by U.S. Customs will be paid from the assessments collected. It is estimated that the fees will range between $30,000-$40,000 monthly after start-up. The annual assessment collected will be approximately $9 million.

Risks:
None.

Timetable:
Action Date FR Cite
NPRM 11/00/02
Final Action 02/00/03

Regulatory Flexibility Analysis Required:
No

Small Entities Affected:
No

Government Levels Affected:
None

Agency Contact:
David Jamison
Chief, Promotion and Research Branch
Department of Agriculture
Agricultural Marketing Service
Stop 0233
Dairy Progams
1400 Independence Avenue SW
Washington, DC 20250-0233
Phone: 202 720-6909
Fax: 202 720-0285
Email: david.jamison2@usda.gov

RIN:

0581-AC16


USDA—Animal and Plant Health Inspection Service (APHIS)

PROPOSED RULE STAGE

3. CHRONIC WASTING DISEASE IN ELK AND DEER; INTERSTATE MOVEMENT RESTRICTIONS AND PAYMENT OF INDEMNITY

Agency:

USDA—Animal and Plant Health Inspection Service (APHIS)

Priority:
Other Significant

Legal Authority:
7 USC 8301 to 8316

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
9 CFR 55; 9 CFR 81

Legal Deadline:
None

Abstract:
APHIS is proposing to establish minimum requirements for the interstate movement of farmed elk and deer and to provide indemnity for the depopulation of farmed elk and deer that have been infected with, or exposed to, chronic wasting disease (CWD).

Statement of Need:
CWD has been confirmed in free-ranging deer and elk in a limited number of counties in northeastern Colorado and southeastern Wyoming and has also been diagnosed in farmed elk herds in South Dakota, Nebraska, Oklahoma, Montana, and Colorado. This project includes an interim rule to establish indemnity for voluntary depopulation of CWD-affected herds, followed by a proposed rule to establish a voluntary certification program and interstate movement restrictions on captive elk and deer. APHIS believes that establishing restrictions on the interstate movement of infected and exposed farmed elk and deer, coupled with the payment of some level of indemnity for infected and exposed animals, will encourage producers who are not yet engaging in surveillance activities to begin doing so. To date, the level of support from States and the farmed cervid industry for such a program has been high. Without a Federal program in place to depopulate infected and exposed animals, the movement of infected animals into new herds and States with no known infection will continue or may even accelerate. APHIS needs to take action to document the prevalence of the disease and to prevent its further spread.

Summary of Legal Basis:
The Secretary of Agriculture, either independently or in cooperation with other Federal agencies, States or political subdivisions of States, national governments of foreign countries, local governments of foreign countries, domestic or international organizations, domestic or international associations, Indian tribes, and other persons, may carry out operations and measures to detect, control, or eradicate any pest or disease of livestock of the United States, including the payment of claims arising out of the destruction of any animal, article, or means of conveyance, if necessary to prevent the dissemination of the pest or disease of livestock (7 U.S.C. 8305 to 8306, 8308, 8310, and 8315).

Alternatives:
APHIS has identified two additional alternatives to our selected action. The first—to maintain the status quo—was rejected because it would not address the animal disease risks associated with CWD. The second option would have been to provide financial and technical assistance to the cervid industry for continuation and expansion of a variety of herd management practices to reduce or eliminate CWD. Although this option may be less costly than the option chosen by APHIS, this option was not selected because it would not advance CWD eradication as quickly or effectively as the chosen option. However, APHIS will continue to work with industry to develop voluntary herd management practices to preserve and increase the reduction in CWD levels that the proposed program is expected to achieve.

Anticipated Cost and Benefits:
The presence of CWD in elk and deer causes significant economic and market losses to U.S. producers. Recently Canada has begun to require, as a condition for importing U.S. elk into Canada, that the animals be accompanied by a certificate stating that the herd of origin is not located in Colorado or Wyoming, and CWD has never been diagnosed in the herd of origin. The Republic of Korea recently suspended the importation of deer and elk and their products from the United States and Canada. Fear of CWD can severely affect the domestic prices for deer and elk, as it is more difficult for producers to sell cervid that are associated with any hint of exposure to the disease.

Risks:
Aggressive action in controlling this disease now will decrease the chance of having to deal with a much larger, widespread, and costly problem later, such as the situation with bovine spongiform encephalopathy ("mad cow disease") in Europe. Although there is currently no evidence that CWD is linked to disease in humans, or in domestic animals other than deer and elk, a theoretical risk of such a link exists.

Timetable:
Action Date FR Cite
Interim Final Rule 02/08/02 67 FR 5925
Interim Final Rule Comment Period End 04/09/02
NPRM 02/00/03

Regulatory Flexibility Analysis Required:
No

Government Levels Affected:
Undetermined

Additional Information:
APHIS documents published in the Federal Register and related information, including the names of organizations and individuals who have commented on APHIS dockets, are available on the Internet at www.aphis.usda.gov/ppd/rad/webrepor.html.

Agency Contact:
Dr. Lynn Creekmore
Staff Veterinarian/Wildlife Diseases Liaison, NAHPS, VS
Department of Agriculture
Animal and Plant Health Inspection Service
4101 Laporte Avenue
Fort Collins, CO 80521
Phone: 970 266-6128

RIN:

0579-AB35


USDA—APHIS

FINAL RULE STAGE

4. FOOT-AND-MOUTH DISEASE; PAYMENT OF INDEMNITY

Agency:

USDA—APHIS

Priority:
Other Significant

Legal Authority:
7 USC 8301 to 8317

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
9 CFR 53

Legal Deadline:
None

Abstract:
APHIS is proposing to amend its regulations for the cooperative control and eradication of foot-and-mouth disease (FMD) and other serious diseases, including both cooperative programs and extraordinary emergencies. The purpose of this rule is to remove possible sources of delay in eradicating foot-and-mouth disease, should an occurrence of that disease occur in this country, so that eligible claimants will be fully compensated while at the same time protecting the U.S. livestock population from the further spread of this highly contagious disease.

Statement of Need:
APHIS has recently reviewed these regulations to determine their sufficiency should an occurrence of foot-and-mouth disease occur in the United States. This review has been prompted, in part, by the series of outbreaks of foot-and-mouth disease that have taken place in the United Kingdom and elsewhere around the world. Based on this review, APHIS has determined that changes to the regulations are needed with regard to the valuation of animals and materials, as well as the payment of an indemnity to those persons who suffer loss of property as a result of foot-and-mouth disease.

Summary of Legal Basis:
The Secretary of Agriculture, either independently or in cooperation with other Federal agencies, States or political subdivisions of States, national governments of foreign countries, local governments of foreign countries, domestic or international organizations, domestic or international associations, Indian tribes, and other persons, may carry out operations and measures to detect, control, or eradicate any pest or disease of livestock that threatens the livestock of the United States, including the payment of claims arising out of the destruction of any animal, article, or means of conveyance, if necessary to prevent the dissemination of the pest or disease of livestock (7 U.S.C. 8306, 8308, 8310, and 8315).

Alternatives:
The rule comprises several regulatory changes, each of which is intended to facilitate the control and eradication of foot-and-mouth disease, should an outbreak of this disease occur in the United States. Reasonable alternatives to the rule would be to not make any changes at all and rely on the current regulations as applied to cooperative programs and extraordinary emergencies.

Anticipated Cost and Benefits:
The rule is expected to affect livestock operations and Federal and State government agencies. The vast majority of livestock operations are small entities. The potential costs and benefits would depend upon the characteristics of the outbreak and mitigation strategy. The proposed changes would strengthen programs for the control and eradication of FMD by broadening USDA's options. The changes would also lessen the chances that FMD's eradication would be delayed.

Risks:
The changes contained in the rule would be particularly important in removing sources of delay in achieving FMD eradication, should an outbreak of foot-and-mouth disease occur in the United States. An effective response in the early stages of such an outbreak greatly reduces the risk of the disease's wider dissemination.

Timetable:
Action Date FR Cite
NPRM 05/01/02 67 FR 21934
NPRM Comment Period Extended 06/28/02 67 FR 43566
NPRM Comment Period End 07/01/02
NPRM Comment Period End 07/31/02
Final Rule 04/00/03

Regulatory Flexibility Analysis Required:
Undetermined

Government Levels Affected:
Undetermined

Additional Information:
APHIS documents published in the Federal Register and related information, including the names of organizations and individuals who have commented on APHIS dockets, are available on the Internet at www.aphis.usda.gov/ppd/rad/webrepor.html.

Agency Contact:
Dr. Mark Teachman
Senior Staff Veterinarian, Emergency Programs, VS
Department of Agriculture
Animal and Plant Health Inspection Service
Unit 41
4700 River Road
Riverdale, MD 20737-1231
Phone: 301 734-8073

RIN:

0579-AB34


USDA—APHIS

5. BIOLOGICAL AGENTS AND TOXINS

Agency:

USDA—APHIS

Priority:
Other Significant

Legal Authority:
7 USC 8401

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
7 CFR 331; 9 CFR 121

Legal Deadline:
None

Abstract:
In accordance with the Agricultural Bioterrorism Protection Act of 2002, APHIS has established, by regulation, an initial list of biological agents and toxins determined to have the potential to pose a severe threat to animal or plant health or to animal or plant products. The Act requires that all persons in possession of any listed biological agent or toxin must, within 60 days of the publication of the interim rule, notify the Secretary of such possession. The interim rule establishes APHIS' initial list of biological agents and toxins and provides guidance on the manner in which the required notice is to be provided. A second interim rule, also required by the Act, will follow this interim rule and will establish regulations regarding the possession, use, and transfer of listed biological agents and toxins.

Statement of Need:
The second interim rule referred to in the abstract is required under section 212 of the Public Health Security and Bioterrorism Response Act of 2002 (Pub. L. 107-188), which requires the Secretary of Agriculture to establish regulations by interim rule for the possession, use, and transfer of biological agents and toxins that she determines has the potential to pose a severe threat to animal or plant health or to animal or plant products. Among other things, the regulations must require registration with the Secretary and include appropriate safeguard and security measures, including data base checks by the Attorney General of individuals and facilities seeking to register with the Secretary. The Act imposes a deadline of December 9, 2002, for the promulgation of the regulations and requires an effective date of February 12, 2003.

