[Federal Register Volume 83, Number 245 (Friday, December 21, 2018)]
[Rules and Regulations]
[Pages 65814-65876]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27283]



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Vol. 83

Friday,

No. 245

December 21, 2018

Part II





Department of Agriculture





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Agricultural Marketing Service





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7 CFR Part 66





National Bioengineered Food Disclosure Standard; Rules

Federal Register / Vol. 83 , No. 245 / Friday, December 21, 2018 / 
Rules and Regulations

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 66

[Doc. No. AMS-TM-17-0050]
RIN 0581-AD54


National Bioengineered Food Disclosure Standard

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule establishes the new national mandatory bioengineered 
(BE) food disclosure standard (NBFDS or Standard). The new Standard 
requires food manufacturers, importers, and other entities that label 
foods for retail sale to disclose information about BE food and BE food 
ingredients. This rule is intended to provide a mandatory uniform 
national standard for disclosure of information to consumers about the 
BE status of foods. Establishment and implementation of the new 
Standard is required by an amendment to the Agricultural Marketing Act 
of 1946.

DATES: Effective Date: This rule becomes effective February 19, 2019.
    Implementation Date: January 1, 2020.
    Extended Implementation Date (for small food manufacturers): 
January 1, 2021.
    Voluntary Compliance Date: Ends on December 31, 2021.
    Mandatory Compliance Date: January 1, 2022.

FOR FURTHER INFORMATION CONTACT: Arthur L. Neal, Jr, Deputy 
Administrator, Transportation and Marketing Program, AMS, USDA, 1400 
Independence Ave. SW, Room 4543-S, Washington, DC 20250; email: 
<a href="/cdn-cgi/l/email-protection#eeaf9c9a869b9cc0a08b8f82ae9b9d8a8fc0898198"><span class="__cf_email__" data-cfemail="246556504c51560a6a41454864515740450a434b52">[email protected]</span></a>; telephone: 202-690-1300; or fax: 202-690-0338.

SUPPLEMENTARY INFORMATION: On July 29, 2016, Public Law 114-216 amended 
the Agricultural Marketing Act of 1946 (7 U.S.C. 1621 et seq.), as 
amended (amended Act), by adding Subtitles E and F. Subtitle E of the 
amended Act directs the Secretary of Agriculture (Secretary) to 
establish the NBFDS for disclosing any food that is or may be 
bioengineered. 7 U.S.C. 1639b(a)(1). Subtitle E also directs the 
Secretary to establish requirements and procedures necessary to carry 
out the new Standard. 7 U.S.C. 1639b(a)(2).

Outline of the Final Rule

I. Introduction
II. Applicability
    A. Definitions
    B. Food Subject to Disclosure
    C. Bioengineered Food
    1. Definition of ``Bioengineering'' and ``Bioengineered Food''
    2. Conventional Breeding
    3. Found in Nature
    D. List of Bioengineered Foods
    1. List Maintenance and Revision
    2. Treatment of Technologies
    E. Factors and Conditions
    1. Incidental Additives
    2. Undetectable Modified Genetic Material
    F. Exemptions
    1. Food Served in a Restaurant or Similar Retail Food 
Establishment
    2. Very Small Food Manufacturers
    3. Threshold
    4. Animals Fed With Bioengineered Feed and Their Products
    5. Food Certified Under the National Organic Program
    G. Severability
III. Disclosure
    A. General
    1. Responsibility for Disclosure
    2. International Impact
    3. Appearance of Disclosure
    4. Placement of Disclosure
    5. How the List of Bioengineered Foods Relates to Disclosure
    a. Disclosure Options
    b. Use of the ``May Be'' Option
    B. Text Disclosure
    C. Symbol Disclosure
    D. Electronic or Digital Link Disclosure
    E. Study on Electronic Disclosure and a Text Message Disclosure 
Option
    F. Small Food Manufacturers
    1. Definition
    2. Telephone Number
    3. Internet website
    G. Small and Very Small Packages
    H. Food Sold in Bulk Containers
    I. Voluntary Disclosure
IV. Administrative Provisions
    A. Recordkeeping Requirements
    B. Enforcement
    C. Effective, Implementation, and Compliance Dates
    D. Use of Existing Label Inventories
V. Comments on the NPRM
VI. Rulemaking Analyses and Notices
    A. Paperwork Reduction Act
    1. Comments on Information Collection and Recordkeeping
    B. E-Gov
    C. Civil Rights Review
    D. Executive Orders 12866, 13563, and 13771
    E. Final Regulatory Flexibility Analysis
    1. Introduction
    2. Economic Effects on Small Entities
    3. Definition of Small Business
    4. Coordination of Definition of Small Food Manufacturers With 
FDA Definition
    5. Exemptions for Very Small Food Manufacturers
    6. Costs to Small Entities
    7. Summary
    F. Executive Order 13175
    G. Executive Order 12988
    H. Executive Order 13132

I. Introduction

    The Secretary delegated authority for establishing and 
administering the NBFDS to the Agricultural Marketing Service (AMS). To 
assist with development of the new Standard, AMS posted 30 questions 
for public consideration and comment on its website (https://www.ams.usda.gov/rules-regulations/public-input-bioengineered-food-disclosure-questions) on June 28, 2017. Contributors from diverse 
backgrounds, including consumers, food manufacturers and retailers, 
farmers and processors, State and foreign governments, and various 
associations and other interested groups representing consumers and 
industry submitted over 112,000 responses. AMS posted the responses on 
its website.
    AMS considered responses to the 30 questions in the development of 
a proposed rule, which was included in a notice of proposed rulemaking 
(NPRM) published in the Federal Register on May 4, 2018 (83 FR 19860). 
The NPRM outlined AMS's proposed requirements and procedures for the 
new Standard to be codified at 7 CFR part 66 and requested public 
comment on several regulatory alternatives offered for consideration. 
The public comment period closed on July 3, 2018. AMS received 
approximately 14,000 comments by the end of the comment period.
    Subsequent to publication of the NPRM, AMS published two documents 
in the Federal Register related to this proceeding. The first, 
published on May 23, 2018 (83 FR 23827), announced the availability of 
a recorded webinar about the proposed NBFDS on AMS's website. The 
second, published on June 20, 2018 (83 FR 28547), made a correction to 
the Initial Regulatory Flexibility Analysis contained in the NPRM to 
clarify that the proposed rule was not expected to have a significant 
economic impact on a substantial number of small business entities.
    AMS also published two supplemental documents related to the NBFDS. 
One, a Regulatory Impact Analysis and its supporting documents, was 
posted on Regulations.gov at https://www.regulations.gov/document?D=AMS-TM-17-0050-2833. The other, a graphic document showing 
alternative proposals for BE food disclosure labels, was posted on 
Regulations.gov at https://www.regulations.gov/document?D=AMS-TM-17-0050-0003, and on AMS's website at https://www.ams.usda.gov/sites/default/files/media/ProposedBioengineeredLabels.pdf.
    The amended Act directs the Secretary to conduct a study to 
identify potential technological challenges related to electronic or 
digital disclosure

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methods. See 7 U.S.C. 1639b(c)(1). AMS sponsored such a study, and the 
results were published on AMS's website (https://www.ams.usda.gov/reports/study-electronic-or-digital-disclosure) in September 2017. 
Public comments on the results of the study were solicited in 
conjunction with the NPRM. The Secretary's determination regarding this 
matter is discussed in Section III of this final rule.
    Finally, Subtitle F of the amended Act addresses Federal preemption 
of State and local genetic engineering labeling requirements. 7 U.S.C. 
1639i. Subtitle F also specifies that certification of food under the 
U.S. Department of Agriculture's (USDA) National Organic Program (NOP) 
(7 CFR part 205) shall be considered sufficient to make claims about 
the absence of bioengineering in the food. 7 U.S.C. 6524.
    The purpose of the NBFDS as contained in this final rule is to 
provide a mandatory disclosure standard for BE food, by which uniform 
information is provided to consumers. Nothing in the disclosure 
requirements set out in this final rule conveys information about the 
health, safety, or environmental attributes of BE food as compared to 
non-BE counterparts.
    In fact, the regulatory oversight by USDA and other Federal 
Government agencies ensures that food produced through bioengineering 
meets all relevant Federal health, safety, and environmental standards. 
The agencies responsible for oversight of the products of biotechnology 
include: USDA's Animal and Plant Health Inspection Service (APHIS), the 
U.S. Environmental Protection Agency (EPA), and the Department of 
Health and Human Services' Food and Drug Administration (FDA). The 
Coordinated Framework for Regulation of Biotechnology (Coordinated 
Framework) is a policy framework that summarizes the roles and 
responsibilities of these three principal regulatory agencies with 
respect to regulating biotechnology products.
    The final rule is intended to provide for disclosure of foods that 
are or may be bioengineered to consumers, but also seeks to minimize 
implementation and compliance costs for the food industry--costs that 
could be passed on to all consumers. To that end, AMS has tried to 
craft requirements that are clear and straightforward, incorporating 
flexibility where appropriate. Public input has been invaluable to this 
effort; public comments submitted in response to the proposed rule were 
critical to the development of the final rule.
    The following discussion of the NBFDS is divided into three parts: 
(1) Applicability; (2) disclosure; and (3) administrative provisions.

II. Applicability

    The amended Act directs USDA to promulgate regulations regarding 
foods required to bear a disclosure indicating that the food is or may 
be bioengineered. 7 U.S.C. 1639b(b). At the outset, the amended Act 
establishes the scope of the NBFDS by defining ``bioengineering'' and 
``food,'' and by limiting mandatory disclosure to those foods subject 
to the labeling requirements of the Federal Food, Drug, and Cosmetic 
Act (FDCA) (21 U.S.C. 301 et seq.) and to certain foods subject to 
labeling under the Federal Meat Inspection Act (FMIA)(21 U.S.C. 601 et 
seq.), the Poultry Products Inspection Act (PPIA)(21 U.S.C. 451 et 
seq.), or the Egg Products Inspection Act (EPIA)(21 U.S.C. 1031 et 
seq.) administered by the Food Safety and Inspection Service (FSIS). 7 
U.S.C. 1639 and 1639a. Definitions pertinent to the new part 66, 
descriptions of foods that are subject to disclosure, and explanations 
of applicable exemptions are included in subpart A of the new 
regulatory section.
    Section 66.3 sets forth the general requirements for disclosure. 
Section 66.3(a) requires that labels for bioengineered food must bear a 
BE disclosure consistent with the requirements of part 66. Section 
66.3(a)(2) prohibits labels for food that is not bioengineered from 
bearing a BE disclosure unless the food may bear a voluntary disclosure 
under Sec.  66.116, based on records maintained under Sec.  66.302.

A. Definitions

    Section 66.1 lists the definitions that apply to new part 66. For 
subpart A, the key terms are ``bioengineered food,'' ``bioengineered 
substance,'' ``food,'' ``label,'' ``predominance,'' ``similar retail 
food establishment,'' ``very small food manufacturer,'' and ``List of 
Bioengineered Foods.'' These terms are critical in determining what 
foods require a BE disclosure.

B. Food Subject to Disclosure

    Whether a food is subject to the labeling requirements of the 
amended Act, depends as a preliminary matter on whether the product at 
issue is a food. The amended Act codified the definition of ``food'' as 
``a food (as defined in section 321 of title 21) that is intended for 
human consumption.''\1\ 7 U.S.C. 1639(2). The final rule adopts the 
same definition of ``food'' as used in the amended Act.
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    \1\ The original text of the amended Act referred to section 201 
of the FDCA, but the reference was changed to section 321 of title 
21 in the codification of the statute.
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    The FDCA defines ``food'' as ``. . . (1) articles used for food or 
drink for man or other animals, (2) chewing gum, and (3) articles used 
for components of any such article.'' 21 U.S.C. 321(f). Ultimately, FDA 
has jurisdiction over the FDCA and has the authority to determine what 
is considered ``food'' under the FDCA. AMS has deferred to FDA in 
interpreting the definition of ``food.'' However, the amended Act 
limits the definition of food for purposes of the NBFDS to articles 
used for human consumption and does not include articles used for 
animals. Therefore, although pet food and animal feed are ``food'' 
under the FDCA, such foods for animals are not covered by this 
regulation, pursuant to the amended Act. Chewing gum is considered to 
be ``intended for human consumption,'' and is therefore considered a 
``food'' for the purpose of the NBFDS.
    Under the FDCA, the definition of ``food'' includes both articles 
used for food or drink and articles used for components of any such 
article. For instance, a raw agricultural commodity such as an apple 
constitutes food under FDCA. A processed item like a soup with the 
following ingredients--water, broccoli, vegetable oil, modified food 
starch, and wheat flour--is also a food, as are each of those 
ingredients. Other examples of ``food'' under the FDCA include dietary 
supplements, processing aids, and enzymes.
    Not all food within the FDCA's definition falls within the scope of 
the NBFDS. The amended Act limits the disclosure to (1) food that is 
subject to the labeling requirements of the FDCA; or (2) food that is 
subject to the requirements of the three FSIS statutes previously 
mentioned, with certain exceptions. See 7 U.S.C. 1639a. As for the 
FDCA, which is under FDA jurisdiction, the NBFDS applies to all foods 
subject to its labeling requirements, including but not limited to raw 
produce, seafood, dietary supplements, and most prepared foods, such as 
breads, cereals, non-meat canned and frozen foods, snacks, desserts, 
and drinks. Distilled spirits, wines, or malt beverages as defined by 
the Federal Alcohol Administration Act (FAA Act) are foods under the 
FDCA but are not subject to the NBFDS because they are subject to the 
labeling provisions of the FAA Act rather than the labeling 
requirements of the FDCA. Alcoholic beverages not subject to the 
labeling provisions of the FAA Act, such as wines with less than seven 
percent alcohol by volume and beers brewed without malted barley and 
hops,

[[Page 65816]]

would be subject to the NBFDS. The amended Act also specifies that the 
NBFDS only applies to foods subject to the labeling requirements of the 
three FSIS statutes if the most predominant ingredient of the food 
would independently be subject to the labeling requirements under the 
FDCA; or if the most predominant ingredient of the food is broth, 
stock, water, or a similar solution and the second-most predominant 
ingredient of the food would independently be subject to the labeling 
requirements under the FDCA. See 7 U.S.C. 1639a(c)(2).
    FDA's method of determining predominance relies on weight of the 
ingredients, as does FSIS's. The NBFDS uses the same methods FDA uses 
to determine predominance at 21 CFR 101.4(a)(1), which provides that 
ingredients required to be declared on the label or labeling of a food, 
including foods that comply with standards of identity, except those 
ingredients exempted by Sec.  101.100, shall be listed by common or 
usual name in descending order of predominance by weight on either the 
principal display panel or the information panel in accordance with the 
provisions of Sec.  101.2. Thus, a multi-ingredient food product that 
contains meat, poultry, or egg product (including beef broth, if 
identified as a composite ingredient), subject to the FMIA, the PPIA, 
or the EPIA, respectively, as the first ingredient of the ingredient 
list on the food label would not be subject to the NBFDS, per the 
amended Act.
    A multi-ingredient food product that contains broth, stock, water, 
or similar solution as the first ingredient, and a meat, poultry, or 
egg product as the second ingredient on the food label would also not 
be subject to the NBFDS. For example, a canned stew where pork is the 
primary ingredient followed by other ingredients such as sweet corn, 
would not be subject to the NBFDS. The corn may be bioengineered, but 
pork, which is subject to the labeling requirements of the FMIA, is the 
predominant ingredient, so the canned stew product is not subject to 
the NBFDS, per the amended Act. If, however, a meat, poultry, or egg 
product is the third most predominant ingredient or lower, the food 
would be subject to the NBFDS. For example, a soup with the following 
ingredient list--broth, carrots, chicken, etc., would be subject to 
disclosure under the NBFDS, and the analysis as to whether it would be 
considered a ``bioengineered food'' subject to the NBFDS's disclosure 
requirements would continue.
    Seafood, except Siluriformes (catfishes), and meats such as venison 
and rabbit are subject to the FDCA (but not the Federal Meat Inspection 
Act). Thus, a multi-ingredient food product that contains one of these 
as the first ingredient would be subject to the NBFDS. A multi-
ingredient product that contained one of these as the second most 
predominant ingredient or lower, could also require disclosure, unless 
the product is otherwise exempt (for example, due to the predominance 
of another ingredient such as chicken or beef, as described above).

C. Bioengineered Food

    The amended Act delegates authority to the Secretary to establish 
the NBFDS regarding ``bioengineered food.'' 7 U.S.C. 1639b(a). This 
authority includes the ability to define ``bioengineered food,'' 
consistent with the statutory provisions that address this term. The 
amended Act also authorizes the Secretary to determine other terms that 
are similar to ``bioengineering.'' 7 U.S.C. 1639(1).
1. Definition of ``Bioengineering'' and ``Bioengineered Food''
    The amended Act defines ``bioengineering'' with respect to a food 
as referring to a food ``(A) that contains genetic material that has 
been modified through in vitro recombinant deoxyribonucleic acid (DNA) 
techniques; and (B) for which the modification could not otherwise be 
obtained through conventional breeding or found in nature.'' 7 U.S.C. 
1639(1). In accordance with its statutory mandate and for purposes of 
consistency, AMS is directly incorporating this statutory definition 
into the definition of ``bioengineered food''.
    The NPRM invited public comment on two different interpretations of 
the statutory definition of ``bioengineering'' and on the scope of the 
regulatory definition of ``bioengineered food.'' Specifically, comments 
were solicited on whether refined foods and ingredients should be 
subject to disclosure under the NBFDS.
    The first interpretation, identified as Position 1 in the NPRM, 
stated that refined products do not ``contain genetic material that has 
been modified through in vitro recombinant deoxyribonucleic acid (DNA) 
techniques'' because the refining process rendered genetic material 
undetectable using common testing methods. The second interpretation, 
identified as Position 2 in the NPRM, stated that the scope of the 
definition of ``bioengineering'' applies to all foods produced from 
bioengineering, such as refined products.
    AMS adopts Position 1 with some modifications. The statutory 
definition of ``bioengineering'' makes clear that food must ``contain[ 
] genetic material that has been modified through in vitro recombinant 
deoxyribonucleic acid (DNA) techniques . . .'' to be labeled as a 
``bioengineered food.'' AMS believes that the definition of 
``bioengineering'' sets forth the scope of the mandatory disclosure 
and, therefore, is incorporated into the definition of ``bioengineered 
food.'' A commenter suggested that AMS adopt a definition of ``highly 
refined'' if it adopts Position 1. We did not do so because the final 
rule does not use that term.
    AMS has chosen to adopt the definition of ``bioengineered food'' 
that hews closely to the plain language of the amended Act. This 
definition references Sec.  66.9 to explain how a regulated entity may 
demonstrate that a food, including a refined food ingredient, does not 
contain detectable modified genetic material. AMS has revised the 
proposed definition of ``bioengineered food'' to reflect its 
interpretation of the amended Act that foods with undetectable modified 
genetic material are not bioengineered foods.
    Whether a food or food ingredient contains modified genetic 
material may vary depending on the refining process used to produce the 
food. For refined foods that are derived from bioengineered crops, no 
disclosure is required if the food does not contain detectable modified 
genetic material.
    Commenters discussed how testing might be used to detect the 
presence of modified genetic material in a food. Some commenters stated 
that testing for modified genetic material would be difficult to 
enforce, expensive, and present barriers to international trade. These 
commenters stated that regulated entities may choose to make a BE 
disclosure rather than conduct testing, thereby resulting in different 
labels for similar food products.
    Other commenters supported the use of testing to determine 
detectability and offered ideas regarding testing methods and standards 
to determine the presence or absence of detectable modified genetic 
material. A few commenters asked AMS to establish minimal standards 
regarding the analytical tools used for detecting, identifying, and 
quantifying modified genetic material. Some commenters also urged AMS 
to update the NBFDS as scientific detection methods evolve, and a few 
further recommended that AMS maintain publicly available guidance 
documents or lists of scientifically validated genetic testing methods 
to

[[Page 65817]]

ensure testing consistency in the marketplace.
    AMS acknowledges there are multiple ways to determine whether a 
food or ingredient contains detectable modified genetic material. 
Because the amended Act authorizes examinations, audits, and similar 
activities with respect to records for enforcement of the NBFDS (7 
U.S.C. 1639b(g)(2)-(3)), AMS added provisions in Sec.  66.9 that 
describe how regulated entities can use records to demonstrate that 
modified genetic material is not detectable. Regulated entities are in 
the best position to know about the products they are sourcing and the 
refinement processes they have undergone. An entity's records, 
therefore, can be used to demonstrate that modified genetic material is 
not detectable.
    First, as provided in Sec.  66.9(a)(1), regulated entities can 
demonstrate that modified genetic material is not detectable with 
records verifying that the food is sourced from a non-bioengineered 
crop or other food source, such as non-bioengineered salmon.
    Second, as provided in Sec.  66.9(a)(2), regulated entities can 
demonstrate that modified genetic material is not detectable in the 
food with records verifying that the food has been subjected to a 
refinement process ``validated'' to render modified genetic material 
undetectable. Process validation for the purposes of the NBFDS can be 
achieved through laboratory testing, as provided in Sec.  66.9(b). 
Commenters stated that modified genetic material is undetectable when 
bioengineered crops are refined or processed under certain conditions. 
Commenters described the food refining and manufacturing process and 
explained the rigorous quality controls necessary to meet modern 
customer demands. Based on this information, AMS believes that once a 
refiner's process has been validated by testing to render modified 
genetic material undetectable, foods subjected to the same process in a 
defined, controlled, documented, and repeated way will also have no 
detectable modified genetic material. Regulated entities that produce 
or use refined foods may rely on processing records alone to prove the 
absence of detectable modified genetic material. In other words, foods 
subjected to the validated refining process would not require 
additional laboratory testing to prove the lack of modified genetic 
material.
    To comply with NBFDS requirements, regulated entities can maintain 
records to verify the foods they use have been subjected to refining 
processes that have been validated to render modified genetic material 
undetectable. Such records may include customary processing records 
maintained in the normal course of business, as well as copies of the 
most recent analytical testing results used to validate the refining 
process. Section 66.9(c) provides standards of performance for 
analytical testing to validate that foods subjected to specific 
refining processes contain no detectable modified genetic material.
    Third, as provided in Sec.  66.9(a)(3), regulated entities can 
demonstrate that modified genetic material is not detectable by 
maintaining certificates of analysis or other testing records 
appropriate to the specific food tested which confirm the absence of 
modified genetic material. As mentioned above and provided in Sec.  
66.9(c), AMS established performance standards related to detectability 
analyses for the purposes of the NBFDS.
    AMS recognizes that some regulated entities may wish to disclose 
that their processed food is derived from a bioengineered source even 
when modified genetic material is not detectable in the food. In 
addition to the authority to establish the mandatory disclosure 
Standard, the amended Act at 7 U.S.C. 1639b(a)(2) grants the Secretary 
the authority to establish other requirements that are necessary to 
carry out the Standard. AMS has determined, based on numerous comments, 
that it is necessary for the Standard to include the ability for 
regulated entities to disclose voluntarily that their processed food 
was made with ingredients derived from a bioengineered source to 
provide a mechanism for regulated entities to provide information to 
consumers. This provision is discussed in more detail Section III.I.--
Voluntary Disclosure, below.
2. Conventional Breeding
    AMS did not include a proposed definition of ``conventional 
breeding,'' a component term of the definition of ``bioengineering.'' 
The NPRM solicited comments on whether such a definition should be 
included in the NBFDS, and if so, what it should be.
    Many commenters recommended that AMS define ``conventional 
breeding'' within the NBFDS final rule, to better define the scope of 
NBFDS for regulated entities and consumers. Several commenters 
suggested various definitions, including adopting the definition used 
by FDA or from the Codex Alimentarius. Several commenters stated that 
the term ``conventional breeding'' is commonly understood in the 
industry and, therefore, does not need to be defined. Some of those 
commenters who did not support defining the term argued that any such 
attempts would be inherently confusing or misleading to consumers.
    AMS finds no compelling reason to adopt a definition of 
``conventional breeding'' at this time and agrees with commenters who 
advised not defining the term. AMS finds that ``conventional breeding'' 
is a commonly understood term within industry and does not need to be 
defined. As techniques and technology evolve, any definition today 
could become unworkable or obsolete because it does not and could not 
anticipate those advancements. Foregoing defining the term allows AMS 
to respond to those challenges in real time.
3. Found in Nature
    AMS did not include a proposed definition of ``found in nature,'' 
another component term of the definition of ``bioengineering.'' The 
NPRM solicited comments on whether such a definition should be included 
in the NBFDS, and if so, what it should be. The NPRM specifically 
requested comments on whether protections under intellectual property 
law might be considered when determining whether a genetic modification 
could be found in nature. Comments were also sought on other possible 
methods for determining whether a genetic modification could be ``found 
in nature.''
    Commenters generally did not support defining or including the term 
``found in nature'' within the NBFDS. Many of those in opposition 
believed the term ``found in nature'' itself was nebulous, misleading, 
and not adequately defined by science. Others argued that agriculture 
is inherently separate from nature. Of those that did request the term 
be defined, two common suggestions were ``spontaneously occurs in 
nature, such as natural biological evolution, and does not overcome 
natural physiological reproductive or combination barriers,'' or ``the 
kinds of genetic modifications which can occur in nature within the 
genome of an organism, without human intervention.''
    One commenter was concerned that if definitions are deemed 
necessary, the definitions avoid setting precedents in other regulatory 
areas, and be kept as simple and as clear as possible. Another group of 
commenters stated that ``this should be done through a supplemental 
proposed rule that provides the public with an additional opportunity 
to provide public comments.''
    Commenters mostly rejected the idea of using intellectual property 
law as a method of determination. Some of the

[[Page 65818]]

objections were that it would add more complexity to the NBFDS without 
any additional clarity; could create unintended disincentives towards 
development of non-BE foods; or is outside the scope of the NBFDS. One 
commenter supported the consideration of intellectual property law 
``when appropriate, as one non-dispositive factor among others in 
making a determination.'' Another stated that the absence of a patent 
should not be a factor in determining if a modification can be found in 
nature, since it is not required to seek patents on BE food.
    AMS finds it unnecessary to define the term ``found in nature.'' 
AMS received no compelling arguments to define the term and believes 
that attempting to do so may cause confusion in light of the rapid pace 
of innovation. In addition, there was little support for relying on 
intellectual property law to inform decisions about whether specific 
modifications ``could not otherwise be found in nature.'' In order to 
incorporate technological changes in industry into this mandatory 
labeling standard, AMS believes it needs to retain maximum flexibility. 
That will not be accomplished by narrowly defining ``found in nature.''

D. List of Bioengineered Foods

    AMS has developed the List of Bioengineered Foods (List) to 
identify the crops or foods that are available in a bioengineered form, 
and to aid regulated entities considering whether they may need to make 
a BE disclosure. The List is provided in Sec.  66.6 of the Standard. As 
will be discussed later in Section III--Disclosure, a regulated 
entity's records will determine whether disclosure for that food is 
required under the NBFDS. The List includes bioengineered foods for 
human consumption that may be produced anywhere in the world. But the 
List should not be considered exhaustive, as new BE products continue 
to be developed. Even if a food is not on the List, regulated entities 
that have actual knowledge that a food they are selling is 
bioengineered, as defined in Sec.  66.1, must make appropriate 
disclosure of that food. The List will be maintained and updated as 
described later in this section.
    The List of Bioengineered Foods replaces the two lists of 
commercially available bioengineered foods in the United States that 
AMS proposed in the NPRM. AMS proposed in the NPRM maintaining lists of 
``highly adopted'' and ``non-highly adopted'' BE foods based on U.S. 
planted crop acreage.
    While some commenters agreed that the lists might simplify 
compliance with the NBFDS, many recommended consolidating the two lists 
into one and expanding the consolidated list to include bioengineered 
foods produced in other countries to provide a more complete picture of 
the variety of foods produced through bioengineering. Commenters argued 
against equating U.S. planted acreage with human food production and 
commercial availability in the United States, explaining that a large 
percentage of highly adopted bioengineered crops are used for animal 
feed, and that U.S. planted acreage does not necessarily reflect the 
prevalence of bioengineered foods available on the market. Commenters 
further argued that commercial availability should not be a basis for 
regulation, because that attribute is not specified in the definition 
of BE food, and because commercial availability can vary from country 
to country, depending on how foods are approved for use.
    For simplicity, AMS consolidated the two lists into one and 
expanded the consolidated List to include bioengineered crops and foods 
that may be produced in other countries. The List makes no presumptions 
about market share represented by bioengineered versions of those crops 
and foods in the United States. It merely provides information about 
what bioengineered crops and foods (including ingredients made from 
such foods), that meet the definition of ``bioengineered food'', could 
be offered for retail sale in the United States, based on information 
available to AMS. A crop or food may be included on the List, but not 
require disclosure under the NBFDS. For instance, not all apple 
varieties are bioengineered. Non-bioengineered apples would not require 
disclosure. As noted elsewhere, the amended Act requires each person 
subject to mandatory BE food disclosure under the NBFDS to maintain 
records such as the Secretary determines to be customary or reasonable 
in the food industry to establish compliance with the Standard. See 7 
U.S.C. 1639b(g)(2). The List establishes the need for recordkeeping by 
regulated entities who are using or selling the crops and foods on the 
List. Further, the List will aid regulated entities in deciding whether 
they may need to make a BE disclosure. Options for disclosure related 
to a regulated entity's records about foods on the List are described 
in Section III.A.5 and IV.A of this document.
    To compile the lists that were proposed in the NPRM, AMS considered 
data published by the International Service for the Acquisition of 
Agri-biotech Applications (ISAAA),\2\ FDA's list of Biotechnology 
Consultations on Food from GE Plant Varieties (Consultations), and 
information published by USDA's Economic Research Service (ERS).\3\ AMS 
also considered input from industry stakeholders and consumers about 
which foods should be considered bioengineered and require disclosure 
labeling. Some commenters in response to the NPRM recommended that 
ISAAA be the sole source for information on international BE foods and 
the modifications that have been made to them. Some commenters said 
that foods should be added to the list as soon as any one of FDA's 
consultation processes are completed for that food. Other commenters 
suggested that additional sources of data on BE foods, such as 
Statistics Canada,\4\ should be considered, given the frequent exchange 
of foods between Canada and the U.S.
---------------------------------------------------------------------------

    \2\ ISAAA (2016), Global Status of Commercialized Biotech/GM 
Crops: 2016. ISAAA Brief No. 52. ISAAA: Ithaca, NY. http://www.isaaa.org/resources/publications/briefs/52/default.asp, accessed 
February 5, 2018.
    \3\ Economic Research Service (2017), Genetically engineered 
varieties of corn, upland cotton, and soybeans, by state and for the 
United States, 2000-17, Adoption of Genetically Engineered Crops in 
the U.S., https://www.ers.usda.gov/data-products/adoption-of-genetically-engineered-crops-in-the-us.aspx, accessed February 5, 
2018.
    \4\ Statistics Canada, https://www.statcan.gc.ca/eng/start, 
accessed July 26, 2018.
---------------------------------------------------------------------------

    Each of the recommended sources assists in the development and 
maintenance of the List; the List should represent a composite of 
information gathered from many sources. However, to be consistent in 
determining what crops or foods should be on the List, AMS has 
determined that the foods included on the initial List of Bioengineered 
Foods must meet the following criteria: (1) They are authorized for 
commercial production somewhere in the world, and (2) they are reported 
to be in legal commercial production for human food somewhere in the 
world. AMS relied on resources such as USDA reports and databases, and 
ISAAA reports and databases,\5\ to determine what crops and foods 
currently meet those criteria. The List attempts to capture any BE 
crops or foods that meet the statutory definition of 
``bioengineering,'' based on existing technology, and that could 
potentially be offered for sale in the United States. AMS recognizes 
that there are other bioengineered foods that meet one of the criteria 
for list inclusion, but not both. For example, bioengineered rice has 
been authorized for production and use

[[Page 65819]]

as food in several countries, but AMS finds no evidence that it is 
currently in legal commercial production anywhere. Foods such as BE 
rice could be added to the List through the update process described 
below when available information suggests that it would be appropriate 
to do so.
---------------------------------------------------------------------------

    \5\ ISAAA GM Approval Database: http://www.isaaa.org/gmapprovaldatabase/. Accessed August 10, 2018.
---------------------------------------------------------------------------

    The considerations described above and the NBFDS definition for 
``bioengineered food'' will be used to determine what foods would be 
added to or removed from the List moving forward. (See the Treatment of 
Technologies section, below.)
    Section 66.1 of the NBFDS defines the List of Bioengineered Foods 
as a list maintained and updated by AMS of foods for which 
bioengineered versions have been developed. In the NPRM, AMS proposed 
to describe the initial List in the preamble to the final rule and to 
update the List by notice in the Federal Register with the opportunity 
for public comment. Given the impact of including foods on the List, we 
have determined that it is appropriate to incorporate the foods on the 
List in the final rule text to provide greater transparency. Further, 
AMS will update the List through rulemaking.
    Information and data to support inclusion of each crop or food on 
the List come from a variety of reliable sources, including industry 
reports and academic and government sources. In some cases, the listed 
crop or food itself may not typically be considered human food, but it 
may be the source from which human food is made. For example, products 
made from field corn, such as grits, corn chips, corn tortillas, and 
corn cereal are human foods and may be subject to disclosure if they 
meet the definition of bioengineered food. The following foods comprise 
the List of Bioengineered Foods: alfalfa, apple (Arctic\TM\ varieties), 
canola, corn, cotton, eggplant (BARI Bt Begun varieties), papaya 
(ringspot virus-resistant varieties), pineapple (pink flesh), potato, 
salmon (AquAdvantage[supreg]), soybean, squash (summer), and sugarbeet.
    Where practical, the List includes specific information about 
individual crops and foods, such as descriptions or trade names, to 
help distinguish bioengineered versions of those foods from their non-
bioengineered counterparts, as requested by commenters. This 
specificity is intended to identify foods for which disclosure may be 
necessary, based on the regulated entities' records. For instance, 
although apples are on the List, most apple varieties are not known to 
be bioengineered. The List is narrowed by identifying the specific 
apples that are known to be bioengineered. As other BE versions of the 
listed foods are authorized and become legally available, AMS will 
revise such listings to be more generic during the annual update 
process.
    Regulated entities may refer to the AMS website to obtain 
additional information regarding the associated bioengineered events 
for crops or foods they are sourcing and determine whether they need to 
make a disclosure. In some cases, trade names or other information may 
be provided to further simplify the identification and determination 
process for regulated entities. As well, information on the website may 
provide consumers additional details about traits (e.g., non-browning, 
pesticide resistance, virus resistance, enhanced growth, etc.) for 
which the foods have been bioengineered. Providing this detailed 
information is intended to help reduce burdens for regulated entities 
by narrowing the list of varieties of each food that may be 
bioengineered.
1. List Maintenance and Revision
    AMS proposed in the NPRM that the List be subject to review and 
update on an annual basis, allowing for public input into the process. 
AMS also proposed an 18-month compliance period following List updates 
to allow for food label revisions in response. Such a schedule was 
proposed to minimize the frequency with which regulated entities would 
be required to update food labels, if, for instance, new BE foods were 
added to the List. Some commenters urged AMS to revise the List more 
frequently to avoid delay providing current information to consumers. 
Others suggested updates should occur less frequently than proposed to 
minimize the impact on small businesses that might have to change 
labels accordingly. Some commenters asked that the compliance period 
for revising labels be shortened, and others asked that it be extended.
    The NPRM described a process to update the List on an annual basis. 
The final rule adopts that process, except that AMS will also initiate 
rulemaking to amend the List as appropriate. As described in Sec.  
66.7(a), AMS will announce the annual review through the Federal 
Register and on the AMS website. Interested parties may submit 
recommendations about foods that could be added to or deleted from the 
List at any time, including in response to the request for 
recommendations that accompanies the review notice. Recommendations 
should include data or other information to support those 
recommendations. AMS will publish any recommendations, along with 
supporting information, on its website and request comments on the 
recommendations.
    Following a review of available information, including consultation 
with Federal Government agencies that comprise the Coordinated 
Framework or any successor body, AMS will make a determination on 
whether to initiate rulemaking to amend the List. Section 66.7(b) 
provides an 18-month compliance period from the effective date of any 
revision to the List to allow regulated entities time to revise 
existing food labels if needed.
    While the List of Bioengineered Foods identifies the foods for 
which regulated entities must maintain records and that may be required 
to bear a BE disclosure, the List and the records kept do not alleviate 
a regulated entity's responsibility for disclosure when the entity has 
actual knowledge that its food is a BE food. Under Sec.  66.109, a 
regulated entity with actual knowledge that it is using BE food is 
responsible for disclosing BE foods, even if the food is not listed on 
the List of Bioengineered Foods. This section does not require 
regulated entities to seek out that information, but they also cannot 
ignore or be willfully blind to information that the food they are 
sourcing is in fact bioengineered.
2. Treatment of Technologies
    Technologies continue to evolve, and food produced through a 
specific technology may or may not meet the definition of BE food. 
Respondents to the 30 questions urged AMS to determine whether foods 
developed through certain emerging technologies would be within the 
scope of the definition of BE food. However, AMS proposed in the NPRM 
that the products of technology, rather than solely the technology 
itself, should be evaluated to determine whether a food meets the BE 
food definition and might require disclosure. AMS proposed to provide 
for the consideration of new technologies used to develop foods during 
the process of reviewing and revising the List pursuant to Sec.  
66.7(a). AMS proposed to do so through consultation with the U.S. 
Government agencies responsible for oversight of the products of 
biotechnology--USDA-APHIS, EPA, FDA, and appropriate members of the 
Coordinated Framework for the Regulation of Biotechnology. In that way, 
AMS could understand whether foods resulting from new technologies 
would meet the definition of ``bioengineered food'' and should be added 
to the List. Conversely, foods may be removed from the List if they are 
no

[[Page 65820]]

longer produced from a technology that meets the definition of 
``bioengineered food.'' In other cases, some varieties may meet the 
definition, while others do not.
    Comments in response to the NPRM ranged from those commenters who 
urged that the scope of the NBFDS should reflect the use of all current 
and emerging technologies to those who argued that some new genetic 
engineering techniques would fall outside the scope of the statutory 
definition. AMS continues to believe that determinations about what 
constitutes BE food for the purposes of the NBFDS should focus 
primarily on the characteristics of foods that have been produced using 
bioengineering as defined in the amended Act, and whether such foods 
meet the definition of ``bioengineered food.'' Thus, as proposed, the 
products of new technologies will be considered during reviews and 
updates of the List of Bioengineered Foods.