Summary of Legal Basis:
The President signed into law the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 on June 12, 2002. Title II of Public Law 107-188 "Enhancing Controls on Dangerous Biological Agents and Toxins" (sections 201 through 231) provides for the regulation of certain biological agents and toxins by the Department of Health and Human Services (subtitle A, sections 201-204) and the Department of Agriculture (subtitle B, sections 211-213) and provides for interagency coordination between the two departments regarding overlap agents and toxins (subtitle C, section 221). Subtitle D (section 231) provides for criminal penalties regarding certain biological agents and toxins. For the Department of Health and Human Services, the Centers for Disease Control and Prevention has been designated as the agency with primary responsibility for implementing the provisions of the Act; the Animal and Plant Health Inspection Service (APHIS) is the agency fulfilling that role for the Department of Agriculture.

Alternatives:
APHIS' Veterinary Services and Plant Protection and Quarantine programs have had regulations in place for some years that require prior authorization from APHIS for the importation or interstate movement of certain animal disease agents and plant pests. Those regulations further require that appropriate safeguards be applied to the handling and containment of those animal disease agents and plant pests. While the biological agents and toxins that the Secretary has determined have the potential to pose a severe threat to animal or plant health or to animal or plant products have historically fallen within the scope of the existing regulations, those regulations do not contain the individual/facility registration requirements, physical security, and other considerations that the Public Health Security and Bioterrorism Response Act of 2002 requires the Agency to address in the second interim rule.

Anticipated Cost and Benefits:
APHIS is currently preparing a regulatory flexibility analysis and cost/benefit analysis to accompany the second interim rule. Among the costs we anticipate will be examined in those analyses are the costs associated with compliance with the administrative requirements of the rule (e.g., salary costs associated with the time needed to complete required forms), as well as costs that may be incurred in the course of making any necessary upgrades to the physical, computer, and biological security capabilities of facilities that possess, use, or transfer listed biological agents and toxins. The regulations are intended to increase the security over such agents and toxins and establish a comprehensive national data base of the location and characterization of those agents and toxins and the identities of those in possession of them. These enhanced security measures will prevent the use in domestic or international terrorism of those biological agents and toxins, thus protecting human, animal, and plant health and preventing the economic impacts that would be associated with the release of those agents and toxins.

Risks:
The regulations will include appropriate safeguard and security requirements for persons possessing, using, or transferring a listed agent or toxin commensurate with the risk such agent or toxin poses to public health and safety (including the risk of use in domestic or international terrorism).

Timetable:
Action Date FR Cite
Interim Final Rule 08/12/02 67 FR 52383
Interim Final Rule Effective 08/12/02
Interim Final Rule Comment Period End 10/11/02
Second Interim Final Rule 12/00/02

Regulatory Flexibility Analysis Required:
No

Government Levels Affected:
State, Federal

Additional Information:
APHIS documents published in the Federal Register, and related information, including the names of organizations and individuals who have commented on APHIS dockets, are available on the Internet at www.aphis.usda.gov/ppd/rad/webrepor.html.

Agency Contact:
Dr. Arnold T. Tschanz
Senior Staff Officer, Regulatory Coordination, Plant Health Programs, PPQ
Department of Agriculture
Animal and Plant Health Inspection Service
Unit 141
4700 River Road
Riverdale, MD 20737-1236
Phone: 301 734-8790
Dr. Denise Spencer
Senior Staff Veterinarian, Technical Trade Services, NCIE, VS
Department of Agriculture
Animal and Plant Health Inspection Service
Unit 40
4700 River Road
Riverdale, MD 20737-1231
Phone: 301 734-3277

RIN:

0579-AB47


USDA—Rural Housing Service (RHS)

PROPOSED RULE STAGE

6. MULTI-FAMILY HOUSING (MFH)

Agency:

USDA—Rural Housing Service (RHS)

Priority:
Other Significant

Legal Authority:
5 USC 301; 42 USC 1490a; 7 USC 1989; 42 USC 1475; 42 USC 1479; 42 USC 1480; 42 USC 1481; 42 USC 1484; 42 USC 1485; 42 USC 1486

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
7 CFR 1806 subpart A; 7 CFR 1955 subpart B; 7 CFR 1955 subpart C; 7 CFR 1956 subpart B; 7 CFR 1965 subpart B; 7 CFR 1965 subpart E; 7 CFR 1930 subpart C; 7 CFR 1944 subpart D; 7 CFR 1944 subpart E; 7 CFR 1951 subpart C; 7 CFR 1951 subpart D; 7 CFR 1951 subpart K; 7 CFR 1951 subpart N; 7 CFR 1955 subpart A

Legal Deadline:
None

Abstract:
The Rural Housing Service (RHS) proposes to consolidate regulations pertaining to section 515 Rural Rental Housing, section 514 Farm Labor Housing Loans, section 516 Farm Labor Housing Grants, and section 521 Rental Assistance Payments. Fourteen published regulations will be reduced to one regulation and handbooks for program administration. This will simplify loan origination and portfolio management for applicants, borrowers, and housing operators, as well as Rural Development field staff. This will also provide flexibility for program modifications to reflect current and foreseeable changes. It will also reduce regulations that address solely internal Agency program administration. Finally, the regulation will be more customer friendly and responsive to the needs of the public.

Statement of Need:
The new regulation for the program known as the Multi-Family Housing Loan and Grant Programs will be more user friendly for lenders, borrowers, and Agency staff. These changes are essential to allow for improved service to the public and for an expanded program with increased impact on rural housing opportunities without a corresponding expansion in Agency staff. The regulations will be shorter, better organized, and more simple and clear. Many documentation requirements will be eliminated or consolidated into more convenient formats.

Summary of Legal Basis:
The existing statutory authority for the MFH programs was established in title V of the Housing Act of 1949, which gave authority to the RHS (then the Farmers Home Administration) to make housing loans to farmers. As a result of this Act, the Agency established single-family and multifamily housing programs. Over time, the sections of the Housing Act of 1949 addressing MFH have been amended a number of times. Amendments have involved issues such as the provision of interest credit, broadening definitions of eligible areas and populations to be served, participation of limited profit entities, the establishment of a rental assistance program, and the imposition of a number of restrictive use provisions and prepayment restrictions.
The MFH program, as it exists today, began in the 1960s. Its first loans were primarily for small rental projects. In the mid-sixties, the program expanded and changed from making small rural rental housing loans to individuals to making larger loans to organizations, such as limited partnerships. Regulations for the program have been amended several times over the years to reflect statutory changes and to revise the Agency's procedures for administering the program. The most recent significant regulatory revisions took place after the Appropriations Act of 1997 directed the Agency to implement six reforms to the MFH program. This was accomplished with the publication of a final rule for the reforms on December 23, 1997. Reforms addressed such items as equity skimming, review of other Government assistance, the maximum loan terms, and the use of a Notice of Funding Availability and competitive process to award funds for new projects.
Statistics show that the MFH program fills a significant need for rural Americans. Two primary types of households occupy RHS-financed, section 515 rental housing—elderly households who have decided that they prefer renting over continued ownership of their own dwellings and younger female and male headed households that do not have sufficient resources available to purchase their own home. Additionally, the sections 514/516 Farm Labor Housing loan and grant programs are the only Federal programs available for the provision of housing to farmworkers, one of the most chronically underhoused populations within America.

Alternatives:
The proposed rule is important to all program participants, beneficiaries, and agency staff. Any budgetary impacts of the regulation are minor and reflect good business practices rather than policy shifts. Funding for major program needs as rehabilitation, preservation, and future new construction may be addressed through the budget process rather than publication of the rule. To not publish the rule will substantially restrict RHS' ability to effectively administer the programs and cost the Agency significant credibility with the public and oversight organizations.
If the Agency were not to publish the proposed rule, the 25 percent reduction in Government burden not achieved would be significant. During the past 6 years, the number of staff-years assigned MFH functions has decreased approximately 25 percent. RHS' limited staff resources could be utilized more effectively on activities that would improve program performance by decreasing and simplifying the paperwork for the MFH program.
Current regulations include standards for physical condition, maintenance, and reserve levels to address the physical condition of the property. However, projects are experiencing physical maintenance problems due to their average age. One of the sources of this problem is that project reserves are inadequate to cover ongoing capital needs. Current regulations require that borrowers contribute initially 1 percent annually of total development costs toward a reserve for project improvements until a total of 10 percent is reached. While borrowers are permitted to request adjustments to their reserve contributions, there is no systematic provision for reevaluating reserves over the life of the project. A recent study found that while an average MFH project has accumulated $5,000 in reserves per unit at the end of 10 years and maintained at that level thereafter, the full cost of rehabilitation is likely to be close to $16,000 per unit. When rehabilitation is needed and the reserve is inadequate to meet the need, the project owner usually applies for a subsequent loan, which, if received, requires that rents be increased. In recent years, RHS has been experiencing a growing number of requests for subsequent loans and rent increases to cover costs of rehabilitation, while funding for such loans has been limited. For example, the President's budget for 2002 provides funding to rehabilitate 4,115 units, which is consistent with the funding received in recent years. However, at that rate, it will take more than 109 years to cycle once through the entire portfolio.
Consistently, RHS is taking several steps to link reserve levels more closely to projects' capital needs. The proposed rule allows a life cycle costs analysis to be used to establish the initial reserve amount needed to meet the capital needs for new projects. For existing projects, the proposed rule requires that any servicing action that involves additional agency funds must take into account physical needs of the project, based on a capital needs assessment. The proposed rule also allows borrowers with existing projects to include the cost of capital needs assessments in their budgets, which is expected to focus attention on the use of such assessments. Alternatively, by not publishing the proposed rule, properties financed under the programs may deteriorate.

Anticipated Cost and Benefits:
Based on analysis of the proposed rule, the following impacts may occur, some of which could be considered significant:
There would be cost savings due to reduced paperwork, estimated to be about $1.8 million annually for the public and about $10.1 million for the Government.
Rents for about half the 459,000 units in MFH projects would likely be increased by an average of about $15 per month. This estimate combines the impacts on rents of two different changes—an increase in reserve requirements for project improvements from $5,000 to $10,000 per unit and a change in RHS' policies relating to the investment of funds in reserves accounts. The latter change is expected to increase interest earnings on reserve accounts from 2 percent currently earned to 6 percent, with 25 percent of the earnings becoming eligible to be taken out of the accounts for owners to pay taxes and the rest remaining for improvements.
Government costs for rental assistance payments would increase by at least $23 million annually, and those for section 8 project-based assistance would increase by about $4 million annually.
Tenants of an estimated 79,500 units, about half the 159,000 units that do not receive rental assistance payments or similar assistance from HUD, would have to pay higher rents of about 5 percent. This amounts to an annual cost of about $14 million for these tenants. Most of these tenants are expected to remain in the projects because rents would remain competitive.
Increasing the reserve requirements would provide additional funds for improving projects. However, the full impact of this change is not expected to be reached until 10 years after it is implemented. Thus, projects that are in need of immediate rehabilitation will likely remain short of adequate funds for making needed improvements in the near term. Only a substantial increase in funding for rehabilitation loans would help resolve this problem.
Allowing project improvement needs to be considered in RHS' servicing actions could result in increased write-downs of the $12 billion MFH portfolio. This potential impact cannot be easily estimated.
Project owners who have or soon will meet the 20-year restriction on the use of their projects for low-income housing will have a clearer picture of RHS' policies in trying to maintain these projects in the program. In particular, establishment of a 15-month limit on waiting for incentives to be offered to them to stay in a program should help them make decisions on either staying in the program or prepaying their loans and possibly converting the projects to other uses.

Risks:
The risk associated with this regulatory initiative is that some program participants may be faced with increased replacement reserve requirements without sufficient cashflow in the property to make the deposits. The Agency believes that the need to adequately address project physical replacement needs offsets this risk. The Agency also believes that for the three-quarters of the properties that have deep tenant subsidies, this impact will be mitigated as rents can be increased in those situations without impacting the affordability of the units to eligible program beneficiaries.
The primary risk to the Agency is if the proposed rule is not implemented. Without the streamlining, program improvements and focus on current industry practices, including the increased use of third-party funds to rehabilitate program properties that are included in the regulation, the underlying assets for the loans and grants made under the programs will deteriorate as the properties age. This will cause a decrease in the ability of the Agency to provide safe, decent, and sanitary housing to program beneficiaries.
The loans made to recipients will become undersecured as the properties' values decrease. Lastly, there will be a greater propensity of borrowers to elect to either default on their loans or to pay off loans and remove their properties from the stock of affordable housing.

Timetable:
Action Date FR Cite
NPRM 12/00/02
NPRM Comment Period End 02/00/03

Regulatory Flexibility Analysis Required:
No

Government Levels Affected:
None

Agency Contact:
Patrick Sheridan
Assistant Deputy Administrator, Multi-Family Housing
Department of Agriculture
Rural Housing Service
Room 1263/Stop 0782
1400 Independence Avenue SW
Washington, DC 20250
Phone: 202 720-1609
Email: psherida@rdmail.rural.usda.gov

RIN:

0575-AC13


USDA—Food and Nutrition Service (FNS)

PROPOSED RULE STAGE

7. SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN (WIC): REVISIONS IN THE WIC FOOD PACKAGES

Agency:

USDA—Food and Nutrition Service (FNS)

Priority:
Economically Significant. Major under 5 USC 801.

Legal Authority:
42 USC 1786

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
7 CFR 246

Legal Deadline:
None

Abstract:
This proposed rule will amend regulations governing the WIC food packages to disallow low-iron WIC formulas in food packages for infants; revise the maximum monthly allowances and minimum requirements for certain WIC foods; revise the substitution rates for certain WIC foods and allow additional foods as alternatives; make technical adjustments in all of the food packages to accommodate newer packaging and physical forms of the WIC foods; add vegetables as a food category in Food Packages III-VII for women and children; require that State agencies make available the full maximum foods allowed in each package; revise the criteria for developing State agency proposals for alternative food packages to accommodate participant food preferences more effectively; revise the purpose, content, and requirements for Food Package III; and address general provisions that apply to all the food packages. These revisions will improve the likelihood that WIC recipients achieve the food servings recommendations of the Dietary Guidelines for Americans and nutritional recommendations, providing WIC participants with a wider variety of foods, accommodating newer packaging and physical forms of WIC foods, and providing WIC State agencies with greater flexibility in prescribing food packages, especially to accommodate participants with hardships or cultural/food preferences. (99-006)

Statement of Need:
While WIC has been successful in many areas, obesity and inappropriate dietary patterns have become equal, if not greater, problems for many in WIC's target population. WIC food packages and nutrition education are the chief means by which WIC affects the dietary quality and habits of participants. Results of a recent WIC study found that the supplemental food package is consistently ranked by pregnant and postpartum women as the leading positive attribute of the program. Therefore, revised food packages, which will foster greater consistency with the Dietary Guidelines for Americans, are an appropriate response to further increase the positive effects of the program among the WIC eligible population.
The overarching objective of this rule is to improve disease prevention and nutritional status by improving dietary quality and nutritional adequacy of the WIC food packages by:
1. Improving the manner in which the nutrients lacking in the target population's diet are provided by revising food packages to reflect more closely the Dietary Guidelines for Americans as represented by the diet recommendations of the Food Guide Pyramid; and
2. Increasing the nutritional adequacy of the WIC food packages for medically needy participants.

Summary of Legal Basis:
The WIC Program was established to provide nutritious supplemental foods, nutrition education, and referrals to related health and social services to low-income pregnant, breastfeeding, and non-breastfeeding postpartum women, infants, and children up to age 5. Section 17 of the Child Nutrition Act of 1966 (as amended, 42 U.S.C. 1786) clearly established the WIC Program as a supplemental nutrition program designed to provide nutrients determined by nutritional research to be lacking in the diets of the WIC target population. WIC law requires that, to the extent possible, the fat, sugar, and salt content of WIC foods be appropriate. The law gives substantial latitude to the Department in designing WIC food offerings but obligates the Department to prescribe foods that effectively and economically supply the target nutrients.

Alternatives:
None.

Anticipated Cost and Benefits:
None.

Risks:
This rule is intended to improve the nutritional status and dietary patterns of the WIC target population, as a response to the threat of increasing risk factors for nutrition-related diseases—obesity, diabetes, coronary heart disease, stroke, and cancer, to name a few—in the WIC eligible population.

Timetable:
Action Date FR Cite
NPRM 12/00/02
NPRM Comment Period End 04/00/03
Final Action 01/00/04
Final Action Effective 03/00/04

Regulatory Flexibility Analysis Required:
Yes

Small Entities Affected:
Businesses

Government Levels Affected:
State, Local, Tribal, Federal

Federalism:
This action may have federalism implications as defined in EO 13132.

Agency Contact:
Sharon Ackerman
Agency Regulatory Officer
Department of Agriculture
Food and Nutrition Service
3101 Park Center Drive
Room 308
Alexandria, VA 22302
Phone: 703 305-2246
Fax: 703 605-0220
Email: sheri.ackerman@fns.usda.gov

RIN:

0584-AC90


USDA—FNS

8. FOOD STAMP PROGRAM: SIMPLIFICATION AND STATE FLEXIBILITY

Agency:

USDA—FNS

Priority:
Economically Significant. Major under 5 USC 801.

Legal Authority:
7 USC 2011 to 2036

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
7 CFR 272; 7 CFR 273

Legal Deadline:
None

Abstract:
This action will 1) propose to streamline the regulations by removing unnecessary or redundant provisions and reorganizing several sections; 2) propose to increase State flexibility by moving overly prescriptive regulations; 3) re-propose several provisions that were proposed in a previous rule, the Noncitizen Eligibility Certification Provisions (NECP) of Public Law 104-193, as amended by Public Laws 104-208, 105-33, and 105-185, published on February 29, 2000, but were not accepted in the final NECP rule published on November 21, 2001; 4) propose to remove or revise several provisions that were finalized in the NECP final rule; and 5) propose to incorporate current policy from the Food Stamp Program's Policy Interpretation Response System (PIRS). (01-018)

Statement of Need:
This rule is discretionary in nature. However, it simplifies the food stamp regulations and allows State flexibility in administering the program.

Summary of Legal Basis:
The legal basis for this rule is Public Law 104-193, as amended by Public Laws 104-208, 105-33, and 105-185.

Alternatives:
This rule is discretionary in nature; therefore it is not mandatory that we publish it.

Anticipated Cost and Benefits:
Undetermined

Risks:
The FSP provides nutrition assistance to millions of Americans nationwide—working families, eligible non-citizens, and elderly and disabled individuals. Many low-income families don't earn enough money and many elderly and disabled individuals don't receive enough in retirement or disability benefits to meet all of their expenses and purchase healthy and nutritious meals. The FSP serves a vital role in helping these families and individuals achieve and maintain self-sufficiency and purchase a nutritious diet. This rule is intended to simplify the regulations and allow State flexibility in administering the program, thus decreasing barriers to access benefits.

Timetable:
Action Date FR Cite
NPRM 02/00/03
NPRM Comment Period End 05/00/03

Regulatory Flexibility Analysis Required:
No

Small Entities Affected:
No

Government Levels Affected:
State, Local, Tribal, Federal

Federalism:
Undetermined

URL For Public Comments:
www.fns.usda.gov/fsp/

Agency Contact:
Sharon Ackerman
Agency Regulatory Officer
Department of Agriculture
Food and Nutrition Service
3101 Park Center Drive
Room 308
Alexandria, VA 22302
Phone: 703 305-2246
Fax: 703 605-0220
Email: sheri.ackerman@fns.usda.gov

RIN:

0584-AD22


USDA—FNS

9. FSP: HIGH PERFORMANCE BONUSES

Agency:

USDA—FNS

Priority:
Economically Significant. Major under 5 USC 801.

Legal Authority:
PL 107-171

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
7 CFR 272; 7 CFR 275

Legal Deadline:
None

Abstract:
This action will propose implementation of the high performance bonuses as provided for in the Farm Security and Rural Investment Act of 2002 for States that demonstrate high or improved performance in administration of the Food Stamp Program. This action will propose the measurement criteria for fiscal year 2005 and beyond. (02-006)

Statement of Need:
This rule is mandated by Public Law 107-171 to codify the performance measures used to award high performance bonuses for fiscal years 2005 and beyond.