E. Factors and Conditions

    As described in the proposed rule, in promulgating a regulation to 
carry out the Standard, the amended Act directs the Secretary to 
establish a process for requesting and granting a determination by the 
Secretary regarding other factors and conditions under which a food is 
considered a BE food. 7 U.S.C. 1639b(b)(2)(C). The amended Act does not 
specify the process by which the Secretary will determine other factors 
and conditions under which a food is considered a BE food; rather, it 
provides the Secretary with discretion in setting up such a process.
    Commenters were generally supportive of the proposed process for 
adopting factors or conditions under which a food is considered a BE 
food, and AMS is adopting the proposed process described in the NPRM. 
Subpart C describes the process by which people can submit a request or 
petition for a determination regarding other factors or conditions. The 
acceptance of a request or petition for determination regarding a 
factor or condition would then culminate in rulemaking to incorporate 
the factor or condition into the ``bioengineered food'' definition. 
Rulemaking allows for transparency and public participation in 
determining whether or not the definition of ``bioengineered food'' 
should be amended. Ultimately, the impact of adopting the proposed 
factors or conditions (as follows) would be to limit the scope of the 
definition of ``bioengineered food,'' thus potentially excluding 
certain products from disclosure.
    Under Sec.  66.200, the determination process begins with the 
submission of a request or petition for determination regarding other 
factors and conditions under which a food is considered a BE food in 
accordance with Sec.  66.204. Section 66.204 describes the process for 
submitting a request or petition, including where to send the 
submission. The submission needs to include a description and analysis 
of the requested new factor or condition and any supporting documents 
or data. Section 66.204 describes how to properly mark confidential 
business information that may be included to support the request, to 
ensure its confidentiality. Finally, Sec.  66.204 instructs that the 
submission must explain how the standards for consideration apply to 
the requested factor or condition.
    Section 66.202 describes the standards for consideration by which 
the Secretary's designee, the AMS Administrator, would evaluate the 
request or petition. Given the existing statutory definition of 
``bioengineering,'' the first standard, in paragraph (a), requires the 
requested factor or condition to be within the scope of the definition 
of ``bioengineering'' in 7 U.S.C. 1639(1). The second standard, in 
paragraph (b), requires the Administrator to evaluate the cost of 
implementation and compliance. In applying this second standard, the 
Administrator will evaluate the cost related to the factor or 
condition, the difficulty for affected regulated entities to implement 
the factor or condition, especially small businesses, and the 
difficulty AMS would have in monitoring compliance with the factor or 
condition. Paragraph (c) allows the Administrator to consider other 
relevant information as part of the evaluation. Relevant information 
for a particular proposed factor or condition will include its 
compatibility with the food labeling requirements of other Federal 
agencies or foreign governments. In determining compatibility with 
other requirements, AMS will consult with the U.S. Government agencies 
responsible for oversight of the products of biotechnology: USDA-APHIS, 
EPA, and FDA. Such information may allow AMS to align the NBFDS with 
the standards of other Federal agencies or foreign governments, which 
may facilitate interstate commerce and trade by allowing for 
recognition of compatible standards.
    The Administrator will also consult with the United States Trade 
Representative (USTR) and the Department of State to ensure the request 
or petition regarding other factors and conditions related to BE 
disclosure requirements results in implementation in a manner 
consistent with international trade obligations as mandated by 7 U.S.C. 
1639c(a). If the Administrator determines that the request or petition 
satisfies the standards for consideration, AMS will initiate rulemaking 
that seeks to amend the definition of ``bioengineered food'' in Sec.  
66.1 to include the factor or condition.
    Some commenters asked AMS to clarify in the final rule the 
parameters for submitting petitions to adopt factors or conditions. A 
few commenters asked AMS to establish a specific time period within 
which the agency would respond to requests for adoption of factors or 
conditions, as well as a time period for regulated entities to attain 
compliance with adopted factors or conditions.
    AMS has made no changes to the submission parameters in connection 
with requests or petition for factors and conditions, as we believe 
they are clear and transparent. AMS has not established a time period 
within which the agency will respond to requests for adoption of 
factors or conditions because such responses will vary depending on 
agency resources, the complexity of the submitted request for adoption 
of factors or conditions, and the nature of implementing regulation. 
Similarly, AMS has not provided a time period for regulated entities to 
attain compliance with adopted factors and conditions in subpart C, as 
adopted factors and conditions act as carve outs from the statutory 
definition of bioengineering such that compliance with the adopted 
factor or condition should not be burdensome. To the extent that the 
adopted factors or conditions would be burdensome or require additional 
time for compliance, AMS would address any compliance period in future 
rulemakings considering the specific adopted factors and conditions.
    In the NPRM, AMS proposed two submitted requests for factors and 
conditions under which a food is considered a BE food. Those requests 
involved (1) whether incidental additives present in food should be 
considered ``bioengineered food'' and labeled accordingly; and (2) 
whether the modified genetic material in a refined food may be 
detected. The impact of adopting these factors or conditions will be to 
limit the scope of the definition of ``bioengineered food,'' thus 
potentially excluding certain products from disclosure.

[[Page 65821]]

1. Incidental Additives
    The first factor or condition concerns a BE food that is an 
incidental additive. As described in 21 CFR 101.100(a)(3), incidental 
additives that are present in food at an insignificant level and do not 
have any technical or functional effect in the food are exempt from 
certain labeling requirements under the FDCA. Commenters in response to 
AMS's 30 questions requested that incidental additives not be subject 
to disclosure under the proposed NBFDS because they are exempt from 
inclusion in the ingredient statement on a food label, according to 21 
CFR 101.100(a)(3). AMS is aware that an ingredient that is required to 
be listed in the ingredient list in one product may be used in another 
product as an incidental additive that is not required to be included 
in the ingredient list. Under this factor or condition, such an item 
will only trigger disclosure when it is used as an ingredient that is 
included on the ingredient list, not when used as an incidental 
additive.
    Application of this factor or condition falls within the scope of 
the definition of ``bioengineering'' in 7 U.S.C. 1639(1), and thus 
meets the first standard for consideration. This factor or condition 
will also satisfy the second standard for consideration--cost of 
implementation and compliance. Aligning the disclosure requirements of 
the NBFDS with the ingredient declaration requirements under applicable 
FDA regulations will simplify compliance and reduce labeling costs for 
regulated entities. Finally, AMS finds it relevant that adoption of 
this factor or condition would be compatible with the food labeling 
requirements of other Federal agencies and some foreign governments.
    The impact of adopting this proposed factor or condition as not 
being within the definition of ``bioengineered food'' is to exclude 
certain incidental additives from disclosure. Based on public comments 
on the 30 questions and the NPRM, AMS believes adopting this factor or 
condition may exempt a number of enzymes that are currently used in 
food production but not currently listed in the ingredient statement on 
a food label. However, based on those same comments, AMS is aware that 
some enzymes may be used in a manner that requires them to be labeled 
on the ingredient statement. In the NPRM, AMS sought comment on 
whether, more generally, enzymes present in food should be considered 
``bioengineered food.''
    AMS has made no changes to this factor and condition regarding 
incidental additives under which products can be excluded from 
disclosure. The amended Act provides the Secretary with authority to 
limit disclosure in certain circumstances. The factors and conditions 
process offers a fair and rational method by which to consider various 
proposals. For the reasons mentioned, AMS believes that exempting 
incidental additives from BE disclosure that are not required to be 
labeled per FDCA regulations is sensible, in alignment with the 
labeling requirements of other trading partners and will limit the 
burden on regulated entities without unduly limiting disclosure for 
consumers.
    Some commenters sought modifications to the text of this provision 
clarifying what ``insignificant'' means or clarifying the types of 
incidental additives that are not subject to disclosure. AMS does not 
believe such clarification is necessary. The provision references the 
FDA regulations that AMS relied upon in drafting the provision. That 
FDA regulation describes the circumstances in which incidental 
additives are not labeled as an ingredient. Title 21 CFR 101.100(a)(3) 
provides an exemption for incidental additives that are present in a 
food at insignificant levels and do not have any technical or 
functional effect in that food. For the purposes of Sec.  
101.100(a)(3), incidental additives are:

    <bullet> Substances that have no technical or functional effect 
but are present in a food by reason of having been incorporated into 
the food as an ingredient of another food, in which the substance 
did have a functional or technical effect.
    <bullet> Processing aids, which are as follows:
    [cir] Substances that are added to a food during the processing 
of such food but are removed in some manner from the food before it 
is packaged in its finished form.
    [cir] Substances that are added to a food during processing, are 
converted into constituents normally present in the food, and do not 
significantly increase the amount of the constituents naturally 
found in the food.
    [cir] Substances that are added to a food for their technical or 
functional effect in the processing but are present in the finished 
food at insignificant levels and do not have any technical or 
functional effect in that food.
    <bullet> Substances migrating to food from equipment or 
packaging or otherwise affecting food that are not food additives as 
defined in section 201(s) of the act; or if they are food additives 
as so defined, they are used in conformity with regulations 
established pursuant to section 409 of the act.

    Section 101.100(a)(3)(i), (ii), and (iii) provide a list of 
incidental additives that are not required to be labeled under FDA 
regulations and by extension are not required to be disclosed as BE 
foods. AMS believes that the cross-reference to the FDA regulations is 
clear.
    With respect to treatment of yeasts, enzymes, or any other 
microorganisms, AMS agrees that if they qualify as incidental additives 
that are not required to be labeled as ingredients on a food label, 
then they do not require disclosure as BE foods. However, bioengineered 
yeasts, enzymes, and other organisms that do not qualify as incidental 
additives that are not required to be labeled as ingredients may 
require disclosure as BE foods unless they meet the requirements of 
another provision (for instance, by establishing that their modified 
genetic material is not detectable). AMS cannot make a categorical 
exemption for microorganisms in this final rule; however, such an 
exemption is possible through the factors and conditions process in 
future rulemakings.
2. Undetectable Modified Genetic Material
    The NPRM also sought comment on another proposed factor and 
condition--excluding food from the disclosure standard where the 
modified genetic material in the food cannot be detected. As the NPRM 
noted, if AMS ultimately proceeded with Position 2 and presumed that 
refined ingredients are bioengineered foods, this factor or condition, 
if adopted, would be a means to potentially exclude products where 
modified genetic material cannot be detected. As discussed above, AMS 
did not adopt Position 2, so this factor or condition is not 
incorporated into the final rule. The definition of ``bioengineered 
food'' in the final rule already excludes foods where modified genetic 
material is not detectable.

F. Exemptions

    The amended Act includes two express exemptions to the disclosure 
requirement: For food served in a restaurant or similar retail food 
establishment and for very small food manufacturers. 7 U.S.C. 
1639b(b)(2)(G). The amended Act also authorizes the Secretary to 
``determine the amounts of a bioengineered substance that may be 
present in food, as appropriate, in order for the food to be a 
bioengineered food.'' 7 U.S.C. 1639b(b)(2)(B). As well, the amended Act 
prohibits food derived from an animal to be considered a BE food solely 
because the animal consumed feed produced from, containing, or 
consisting of a bioengineered substance. 7 U.S.C. 1639b(b)(2)(A). 
Finally, Subtitle F specifies that the certification of food under 
USDA's National Organic Program (7 CFR part 205) shall be

[[Page 65822]]

considered sufficient to make claims about the absence of 
bioengineering in the food. 7 U.S.C. 6524. Section 66.5 incorporates 
each of these as regulatory exemptions in the NBFDS.
1. Food Served in a Restaurant or Similar Retail Food Establishment
    Section 66.5(a) exempts food served in a restaurant or similar 
retail food establishment from disclosure under the NBFDS. In the NPRM, 
Sec.  66.1 defined ``similar retail food establishment'' as a 
cafeteria, lunch room, food stand, saloon, tavern, bar, lounge, other 
similar establishment operated as an enterprise engaged in the business 
of selling prepared food to the public, or salad bars, delicatessens, 
and other food enterprises located within retail establishments that 
provide ready-to-eat foods that are consumed either on or outside the 
retailer's premises. This definition is consistent with the definition 
of ``food service establishment'' included in other labeling programs 
authorized by the amended Act. See 7 U.S.C. 1638(3) and the regulations 
at 7 CFR 60.107 and 7 CFR 65.140, with minor modifications.
    The NPRM solicited comments on the scope of this definition. Some 
commenters stated that restaurants should not be exempt from the NBFDS 
because it would undermine the transparency and consistency important 
to consumers who want to know the origins of their food. Other 
commenters supported the exemption generally and AMS's proposed 
definition. Other commenters stated that AMS's proposed definition was 
too narrow and should include a list of places as examples, rather than 
an exclusive list, such as cafeteria, lunch room, food stand, food 
truck, saloon, tavern, bar, lounge, salad bar, delicatessen, 
entertainment venue, or other retail business establishment where meals 
or refreshments constituting food may be purchased. One commenter 
requested that transportation carriers be added to the list of places 
exempted from the NBFDS.
    Another commenter stated that all foods prepared, processed, or 
packaged in the retail food establishment, including those utilizing 
``central kitchen'' locations for certain prepared foods, should be 
exempt from the disclosure requirement and that the term ``packaged'' 
should conform to 21 CFR 1.20, FDA's general food labeling 
requirements.
    Based on the comments received, AMS has modified the definition of 
``similar retail food establishment'' to add additional examples, 
including food truck and transportation carrier. AMS considered 
including a list of places as examples, rather than an exhaustive list, 
but believes that the reference to ``other similar establishment 
operated as an enterprise engaged in the business of selling prepared 
food to the public'' should capture any additional places that are not 
specifically listed. To clearly address a point of confusion observed 
in the comments received, AMS is clarifying that salads, soups, and 
other ready-to-eat items prepared by grocery stores are exempt from the 
disclosure requirements.
    AMS has not modified the definition to state ``where meals or 
refreshments constituting food may be purchased,'' as we believe that 
with this insertion the exemption would be much broader than the plain 
meaning of the amended Act. AMS believes that the exemption is intended 
to cover ready-to-eat or prepared foods. To extend the exemption to all 
foods prepared, processed, or packaged in a retail food establishment, 
which would include bulk foods such as granola or apples in a bin, 
would conflict with the requirement that foods subject to FDCA's 
labeling requirements are subject to disclosure. The modified 
definition provides clarity and flexibility to regulated entities and 
is in accordance with the plain language of the amended Act.
2. Very Small Food Manufacturers
    Section 66.5(b) exempts very small food manufacturers from the 
disclosure requirement of the NBFDS. Section 66.1 defines ``very small 
food manufacturer'' as a food manufacturer with annual receipts of less 
than $2.5 million. To develop this definition, AMS considered FDA's 
exemptions or special labeling requirements for certain food if the 
food is offered for sale by certain persons who have annual gross sales 
made or business done in sales to consumers that are not more than 
$500,000 under certain conditions (see 21 CFR 101.9(j)(1)(i) and 
101.36(h)(1)) and U.S. Census Bureau (USCB) regulations. AMS evaluated 
the impact of applying various definitions of ``very small food 
manufacturer'' by estimating the number of firms that would be 
exempted, the number of products that would likely be exempt, and the 
proportion of annual industry sales that would be exempt under each 
exemption level. The NPRM included the following tables showing the 
cumulative percentage of firms, products (UPCs), and sales that would 
be exempt if the definition of ``very small food manufacturer'' were 
set at the top of each of the annual revenue ranges (based on USCB's 
2012 Statistics of U.S. Businesses).

                                               Food Manufacturers
----------------------------------------------------------------------------------------------------------------
                                                                    Cumulative      Cumulative      Cumulative
                                                                    percent of      percent of      percent of
             Establishment receipts threshold (in $)               firms exempt      products      sales exempt
                                                                        (%)         exempt (%)          (%)
----------------------------------------------------------------------------------------------------------------
<100,000........................................................              20               0               0
100,000-499,999.................................................              45               1               0
500,000-999,999.................................................              58               2               1
1,000,000-2,499,999.............................................              74               4               1
2,500,000-4,999,999.............................................              81               6               2
5,000,000-7,499,999.............................................              84               7               3
7,500,000-9,999,999.............................................              86               8               3
----------------------------------------------------------------------------------------------------------------


[[Page 65823]]


                                        Dietary Supplement Manufacturers
----------------------------------------------------------------------------------------------------------------
                                                                    Cumulative      Cumulative      Cumulative
                                                                    percent of      percent of      percent of
             Establishment receipts threshold (in $)               firms exempt      products      sales exempt
                                                                        (%)         exempt (%)          (%)
----------------------------------------------------------------------------------------------------------------
<100,000........................................................            7.36            0.02            0.00
100,000-499,999.................................................           16.75            0.12            0.10
500,000-999,999.................................................           26.14            0.33            0.32
1,000,000-2,499,999.............................................           45.18            1.54            1.26
2,500,000-4,999,999.............................................           59.14            3.26            2.63
5,000,000-7,499,999.............................................           62.18            3.83            3.15
7,500,000-9,999,999.............................................           63.96            4.41            3.63
----------------------------------------------------------------------------------------------------------------

    Applying the FDA exemptions (annual sales of no more than $500,000) 
at 21 CFR 101.9(j)(1)(i) and 101.36(h)(1) as described above would 
exempt 45 percent of firms, only one percent of products, and less than 
0.5 percent of sales for food manufacturers, and only 17 percent of 
firms and about 0.1 percent of products and sales for dietary 
supplement manufacturers. In conducting the Initial Regulatory Impact 
Analysis, we estimated the impact of applying the USCB definition of 
very small enterprise (fewer than 20 employees), which falls somewhere 
between the $2.5 million and $5 million annual sales cutoffs. We found 
that both of these revenue cutoff levels for the definition of ``very 
small food manufacturer'' would offer significantly greater relief for 
those manufacturers, while still having a relatively minor impact on 
the amount of information available to consumers. Exempting 
manufacturers with annual receipts of less than $2.5 million would 
provide regulatory relief to 74 percent of food manufacturers and 45 
percent of dietary supplement manufacturers, while reducing the number 
of products covered by four percent (two percent for dietary 
supplements), and the number of purchases covered by only one percent 
for both food and dietary supplement manufacturers.
    The NPRM solicited comments on alternative revenue cutoffs for the 
definition of ``very small food manufacturer'' of $500,000 and $5 
million. Many commenters generally supported AMS's proposal. Some 
stated that there should be no exemption for very small food 
manufacturers or to use a $500,000 or $1,000,000 revenue cutoff. Some 
commenters stated that number of employees was a more suitable 
criterion in determining the threshold for a very small food 
manufacturer. One commenter recommended the agency should revise the 
definition of ``very small food manufacturer'' in proposed 7 CFR 66.1 
to read: ``any food manufacturer with either (1) annual receipts of 
less than $2,500,000 or (2) 50 or fewer employees, measured as an 
annual daily average.''
    Some commenters suggested that we should use food sales, rather 
than total receipts, to define small food manufacturers to avoid 
inclusion of firms that have multiple sources of income that could 
cause them to exceed the threshold. Some commenters stated that the 
exemption for very small food manufacturers be extended to small 
retailers.
    AMS has made no changes to its proposal. In considering this 
definition, AMS must balance providing regulatory flexibility for 
regulated entities and providing information to consumers regarding the 
bioengineered status of their foods. AMS considered other revenue 
cutoffs, including those above and below $2,500,000, and considered 
other definitions from various sources. Because food and dietary 
supplement manufacturers are in the manufacturing sector, they are both 
defined by number of employees for purposes of SBA size categorization. 
However, the firms defined as small or very small for purposes of the 
NBFDS all fall well below the SBA size categorizations, so we do not 
feel we need to be bound by that methodology.
    In addition, the small food manufacturer definition was defined to 
be consistent with the FDA definition of small manufacturer under its 
nutrition labeling standards, which use annual receipts. AMS believes 
that the very small food manufacturer definition should be consistent 
with these other definitions.
    AMS believes that annual receipts are a reasonable measure in 
determining the threshold for small businesses and specifically here, 
very small food manufacturers. Using total receipts is administratively 
simpler than tracking and demonstrating revenue by category for 
purposes of this rule. We do not expect that there are a significant 
number of firms for which this distinction would make a difference, but 
it would increase recordkeeping burden for all firms that fall under 
this exemption if it was based on food sales rather than annual 
receipts.
    The $2.5 million threshold will provide relief to small businesses, 
but will not markedly decrease the number of products subject to 
disclosure. By defining ``very small food manufacturers'' as those with 
annual receipts below $2,500,000, about 74 percent of food 
manufacturers are exempt from mandatory disclosure, but 96 percent of 
products will still be subject to disclosure. An increase in revenue 
cutoff would increase the number of exempt businesses, but would also 
increase the number of products exempt from disclosure. The definition 
of very small food manufacturer provides flexibility for small entities 
while providing information to consumers regarding the bioengineered 
status of their foods.
    With respect to comments seeking that this exemption extend to 
small retailers, AMS states that this exemption is statutorily mandated 
and cannot be extended to small retailers. To the extent that a small 
retailer is also a very small food manufacturer, they may be able to 
take advantage of the exemption in that instance.
3. Threshold
    Section 66.5(c) establishes a threshold for the inadvertent or 
technically unavoidable presence of bioengineered substances of up to 
five percent (5%) for each ingredient, with no such allowance for any 
BE presence that is intentional. Section 66.1 defines ``bioengineered 
substance'' as substance that contains genetic material that has been 
modified through in vitro recombinant deoxyribonucleic acid (rDNA) 
techniques and for which the modification could not otherwise be 
obtained through conventional breeding or found in nature. This 
definition differs slightly from the definition in the NPRM. We 
replaced the word ``matter'' with ``substance'' to simplify

[[Page 65824]]

discussions about threshold. Thus, food in which any single ingredient 
contains more than 5% of a bioengineered substance, regardless of 
whether its presence is inadvertent or unintentional, is subject to 
disclosure. Food containing any amount of a bioengineered substance 
that is not inadvertent or unintentional is also subject to disclosure.
    In proposing an appropriate threshold level, AMS considered 
responses to the 30 questions posted on its website. Respondents 
offered a number of concepts to consider, including different threshold 
levels for determining exemptions (0.9, 5, and 10 percent) and 
different ways of calculating the threshold (by ingredient or by total 
weight). The NPRM solicited comments on multiple proposed issues 
pertaining to threshold exemptions. These exemptions consisted of three 
alternative thresholds for bioengineered substances that would trigger 
disclosure.
    The first proposed option (Alternative 1-A) would establish that 
food in which an ingredient contains a BE substance that is inadvertent 
or technically unavoidable, and accounts for no more than five percent 
(5%) of the specific ingredient, would not be subject to disclosure as 
a result of that one ingredient. The second proposed option 
(Alternative 1-B) would establish that food, in which an ingredient 
contains a BE substance that is inadvertent or technically unavoidable, 
and accounts for no more than nine-tenths percent (0.9%) of the 
specific ingredient by weight, would not be subject to disclosure as a 
result of that one ingredient. The third proposed option (Alternative 
1-C) would allow regulated entities to use intentionally a small amount 
of BE ingredients up to a certain threshold, such as 5% of the total 
weight of the product, before being required to label a product with a 
BE disclosure.
    Some commenters supported threshold alternative 1-B, which would 
have exempted products where the bioengineered substance in an 
ingredient was inadvertent or technically unavoidable and less than 0.9 
percent of each specific ingredient by weight. They suggested that this 
alternative is the most transparent, aligns with consumer expectations, 
is more widely used in other countries, and is the most closely aligned 
with existing industry standards.
    A small number of comments supported alternative 1-C, an exemption 
allowing for the intentional use of a bioengineered substance up to 5 
percent of the total weight of the food, because it would allow for the 
de minimis use of BE ingredients. Many commenters generally opposed 
alternative 1-C.
    AMS has adopted Alternative 1-A because we believe this approach 
appropriately balances providing disclosure to consumers with the 
realities of the food supply chain. A threshold amount of 5 percent 
allows BE and non-BE production systems to coexist, whereas a lower 
threshold, such as 0.9 percent, may increase the regulatory burden for 
producers and food processors. Any disruption or increased burden on 
the food supply chain may unnecessarily increase the cost of producing 
food, and that cost may ultimately be passed on to consumers. To the 
degree that some production systems and supply chains have already 
adopted a threshold lower than 5 percent for purposes of voluntary 
labeling, continued compliance with a lower threshold for the 
inadvertent or technically unavoidable presence of a BE substance would 
meet the requirements of the NBFDS.
    AMS considered the threshold amounts used by other countries and 
acknowledges that there is no uniform or universal threshold amount. 
While some other countries have chosen lower amounts for their 
threshold, such as 0.9 percent, compliance with a lower threshold for a 
foreign country would still comply with the NBFDS. For example, a food 
produced and labeled for sale in a country with a threshold amount of 
0.9 percent, would still comply with the 5 percent threshold AMS has 
chosen because 0.9 percent is lower than 5 percent. AMS believes this 
approach minimizes the potential burden on trade.
    AMS did not choose alternative 1-C or allow for the intentional use 
of a BE substance without requiring disclosure because the agency 
believes that allowing entities to avoid disclosing despite the 
intentional presence of BE substances in food does not provide 
consumers with the information they desire. In addition, AMS believes 
that, to the degree regulated entities are currently tracking the use 
of BE and non-BE foods for voluntary disclosure, most customary records 
only indicate the presence or absence of a BE substance and not 
necessarily the amount. Requiring regulated entities to track the 
amount of a BE substance for purposes of disclosure would create an 
unnecessary burden on regulated entities and likely increase their 
compliance costs.
    AMS reiterates that the threshold is intended to allow for 
coexistence among BE and non-BE crops, and nothing about the threshold 
amount is meant to convey anything related to health, safety, or 
environmental attributes of BE food as compared to non-BE alternatives. 
This rule is intended only to provide a mandatory uniform national 
standard to equip consumers with information for their personal use.
4. Animals Fed With Bioengineered Feed and Their Products
    The amended Act prohibits a food derived from an animal from being 
considered a BE food solely because the animal consumed feed produced 
from, containing, or consisting of a BE substance. 7 U.S.C. 
1639b(b)(2)(A). Section 66.5(d) incorporates this statutory exemption. 
For example, eggs used in a baked good, where the eggs come from a 
chicken fed feed produced from BE corn and soy, would not be considered 
bioengineered solely on the basis of the chicken's feed.
    As most commenters noted, this exemption is mandated by the amended 
Act, and AMS does not have the authority to change this statutory 
mandate. Some commenters argued that the rationale for excluding the 
products of animals fed bioengineered feed should also apply to yeasts, 
rennet, and enzymes produced by fermentation using a bioengineered 
substrate. The plain reading of the statutory language exempting the 
products of animals fed bioengineered feed does not provide authority 
for AMS to extend the exemption to yeast, rennet, or enzymes or to 
extend the definition of ``animal'' to include those substances. As 
discussed above, those substances may be exempted if they qualify as an 
incidental additive or if they do not contain detectable modified 
genetic material. Thus, the final rule adopts the proposed rule text 
without revisions.
5. Food Certified Under the National Organic Program
    Subtitle F states that ``[i]n the case of food certified under the 
national organic program established under the Organic Foods Production 
Act of 1990 (7 U.S.C. 6501 et seq.), the certification shall be 
considered sufficient to make a claim regarding the absence of 
bioengineering in the food, such as `not bioengineered', `non-GMO', or 
another similar claim.'' 7 U.S.C. 6524. The NPRM stated that implicit 
in the statutory provision is that certified organic foods are not 
subject to BE disclosure. This implication, in conjunction with the 
Secretary's authority to consider establishing consistency between the 
NBFDS and the Organic Foods Production Act, permits a regulatory 
exemption for products certified under

[[Page 65825]]

the NOP. See 7 U.S.C. 1639b(f). The NPRM proposed that Sec.  66.5(e) 
would exempt certified organic foods from BE disclosure.
    Commenters generally supported this exemption and some commenters 
stated the need for a technical correction to accurately exempt all 
food certified under the NOP and to create consistency with both the 
language and the meaning in the amended Act. The prohibition on the use 
of excluded methods extends to all NOP certified label categories 
(``100% Organic,'' ``Organic,'' and ``Made with Organic'') and all 
ingredients (organic and nonorganic) contained within each label 
category. Commenters stated that the inclusion of the phrase ``. . . 
certified organic . . .'' is problematic because it could imply that 
the exemption does not extend to products certified in the ``made with 
organic (specified ingredients or food group(s))'' labeling category 
and recommended that the exemption should be applied to foods certified 
under the NOP.
    AMS agrees with commenters that a technical correction to this 
provision is required. This exemption is intended to cover all NOP 
certified label categories (``100% Organic,'' ``Organic,'' and ``Made 
with Organic'') because NOP regulations at 7 CFR 205.301(a) through (c) 
clearly require that no ingredient may be bioengineered. See 7 CFR 
205.301(f)(1) and 205.105(e) and the definition of ``excluded methods'' 
in 7 CFR 205.2. Accordingly, Sec.  66.5(e) is revised to read ``Food 
certified under the National Organic Program.'' This exemption, 
however, does not apply to ``products with less than 70 percent 
organically produced ingredients'' as described in 7 CFR 205.301(d) and 
205.305 because those products may include bioengineered ingredients 
along with organic ingredients.

G. Severability

    AMS has added a new Sec.  66.11 on severability in subpart A. This 
is a standard provision in regulations. This section provides that if 
any provision of part 66 is found to be invalid, the remainder of the 
part shall not be affected.

III. Disclosure

    As statutorily required, the NBFDS, ``for the purposes of 
regulations promulgated and food disclosures made pursuant to[], a 
bioengineered food that has successfully completed the pre-market 
Federal regulatory review process shall not be treated as safer than, 
or not as safe as, a non-bioengineered counterpart of the food solely 
because the food is bioengineered or produced or developed with the use 
of bioengineering.'' 7 U.S.C. 1639b(b)(3) The amended Act provides 
three disclosure options for all food subject to the mandatory BE food 
disclosure standard, as well as additional options for small food 
manufacturers, and requires that the Secretary provide reasonable 
alternative disclosure options for food contained in small and very 
small packages. 7 U.S.C. 1639b(b)(2)(D), 1639b(b)(F), and 1639b(b)(E). 
In addition, the amended Act required the Secretary to conduct a study 
to identify potential technological challenges that may impact whether 
consumers have access to the bioengineering disclosure through 
electronic or digital disclosure methods and provides specific factors 
to be considered in the study. 7 U.S.C. 1639b(c)(1) and 1639(b)(c)(3). 
Based on the study, if the Secretary determines that consumers would 
not have sufficient access to the bioengineering disclosure through 
electronic or digital disclosure methods, the Secretary, after 
consultation with food retailers and manufacturers, shall provide 
additional and comparable disclosure options. 7 U.S.C. 1639b(c)(4).
    Subpart B specifies: (1) Who is responsible for the BE food 
disclosure in Sec.  66.100; (2) the text disclosure in Sec.  66.102; 
(3) the symbol disclosure in Sec.  66.104; (4) the electronic or 
digital link disclosure in Sec.  66.106; (5) the text message 
disclosure in Sec.  66.108; (6) the disclosure options for small food 
manufacturers in Sec.  66.110; (7) the disclosure options for small or 
very small packages in Sec.  66.112; (8) the disclosure for food sold 
in bulk containers in Sec.  66.114; (9) the voluntary disclosure in 
Sec.  66.116; and (10) other claims in Sec.  66.118. As used in subpart 
B, the key terms include ``information panel'' and ``label.'' As 
defined in Sec.  66.1, these definitions are consistent with those used 
in the NOP regulations, 7 CFR 205.2. In addition, the terms ``regulated 
entity,'' ``marketing and promotional information,'' ``principal 
display panel,'' ``small package,'' ``very small package,'' and ``small 
food manufacturer,'' are also discussed.

A. General

1. Responsibility for Disclosure
    The amended Act requires bioengineered food and bioengineered food 
ingredients to be labeled or ``disclosed'' in accordance with 
regulations promulgated by the Secretary. 7 U.S.C. 1639b(b)(1). Section 
66.100(a) identifies three categories of entities responsible for 
disclosure: Food manufacturers, importers, and certain retailers. This 
final rule adopts these three categories of responsible entities as 
proposed. For purposes of clarity, a definition of ``regulated entity'' 
is incorporated in Sec.  66.1 as ``the food manufacturer, importer, or 
retailer that is responsible for making bioengineered food disclosures 
under Sec.  66.100(a).'' Accordingly, if a food is packaged prior to 
receipt by a retailer, either the food manufacturer or the importer is 
responsible for ensuring that the food label bears a BE food disclosure 
in accordance with this part. If a retailer packages a food or sells 
food in a bulk container and/or display, then the retailer is 
responsible for ensuring that the food bears a BE food disclosure in 
accordance with this part. Based on the input received from commenters, 
this approach will align responsibility for labeling with the 
requirements of other mandatory food labeling laws and regulations, 
including those administered by FDA and USDA FSIS.
2. International Impact
    Based on extensive input from commenters, we continue to find that 
importers should be subject to the same disclosure and compliance 
requirements as domestic entities. Importers of BE foods are subject to 
the requirements of the NBFDS and are required to make appropriate 
disclosures on the labels of BE foods imported and sold in the United 
States.
    Based on comments, this rule finds that establishing mutual 
recognition arrangements with appropriate foreign government entities 
that have established labeling standards for BE food may be appropriate 
in the future. No such recognition arrangements are currently in place 
or are established under this regulation. As no mutual recognition 
arrangements are currently in place, imports of products are subject to 
the disclosure and recordkeeping requirements of the NBFDS as described 
in this final rule. U.S. exports to non-partner countries will need to 
continue to meet that country's import requirements.
3. Appearance of Disclosure
    Requirements on how the disclosure must appear on food labels and 
packaging remain the same as proposed in the NPRM. As provided in Sec.  
66.100(c), the disclosure is required to be of sufficient size and 
clarity to appear prominently and conspicuously on the label, making it 
likely to be read and understood by the consumer under ordinary 
shopping conditions. AMS believes these requirements will align with 
other mandatory food labeling requirements, including those

[[Page 65826]]

administered by FDA (21 CFR 101.15) and FSIS (9 CFR 317.2(b)). While 
FDA uses the term ``customary conditions of purchase'' (21 CFR 101.15), 
we have decided to utilize the term ``ordinary shopping conditions,'' 
as the statutory language references ``shopping'' in 7 U.S.C. 
1639b(c)(4). AMS considered prescribing specific type sizes for 
different disclosure options, but after considering comments, 
determined that the number and type of disclosure options, combined 
with the variety of food package sizes, shapes, and colors, would make 
prescriptive requirements too difficult to implement. AMS believes that 
the requirements in Sec.  66.100(c) will likely provide the BE food 
disclosure information to consumers in an accessible and transparent 
manner, while allowing regulated entities to have flexibility in 
implementing the requirements.
4. Placement of Disclosure
    As proposed, Sec.  66.100(d) offered that the BE food disclosure be 
placed in one of the following places: The information panel adjacent 
to the statement identifying the name and location of the manufacturer/
distributor or similar information; anywhere on the principal display 
panel; or an alternate panel if there is insufficient space to place 
the disclosure on the information panel or the principal display panel. 
Section 66.100(d) would not apply to bulk foods (see Sec.  66.114). 
``Information panel'' as defined in Sec.  66.1 is consistent with the 
definitions found in the USDA NOP regulations at 7 CFR 205.2, which 
largely reflect those found in FDA's food labeling regulations at 21 
CFR 101.2. ``Principal display panel,'' as defined in Sec.  66.1, 
reflects the definition found in FDA's food labeling regulations at 21 
CFR 101.1. Based on input from commenters, if there is insufficient 
space on either the information panel or the principal display panel, 
the disclosure may be placed on an alternate panel likely to be seen by 
a consumer under ordinary shopping conditions.
    Based on commenter feedback, this rule requires locating the 
disclosure on the information panel or the principal display panel 
because that is where consumers who are interested in additional food 
information typically look for information about their food. The 
information panel typically includes the nutrition fact panel, the 
ingredient list, the manufacturer/distributor name and address, and, if 
applicable, the country of origin. The principal display panel 
typically includes the statement of identity and the net quantity 
statement, in addition to other marketing claims. AMS believes that 
placing the BE food disclosure near this existing information will be 
effective because consumers will be able to see all the disclosures, 
statements, and marketing claims in one common place on the label.
    The NBFDS will require placement of the disclosure adjacent to the 
manufacturer/distributor name and location statement. Such placement 
will avoid interference with other required statements on the 
information panel. We think that the information panel will be an 
appropriate location for a mandatory BE food disclosure because food 
manufacturers are accustomed to making statements and disclosures 
required by FDA and FSIS on the information panel. By also permitting 
that the disclosure may appear on the principal display panel, AMS 
acknowledges that some regulated entities may want to increase 
transparency or highlight specific traits from the BE food in tandem 
with the BE food disclosure. Also, as a result of input from 
commenters, we are including additional flexibilities for food 
manufacturers; if there is insufficient space on the information panel 
or the principal display panel, the disclosure may be displayed in an 
alternate panel, provided the disclosure is available to the consumer 
under ordinary shopping conditions. In response to a received comment, 
AMS is clarifying the BE disclosure for multi-unit packages. For multi-
unit packages where individual units are not labeled for retail sale 
and are enclosed within and not intended to be separated from the 
multi-unit package, AMS has determined that disclosure on the outer 
packaging in a manner consistent with the options provided in Sec.  
66.100(c) is sufficient to meet the requirements of the NBFDS. Any 
additional requirements regarding multi-unit packaging would be 
addressed in future rulemakings.
    This subpart does not prevent, pursuant to Sec.  66.118, regulated 
entities from making other claims regarding bioengineered foods, 
provided that such claims are consistent with applicable Federal law.
5. How the List of Bioengineered Foods Relates to Disclosure
    The purpose of the List of Bioengineered Foods is to provide 
regulated entities with a tool to determine whether a food must bear a 
BE disclosure. If a food or food ingredient is on the List of 
Bioengineered Foods, and the regulated entity's records show that the 
food is a bioengineered food or does not indicate whether or not the 
food is bioengineered, the food must bear a BE disclosure. While we 
acknowledge that this framework may result in regulated entities 
placing a BE disclosure on a food that they do not know with certainty 
is bioengineered, we believe that it is appropriate to err on the side 
of disclosure to provide consumers with the fullest information about 
food that could be bioengineered.
    The List of Bioengineered Foods is alfalfa, apple (Arctic\TM\ 
varieties), canola, corn, cotton, eggplant (BARI Bt Begun varieties), 
papaya (ringspot virus-resistant varieties), pineapple (pink flesh), 
potato, salmon (AquAdvantage[supreg]), soybean, squash (summer), and 
sugarbeet. These foods comprise most of the bioengineered crops or 
foods grown in the world and, therefore, most of the bioengineered food 
and food ingredients. As described in Sec.  66.7, AMS will conduct 
annual reviews of the List. Through this process, AMS will request 
public input, including data and other information, to support any 
changes made. Any amendments (additions or deletions) to this List will 
be made through rulemaking. We recognize that for some items on this 
List, most varietals are not bioengineered. Because of this, AMS will 
maintain more detailed information on its website about each 
bioengineered crop or food to help regulated entities understand the 
associated bioengineered events for crops or foods they are sourcing 
and assist in determining whether disclosure is required. AMS will 
update information on its website as necessary.
    If a regulated entity is using a food, including an ingredient 
produced from such food, not on the List of Bioengineered Foods, and 
the regulated entity has actual knowledge that the crop or ingredient 
is, in fact, bioengineered, the entity is still responsible for 
labeling the food in compliance with the NBFDS. If a regulated entity 
uses a food, including an ingredient produced from such food, on the 
List of Bioengineered Foods and its records demonstrate that the food 
is not bioengineered (e.g., modified genetic material is not detectable 
in accordance with Sec.  66.9) or is exempt from disclosure under Sec.  
66.5, the food is not required to bear a BE disclosure.
a. Disclosure Options
    Regulated entities have several disclosure options (text, symbol, 
electronic or digital link, and/or text message, with additional 
options available to small food manufacturers or for small or very 
small packages), with differing requirements, as described

[[Page 65827]]

below. Regardless of the type of disclosure used, regulated entities 
can generally look to the List of Bioengineered Foods to determine if 
the food is required to have a BE disclosure.
b. Use of the ``May Be'' Option
    The NPRM specifically requested comments on whether the phrase 
``may be'' could be used when making a disclosure under the NBFDS. As 
proposed, the phrase ``may be'' would have been able to be inserted 
prior to the word ``bioengineered'' in the various disclosure methods, 
including a ``may be bioengineered'' symbol. This proposal was 
primarily included in the NPRM to provide regulated entities with 
flexibility when using food ingredients on the ``low adoption'' list of 
bioengineered foods. Because the List of Bioengineered Foods adopted in 
this rule does not distinguish between low and high adoption 
bioengineered foods, the ``may be'' option is no longer appropriate. 
Additionally, commenters explained how the use of ``may be'' in the 
disclosure will lead to unnecessary confusion for regulated entities 
and for consumers. Commenters explained that when consumers see the 
words ``may be bioengineered'' on a food package, consumers may be 
unsure whether the food is bioengineered or whether certain ingredients 
are bioengineered. Many commenters suggested that the disclosure be an 
affirmative statement. They noted that many of the countries with 
mandatory disclosure requirements do not allow the use of a ``may'' 
statement. Comments from food companies also described confusion around 
when the ``may be'' wording is appropriate. Commenters noted that 
because records must be maintained to substantiate claims of disclosure 
and non-disclosure, any such use of ``may'' claims would only serve to 
confuse consumers. For these reasons, disclosure under the NBFDS must 
be made with the term ``bioengineered,'' unless making a voluntary 
disclosure as described in Sec.  66.116. The ``may be bioengineered'' 
disclosure cannot be used.

B. Text Disclosure

    The amended Act allows for BE food to be labeled with a text 
disclosure. 7 U.S.C. 1639b(b)(2)(D). Regulated entities may utilize 
text to disclose the presence of bioengineered food or bioengineered 
food ingredients for foods in the List of Bioengineered Foods. For a 
food, including a food ingredient produced from that food, that is a 
raw agricultural commodity and for which records demonstrate that the 
food or food ingredient is bioengineered or does not indicate whether 
the food or food ingredient is bioengineered, the text disclosure is 
``bioengineered food.'' This same disclosure is applicable to multi-
ingredient food products in which all ingredients are on the List of 
Bioengineered Foods and are bioengineered or records do not indicate 
whether the ingredients are bioengineered. For a multi-ingredient food 
that contains ingredients that are and are not on the List of 
Bioengineered Foods and records demonstrate that at least one of the 
ingredients is bioengineered, or do not indicate whether any of the 
ingredients produced from one of the foods on the List of Bioengineered 
Foods are bioengineered, the text disclosure is ``contains a 
bioengineered food ingredient.'' We believe this approach provides 
flexibility to regulated entities, transparency to consumers, and 
recognizes that some foods are entirely a product of bioengineering and 
that some foods are a mix of BE and non-BE food ingredients.
    For BE food that is distributed solely in a U.S. territory, Sec.  
66.102(b) requires that disclosure statements equivalent to those above 
be allowed in the predominant language of that territory. AMS believes 
this approach will make the BE food disclosure more accessible in 
territories where the predominant language is something other than 
English. AMS also believes this allows regulated entities who only 
distribute food in a given territory to respond to consumer demand.

C. Symbol Disclosure

    A symbol is another form of BE food disclosure regulated entities 
may use as set forth in the amended Act. 7 U.S.C. 1639b(c)(4). 
Regulated entities can use this symbol to designate BE food or food 
that contains a BE food ingredient.
    AMS proposed three alternative symbols with variations of those 
symbols and invited comment on each alternative and its variation. The 
three symbols were designed to communicate the bioengineered status of 
a food in a way that would not disparage biotechnology or suggest BE 
food is more or less safe than non-BE food. Based on comments, we have 
decided to use a variation of option 2-A below. AMS requested comments 
on whether the word ``bioengineered'' should be incorporated into the 
design of the chosen disclosure symbol. Based on comments, we have 
decided to include the word ``bioengineered'' in the symbol. This will 
improve the understanding of the symbol, as many comments explained 
that they did not understand what the acronym ``BE'' stood for. 
Comments in response to the NPRM reported results of independent 
surveys conducted during the public comment period that suggested the 
greatest number of respondents believe the symbol with the word 
``bioengineered'' provides the right amount of information when 
compared to the symbol with the letters ``BE.'' \6 7\
---------------------------------------------------------------------------

    \6\ Public comment submitted by the International Food 
Information Council Foundation (IFIC) reports their May 2018 study 
regarding consumer attitudes and perceptions related to the NPRM. 
Comment may be accessed at https://www.regulations.gov/document?D=AMS-TM-17-0050-8861.
    \7\ Public comment submitted by the Rutgers School of 
Environmental and Biological Sciences reports their June-July 2018 
survey regarding consumer perceptions related to the proposed 
disclosure options in the NPRM. Comment may be accessed at https://www.regulations.gov/document?D=AMS-TM-17-0050-14011.
---------------------------------------------------------------------------

    The adopted symbol is a circle with a green circumference, with the 
word ``bioengineered'' displayed at the top and the bottom of the outer 
ring. The bottom portion of the circle contains an arch, filled in 
green to the bottom of the circle. The arch contains two light green 
terrace lines, sloping downward from left to right. On the left side of 
the arch, near the left side of the circle, is a stem arching towards 
the center of the circle, ending in a four-pointed starburst. The stem 
has two leaves coming from the upper side of the stem and pointing 
towards the top of the circle. At the top of the circle, to the left of 
center, in the background of the leaves, is a portion of a yellow 
circle that resembles a sun. The remainder of the circle is filled in 
light blue, resembling the sky.
    Commenters recognized that a multi-colored product label can 
increase printing costs and disrupt product design in other ways. 
Therefore, like the USDA Organic seal under the NOP, AMS will allow 
regulated entities to use a black and white version of the symbol. 
Regardless of colors, the symbol is required to meet the appearance and 
placement requirements in Sec.  66.100. A supplemental document to this 
final rule contains the symbol in full color, as well as another 
variation of the symbol incorporating the words ``derived from 
bioengineering'' (for voluntary disclosure discussed below). The 
document may be viewed in the docket for this rulemaking at 
regulations.gov and on the AMS website.

D. Electronic or Digital Link Disclosure

    The third disclosure option available for regulated entities to use 
is an electronic or digital link disclosure. 7 U.S.C. 1639b(b)(2)(D) 
and 1639b(d). The amended Act requires that the use of an electronic or 
digital link to disclose BE food must be accompanied by the

[[Page 65828]]

statement ``Scan here for more food information'' or equivalent 
language that reflects technological changes. 7 U.S.C. 1639b(d)(1). 
This statutory requirement is incorporated in Sec.  66.106(a)(1). AMS 
recognizes that electronic and digital links currently used on food 
products in the marketplace take different forms, and the amended Act 
allows for equivalent statements that reflect technological changes. 
Current technology includes, among others, quick response (QR) codes 
that are detectable by consumers and digital watermark technology that 
is imperceptible to consumers but can be scanned anywhere on a food 
package using a smart phone or other device. These technologies may or 
may not include an embedded Uniform Resource Locator (URL). 
Consequently, AMS will allow for other alternative statements that can 
appear above or below an electronic or digital link to direct consumers 
to the link to the BE food disclosure. Examples of other statements 
include: ``Scan anywhere on package for more food information,'' or 
``Scan icon for more food information.'' The statement will provide the 
shopper with clear instructions on how to utilize an electronic device 
to scan a food package to obtain information about the bioengineered 
content of the food.
    Section 66.106(a)(2) incorporates the amended Act's requirement 
that the electronic or digital disclosure be accompanied by a telephone 
number that a consumer can call to access the disclosure information. 7 
U.S.C. 1639b(d)(4). If a regulated entity decides to utilize electronic 
or scannable technology to convey bioengineered food information, they 
must also provide options for the consumer to access the disclosure by 
calling a phone number. There must be clear instructions for the 
shopper to ``Call [1-000-000-0000] for more food information.'' Many 
commenters explained how certain consumers do not understand how to 
utilize certain scannable technology to access food disclosure 
information. AMS believes that requiring regulated entities who are 
disclosing bioengineered food information through scannable means to 
offer the option to call a telephone number will best provide for 
accessible and understandable food information.
    The telephone number must be available at all times of the day and 
must clearly provide bioengineered food information to the caller. Pre-
recorded information is permitted. The telephone number and instruction 
must be located in close proximity to the electronic or digital link.
    The amended Act requires the electronic or digital link to provide 
the bioengineering disclosure on the first product information page 
accessed through the link, without any marketing and promotional 
information. 7 U.S.C. 1639b(d)(2). Section 66.106(b) incorporates this 
requirement. ``Marketing and promotional information'' means ``any 
written, printed, audiovisual, or graphic information, including 
advertising, pamphlets, flyers, catalogues, posters, and signs that are 
distributed, broadcast, or made available to assist in the sale or 
promotion of a product.'' This definition aligns with that in the NOP 
regulations at 7 CFR 205.2. If a regulated entity wants to provide 
additional information about BE food to consumers, the information 
should be provided outside of the landing page that includes the BE 
food disclosure.
    Based on commenter suggestions to ensure reliable, consistent 
disclosure information to consumers, AMS is requiring that the 
disclosure on the product information page conform to the requirements 
of the text disclosure in Sec.  66.102 or the symbol disclosure in 
Sec.  66.104. AMS believes that using a uniform, consistent approach to 
the disclosure language and symbol will make it easier for consumers to 
understand the disclosure, whether that language or symbol appears on a 
food label or an electronic or digital device. AMS also believes that 
this approach will make compliance easier for entities responsible for 
disclosure, and ensure consistency in the communication of required 
disclosure information.
    If the regulated entity chooses to use an electronic or digital 
link, the amended Act requires that the entity not collect, analyze, or 
sell any personally identifiable information about consumers or their 
devices. 7 U.S.C. 1639b(d)(3)(A). Under Sec.  66.106(b)(4), if such 
information must be collected to fulfill the disclosure requirements, 
that information must be deleted immediately and not used for any other 
purpose. 7 U.S.C. 1639b(d)(3)(B).

E. Study on Electronic or Digital Disclosure and a Text Message 
Disclosure Option

    The amended Act requires the Secretary to conduct a study to 
identify potential technological challenges that may impact whether 
consumers would have access to the bioengineering disclosure through 
electronic or digital disclosure methods. 7 U.S.C. 1639b(c)(1). The 
Department contracted with Deloitte Consulting LLP to perform the 
study, received the study results from Deloitte Consulting LLP on July 
27, 2017, and made the study available to the public on September 6, 
2017, at https://www.ams.usda.gov/reports/study-electronic-or-digital-disclosure.
    As required by the amended Act, the study considered five factors: 
The availability of wireless internet or cellular networks; the 
availability of landline telephones in stores; challenges facing small 
retailers and rural retailers; the efforts that retailers and other 
entities have taken to address potential technology and infrastructure 
challenges; and the costs and benefits of installing in retail stores 
electronic or digital link scanners or other evolving technologies that 
provide bioengineering disclosure information. 7 U.S.C. 1639b(c)(3). 
The amended Act also requires the Secretary, after consultation with 
food retailers and manufacturers, to provide additional and comparable 
options to access the bioengineering disclosure, should the Secretary 
determine that consumers, while shopping, would not have sufficient 
access to the bioengineering disclosure through electronic or digital 
disclosure methods. 7 U.S.C. 1639b(c)(4).
    Several commenters agreed that the challenges described in the 
study prevented consumers from accessing electronic or digital 
disclosures. Other commenters noted that smartphone usage and broadband 
access were increasing in the United States. After reviewing the study 
and comments submitted to the NPRM related to the study, the Secretary 
has determined that consumers would not have sufficient access to the 
bioengineering disclosure through electronic or digital means under 
ordinary shopping conditions at this time. While a large number of 
Americans have a smartphone and a large number of national and regional 
supermarkets provide Wi-Fi, most consumers in the study experienced 
technical challenges in accessing the bioengineered food disclosure on 
their phones.
    The NPRM proposed text message as an additional disclosure option 
if the Secretary were to determine that shoppers would not have 
sufficient access to digital or electronic disclosure. Food 
manufacturers and retailers that commented on this option were 
generally supportive of this option. Thus, AMS is adopting the text 
message option in Sec.  66.108. Regulated entities that choose this 
option are required to include a statement on the package that 
instructs consumers on how to receive a text message. Those 
instructions can be shared or centralized among regulated entities, if 
so desired. Industry is not prohibited from developing a

[[Page 65829]]

standardized instruction or response if it is in compliance with the 
NBFDS regulations. A one-time automated response would immediately 
provide the disclosure using text in conformance with Sec.  66.102. 
Similar to the electronic or digital disclosure, the text message is 
not allowed to contain marketing and promotional information. The 
regulated entity must not collect, analyze, or sell any personally 
identifiable information, unless necessary to complete the disclosure, 
or use any information related to the text message for marketing 
purposes. If the regulated entity must collect any personally 
identifiable information to complete the disclosure process, it must 
immediately delete the information and not use it for any other 
purpose. Additionally, consumers must not be charged a fee by the 
regulated entity to access the disclosure information. However, 
consumers may be subject to a text messaging fee charged through their 
wireless telephone carrier.

F. Small Food Manufacturers

    The amended Act provides two additional disclosure options for 
small food manufacturers: (1) A telephone number accompanied by 
appropriate language to indicate that the phone number provides access 
to additional information; and (2) an internet website address. 7 
U.S.C. 1639b(b)(2)(F)(ii). In addition, in the case of small food 
manufacturers, the amended Act provides that the implementation date 
not be earlier than one year after the implementation date for 
regulations promulgated in accordance with the NBFDS. See 7 U.S.C. 
1639b(b)(2)(F)(i).
1. Definition
    AMS has made very minor changes to the definition of small food 
manufacturer. AMS defines ``small food manufacturer'' as ``any food 
manufacturer with annual receipts of at least $2,500,000 but less than 
$10,000,000.'' This definition is similar to FDA's final rule to extend 
the compliance dates for manufacturers with less than $10 million in 
annual food sales (see 83 FR 19619).
    Section 66.110 provides two additional options that are available 
to small food manufacturers in addition to the text, symbol, electronic 
or digital link, or text message disclosure options. The two options 
are disclosure by telephone number and by internet website.
2. Telephone Number
    Under Sec.  66.110(a), if a small food manufacturer chooses to use 
a telephone number to disclose the presence of a BE food or BE food 
ingredients, a compliant text accompanying the telephone number is 
``Call [1-000-000-0000] for more food information.'' The telephone 
number should provide the BE food disclosure regardless of the time of 
day. Disclosure via telephone number must include a BE food disclosure 
information that is consistent with Sec.  66.102 in audio form and can 
be pre-recorded. While some commenters suggested that a telephone 
disclosure at any time of day would be burdensome and unreasonable, AMS 
believes that the requirement to provide the BE food disclosure at any 
time of day is reasonable, given the different hours that consumers 
shop for groceries and the varying time zones in the United States. 
Because the disclosure by telephone can be accomplished through a 
recorded message, AMS does not believe that requiring the disclosure to 
be available at any time of day will increase the burden on small food 
manufacturers.
3. Internet Website
    Under Sec.  66.110(b), if the small food manufacturer chooses to 
use an internet website to disclose the presence of BE food or BE food 
ingredients, text would need to accompany the website address on the 
label stating, ``Visit [Uniform Resource Locator of the website] for 
more food information.'' The website must meet the requirements for a 
product information page in Sec.  66.106(b). Disclosure via website 
must include a bioengineered food disclosure that is consistent with 
Sec.  66.102 or Sec.  66.104 in written form. AMS believes that 
implementing the internet website option for small food manufacturers 
in conformance with the requirements for the electronic or digital 
disclosure product information page will give small food manufacturers 
the flexibility to disclose in a way that is cost effective for a small 
business, while providing disclosure to consumers and the same level of 
protection for personally identifiable information.

G. Small and Very Small Packages

    The amended Act requires the Secretary to provide alternative 
reasonable disclosure options for food contained in small or very small 
packages. 7 U.S.C. 1639b(b)(2)(E). In order to ensure consistency with 
existing labeling requirements, the definition of ``small packages'' 
was taken from FDA labeling requirements at 21 CFR 101.9(j)(17). The 
definition of ``very small package'' was also taken from FDA labeling 
requirements at 21 CFR 101.9(j)(13)(i). Section 66.112 continues to 
provide certain flexibilities for food in small and very small 
packages: A modified version of the electronic or digital link 
disclosure in Sec.  66.106; a modified version of the text message in 
Sec.  66.108; and a modified version of the phone number disclosure in 
Sec.  66.110. In addition, for very small packages, regulated entities 
may use a label's preexisting Uniform Resource Locator or telephone 
number for disclosure.
    For the modified version of the electronic or digital link, Sec.  
66.112(a) allows regulated entities to utilize the electronic or 
digital link in Sec.  66.106, but replace the statement ``Scan here for 
more food information'' and the accompanying phone number and 
instructions required in paragraph (a) of that section with the 
statement ``Scan for info.'' AMS believes that shortening the statement 
may make the electronic or digital link disclosure small enough to fit 
on small and very small packages.
    For the modified version of the text message, Sec.  66.112(b) 
allows regulated entities to utilize the text message in Sec.  66.108, 
but replace the statement ``Text [number] for more bioengineered food 
information'' with ``Text [number] for info.'' AMS believes that 
shortening the statement may make the text message disclosure small 
enough to fit on small and very small packages. Similarly, AMS believes 
that a phone number with a short statement is small enough to fit on 
small and very small packages. Section 66.112(c) requires the 
disclosure to meet the requirements of Sec.  66.110, but allows the 
statement ``Call [1-000-000-0000] for more food information'' to be 
replaced with ``Call [1-000-000-0000] for info.''
    AMS recognizes that very small packages have limited surface area 
on which to bear disclosures. Under Sec.  66.112(d), for very small 
packages, if the label includes a preexisting Uniform Resource Locator 
for a website or a telephone number that a person can use to obtain 
other food information, that website or telephone number may also be 
used for the BE food disclosure, provided that the disclosure is 
consistent with Sec.  66.102 or Sec.  66.104 in written or audio form, 
as applicable.
    Stakeholders representing food manufacturers who use small and very 
small packages indicated that using the symbol under Sec.  66.104 is a 
viable disclosure option. Accordingly, the symbol and other disclosure 
options available to all entities responsible for disclosure are also 
available to those who package foods in small and very small packages. 
AMS believes providing the additional options described above will 
provide needed flexibility for

[[Page 65830]]

disclosure on small and very small food packages.

H. Food Sold in Bulk Containers

    Because bulk products, such as cornmeal in a bin or unpackaged 
produce, are frequently displayed without packaging and placed on 
display by retailers, rather than food manufacturers or importers, AMS 
requires that retailers be held responsible for complying with the BE 
food disclosure of bulk food. AMS already requires bulk foods sold in 
grocery stores to comply with Country of Origin Labeling requirements 
and believes that retailers are already accustomed to ensuring that 
bulk food appears with appropriate signage.
    As requested by several commenters, Sec.  66.114(a) requires that 
the BE food disclosure on bulk foods appears using any of the options 
for on-package disclosure including: Text, symbol, electronic or 
digital link, or text message (if applicable). The disclosure is 
required to appear on signage or other materials (stickers, bindings, 
etc.) on or near the bulk item. AMS believes the requirement that the 
signage or materials include the disclosure will allow consumers to 
identify and understand the bioengineered status of the food and allow 
retailers to adapt to new technologies and consumer preference. 
Retailers who use an electronic or digital link will be required to 
place any sign or image to be scanned in a place readily accessible by 
consumers. For all other disclosure options, signs currently used on or 
near bulk items, when supplemented with the BE food disclosure, are 
sufficient to comply with the requirements of the amended Act.

I. Voluntary Disclosure

    AMS received significant input on the proposed NBFDS regarding the 
ability for regulated entities to voluntarily label foods not subject 
to mandatory BE disclosure requirements. Comments from food companies 
explained that consumers expect transparency and as much information as 
possible on the origin of food ingredients. Comments from consumers 
agreed. AMS acknowledges that voluntary disclosure provisions enable 
food manufacturers, retailers, and other entities to share more 
information with consumers, provided the information is truthful and 
not misleading and otherwise in compliance with all applicable Federal 
laws.
    In designing the NBFDS, which is focused on positive disclosure 
claims, AMS has attempted to provide as much flexibility to the food 
and grocery industry as possible, along with the transparency to 
consumers that they expect and deserve. As such, the final rule 
provides for voluntary labeling (1) by entities that are otherwise 
exempt from the requirements of the NBFDS or (2) for certain foods that 
do not meet the definition of ``bioengineered food'' but are derived 
from bioengineered crops or food. Voluntary labeling is only permitted 
in these circumstances.
    Entities that are exempt from the NBFDS are very small food 
manufacturers, and restaurants and similar retail food establishments. 
Under Sec.  66.116(a) those entities may voluntarily include a 
bioengineered disclosure on their products in the same manner as those 
that are required to provide a BE disclosure.
    Under Sec.  66.116(b), regulated entities may voluntarily include a 
disclosure for foods or food ingredients derived from items on the List 
of Bioengineered Foods. A food that meets a factor or condition under 
paragraph (2) of the definition of ``bioengineered food'' in Sec.  66.1 
or is exempt from disclosure under Sec. Sec.  66.5(c)-(e), is 
prohibited from voluntary disclosure under the NBFDS. For example, a 
soup that lists beef broth as the first ingredient on the ingredient 
list may not bear a voluntary disclosure regardless of the other 
ingredients in the soup. Voluntary labeling provisions are found in 
Sec.  66.116.
    As described earlier in this final rule, only products that contain 
ingredients with detectable modified genetic material, as demonstrated 
through records maintained by the regulated entity, must be disclosed. 
This means that many refined products originating from bioengineered 
crops do not constitute bioengineered foods. However, if a food 
manufacturer, retailer, or importer that would otherwise not be 
required to provide a disclosure wants to voluntarily disclose that a 
refined food originates from an item on the List of Bioengineered 
Foods, it is free to do so. For example, if a beverage company makes a 
carbonated soda containing corn syrup originating from BE corn, and the 
corn syrup does not have detectable modified genetic material, the corn 
syrup alone does not trigger mandatory disclosure. Under voluntary 
labeling provisions, because the corn syrup originates from BE corn, 
the beverage company may provide a disclosure explaining to the 
consumer that the ingredients in the soda are ``derived from 
bioengineering,'' even though the ingredient is not for the purposes of 
this regulation considered to be ``bioengineered.''
    AMS believes that exempt entities should also be permitted to 
voluntarily disclose bioengineered foods. For instance, AMS believes 
that very small food manufacturers, who are entities with less than 
$2.5 million in annual receipts and who are exempt from mandatory 
disclosure requirements, should also be able to voluntarily disclose 
the presence of bioengineered ingredients, or ingredients originating 
from bioengineered crops. If a very small food manufacturer is using 
items on the List of Bioengineered Foods that contain modified genetic 
material and the food would be subject to mandatory disclosure 
requirements but for the company size exemption, they may provide a 
disclosure as provided in Sec.  66.116(a). If a very small food 
manufacturer is using ingredients that do not contain modified genetic 
material but are derived from items on the List of Bioengineered Foods, 
they also may utilize the voluntary disclosure rules explained in Sec.  
66.116(b).
    It is important to note that when entities utilize the voluntary 
disclosure provisions in Sec.  66.116, they are required to comply with 
the disclosure requirements (size, location on package, etc.) for text, 
symbol, digital or electronic link, or text message disclosure, as 
applicable.

IV. Administrative Provisions

A. Recordkeeping Requirements

    The amended Act requires each person subject to mandatory BE food 
disclosure under the NBFDS to maintain records such as the Secretary 
determines to be customary or reasonable in the food industry to 
establish compliance with the Standard. See 7 U.S.C. 1639b(g)(2). 
Persons required to keep such records include food manufacturers, 
importers, and retailers who label bulk foods or package and label 
foods for retail sale. Section 66.302(a)(1) therefore requires that 
regulated entities maintain customary or reasonable records to 
demonstrate compliance with the BE food disclosure requirements. So 
long as the records contain sufficient detail as to be readily 
understood and audited as set forth in Sec.  66.302(a)(2), each entity 
subject to the disclosure requirement may decide for itself what 
records and records management protocols are appropriate, given the 
scope and complexity of individual businesses, as well as the food 
being produced. AMS notes that regulated entities, both domestic and 
foreign, will likely have customary or reasonable records in accordance 
with the NBFDS if they are maintaining records in compliance with

[[Page 65831]]

other laws or regulations associated with the food sector.
    In general, comments in response to the proposed recordkeeping 
requirements in the NPRM supported AMS's proposals. Commenters agreed 
that the recordkeeping requirements of the NBFDS should be consistent 
with those under other AMS marketing programs so as not to present an 
unreasonable burden to entities who must comply with the Standard. 
Commenters observed that the recordkeeping requirements as proposed 
would probably not impose additional costs or burdens to existing 
business practices. Commenters provided examples of typical records 
generated in the course of business that should satisfy the audit 
requirements under Sec.  66.402 to verify compliance with disclosure 
requirements under the NBFDS. Commenters suggested that the regulation 
include examples of appropriate records an entity might maintain to 
meet the recordkeeping requirements. Commenters supported the proposed 
flexibility that would allow for record maintenance in the format 
preferred by the entity. Commenters also supported the proposed two-
year record retention period, consistent with the recordkeeping 
requirements under other USDA and FDA regulations.
    AMS agrees that recordkeeping and compliance requirements under the 
NBFDS should be consistent with those under other AMS programs, such as 
NOP and PACA, and has incorporated elements from each of those programs 
into the NBFDS. Accordingly, Sec.  66.302 does not specify the records 
regulated entities must maintain to demonstrate compliance with the 
disclosure regulations. Instead, as with other AMS programs, regulated 
entities are free to determine for themselves which of their customary 
business records will demonstrate compliance and should be maintained. 
Section 66.302(a)(4) includes a non-exhaustive list of records that 
could satisfy the recordkeeping requirements of the NBFDS. That list 
includes: Supply chain records, bills of lading, invoices, supplier 
attestations, labels, contracts, brokers' statements, organic 
certifications, laboratory testing results, validated process 
verifications, and other records generated or maintained by the 
regulated entity in the normal course of business. If records 
demonstrate that a product originates from a country where BE food is 
not commercially grown, those records are sufficient to justify lack of 
disclosure and demonstrate compliance with the NBFDS. Section 
66.302(a)(2) provides that records can be in paper or electronic format 
at the discretion of the regulated entity. Section 66.302(a)(3) 
requires that records be maintained for at least two years beyond the 
date the food or food product is sold or distributed for retail sale.
    As noted above, the amended Act requires that each person subject 
to mandatory BE food disclosure under the NBFDS must maintain records. 
In this regard, as noted in section 66.302(b), the List of 
Bioengineered Foods identifies the foods for which regulated entities 
must maintain records and that may be required to bear a BE disclosure, 
based on what the records show. Consistent with the statutory 
requirement, where the regulated entity has actual knowledge that the 
food or food ingredient is bioengineered, the regulated entity must 
maintain records for that food or food ingredient, even if the food is 
not on the List of Bioengineered Foods.
    Some comments in response to the NPRM opposed requiring entities 
who do not handle BE foods to maintain records to verify compliance 
with the regulation. Other comments supported AMS's proposal to do so, 
explaining that all regulated entities subject to the disclosure 
standard should be required to keep the same kind of records. AMS 
agrees that all food manufacturers, importers, and retailers who offer 
for retail sale foods on the List of Bioengineered Foods are considered 
regulated entities for purposes of the NBFDS insofar as they may be 
required to make BE food disclosures. Their customary business records 
should be able to satisfy an audit to determine whether they are in 
compliance with the disclosure requirements of the NBFDS.
    The amended Act requires each person subject to the disclosure 
requirements of the NBFDS to give the Secretary access to records to 
establish compliance with the disclosure requirements upon request. 
Accordingly, Sec.  66.304 sets forth the provisions for AMS's access to 
records.
    AMS proposed in the NPRM that entities would have five business 
days to provide records to AMS upon request, unless AMS extends the 
deadline. AMS also proposed to provide prior notice of at least three 
business days if we need to access the records at the entity's place of 
business. Finally, AMS proposed that it would examine the records 
during normal business hours and that entities should make their 
records available during those times.
    Commenters generally supported the proposed five- and three-day 
timeframes for the production of records and access to records at the 
entity's place of business, respectively. Some commenters suggested 
that because the NBFDS is a marketing standard rather than a food 
safety regulation, longer timeframes for records production would be 
appropriate. AMS believes that the timelines for records production and 
access are appropriate for enforcing compliance with the NBFDS and 
notes that flexibility is provided in the regulation to extend 
deadlines if necessary. Commenters requested that regulated entities be 
allowed to maintain records at locations most convenient for each 
business. AMS agrees that entities can maintain records at the location 
that best serves the entity's business needs.
    Accordingly, Sec.  66.304(a) provides that the entity must provide 
records to AMS within five business days of AMS's request, unless AMS 
extends the deadline. Section 66.304(b) provides that AMS will give at 
least three business days' notice if it needs access to records at the 
entity's place of business. As well, AMS will examine records during 
normal business hours, and records should be made available during 
those times. Finally, entities must provide AMS access to facilities 
necessary for records examinations. As proposed in the NPRM, Sec.  
66.304(c) specifies that if an entity fails to give AMS access to 
records as required, the result of the examination or audit will be 
that the entity did not comply with the requirement to provide access 
to records and that AMS could not confirm whether the entity is in 
compliance with the disclosure standard of the NBFDS.

B. Enforcement

    The amended Act specifies that failure to make a BE food disclosure 
as required by the NBFDS is prohibited. See 7 U.S.C. 1639b(g)(1). 
Section 66.400 of the NBFDS captures this prohibition. The amended Act 
authorizes AMS to enforce compliance with the standard only through 
records audits and examinations, hearings, and public disclosure of the 
summary of the results of audits, examinations, and similar activities. 
See 7 U.S.C. 1639b(g)(3). The amended Act further states that the 
Secretary shall have no authority to recall any food subject to the 
NBFDS ``on the basis of whether the food bears a disclosure that the 
food is bioengineered.'' See 7 U.S.C. 1639b(g)(4).
    AMS considered responses to the 30 questions when developing the 
proposed enforcement provisions of the NBFDS, and many suggestions were 
incorporated into the proposal. Accordingly, the NPRM outlined a

[[Page 65832]]

process for receiving complaints about possible violations of the 
disclosure standard and set forth a records audit procedure. As 
provided in the amended Act, AMS proposed to review the records of 
regulated entities during audits and examinations to verify compliance 
with the NBFDS's disclosure requirements. Provisions for making 
findings and allowing for appeals hearings in response to the findings 
were proposed. Finally, provision was made for publicizing the results 
of audits, examinations, and hearings.
    As with responses to the 30 questions, comments on the proposed 
NBFDS enforcement provisions reflected a range of opinions about how 
AMS should enforce compliance with the NBFDS. Many suggested that AMS 
conduct regularly scheduled or unannounced records audits. Others 
supported conducting audits and examinations in response to complaints. 
Some commenters called for the imposition of heavy fines or other 
penalties for non-compliance, while others agreed that publicizing the 
results of audits and hearings would be adequate enforcement for this 
marketing regulation. Several commenters requested that records related 
to product formulations and formulas remain confidential.
    As pointed out in the NPRM, the amended Act does not authorize 
civil penalties for violations of the NBFDS, and AMS believes some of 
the other enforcement suggestions to be impractical. Therefore, the 
enforcement provisions of the NBFDS reflect those proposed in the NPRM, 
with one exception. Comments in response to the NPRM suggested that AMS 
provide greater clarity about the process for filing complaints about 
potential violations of the disclosure standard. Paragraph (a) of Sec.  
66.402 is revised to include greater specificity about the complaint 
process. The remainder of Sec.  66.402 continues to describe the 
process for initiating records audits or examinations, including 
providing notice of such activities, making the audit or examination 
findings available to the regulated entity, and providing for appeals 
to object to the findings. Section 66.404 provides that within 30 days 
of receiving the results of an audit or examination of its records, the 
regulated entity that objects to the findings may request a hearing by 
filing a request and submitting a response to the findings, along with 
any supporting documents, to AMS. AMS may allow the entity to make an 
oral presentation, after which the AMS Administrator may revise the 
findings of the audit or examination. Section 66.406 provides that AMS 
will make public the summary of the final results of the audit, 
examination, or similar activity, and that such final results 
constitute final agency action for purposes of judicial review of the 
matter. AMS agrees that the confidential business records, including 
product formulations and recipes, should not be disclosed.

C. Effective, Implementation, and Compliance Dates

    Because this rule is a major rule, the effective date will be 
February 19, 2019 to comply with the Congressional Review Act. The 
proposed rule included an initial compliance date of January 1, 2020, 
and a delayed compliance date of January 1, 2021, for small food 
manufacturers, as mandated by the amended Act. AMS received several 
comments on the compliance date, some of which supported the proposed 
dates, while others sought earlier or later dates.
    After considering input from commenters and other available 
information, AMS recognized that regulated entities should have 
sufficient time to transition their recordkeeping and labeling 
processes and procedures to implement the BE disclosure requirements 
and that the transition should be completed in phases. Section 66.13 
sets forth the implementation and compliance dates for the NBFDS. The 
final rule establishes implementation dates of January 1, 2020, for 
regulated entities other than small food manufacturers and January 1, 
2021, for small food manufacturers. Regulated entities should begin 
implementing the NBFDS no later than those dates by identifying the 
foods that will need to bear a BE disclosure, the records necessary to 
meet the recordkeeping requirements, and the type of BE disclosure they 
will use on their products.
    Following the implementation dates, the final rule establishes a 
mandatory compliance date and a voluntary compliance period. Mandatory 
compliance begins on January 1, 2022, and all regulated entities must 
comply with the requirements of the NBFDS beginning on that date. For 
regulated entities that can and would like to do so, the final rule 
provides for a voluntary compliance period that ends on December 31, 
2021. We believe this phased approach balances the needs of consumers 
to have access to information about bioengineered foods they may 
purchase with the cost and burdens to regulated entities in complying 
with the NBFDS requirements.

D. Use of Existing Label Inventories

    In an effort to reduce costs and burdens, AMS proposed in the NPRM 
to allow regulated entities to use up food labels that are printed by 
the initial compliance date, regardless of whether the existing labels 
comply with the NBFDS, until the remaining label inventories are 
exhausted or until January 1, 2022, whichever comes first. Comments in 
response to the NPRM generally reflected two viewpoints. Consumers and 
consumer groups claimed that manufacturers could theoretically continue 
printing and using non-compliant labels for up to six years after the 
Act was amended to require mandatory BE food disclosure. Those 
commenters urged AMS to allow a shorter compliance period for label 
use-up. Food manufacturer comments generally supported the proposed 
label use-up provision, but they asked that the final rule provide a 
two-year compliance period after the compliance date, rather than 
specifying a hard date, to allow for regulatory delays. Manufacturer 
commenters also urged AMS to allow the use of labels compliant with the 
preempted State GMO labeling laws during the compliance period. Some 
commenters recommended that AMS allow entities to apply stickers or ink 
stamp disclosures to existing labels to reduce waste. Others suggested 
that AMS incorrectly assumes manufacturers maintain large label 
inventories, asserting that manufacturers order labels in the smallest 
batches economically practical.
    As discussed above, AMS is providing a period of voluntary 
compliance until December 31, 2021, with mandatory compliance to begin 
on January 1, 2022. With this voluntary compliance period, it is not 
necessary to provide for regulated entities to be able to use its 
existing label inventories. Thus AMS is not adopting this component of 
the proposed rule. However, in response to comments regarding this 
proposal, regulated entities may use labels that are compliant with 
preempted State labeling laws during the voluntary compliance period. 
They may also apply stickers or ink stamp disclosures to existing 
labels. The sticker or printing cannot cover any other mandatory 
labeling, such as nutrition facts.