Summary of Legal Basis:
The legal basis for this rule is Public Law 107-171.

Alternatives:
This rule is mandated by law. Therefore, there are no alternatives.

Anticipated Cost and Benefits:
Undetermined

Risks:
The law mandates that we codify the performance measures for the high performance bonuses for FY 2005 and beyond. If we did not publish this proposed rule, we would be unable to publish a final rule, thus making us out of compliance with a legislative mandate.

Timetable:
Action Date FR Cite
NPRM 08/00/03
NPRM Comment Period End 10/00/03

Regulatory Flexibility Analysis Required:
No

Small Entities Affected:
No

Government Levels Affected:
State, Local, Tribal, Federal

Federalism:
Undetermined

URL For More Information:
www.fns.usda.gov/fsp

Agency Contact:
Sharon Ackerman
Agency Regulatory Officer
Department of Agriculture
Food and Nutrition Service
3101 Park Center Drive
Room 308
Alexandria, VA 22302
Phone: 703 305-2246
Fax: 703 605-0220
Email: sheri.ackerman@fns.usda.gov

RIN:

0584-AD29


USDA—FNS

10. FSP: ELIGIBILITY AND CERTIFICATION PROVISIONS OF THE FARM SECURITY AND RURAL INVESTMENT ACT OF 2002

Agency:

USDA—FNS

Priority:
Economically Significant. Major under 5 USC 801.

Legal Authority:
PL 107-171, secs 4101 to 4109, 4114, 4115, and 4401

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
7 CFR 273

Legal Deadline:
None

Abstract:
This proposed rule will amend Food Stamp Program regulations to implement the food stamp eligibility and certification provisions of Public Law 107-171, the Farm Security and Rural Investment Act of 2002. The rule allows States, at their option, to treat legally obligated child support payments to a non-household member as an income exclusion rather than a deduction (as provided in current law); allows a State option to exclude certain types of income that are not counted under the State's Temporary Assistance for Needy Families (TANF) cash assistance or Medicaid programs; replaces the current, fixed standard deduction with a deduction that varies according to household size and is adjusted annually for cost-of-living increases; allows States to simplify the Standard Utility Allowance (SUA) if the States elect to use the SUA rather than actual utility costs for all households; allows States to use a standard deduction from income of $143 per month for homeless households with some shelter expenses; allows States to disregard reported changes in deductions during certification periods except for changes associated with a new residence or earned income until the next recertification; increases the resource limit for households with a disabled member from $2,000 to $3,000 consistent with the limit for households with an elderly member; allows States to exclude certain types of resources that the State does not count for TANF or Medicaid (section 1931); allows USDA to approve alternate methods for issuing food stamp benefits during disasters when reliance on electronic benefit transfer systems (EBT) is impracticable; allows States to extend semiannual reporting of changes to all households not exempt from periodic reporting; requires State agencies that have a website to post applications on these sites in the same languages that the State uses for its written applications; allows States to extend from the current 3 months up to 5 months the period of time households may receive transitional food stamp benefits when they lose TANF cash assistance; and restores food stamp eligibility to qualified aliens who are otherwise eligible AND who (1) are receiving disability benefits regardless of date of entry (current law requires them to have been in the country on 8/22/96)—effective FY 2003, (2) are under 18 regardless of date of entry (current law limits eligibility to children who were in the country on 8/22/96)—effective FY 2004 and beyond, or (3) have lived in the U.S. continuously for 5 years as a qualified alien beginning on date of entry—effective April 2003. (02-007)

Statement of Need:
The rule is needed to implement the food stamp certification and eligibility provisions of Public Law 107-171, the Farm Security and Rural Investment Act of 2002.

Summary of Legal Basis:
The legal basis for this rule is Public Law 107-171, the Farm Security and Rural Investment Act of 2002.

Alternatives:
This proposed rule deals with changes required by Public Law 107-171, the Farm Security and Rural Investment Act of 2002. The Department has limited discretion in implementing provisions of that law. Most of the provisions in this rule are effective October 1, 2002, and must be implemented by State agencies prior to publication of this rule.

Anticipated Cost and Benefits:
The provisions of this rule will simplify State administration of the Food Stamp Program, increase eligibility for the program among certain groups, increase access to the program among low-income families and individuals, and increase benefit levels. The provisions of Public Law 107-171 implemented by this rule will have a 5-year cost of approximately $1.9 billion.

Risks:
The FSP provides nutrition assistance to millions of Americans nationwide—working families, eligible non-citizens, and elderly and disabled individuals. Many low-income families don't earn enough money and many elderly and disabled individuals don't receive enough in retirement or disability benefits to meet all of their expenses and purchase healthy and nutritious meals. The FSP serves a vital role in helping these families and individuals achieve and maintain self-sufficiency and purchase a nutritious diet. This rule is intended to implement the certification and eligibility provisions of Public Law 107-171, the Farm Security and Rural Investment Act of 2002. It will simplify State administration of the Food Stamp Program, increase eligibility for the program among certain groups, increase access to the program among low-income families and individuals, and increase benefit levels. The provisions of this rule will increase benefits by approximately $1.95 billion over 5 years. When fully effective in FY 2006, the provisions of this rule will add approximately 415,000 new participants.

Timetable:
Action Date FR Cite
NPRM 09/00/03
NPRM Comment Period End 11/00/03
Final Action 12/00/04
Final Action Effective 02/00/05

Regulatory Flexibility Analysis Required:
No

Small Entities Affected:
No

Government Levels Affected:
State, Local, Tribal, Federal

Federalism:
Undetermined

URL For Public Comments:
www.fns.usda.gov/fsp/

Agency Contact:
Sharon Ackerman
Agency Regulatory Officer
Department of Agriculture
Food and Nutrition Service
3101 Park Center Drive
Room 308
Alexandria, VA 22302
Phone: 703 305-2246
Fax: 703 605-0220
Email: sheri.ackerman@fns.usda.gov

RIN:

0584-AD30


USDA—FNS

11. FSP: QUALITY CONTROL PROVISIONS OF THE FARM SECURITY AND RURAL INVESTMENT ACT OF 2002

Agency:

USDA—FNS

Priority:
Other Significant

Legal Authority:
7 USC 2011 to 2032; PL 107-171

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
7 CFR 273; 7 CFR 275

Legal Deadline:
None

Abstract:
This proposed rule will implement quality control changes to the Food Stamp Act required by sections 4118 and 4119 of the Farm Security and Rural Investment Act of 2002 in the following areas: 1) Timeframes for completing quality control reviews; 2) timeframes for completing the arbitration process; 3) timeframes for determining final error rates; 4) the threshold for potential sanctions and time period for sanctions; 5) the calculation of State error rates; 6) the formula for determining States' liability amounts; 7) sanction notification and method of payment; and 8) corrective action plans. (02-008)

Statement of Need:
The rule is needed to implement the food stamp quality control provisions of Public Law 107-171, the Farm Security and Rural Investment Act of 2002.

Summary of Legal Basis:
The legal basis for this rule is Public Law 107-171, the Farm Security and Rural Investment Act of 2002.

Alternatives:
This proposed rule deals with changes required by Public Law 107-171, the Farm Security and Rural Investment Act of 2002. The Department has limited discretion in implementing provisions of that law. The provisions in this rule are effective for fiscal year 2002 quality control review period and must be implemented by FNS and State agencies during fiscal year 2002.

Anticipated Cost and Benefits:
The provisions of this rule will eliminate enhanced funding for low payment error rates and revise the quality control sanction and liability requirements. The provisions of Public Law 107-171 implemented by this rule will save $190 million over 5 years through elimination of the current enhanced funding system. This savings will be partially offset by costs of implementing a new performance system. The costs for the new performance system are estimated to be $144 million.

Risks:
The FSP provides nutrition assistance to millions of Americans nationwide. The quality control system measures the accuracy of States providing food stamp benefits to the program recipients. This rule is intended to implement the quality control provisions of Public Law 107-701, the Farm Security and Rural Investment Act of 2002. The provisions of this rule will eliminate enhanced funding for low payment error rates. It will significantly revise the system for determining State agency liabilities and sanctions for high payment error rates.

Timetable:
Action Date FR Cite
NPRM 01/00/03
NPRM Comment Period End 04/00/03
Final Action 01/00/04
Final Action Effective 02/00/04

Regulatory Flexibility Analysis Required:
No

Government Levels Affected:
State, Local, Federal

Federalism:
Undetermined

Agency Contact:
Sharon Ackerman
Agency Regulatory Officer
Department of Agriculture
Food and Nutrition Service
3101 Park Center Drive
Room 308
Alexandria, VA 22302
Phone: 703 305-2246
Fax: 703 605-0220
Email: sheri.ackerman@fns.usda.gov

RIN:

0584-AD31


USDA—FNS

12. FSP: EMPLOYMENT AND TRAINING PROGRAM PROVISIONS OF THE FARM SECURITY AND RURAL INVESTMENT ACT OF 2002

Agency:

USDA—FNS

Priority:
Economically Significant. Major under 5 USC 801.

Legal Authority:
PL 107-171

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
7 CFR 273.7

Legal Deadline:
None

Abstract:
This proposed rule will implement revisions to the Food Stamp Employment and Training (E&T) Program funding requirements. (02-009)

Statement of Need:
This rule is necessary to implement statutory revisions to E&T Program funding provisions.

Summary of Legal Basis:
All provisions of this proposed rule are mandated by Public Law 107-171.

Alternatives:
The alternative is not to revise current funding rules. This is not practical. The current rules have been superseded by changes brought about by Public Law 107-171. These changes were effective on May 13, 2002, the date of enactment of Public Law 107-171.

Anticipated Cost and Benefits:
None.

Risks:
None.