V. Comments on the NPRM

    AMS received approximately 14,000 comments in response to the NPRM. 
We received comments from individuals, consumer groups, companies, and 
organizations that represent different segments of the food industry. 
We

[[Page 65833]]

review and respond to the comments below.

1. Definition of ``Food''

    In the NPRM, AMS described how it would implement the statutory 
definition of ``food'' in the amended Act and how the disclosure 
requirements would intersect with the FDCA, the FMIA, the PPIA, and the 
EPIA.
    Comment: Many commenters supported the proposed definition of 
``food.'' Some commenters disagreed with how predominance was 
determined for meat, poultry, and egg products for purposes of BE food 
disclosure. Some commenters stated that the final rule should adopt the 
labeling approach used by FSIS and determine the ingredient 
predominance based on weight of ingredients so as not to confuse 
companies and consumers. Other commenters noted that FDA permits 
composite and component labeling in ingredient declaration statements.
    AMS Response: AMS notes that FDA and FSIS use the same method for 
determining predominance of ingredients by weight. Thus, we agree that 
the predominance determination for meat, poultry, and egg products 
should be based on weight. As FDA permits both composite and component 
labeling, AMS also will permit such ingredient declaration labeling.
    Comment: Several commenters pointed out that because most seafood 
products are subject to the FDCA, BE seafood would be subject to 
disclosure. However, catfish and related species would not require 
disclosure because they fall under the FMIA. Commenters stated that 
this will cause consumer confusion and the rule should be reworded to 
require all seafood products that contain BE ingredients to be labeled.
    AMS Response: AMS acknowledges that there may be consumer confusion 
if the industry develops a BE catfish and it may not be subject to 
disclosure, depending on its predominance on the ingredient list, while 
other BE seafood would be. However, the amended Act clearly sets forth 
how food subject to the FMIA are to be disclosed and AMS does not have 
the statutory authority to expand disclosure beyond what those 
statutory provisions provide.
    Comment: Several commenters opposed limiting the definition of 
``food'' to food for human consumption and sought to include food for 
animal consumption to be included.
    AMS Response: We appreciate that several commenters would like to 
extend the BE disclosure to food for animals. The amended Act, however, 
clearly limits the mandatory disclosure requirements to food for human 
consumption and AMS does not have the statutory authority to require BE 
disclosure for food for animal consumption on a mandatory or voluntary 
basis.

2. Definition of ``Bioengineered Food''

    AMS requested public comments on the definition of ``bioengineered 
food.'' The statutory definition of bioengineering describes food that 
``contains genetic material that has been modified through in vitro 
recombinant deoxyribonucleic acid (DNA) techniques.'' In the NPRM, we 
proposed two interpretations of this definition; Position 1 proposed 
that highly refined products do not contain genetic material that has 
been modified through in vitro recombinant deoxyribonucleic acid (rDNA) 
techniques and therefore are not bioengineered food, while Position 2 
proposed that all foods produced from bioengineering, including refined 
and highly refined products, are bioengineered food.
    Comment: Several commenters supported Position 1. Those commenters 
concluded that, in general, highly refined foods and ingredients do not 
meet the statutory definition of ``bioengineering,'' and thus, are not 
subject to the labeling requirements because they lack rDNA. Many of 
those commenters cited several scientific studies they viewed as 
demonstrating an absence of genetic material in such foods. Some 
commenters also noted that the proposed regulation governs the food 
product, not the source plant from which the food was produced.
    AMS Response: Because some countries previously established BE food 
labeling requirements, the industry recognized the need for 
standardized methods for the detection of rDNA. Technical Committee 34 
(TC 34) ``Food Products'' of the International Organization for 
Standardization (ISO) developed numerous validated sampling and 
detection methods to detect rDNA in food products.\8\ Subcommittee 16 
(SC 16) established the ``Horizontal methods for molecular biomarker 
analysis'' in 2008. ISO/TC 34/SC 16 published 19 ISO standards and has 
17 additional standards under development. The established detection 
methods are generally carried out in accordance with the ISO/ICE 
17025:2017 standard and validated according to Codex Alimentarius 
guidelines.
---------------------------------------------------------------------------

    \8\ ISO (2018) https://www.iso.org/committee/560239.html.
---------------------------------------------------------------------------

    These methods are crop and event specific and most rely on 
quantitative Polymerase Chain Reaction (PCR). In general, the detection 
methods are most effective when applied to raw agricultural commodities 
because the DNA remains relatively intact; many types of food 
processing (e.g. heating) serve to degrade and eliminate DNA.
    Screening of raw agricultural commodities (e.g. seeds, leaves and 
roots) for rDNA is routinely conducted by the global grain and food 
industries in order to maintain identity preserved supply chains. After 
testing at the commodity level, identity is generally preserved through 
records rather than through additional testing after processing. This 
is practical since methodology for detection of rDNA at the commodity 
level is well established; applying these same methods to refined 
ingredients and processed foods can be much more challenging.
    The Pauli study attempted to extract DNA from 55 common foodstuffs 
derived from soybean, corn, potato, rice, sugar beet, tomato and 
wheat.\9\ They were able to extract some DNA from most of the 
foodstuffs, but were not able to extract any DNA from refined sugar and 
oil.\10\ Whether rDNA can be detected in processed foods will depend on 
the specific processing conditions for each food ingredient. The 
Greiner study analyzed 100 foods derived from BE corn and 100 foods 
derived from BE soybean; they were able to detect rDNA in 13% of the 
soy products and 8% of the maize products.\11\ The Orlandi study 
evaluated 63 products derived from BE corn, but only detected rDNA in 
four of the products, all of which were taco shells.\12\ The Arun study 
found that detectability of rDNA in cookies varied with cooking time 
and cooking temperature.\13\
---------------------------------------------------------------------------

    \9\ Pauli et al. (2000) Extraction and amplification of DNA from 
55 foodstuffs. Mitteilungen aus Lebensmitteluntersuchung und 
Hygiene. 91:491-501 (Pauli study).
    \10\ In this study, the scientists were simply extracting total 
DNA, and any rDNA, if present, would be a minute fraction of the 
total DNA extracted.
    \11\ Greiner et al. (2005) Qualitative and quantitative 
detection of genetically modified maize and soy in processed foods 
sold commercially in Brazil by PCR-based methods. Food Control 16: 
753-759 (Greiner study).
    \12\ Orlandi et al. (2002) Analysis of Flour and Food Samples 
for cry9C from Bioengineered Corn. J Food Protection 65:426-431 
(Orlandi study).
    \13\ Arun et al. (2016) The effect of heat processing on PCR 
detection of genetically modified soy in bakery products. J Health 
and Food Sci. 2:130-139 (Arun study).
---------------------------------------------------------------------------

    When refining food ingredients from agricultural inputs, the 
objective is often to produce ingredients with a high degree of purity. 
Therefore, it is not

[[Page 65834]]

surprising that the industrial processes developed for the refining of 
sugars and oils effectively eliminate the majority of undesired 
substances, including DNA and protein. Several published studies have 
demonstrated that genetic material is not detectable in refined beet 
sugar or refined cane sugar.\14\ One study reported detection of rDNA 
in raw cane sugar, but not in refined cane sugar; \15\ however, the 
Cheavegatti-Gianotto study did not detect rDNA in raw sugar. One 
commenter noted that raw cane sugar is not intended for human 
consumption; rather it is intended as a feedstock for refining white 
cane sugar. Therefore, all five published studies referred to above 
reached the same conclusion, that DNA could not be detected in refined 
sugar.
---------------------------------------------------------------------------

    \14\ See Cheavegatti-Gianotto et al. (2018) Lack of Detection of 
Bt Sugarcane Cry1Ab and NptII DNA and Proteins in Sugarcane 
Processing Products Including Raw Sugar. Front Bioeng Biotechnology. 
27:24 (Cheavegatti-Gianotto study); Joyce et al. (2013) Sugar from 
genetically modified sugarcane: Tracking transgenes, transgene 
products and compositional analysis. International Sugar Journal. 
pp. 861-863; Klein et al. (1998) Nucleic acid and protein 
elimination during the sugar manufacturing process of conventional 
and transgenic sugar beets. J Biotech 60, 145-153; Oguchi et al. 
(2008) Investigation of Residual DNAs in Sugar from Sugar Beet (Beta 
vulgaris L.). J. Food Hyg. Soc. Japan. 50:41-46.
    \15\ Cullis et al. (2014) DNA and Protein Analysis throughout 
the Industrial Refining Process of Sugar Cane. Science Target 3:1-
15.
---------------------------------------------------------------------------

    The sugar refining process from sugar beet or sugarcane juice that 
has been extracted by pressing or diffusion, then clarified and 
evaporated, results in sucrose of 99.9% purity. Several of these 
refining steps involve heating which serves to degrade DNA. 
Additionally, prior to crystallization, lime is used to remove the 
impurities remaining in the sugar juice; DNA and protein are 
effectively removed at this step in the sugar refining process. Based 
on the available scientific evidence, several countries (e.g. 
Australia, Brazil, Japan, Israel, New Zealand and South Korea) have 
exempted refined sugar from their respective BE food labeling 
requirements.
    Food grade vegetable oils can be derived from a variety of BE crop 
sources (e.g. corn, soybean, and canola) and can be refined with a 
variety of methods (e.g. chemical vs. physical refining). The 
detectability of rDNA may vary by crop and by refining method. 
Substances present in raw vegetable oil are removed by steps such as 
degumming, neutralizing, bleaching, deodorizing, and dewaxing.
    The Pauli study was unable to extract DNA from refined oil. Another 
study was unable to detect rDNA in refined soybean oil; they observed 
degradation of DNA during degumming and concluded that degumming was 
the most important step in removing DNA when refining soybean oil.\16\ 
However, one study was able to detect rDNA in refined soybean oil.\17\ 
These variable results may be due to differences in refining processes; 
some oil refining processes may effectively eliminate all DNA, while 
others, such as cold pressing, are unlikely to eliminate all DNA. 
Similar to refined sugar, several countries (e.g. Australia, Brazil, 
Japan, Israel, New Zealand and South Korea) have exempted refined 
vegetable oils from their respective BE food labeling requirements.
---------------------------------------------------------------------------

    \16\ Gryson et al. (2002) Detection of DNA during the refining 
of soybean oil. JAOCS, Vol. 79, 171-174.
    \17\ Costa et al. (2010) Monitoring GM soybean along the 
industrial soybean oil extraction and refining processes by PCR 
techniques. Food Research Intl 43:301-306.
---------------------------------------------------------------------------

    The studies cited above, as well as similar studies provided by 
some commenters demonstrate for many refined food products and 
ingredients, the refining process removes the genetic material so that 
it can no longer be detected. If the genetic material is not detected, 
then it is not possible to conclude that the food product or ingredient 
contains modified genetic material. Thus, based on the available 
scientific evidence, refined beet and cane sugar, high fructose corn 
syrup, degummed refined vegetable oils and various other refined 
ingredients are unlikely to require BE food disclosure because the 
conditions of processing serve effectively to degrade or eliminate the 
DNA that was initially present in the raw agricultural commodity.
    Comment: Many commenters supported the labeling of all foods 
produced through bioengineering including refined oils, sugars and 
starches. They believed processed foods originating from BE raw 
agricultural commodities should be considered bioengineered food, 
regardless of whether modified genetic material remains detectable in 
the final product. Some commenters did not believe disclosure should 
rely only on the detection of genetic material in a food, or food 
ingredient, or solely on specific test methods like PCR. Commenters 
noted that scientific methods may advance to where today's 
``undetectable'' genetic material may be detectable using future 
technologies. In support of this position, commenters cited several 
studies documenting the evolution of our ability to detect previously 
undetectable bioengineered products.
    AMS Response: AMS appreciates commenters' position on disclosing 
foods produced through bioengineering. AMS has adopted the statutory 
definition of ``bioengineering,'' which makes clear that food must 
``contain genetic material that has been modified through in vitro rDNA 
techniques . . .'' to be labeled as a ``bioengineered food.'' Highly 
refined products have undergone processes that removed genetic material 
such that it cannot be detected using common testing methods. As such, 
the NBFDS will not require disclosure for refined products that do not 
contain modified genetic material. Regulated entities who do not 
disclose such products would maintain records that substantiate their 
claim that the products do not contain modified genetic material. As 
described in the Preamble and in Sec.  66.9, regulated entities can 
demonstrate that their food products do not contain modified genetic 
material in multiple ways.
    AMS maintains that the products of technology, rather than the 
technology itself, should determine whether a food meets the BE food 
definition and requires disclosure unless exempted from disclosure 
pursuant to Sec.  66.5. We also recognize that emerging technologies 
could impact the list of foods requiring disclosure. As such, AMS 
provides for the consideration of new technologies used to develop 
foods during the process of reviewing and revising the List of 
Bioengineered Foods.
    We recognize that testing methodology may evolve so that a future 
test may detect modified genetic material in a food ingredient that 
current tests do not. The definition of ``bioengineered food'' accounts 
for this possible evolution. If the modified genetic material in that 
food ingredient becomes detectable under Sec.  66.9 in the future, the 
food ingredient would be subject to BE disclosure.
    Comment: Some commenters supported the inclusion of highly refined 
ingredients and foods, such as oils and sugars derived from 
bioengineered crops, in the mandatory disclosure standard (Position 2). 
Some commenters who supported Position 2 viewed it as being consistent 
with the FDA's guidance to manufacturers entitled, ``Voluntary Labeling 
Indicating Whether Foods Have or Have Not Been Derived from Genetically 
Engineered Plants.'' Commenters considered detection of genetic 
material in the food immaterial to its exemption from the Standard. 
Instead, they justified their position based on consumer interest and 
popular understanding of how common BE agricultural crops are grown, 
not whether the food or ingredient contains modified genetic material. 
These

[[Page 65835]]

commenters proposed that a narrow focus on the presence of genetic 
material creates a differentiation based on rDNA that some could use to 
imply a safety issue with the rDNA. Commenters further suggest such 
implied issues could lead consumers to believe foods and food 
ingredients containing genetic material are different in a way that 
necessitates informing consumers.
    AMS Response: AMS appreciates commenters' interest in the new 
Standard and their efforts to be transparent and build consumer trust. 
As stated in the previous comment response, AMS has adopted the 
statutory definition of bioengineering. That definition focuses on the 
products of technology, rather than the technology itself. For this 
rule, the presence or absence of detectable modified genetic material 
in a final food product determines in part whether a food meets the BE 
food definition and might require disclosure. AMS reiterates that 
nothing in the disclosure requirements set out in this final rule 
conveys information about the health, safety, or environmental 
attributes of BE food as compared to non-BE counterparts. The 
regulatory oversight by USDA and other Federal government agencies 
ensures that food, including that produced through bioengineering, 
meets all relevant Federal health, safety, and environmental standards.
    AMS values transparency and consumer interests. AMS recognizes that 
some regulated entities may wish to disclose that their refined foods 
(that do not contain modified genetic material and thus are not 
bioengineered foods) are derived from bioengineering. Accordingly, AMS 
has provided for voluntary disclosure of such foods.
    Comment: One commenter supported Position 2 suggesting that non-BE, 
identity-preserved, or certified organic crops and products can offer a 
price premium and new or additional market access--domestic and 
international--to producers. These commenters maintain that disclosing 
all BE foods would improve these farmers' market transparency, while 
exemption will require added costs for coexistence, segregation and 
detectability testing.
    AMS Response: AMS agrees that it is possible that some marketing 
claims may offer a price premium or new market access. AMS has adopted 
Position 1 with some modifications. For further details on our 
rationale for adopting this position, see Section II.C.1 of this rule. 
With the adoption of Position 1, foods with undetectable modified 
genetic material are not bioengineered foods. Accordingly, regulated 
entities need not disclose such foods as bioengineered foods. AMS has 
determined that regulated entities can establish that their foods do 
not contain detectable rDNA through their records of the foods on the 
List of Bioengineered Foods.
    Comment: Some commenters suggested a broad interpretation of the BE 
definition and scope accounting for existing technologies like CRISPR 
and TALENS, as well as for future developments. The interest of these 
commenters was to prevent confusion among consumers and in the 
international marketplace if the NBFDS failed to harmonize the law with 
existing standards--FDA, Codex Alimentarius, and USDA Certified 
Organic, all of which include gene editing and gene silencing 
techniques (e.g. sequence-specific nucleases, meganucleases, zinc 
finger nuclease, CRISPR-Cas system, TALENs, oligonucleotide directed 
mutagenesis RNAi, RNAi pesticides, and RNA-dependent DNA methylation). 
Commenters cited USDA's General Counsel Jeffrey M. Prieto, who stated 
that it is well within USDA's authority under Public Law 114-216 to 
mandate a broad interpretation. Another commenter was concerned that a 
failure to further define bioengineering could lead to state preemption 
concerns. The commenter stated that preemption, as intended by the BE 
Food Disclosure Act, Sec. 295, was not intended to be limited to the 
smaller subset of foods now defined as ``bioengineered,'' which, as 
proposed, excludes highly refined ingredients and products of gene 
editing.
    AMS Response: AMS appreciates commenters' concerns and acknowledges 
the range of feedback provided. AMS has adopted a modified version of 
Position 1 and believes that the definition of ``bioengineering'' sets 
forth the scope of the mandatory disclosure. Although the Jeffrey 
Prieto letter seemingly advocated an expansive interpretation of the 
statutory definition of bioengineering along the lines of Position 2, 
AMS maintains that with the full range of information before it, 
including additional interpretation of the amended Act and responses to 
both the 30 questions and the NPRM, Position 1 is more closely aligned 
with the amended Act's definition of bioengineering. AMS will adopt 
Position 1 and is incorporating the statutory definition of 
bioengineering into the regulatory definition of ``bioengineered 
food.''
    AMS does not find it necessary to further define bioengineering. 
AMS also disagrees with commenters' concerns that failing to further 
define bioengineering would result in limiting preemption. Subtitle F 
of the amended Act addresses Federal preemption of State and local 
genetic engineering labeling requirements. 7 U.S.C. 1639i. The 
preemption provisions extend beyond bioengineering labeling and include 
genetic engineering labeling requirements.
    Also, as stated earlier, this definition of bioengineered food 
focuses primarily on the products of technology, not the technology 
itself. AMS is not making a blanket statement regarding the scope of 
technologies that are covered by the NBFDS. Finally, AMS agrees the 
NBFDS should align with some elements of existing standards to the 
extent possible. In Sections II through IV of this rule, AMS outlines 
its efforts to align the NBFDS with existing laws.
    Comment: Several commenters supporting Position 2 also recommended 
adopting the Codex Alimentarius definition for Modern Biotechnology: 
(i) In vitro nucleic acid techniques, including rDNA and direct 
injection of nucleic acid into cells or organelles, or (ii) fusion of 
cells beyond the taxonomic family, that overcomes natural, 
physiological reproductive or recombination barriers, and that are not 
techniques used in traditional breeding and selection. These commenters 
state that the Codex Alimentarius definition of bioengineering is 
internationally recognized by the World Trade Organization as the 
standard for settling trade disputes, and therefore should serve as a 
guidepost for the USDA. Additionally, several commenters expressed 
concern that adopting Position 1 could negatively impact trade. 
According to these commenters, most countries with BE disclosure 
standards require that highly refined products be disclosed. They 
contend that adopting Position 1 and not aligning the NBFDS with 
existing international standards would create confusion among consumers 
and in the international marketplace.
    AMS Response: In drafting the proposed rule and in finalizing the 
rule, AMS has reviewed and considered various foreign labeling regimes. 
To the extent possible, AMS has tried to align the NBFDS with existing 
domestic and international regimes to reduce burdens on regulated 
entities, promote consistency for consumers, and limit trade impacts. 
AMS is bound by the plain language of the amended Act. As described 
above, based on the language of the amended Act, AMS is incorporating 
the statutory definition of bioengineering into the regulatory 
definition of ``bioengineered food.'' As

[[Page 65836]]

such, if a food does not contain detectable modified genetic material, 
it is not a bioengineered food and does not require disclosure.
    Comment: Some commenters also cited evidence that the amended Act 
did not propose the adoption of any ``other factors and conditions 
under which a food is considered a bioengineered food'' as part of the 
final rule. These commenters state that this rulemaking may only 
provide a process to allow any person to petition AMS and request the 
adoption of specified ``other factors and conditions.''
    AMS Response: AMS disagrees with commenters who assert that the 
amended Act did not provide for factors and conditions under which a 
food is considered a bioengineered food. The amended Act clearly 
provides the Secretary with this authority. 7 U.S.C. 1639b(b)(2)(C). 
AMS has interpreted this statutory provision as one that limits the 
scope of the definition of ``bioengineered food,'' thus potentially 
excluding certain products from disclosure. The factors and conditions 
process, as proposed in the NPRM and adopted in this rule, offers a 
fair and rational method by which interested persons can petition AMS 
to consider various proposals. See Section II.E of this rule for 
details of the process.
    Additionally, nothing in the amended Act precludes AMS from 
considering requests for a factor and condition that were submitted as 
part of responses to the 30 questions as petitions contemplated by 7 
U.S.C. 1639b(b)(2)(C) and applying the process in this final rule to 
consider those petitions. Because the process is a rulemaking process, 
we believe that it is appropriate and efficient to consider certain 
petitions that meet the standards for consideration in Sec.  66.202 as 
part of this rulemaking.
    Comment: One commenter stated that because there is no difference 
chemically between refined and highly refined products and their non-BE 
counterparts, these products should not be treated differently. 
Instead, commenters believe refined and highly refined products should 
be exempt from BE labeling similar to their non-BE counterparts. 
Several commenters expressed concern that treating these chemically 
identical products differently could negatively impact the market 
appeal of highly refined products. Commenters also point out that 
enzymes produced from bioengineering as sourced from bioengineered 
crops are not themselves BE food, because enzymes are proteins and do 
not contain DNA.
    AMS Response: AMS recognizes that highly refined foods produced 
from BE crops are generally chemically identical to the same foods 
produced from non-BE sources. Under the NBFDS, neither product would be 
subject to disclosure unless another ingredient triggers the disclosure 
requirement. However, regulated entities do have the option to 
voluntarily disclose information about highly refined foods derived 
from BE sources.
    AMS notes that enzymes may be used in a manner that requires them 
to be labeled on the ingredient statement. Enzymes sometimes qualify as 
incidental additives that are not required to be labeled as ingredients 
on a food label. In those instances, they do not require disclosure as 
BE foods. However, bioengineered enzymes that do not qualify as 
incidental additives may require disclosure as BE foods, unless they do 
not have detectable modified genetic material.
    Comment: Some commenters feel that mandating disclosure for refined 
products would disparage biotechnology. They also felt that labeling BE 
products would impose a burden on them that was not levied upon the 
non-BE counterpart.
    AMS Response: AMS appreciates commenters' concerns about mandatory 
disclosure and explains the NBFDS seeks to minimize the food industry's 
implementation and compliance costs while providing a mandatory, 
uniform disclosure standard for BE food. As noted, AMS has adopted 
Position 1, in which products that do not contain modified genetic 
material are not bioengineered foods and are not subject to mandatory 
disclosure. Such products could be voluntarily disclosed.
    Comment: Some commenters provided an economic argument that the 
number of BE foods covered would not change if refined and highly 
refined foods where no rDNA is detectable are not covered by the NBFDS. 
In addition these commenters cite the inconsistency of requested 
exemptions for (1) incidental additives, processing aids, secondary 
direct additives; (2) food derived from insects or microorganisms that 
grow or feed on a bioengineered substrate, such as a bioengineered crop 
or other substance; (3) enzymes; (4) ingredients derived via 
fermentation regardless of whether the microorganisms used in the 
fermentation are derived using rDNA technology, and (5) food products 
with medicinal or supplementary applications to be excluded from the 
definition of a BE Food. They stated that exemptions for refined and 
highly refined products would be no different.
    AMS Response: AMS acknowledges the range of comments citing 
substances that may or may not be subject to disclosure. In 
establishing this rule, AMS relied on the statutory language in the 
amended Act in adopting Position 1. Foods with no modified genetic 
material are not bioengineered food and therefore are not subject to BE 
disclosure. As stated in the RIA, because AMS has adopted this 
position, there would be a reduction in the number of products that are 
labeled BE. Because those foods are not bioengineered food subject to 
mandatory disclosure under the amended Act, AMS does not have the 
authority to require BE disclosure for those foods regardless of the 
number of food products that may be affected.
    In addition, AMS sought to align the disclosure requirements of the 
NBFDS with the ingredient declaration requirements under applicable FDA 
regulations to simplify compliance and reduce labeling costs for 
regulated entities. Section II.E.1 of this rule details AMS's position 
on disclosure of incidental additives, including enzymes and 
microorganisms used in fermentation. AMS further discusses its position 
for some of these substances in Section II.E.4 of this rule.
    AMS sought to limit inconsistencies to the extent possible and 
where it had the authority to do so. To the extent that interested 
persons think that other products should be subject to disclosure, they 
may submit a petition or request seeking to adopt a factor or condition 
to potentially modify the definition of ``bioengineered food'' in a 
future rulemaking.
    Comment: Commenters pointed out that the NBFDS is a marketing 
standard, not a safety standard. Consequently, they feel AMS should aim 
to determine whether its new labeling system would confuse consumers. 
These commenters were concerned that consumers who expect food 
containing raw BE ingredients to be labeled as such may feel misled if 
AMS adopts Position 1 for the NBFDS. Other commenters suggested that 
the NBFDS clarify the definition of bioengineering to state that it is 
synonymous with ``genetic engineering'' or ``GMO.'' These commenters 
are concerned that the public, which commonly refers to BE products as 
GMOs, may be confused when using the term bioengineering and that the 
terminology may be inconsistent with other labeling systems.
    Several commenters cited the option in the proposed rule to later 
petition AMS to include specific factors or conditions not otherwise 
provided for in the definition of ``bioengineered food''

[[Page 65837]]

and provide stakeholders with the freedom to disclose voluntarily 
additional ingredients/products if they are truthful and consistent 
with the NBFDS.
    AMS Response: AMS acknowledges commenters' concern for potential 
consumer confusion regarding the new labeling system. As explained in 
earlier comments, AMS has adopted Position 1 and has incorporated the 
statutory definition of bioengineering into the regulatory definition 
of ``bioengineered food.'' We believe this definition of 
``bioengineering'' clearly sets forth the scope of the mandatory 
disclosure. AMS does not believe that the definition of bioengineered 
food will create consumer confusion. However, AMS does understand that 
some regulated entities are interested in disclosing that certain 
products such as refined products are derived from bioengineering; 
accordingly, regulated entities may voluntarily disclose such products.
    AMS considered similar terms to bioengineering as permitted by the 
amended Act but ultimately determined that bioengineering and 
bioengineered food accurately reflected the scope of disclosure and the 
products and potential technology at issue. AMS believes that using 
other terms such as genetic engineering or genetically modified 
organisms may create inconsistencies with the preemption provisions or 
muddy the scope of disclosure.
    Comment: Several commenters cited the option in the proposed rule 
to later petition AMS to include specific factors or conditions not 
otherwise provided for in the definition of ``bioengineered food'' and 
provide stakeholders with the freedom to voluntarily disclose 
additional ingredients/products if it is truthful and consistent with 
the NBFDS. Many commenters saw this as a basis to exempt refined and 
highly refined foods from the NBFDS as proposed in Position 1.
    Some commenters were concerned with the economic impacts of 
labeling refined foods as bioengineered and leading consumers to 
improperly believe refined products contain bioengineered ingredients. 
A related concern by one commenter maintains that Position 2 
contradicts FDA's requirement that labeling be accurate. As an example, 
the commenter suggested that labeling a package of sugar, a refined 
food product, with one of the NBFDS disclosure options would falsely 
imply the product contains modified DNA, and such a claim would not 
comply with FDA's labeling requirement.
    AMS Response: AMS has adopted Position 1 based on the plain 
language of the amended Act. In addition, we agree that entities can 
opt to voluntarily disclose information about highly refined foods made 
from BE sources in accordance with Sec.  66.116.
    Comment: Some commenters contend consumer expectations for BE 
disclosure are driven, in part, by voluntary marketing claims like Non-
GMO Project Verified and True North. These voluntary programs label 
highly refined products derived from bioengineering as GMO's. 
Commenters suggest using an alternative approach to labeling these 
products would cause consumer confusion and disrupt the industry. 
Several commenters expressed concern this potential confusion could 
impact them personally, as many have experienced health-related issues 
after consuming products made with GMO ingredients. Others expressed 
concerns about products made using bioengineered products.
    AMS Response: AMS acknowledges that entities may participate in 
voluntary labeling initiatives such as the non-GMO Project so long as 
they are in compliance with all applicable Federal regulations. To the 
degree possible, USDA has tried to minimize the impact the NBFDS will 
have on these voluntary absence claims. AMS acknowledges that some 
elements of the NBFDS may differ from requirements of some existing 
voluntary marketing claims. As explained in earlier comment responses, 
AMS has adopted the statutory definition of ``bioengineering,'' thereby 
exempting from disclosure labeling foods such as refined products that 
have undergone processes to remove modified genetic material.
    In establishing this rule, AMS has considered the interest of 
consumers and seeks to minimize the food industry's implementation and 
compliance costs--costs that could be passed on to the consumers. That 
said, as we have stated previously, nothing in this disclosure standard 
conveys information about the health, safety, or environmental 
attributes of BE food compared to non-BE counterparts. The NBFDS 
provides a mandatory, uniform disclosure standard for BE food--as 
defined in this rule, by which uniform information is provided to 
consumers.

3. Conventional Breeding

    AMS solicited comments on whether to define ``conventional 
breeding'' and suggestions for what that definition should be.
    Comment: Many commenters requested that AMS define conventional 
breeding within the NBFDS final rule, to better define the scope of 
NBFDS for regulated entities and consumers. Several commenters stated 
that conventional breeding should be narrowly defined, opining that the 
purpose of the NBFDS was to require labeling of bioengineered food. 
This was in contrast to another commenter who desired a broad 
definition of the term, stating that the final rule ``should recognize 
that because a process accelerates what could be accomplished through 
other, slower processes to achieve the same result, it should not 
preclude the accelerated process from being deemed ``conventional.''
    A few commenters accepted one of the sample definitions included by 
AMS in the proposed rule, but there were many additional proposed 
definitions. Some commenters suggested conventional breeding be defined 
as ``referring to a wide range of modifications obtained through 
methods that use an organism's potential genetic variability within its 
gene pool.'' One commenter suggested modifying one of AMS's sample 
definitions for conventional breeding to state ``protoplast fusion'' 
rather than ``protoplast,'' ``cell selection'' rather than ``cell'' and 
``embryo rescue'' rather than ``embryo fusion.'' Other commenters 
suggested adopting bioengineered food definitions from the USDA 
National Organic Standard (see 7 U.S.C. 1639b(f)(2)), by the Food and 
Drug Administration, or from the Codex Alimentarius. One such commenter 
believed that doing so would make clear that the techniques of modern 
biotechnology, such as gene editing and gene silencing, were not 
conventional breeding.
    A few groups of commenters requested the term be defined but did 
not propose a specific definition. Many of them stated that they 
disapproved of the use of any definition that includes a list, as 
breeding techniques are continually evolving. One commenter argued that 
the definition should be fashioned in such a way that the only products 
subject to labeling are the ``products that were developed by 
transferring genetic material between non-sexually compatible 
species.'' A few other commenters desired that clarity would be 
achieved by providing a definition and identifying, through examples, 
those modifications that could be obtained through conventional 
breeding. Another group of commenters stated that ``this should be done 
through a supplemental proposed rule that provides the public with an 
additional opportunity to provide public comments.''

[[Page 65838]]

    There were, however, several commenters who believed that there was 
no reason to define conventional breeding. Some stated that the term 
was commonly understood and therefore unnecessary to define. Others 
argued that the term was difficult to precisely define and therefore 
would only sow confusion amongst the regulated if there was any attempt 
to do so. One commenter worried that a definition would likely not 
stand the test of time due to the pace of new technology and therefore 
would not cover newly established processes.
    AMS Response: AMS appreciates the wide range of comments received 
related to defining ``conventional breeding.'' AMS finds ``conventional 
breeding'' is a commonly understood term within the industry which does 
not require a definition. Additionally, any ``conventional breeding'' 
definition could become unworkable or obsolete as technology and 
techniques evolves. Forgoing defining the term would allow AMS to 
respond to those challenges in real time.
    Comment: Several commenters stated that conventional breeding is a 
common term which is well understood, therefore the term does not need 
to be defined. Some of those that did not wish the term to be defined 
argued that any such attempts would be inherently confusing or 
misleading to consumers.
    AMS Response: AMS agrees that ``conventional breeding'' is a 
commonly understood term within the industry that does not require 
definition.

4. Found in Nature

    AMS requested comments on whether the term ``found in nature'' 
should be defined, and if so, what that definition should be. AMS 
specifically sought comment on whether intellectual property law should 
be considered as one method for determination.
    Comment: Commenters generally did not support defining or including 
the term ``found in nature'' within the NBFDS. Many of those in 
opposition believed the term ``found in nature'' itself was nebulous, 
misleading, and not adequately defined by science. Others argued that 
agriculture is inherently separate from nature.
    Of those that did request the term be defined, two common 
suggestions were ``spontaneously occurs in nature, such as natural 
biological evolution, and does not overcome natural physiological 
reproductive or combination barriers,'' or ``the kinds of genetic 
modifications which can occur in nature within the genome of an 
organism, without human intervention.''
    One commenter suggested that should definitions be deemed 
necessary, the definitions avoid setting precedents in other regulatory 
areas, and be kept as simple and as clear as possible. Another group of 
commenters stated that ``this should be done through a supplemental 
proposed rule that provides the public with an additional opportunity 
to provide public comments.''
    AMS Response: AMS finds it unnecessary to define the term ``found 
in nature.'' AMS received no compelling arguments to define the term 
and believes that attempting to do so may cause confusion in light of 
the rapid pace of innovation. In order to incorporate technological 
changes in industry into this mandatory labeling standard, AMS believes 
it needs to retain maximum flexibility. That will not be accomplished 
by narrowly defining found in nature.

5. List of Bioengineered Foods

    AMS solicited comments on the option of utilizing a list of foods 
in an attempt to make it easier for regulated entities to identify what 
products require disclosure. AMS proposed two lists: One composed of 
highly adopted foods commercially available in the United States and 
another of non-highly adopted foods commercially available in the 
United States. AMS requested comments on maintenance of and revisions 
to the lists, the threshold for ``highly adopted,'' and list 
composition. AMS also requested comments on using list maintenance to 
evaluate whether a particular crop meets the definition of 
``bioengineering'' in light of emerging technologies; on whether 
enzymes, yeasts, and other foods produced in a controlled environment 
should be included on the lists; and on the treatment of foods produced 
in other countries.
    Comment: While some commenters suggested that a list should not be 
used as a tool to help identify potential BE foods, most commenters 
generally supported the use of a list method to identify foods subject 
to disclosure, noting a readily available list of such foods would make 
compliance less costly. A few commenters acknowledged the usefulness of 
the proposed lists as a reference tool but recommended that the 
presence of BE ingredients in a food trigger the disclosure requirement 
even if those foods do not appear on the lists.
    AMS Response: AMS agrees that the List of Bioengineered Foods is an 
important part of the rule that will facilitate compliance with the 
NBFDS. AMS also agrees that foods should be subject to disclosure to 
the extent regulated entities have actual knowledge such foods are 
bioengineered. Disclosure decisions are based on entities' records. 
Nevertheless, entities that have actual knowledge that a food is 
bioengineered must make appropriate disclosure of that food, even if 
that food does not appear on the List. AMS believes, however, that it 
would be unduly burdensome to hold regulated entities responsible for 
failing to make BE disclosures for foods that do not appear on the List 
and for which regulated entities have no actual knowledge of 
bioengineered status. Disclosure and recordkeeping for unlisted foods 
is therefore required only when regulated entities have actual 
knowledge of the bioengineered status of the food in question. AMS 
notes that it intends its List to be as complete as possible, aiming to 
capture any BE foods that meet the definition of bioengineered food and 
that could potentially be offered for sale in the United States.
    Comment: While some commenters supported the use of separate lists 
for highly adopted and non-highly adopted BE foods, many suggested that 
using two lists with different labeling requirements would be confusing 
and burdensome, and recommended the final rule call for the use of a 
single list. A few commenters noted that using a single list could make 
enforcement and list revision less burdensome for AMS. Others 
recommended using a single list because the adoption rates forming the 
basis of the two-list approach do not necessarily correspond to the 
rates at which the listed crops are used in foods commercially 
available for human consumption in the United States. Several 
commenters recommended the single list be comprised of all commercially 
available crops, while a few industry commenters asked that the single 
list include only crops with a high (85%) BE adoption rate.
    AMS Response: In the interest of simplifying compliance with the 
NBFDS, AMS has consolidated the two lists proposed in the NPRM into one 
List of Bioengineered Foods and has expanded that List to include foods 
that may be produced internationally.
    AMS has also determined that the purposes of the NBFDS are best 
served by maintaining a list that, to the extent possible, captures all 
foods meeting the regulatory definition of a ``bioengineered food'' 
that could potentially be offered for sale in the United States, 
regardless of U.S. adoption rate. AMS has therefore expanded the List 
beyond foods that are commercially available domestically. The initial 
List, in Sec.  66.6, is comprised

[[Page 65839]]

of foods that, to the best of AMS's knowledge, are authorized for 
production somewhere in the world and are currently in commercial 
production somewhere in the world. AMS has considered information and 
data from several sources, including, but not limited to USDA reports 
and databases, ISAAA reports and databases, and reports and databases 
produced by other Federal government agencies. Foods that AMS believes 
are not currently in commercial production do not appear on the initial 
List, even if such foods are authorized for production in the U.S. or 
elsewhere. AMS may add those foods to the List through the process 
prescribed for list maintenance and revision when available information 
suggests it would be appropriate to do so. In any event, even if a food 
is not on the List, regulated entities knowingly using a bioengineered 
product are required to make disclosures for that food.
    Comment: Several commenters recommended using an ingredients-based 
list rather than a crops-based list. A few commenters stated that 
presuming BE material is present in food derived from crops on the list 
would frequently be unwarranted, as many such foods derive from listed 
crops only because they contain certain highly refined ingredients that 
lack BE material; these commenters explained that using an ingredients-
based list (such as a modified version of the lists in Exhibit 2 or 
Table 5 from the Regulatory Impact Analysis) instead would avoid 
creating that misleading presumption. Other commenters stated that an 
ingredients-based list would make compliance easier for regulated 
entities, which are often unsure which crops a food's ingredients 
derive from. Some commenters, however, thought a crops-based list would 
be easier for regulated entities to use and noted that a crops list, 
unlike an ingredients list, could be updated and verified using 
adoption rates and field data. A few commenters also expressed a need 
for a list containing BE microorganisms or other BE species, such as BE 
salmon.
    AMS Response: AMS believes that regulated entities are in the best 
position to know the source, origin, and type of food products they are 
procuring, sourcing, refining, and potentially labeling. AMS developed 
the List of Bioengineered Foods to reduce potential recordkeeping 
burden of regulated entities while also providing information about the 
scope of potentially available bioengineered foods. The List has been 
expanded to include bioengineered foods that may not be produced in the 
United States and non-crop bioengineered foods, for example salmon. AMS 
acknowledges that the List may not be complete and may require periodic 
updates. The rule provides for annual review of the List and provides a 
mechanism for public input into list population, including rulemaking 
as necessary, as well as consultation with other government agencies.
    AMS anticipates that maintaining an ingredients-based list would be 
resource-intensive, difficult to maintain, and would likely become 
obsolete in short order. As stated, AMS believes that regulated 
entities have more knowledge than AMS regarding the ingredients they 
are sourcing. Entities who knowingly use bioengineered foods are 
responsible for making appropriate disclosures, even if the food is not 
on the List.
    Comment: A few commenters requested that AMS establish a list of 
Excluded Ingredients identifying ingredients or substances AMS 
ultimately deems not to trigger the disclosure requirement. These 
commenters noted that such a list could reduce compliance and 
recordkeeping costs for regulated entities and suggested AMS could 
periodically amend the list as appropriate without going through formal 
notice and comment rulemaking. These commenters requested that AMS set 
forth the process for creating and updating a list of Excluded 
Ingredients in the final rule.
    AMS Response: As explained in the Preamble, AMS cannot at this time 
establish and maintain a list of ingredients excluded from the scope of 
the disclosure requirement. Regulated entities are in the best position 
to know whether disclosure is not required for the ingredients in their 
products, including, for example, because records verify the products 
are sourced from non-bioengineered crops or other sources, the 
ingredients have been subjected to refinement processes validated to 
remove genetic material, or analytical testing results demonstrate the 
absence of modified genetic material.
    Comment: Several commenters supported the proposed rule's exclusion 
of enzymes, yeasts, and other non-crop foods created in controlled 
environments from the proposed lists on the grounds that such foods 
contain no genetic material and thus should not trigger the BE 
disclosure requirement. Some commenters, however, recommended the lists 
be expanded to include those products and all other BE-derived 
substances in commercially available foods. Several of these commenters 
explained that such substances, if ultimately deemed to meet the NBFDS 
definition of BE food, should be included in the final lists to 
facilitate compliance with the disclosure rule.
    AMS Response: AMS notes that if regulated entities have actual 
knowledge that enzymes, yeasts, and other similar foods produced in 
controlled environments are bioengineered foods, then regulated 
entities are obligated to disclose accordingly. AMS has decided not to 
include on the List of Bioengineered Foods enzymes, yeasts, and other 
similar foods produced in controlled environments. AMS believes that 
such substances often do not meet the definition of a ``bioengineered 
food'' because they may be incidental additives with no technical or 
functional effect in the food under Sec.  66.1 and 21 CFR 101.100(a)(3) 
(see Section E.1 of the Preamble, adopting the ``incidental additive'' 
factor or condition). Similarly, in many instances, a regulated entity 
may be able to demonstrate that such foods do not contain modified 
genetic material, such that they are not bioengineered foods. AMS 
believes categorical inclusion of such substances on the List of 
Bioengineered Foods would create confusion and complicate regulated 
entities' efforts to comply with the NBFDS's disclosure requirement. 
Regulated entities must determine whether recordkeeping and, 
ultimately, disclosure of those substances are required on a case-by-
case basis.
    Comment: Some commenters supported the proposed approach of listing 
crops or foods generally by type rather than creating a more cumbersome 
list identifying specific derivatives or varieties of listed crops. 
Other commenters recommended that the final lists refer to crops with 
greater specificity than the lists proposed--such as by specific 
cultivars for each crop, brand name, variety, or narrowly-defined 
product characteristic--to avoid burdening too many producers of non-BE 
crops with the NBFDS recordkeeping requirement. For example, one 
comment suggested listing ``Arctic[supreg] apple'' instead of ``Apple, 
Non-browning cultivars,'' since the only commercially available version 
of BE apples uses the Arctic[supreg] brand name. A few commenters also 
requested clarification on which types of corn constitute ``sweet 
corn'' and which types constitute ``field corn.''
    AMS Response: AMS recognizes that listing foods broadly by type, 
rather than by bioengineered derivatives or varieties of particular 
foods, may impose disclosure or recordkeeping burdens on overbroad 
segments of

[[Page 65840]]

producers or sellers of non-bioengineered foods. To address that 
concern while maintaining a list of bioengineered foods that is not 
overly cumbersome, AMS has decided to list foods broadly by type while 
providing more details regarding specific varieties and 
characteristics, where possible. With respect to apples, AMS 
understands that most apple varieties are not known to be 
bioengineered. AMS has modified the List to identify the specific 
apples that are known to be bioengineered. As other BE versions of 
foods that are listed by variety are approved and become legally 
available, AMS will revise such listings to be more generic during the 
annual update process.
    Additional information will be provided on AMS's website about 
specific varieties of foods that have been bioengineered, where that 
information is available to AMS. To the extent possible, the AMS 
website will also provide additional information about the traits for 
which the foods have been bioengineered. The information on the AMS 
website should aid regulated entities in determining which foods must 
bear a BE disclosure. As part of the annual review process, AMS will 
solicit information from the public to ensure that the List and the 
additional information maintained on the AMS website are complete, 
accurate, and as detailed, as possible.
    Comment: Some commenters asked AMS to expand the proposed lists of 
BE products to include any BE foods that have undergone an FDA pre-
market consultation, noting that such foods would be free to enter the 
market in the United States. However, other commenters pointed out that 
FDA pre-market consultation is not necessarily a reliable indicator 
that commercial availability is imminent, and they supported limiting 
the lists to products that are commercially available. Some commenters 
also requested clarification in the final rule on the definition of 
commercial availability, with a few commenters suggesting a market 
threshold of 10% for deeming a product commercially available.
    AMS Response: As previously discussed, AMS has replaced the two 
lists of commercially available bioengineered foods proposed in the 
NPRM with a consolidated List of Bioengineered Foods that includes, to 
the best of AMS's knowledge, all foods that may meet the regulatory 
definition of a ``bioengineered food'' that could potentially be 
offered for retail sale in the United States. The consolidated List, 
which can be found in Sec.  66.6, is comprised of foods that meet the 
following criteria: (1) They are authorized for production somewhere in 
the world and (2) they are believed to be in legal commercial 
production somewhere in the world. AMS believes this approach is 
consistent with the regulatory definition of ``bioengineered food'' and 
avoids potential confusion on the meaning of or threshold for the term 
``commercial availability,'' that was proposed in the NPRM.
    Comment: Many commenters supported expanding the lists to encompass 
BE crops grown in and imported from other countries, as large 
quantities of foods containing or derived from such crops are 
commercially available in the United States. Several commenters 
acknowledged that assembling international food lists and ensuring 
NBFDS compliance by foreign suppliers may be complicated, but that AMS 
might accomplish those ends by, for example, collaborating with 
international trade partners, using data published by organizations 
like the ISAAA and setting forth specific recordkeeping and/or testing 
requirements for foods imported from other countries.
    AMS Response: Because bioengineered foods produced abroad are 
imported and offered for sale (or incorporated into products offered 
for sale) in the United States, AMS has decided to expand the list to 
include bioengineered foods that are in commercial production 
internationally. AMS has assembled that list by gathering information 
from several sources, including data published by ISAAA, FDA's list of 
completed voluntary premarket biotechnology consultations, and 
information published by ERS. AMS believes ongoing maintenance of the 
list may appropriately involve consideration of information from these 
and similar sources, as well as information supplied by the United 
States' trade partners. During the annual process to review and update 
the lists, AMS will consider information from interested parties, 
including importers and trade partners.
    Comment: Several commenters agreed that if a food contains an 
ingredient appearing on the List, the entity should make a BE 
disclosure unless it keeps records verifying it is not a BE food and 
does not contain BE ingredients. Other comments criticized basing the 
disclosure requirement on whether foods were among the listed crops, 
explaining that the presumption created by a food's inclusion on the 
lists would place the rule's recordkeeping burden primarily on those 
who use non-BE commodity varieties in their foods--a result these 
comments viewed as at odds with congressional intent. Similarly, 
another commenter suggested that AMS should be tasked with keeping 
track of records supporting disclosure, allowing entities to challenge 
their appearance on the list directly to USDA.
    AMS Response: AMS has determined that all food manufacturers, 
importers, and retailers offering for retail sale foods on the List of 
Bioengineered Foods are regulated entities and must maintain records 
related to those foods. The records can be used to verify disclosure or 
non-disclosure decisions. AMS does not believe this approach places an 
undue recordkeeping burden on entities that do not handle bioengineered 
foods; the NBFDS requires all regulated entities to maintain customary 
business records on foods they handle that appear on the List of 
Bioengineered Foods, and AMS anticipates those customary business 
records will be sufficient to demonstrate whether or not a food is 
bioengineered or contains bioengineered ingredients.
    It would be expensive and very difficult, if not impossible, for 
AMS to keep track of records that support disclosure. AMS believes that 
regulated entities are in the best position to know the foods they are 
sourcing, distributing, using, and labeling, and the amended Act 
requires them to maintain usual and customary records. Because 
regulated entities must provide AMS with access to those records, it 
would be unnecessary to keep track of those records.
    Comment: While some commenters favored annual review and revision 
of the lists, others found annual updates too infrequent to keep 
consumers effectively apprised of the BE status of their foods, and 
asked AMS to update the lists on a quarterly, monthly, or continuous 
basis instead. Some commenters, by contrast, suggested annual updates 
would be too frequent and unduly burdensome to AMS, particularly in 
light of the delay potentially associated with seeking public input 
before list revision, as proposed in the NPRM.
    Commenters nevertheless generally approved of employing an open, 
clear, and transparent revision process. A few commenters warned 
against overreliance on the views of interested stakeholders in the 
proposed revision process, encouraging AMS to rely primarily on 
evidence-based criteria for list updates. Some commenters also 
requested that AMS disclose the potential environmental impact of the 
BE products recommended for inclusion on the lists.
    AMS Response: AMS recognizes the brisk rate at which bioengineering

[[Page 65841]]

technology is advancing and new bioengineered food products are 
entering the marketplace. Accordingly, and because of the role of the 
List of Bioengineered Foods in determining whether specific foods 
require BE disclosure, AMS believes the List should be reviewed and 
updated on a regular basis. At the same time, AMS is mindful of the 
need to ensure the process for updating the list is transparent and 
allows for careful consideration of all relevant information on the 
appropriateness of proposed revisions. AMS has determined that updating 
the list on an annual basis through the notice process strikes the most 
appropriate balance among these considerations.
    The Preamble and Sec.  66.7(a) of the NBFDS describe the process by 
which AMS will seek recommendations and conduct an annual notice 
process through the Federal Register to review proposals regarding 
updates to the List of Bioengineered Foods. If indicated, AMS will 
conduct rulemaking to address proposed changes to the List. AMS 
believes this process will supply it with a wide range of pertinent 
information, including but not limited to scientific evidence, to allow 
the agency to make an informed decision whether certain foods should be 
added to or deleted from the list. The list review and update process 
will include consultation with other U.S. Federal government agencies 
with oversight of the use of bioengineered foods, including on the 
environmental impacts of using bioengineered foods. AMS, however, does 
not plan to attempt disclosure of potential environmental impacts as 
part of the list maintenance and revision process, as the NBFDS is not 
intended to convey information about the environmental attributes of BE 
food. AMS will instead revise the list based on whether a food meets 
the definition of a ``bioengineered food.''
    Comment: Many of those who commented requested that the lists 
reflect the use of new and emerging technologies such as CRISPR, 
Synbio, and Talens. Those commenters recommended the lists remain 
consistent with the standards set forth in other Federal regulations, 
as well as the Codex Alimentarius, in order to facilitate compliance 
with applicable requirements and avoid conflicts with trade partners. 
Other commenters maintained that some existing or future genetic 
engineering techniques may not produce foods falling within the 
statutory definition of BE food and that such products should not 
appear on the proposed lists.
    AMS Response: As previously noted, AMS believes that the 
characteristics of the biotechnology product itself, rather than the 
particular technological process by which the product was created, 
should determine whether a product is included on the List of 
Bioengineered Foods. AMS considers this approach more compatible with 
the text of the amended Act and Congressional intent. As part of the 
process for list maintenance and revision, AMS will, in consultation 
with the U.S. Government agencies responsible for the oversight of 
biotechnology products, consider new and emerging technologies and 
whether foods resulting from those technologies meet the definition of 
``bioengineered food.''
    Comment: Comments reflected a wide range of opinion on the 
appropriate timeframe for regulated entities to attain compliance after 
the BE food lists are revised. Many commenters supported the proposed 
18-month compliance period. Others, concerned that the proposed period 
would allow new BE products to remain undisclosed to consumers for too 
long, recommended a 12-month period instead. Several industry 
commenters recommended a 24-month period, explaining that labeling 
costs rise and packaging waste results each time relabeling and 
repackaging are required, so those processes should occur as 
infrequently as reasonably possible. A few commenters suggested taking 
a more flexible approach, which would allow interested parties to 
submit comments on an appropriate time period as part of the list 
revision process. These commenters stated that a more contracted or 
extended compliance period might be appropriate, depending on the foods 
proposed to be added to the lists and impacts of the proposed changes 
on supply chains.
    AMS Response: AMS acknowledges the burden frequent relabeling and 
repackaging would place on regulated entities. We believe the proposed 
18-month compliance period allows regulated entities sufficient time to 
exhaust existing supplies and make necessary revisions to labels, and 
strikes the most appropriate balance with the countervailing need for 
consumer-facing labels to reflect accurate and updated BE information. 
In addition, AMS believes using a fixed 18-month compliance period for 
all changes to the list will prove more workable than setting 
applicable compliance periods on an ad hoc basis as part of the annual 
notice process for list revision.

6. Factors and Conditions

    AMS solicited comments on whether one or both of the following 
should constitute factors or conditions under which a food is 
considered a BE food: (1) Whether incidental additives should be 
considered a BE food and labeled accordingly; and (2) whether the 
modified genetic material in a highly refined food may be detected. The 
proposed definition of BE food in the NPRM included the first factor or 
condition (incidental additives) but did not include the second 
(detection). AMS sought comment on whether the final rule should 
incorporate one or both of those factors or conditions into the 
definition. The proposed rule also sought comment on the process for 
seeking a determination on the adoption of other factors or conditions.
    Comment: Commenters were generally supportive of the proposed 
process for adopting factors or conditions under which a food is 
considered a BE food. Some commenters, however, requested AMS to 
clarify in the final rule the parameters for submitting petitions to 
adopt factors or conditions. A few commenters asked AMS to establish a 
specific time period within which the agency would respond to requests 
for adoption of factors or conditions, as well as a time period for 
regulated entities to attain compliance with adopted factors or 
conditions. Other commenters asked AMS to allow the adoption of factors 
or conditions under which food produced through new technologies falls 
within the definition of BE food.
    AMS Response: As noted above, AMS has determined to adopt the 
process proposed in the NPRM for adopting factors and conditions under 
which a food is considered a BE food. AMS believes that process as 
outlined in the NPRM and this final rule is clear and transparent, and 
the agency has thus declined to alter the proposed submission 
parameters for petitions to adopt factors and conditions. AMS has also 
declined to establish a time period within which the agency must 
respond to requests for adoption of factors and conditions, as the time 
necessary for responding to such requests will vary depending on 
available agency resources, the complexity of the requests, and the 
nature of rulemaking. Similarly, AMS has not established a fixed 
compliance period within which regulated entities must attain 
compliance with adopted factors and conditions. To the extent 
necessary, AMS will address any compliance period in particular 
rulemakings considering factors or conditions to be

[[Page 65842]]

adopted. It is the view of AMS, however, that because adopted factors 
and conditions operate only to carve out foods from the definition of 
``bioengineered food,'' compliance with adopted factors and conditions 
will not ordinarily be burdensome.
    AMS also notes that the text of the amended Act authorizes the 
Secretary to establish a process for making determinations regarding 
``other factors and conditions under which a food is considered a 
bioengineered food.'' 7 U.S.C. 1639b(b)(2)(C). Although AMS may 
consider particular technologies as part of the factors and conditions 
process (as well as in revising and updating the List of Bioengineered 
Foods), in accordance with the language in the amended Act, AMS 
believes determinations whether to adopt a proposed factor or condition 
will primarily focus on the characteristics of the final food products, 
rather than on the particular technologies used to create the food 
products. In deciding whether to adopt proposed factors or conditions, 
AMS will consult with U.S. government agencies responsible for 
oversight of biotechnology products and consider relevant information 
that may allow AMS to align the NBFDS with the standards of other 
Federal agencies or foreign governments.
    Comment: A few commenters opposed the adoption of the factors or 
conditions on which AMS solicited comments on the grounds that all 
foods derived in any part from BE substances, including incidental 
additives or foods with no detectable modified genetic material, should 
be disclosed in the interests of transparency. The commenters added 
that consumers want to know not only whether the final product contains 
BE genetic material, but also whether BE substances were used to make 
the final product.
    AMS Response: As explained in the Preamble to this final rule, a 
food does not fall within the definition of a ``bioengineered food'' 
simply because a BE substance was used in the process of making the 
food--to be a ``bioengineered food,'' the food must contain modified 
genetic material. For that reason, AMS cannot decline to adopt a 
proposed factor or condition--which, under this final rule, could serve 
only to exclude foods from the scope of the ``bioengineered food'' 
definition--solely on the basis that the factor or condition would 
exclude from disclosure a food derived in part from the use of a BE 
substance.
    Comment: Many commenters agreed that incidental additives should 
not be subject to disclosure when FDA regulations exempt them from 
inclusion in the ingredient statement on a food label. These commenters 
stated that aligning the NBFDS with FDA ingredient labeling 
requirements would simplify compliance and reduce labeling costs for 
regulated entities, and would also avoid creating consumer confusion. A 
few commenters added that excluding incidental additives from 
disclosure would align the NBFDS with the regulations of international 
trading partners. Several commenters further noted that incidental 
additives are present in food at an insignificant level and do not have 
any technical or functional effect in the final food product.
    AMS Response: AMS agrees with the above comments. Exempting 
incidental additives that are not required to be labeled under FDCA 
regulations is sensible, aligns the NBFDS with practices of trading 
partners, avoids consumer confusion that could otherwise result if a 
substance not appearing on a food label triggered the NBFDS disclosure 
requirement, and limits the burden on regulated entities without unduly 
limiting disclosure for consumers. For these reasons, AMS has adopted 
the proposed factor and condition regarding incidental additives.
    Comment: A few commenters recommended that enzymes be excluded from 
the disclosure requirement even if FDA regulations require their 
inclusion in the ingredient statement on a food label. These commenters 
stated this approach would be consistent with how state laws on BE 
disclosure treated enzymes. Some commenters noted, however, that 
certain yeasts (unlike enzymes) must be disclosed because they contain 
DNA and remain active and functional in finished food. One commenter 
added that if a 5% threshold is selected, it is unlikely that the 
presence of yeast would trigger disclosure.
    AMS Response: AMS anticipates that enzymes, yeasts, and similar 
organisms will frequently be excluded from the disclosure requirement, 
either because they will meet the requirements of the incidental 
additive factor or condition or because they meet some other NBFDS 
provision permitting nondisclosure (such as Sec. Sec.  66.1 and 66.9 
regarding foods with no detectable genetic material). For organisms 
present in food that do not meet the requirements of any such 
provision, however, AMS cannot provide a categorical exclusion from the 
disclosure requirement. To the extent that interested parties seek a 
categorical exemption for microorganisms, they may submit a request for 
such a factor and condition to modify the definition of bioengineered 
food in a future rulemaking.
    Comment: Some commenters in favor of excluding incidental additives 
from disclosure requested the proposed factor or condition to be 
modified to expressly include within the meaning of ``incidental 
additives'' processing aids, secondary direct additives, and substances 
migrating to food from equipment or packaging. A few commenters further 
requested AMS to clarify that BE microorganisms (such as those used in 
fermentation) constitute incidental additives where those 
microorganisms do not remain active and have no technical or functional 
effect in the finished food product. One commenter requested that AMS 
clarify what it considers to be an ``insignificant'' level of an 
incidental additive present in food, and recommended AMS adopt a 
meaning of ``insignificant'' consistent with that set forth in the 
FDA's regulations on labeling ingredients in food.
    AMS Response: AMS does not believe the requested modifications or 
clarifications are necessary. The factor and condition regarding 
incidental additives is designed to align the NBFDS with the FDA's 
regulations on labeling food ingredients. Section 66.1's incorporation 
of the incidental additives factor and condition into the NBFDS thus 
references the FDA labeling requirement at 21 CFR 101.100(a)(3), which, 
among other things, outlines the circumstances in which incidental 
additives need not be labeled as ingredients and describes the types of 
substances constituting ``incidental additives.'' To the extent that 
secondary direct additives do not constitute incidental additives not 
subject to FDCA labeling requirements, then such additives would be 
subject to BE disclosure. AMS notes that 21 CFR 101.100(a)(4) defines 
``insignificant'' levels of additives for certain applications of 21 
CFR 101.100(a)(3). As Sec.  66.1 thus incorporates the FDA labeling 
regulations' conception of ``incidental additives'' into the NBFDS, AMS 
believes further clarification or modification on the meaning of, or 
circumstances under which a substance may qualify as, an ``incidental 
additive'' would be redundant or risk creating the appearance of a 
conflict between the NBFDS's incidental additives provision and the 
FDA's labeling requirements.
    Comment: Many commenters opposed the factor or condition excluding 
highly refined foods from disclosure where no modified genetic material 
can be detected. These commenters suggested that consumers deserve to 
make informed purchasing decisions and

[[Page 65843]]

expect BE disclosure where food or ingredients are derived from BE 
crops, regardless of whether modified genetic material can be detected 
in the finished food. Some commenters objected to this factor or 
condition because it would result in fewer products being subject to 
disclosure, which in their view would be inconsistent with consumer 
expectations. Other commenters stated that testing for trace amounts of 
modified genetic material would be difficult to enforce, impose 
burdensome compliance and recordkeeping costs on the industry that 
would then be passed to consumers, and present barriers for 
international trade as several trade partners do not require testing 
before permitting nondisclosure for highly refined ingredients. Many 
regulated entities, these commenters added, would choose to make a BE 
disclosure rather than undergo testing, resulting in different labeling 
for similar food products. Some commenters also voiced concerns about 
the ability of current testing methods and technology to accurately or 
consistently capture the presence or absence of modified genetic 
material.
    AMS Response: The NPRM sought comment on a second proposed factor 
and condition, excluding food from the disclosure requirement where 
modified genetic material in the food cannot be detected. Because this 
proposed factor and condition would serve a purpose in the NBFDS only 
if foods without detectable modified genetic material were included 
within the general definition of ``bioengineered food,'' the NPRM 
explained that AMS would consider this factor and condition only if AMS 
decided to proceed with Position 2 on the scope of the regulatory 
definition of ``bioengineered food.'' As AMS declined to adopt Position 
2 for the reasons stated in Section C.1, above, this factor and 
condition will not be incorporated into the NBFDS.
    Comment: One commenter generally supported the exclusion of highly 
refined foods from the definition of BE food but opposed the 
undetectable modified genetic material factor or condition as proposed, 
on the ground that requiring regulated entities to provide the BE 
disclosure unless they first disprove the presence of modified genetic 
material by testing is an unconstitutional impingement on those 
entities' First Amendment rights.
    AMS Response: AMS has adopted Position 1. The statutory definition 
of bioengineering states that food must ``contain[ ] genetic material 
that has been modified through in vitro recombinant deoxyribonucleic 
acid (DNA) techniques. . . '', to be labeled as a ``bioengineered 
food.'' AMS is not compelling regulated entities to label refined foods 
as ``bioengineered food.'' If the food product at issue is not a 
bioengineered food, AMS does not require that it be mandatorily 
labeled.
    Comment: Many commenters supported the factor or condition 
excluding highly refined foods with no detectable modified genetic 
material from the disclosure requirement, pointing to several 
scientific studies they viewed as demonstrating an absence of genetic 
material in such foods. These comments explained that disclosure under 
the amended Act is triggered by the presence of modified genetic 
material and that, if no modified genetic material is detectable, 
Congress did not intend the food to be disclosed as BE. A few 
commenters also stated that treating highly refined ingredients derived 
from BE crops differently than their non-BE counterparts would create 
harmful marketplace impacts with no meaningful benefit to consumers.
    AMS Response: As discussed in Section II.C.1, above, AMS agrees 
that highly refined foods with no detectable modified genetic material 
should not trigger the disclosure requirement. AMS, however, has 
decided to permit nondisclosure for such foods by adopting Position 1 
on the scope of the regulatory definition of ``bioengineered food,'' 
and will therefore not incorporate this proposed factor or condition 
into the NBFDS.
    Comment: Some parties in favor of the undetectable modified genetic 
material factor or condition offered comments on the testing methods 
and standards to be used to determine the presence or absence of 
detectable rDNA. One commenter recommended AMS accept a ``de minimis'' 
level of modified genetic material at or below which ingredients are 
not subject to mandatory disclosure and set that de minimis level of 
detection at 0.1% modified genetic material to total DNA. That 
commenter added that if AMS decides a de minimis detection level is not 
appropriate, detectability should be defined in accordance with ISO/ICE 
standards and using a methodology validated by Codex Alimentarius 
guidelines. A few commenters asked AMS to establish minimal standards 
regarding the analytical tools used for detecting, identifying, and 
quantifying modified genetic material. Some commenters also urged AMS 
to update the NBFDS as scientific detection methods evolve, with a few 
further recommending that AMS maintain publicly available guidance 
documents or lists of scientifically validated genetic testing methods 
to ensure testing consistency in the marketplace.
    AMS Response: As mentioned, because AMS has adopted Position 1 on 
the scope of the regulatory definition of ``bioengineered food,'' the 
proposed factor or condition regarding undetectable rDNA will not be 
incorporated into the NBFDS. The methods by which regulated entities 
may demonstrate that particular foods contain no detectable modified 
general material, and thus are not bioengineered foods, are discussed 
in Section II.C.1, above. As stated in the Preamble, AMS will provide 
instructions to the industry to explain how they can ensure acceptable 
validation of refining processes in accordance with AMS standards. AMS 
will also provide instructions regarding acceptable testing methodology 
used to satisfy that a food does not contain detectable modified 
genetic material.
    Comment: Several commenters requested AMS to establish a list of 
Excluded Ingredients, identifying ingredients excluded from the scope 
of the disclosure requirement under the undetectable rDNA factor or 
condition. Those commenters noted that AMS could periodically amend 
that list as appropriate without going through formal notice and 
comment rulemaking, helping to ensure the list is kept current. Those 
commenters requested AMS to set forth the process for creating and 
updating a list of Excluded Ingredients in the final rule.
    AMS Response: AMS has not adopted the second proposed factor or 
condition. As discussed in Section II.C.1, above, AMS cannot at this 
time establish and maintain a list of ingredients excluded from the 
scope of the disclosure requirement. Regulated entities are in the best 
position to know the products they are sourcing and the refinement 
processes those products have undergone. AMS has determined that 
regulated entities can demonstrate that modified genetic material is 
not detectable by maintaining records verifying that a food is sourced 
from a non-bioengineered crop or source, showing that a food has been 
subjected to a refinement process validated to remove modified genetic 
material, or maintaining records of analytical testing results 
demonstrating the absence of modified genetic material.
    Comment: Commenters also requested AMS to adopt additional factors 
or conditions excluding the following substances from triggering the 
disclosure requirement: microorganisms derived through fermentation; 
ingredients derived from animals fed with or treated with 
pharmaceuticals

[[Page 65844]]

produced from BE substances; ingredients produced through the chemical 
transformation of BE foods or ingredients into substantially new 
ingredients with no present or readily traceable BE source; and dietary 
supplements and/or food products with medicinal or supplementary 
applications.
    AMS Response: AMS solicited comments only on the two factors and 
conditions proposed in the NPRM and cannot adopt additional factors and 
conditions in this final rule. It is possible, however, that some or 
all of the foregoing factors and conditions may appropriately be 
adopted through the factors and conditions process in future 
rulemakings. The process for requesting adoption of factors and 
conditions is discussed in the Preamble to this final rule and outlined 
in subpart C of the NBFDS.

7. Exemptions

a. Animals Fed Bioengineered Feed
    The amended Act prohibits a food derived from an animal from being 
considered a BE food solely because the animal consumed feed produced 
from, containing, or consisting of a BE substance. 7 U.S.C. 
1639b(b)(2)(A). Section 66.5(d) incorporates this statutory exemption 
and exempts products produced from animals fed bioengineered feed from 
displaying any form of disclosure regarding the presence of 
bioengineered ingredients or substances.
    Comment: Commenters generally support the idea that animals fed 
with bioengineered feed and their products, including milk and eggs, 
should be exempt from the NBFDS. Many commenters understood that this 
provision was statutorily mandated. One commenter suggested that this 
provision should be framed as an exclusion rather than an exemption. 
Some commenters stressed that the NBFDS should state that products 
exempt from disclosure as bioengineered, such as products from animals 
fed bioengineered animal food, cannot by default qualify for an absence 
claim.
    AMS Response: As commenters recognized, the amended Act prohibits a 
food derived from an animal from being considered a bioengineered food 
solely because the animal consumed animal feed produced from, 
containing, or consisting of a bioengineered substance. 7 U.S.C. 
1639b(b)(2)(A). Section 66.5(d) incorporates this statutory exemption. 
For example, eggs used in a baked good, where the eggs come from a 
chicken fed feed produced from BE corn and soy, would not be considered 
bioengineered solely on the basis of the chicken's feed.
    AMS has made no changes to this statutory mandate. Although this 
provision could be framed as an exclusion, AMS believes that it is 
permissible to frame it as an exemption. Moreover, the regulatory text 
makes clear that food derived from an animal shall not be considered a 
bioengineered food solely because the animal consumed feed produced 
from, containing, or consisting of a bioengineered substance.
    AMS agrees that food derived from an animal that consumed feed 
produced from, containing, or consisting of a bioengineered substance 
does not automatically qualify for absence claims. See 7 U.S.C. 
1639c(c). AMS declines to insert this in the regulatory text because 
the amended Act in this respect is self-executing. In addition, the 
focus of the NBFDS is on BE claims and not on absence claims. AMS notes 
that FDA (and FSIS depending on the food at issue) retain authority 
over absence claims. Entities seeking to use absence claims should 
ensure that they are in compliance with all pertinent Federal 
regulations and that such claims are truthful and not misleading.
    Comment: Some commenters suggested that AMS should work to align 
``Non-GMO'' text claim mandates with the NBFDS disclosure requirements, 
and that the exemption should also apply to products derived from 
animals or birds treated with drugs or pharmaceuticals produced through 
bioengineering.
    AMS Response: AMS does not believe the amended Act provides 
authority to establish or align the NBFDS with a ``non-GMO'' label. 
Statutory provisions clearly instructed the Secretary to establish a 
national mandatory bioengineered food disclosure standard with respect 
to any ``bioengineered food'' and any food that may be 
``bioengineered.'' As it pertains to other food labeling programs, the 
amended Act only acknowledges food certified under the NOP as 
sufficient to make a claim regarding the absence of bioengineering in 
the food, such as ``not bioengineered,'' ``non-GMO,'' or another 
similar claim. As noted above, AMS recognizes that FDA and FSIS retain 
authority over absence claims. Entities seeking to use absence claims 
should ensure that such claims comply with all applicable Federal laws 
and are otherwise truthful and not misleading. Regulated entities would 
need to ensure that their use of any other third-party standard that 
establishes and allows use of claims such as ``non-GMO,'' ``non-
Bioengineered,'' or other similar claims does not put their product at 
risk of violating the NBFDS.
    With respect to products derived from animals or birds treated with 
drugs or pharmaceuticals produced with bioengineering, AMS believes 
that such products, if they do not contain modified genetic material, 
would not meet the definition of ``bioengineered food.''
    Comment: Some commenters requested that AMS define the term 
``animal'' to include any animal, fish, insect, or microorganism. One 
commenter specifically pointed out that bees consuming pollen from 
bioengineered crops should be included in the definition of animal, and 
that honey should be exempted from disclosure. Some commenters argued 
that food ingredients like yeast, rennet, and enzymes should be exempt 
from disclosure. They explained that because yeast, rennet, and enzymes 
are typically produced or fed using bioengineered substrates, but may 
not be bioengineered themselves, they should be treated the same as 
products derived from animals that consumed bioengineered feed and 
exempted from the NBFDS. Many commenters agreed that the term ``non-
agricultural ingredients'' is an appropriate description for such 
ingredients.
    Another commenter went further to state that ingredients that are 
produced through the chemical transformation of a bioengineered food or 
ingredient and substantially transformed into a new ingredient, such as 
caramel flavoring and color, polydextrose, vitamin C, and sugar 
alcohols, should also be exempted. Commenters explained how for these 
kinds of ingredients that undergo significant processing, modified 
genetic material is rendered undetectable. Alternatively, other 
commenters argued that these ingredients should be subject to 
disclosure if they are listed as ingredients on a label.
    AMS Response: AMS did not define animal in the regulatory text. 
AMS's understanding of an animal is based on the common understanding 
of an ``animal'', which refers to any organism in the biological 
kingdom Animalia, and would include fish, birds, and insects. 
``Products derived from an animal'' would include milk, eggs, honey, 
rennet and other enzymes derived from animals, and similar products. 
The common understanding of ``animal'' and ``products derived from an 
animal'' would not include yeast since yeast is a single celled 
organism in the Fungi kingdom, or microbial rennet. Exempting yeast, 
microbial rennet, and