Timetable:
Action Date FR Cite
NPRM 09/00/03
NPRM Comment Period End 11/00/03
Final Action 12/00/04
Final Action Effective 02/00/05

Regulatory Flexibility Analysis Required:
No

Small Entities Affected:
No

Government Levels Affected:
State, Local, Federal

Agency Contact:
Sharon Ackerman
Agency Regulatory Officer
Department of Agriculture
Food and Nutrition Service
3101 Park Center Drive
Room 308
Alexandria, VA 22302
Phone: 703 305-2246
Fax: 703 605-0220
Email: sheri.ackerman@fns.usda.gov

RIN:

0584-AD32


USDA—FNS

FINAL RULE STAGE

13. CHILD AND ADULT CARE FOOD PROGRAM: IMPROVING MANAGEMENT AND PROGRAM INTEGRITY

Agency:

USDA—FNS

Priority:
Other Significant

Legal Authority:
42 USC 1766; PL 103-448; PL 104-193; PL 105-336

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
7 CFR 226

Legal Deadline:
None

Abstract:
This rule amends the Child and Adult Care Food Program (CACFP) regulations. The changes in this rule result from the findings of State and Federal program reviews and from audits and investigations conducted by the Office of Inspector General. This rule will revise: State agency criteria for approving and renewing institution applications; program training and other operating requirements for child care institutions and facilities; and State- and institution-level monitoring requirements. This rule also includes changes that are required by the Healthy Meals for Healthy Americans Act of 1994 (Pub. L. 103-448), the Personal Responsibility and Work Opportunities Reconciliation Act of 1996 (Pub. L. 104-193), and the William F. Goodling Child Nutrition Reauthorization Act of 1998 (Pub. L. 105-336).
The changes are designed to improve program operations and monitoring at the State and institution levels and, where possible, to streamline and simplify program requirements for State agencies and institutions. (95-024)

Statement of Need:
In recent years, State and Federal program reviews have found numerous cases of mismanagement, abuse, and in some instances, fraud by child care institutions and facilities in the CACFP. These reviews revealed weaknesses in management controls over program operations and examples of regulatory noncompliance by institutions, including failure to pay facilities or failure to pay them in a timely manner; improper use of program funds for non-program expenditures; and improper meal reimbursements due to incorrect meal counts or to mis-categorized or incomplete income eligibility statements. In addition, audits and investigations conducted by the Office of Inspector General (OIG) have raised serious concerns regarding the adequacy of financial and administrative controls in CACFP. Based on its findings, OIG recommended changes to CACFP review requirements and management controls.

Summary of Legal Basis:
Some of the changes proposed in the rule are discretionary changes being made in response to deficiencies found in program reviews and OIG audits. Other changes codify statutory changes made by the Healthy Meals for Healthy Americans Act of 1994 (Pub. L. 103-448), the Personal Responsibility and Work Opportunities Reconciliation Act of 1996 (Pub. L. 104-193), and the William F. Goodling Child Nutrition Reauthorization Act of 1998 (Pub. L. 105-336).

Alternatives:
In developing the proposal, the Agency considered various alternatives to minimize burden on State agencies and institutions while ensuring effective program operation. Key areas in which alternatives were considered include State agency reviews of institutions and sponsoring organization oversight of day care homes.

Anticipated Cost and Benefits:
This rule contains changes designed to improve management and financial integrity in the CACFP. When implemented, these changes would affect all entities in CACFP, from USDA to participating children and children's households. These changes will primarily affect the procedures used by State agencies in reviewing applications submitted by, and monitoring the performance of, institutions which are participating or wish to participate in the CACFP. Those changes which would affect institutions and facilities will not, in the aggregate, have a significant economic impact.
Data on CACFP integrity is limited, despite numerous OIG reports on individual institutions and facilities that have been deficient in CACFP management. While program reviews and OIG reports clearly illustrate that there are weaknesses in parts of the program regulations and that there have been weaknesses in oversight, neither program reviews, OIG reports, nor any other data sources illustrate the prevalence and magnitude of CACFP fraud and abuse. This lack of information precludes USDA from estimating the amount of money lost due to fraud and abuse or the reduction in fraud and abuse the changes in this rule will realize.

Risks:
Continuing to operate the CACFP under existing provisions of the regulations that do not sufficiently protect against fraud and abuse in CACFP puts the program at significant risk. This rule includes changes designed to strengthen current program regulations to reduce the risk associated with the program.

Timetable:
Action Date FR Cite
NPRM 09/12/00 65 FR 55103
NPRM Comment Period End 12/11/00
Interim Final Rule 06/00/03
Interim Final Rule Effective 07/00/03

Regulatory Flexibility Analysis Required:
No

Small Entities Affected:
No

Government Levels Affected:
State, Local

Federalism:
This action may have federalism implications as defined in EO 13132.

Agency Contact:
Sharon Ackerman
Agency Regulatory Officer
Department of Agriculture
Food and Nutrition Service
3101 Park Center Drive
Room 308
Alexandria, VA 22302
Phone: 703 305-2246
Fax: 703 605-0220
Email: sheri.ackerman@fns.usda.gov

RIN:

0584-AC24


USDA—Food Safety and Inspection Service (FSIS)

PROPOSED RULE STAGE

14. PERFORMANCE STANDARDS FOR BACON

Agency:

USDA—Food Safety and Inspection Service (FSIS)

Priority:
Other Significant

Legal Authority:
21 USC 601 et seq; 21 USC 451 et seq

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
9 CFR 424.22(b)

Legal Deadline:
None

Abstract:
FSIS is proposing to revise the regulatory provisions concerning the production and testing of pumped bacon (9 CFR 424.22(b)). FSIS is proposing to remove provisions that prescribe the substances and amounts of such substances that must be used to produce pumped bacon. FSIS is proposing to replace these provisions with an upper limit for nitrite and a performance standard that establishments producing pumped bacon must meet. To meet the proposed performance standard, the process used would be required to limit the presence of nitrosamines when the product is cooked.

Statement of Need:
FSIS is proposing to replace restrictive provisions concerning the processing of pumped bacon with an upper limit for nitrite and a performance standard. The proposed performance standard concerns limiting the presence of volatile nitrosamines in pumped bacon. These proposed changes are necessary to make the regulations concerning pumped bacon consistent with those governing Hazard Analysis and Critical Control Point (HACCP) systems.

Summary of Legal Basis:
Under the Federal Meat Inspection Act (21 U.S.C. 601-695) a meat or meat food product is adulterated "if it bears or contains any poisonous or deleterious substance which may render it injurious to health, but in case the substance is not an added substance, such article shall not be considered adulterated under this clause if the quantity of such substance in or on such article does not ordinarily render it injurious to health" (21 U.S.C. 601(m)(1)). Volatile nitrosamines are deleterious because they are carcinogenic, and though not added directly to pumped bacon, they may be produced when the pumped bacon is fried. Processors can control the levels of nitrosamines that may be present when the product is fried by controlling the levels of ingoing nitrite and of ingoing curing accelerators that are used in the production of pumped bacon. In 1978, USDA stated that nitrosamines present at confirmable levels in pumped bacon after preparation for eating were deemed to adulterate the product. FSIS still maintains that pumped bacon with confirmable levels of nitrosamines after preparation for eating is adulterated. Under this proposed rule, processors meeting the performance standard would control the levels of nitrosamines in the finished product by complying with a performance standard.

Alternatives:
No action; performance standards for all types of bacon (not just pumped bacon, as proposed).

Anticipated Cost and Benefits:
Because FSIS is proposing to convert existing regulations to a performance standard and is not proposing any new requirements for establishments producing pumped bacon, FSIS does not anticipate that this proposed rule would result in any significant costs or benefits. Pumped bacon processing establishments whose HACCP plans do not address nitrosamines as hazards reasonably likely to occur may incur some costs. Also, establishments that choose to test their products for nitrosamines may incur some costs. Because this rule provides establishments the flexibility to develop new procedures for producing bacon, this rule may result in profits to processors who develop cheaper means of producing product or who develop a product with wide consumer appeal.

Risks:
None.

Timetable:
Action Date FR Cite
NPRM 12/00/02

Regulatory Flexibility Analysis Required:
No

Government Levels Affected:
None

Agency Contact:
Dr. Daniel L. Engeljohn
Director, Regulations and Directives Development Staff
Department of Agriculture
Food Safety and Inspection Service
Room 112 Cotton Annex Building
1400 Independence Avenue SW
Washington, DC 20250
Phone: 202 720-5627
Fax: 202 690-0486
Email: daniel.engeljohn@usda.gov

RIN:

0583-AC49


USDA—FSIS

15. EGG AND EGG PRODUCTS INSPECTION REGULATIONS

Agency:

USDA—FSIS

Priority:
Economically Significant. Major status under 5 USC 801 is undetermined.

Unfunded Mandates:
Undetermined

Legal Authority:
21 USC 1031 to 1056

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
9 CFR 590.570; 9 CFR 590.575; 9 CFR 590.146; 9 CFR 590.10; 9 CFR 590.411; 9 CFR 590.502; 9 CFR 590.504; 9 CFR 590.580; 9 CFR 591; ...

Legal Deadline:
None

Abstract:
The Food Safety and Inspection Service (FSIS) is proposing to require shell egg packers and egg products plants to develop and implement Hazard Analysis and Critical Control Points (HACCP) systems and Sanitation Standard Operating Procedures (SOPs). FSIS also is proposing pathogen reduction performance standards that would be applicable to pasteurized shell eggs and egg products. Plants would be expected to develop HACCP systems that ensure products meet the pathogen reduction performance standards. Finally, FSIS is proposing to amend the Federal egg and egg products inspection regulations by removing current requirements for prior approval by FSIS of egg products plant drawings, specifications, and equipment prior to their use in official plants. The Agency also plans to eliminate the prior label approval system for egg products.
The actions being proposed are part of FSIS' regulatory reform effort to improve FSIS' egg and egg products food safety regulations, better define the roles of Government and the regulated industry, encourage innovations that will improve food safety, remove unnecessary regulatory burdens on inspected egg products plants, and make the egg and egg products regulations as consistent as possible with the Agency's meat and poultry products regulations. FSIS is also taking these actions in light of changing inspection priorities and recent findings of Salmonella in pasteurized egg products.