[[Page 65845]]

enzymes that are not derived from animals as an extension of the 
exemption for animal fed with bioengineered feed is beyond AMS's 
statutory authority. As discussed above, those substances may not be 
subject to BE disclosure if they qualify as an incidental additive that 
is not required to be labeled or if the modified genetic material in 
those products is undetectable.
    Similarly, ingredients produced through the chemical transformation 
of a bioengineered food or ingredient and substantially transformed 
into a new ingredient, such as caramel flavoring and color, 
polydextrose, vitamin C, and sugar alcohols are subject to the NBFDS. 
They are not automatically exempt from disclosure. Based on AMS's 
understanding, these products would not qualify as products derived 
from animals that consumed bioengineered feed. However, they may not be 
subject to disclosure if they qualify as an incidental additive that is 
not required to be labeled or if the modified genetic material in those 
products is undetectable.
    Comment: One commenter requested that AMS exempt foods produced 
from conventionally bred plants grafted to bioengineered rootstocks--
provided that the plants producing such food have not otherwise been 
bioengineered. Such an exemption should cover the food and the plant 
that produced the food, including its bioengineered rootstock.
    AMS Response: AMS cannot exempt foods produced from conventionally 
bred plants grafted to bioengineered rootstocks in this rulemaking. To 
the extent that these plants produce foods that have otherwise not been 
bioengineered, the resulting foods would not be bioengineered because 
they do not contain modified genetic material or for other reasons.
b. Food Served in a Restaurant or Similar Retail Food Establishment
    As required by the amended Act, AMS proposed that food served in 
restaurants or similar retail food establishments should be exempt from 
the NBFDS. See 7 U.S.C. 1639b(b)(2)(G)(i). We received several comments 
on this exemption and what food establishments should qualify for the 
exemption.
    Comments: Commenters generally supported exempting restaurants and 
similar retail food establishments from the NBFDS. Commenters explained 
how if these kinds of establishments were subject to the NBFDS, they 
would be unnecessarily burdened with maintaining product lists of 
bioengineered food and ingredients sold on a daily basis. Other 
comments suggested that the proposed definition was too narrow and 
should include a list of places as examples, rather than an exclusive 
list, such as cafeteria, lunch room, food stand, food truck, saloon, 
tavern, bar, lounge, salad bar, delicatessen, entertainment venue, or 
other retail business establishment where meals or refreshments 
constituting food may be purchased. One commenter requested that 
transportation carriers be added to the list of places exempted from 
the NBFDS.
    Comments were also received that opposed the exemption for 
restaurants and similar retail prepared food establishments. These 
comments explained how consumers deserve to know when the food they are 
buying is bioengineered, regardless of whether it was purchased in a 
restaurant or in a grocery store.
    Another commenter explained how all foods prepared, processed, or 
packaged in a retail food establishment, including those utilizing 
``central kitchen'' locations for certain prepared foods, should also 
be exempt from the disclosure requirements of the NBFDS.
    Others suggested that AMS should consider exempting foods sold by 
manufacturers to restaurants and similar establishments, and foods 
marked as ``for institutional use'' or ``not for resale.''
    AMS Response: This final rule continues to exempt food served in a 
restaurant or similar retail food establishment from disclosure under 
the NBFDS. Based on the comments received, AMS has now modified the 
definition of ``similar retail food establishment'' to add additional 
examples, including food truck and transportation carrier: ``Similar 
retail food establishment means a cafeteria, lunch room, food stand, 
food truck, transportation carrier (such as a train or airplane), 
saloon, tavern, bar, lounge, other similar establishment operated as an 
enterprise engaged in the business of selling prepared food to the 
public, or salad bars, delicatessens, and other food enterprises 
located within retail establishments that provide ready-to-eat foods 
that are consumed either on or outside the retailer's premises.'' AMS 
considered including a list of places as examples, rather than an 
exclusive list, but believes that the reference to ``other similar 
establishment operated as an enterprise engaged in the business of 
selling prepared food to the public'' should capture any additional 
places that are not specifically listed.
    AMS has not modified the definition to state ``where meals or 
refreshments constituting food may be purchased'' as we believe that 
with this insertion, the exemption would be much broader than the plain 
meaning of the amended Act. AMS believes that the exemption is intended 
to cover ready-to-eat or prepared foods. To extend the exemption to all 
foods prepared, processed, or packaged in a retail food establishment, 
which would include bulk foods such as granola or packaged apples in a 
bin, would conflict with the requirement that foods subject to FDCA's 
labeling requirements are subject to disclosure. AMS notes it does not 
have statutory authority to extend this exemption to foods sold by 
manufacturers to restaurants and similar retail food establishments, or 
to foods marked as ``for institutional use'' or ``not for resale.'' 
However, AMS anticipates that some of these foods would fall under this 
exemption because the entities selling or providing such food meet the 
definition of a similar retail food establishment.
    AMS believes that the modified definition provides clarity and 
flexibility to regulated entities and is in accordance with the plain 
language of the amended Act. AMS also notes that exempt entities such 
as restaurants and similar retail food establishments may voluntarily 
provide disclosures of ``bioengineered food'' in accordance with the 
NBFDS if they so choose.
c. Very Small Food Manufacturer
    As required by the amended Act, AMS proposed that very small food 
manufacturers be exempt from displaying any form of disclosure 
regarding the presence of bioengineered ingredients or substances in 
their products. See 7 U.S.C. 1639b(b)(2)(G)(ii).
    Comment: Some commenters did not support a disclosure exemption for 
very small food manufacturers. These commenters stated that the NBFDS 
should apply equally to all companies regardless of size or revenue. 
These commenters stated that excluding small companies would undermine 
the transparency and consistency necessary for building consumer trust.
    AMS Response: Section 66.5(b) exempts very small food manufacturers 
from the disclosure requirement of the NBFDS, as required by the 
amended Act. Section 66.1 defines ``very small food manufacturer'' as 
``any food manufacturer with annual receipts of less than $2,500,000.'' 
AMS has made no changes to its proposal. In considering this 
definition, AMS must balance between providing regulatory flexibility 
for regulated entities and providing information to consumers

[[Page 65846]]

regarding the bioengineered status of their foods.
    Comment: A few commenters stated that number of employees was an 
equally if not more suitable criterion than receipts for a small 
business. For instance, Congress has exempted small employers with 50 
or few employees from some other Federal statutory provisions, such as 
the Affordable Care Act (42 U.S.C. 18024(b)(2)) and the Family and 
Medical Leave Act (29 U.S.C. 2601). A commenter recommended the agency 
should revise the definition of ``very small food manufacturer'' to 
include either those that have less than $2.5 million in annual 
receipts or 50 or fewer employees.
    Understanding that there is a statutory obligation to exclude very 
small companies from the disclosure requirement, some commenters 
suggested using the lowest reasonable financial threshold of $500,000 
consistent with those exempted from labeling requirements under the 
FDCA (Sec.  66.3(b) or limited to only ``cottage foods.''
    A few commenters suggested revising the definition of ``very small 
food manufacturer'' to align with the Food Safety Modernization Act's 
definition for a ``very small business,'' which is defined as ``a 
business (including any subsidiaries and affiliates) averaging less 
than $1,000,000.''
    AMS Response: To develop this definition, AMS considered small 
business definitions under FDA (21 CFR 101.9(j)(1)(i) and 21 CFR 
101.36(h)(1)) and U.S. Census Bureau (USCB) regulations. AMS evaluated 
the impact of applying various definitions of ``very small food 
manufacturer'' by estimating the number of firms that would be 
exempted, the number of products that would likely be exempt, and the 
proportion of annual industry sales that would be exempt under each 
exemption level. The NPRM and the final rule above included tables 
showing the cumulative percentage of firms, products (UPCs), and sales 
that would be exempt if the definition of ``very small food 
manufacturer'' were set at the top of each of the annual revenue ranges 
(based on USCB's 2012 Statistics of U.S. Businesses).
    Applying the FDA exemptions (annual sales of no more than $500,000) 
at 21 CFR 101.9(j)(1)(i) and 21 CFR 101.36(h)(1) as described above 
would exempt 45 percent of firms, only one percent of products, and 
less than 0.5 percent of sales for food manufacturers, and only 17 
percent of firms and about 0.1 percent of products and sales for 
dietary supplement manufacturers. In conducting the Regulatory Impact 
Analysis, we estimated the impact of applying the USCB definition of 
very small businesses (fewer than 20 employees), which falls somewhere 
between the $2.5 million and $5 million annual sales cutoffs. We found 
that both of these revenue cutoff levels for the definition of ``very 
small food manufacturer'' would offer significantly greater relief for 
small manufacturers, while still having a relatively minor impact on 
the amount of information available to consumers. Exempting 
manufacturers with annual receipts of less than $2.5 million would 
provide regulatory relief to 74 percent of food manufacturers and 45 
percent of dietary supplement manufacturers, while reducing the number 
of products covered by four percent (two percent for dietary 
supplements), and the number of purchases covered by only one percent 
for both food and dietary supplement manufacturers.
    AMS considered other revenue cutoffs, including those above and 
below $2,500,000 and considered other definitions from various sources. 
AMS considered number of employees as a criterion by which to determine 
the threshold and ultimately determined that we do not need to be bound 
by that methodology. Because food and dietary supplement manufacturers 
are in the manufacturing sector, they are both defined by number of 
employees for purposes of SBA size categorization. However, the firms 
defined as small or very small for purposes of the NBFDS all fall well 
below the SBA, so we do not feel we need to be bound by that 
methodology.
    In addition, the small food manufacturer definition was defined to 
be consistent with the FDA definition of small manufacturer under its 
nutrition labeling standards, which uses annual receipts. AMS believes 
that the very small food manufacturer definition should be consistent 
with these other definitions.
    AMS believes that annual receipts is a reasonable measure in 
determining the threshold for small businesses and specifically here, 
very small food manufacturers. Using total receipts is administratively 
simpler than tracking and demonstrating revenue by category for 
purposes of this rule. We do not expect that there are a significant 
number of firms for which this distinction would make a difference, but 
it would increase recordkeeping burden for all firms that fall under 
this exemption if it was based on food sales, rather than annual 
receipts.
    The $2.5 million threshold will provide relief to small businesses 
but will not markedly decrease the number of products subject to 
disclosure. By defining ``very small food manufacturers'' as those with 
annual receipts below $2,500,000, about 74 percent of food 
manufacturers are exempt from mandatory disclosure, but 96 percent of 
products will still be subject to disclosure. An increase in revenue 
cutoff would increase the number of exempt businesses but would also 
increase the number of products exempt from disclosure. The definition 
of very small food manufacturer provides flexibility for small entities 
while providing information to consumers regarding the bioengineered 
status of their foods.
    Comment: Some commenters expressed concern that exemptions did not 
extend to small retailers that display food for sale in bulk 
containers, including made-to-order products. Commenters explained how 
these products often have significant variation day-to-day depending on 
the ingredients available, and they can be difficult to trace. Several 
small entities stated that it is nearly impossible to change the labels 
on a daily basis, and that they would have to consider whether to 
continue to carry these items if required to label them under the rule. 
The Small Business Administration (SBA) Office of Advocacy recommended 
broadening the definition of ``very small food manufacturer'' to allow 
more small businesses an opportunity to take advantage of the 
exemption. Similarly, they advocated extending the exemption to small 
retailers to allow small or very small retailers to be exempt from the 
bulk container labeling requirement.
    Another commenter suggested that these revenue limits should extend 
to dietary supplement manufacturers, and that AMS should consider 
exempting foods sold by manufacturers to restaurants and similar 
establishments, and foods marked as ``for institutional use'' or ``not 
for resale'' because these foods are not consumer-facing and not 
required to carry consumer-directed information such as nutrition 
facts. In addition, medical foods, such as enteral foods, provided 
under a physician's care should also be exempted from these 
disclosures.
    AMS response: With respect to comments urging AMS to extend this 
exemption to small retailers, AMS states that this exemption is 
statutorily mandated and cannot be extended to small retailers. To the 
extent that a small retailer is also a very small food manufacturer, 
they may be able to take advantage of the exemption in that instance. 
Additionally, foreign very small food manufacturers shipping

[[Page 65847]]

prepackaged food products intended for U.S. retail sale are exempt from 
regulation. Importers are ultimately responsible for verifying whether 
or not foreign food manufacturers are subject to the requirements of 
the NBFDS.
    AMS acknowledges commenters' concerns regarding labeling foods sold 
by manufacturers to restaurants and similar establishments, foods 
marked as ``for institutional use'' or ``not for resale,'' and medical 
foods. AMS notes that if such foods are subject to the labeling 
requirements of the FDCA, then they are subject to the NBFDS. Such 
foods may be exempt if they fall under statutory exemptions, but AMS 
does not have statutory authority to create exemptions for such foods 
in this rulemaking.
d. Food Certified Under the National Organic Program
    AMS proposed that foods certified organic under the National 
Organic Program shall be exempt from disclosure.
    Comment: Many commenters that weighed in on the exemption of foods 
certified under the National Organic Program (NOP) supported the 
exemption. Many commenters requested that AMS clarify that the NBFDS 
shall not: Affect the definition of ``excluded methods'' or any other 
definition or practice under the NOP, circumvent the letter or intent 
of the organic standard, or require any amendment to the organic 
standard, and that organic certification shall be sufficient to claim 
the absence of bioengineering in the food, such as ``not 
bioengineered,'' ``not genetically engineered,'' ``non- GMO,'' or 
another similar claim. A commenter recommended adding language to Sec.  
66.3 to state that a food or food ingredient that is not required to 
bear a BE disclosure does not necessarily mean that the food or food 
ingredient qualifies for an absence claim such as ``non-GMO.'' The 
commenter also suggested that food certified under the NOP may bear an 
absence claim.
    Additionally, other commenters stated that food certified under 
other international organic product regulations with which the NOP has 
established either recognition or equivalency agreements would be 
exempt from this rule. These types of agreement are currently in place 
with nine countries or regional trading partners, including Canada, 
Mexico, and the European Union.
    AMS Response: AMS has ensured that the final rule does not affect 
the NOP regulation or products certified as organic under the NOP. 
Subtitle F states that ``In the case of food certified under the 
national organic program established under the Organic Foods Production 
Act of 1990 (7 U.S.C. 6501 et seq.), the certification shall be 
considered sufficient to make a claim regarding the absence of 
bioengineering in the food, such as `not bioengineered', `non-GMO', or 
another similar claim.'' 7 U.S.C. 6524. The NPRM stated that implicit 
in the statutory provision is that certified organic foods are not 
subject to bioengineering disclosure. This implication, in conjunction 
with the Secretary's authority to consider establishing consistency 
between the NBFDS and the Organic Foods Production Act, permits a 
regulatory exemption for products certified organic under the NOP. See 
7 U.S.C. 1639b(f). The NPRM proposed that Sec.  66.5(e) would exempt 
certified organic foods from bioengineered disclosure, so food 
manufacturers, retailers, and importers of certified organic food would 
not be required to maintain additional records to demonstrate that the 
organic food is not bioengineered for purpose of the NBFDS regulations.
    The focus of the NBFDS is on establishing a disclosure standard 
with respect to any bioengineered food and any food that may be 
bioengineered. Although the amended Act mentions absence claims, the 
mandate of the NBFDS is not on absence claims. Therefore, AMS has 
reframed this provision as a statutory exemption and will not 
incorporate absence claims in the NBFDS. The amended Act's references 
to absence claims for foods certified under the NOP are self-executing.
    AMS agrees with commenters that a technical correction to this 
provision is required. This exemption is intended to cover all NOP 
certified label categories (``100% Organic,'' ``Organic,'' and ``Made 
with Organic''). Accordingly, Sec.  66.5(e) is revised to read ``Food 
certified under the National Organic Program.'' In addition, AMS 
confirms that food certified under other international regulations with 
which the NOP has established recognition or equivalency agreements 
would be exempt from the NBFDS.
    Comment: Other commenters requested that the NBFDS also exempt from 
disclosure foods certified/verified to the AMS Processed Verified 
Program (PVP); non-GMO certification programs or third-party 
verification programs such as the Non-GMO Project, NSF True North 
Protocol, or SGS Non-GMO Certification; and other credible schemes. In 
addition, commenters suggested that AMS should help consumers 
distinguish among these many claims and standards.
    AMS Response: AMS only has authority to exempt food certified under 
NOP. However, to the extent that these third-party verified programs 
meet the standards under Sec.  66.9 and/or recordkeeping requirements 
associated with non-disclosure, then regulated entities employing these 
external frameworks may use associated paperwork to show that their 
products are not BE to the extent the scope of such programs align with 
that of this rule. As discussed previously, regulated entities seeking 
to use absence claims should ensure that such claims comply with all 
applicable Federal laws and are otherwise truthful and not misleading.
    Comment: Another commenter stresses that the NOP has recognized 
that ingredients developed with the use of mutagenesis, such as 
docosahexaenoic acid (DHA) algal oil, may be used as an ingredient in 
organic foods. Under the NOP, bioengineering is considered an 
``excluded method'' that cannot be used. The NBFDS needs to make clear 
that mutagenesis is excluded from the definition of bioengineering.
    AMS Response: AMS agrees that NOP regulations require that no 
ingredient may be bioengineered. See 7 CFR 205.301(f)(1) and 205.105(e) 
and the definition of ``excluded methods'' in 7 CFR 205.2. In addition, 
AMS agrees that mutagenesis is a conventional breeding method.

8. Threshold

    The NPRM solicited comments on an array of issues pertaining to the 
threshold exemption. This proposed exemption consists of three 
alternative threshold options that would exempt products from 
disclosure depending on the amount of a bioengineered substance that 
they contain.
a. Alternative 1-A: 5 Percent of Inadvertent or Technically Unavoidable
    The first proposed alternative would establish that food in which 
an ingredient contains a BE substance that is inadvertent or 
technically unavoidable, and accounts for no more than five percent 
(5%) of the specific ingredient by weight, would not be subject to 
disclosure as a result of that one ingredient.
    Comment: Many commenters generally agreed with Alternative 1-A. 
These commenters suggested that this threshold offered adequate 
disclosure, the most flexibility, and limited impacts on the food 
supply chain. They stated that many parties throughout the food supply 
chain use the same manufacturing processes and equipment for both BE 
and non-BE crops, so a 5 percent threshold would allow for the

[[Page 65848]]

continued coexistence of existing supply chains without significantly 
increasing costs. They also noted that the standard is a marketing 
standard and not one based on health and safety.
    AMS Response: AMS believes that Alternative 1-A provides the right 
balance between disclosing and minimizing the potential impact on the 
food supply chain. BE crops and non-BE crops are often grown in close 
proximity and, depending on the crop, cross-pollination may occur. 
Similarly, BE and non-BE crops are often harvested and processed using 
the same equipment, which means trace amounts of BE crops may 
unintentionally be mixed with non-BE crops. The proximity of 
bioengineered crops to non-bioengineered crops, and the use of the same 
production, transportation, and processing equipment allows for the 
coexistence of different production systems without unnecessarily 
increasing food production costs. Because the NBFDS is a marketing 
standard and not related to health or safety, any threshold amount must 
balance the benefits gained from disclosure with the costs to implement 
that disclosure. AMS believes Alternative 1-A appropriately identifies 
that balance.
    Comment: Some commenters noted that countries such as Canada, 
Indonesia, and Japan, have incorporated a 5% threshold into their 
mandatory and voluntary disclosure regimes. The commenters state that 
it would be prudent to mirror that level to support regulatory 
certainty in the international food supply chain.
    AMS Response: AMS acknowledges that some U.S. trading partners have 
adopted a five percent threshold, either on a mandatory or voluntary 
basis, and that aligning our threshold amount with those countries will 
facilitate trade.
    Comment: Some commenters proposed variations of Alternative 1-A, 
including hybrid schemes that would adopt Alternative 1-A for the 
inadvertent and unintentional presence of a bioengineered substance, 
and then an additional threshold for intentional use of bioengineered 
substances. These commenters believed such a hybrid method would give 
food manufacturers flexibility and allow them to intentionally use a de 
minimis amount of bioengineered ingredients without requiring 
disclosure.
    AMS Response: AMS determined that food containing any amount of a 
bioengineered substance that is not inadvertent or unintentional is 
subject to disclosure. Therefore, whenever a regulated entity 
intentionally uses a food or food ingredient that contains a 
bioengineered substance, no matter the amount, that food would be 
subject to disclosure, so long as the food is not otherwise exempt. AMS 
believes that allowing for the intentional use of food and food 
ingredients that contain a bioengineered substance without requiring 
disclosure would undermine consumer trust and confidence in the NBFDS.
    AMS also believes that any sort of hybrid or dual threshold scheme 
unnecessarily complicates compliance for regulated entities and 
increases the likelihood of confusion among consumers. The agency is 
not aware of customary or usual business records that would allow a 
regulated entity to accurately track the percentage of a bioengineered 
substance that is intentionally used in a food, and any such 
requirement to create new records unnecessarily increases the cost and 
complexity of complying with the NBFDS. Similarly, a marketing standard 
should be designed to clearly communicate information to consumers and 
a hybrid or dual threshold would unnecessarily complicate the type and 
amount of information being communicated to consumers.
    Comment: Some commenters stated that AMS should not measure the 
threshold by weight, but by other means, such as a percent of rDNA that 
is present in the food or food ingredient. They suggested that this 
approach is more consistent with the BE labeling regimes of other 
countries and existing industry standards.
    AMS Response: AMS agrees that the phrase ``by weight'' should be 
removed from the threshold exemption. AMS understands that existing 
industry standards and the BE labeling requirements of other countries 
do not use weight to calculate the threshold, but typically calculate 
such threshold amounts as the BE content of an item or ingredient 
relative to the non-BE content of that same item or ingredient. AMS 
believes existing industry standards are sufficient.
    Comment: A number of commenters suggested that AMS should adopt 
Alternative 1-A because the NOP allows for up to 5 percent of products 
that are not certified organic to be used in organic products.
    AMS Response: While we recognize that the NOP regulations at 7 CFR 
205.301(b) suggest that products labeled as organic may contain 5 
percent of ingredients that are not organic, that would be an 
incomplete understanding of that regulation. That regulation also 
states that this 5 percent must be organic unless the organic form is 
not commercially available and must be nonagricultural substances or 
non-organically produced agricultural products produced consistent with 
the National List in 7 CFR part 205, subpart G. The NOP regulations 
further require that this 5 percent not be bioengineered. See 7 CFR 
205.301(f)(1) and the definition of ``excluded methods'' in 7 CFR 
205.2. Thus, the NOP regulations are not an analogous situation that 
would be a rationale for adopting a 5 percent threshold.
b. Alternative 1-B: 0.9 Percent Inadvertent or Technically Unavoidable
    Comment: Many commenters, including consumers, consumer groups, 
food manufacturers, and some industry trade groups were generally in 
favor of Alternative 1-B. Commenters noted that this threshold most 
closely aligns with consumer expectations, the threshold used by many 
trading partners, and existing domestic standards currently in use for 
voluntary BE and non-BE labeling programs. Additionally, a commenter 
stated that farmers, testing organizations, and food manufacturers have 
used 0.9% as the maximum threshold since 2003. The commenters argued 
that adopting the 0.9% threshold would avoid confusion into the 
marketplace and would ease the process of negotiating and executing 
mutual recognition agreements which would help stimulate trade between 
countries.
    AMS Response: AMS recognizes that uniformity and consistency 
promote efficiency and lessen confusion. We note, however, that there 
is not one consistent threshold used for all foods and inputs 
domestically or by all trading partners. When determining whether the 
absence or presence of a bioengineered food or substance requires 
disclosure, domestic voluntary standards and/or foreign governments use 
thresholds greater than 0.9%, including 5%, under specified 
circumstances. AMS, however, must balance the costs and benefits for 
regulated entities and consumers in the United States when establishing 
thresholds for the NBFDS. A threshold substantially lower than 5% per 
ingredient may not be practical or achievable in production systems 
across a range of commodity groups. Furthermore, the requirements to 
attempt to meet a 0.9% threshold would be overly burdensome in 
proportion to the goal of providing consumers with a suitable amount of 
information on the presence of bioengineered substances in food 
products. AMS believes a threshold of 5% per ingredient does the best 
job in balancing the costs and benefits for regulated entities and 
consumers in the United States.

[[Page 65849]]

    Comment: Consumer transparency is another reason commenters give 
for supporting Alternative 1-B. They suggest that the relatively wide 
use of Alternative 1-B internationally and domestically promotes 
consumer transparency, and that adopting Alternative 1-B would ensure 
that the greatest number of products are subject to disclosure while 
still allowing for co-existence of BE and non-BE foods. A food 
manufacturer states that consumers recognize the potential for 
inadvertent and technologically unavoidable commingling of BE 
substances and accept standards in use today that allow for the 
presence of a BE substance up to the 0.9% level, including companies 
that voluntarily disclose and voluntary standards established by third-
party organizations for non-BE labels. Some commenters suggested that 
any higher threshold amount would negate the purpose of labeling and 
not match consumer expectations for transparency. Commenters also said 
that Alternative 1-B would promote good practices by companies because 
they would be able to segregate ingredient streams, while still 
allowing for some inadvertent or unavoidable introduction of BE 
material.
    AMS Response: AMS understands that a lower threshold would likely 
result in a larger number of products being subject to disclosure. AMS 
also understands that if a threshold is set too low, regulated entities 
may have to label almost everything and the information may become less 
meaningful to consumers. Ensuring each ingredient stream remains below 
the threshold of 0.9% may not always be practical or achievable for all 
commodity groups, or the processes and equipment required to do so may 
increase food production costs. AMS believes a threshold of 5% per 
ingredient provides the best balance between reducing costs for 
regulated entities and maximizing information conveyed to consumers.
    Comment: Several comments propose hybrid alternatives. A few 
commenters suggested combining the requirements of Alternative 1-A 
allowing for the inadvertent or technically unavoidable presence of a 
BE substance up to 5% in any ingredient with the requirements of 
Alternative 1-C to also allow for the intentional use of a 
bioengineered substance up to 0.9% in the finished product by weight. 
Another commenter suggested allowing a product to contain up to 0.9% 
total ingredients that had not been tested for BE substances, and 
requiring each such ingredient to comprise no more than 0.5% of the 
finished weight of the product, minus added water and salt. Other 
commenters were opposed to a hybrid approach. They argue that this 
would be more confusing and difficult to explain to consumers and would 
suggest a lack of transparency.
    AMS Response: AMS understands the desire for flexibility that a 
hybrid approach might create. However, AMS believes the threshold is 
intended to recognize the complexities of the supply chain, not 
necessarily create a mechanism to avoid BE food disclosure. A simple, 
straight forward threshold that allows for the unintentional or 
technically unavoidable presence of a BE substance acknowledges the 
complexities of the supply chain while increasing transparency. A 
hybrid or dual threshold scheme would add an unnecessary degree of 
complexity that would confuse to consumers and increase the 
administrative burden on regulated entities. The additional sampling, 
testing, and recordkeeping requirements of a multi-pronged threshold 
scheme would likely go beyond the customary business records currently 
kept by regulated entities and AMS does not intend to unnecessarily 
increase the administrative burden of the rule on regulated entities.
    Comment: A small number of commenters in response to Alternatives 
1-A and 1-B suggested making two minor changes to clarify how the 
threshold would be applied and how it would be calculated. The first 
recommendation was to change ``an'' to ``any'' to clarify that the 
threshold applied to all ingredients. The second recommendation was to 
remove ``by weight'' because some methods of testing for threshold 
amounts do not calculate by weight, but rather as a percent of DNA.
    AMS Response: AMS has changed the language used to define the 
threshold to make it clear that it applies to all ingredients. AMS also 
removed the reference to ``by weight'' to clarify that existing 
industry standards for determining the amount of a BE substance that is 
present in a food or food ingredient would be appropriate for purposes 
of applying the threshold exemption.
    Comment: A number of comments supported Alternative 1-B but called 
on AMS to establish very specific testing requirements to guarantee 
manufacturers applied 0.9% thresholds meaningfully. They state that the 
testing should be conducted using the real-time or digital polymerase 
chain reaction (PCR) method conducted by an ISO 17025 accredited 
laboratory, conducted on samples where laboratory controls indicate the 
DNA input is sufficiently intact to allow for valid quantitative 
analysis, and follow a meaningful sampling plan in accordance with 
industry standards. Regulated entities would be required to adhere to 
these testing standards.
    A commenter who was a food manufacturer stated that many food 
manufacturers do not test food products for BE substances. They rely 
instead on certifications of food ingredients from suppliers. The 
commenter stated that food importers in Europe are not required to test 
imported products. They stated that checking certifications from 
suppliers in place of testing was reasonable because suppliers are more 
familiar with ingredients, they already test their products, and there 
is no requirement that food manufacturers conduct further testing.
    AMS Response: AMS understands the desire for uniform application of 
the threshold and a regimented approach to ensure that regulated 
entities are complying with all aspects of the NBFDS, including the 
threshold. However, AMS is aware that strict requirements on 
methodologies, processes, testing, and recordkeeping all increase the 
cost of compliance with the NBFDS. Because this is a marketing standard 
that provides additional food information to consumers, there is little 
benefit to highly prescriptive testing and recordkeeping requirements. 
AMS has the authority to enforce compliance with the NBFDS and believes 
the best way to ensure compliance is through the enforcement process 
described in the final rule, not through strict, burdensome 
regulations.
    Comment: Those opposed to Alternative 1-B suggested that this 
alternative is overly restrictive, especially for a marketing standard. 
A few noted that Alternative 1-B would lead to over-disclosure because 
some companies would likely consider any commingled food as BE food. 
They said this could discourage consumers from purchasing products with 
BE labels. Others suggested that a 0.9% threshold would denigrate 
biotechnology and reduce choices for both farmers and consumers. 
Similarly, some commenters state that they believe Alternative 1-B 
treated BE substance as a contaminant. A few commenters believe that 
any threshold below 5% is not practical or achievable for many 
commodities. They state that traceability requirements would be overly 
burdensome in relation to the benefits derived from providing 
additional information to consumers. They believe that this would 
result in technology avoidance and a stifling of innovation. A few 
comments suggested that recordkeeping burdens would be costly at a 0.9% 
threshold because

[[Page 65850]]

regulated entities would have to account for traces of BE substance 
down to a very small degree throughout the entire supply chain. 
Although food manufacturers keep records now, these commenters believe 
such records are usually on a finished product basis and not by 
ingredient.
    AMS Response: AMS understands the concerns raised by these 
comments. AMS is aware that setting a threshold too low may have 
practical limitations on the supply chain and could increase costs as 
entities throughout the supply chain implement additional measures to 
maintain a lower threshold on the food and ingredients they produce. 
While AMS understands that some supply chains and some countries 
currently produce food and ingredients that contain a BE substance 
below 0.9 percent, AMS does not want to unnecessarily increase the 
regulatory burden and costs on supply chains that may not currently be 
meeting that threshold. Moreover, those who are currently meeting the 
threshold for 0.9 would still be in compliance with Alternative 1-A, 
because ingredients that contain an inadvertent or technically 
unavoidable BE substance below 0.9 percent are still below the 5 
percent threshold in Alternative 1-A.
    Comment: A few comments questioned how AMS would interpret 
Alternatives 1-A and 1-B with respect to what is inadvertent or 
technically unavoidable, and whether such a definition would require 
any intentional use of a BE substance to be disclosed.
    AMS Response: AMS has clarified in the final rule that any 
intentional use of a BE substance requires disclosure.
c. Alternative 1-C: 5 Percent of Intentional Use
    One of the exemptions from food labeling proposed by AMS was 
Alternative 1-C. Alternative 1-C would exempt food from disclosure if 
the ingredient or ingredients in the food containing a BE substance 
accounted for no more than five percent (5%) of the total weight of the 
food in final form. AMS also sought comments on whether the specific 
threshold amount of 5% should be increased or decreased.
    Comment: Comments in favor of Alternative 1-C suggest that this 
approach would allow for the de minimis use of BE food ingredients 
without requiring disclosure. They also indicate that this approach 
would align with that used in some other countries. Supporters of this 
alternative also suggest that this approach is the most supportive of 
bioengineering. Some commenters also believe this alternative would 
have the least impact on domestic and international value chains and 
international trade. Similarly, they suggest this would also be the 
option most compatible with our North American trading partners, Mexico 
and Canada, neither of which mandate labeling.
    AMS Response: AMS understands that for some commenters, Alternative 
1-C would increase the amount of flexibility under the standard and 
allow for the de minimis use of a BE substance without requiring 
disclosure. Although Alternative 1-C could be used in other countries, 
AMS is aware that there is no universal threshold level and that any 
choice of threshold will have implications on trade. While some have 
suggested that Alternative 1-C could cost less to implement because 
fewer products are labeled, AMS believes that current industry 
practices track the presence of absence of BE substances in an 
ingredient and not necessarily the specific amount. Adding the 
requirement to track the amount of a BE substance in each ingredient, 
and subsequently the final product, could unnecessarily increase costs 
for regulated entities, even though the number of products subject to 
disclosure may ultimately be less.
    Comment: Some commenters suggested that Alternative 1-C would 
reduce consumer confusion.
    AMS Response: AMS does not agree with those suggesting that a 5% 
threshold as proposed in Alternative 1-C would reduce consumer 
confusion. AMS believes it will lead to the exemption of a wider array 
of foods from labeling and cause consumers to have less confidence and 
trust in the NBFDS. AMS believes that providing more information and 
not creating an exemption for the intentional use of a BE substance is 
likely to provide more BE food information to consumers.
    Comment: Several commenters suggested Alternative 1-C but with an 
amount lower than 5 percent--such as 0.9 percent. One commenter said 
that such an approach would exempt most fermentation/probiotic, viable 
enzymes, and defining/characterizing ingredients.
    AMS Response: A threshold substantially lower than 5% per 
ingredient may not be practical or achievable in production systems 
across a range of commodity groups. Furthermore, the traceability 
requirements to attempt to meet a 0.9% threshold would be overly 
burdensome in proportion to the goal of providing consumers with a 
suitable amount of information on the presence of bioengineered 
substances in food products. AMS believes a threshold of 5% per 
ingredient does the best job in balancing the costs and benefits for 
regulated entities and consumers in the United States. AMS is allowing 
regulated entities to voluntarily disclose (Sec.  66.116) the presence 
of bioengineered substances even when not otherwise required to do so. 
This will help regulated entities to meet demands on their food 
products to conform to standards used in other programs. AMS will also 
work to develop mutual recognition arrangements so that countries might 
agree to recognize each other's standards as comparable.
    AMS understands that some food products may include only a very 
small amount of a BE substance, such as enzymes or other products 
created in a controlled environment. Similarly, if there are other 
products that people believe should be exempted from disclosure, AMS 
has established a process to exclude them under factors and conditions. 
For reasons stated above, AMS believes that Alternative 1-A is the 
appropriate threshold and that any intentional use of a bioengineered 
substance should be disclosed.
    Comment: One commenter supports the 5% threshold, but believes it 
should be measured using the percent based on volume of the BE 
substance in the ingredient, rather than ingredient weight. They state 
that other countries quantify the threshold by the volume of BE 
substance present in ingredients. They assert that a BE threshold 
defined by weight is not enforceable.
    AMS Response: AMS has determined Alternative 1-A is the best 
approach, but has removed the phrase ``by weight'' from the regulatory 
text reflecting that option.
    Comment: A majority of comments received regarding Alternative 1-C 
are opposed to this alternative. Many believe that this alternative is 
not transparent enough and that it would exempt wide amounts of food 
items from labeling. They suggest this would undermine consumer 
expectations, and possibly damage consumer confidence and trust in the 
labeling program. Commenters expressed the opinion that consumers 
wanting to avoid BE substances would not support Alternative 1-C 
because they would believe it was not low enough to be meaningful. A 
number of comments suggested that Alternative 1-C subverted the amended 
Act by allowing the intentional use of a BE substance into food 
products without requiring labeling.
    Another large group of comments state that the 5% threshold amount 
will result in the rejection of our exports by countries with lower 
threshold amounts, damaging our ability to trade

[[Page 65851]]

food products in foreign markets. A food exporter expressed concern 
with the lack of conformity between Alternative 1-C and disclosure 
requirements in other countries. The exporter said that this lack of 
conformity would add complexity to their efforts to export their 
products because they would have to make disclosure adjustments for 
each country with differing disclosure laws.
    AMS Response: AMS understands the concerns raised by Alternative 1-
C, AMS has not chosen this alternative. AMS will not allow an exemption 
from labeling when a regulated entity intentionally introduces a 
bioengineered substance into a food product.
    AMS believes that exporters are already complying with the laws of 
the countries into which they import their products and to the degree 
possible, AMS has tried to minimize any potential impacts on 
international trade. If other countries have a BE labeling program, AMS 
is also working to develop mutual recognition agreements where the 
requirements of countries with similar labeling requirements may be 
recognized in the United States.
    Comment: A commenter stated that the EU uses ``accidental'' and 
``technologically unavoidable'' instead of inadvertent and technically 
unavoidable. The exporter states that the EU defines accidental to 
include BE adulteration occurring during cultivation, transportation, 
or processing. AMS interprets inadvertent or technologically 
unavoidable as ``insignificant amounts of a BE substance in food that 
resulted from the coexistence of BE and non-BE foods in the supply 
chain'' [83 FR 19869]. This commenter presses AMS to interpret 
inadvertent in a manner identical to EU's ``accidental,'' or in a way 
that was consistent with the EU definition for ``accidental.''
    AMS Response: AMS is not in a position to interpret how the EU 
implements their BE labeling law, but does intend to interpret AMS 
regulations in a manner that minimizes the impact on international 
trade.
    Comment: Several commenters questioned how AMS will treat 
ingredients that are not considered bioengineered foods, such as 
incidental additives, for purposes of determining whether a food is 
exempt from labeling under the threshold.
    AMS Response: If an ingredient is not considered a bioengineered 
food under another section of the NBFDS, such as an incidental 
additive, a regulated entity does not need to apply the threshold 
exemption to that ingredient to determine whether a food is disclosed 
as BE. If an ingredient is otherwise not a bioengineered food, it will 
not trigger labeling due to the presence of a bioengineered substance.
    Comment: A commenter suggested that for Alternative 1-A and 1-B, 
any intentional use of a BE substance would require labeling even if 
the threshold limit is not exceeded. They then pointed out that to 
avoid this, food manufacturers would have to establish records to show 
that any BE substance in the food came only from inadvertent and 
technically unavoidable sources. This may require the manufacturer to 
keep additional records than those currently generated.
    AMS Response: AMS intends to require only customary business 
records. For purposes of ensuring compliance with the threshold, AMS 
will look to the records to determine whether a regulated entity 
intended to purchase non-BE ingredients and the documentation they have 
from their suppliers indicating as much.
    Comment: A commenter suggested that AMS should not require the 
exclusion of water and salt from the threshold calculation. This 
commenter stated that the finished product should be in the same form 
as it would be when presented to the consumer and excluding the weight 
of the water and salt from the calculation of the amount of BE would 
add complexity. The manufacturers would have to adjust their 
calculations to account for only the amount of a BE substance in the 
dry ingredients in the absence of water or salt.
    AMS Response: AMS did not choose Alternative 1-C and this comment 
is inapplicable to Alternative 1-A. Water and salt do not contain DNA 
and would therefore, as individual ingredients under Alternative 1-A, 
never trigger disclosure.
    Comment: A few commenters stressed that testing for BE content 
should not be a requirement. They emphasized the use of proper 
documentation, supplier assurances, along with existing controls should 
suffice. One commenter stated that in some cases statistical and 
qualitative tests could be used to obtain qualitative results and 
provide adequate verification of BE content. The commenters suggest 
that testing, such as PCR testing, would drive up costs significantly, 
decrease efficiencies in the handling and distribution systems, 
introduce new market risks, and disrupt global trade.
    AMS Response: AMS does not intend to prescribe specific tests or 
methodologies for verifying compliance with the threshold. AMS intends 
to rely on customary business records.