Statement of Need:
FSIS is proposing to require shell egg packers and egg products plants to develop and implement HACCP systems and sanitation SOPs. FSIS also is proposing pathogen reduction performance standards that would be applicable to pasteurized eggs and egg products. Plants would be expected to develop HACCP systems that ensure that these products meet the lethality required by the pathogen reduction performance standards. In addition, FSIS is proposing to amend the Federal shell egg and egg products inspection regulations by removing current requirements for approval by FSIS of egg product plant drawings, specifications, and equipment prior to their use in official plants. Finally, the Agency plans to eliminate the pre-marketing label approval system for egg products but to require safe-handling labels on all shell eggs.
The actions being proposed are part of FSIS' regulatory reform effort to improve FSIS' shell egg and egg products food safety regulations, better define the roles of Government and the regulated industry, encourage innovations that will improve food safety, remove unnecessary regulatory burdens on inspected egg products plants, and make the shell egg and egg products regulations as consistent as possible with the Agency's meat and poultry products regulations. FSIS also is taking these actions in light of changing inspection priorities and recent findings of Salmonella in pasteurized egg products.
This proposal is directly related to FSIS' PR/HACCP initiative.

Summary of Legal Basis:
This proposed rule is authorized under the Egg Products Inspection Act (21 U.S.C. 1031-1056). It is not the result of any specific mandate by the Congress or a Federal court.

Alternatives:
A team of FSIS economists and food technologists is conducting a cost-benefit analysis to evaluate the potential economic impacts of several alternatives on the public, the shell egg and egg products industry, and FSIS. These alternatives include: (1) Taking no regulatory action; (2) requiring all inspected egg products plants to develop, adopt, and implement written sanitation SOPs and HACCP plans; and (3) converting to a lethality-based pathogen reduction performance standard many of the current highly prescriptive egg products processing requirements. The team will consider the effects of a uniform, across-the-board standard for all egg products; a performance standard based on the relative risk of different classes of egg products; and a performance standard based on the relative risks to public health of different production processes.

Anticipated Cost and Benefits:
FSIS is analyzing the potential costs of this proposed rulemaking to industry, FSIS and other Federal agencies, State and local governments, small entities, and foreign countries. The expected costs to industry will depend on a number of factors. These costs include the required lethality, or level of pathogen reduction, and the cost of HACCP plan and sanitation SOP development, implementation, and associated employee training. The pathogen reduction costs will depend on the amount of reduction sought and in what classes of product, product formulations, or processes.
Relative enforcement costs to FSIS and Food and Drug Administration may change because the two agencies share responsibility for inspection and oversight of the egg industry and a common farm-to-table approach for shell egg and egg products food safety. Other Federal agencies and local governments are not likely to be affected.
FSIS has cooperative agreements with six States and the Commonwealth of Puerto Rico under which they provide inspection services to egg processing plants under Federal jurisdiction. FSIS reimburses the States for staffing costs and expenses for full-time State inspectors. HACCP implementation may result in a reduction of staffing resource requirements in the States and a corresponding reduction of the Federal reimbursement. As a result, some States may decide to stop providing inspection services and convert to Federal inspection of egg products plants.
Egg and egg product inspection systems of foreign countries wishing to export eggs and egg products to the U.S. must be equivalent to the U.S. system. FSIS will consult with these countries, as needed, if and when this proposal becomes effective.
This proposal is not likely to have a significant impact on small entities. The entities that would be directly affected by this proposal would be the approximately 75 federally inspected egg products plants, most of which are small businesses, according to Small Business Administration criteria. If necessary, FSIS will develop compliance guides to assist these small firms in implementing the proposed requirements.
Potential benefits associated with this rulemaking include: Improvements in human health due to pathogen reduction; improved utilization of FSIS inspection program resources; and cost savings resulting from the flexibility of egg products plants in achieving a lethality-based pathogen reduction performance standard. Once specific alternatives are identified, economic analysis will identify the quantitative and qualitative benefits associated with each.
Human health benefits from this rulemaking are likely to be small because of the low level of (chiefly post-processing) contamination of pasteurized egg products. In light of recent scientific studies that raise questions about the efficacy of current regulations, however, it is likely that measurable reductions will be achieved in the risk of foodborne illness.

Risks:
FSIS believes that this regulatory action may result in a further reduction in the risks associated with egg products. The development of a lethality-based pathogen reduction performance standard for egg products, replacing command-and-control regulations, will remove unnecessary regulatory obstacles to, and provide incentives for, innovation to improve the safety of egg products.
To assess the potential risk-reduction impacts of this rulemaking on the public, an intra-Agency group of scientific and technical experts is conducting a risk management analysis. The group has been charged with identifying the lethality requirement sufficient to ensure the safety of egg products and the alternative methods for implementing the requirement. The egg products processing and distribution module of the Salmonella enteritidis Risk Assessment, made public June 12, 1998, will be appropriately modified to evaluate the risk associated with the regulatory alternatives.

Timetable:
Action Date FR Cite
NPRM 06/00/03

Regulatory Flexibility Analysis Required:
Yes

Small Entities Affected:
Businesses, Governmental Jurisdictions

Government Levels Affected:
Federal, State

Federalism:
Undetermined

Agency Contact:
Dr. Daniel L. Engeljohn
Director, Regulations and Directives Development Staff
Department of Agriculture
Food Safety and Inspection Service
Room 112 Cotton Annex Building
1400 Independence Avenue SW
Washington, DC 20250
Phone: 202 720-5627
Fax: 202 690-0486
Email: daniel.engeljohn@usda.gov

RIN:

0583-AC58


USDA—FSIS

16. ELIMINATION OF CHILLING TIME AND TEMPERATURE REQUIREMENTS FOR READY-TO-COOK POULTRY (SECTION 610 REVIEW)

Agency:

USDA—FSIS

Priority:
Other Significant

Legal Authority:
21 USC 451 to 470

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
9 CFR 381.66

Legal Deadline:
None

Abstract:
FSIS is proposing to eliminate the time and temperature requirements for chilling ready-to-cook poultry carcasses and giblets. The Agency is taking this action because the requirements are inconsistent with the Agency's Pathogen Reduction/Hazard Analysis and Critical Control Point (PR/HACCP) System regulations, with its final rule further restricting retained water in raw meat and poultry, and with the Agency's regulatory reform program. Moreover, because of these regulations, the meat and poultry industries receive disparate regulatory treatment: No regulations that apply to the chilling of poultry apply to the chilling of meat. This proposal responds to longstanding petitions by industry trade associations.

Statement of Need:
This proposed rule addresses Federal regulations that are inconsistent with the PR/HACCP regulations because they restrict the ability of poultry processors to choose appropriate and effective measures to eliminate, reduce, or control biological hazards identified in their hazard analyses. The regulations also complicate efforts by establishments to comply with the terms of the January 9, 2001, final rule further restricting the amount of water that may be retained in raw meat or poultry products after post-evisceration processing; some establishments may have to use chilling procedures that result in higher levels of retained water in carcasses than may be necessary to achieve the same food safety objective. For example, establishments that operate automated chillers may have to subject poultry carcasses to higher agitation rates or longer dwell times in the chillers. Also, as discussed above, the time/temperature chilling regulations for poultry are inconsistent with the PR/HACCP regulations, the retained water regulations, and the meat inspection regulations.

Summary of Legal Basis:
This regulatory action is authorized under the Poultry Products Inspection Act (21 U.S.C. 451-470).

Alternatives:
FSIS evaluated five regulatory alternatives: (1) Taking no regulatory action; (2) replacing the command-and-control requirements with a performance standard; (3) requiring meatpackers, as well as poultry processors, to comply with such a performance standard; (4) requiring all establishments that prepare raw meat or poultry products or handle, transport, or receive the products in transportation to comply with a performance standard; or (5) removing the command-and-control requirements from the poultry products inspection regulations. The Agency chose the fifth alternative.

Anticipated Cost and Benefits:
Poultry processors would gain the flexibility to choose the best processing techniques and procedures for achieving production efficiencies, meeting HACCP food safety objectives, and preventing economic adulteration of raw product with retained water in amounts greater than unavoidable for food-safety purposes. They would be able to operate with a wider range of chilling temperatures consistently with the requirements of the PR/HACCP regulations. The poultry products industry could achieve energy efficiencies resulting in annual savings of as much as $2.8 million. The industry could also reduce carcass "dwell times" in immersion chillers and thereby reduce the amount of water absorbed and retained by the carcasses. The reduction in dwell time might enable some establishments, particularly those currently operating at the throughput capacity of their chillers, to increase production by installing additional evisceration lines.
Poultry establishments would therefore be able to operate more efficiently to provide consumers with product that is not adulterated. FSIS also would gain some flexibility by being able to reallocate some inspection resources from measuring the temperature of chilled birds to such activities as HACCP system verification.
This proposed rule would directly impose no new costs on the regulated industry. It would relieve burdens arising from the disparate impacts of the current regulations on the meat and poultry industries.

Risks:
None

Timetable:
Action Date FR Cite
NPRM 06/00/03

Regulatory Flexibility Analysis Required:
No

Small Entities Affected:
Businesses

Government Levels Affected:
None

Agency Contact:
Dr. Daniel L. Engeljohn
Director, Regulations and Directives Development Staff
Department of Agriculture
Food Safety and Inspection Service
Room 112 Cotton Annex Building
1400 Independence Avenue SW
Washington, DC 20250
Phone: 202 720-5627
Fax: 202 690-0486
Email: daniel.engeljohn@usda.gov

RIN:

0583-AC87


USDA—FSIS

17. EMERGENCY REGULATIONS TO PREVENT MEAT FOOD AND MEAT PRODUCTS THAT MAY CONTAIN THE BSE AGENT FROM ENTERING COMMERCE

Agency:

USDA—FSIS

Priority:
Economically Significant. Major status under 5 USC 801 is undetermined.

Legal Authority:
21 USC 601 et seq

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
Not Yet Determined

Legal Deadline:
None

Abstract:
FSIS is proposing to amend the meat inspection regulations to add emergency regulations to prevent meat and meat food products that may contain the bovine spongiform encephalopathy (BSE) agent from entering commerce. The emergency regulations would become effective when, and if, BSE is diagnosed in native cattle in the United States. FSIS may also propose to issue certain regulations in the absence of BSE as preventive measures. The proposed regulations provide for periodic review by FSIS to determine their effectiveness and to evaluate the need to modify or remove some measures or impose additional measures.