9. Appearance and Placement of Disclosure

    The NPRM solicited comments on the size, legibility, appearance, 
and location under ordinary shopping conditions for the BE food 
disclosure. The NPRM also solicited comments on the placement of the BE 
disclosure. AMS received several comments on those topics.
    Comment: Many commenters supported the NPRM goal of ensuring that 
the BE food disclosure was likely to be read and understood under 
ordinary shopping conditions. Commenters suggested that the disclosure 
be concise, large enough to read, easily located, and intelligible. One 
commenter recommended the BE food disclosure size be consistent with 
FDA regulations at 21 CFR 101.2(c) governing ``customary conditions of 
purchase.''
    AMS Response: AMS agrees that the BE food disclosure should appear 
prominently and conspicuously on the label, such that it can be read 
and understood under ordinary shopping conditions. This position aligns 
with other mandatory food labeling requirements, including the FDA 
regulations at 21 CFR 101.15.
    Comment: Several commenters felt that the term BE was misleading 
and confusing to consumers. Commenters suggested that a disclosure 
using GMO would be simple, clear and suffice.
    AMS Response: AMS understands and appreciates commenters request 
for clear, understandable disclosure language that references a 
familiar term like ``genetically modified organism.'' However, the 
amended Act clearly sets forth use of the term bioengineering. AMS 
acknowledges that the amended Act authorizes the Secretary to determine 
other terms that are similar to ``bioengineering.'' 7 U.S.C. 1639(1). 
But, for purposes of ensuring disclosure consistency and minimizing 
marketplace confusion, AMS has chosen not to adopt other similar terms 
and to require the use of the term ``bioengineered.'' AMS will engage 
in outreach and education to provide information about the new 
disclosure term.
    Comment: Some commenters recommended AMS implement strong 
guidelines for the type size used for the BE disclosure. One commenter 
recommended that size requirements be defined with a minimum letter 
height and logo size. Another commenter requested that AMS provide 
uniform requirements for the disclosure location and size. Others 
suggested that the disclosure be similar in size of the product/brand 
name or at least 75 percent of the font size.

[[Page 65852]]

    Several commenters requested flexibility in determining the 
disclosure's size and placement. One stated that AMS should give 
regulated entities flexibility in selecting the size and placement 
options that provide the best proportions for displaying the disclosure 
while also complying with the requirement for maintaining high 
visibility. Commenters also proposed if AMS specifies a disclosure size 
that it should range from 0.5-1 inch in diameter.
    AMS Response: AMS acknowledges that font and type size contribute 
significantly to the consumers' ability to access information provided 
on food labels. As such, AMS considered prescribing specific type sizes 
for different disclosure options. After considering comments, however, 
AMS determined that the number and type of disclosure options, combined 
with the variety of food package sizes, shapes, and colors, would make 
prescriptive requirements too difficult to implement. Therefore, AMS is 
allowing regulated entities responsible for the disclosure to have 
flexibility in implementing the disclosure requirements. The NBFDS 
requires that disclosure text ``. . . be of sufficient size and clarity 
to appear prominently and conspicuously on the label, making it likely 
to be read and understood by the consumer under ordinary shopping 
conditions.''
    Comment: Most commenters supported AMS's proposal for placement of 
the BE disclosure. One commenter recommended that the disclosure had to 
be placed on the information panel if room allowed. The commenter 
recommended that the disclosure needed to be consistent, and not at the 
discretion of the manufacturer.
    AMS Response: AMS acknowledges commenters' support for the NPRM's 
proposed placement of the BE disclosure. AMS also agrees that the 
information panel is an appropriate location for the BE disclosure 
because consumers who are interested in additional information on food 
products will generally look for it on the information panel. Section 
III.A.4 of this rule provides a more detailed rationale regarding AMS's 
position on placement of the BE disclosure.
    Comment: One commenter recommended that manufacturers be given 
greater flexibility in determining the disclosure placement and size. 
Another commenter also stated that there should be the option of 
placement and size of disclosure on the package. One commenter 
recommended that the disclosure be placed on any of the panels of the 
food package provided the disclosure is displayed prominently on the 
label and does not interfere with mandatory nutrition labeling 
requirements.
    AMS Response: AMS agrees that manufacturers may need some 
flexibility when determining the size and placement of a BE disclosure. 
Based on its review of comments, AMS will allow manufacturers to 
include the disclosure on an alternate panel likely to be seen by a 
consumer under ordinary shopping conditions if there is insufficient 
space on either the principal display or information panels. Similarly, 
the NBFDS allows flexibility in the disclosure size. For a detailed 
explanation of AMS's position regarding the appearance and placement of 
the BE disclosure, refer to Section III.A.3 and Section III.A.4 of this 
rule, respectively.

10. Text Disclosure

    AMS solicited comments on adoption of the text disclosures: 
``Bioengineered Food,'' ``Contains Bioengineered Food Ingredients,'' 
``May Contain Bioengineered Food Ingredients,'' and ``May Be 
Bioengineered.''
    Comment: Several commenters believe the phrases ``may contain a 
bioengineered food ingredient'' and ``may be a bioengineered food'' 
would lead to more confusion for consumers who want to know the exact 
nature of the ingredients being consumed by their families. Some 
comments noted that many of the countries with mandatory disclosure 
requirements do not allow the use of a ``may'' statement. Some 
commenters stated that a ``may'' claim should be permissible to 
describe foods that contain ingredients where the sourcing may change 
from a bioengineered to a non-bioengineered source. Other comments 
suggested that regulated entities know and have records to demonstrate 
the bioengineered status of their foods and should not be permitted to 
use ``may'' claims when they know with certainty that their foods are 
bioengineered.
    Commenters suggested that a symbol, such as an asterisk, could be 
used to denote an ingredient that was BE. Commenters also suggested 
that the disclosure statement should provide a declarative statement 
designating the BE information.
    AMS Response: AMS appreciates commenters' desire for USDA to 
implement clear standards for disclosing bioengineered food products 
using on-package text. We recognize that consumers want additional 
information about the food they eat and may see the use of the word 
``may'' in the text disclosure as ambiguous. As a result, AMS has 
removed the ``may'' disclosure option and will only allow regulated 
entities to make affirmative BE food disclosures.
    Comment: Commenters requested straightforward labeling that would 
not confuse consumers by using unfamiliar terms. Many commenters 
suggested allowing or mandating other phrases such as ``genetically 
modified organism,'' ``GMO'' or ``genetic engineering.'' Another 
commenter suggested using the phrase ``includes'' rather than 
``contains.'' Some commenters also requested clarification regarding 
whether regulated entities could provide additional statements 
regarding bioengineered foods as part of their disclosures.
    AMS Response: AMS understands and appreciates the desire for clear, 
straightforward text disclosure language. The Secretary believes that 
the language used by Congress in the amended Act clearly and accurately 
describes the technology and provides consumers with the information 
they desire. AMS will engage in outreach and education to provide 
information about the new disclosure term. AMS also notes that, 
pursuant to Sec.  66.118, nothing in the final rule prohibits regulated 
entities from providing additional statements or other claims regarding 
bioengineered foods and bioengineered food ingredients, so long as such 
statements are consistent with all other applicable laws and 
regulations.
    Comment: Some commenters expressed concern about the disclosure 
options for foods contained on the proposed non-high adoption list of 
bioengineered foods. One commenter was concerned about the possibility 
that manufacturers could use loopholes to avoid having to say a food is 
bioengineered.
    AMS Response: AMS acknowledges the concerns and notes that, as part 
of the NBFDS, AMS has developed a List of Bioengineered Foods for human 
consumption that may be produced anywhere in the world. This list 
establishes a presumption about what foods might require disclosure 
under the NBFDS, but does not absolve regulated entities from the 
requirement to disclose the bioengineered status of food and food 
ingredients produced with foods not on the list when the regulated 
entities have actual knowledge that such foods or food ingredients are 
bioengineered.
    AMS also appreciates the concerns about regulated entities 
complying with the disclosure requirements. As such, subpart E of this 
rule outlines the enforcement regulations established to ensure 
compliance with the regulations.

[[Page 65853]]

    Comment: Many commenters requested the use of the phrase 
``bioengineered ingredients used in this product,'' regardless of the 
amount of bioengineered foods or ingredients contained in the product. 
Similarly, other commenters stated where trace amounts of bioengineered 
ingredients are identified, the entire food product should be labeled 
``contains BE ingredients.''
    AMS Response: The amended Act directs the Secretary to determine 
the amount of a bioengineered substance that may be present in a food, 
as appropriate, in order for the food to be a bioengineered food. 
Requiring a label for food that includes a bioengineered substance that 
falls below this amount would contravene Congress's intent.

11. Symbol Disclosure

    AMS solicited comments on three alternatives for disclosure 
symbols, each in full color and black and white. All three include some 
variation of the letters BE, short for ``bioengineered.'' AMS also 
sought comment on whether the symbol should include the word 
``bioengineered.''
    Comment: Some comments suggested that none of the three symbols 
were acceptable. Many of these commenters suggested that the 
alternatives AMS provided promoted bioengineering or provided the BE 
food disclosure in a misleading or confusing manner. Some comments 
provided alternative symbols and others suggested general ideas that 
AMS should incorporate, such as more neutral colors or images.
    AMS Response: AMS appreciates the comments and alternative symbol 
designs. AMS has chosen a modified version of Alternative 2-A. The 
modified version removed the letters ``BE'' and instead uses the word 
``Bioengineered,'' which AMS believes will better inform consumers than 
just the letters ``BE.'' AMS believes the modified symbol is an 
appropriate, non-disparaging way to communicate the information 
required by the amended Act.
    Comment: Some commenters believed adding the word ``bioengineered'' 
to the symbol was unnecessary and that other symbols used on food (e.g. 
the organic seal, irradiation symbol, and recycling symbol) do not use 
additional text to convey meaning. Other commenters, including some who 
conducted research on consumer response to the proposed symbols and 
text options, said the proposed symbols and text options did not 
provide clear information to consumers. Conversely, other commenters 
who also conducted research on consumer response to the proposed 
symbols and text options, believed adding the word ``bioengineered'' 
would provide consumers with more information than a symbol with the 
acronym ``BE.''
    AMS Response: AMS has chosen to add the word ``bioengineered'' to 
the symbol and believes that the combination of the symbol with the 
additional text will provide consumers with more information about 
their food. AMS understands that because the symbol has not yet been 
used in commerce, consumers and those who may have responded to surveys 
conducted during the comment period that examined the proposed 
disclosure options may not fully understand the meaning of the symbol 
and accompanying text. As the NBFDS is implemented, AMS is committed to 
helping consumers understand the meaning of the new symbol and 
accompanying text.
    Comment: Of those in favor of the proposed symbols, most favored 
Alternative 2-A. Commenters indicated that Alternative 2-A was the 
``best choice of the three provided.'' They found it to be the ``most 
simple,'' ``most professional,'' and ``most neutral'' of the three 
proposed.
    AMS Response: AMS agrees that Alternative 2-A is the most 
appropriate choice of the three proposed alternatives and has modified 
Alternative 2-A in the NPRM to address some of the concerns raised by 
other commenters, as described above.
    Comment: Most commenters did not support the use of Alternatives 2-
B or 2-C. Commenters believed the symbols and colors were misleading, 
not neutral, and that they resembled a smiley face. Conversely, several 
commenters liked the symbol because they believed they were the 
``friendliest'' or ``happy'' option.
    AMS Response: AMS appreciates commenters' concerns regarding the 
use of Alternatives 2-B or 2-C. Based on comments received for all 
three alternatives and commenter sponsored studies on consumer 
perceptions of labeling (see footnotes 7 and 8), AMS has chosen a 
modified version of Alternative 2-A, as discussed above.

12. Electronic or Digital Link Disclosure

    AMS solicited comments on the option of an electronic or digital 
link disclosure including the use of current technology such as QR 
codes and digital watermark technology. In addition to the use of 
electronic or digital link technology, AMS solicited comments on 
language that must accompany the electronic or digital link such as, 
``Scan here for more food information'' or equivalent language that 
reflects technological changes. The proposal would also incorporate a 
requirement to include a telephone number that provides access to the 
BE food disclosure and would further require that disclosure be 
available, regardless of the time of day, and that the telephone number 
be located in close proximity to the electronic or digital link and 
state ``Call for more food information.''
    Comment: The majority of commenters did not support the use of 
electronic or digital link disclosure in lieu of on-package labeling. 
Many commenters cited the USDA study conducted by Deloitte Consulting 
LLP, Study of Electronic or Digital Link Disclosure: A Third-Party 
Evaluation of Challenges Impacting Access to Bioengineered Food 
Disclosure (July 2017), and listed concerns with electronic or digital 
link disclosures. Such commenters stated that reliance on electronic or 
digital link disclosure would discriminate against those without access 
to smartphones or other technology, such as reliable high-speed 
internet access, and would disproportionately have a negative impact on 
rural, low-income, minority, and elderly consumers. Commenters stated 
that many consumers are not aware of QR codes or how they work. Many of 
these commenters also stated that electronic or digital link disclosure 
should not replace on-package disclosure because even when consumers 
are aware of QR codes and attempt to access the information through 
their smartphones, the QR codes do not always work and are not easy for 
all consumers to use. Some of these commenters also stated that 
consumers associated digital link disclosures like QR codes with 
marketing, and would not be inclined to take steps to access the 
disclosure information. Most of these commenters stated that electronic 
or digital link disclosure would serve as a barrier between consumers 
and BE disclosure. Such barriers identified by commenters included 
additional costs for consumers, such as through increased data plans, 
and time spent scanning and obtaining information. Some commenters 
noted that consumers with families or limited windows of time for 
shopping would find accessing electronic or digital link disclosures 
difficult and frustrating.
    AMS Response: AMS acknowledges that most commenters do not support 
the use of electronic or digital link disclosure. However, AMS notes 
that electronic or digital link disclosure is mandated by the amended 
Act. AMS

[[Page 65854]]

also notes that if a regulated entity decides to utilize electronic or 
digital link technology to convey bioengineered food information, that 
entity must also provide options for the consumer to access the 
disclosure by calling a phone number. AMS believes that requiring the 
option to call a telephone number will provide BE food information in 
an accessible and understandable manner. AMS also notes that such 
telephone number disclosure must be available regardless of the time of 
day.
    Comment: Several commenters suggested that the use of electronic or 
digital disclosures would be acceptable only in conjunction with on-
package text or symbol disclosures. Such commenters stated that on-
package labeling provided shoppers a way to quickly and easily compare 
one product to another for BE ingredients and, at the same time, 
compare prices and nutritional content. These commenters identified 
many of the same issues as commenters opposed to electronic or digital 
disclosures. Some of these commenters noted that a store could install 
its own scanners to allow consumers to access electronic or digital 
link disclosures, but a subset of such commenters stated that such 
scanners would need to be installed within easy access to all shelves 
throughout the store, and not just near check-out counters, in order to 
be comparable to on-package labeling.
    AMS Response: AMS notes that the amended Act mandates the 
electronic or digital link disclosure without requiring any separate 
on-package disclosure. AMS acknowledges that in-store scanners could 
allow consumers to access electronic or digital link disclosures. 
However, AMS does not believe such a requirement is necessary because 
any electronic or digital link disclosure must also provide options for 
the consumer to access the disclosure by calling a phone number.
    Comment: Many commenters stated that if digital disclosure is 
allowed, the rule should account for new developments in technology 
that would be subject to guidelines to improve readability and ease of 
access to information. Some commenters stated that AMS should adopt 
rules to make sure that such disclosures made using electronic or 
digital technology consistently scan every time, work in all 
conditions, are optimized for readability and accessibility, and are 
easily accessible for consumers who do not have smartphones. In 
addition, commenters stated the need for AMS to ensure that QR code 
design, packaging material and shape is included in its performance 
standards. Commenters also stated that AMS should not allow multiple QR 
codes on the same package to diminish the risk that consumers will not 
know where to obtain the BE disclosure. Some commenters stated that AMS 
should use language that alerts the consumers that scanning the QR code 
or calling the provided number would provide BE information. Other 
commenters stated that if digital disclosure is allowed, the rule 
should account for new developments in technology that would be subject 
to guidelines to improve readability and ease of access to information. 
They also stated that AMS should use URLs or shortened URLs rather than 
QR codes as a disclosure method.
    AMS Response: AMS recognizes that electronic and digital links 
currently used on food products in the marketplace take different 
forms, and are accessible on different devices, which would make 
certain specific requirements impractical. The amended Act allows for 
equivalent statements that reflect technological changes. Consequently, 
AMS has allowed for other alternative statements to direct consumers to 
the link to the BE food disclosure. Examples of other statements 
include: ``Scan anywhere on package for more food information,'' or 
``Scan icon for more food information.'' AMS acknowledges that some 
consumers may experience difficulty accessing electronic or digital 
link disclosures. However, AMS does not believe additional rules 
mandating standards for QR codes are necessary because any electronic 
or digital link disclosure must also provide options for the consumer 
to access the disclosure by calling a phone number. Therefore, 
consumers experiencing difficulty with any electronic or digital link 
disclosure methods will have an alternative disclosure method 
available. AMS notes that the language to accompany any electronic or 
digital link disclosure is provided in the amended Act, which only 
allows for changes to the terminology based on technology, not a 
specific reference to bioengineering. AMS notes that while the amended 
Act does not allow for the use of URLs or shortened URLs for all 
manufacturers, website disclosure is allowed for small food 
manufacturers.
    Comment: Many commenters urged that any electronic or digital link 
disclosure must remain free from any promotional or marketing 
information on the first product information page, or ``landing page,'' 
to which consumers are directed. These commenters urged that such 
disclosure must contain only BE information, as many of these 
commenters were concerned that QR codes would direct consumers to 
marketing information before bioengineering disclosure information. 
Some commenters disagreed with AMS's proposal requiring that the 
electronic or digital link disclosure provide the bioengineering 
disclosure on the first product information page.
    AMS Response: Based on the amended Act, AMS believes that the 
electronic or digital link disclosure requires that the bioengineering 
disclosure be on the first product information page. See 7 U.S.C. 
1639b(d)(2). AMS does not believe that consumers should have to 
navigate to other pages to locate the bioengineering disclosure.
    AMS agrees that any electronic or digital link disclosure should 
remain distinct from any promotional or marketing information. While 
AMS acknowledges that some commenters have urged maximum flexibility in 
allowing disclosures alongside other information, AMS notes that the 
amended Act requires the electronic or digital link to provide the 
bioengineering disclosure on the first product information page 
accessed through the link, without any marketing and promotional 
information. Therefore, if a regulated entity wants to provide 
additional information about BE food to consumers, the information 
should be provided outside of the landing page that includes the BE 
food disclosure.
    Comment: Some commenters were concerned about the potential 
liability digital disclosure options could present if they were 
accessed by unauthorized individuals, such as hackers.
    AMS Response: AMS agrees that unauthorized access to personal 
information is a grave concern to many consumers. AMS notes that the 
amended Act specifically states that any electronic or digital link 
disclosure may not collect, analyze, or sell any personally 
identifiable information about consumers or the devices of consumers 
and, to the extent that any such information must be collected for the 
purposes of disclosure, that information must be deleted immediately 
and not used for any other purpose.
    Comment: Many commenters supporting the use of electronic or 
digital link disclosure also cited the Deloitte study, noting that a 
vast and growing majority of Americans own smart phones capable of 
accessing digital disclosures and that wireless internet access is 
nearly universal in retail establishments. However, several commenters 
who support the use of electronic or digital link disclosure objected 
to the proposed requirement

[[Page 65855]]

for an additional phone number and call to action statement (``Call for 
more food information'') in conjunction with the digital disclosure 
link and digital call to action statement (``Scan here for more food 
information''). Some commenters stated that such a requirement will be 
costly to implement and is unnecessary when the regulated entity 
chooses the digital disclosure option. From their perspective, because 
existing toll-free numbers already appear on many labels, the package 
will also bear a link to the digital disclosure, and consumers will 
have sufficient and growing access to digital disclosure methods. Some 
of these commenters suggested that when regulated entities choose the 
digital disclosure option, consumers could access bioengineered food 
disclosure information through existing phone numbers, with the same 
placement and call to action to which consumers are accustomed. 
Commenters stated that by not allowing such flexibility, consumers 
could face two competing phone numbers on a single package, which would 
cause confusion. In addition, commenters stated the proposed 
requirement that phone lines be staffed at all hours would be extremely 
costly to implement. These commenters request that AMS consider less 
costly alternatives, such as allowing existing consumer support phone 
lines to also provide disclosure and specify in the final regulation 
that phone lines must be available only during normal business hours.
    AMS Response: AMS acknowledges that a large number of Americans 
have smartphones and most national and regional supermarkets provide 
wireless internet connections. However, as discussed in relation to the 
study identifying potential technology challenges impacting consumers, 
the Secretary has determined that many consumers do not have sufficient 
access to electronic or digital link disclosures under ordinary 
shopping conditions at this time. AMS notes that the amended Act 
requires that any electronic or digital link disclosure also includes a 
telephone number that provides access to the bioengineering disclosure. 
While AMS acknowledges that a product may bear more than one phone 
number, AMS believes that any consumer confusion would be minimized 
because the bioengineering disclosure phone number must be in close 
proximity to the digital link. AMS believes that access to the 
disclosure regardless of the time of day is important to provide 
meaningful disclosure to consumers. AMS further believes that allowing 
pre-recorded information for such a disclosure lessens any burden on 
regulated entities.

13. Study on Electronic Disclosure

    The amended Act requires the Secretary to conduct a study to 
identify potential technological challenges that may impact whether 
consumers would have access to the bioengineering disclosure through 
electronic or digital disclosure methods and to solicit comment on the 
study. AMS contracted with Deloitte Consulting LLP (Deloitte) to 
conduct the study and posted the resulting report, Study of Electronic 
or Digital Link Disclosure: A Third-Party Evaluation of Challenges 
Impacting Access to Bioengineered Food Disclosure, on its website in 
September 2017. As part of the NPRM, AMS sought comments on the study, 
as well as the proposed text message disclosure option, should the 
Secretary determine, after reviewing the study and comments, that 
consumers would not have sufficient access to the bioengineering 
disclosure through electronic or digital disclosure methods.
    Comment: Many commenters cited the study in opposition to 
electronic or digital link disclosure, with several citing the study's 
finding that consumers may not have smartphones or access to internet 
speeds capable of downloading BE disclosure content. These commenters 
stated that this lack of access would disproportionately impact groups 
such as rural consumers and retailers. Commenters also cited the 
study's finding that consumers either do not know what digital links 
are or, if they do recognize them, they typically associate digital 
links with marketing information and they may not know, or be inclined 
to use, such methods to obtain a BE disclosure. Commenters further 
cited the study to note that even when consumers are aware of digital 
links and attempt to use them, they often run into problems scanning 
and using such links.
    AMS Response: AMS acknowledges that some consumers may lack access 
to technology required to utilize electronic or digital link 
disclosure. In fact, after reviewing the study and comments submitted 
to the NPRM related to the study, the Secretary has determined that 
consumers would not have sufficient access to the bioengineering 
disclosure through only electronic or digital means under ordinary 
shopping conditions at this time. Thus, AMS, in compliance with the 
amended Act, is adopting a text message disclosure option. See 7 U.S.C. 
1639b(c)(4). The amended Act does not, however, vest AMS with authority 
to eliminate the electronic or digital disclosure option. See id. The 
amended Act is clear that it is the food manufacturer that selects the 
disclosure option that it wants to use to make the required disclosure. 
See 7 U.S.C. 1639b(b)(2)(D).
    Comment: Some commenters noted additional disclosure technology 
cited in the study, such as in-store digital link scanners, and stated 
that digital disclosure would need to be paired with other such 
disclosure options to ensure access to all consumers.
    AMS Response: AMS agrees that additional technology in the grocery 
stores may make electronic or digital disclosure more accessible. 
Grocery stores are welcome to have those technologies in place for 
consumers. However, the amended Act does not provide AMS with the 
authority to require grocery stores to make those technologies 
available to consumers.
    Comment: Some commenters cited the study in support of digital 
disclosure. These commenters noted the study's findings that wireless 
internet and cellular networks are already widely available, and access 
to these technologies is increasing.
    AMS Response: AMS acknowledges that a large number of Americans 
have smartphones and many national and regional supermarkets provide 
wireless internet connections. However, as noted above, the Secretary 
has determined that many consumers do not have sufficient access to 
electronic or digital link disclosures under ordinary shopping 
conditions at this time.
    Comment: Numerous commenters, including those representing food 
manufacturers and retailers, supported the use of text message 
disclosure. Many of these commenters urged maximum flexibility in 
disclosure, including text messages. Some commenters supporting text 
message disclosure noted that it would provide for disclosure without 
access to a smartphone or the internet. These commenters stated that 
text message disclosure could serve a broader range of consumers than 
digital disclosure options, noting the availability of cellular phone 
coverage throughout the country.
    AMS Response: AMS notes that the Deloitte study reported that 
approximately 5% of Americans do not own mobile phones based on the Pew 
Research Center's Mobile Fact Sheet. Because text messaging is not 
dependent on broadband or wireless internet access, it stands to reason 
that 95% of Americans can receive text messages. Thus, we agree that 
text message disclosure can serve a broad range of consumers. 
Additionally, the amended Act requires the Secretary to consult with 
food retailers and

[[Page 65856]]

manufacturers in providing the additional and comparable option. See 7 
U.S.C. 1639b(c)(4). AMS, therefore, gave significant weight to comments 
from this group that overwhelmingly supported the text message 
disclosure option.
    Comment: Many commenters opposed the use of text message 
disclosure. Several argued that the additional need for a phone, even 
if it is not a smartphone, is a burden on consumers. Many of these 
commenters cited the study and noted that many consumers, especially 
rural consumers, do not have access to reliable cellular phone service, 
making text message disclosure difficult to use. Some of these 
commenters also noted that text messaging could result in additional 
charges to consumers who pay for individual text messages or have to 
pay for an upgraded phone plan. Other commenters stated that the need 
to text for a disclosure would be time consuming and ineffective, 
placing unnecessary barriers between consumers and BE disclosures. 
These commenters stated that text messaging was not comparable to on-
package labeling and should not be adopted.
    AMS Response: AMS acknowledges that text messaging might require an 
additional cost for some consumers depending on the consumer's cellular 
phone data plan. However, AMS notes that consumers must not be charged 
a fee by the regulated entity to access the disclosure information by 
text message. We also note that a text message disclosure request sent 
by a consumer must trigger an immediate response to the consumer's 
mobile device. Finally, we note that the amended Act requires a 
comparable option to access the BE disclosure, not that the option be 
comparable to on-package labeling. Therefore, we conclude that the text 
message disclosure meets the requirements of the amended Act.
    Comment: Some commenters urged that if text message disclosure is 
allowed, the text message disclosure should not include any marketing 
information. Other commenters noted that the proposed rule would 
prohibit charging fees, data collection, and privacy invasions that 
could be associated with text message disclosure, but they stated that 
consumers may not know of these prohibitions.
    AMS Response: AMS agrees that any text message disclosure must not 
contain marketing and promotional information and is adopting proposed 
Sec.  66.108(c) in the final rule to prohibit that information in the 
text message option. AMS is also adopting Sec.  66.108(d) to protect 
the privacy of consumers who access BE information through text 
message. AMS will inform consumers of the privacy protections for text 
message disclosures on its website and encourages food manufacturers 
and retailers and consumer advocacy groups to do the same.

14. Disclosures for Certain Circumstances

a. Small Food Manufacturers
    AMS solicited comments on two disclosure options for small food 
manufacturers: (1) A telephone number accompanied by appropriate 
language to indicate that the phone number provides access to 
additional information; and (2) an internet website address. In 
addition, in the case of small food manufacturers, the amended Act 
provides that the implementation date not be earlier than one year 
after the implementation date for regulations promulgated in accordance 
with the NBFDS. AMS proposed to define ``small food manufacturer'' as 
``any food manufacturer with less than $10 million in annual receipts 
but $2,500,000 or more in annual receipts.'' This definition would be 
similar to FDA's proposed rule to extend the compliance dates for 
manufacturers with less than $10 million in annual food sales.
    Comment: Several commenters recognized a need to give small food 
manufacturers the flexibility to disclose in a way that is cost 
effective for a small business, while providing the same level of 
protection for consumers' personally identifiable information. Several 
commenters recommended that the annual receipts threshold defining a 
small food manufacturer be changed to $2,500,000 or less, while other 
commenters suggested the definition should be based on number of 
employees, such as 500 or 100, because the measure of annual receipts 
can become outdated over time. Some commenters requested that the 
implementation date for small food manufacturers be delayed one 
additional year. Some commenters said no manufacturers should be exempt 
from disclosure based on size, with many of those commenters stating 
that the same reasons for disclosing apply regardless of the size of 
the manufacturer.
    AMS Response: AMS believes that annual receipts are a reasonable 
measure in determining the threshold for small and very small food 
manufacturers, and that the definition of ``small food manufacturer'' 
provides flexibility for small entities while providing information to 
consumers regarding the bioengineered status of their foods. AMS notes 
that it considered other revenue cutoffs and other definitions. For 
instance, AMS considered the number of employees as a criterion, but 
found that it could be misleading and difficult to administer given the 
seasonal and part-time nature of some food manufacturing. AMS also 
believes that using total receipts is administratively simpler. In 
addition, AMS believes that the small food manufacturer definition 
should be consistent with the FDA's definition under its nutrition 
labeling standards, which also uses annual receipts. AMS believes that 
delaying implementation for small food manufacturers for the 
statutorily-required 1-year period, but not longer, provides such 
manufacturers with enough time to ensure compliance. AMS understands 
the concern of commenters that any exemption will lead to some level of 
non-disclosure, but notes that the implementation delay for small food 
manufacturers and the very small food manufacturer exemption are 
statutorily required. AMS also notes that any electronic or digital 
link disclosure utilized by small food manufacturers must take the same 
steps as larger manufacturers to protect personally identifiable 
information about consumers.
    Comment: Several commenters recommended that the text accompanying 
telephone numbers and websites be clarified to include a reference to 
bioengineered disclosure so consumers know what type of information the 
text refers to. Some commenters recommended that companies should be 
able to use the same phone numbers and websites already on packaging to 
inform consumers because having a separate phone number or website link 
for bioengineered disclosure would be redundant.
    AMS Response: AMS appreciates that some commenters requested a 
specific reference to bioengineering on small food manufacturer 
disclosures. However, AMS notes that the disclosure wording for small 
food manufacturers matches the statutorily-required on-package language 
required for electronic or digital link disclosures and any telephone 
number disclosures. AMS also acknowledges concerns commenters expressed 
regarding redundant phone numbers or website links. However, AMS 
believes that the rule provides small food manufacturers flexibility in 
disclosing bioengineered food information to consumers while ensuring 
that the manufacturer's chosen disclosure method is consistent with the 
disclosure required for larger manufacturers.

[[Page 65857]]

b. Small and Very Small Packages
    AMS solicited comments on three disclosure options for small and 
very small packages: (1) A modified version of the electronic or 
digital link disclosure (``scan for info''); (2) a modified version of 
the text (``text for info''); and (3) a modified version of the phone 
number (``call for info''). The definition of ``small packages'' and 
``very small packages'' was taken from FDA labeling requirements.
    Comment: Many commenters supported using the FDA labeling 
requirement definitions of ``small packages'' and ``very small 
packages,'' with many of these commenters recognizing the need for 
flexibility for disclosure as small and very small packages have 
limited surface area for labels. Several commenters recommended that 
the disclosures be simplified to include a clear reference to 
bioengineering. Some commenters recommended that even small packages 
should fully disclose BE with a symbol or distinct on-package marking, 
with many such commenters stating that consumers might not have access 
to technology to access links or QR codes.
    AMS Response: AMS appreciates that some commenters requested a 
specific reference to bioengineering on small and very small packages. 
However, AMS notes that the disclosure wording for small and very small 
packages matches the statutorily-required on-package language required 
for other electronic or digital link disclosures and any telephone 
number disclosures, but in a shortened form. AMS acknowledges concerns 
some commenters expressed regarding on-package labeling, even for small 
packages, and concerns with access to electronic or digital disclosure. 
However, AMS believes that the disclosure options available to 
manufacturers utilizing small and very small packages, including 
electronic or digital disclosure, provides needed flexibility to such 
manufacturers while providing disclosure to consumers.
c. Food Sold in Bulk Containers
    AMS solicited comments on the AMS proposal that retailers would be 
responsible for complying with the BE food disclosure of bulk food, and 
that BE food disclosure on bulk foods be allowed to appear using any of 
the options for on-package disclosure, including text, symbol, 
electronic or digital link, or text message, if applicable.
    Comment: Several commenters supported the proposed disclosure 
requirements for food sold in bulk containers, stating that such 
disclosure is necessary to allow consumers to easily identify and 
understand the bioengineered status of the food. Such commenters stated 
that the proposal provided retailers flexibility in the form of 
disclosure. Some commenters expressed that bulk food should not be 
subject to disclosure. While some other commenters stated the proposed 
requirements were reasonable if disclosure was required. In some 
instances, commenters emphasized that retailers should be given maximum 
disclosure flexibility. Some commenters requested that small and very 
small retailers and other businesses should be exempt from the bulk 
container disclosure because the availability and selection of bulk 
food, and therefore the presence of BE in such food, can change daily, 
making disclosure burdensome. Other commenters noted that the bulk food 
disclosure requirements may result in non-BE food being sold or 
commingled with, and disclosed as, BE food.
    AMS Response: AMS agrees that labeling bulk containers is necessary 
to provide consumers with disclosure information. The final rule is 
meant to provide retailers with flexibility in choosing a disclosure 
method. With respect to comments seeking an exemption for small food 
retailers, such as the exemption for very small food manufacturers, AMS 
states that the very small food manufacturer exemption is statutorily 
mandated and cannot be extended to small retailers. To the extent that 
a small retailer is also a very small food manufacturer, it may be able 
to take advantage of the exemption in that instance. Although retailers 
will be required to correctly disclose BE food, AMS believes that 
retailers are already accustomed to ensuring that bulk food appears 
with appropriate signage because AMS already requires Country of Origin 
Labeling on bulk food. Additionally, commingled bulk foods should be 
disclosed in the same manner as commingled food or ingredients in 
packaged or processed food.