Statement of Need:
FSIS is proposing to amend the meat inspection regulations to add provisions to prevent meat and meat products that may contain the BSE agent from entering commerce in the event that BSE is diagnosed in native cattle in the U.S. Any final rule that is developed as a result of this proposal will become effective if, and when, a native case of BSE is detected in the U.S.
BSE is a chronic, degenerative, neorological disorder of cattle. Worldwide, there have been more than 185,000 cases since the disease was first diagnosed in 1986 in Great Britain. There have been no cases of BSE detected in the United States despite 10 years of active surveillance for the disease. Recent laboratory and epidemiological research indicate that there is a causal association between BSE and variant Creutzfeldt-Jakob Disease (vCJD), a slow degenerative disease that affects the central nervous system of humans. Like BSE, vCJD has not been detected in the United States. Both BSE and vCJD are always fatal.
Although BSE has not been detected in the U.S., USDA policy in regard to BSE has been to be proactive and preventive. Therefore, FSIS is proposing these regulations so that the Agency will have an immediate regulatory response in the event that BSE is detected in the U.S. Once finalized, the proposed measures will be incorporated in the meat inspection regulations but would only become effective if, and when, BSE is detected in native cattle. The proposed regulations would: (1) Prohibit certain materials that have been shown to contain the BSE agent in BSE-infected cattle to be used for human food or in the production of human food; (2) prescribe handling, storage, and transportation requirements for such materials; (3) prohibit slaughter procedures that may cause potentially infective tissues to migrate to edible tissues; (4) impose restrictions on the use of the vertebral column as a source material in the production of meat produced using advanced meat recovery systems (AMRS) and in the production of "Mechanically Separated (Beef)" (MS(Beef)) meat food product; (5) prescribe requirements for the slaughtering and processing of cattle whose materials are most likely to contain the BSE agent if the animal is infected with BSE; and (6) prescribe requirements for the sanitation or disposal of plant equipment that may be contaminated with the BSE agent. The proposed regulations provide for periodic review by FSIS to determine their effectiveness and to evaluate the need to modify or remove some measures or impose additional measures.

Summary of Legal Basis:
Under the Federal Meat Inspection Act (21 U.S.C. 601-695), FSIS issues regulations governing the production of meat and meat food products. The regulations, along with FSIS inspection programs, are designed to ensure that meat food products are safe, not adulterated, and properly marked, labeled, and packaged.

Alternatives:
As an alternative to the proposed requirements, FSIS considered taking no action. FSIS rejected this option because, as previously mentioned, USDA policy in regard to BSE has been to be proactive and preventive. Publishing a proposed rule will inform the public of the type of regulatory response it can expect from FSIS when, and if, BSE is detected in native cattle.
In addition to the proposed requirements, FSIS is considering taking actions prior to the detection of BSE in the U.S. to minimize human exposure to materials from cattle that could potentially contain the BSE agent. The measures under consideration are targeted at the materials of cattle that are most likely to contain the BSE agent, if such animals have been infected with BSE, and those cattle that have consumed feed prohibited by Food and Drug Administration's (FDA) regulations (i.e., mammalian meat and bone meal in ruminant feed).

Anticipated Cost and Benefits:
If issued as a final rule, this proposal would result in costs to the regulated industry. FSIS expects to minimize the costs by targeting the regulations to apply to those cattle whose materials are most likely to contain the BSE agent if the animal is infected with BSE. Banning certain materials, such as brain and spinal cord, for use as human food may require additional staff and time to remove such materials. Materials prohibited for use as human food could not be sold domestically or exported. Companies may be required to find new ways to handle and dispose of these materials, which would impose additional costs. Prohibiting the use of bovine vertebral column as a source material in AMRS and systems used to produce MS (Beef) product could result in a decrease in product yield and may require companies that use these systems to produce boneless beef and beef products to find other uses for bovine vertebral column. Establishments whose equipment may have been contaminated with the BSE agent may have costs associated with sanitation or disposal of plant equipment.
FSIS may incur costs to increase inspection and compliance activities to ensure that the measures taken to prevent meat and meat food products that may contain the BSE agent from entering commerce are effective. Producers may receive lower prices from processors, and some of their stock may be condemned outright. The price consumers pay for meat may rise or fall depending on how the discovery of BSE in the U.S. would affect consumer demand for beef.
The main benefit of this proposed rule is the prevention of vCJD in the United States. There have been over 100 definite and probable cases of vCJD detected worldwide since the disease was first identified in 1986 in the United Kingdom. While vCJD is still considered a rare condition, the extent or occurrence of a vCJD epidemic in the United Kingdom cannot be determined because of the long incubation period (up to 25 years). Thus, if issued as a final rule, this proposal could have widespread public health benefits if it serves to prevent a vCJD epidemic from developing in the U.S. Even if vCJD remains a rare condition, this proposed rule will still have public health benefits because of the severity of the symptoms associated with vCJD and the fact that vCJD is always fatal.
This proposed rule may benefit the meat industry by helping to restore confidence in the domestic meat supply when, and if, a native case of BSE is detected in the U.S. This may limit losses to meat slaughter and processing operations in the long run.

Risks:
Although vCJD is a rare condition, the symptoms are severe, and it is always fatal. This proposed rule is intended to reduce the risk of humans developing vCJD in the U.S. in the event BSE is detected in native cattle. The measures proposed by FSIS are intended to minimize human exposure to materials from cattle that could potentially contain the BSE agent. In April 1998, USDA entered into a cooperative agreement with Harvard University's School of Public Health to conduct a risk analysis to assess the potential pathways for entry into U.S. cattle and the U.S. food supply, to evaluate existing regulations and policies, and to identify any additional measures that could be taken to protect human and animal health. FSIS will use the findings of the risk assessment to evaluate the level of risk reduction associated with the proposed measures.
Unlike bacterial and viral pathogens that may be found in or on meat food products, the BSE agent cannot be destroyed by conventional methods, such as cooking or irradiation. Also, although it is rare, vCJD, the human disease associated with exposure to the BSE agent, is generally more severe than the human illnesses associated with exposure to bacterial and viral pathogens. Thus, if BSE were detected in the U.S., additional measures to reduce the risk of human exposure to the BSE agent are necessary to protect public health.

Timetable:
Action Date FR Cite
NPRM 09/00/03

Regulatory Flexibility Analysis Required:
Yes

Small Entities Affected:
Businesses

Government Levels Affected:
Undetermined

Federalism:
Undetermined

Agency Contact:
Dr. Daniel L. Engeljohn
Director, Regulations and Directives Development Staff
Department of Agriculture
Food Safety and Inspection Service
Room 112 Cotton Annex Building
1400 Independence Avenue SW
Washington, DC 20250
Phone: 202 720-5627
Fax: 202 690-0486
Email: daniel.engeljohn@usda.gov

RIN:

0583-AC88


USDA—FSIS

FINAL RULE STAGE

18. PERFORMANCE STANDARDS FOR READY-TO-EAT MEAT AND POULTRY PRODUCTS

Agency:

USDA—FSIS

Priority:
Economically Significant

Unfunded Mandates:
Undetermined

Legal Authority:
21 USC 451 et seq; 21 USC 601 et seq

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
9 CFR 317; 9 CFR 381; 9 CFR 430

Legal Deadline:
None

Abstract:
FSIS has proposed to establish pathogen reduction performance standards for all ready-to-eat and partially heat-treated meat and poultry products. The performance standards spell out the objective level of pathogen reduction that establishments must meet during their operations in order to produce safe products but allow the use of customized, plant-specific processing procedures other than those prescribed in the earlier regulations. Along with HACCP, food safety performance standards will give establishments the incentive and flexibility to adopt innovative, science-based food safety processing procedures and controls, while providing objective, measurable standards that can be verified by Agency inspectional oversight. This set of performance standards will include and be consistent with those already in place for certain ready-to-eat meat and poultry products. FSIS also proposed testing requirements intended to reduce the incidence of Listeria in ready-to-eat meat and poultry products.

Statement of Need:
The Food Safety and Inspection Service (FSIS) has proposed to amend the Federal meat and poultry inspection regulations by establishing food safety performance standards for all ready-to-eat and all partially heat-treated meat and poultry products. The proposed performance standards set forth both levels of pathogen reduction and limits on pathogen growth that official meat and poultry establishments must achieve during their operations in order to produce unadulterated products but allow the use of customized, plant-specific processing procedures. The proposed performance standards apply to ready-to-eat meat and poultry products, categorized as follows: Dried products (e.g., beef or poultry jerky); salt-cured products (e.g. country ham); fermented products (e.g., salami and Lebanon bologna); cooked and otherwise processed products (e.g., beef and chicken burritos, corned beef, pastrami, poultry rolls, and turkey franks); and thermally-processed, commercially sterile products (e.g., canned spaghetti with meat balls and canned corned beef hash).
Although FSIS routinely samples and tests some ready-to-eat products for the presence of pathogens prior to distribution, there are no specific regulatory pathogen reduction requirements for most of these products. The proposed performance standards will help ensure the safety of these products; give establishments the incentive and flexibility to adopt innovative, science-based food safety processing procedures and controls; and provide objective, measurable standards that can be verified by Agency oversight.
FSIS also proposed requirements intended to reduce the incidence of Listeria in ready-to-eat meat and poultry products. First, FSIS proposed to require establishments that produce ready-to-eat meat and poultry products to conduct environmental testing for Listeria to verify that they are controlling the presence of L. monocytogenes within their processing environments. Establishments that have developed and implemented HACCP controls for L. monocytogenes would be exempt from these testing requirements.
FSIS also has proposed to eliminate its regulations that require that both ready-to-eat and not-ready-to-eat pork and products containing pork be treated to destroy trichinae (Trichinella spiralis). These requirements are inconsistent with HACCP, and some will be unnecessary if FSIS makes final the proposed performance standards for ready-to-eat meat and poultry products.

Summary of Legal Basis:
Under the Federal Meat Inspection Act (21 U.S.C 601-695) and the Poultry Product Inspection Act (21 U.S.C 451-470) FSIS issues regulations governing the production of meat and poultry products prepared for distribution in commerce. The regulations, along with FSIS inspection programs, are designed to ensure that meat and poultry products are safe, not adulterated, and properly marked, labeled, and packaged.

Alternatives:
As an alternative to all of the proposed requirements, FSIS considered taking no action. As alternatives to the proposed requirements for Listeria testing, FSIS considered: End-product testing; mandatory post-lethality interventions for L. monocytogenes; mandatory food-contact surface testing for all establishments that produce read-to-eat products; redesignation of hotdogs and other ready-to-eat products as not-ready-to-eat; and requiring "use-by" date labeling on certain ready-to-eat products.

Anticipated Cost and Benefits:
If the proposed regulations could achieve a complete elimination of listeriosis that results from the consumption of contaminated RTE meat and poultry products, the expected annual reduction in listeriosis cases and deaths would range from 1,660 cases and 331 deaths (based on the draft FDA-FSIS risk assessment and on 100 percent program effectiveness) to 167 cases and 35 deaths (based on two independent CDC studies and on 100 percent program effectiveness). FSIS is uncertain about the effectiveness of its proposed testing requirements in reducing listeriosis and therefore unable to adequately quantify a range of benefits. FSIS intends to use comments and data received during the comment period and at the planned technical conference to refine the proposed regulations and to better estimate benefits. It is of course unlikely that the proposed regulations could achieve complete elimination of the listeriosis that results from contaminated meat and poultry, but FSIS believes that the benefits of the regulations would exceed the total costs of all of the proposed provisions.
The two main provisions of the proposed rule are: (1) Mandatory in-plant testing for Listeria and (2) Salmonella and E. coli performance standards firms must employ as measures of process control. Much of the costs of these actions are associated with first-year, one-time validation pertaining to the achievement of the performance standards and with the incorporation of new information into plants' HACCP plans. These initial costs are projected at over $6.5 million, while annual recurring costs are estimated at $6.2 million. Benefits are expected to result from less contaminated product entering commercial channels due to increased sanitation efforts and in-plant verification through testing.

Risks:
None.

Timetable:
Action Date FR Cite
NPRM 02/27/01 66 FR 12590
NPRM Comment Period End 05/29/01
NPRM Comment Period Extended 07/03/01 66 FR 35112
NPRM Comment Period End 09/10/01
Final Action 06/00/03

Regulatory Flexibility Analysis Required:
Yes

Small Entities Affected:
Businesses

Government Levels Affected:
Undetermined

Agency Contact:
Dr. Daniel L. Engeljohn
Director, Regulations and Directives Development Staff
Department of Agriculture
Food Safety and Inspection Service
Room 112 Cotton Annex Building
1400 Independence Avenue SW
Washington, DC 20250
Phone: 202 720-5627
Fax: 202 690-0486
Email: daniel.engeljohn@usda.gov

RIN:

0583-AC46


USDA—FSIS

19. MEAT PRODUCED BY ADVANCED MEAT/BONE SEPARATION MACHINERY AND RECOVERY SYSTEMS

Agency:

USDA—FSIS

Priority:
Other Significant

Legal Authority:
21 USC 601 to 695

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
9 CFR 301.2; 9 CFR 318.24 (Revision); 9 CFR 320.1(b)(10)

Legal Deadline:
None

Abstract:
In 1994, the Food Safety and Inspection Service (FSIS) amended its regulations to recognize that products resulting from advanced meat/bone separation machinery comes within the definition of meat when recovery systems are operated to assure that the characteristics and composition of the resulting product are consistent with those of meat. Subsequent compliance problems and other concerns have made it apparent that the regulations are inadequate to prevent misbranding and economic adulteration. Therefore, FSIS is developing a rule to clarify the regulations and supplement the rules for assuring compliance.

Statement of Need:
In 1998, FSIS proposed to clarify the meat inspection regulations regarding mechanically separated meat contained in a final rule issued in December 1995. The rule would replace the present compliance program parameters with non-compliance criteria for bone and bone-related material. The rule would require, as a prerequisite to labeling or using product derived by mechanically separating skeletal muscle tissue from cattle and swine bones as meat, that establishments implement and document procedures for ensuring that their production process is in control. The proposed rule was published in 1998.
FSIS intends to implement more rigid measures for central nervous system tissue and prohibiting the use of vertebral columns in the AMR final product unless the establishment can demonstrate effective process control to ensure that no spinal cord and dorsal root ganglia will be present in the final AMR product. Current FSIS policy prohibits the presence of spinal cord in AMR products but not the presence of DRG or the use of vertebral columns. In January 2002, FSIS began the first of two surveys on AMR products derived from non-vertebral and vertebral beef and pork columns.

Summary of Legal Basis:
This action is authorized under the Federal Meat Inspection Act (21 U.S.C. 601-695).

Alternatives:
No action.

Anticipated Cost and Benefits:
Although the 1998 proposed rule was determined to be not economically significant, FSIS restudied the projected costs using data from various FSIS data bases and other sources to develop an improved estimate of the benefits and costs of implementing the final rule. To date, it appears that the final rule will not be economically significant, but data evaluation continues. The benefit of enforcing the misbranding provisions will ensure that the product does not contain materials not consistent with boneless, comminuted meat.

Risks:
None.

Timetable:
Action Date FR Cite
NPRM 04/13/98 63 FR 17959
NPRM Comment Period End 06/12/98
Final Action 09/00/03

Regulatory Flexibility Analysis Required:
Undetermined

Government Levels Affected:
None

Agency Contact:
Dr. Daniel L. Engeljohn
Director, Regulations and Directives Development Staff
Department of Agriculture
Food Safety and Inspection Service
Room 112 Cotton Annex Building
1400 Independence Avenue SW
Washington, DC 20250
Phone: 202 720-5627
Fax: 202 690-0486
Email: daniel.engeljohn@usda.gov

RIN:

0583-AC51


USDA—FSIS

20. NUTRITION LABELING OF GROUND OR CHOPPED MEAT AND POULTRY PRODUCTS AND SINGLE-INGREDIENT PRODUCTS

Agency:

USDA—FSIS

Priority:
Other Significant

Legal Authority:
21 USC 601 et seq; 21 USC 451 et seq

CFR Citation: (To search for a specific CFR, visit the Code of Federal Regulations.)
9 CFR 317; 9 CFR 381

Legal Deadline:
None

Abstract:
FSIS has proposed to amend the Federal meat and poultry products inspection regulations to require that nutrition information be provided for the major cuts of single-ingredient, raw meat and poultry products, either on their label or at their point-of-purchase. FSIS proposed to require nutrition labeling of the major cuts of single-ingredient, raw meat and poultry products because, during the most recent surveys of retailers, the Agency did not find significant participation in the voluntary nutrition labeling program for single-ingredient, raw meat and poultry products.
In this rule, FSIS also proposed to amend its regulations to extend mandatory labeling to single-ingredient ground or chopped products. Under this proposal, individual retail packages of ground or chopped meat and ground or chopped poultry products would bear nutrition labeling. The Agency has determined that ground or chopped products are different from other single-ingredient products in several important respects. Thus, FSIS proposed to make nutrition labeling requirements for ground or chopped products consistent with those for multi-ingredient products.
Finally, FSIS has proposed to amend the nutrition labeling regulations to provide that, when a ground or chopped product does not meet the criteria to be labeled "low fat," a lean percentage claim may be included on the product label or in labeling as long as a statement of the fat percentage also is displayed on the label or in labeling.

Statement of Need:
The Agency has proposed to require that nutrition information be provided for the major cuts of single-ingredient, raw meat and poultry products, either on their label or at their point-of-purchase, because during the most recent surveys of retailers, the Agency did not find significant participation in the voluntary nutrition labeling program for single-ingredient, raw meat and poultry products. Without the nutrition information for the major cuts of single-ingredient, raw meat and poultry products that would be provided if significant participation in the voluntary nutrition labeling program existed, FSIS believes that these products would be misbranded.
FSIS has also proposed to amend its regulations to require nutrition labels on the packages of all ground or chopped meat and poultry products. The Agency has determined that single-ingredient, ground or chopped products are different from other single-ingredient products in several important respects. Thus, FSIS has proposed to make nutrition labeling requirements for all ground or chopped products consistent with those for multi-ingredient products.
Finally, FSIS has proposed to amend the nutrition labeling regulations to provide that when a ground or chopped product does not meet the criteria to be labeled "low fat," a lean percentage claim may be included on the product as long as a statement of the fat percentage is also displayed on the label or in labeling. FSIS proposed this provision because many consumers have become accustomed to this labeling on ground beef products and because FSIS believed this labeling provides a quick, simple, accurate means of comparing all ground or chopped meat and poultry products.

Summary of Legal Basis:
This action is authorized under the Federal Meat Inspection Act (21 U.S.C. 601-695) and the Poultry Products Inspection Act (21 U.S.C. 451-470).

Alternatives:
No action; nutrition labels required on all single-ingredient, raw products (major cuts and non-major cuts) and all ground or chopped products; nutrition labels required on all major cuts of single-ingredient, raw products (but not non-major cuts) and all ground or chopped products; nutrition information at the point-of-purchase required for all single-ingredient, raw products (major and non-major cuts) and for all ground or chopped products.

Anticipated Cost and Benefits:
Costs would include the equipment for making labels, labor, and materials used for labels for ground or chopped products. FSIS believes that the cost of providing nutrition labeling for the major cuts of single-ingredient, raw meat and poultry products should be negligible. Retail establishments would have the option of providing nutrition information through point-of-purchase materials. These materials are available for a nominal fee through the Food Marketing Institute. Also, FSIS intends to make point-of-purchase materials available, free of charge, on the FSIS web site.
Benefits of the nutrition labeling rule would result from consumers modifying their diets in response to new nutrition information concerning ground or chopped products and the major cuts of single-ingredient, raw products. Reductions in consumption of fat and cholesterol are associated with reduced incidence of cancer and coronary heart disease.

Risks:
None.

Timetable:
Action Date FR Cite
NPRM 01/18/01 66 FR 4970
NPRM Comment Period End 04/18/01
Extension of Comment Period 04/20/01 66 FR 20213
NPRM Comment Period End 07/17/01
Final Action 07/00/03

Regulatory Flexibility Analysis Required:
Yes

Small Entities Affected:
Businesses

Government Levels Affected:
None

Agency Contact:
Robert Post
Director, Labeling and Consumer Protection Staff
Department of Agriculture
Food Safety and Inspection Service
Washington, DC 20250
Phone: 202 205-0279

RIN:

0583-AC60