15. Voluntary Disclosure

    AMS solicited comments on voluntary BE disclosure. Recognizing that 
some entities may want to provide a BE disclosure to consumers even 
though they are not required to do so, AMS proposed allowing voluntary 
disclosure for food that meets the definition of ``bioengineering'' in 
the amended Act to ensure that entities responsible for disclosure 
would have the option to disclose bioengineering information regarding 
foods not subject to mandatory disclosure. AMS proposed that voluntary 
disclosure methods and requirements (for text, symbol, digital or 
electronic link, or text message disclosure) would be the same as for 
mandatory disclosure.
    Comment: Most commenters agreed that the law allowed voluntary 
disclosure. However, some commenters expressed concern that voluntary 
disclosures could potentially be false or misleading, while others 
stated that voluntary disclosures could lead to a fractured system 
where individual companies make different choices regarding the exact 
same ingredients and consumers would not know what such disclosure 
really means.
    AMS Response: AMS agrees that voluntary disclosure is permissible 
under the amended Act. AMS acknowledges that regulated entities may 
make different decisions regarding voluntary disclosure. However, AMS 
has attempted to provide flexibility to the food industry, along with 
the transparency to consumers that they expect and deserve. Voluntary 
disclosure is available to exempt entities, as described in Sec.  
66.116(a), and to foods in which rDNA material is not detectable but 
are derived from bioengineered crops or foods, as described in Sec.  
66.116(b). AMS believes that the final voluntary disclosure provisions 
give food manufacturers, retailers, and other entities the ability to 
provide consumers with the information to make informed choices.
    Comment: Some commenters agreed with AMS's proposal to permit 
voluntary disclosure for food that meets the regulatory definition of 
``bioengineered food'' but is not subject to mandatory disclosure, so 
long as such disclosure is consistent with the Act. Some of these 
commenters agreed that voluntary text disclosure methods should be 
identical to mandatory disclosure rules to minimize consumer confusion 
and unfair competition, while others recommended that AMS offer 
companies additional flexibility in deciding what language to use for 
voluntary disclosures. These commenters also stated that voluntary 
disclosure should not be permitted for a non-bioengineered food that 
was ``derived from'' or ``sourced from'' a bioengineered crop, and they 
opposed allowing voluntary disclosure for highly refined ingredients 
because consumers would find it challenging to make accurate 
comparisons between similar products where only one bears a voluntary 
disclosure. A subset of these commenters also requested that AMS 
prohibit voluntary disclosure terminology that suggests that food 
derived from animals fed bioengineered feed is therefore considered

[[Page 65858]]

bioengineered. Other commenters stated that AMS should permit voluntary 
disclosure on food from animals consuming feed derived from BE crops. 
Several commenters stated that voluntary claims such as ``non-
bioengineered'' should be prohibited for foods where there is no 
bioengineered alternative.
    AMS Response: AMS agrees that any methods to voluntarily disclose 
bioengineered food should match the disclosure methods available to 
regulated entities to ensure consistent disclosure. AMS also notes that 
food companies and consumers generally agreed that consumers expect as 
much information as possible on the origin of food ingredients. For 
this reason, the final voluntary disclosure provisions allow for a food 
manufacturer, retailer, importer, or other entity to voluntarily 
disclose a food that originates from a bioengineered crop that they 
would otherwise not be required to disclose, using the distinct 
terminology ``derived from bioengineering.'' This terminology includes 
refined ingredients. As noted above, AMS acknowledges that regulated 
entities may make different decisions regarding voluntary disclosure. 
However, AMS believes that allowing voluntary disclosure of these 
ingredients allows food manufacturers, retailers, importers and other 
entities to provide the information that consumers expect in a 
consistent manner. AMS agrees with commenters that stated that 
voluntary BE disclosure is not permitted for foods derived from animals 
fed bioengineered feed. Section 66.116 makes clear that voluntary BE 
disclosure is available in limited circumstances and does not apply to 
any foods that the amended Act excludes from the requirements for 
disclosure. AMS notes that the final rule does not prohibit regulated 
entities from making other claims regarding bioengineered foods. 
Entities seeking to use absence claims should ensure that such claims 
are in compliance with all applicable Federal laws and are otherwise 
truthful and not misleading.
    Comment: Many commenters supported voluntary disclosure for 
products that do not meet the definition of ``bioengineered food,'' 
with some commenters noting that many manufacturers have already 
invested resources into systems of voluntary disclosure. Some of these 
commenters favored the ability to use terminology that is distinctly 
different from the mandatory disclosure language, provided the claims 
are truthful, not misleading, and otherwise consistent with applicable 
Federal law. Some of these commenters favored voluntary disclosure of 
foods that contain an ingredient ``derived from'' or ``sourced from'' a 
bioengineered crop, such as ingredients on the Bioengineered Source 
List. Some of these commenters favored voluntary disclosure of highly 
refined ingredients that are not required to be disclosed but were 
derived from a BE crop, especially if AMS excludes refined ingredients 
from the definition of ``bioengineered food.'' Some commenters 
recommended voluntary disclosures be standardized in a way that is 
rigorous but flexible, with some urging inclusion of a non-exclusive 
list of examples of permitted claims into the rule. A subset of these 
commenters stated that voluntary disclosure should be permitted below 
the threshold or amount of a bioengineered ingredient that triggers 
mandatory disclosure.
    Some commenters favored voluntary disclosure of the amount of 
ingredients that meet the BE food definition, regardless of whether the 
finished food meets the definition. Some of these commenters favored 
voluntary disclosure of a food made using genetic engineering, 
ingredients sourced from gene editing, or use of other technology that 
may fall outside the definition of bioengineering. Some also stated 
that AMS should allow voluntary disclosure with crops that do not meet 
the 85-percent acreage threshold because BE technology has not been 
widely adopted.
    Some of these commenters requested that AMS allow entities to 
identify individual ingredients that meet the definition of BE food 
within the ingredient statement by using an asterisk or other symbol 
next to the ingredient in the ingredient list, regardless of whether 
the finished food meets the definition of BE food. Another subset of 
commenters favored voluntary disclosure permitting the use of an 
asterisk or other symbol to identify ingredients in the ingredient 
statement that fall outside the definition of ``bioengineered food,'' 
such as those derived from gene editing.
    AMS Response: AMS agrees that voluntary disclosure should be 
allowed for foods that do not meet the ``bioengineered food'' 
definition because the rDNA is not detectable, and that such disclosure 
should utilize distinct terminology. As noted above, the final 
voluntary disclosure provisions allow a food manufacturer, retailer, 
importer, or other entity to voluntarily disclose a food that is 
derived from a bioengineered crop that they would otherwise not be 
required to disclose, using the statement ``derived from 
bioengineering.'' AMS has considered comments requesting additional 
disclosure options and understands that some entities may want to 
disclose bioengineered crops or ingredients with more specificity. 
Therefore, when an entity chooses to voluntarily disclose foods derived 
from bioengineering with the statement ``ingredient(s) derived from a 
bioengineered source,'' the word ``ingredient(s)'' may be replaced with 
the name of the specific crops or ingredients that are being disclosed. 
AMS acknowledges that many entities have invested resources into 
alternative voluntary disclosure methods or labels, but AMS believes 
that voluntary disclosure should be consistent to avoid consumer 
confusion. Therefore, an entity utilizing the voluntary disclosure 
provisions must comply with the disclosure requirements for text, 
symbol, digital or electronic link, or text message disclosure, as 
applicable. Nonetheless, as noted above, the final rule does not 
prohibit regulated entities from making other claims regarding 
bioengineered foods, provided that such claims are consistent with 
applicable Federal law.
    Comment: Some commenters favoring voluntary disclosure urged AMS 
not to limit voluntary claims. They stated that AMS should recognize 
that entities may want to provide additional information beyond what is 
required under the disclosure standard, including statements about the 
safety of bioengineering.
    Many commenters stated that AMS's use of the single term 
``bioengineered'' for mandatory disclosure should not preclude the use 
of different terms, including ``genetically engineered'' and ``GMO,'' 
in additional voluntary statements and symbols about foods. However, 
these commenters disagreed about whether AMS should consider these 
terms synonymous and interchangeable with ``bioengineered.'' In 
addition, one commenter suggested that AMS add a provision about 
absence claims that would clarify that claims such as ``not 
bioengineered'' or ``non-GMO'' are permitted on certified organic 
products by nature of their certification and that a food may not be 
considered ``not bioengineered'' solely because the food is exempt from 
mandatory disclosure.
    AMS Response: As noted above, AMS acknowledge that entities may 
want to make additional claims regarding bioengineered foods. However, 
AMS believes that voluntary disclosure should generally be consistent 
to avoid consumer confusion. Therefore, an entity utilizing the 
voluntary disclosure provisions must comply with the disclosure 
requirements for text, symbol, digital or electronic link, or text

[[Page 65859]]

message disclosure, as applicable. Nonetheless, the final rule does not 
prohibit regulated entities from making other claims regarding 
bioengineered foods, provided that such claims are consistent with 
applicable Federal law. With respect to absence claims, NBFDS covers 
mandatory and voluntary bioengineered and BE-derived claims and 7 
U.S.C. 1639b does not provide authority for AMS to establish an absence 
claims regime as part of the NBFDS. AMS notes that FDA (and FSIS 
depending on the food at issue) retain authority over absence claims. 
Entities seeking to use absence claims should ensure that such claims 
are in compliance with all applicable Federal laws and regulations and 
are otherwise truthful and not misleading. With respect to organic 
certification, AMS believes that the amended Act in this respect is 
self-executing.

16. Recordkeeping

    AMS proposed recordkeeping requirements that aligned with the 
disclosure requirements. Commenters generally supported the proposal, 
and several commenters submitted suggestions for clarification.
    Comment: Many commenters appreciated the flexibility provided to 
regulated entities by enabling the use of multiple documentation 
sources. Commenters agreed with the 12 categories of documentation 
identified as appropriate to verify that foods are not BE, though some 
asked that examples of appropriate records be incorporated into the 
final rule. Commenters noted that records should be in any format (hard 
copy or electronic), with records stored at any business location.
    AMS Response: AMS agrees with these comments. Section 66.302(a) 
includes a non-exhaustive list of examples of customary or reasonable 
records that demonstrate compliance with the NBFDS's disclosure 
requirements. That section also clearly states that the records may be 
maintained in electronic or paper format.
    Comment: Many commenters noted that the reasonable or customary 
records already in use throughout the industry should suffice to comply 
with the Act and agreed that the recordkeeping requirements would not 
impose additional costs or burden to existing practices. One commenter, 
however, noted that implementation could result in significant changes 
to existing supply chain documentation practices, increasing complexity 
and cost throughout the value chain.
    AMS Response: As the commenters stated, we do believe that many, if 
not most, regulated entities currently maintain the types of records 
that will satisfy the NBFDS's recordkeeping requirements. Regulated 
entities may make changes to their documentation practices for business 
reasons, but this final rule does not specifically require them to do 
so.
    Comment: A commenter suggested that USDA should require companies 
to maintain records similar to those required by private certification 
entities such as the Non-GMO project (i.e. for a particular crop or 
ingredient, companies must have the DNA testing records, certifications 
by crop suppliers of GE/non-GE content, supply chain documents, 
purchase orders, bills of sale).
    AMS Response: AMS believes that it is efficient to allow companies 
to determine the records that best fit their business needs while 
demonstrating compliance with the NBFDS. If a regulated entity 
maintains one type of records that does so, it serves no purpose to 
require that entity to maintain additional or redundant records.
    Comment: A commenter encouraged AMS to coordinate with other 
Federal agencies to better understand what recordkeeping and records 
access is already required and enforced.
    AMS Response: AMS agrees that recordkeeping and compliance 
requirements under the NBFDS should be consistent with those under 
other AMS programs, such as NOP and PACA, and has incorporated elements 
from each of those programs into the NBFDS. Accordingly, Sec.  66.302 
does not specify the records regulated entities must maintain to 
demonstrate compliance with the disclosure regulations. Instead, as 
with other AMS programs, regulated entities are free to determine for 
themselves which of their customary business records will demonstrate 
compliance and should be maintained.
    Comment: A commenter suggested that bioengineering-specific records 
should be necessary only to support decisions that disclosure is not 
required. Manufacturers typically do not test for or maintain 
documentation on the presence of modified genetic material in food 
unless they are making a ``non-GMO'' claim. A commenter recommended a 
regulated entity should only be required to maintain records about 
foods on the List of Bioengineered Foods for which the regulated entity 
does not make a bioengineered disclosure, including records 
demonstrating that the food is below the 5 percent threshold. The 
commenter also suggested that acceptable records include documentation 
showing the identity preserved seed was produced and handled throughout 
the supply chain in a manner to mitigate the potential for cross-
contact with BE substances in the supply chain.
    AMS Response: To ensure that BE disclosures are consistent with the 
requirements of the NBFDS, AMS is requiring that customary or 
reasonable records be maintained when bioengineered food or food 
ingredients are used.
    Comment: Several commenters suggested that requiring testing 
documentation would be burdensome. Commenters suggested adopting a 
recordkeeping approach based on traceability and segregation rather 
than analytical testing. A commenter sought clarification regarding 
whether regulated entities may entirely rely on traceability records 
rather than testing results to establish compliance with the Act.
    AMS Response: AMS believes that regulated entities should have the 
flexibility to determine what customary or reasonable records they 
should maintain to demonstrate compliance with the NBFDS, because each 
business is different. Section 66.302(a)(4) provides a non-exhaustive 
list of record types that might be used to verify that foods are or are 
not bioengineered. Further, Sec.  66.9 provides that, in order to 
verify that refined foods do not contain modified genetic material, 
regulated entities can choose to rely on traceability or source 
records, validated process verifications, or analytical testing 
results.
    Comment: A commenter suggested that if AMS exempts ingredients from 
disclosure that do not contain modified genetic material, AMS should 
maintain a list of these kind of ingredients. This list would eliminate 
the need for testing and maintaining documentation.
    AMS Response: The final rule does not exempt any specific 
ingredient. Rather, if the regulated entity can demonstrate that no 
modified genetic material may be detected in the food or food 
ingredient, the regulated entity is not required to include a BE 
disclosure for that food or food ingredient. Consequently, AMS will not 
maintain a list of ingredients that do not include modified genetic 
material.
    Comment: A commenter suggested that each BE food manufacturer has 
an independent duty to comply with the standard and its provisions, 
including record[hyphen]keeping, regardless of whether and when USDA 
puts a food product on its lists. Other commenters argued that

[[Page 65860]]

there should be no recordkeeping requirements for foods not on the 
list.
    AMS Response: AMS believes that foods that bear a BE disclosure 
must have records to verify that disclosure. Regulated entities do not 
have to maintain records for foods that are not on the List of 
Bioengineered Foods provided in Sec.  66.6, unless a regulated entity 
has actual knowledge that a food or food ingredient is bioengineered. 
Regulated entities must make BE disclosures when their records show 
that foods or ingredients are bioengineered, regardless of whether 
those foods or ingredients are on the list. If regulated entities have 
actual knowledge that the foods or food ingredients are bioengineered 
Sec.  66.109 requires those foods and foods ingredients to bear a BE 
disclosure, and Sec.  66.302(b)(2) requires regulated entities to 
maintain records for those foods.
    Comment: A commenter agreed with AMS's proposed 5 days to produce 
records (except in the event USDA grants an extension). A commenter 
also suggested that USDA specify business days in its timelines. 
Several commenters disagreed with the proposed five business days' 
notice to produce records. As the NBFDS is intended as a marketing 
standard unrelated to food safety, commenters stated that it is more 
appropriate for record production requirements to be consistent with 
other marketing programs (i.e. the four to six week notice given to 
produce records establishing compliance with FDA menu labeling 
requirements).
    AMS Response: AMS agrees that the final rule should specify that 
the timelines are business days and Sec.  66.304 makes that clear. We 
also believe the timeframes in the final rule provide reasonable notice 
to regulated entities to produce records. If a regulated entity 
requires additional time to provide records, AMS may grant an 
extension. Additionally, the timelines to produce records are 
consistent with other marketing labels administered by AMS. See e.g. 7 
CFR 60.400 (country of origin labeling for fish and shellfish).
    Comment: Several commenters supported the timeline of at least 
three days' notice for an on-site visit, but requested that the final 
rule permit the entity to determine the location of the audit at the 
regulated entity's discretion, including the option to conduct an audit 
at a company's corporate headquarters.
    AMS Response: AMS agrees that entities may maintain records at the 
location that best serves the entity's business needs.

17. Compliance and Enforcement

    Several commenters addressed the Enforcement section of the 
proposed rule, including the complaint process and audit and hearing 
procedures. Most of the comments broadly back the rule text while 
emphasizing that the rule should not authorize USDA to recall any food 
based on whether the food has a BE disclosure or impose civil penalties 
for violations.
    Comment: Several commenters argued that accountability is a key 
aspect of a meaningful labeling claim, that label misuse must trigger 
consequences, and that USDA must prioritize and implement a more 
rigorous audit regimen and make the audit results available to the 
public. However, other commenters agreed with AMS that conducting 
unannounced audits or imposing steep fines for non-compliance issues 
are impractical, and supported the rule on the basis that AMS's 
enforcement authority remain limited as set forth in the amended Act.
    AMS Response: AMS acknowledges various stakeholders' advocacy for 
more rigorous enforcement provisions. We note, however, that the 
amended Act prescribes an enforcement program based on records audits, 
and provides for publicizing the results of an audit after the 
opportunity for a hearing. The amended Act does not authorize civil 
penalties or other remedial or punitive measures. We believe that the 
enforcement process in the final rule that includes a complaint 
process, investigations, audits, hearings of limited scope, and 
resulting notifications to both regulated entity and the public 
sufficiently meets the amended Act's requirement for enforcement.
    Comment: Some commenters requested that USDA more clearly state 
when an audit may occur, so producers are not erroneously subject to 
audit reviews due to baseless complaints. Several commenters asked that 
the rule specify what information is required when filing a complaint. 
One commenter asked that the rule incorporate deadlines for considering 
complaints.
    AMS Response: In response to comments, Sec.  66.402(a) was revised 
to include a description of the information that must be submitted with 
a complaint alleging violation of the NBFDS. To ensure that audits are 
not conducted needlessly, the rule provides that AMS will consider 
complaints about potential violations of the disclosure requirements 
and determine whether audits or other further investigations are 
merited. Complaints will be considered on a case-by-case basis, and 
depending on the complexity of the complaints, some may require more 
time than others to consider, so no deadlines for consideration were 
added. If the complaint merits further investigation, the regulated 
entity will be given notice regarding access to its records. It should 
be noted that the results of all investigations will be publicized, and 
if an audit or investigation finds that the regulated entity is in 
compliance with the disclosure requirement, such finding will be made 
public.
    Comment: Comments regarding audit procedures suggested that while 
USDA's proposal is reasonable, if an audit finds a firm out of 
compliance, then a detailed summary of records should not be released 
to the public to protect confidential business information. Some input 
cites public access concerns to confidential business information of 
product formulations or recipes. Related comments requested the 
regulated entity set the location where the audit should occur. Some 
comments stated a labeling duty should arise only if AMS, while 
conducting audit procedures, determines producer testing is inadequate 
and/or its products really do contain modified genetic material.
    AMS Response: AMS does not release confidential business 
information, consistent with other applicable Federal regulations. AMS 
agrees that entities may maintain records at the location that best 
serves the entity's business needs. Audits can be conducted at the 
regulated entity's place of business. Regulated entities subject to the 
NBFDS should make determinations about disclosures based on records. 
AMS does not intend to test final food products to determine compliance 
with the rule.
    Comment: Several commenters favored notice of non-compliance to 
regulated entities with a 30-day window to object and request a 
hearing, then making results public if a hearing is not requested or 
the Administrator upholds the finding of non-compliance. In addition, 
when auditing a regulated entity to determine whether the entity is in 
compliance with the disclosure standard--either on its own initiative 
or in response to a complaint by a consumer, competitor, state 
regulator, or another party--some commenters suggested AMS should begin 
by contacting the regulated entity and providing a 4 to 6-week period 
for the entity to produce appropriate records. If the company can 
provide records demonstrating the food is not subject to disclosure, 
the entity would be deemed in compliance. Another comment addressing 
timeframes advocated that deadlines for providing records for

[[Page 65861]]

review during audit or investigation be ``business days.''
    AMS Response: AMS deems the goals of disclosure and minimizing 
economic burden whenever feasible is best obtained by NBDFS flexibility 
on maintaining customary business records, while requiring compliance 
with the specified timeframes for furnishing data access to AMS. Since 
all regulated entities are required to maintain customary and usual 
business records to demonstrate compliance, the timeframes provided 
should give entities adequate time to produce appropriate records. 
Nevertheless, the rule provides for extending records access deadlines 
at AMS's discretion. It should also be noted that Sec.  66.304 of the 
rule specifies records production deadlines in terms of business days. 
Thus, the rule declines to impose the timeframes suggested by these 
comments, and provides for an audit process with the more immediate 
investigative and auditing elements specified.
    Comment: Several comments acknowledged the statutory obligation to 
provide the results of an examination or audit, and further asserted 
the rule also needs to ensure any trade secrets or confidential 
commercial information is redacted before providing publicly those 
results, as required under the Freedom of Information Act (FOIA). One 
commenter recommended that results only be posted for six months, as 
afterwards this information has diminishing relevance, but can still be 
accessed via FOIA requests.
    AMS Response: Proprietary business information, including product 
formulation and recipes, will be kept confidential by AMS, consistent 
with FOIA, 5 U.S.C. 552(b)(4). Section 66.406 does not specify how long 
hearing results will be posted. The duration of posting hearing results 
will be in accordance with relevant departmental policy and FOIA.
    Comment: Several commenters suggested that regulated entities 
making ``may contain'' disclosures should be subject to periodic 
compliance audits in a separate mode from other regulated entities.
    AMS Response: The final NBFDS does not provide for ``may contain'' 
disclosures.
    Comment: Several commenters argued a deadline for agency responses 
to complaints should be set, and a standard for when and why further 
investigation is warranted should be established. These comments 
recommended USDA should audit or examine records of manufacturers and 
establish fines for non-compliance violations. In addition, comments 
suggested the audit and hearing process should be undertaken pursuant 
to deadlines to ensure timely resolution, and all results must be made 
public.
    AMS Response: AMS notes the concern, but determines the optimal 
balance between expeditious enforcement and associated aspects, 
including complaints, audit, examination, investigation, hearing and 
appeal, and the disclosure rule's broad mandate to also facilitate 
commerce, is best met by the rule's mix of strict record access 
deadlines with further timeframes for hearing request and appeal. Other 
response deadlines are deemed impractical, as audits or investigations 
are case specific, require individual time to complete, and reflect 
various factors such as extensiveness of a case under review and AMS 
workload.
    Comment: Many commenters recommended that AMS include limitations 
on recall authority in the final rule.
    AMS Response: The amended Act does not authorize product recalls 
based on compliance with the disclosure requirements of the NBFDS. 
Thus, establishing limitations on recall authority is unnecessary.

18. Compliance Dates

    AMS proposed an initial compliance date of January 1, 2020, for all 
regulated entities other than small food manufacturers whose initial 
compliance date would be January 1, 2021. We also proposed allowing 
regulated entities until January 1, 2022, to use up labels that have 
been printed by the initial compliance date. We received many comments 
on this proposal.
    Comment: Several commenters argued that manufacturers have had 
plenty of warning about the NBFDS and that consumers have waited a long 
time for mandatory bioengineered food labeling and should not have to 
wait longer. Other commenters suggested extending compliance deadlines 
for all manufacturers, explaining that label changes are costly and 
time consuming. Still other commenters agreed with the compliance dates 
as proposed, finding that they hit a balance between consumer desire 
for information and industry need for time to make label changes. Other 
commenters advocated that the compliance dates for the NBFDS should 
align with the FDA deadlines related to the recently updated Nutrition 
Facts and Supplement Facts panel.
    Several commenters claimed that manufacturers could theoretically 
continue printing and using non-compliant labels for up to six years 
after the Act was amended to require mandatory BE food disclosure. 
Those commenters urged AMS to allow a shorter compliance period for 
label use-up. Food manufacturer comments generally supported the 
proposed label use-up provision, but they asked that the final rule 
provide a two-year compliance period after the compliance date, rather 
than specifying a hard date, to allow for regulatory delays.
    Commenters also urged AMS to allow the use of labels compliant with 
the preempted State GMO labeling laws during the compliance period. 
Some commenters recommended that AMS allow entities to apply stickers 
or ink stamp disclosures to existing labels to reduce waste. Others 
suggested that AMS incorrectly assumes manufacturers maintain large 
label inventories, asserting that manufacturers order labels in the 
smallest batches economically practical.
    Several commenters requested additional time for regulated entities 
to meet the requirements of the NBFDS because complying with the 
regulatory requirements of the NBFDS will be complex. They explained 
how regulated entities will need time to determine how their specific 
business might be impacted by the labeling and recordkeeping 
requirements of the NBFDS, and the challenges in meeting the proposed 
January 1, 2020, deadline. Several commenters explained how labeling 
costs would not be costly as many companies print labels in minimally 
necessary quantity and print labels themselves using digital equipment. 
Under this view, the proposed January 1, 2020, compliance date would be 
more than enough time for affected entities to make necessary changes 
to achieve compliance.
    Other comments supported the proposed compliance dates. Conversely, 
many commenters felt that the compliance dates and compliance periods 
proposed in the NPRM were too lenient, and that regulated entities 
should be required to immediately change their labels to denote the 
presence of bioengineered food and/or food ingredients. They explained 
that consumers have a right to know that the food they are buying is 
bioengineered and should have access to this information as soon as 
possible.
    AMS Response: Because this rule is a major rule, the effective date 
will be February 19, 2019 to comply with the Congressional Review Act. 
After consideration of the comments, AMS has decided to adopt 
implementation dates, a compliance date, and a compliance period. The 
implementation dates are the same as the proposed

[[Page 65862]]

compliance dates: January 1, 2020, for regulated entities other than 
small food manufacturers and January 1, 2021, for small food 
manufacturers.
    As evaluated in the Regulatory Impact Analysis, AMS recognizes that 
this final rule will be complicated to implement, requiring regulated 
entities to modify their existing business practices, and thus, 
regulated entities will need adequate time to come into compliance. 
Requiring compliance on the rule's effective date or by January 1, 
2020, would be overly burdensome because of the time and cost involved 
in determining which foods require disclosure, identifying the required 
records, modifying labels, and providing the appropriate disclosure on 
the labels. In establishing the compliance dates, AMS determined that 
regulated entities should have greater flexibility, beyond using 
existing label inventories, to transition to the mandatory BE 
disclosure and recordkeeping. Thus, the final rule includes a voluntary 
compliance period and the mandatory compliance date. As explained 
above, regulated entities may voluntarily comply with the requirements 
of part 66 until December 31, 2021. Beginning on January 1, 2022, all 
regulated entities must comply with the requirements. Those periods are 
comparable to the extended compliance date of January 1, 2020, for 
FDA's Nutrition Facts and Supplement Facts Label and Serving Size final 
rules, which is approximately 3.5 years after FDA published the final 
rules. We note that many food manufacturers have complied with the 
FDA's final rules well ahead of the compliance date, and we anticipate 
the same for the NBFDS.

19. Use of Existing Label Inventories

    AMS recognizes that the new NBFDS will require regulated entities 
to make BE disclosures on their labels. The NPRM included a proposal to 
allow regulated entities a period of time to use their existing label 
inventories and AMS received several comments in support and in 
opposition to this proposal.
    Comment: Many commenters supported continuing use of existing label 
inventories until the compliance deadline. They believed that ongoing 
use of existing inventories reflects the best economic, environmentally 
valid option to mitigate waste associated with letting existing label 
stock go unused if not depleted before the deadline. Such feedback 
sought an extension of the compliance deadline until existing stock had 
been exhausted or materially depleted. Several commenters were 
concerned that by providing a blanket exemption for unused label stock, 
AMS would be encouraging noncompliance. One commenter expressed concern 
that the rule has insufficient safeguards to prevent or discourage 
excess labels being printed merely to escape or unduly extend the 
compliance deadline.
    AMS Response: As explained above, AMS is adopting a voluntary 
compliance period until December 31, 2021, to allow regulated entities 
more flexibility. Thus we are not adopting the proposal to allow 
regulated entities to use existing label inventories because it is 
unnecessary.
    Comment: Commenters suggested an alternative website disclosure 
option be available until new labels can be printed.
    AMS Response: The amended Act does not authorize AMS to require an 
independent website disclosure. Regulated entities, however, are free 
to include BE disclosures on their websites.

20. Regulatory Flexibility Analysis

    The Agricultural Marketing Service sought public comment on several 
aspects of the proposed National Bioengineered Food Disclosure Standard 
rule to guide efforts in creating a final rule for implementation. 
Though the proposed rule was not predicted to have a significant 
adverse economic impact on substantial number of small entities, the 
Agricultural Marketing Service conducted an initial regulatory 
flexibility analysis and provided suggestions and analysis of measures 
to reduce the economic effect on small entities. For purposes of the 
regulatory flexibility analysis, AMS solicited comments regarding 
suggested standards to define ``very small food manufacturer'' based 
upon a range of annual receipts. Additionally, AMS sought comments on 
the defining a ``small food manufacturer'' based upon receipts or upon 
number of employees to determine what firms should receive additional 
time to comply with the disclosure requirements of the rule. Comment 
summaries below represent public input on suggested flexibility 
provisions in the proposed rule.
    Comment: Commenters supported a range of definitions for a ``very 
small food manufacturer.'' Some commenters suggested that there be no 
exemption for food manufacturers of any size. Many commenters supported 
the alternative definition analyzed by AMS to narrow ``very small food 
manufacturers'' as those with less than $500,000 in annual receipts. 
Several noted this number would comply with similar standards imposed 
by the FDA for nutrition labeling requirements. Many of these 
commenters cited a desire for increased transparency by labeling more 
products. Some commenters supported the proposed definition of food 
manufacturers with $2.5 million or less in annual receipts, citing the 
high costs of bringing their business into compliance with the rule. 
Several commenters also proposed an alternative definition of food 
manufacturers with less than $1 million in annual receipts. These 
commenters cited the FDA's use of this number to define ``very small 
businesses'' in rules not related to food labeling.
    AMS Response: AMS considered a range of definitions for a ``very 
small food manufacturer'' including the small business definitions 
under FDA and U.S. Census Bureau (USCB) regulations. AMS evaluated the 
impact of applying various definitions by estimating the number of 
firms that would be exempted, the number of products that would likely 
be exempt, and the proportion of annual industry sales that would 
exempt under each exemption level. Exempting manufacturers with annual 
receipts of less than $2.5 million will provide regulatory relief to 74 
percent of food manufacturers and 45 percent of dietary supplement 
manufacturers, while reducing the number of products covered by only 
one percent for both food and dietary supplement manufacturers.
    Comment: To define ``small food manufacturers,'' some commenters 
expressed interest in aligning the definition with Small Business 
Administration standards on number of employees rather than the 
proposed annual receipts definition to promote consistency. Many of 
these commenters supported the AMS alternative definition of businesses 
with fewer than 500 employees. Other commenters suggested defining 
``small food manufacturers'' as those with less than $2.5 million in 
annual receipts.
    AMS Response: The Small Business Administration uses both the 
number of employees and annual receipts to describe business size 
categories. Because food and dietary supplement manufacturers are in 
the manufacturing sector, they are both defined by number of employees 
for purposes of SBA size categorization. However, the firms defined as 
small or very small for purposes of the NBFDS all fall well below the 
SBA definition of small, so we do not feel we need to be bound by that 
methodology. The FDA nutrition labeling definition of small is based on 
sales rather than number of employees, and it is important to remain 
consistent with that definition. We decided to extend the use of 
receipts to define very small food manufacturers because we

[[Page 65863]]

believe it to be administratively simpler, as it does not require 
development of an averaging system to track employees over time 
(especially in firms that may have some degree of seasonality).
    Comment: Some commenters specifically suggested that we define very 
small manufacturer as a manufacturer with annual receipts below 
$2,500,000 or less than 50 employees.
    AMS Response: While we do not have data on manufacturers with less 
than 50 employees (Census has data cutoffs at 20 employees and 100 
employees), we do know that defining very small manufacturers as those 
with less than 20 employees would exempt the same 74 percent of firms 
as receipts less than $2,500,000. So, the compound definition would 
result in significantly more exemptions. When Census uses the term very 
small enterprise, it refers to 20 employees. The fact that the results 
of estimating exemptions at 20 employees and $2,500,000 annual receipts 
are so close gives us confidence that we are not outside of the 
reasonable norm in using this cutoff.
    Comment: Several commenters also sought shorter compliance 
deadlines and no implementation extensions for small food manufacturers 
with more than $2.5 million in annual receipts. Several commenters 
insisted no entities be exempted from the NBFDS, including those 
defined as very small and small food manufacturers.
    AMS Response: AMS appreciates that several commenters insisted no 
entities be exempted from the NBFDS including those defined as very 
small and small food manufacturers, however, the very small food 
manufacturer exemption is a statutory requirement. Congress 
contemplated some level of undisclosed use of bioengineered foods to 
avoid undue burden on very small food manufacturers. Our goal is to 
find a reasonable balance between the number of small firms that are 
exempted and the number of products for which the consumer may not 
receive full disclosure of bioengineered content. By defining ``very 
small food manufacturers'' as those with annual receipts below 
$2,500,000, about 74 percent of food manufacturers are exempt from 
mandatory disclosure, but 96 percent of products will still be covered.
    Comment: Some comments further suggested the proposed exemption for 
very small food manufacturers be extended to very small food retailers 
using the standard in FDA's Menu Labeling Rule applicable only to 
restaurants and similar retail food establishments that are part of a 
chain with 20 or more locations doing business under the same name and 
offering for sale substantially the same menu items.
    AMS Response: The exemption for ``very small food manufacturers'' 
is provided for in the amended Act. The amended Act also provides an 
exemption for all restaurants and similar food establishments. The 
amended Act does not contain a similar exemption for retail 
establishments that are not manufacturers or restaurants. However, the 
portions of grocery stores and similar retail establishments that 
prepare food for immediate consumption (e.g. deli or prepared food 
section) fall within the definition of restaurant and are exempt from 
the disclosure requirement. So unpackaged food in the produce section 
would be subject to disclosure if it meets the definition of 
bioengineered food, while the same product used as an ingredient in a 
sandwich in the deli would not.

21. Regulatory Impact Analysis

    AMS provided a Regulatory Impact Analysis (RIA) with the proposed 
rule that provided details on the expected costs and benefits of the 
rule, and solicited comments.
    Comment: One commenter provided a detailed analysis of the costs 
and benefits of the NBFDS conducted by John Dunham and Associates (JDA) 
(National Bioengineered Food Disclosure Standard: A Review of the 
United States Department of Agriculture's Regulatory Impact Analysis 
(Brooklyn, NY: June 2018)). The JDA assessment estimated much higher 
costs than the AMS analysis, though since it also estimated much higher 
benefits, the JDA analysis concluded that the Federal disclosure 
standard would be the most cost-effective method to provide information 
and minimize inefficiencies caused by inconsistent State-level 
standards. JBA found cost savings of avoiding compliance with twenty 
separate state rules to be $97.3 billion over twenty years and $129.7 
billion cost savings over the same period if all 51 states implemented 
different labeling provisions.
    AMS Response: The JDA assessment provides valuable corroborating 
evidence of the net benefits of the NBFDS. However, AMS could not adopt 
JDA's methodology--and higher cost and benefit estimates--for the RIA 
since this methodology incorporates a broader set of impacts and 
transfers than recommended by OMB for regulatory impact assessment. OMB 
Circular A-4 admonishes agencies to focus on opportunity costs, the 
real expenditure of society's resources, and to avoid counting 
transfers as benefits or costs. JDA uses a partial equilibrium input-
output model (IMPLAN) to estimate the costs of the NBFDS. This model 
estimates the cost of labeling to specific industries/sectors and then 
calculates the multiplier effects on other industries and consumers 
(prices held constant) within the study region. Such an analysis tracks 
transfers rather than the commitment of real resources to compliance. 
OMB Circular A-94 states ``Employment or output multipliers that 
purport to measure the secondary effects of government expenditures on 
employment and output should not be included in measured social 
benefits or costs.'' Moreover, the JDA analysis only tracks half of the 
equation in that it follows the changes in upstream expenditures 
resulting from decreased expenditures by food manufacturers, but does 
not track the increased downstream expenditures related to additional 
income to label printers. While partial equilibrium models can be very 
useful for evaluating local effects of a specific policy and for other 
purposes, its results for purposes of evaluating compliance costs tends 
to inflate the compliance costs by the velocity of money. However, 
because the velocity of money is constant within the region, the 
relative attractiveness of individual policy choices would be the same 
as if those alternatives were evaluated based on opportunity cost 
alone.
    Comment: Many comments addressed the RIA's discussion of signage in 
stores selling fresh produce. These generally disagreed with the 
proposal that retailers be responsible for disclosure in any 
circumstances because manufacturers and suppliers are better equipped 
to provide labelling information and costs will be too burdensome on 
retailers. A common concern identified proposed producer requirements 
regarding modifying contracts for manufacturers to notify end users 
when a product is reformulated (or otherwise changed) as time consuming 
and costly. However, these comments agreed with the RIA that if 
retailers must be responsible for labeling, signage as posted by the 
retailer may be an appropriate method to help keep costs low for 
retailers and provide consistency for consumers. Some comments asked 
the final rule allow retailers to post signage such as a single sign 
near a produce section listing all BE foods in that section, to further 
reduce retailer burden.
    AMS Response: Retailers should not have to take into account costs 
associated with modifying contracts to provide for end user 
notification of

[[Page 65864]]

product reformulations since packaged food will be labeled by the 
manufacturers. For prepared foods sold by grocers in in-store delis or 
salad bars, Sec.  66.5(a) provides an exemption for food served in a 
restaurant or similar retail food establishment from disclosure under 
the NBFDS. Section 66.1 now defines ``similar retail food 
establishment'' as a cafeteria, lunch room, food stand, food truck, 
transportation carrier (such as a train or airplane), saloon, tavern, 
bar, lounge, other similar establishment operated as an enterprise 
engaged in the business of selling prepared food to the public, or 
salad bars, delicatessens, and other food enterprises located within 
retail establishments that provide ready-to-eat foods that are consumed 
either on or outside of the retailer's premises.
    Comment: Some comments further suggested the proposed exemption for 
very small food manufacturers be extended to very small food retailers 
using the standard in FDA's Menu Labeling Rule applicable only to 
restaurants and similar retail food establishments that are part of a 
chain with 20 or more locations doing business under the same name and 
offering for sale substantially the same menu items.
    AMS Response: The exemption for ``very small food manufacturers'' 
is provided for in the amended Act. The amended Act also provides an 
exemption for all restaurants and similar food establishments. The 
amended Act does not contain a similar exemption for retail 
establishments that are not manufacturers or restaurants. However, the 
portions of grocery stores and similar retail establishments that 
prepare food for immediate consumption (e.g. deli or prepared food 
section) fall within the definition of restaurant and are exempt from 
the disclosure requirement. So unpackaged food in the produce section 
would be subject to disclosure if it meets the definition of 
bioengineered food, while the same product used as an ingredient in a 
sandwich in the deli would not.
    Comment: Some comments noted the RIA does not address all market 
impacts under a rule that includes products containing highly refined 
ingredients within the definition of a bioengineered food. The 
expressed concern was this does not consider price impacts of presuming 
refined ingredients not containing modified genetic material are BE 
foods under Position 2, when in fact they are identical to all other 
refined ingredients from conventional crops. Such input recommended AMS 
exclude refined ingredients from definition of BE foods because of 
these unidentified likely significant harmful effects on the 
agricultural value chain. Related comments addressed economic 
consequences of presuming beet sugar is a BE food when it is identical 
to other refined sugar products, noting costs will be greater than the 
RIA estimates. Citing Vermont's labeling law as an example, such 
feedback advised there will be significant market consequences 
resulting from market discrimination resulting in higher consumer 
prices if refined sugar is included in a BE food definition. Farms will 
bear the brunt of the economic impact as there are currently no non-
bioengineered sugar beets grown for sugar production. A commenter 
expands this concern and concludes adverse market and agricultural 
impacts will flow from any RIA presumption that refined food 
ingredients are presumptive BE foods, and will trigger market 
discrimination against such entities. Several comments express the 
broad concern that the RIA and underlying rule presume refined 
ingredients are BE, resulting in competitive harm and undue costs to 
the American farmer. Associated comments asserts the RIA significantly 
understates the costs of the rule to the sugar industry, claiming such 
industry's product is identical to all other refined sugar products, 
but would be selectively burdened under BE standards.
    AMS Response: The commenter is referring largely to incidence of 
costs rather than the estimated magnitude. The RIA did not estimate 
cost increases across the board and does not believe that doing so is 
consistent with recent real-world experience. What the RIA does do is 
assume that manufacturers of 20 percent of products will seek to 
replace BE ingredients with non-BE alternatives. The costs associated 
with trying to avoid a cost differential is, therefore, accounted for 
in the RIA. Nevertheless, the final rule would allow manufacturers to 
demonstrate through records (potentially including test results) that a 
food or ingredient does not contain modified genetic material and would 
not be required to disclose the food or ingredient as BE. The concern 
raised by the commenter has been addressed by the final rule.
    Comment: A number of commenters suggested that there could be 
distributional effects of the NBFDS that were not considered in the 
RIA, including impacts on farmers through segregation costs and 
consumers through higher food prices.
    AMS Response: Potential impacts on farmers arise in the case where 
manufacturers and retailers take the marketing decision to replace BE 
ingredients with their non-BE counterparts. The RIA notes that this 
decision would entail higher costs stretching back to the farm, 
including the extra cost to farmers of supplying non-BE commodities and 
crops include the costs of sourcing non-BE seeds; avoiding cross 
contamination with BE varieties during planting, harvesting and 
transporting; driving to an elevator or handler that is farther away 
than the nearest bulk elevator; and foregoing the benefits of BE 
production. However, as noted in the RIA, these extra costs are 
reflected in price premiums paid to farmers for non-BE varieties. The 
RIA provides current estimates of this price premiums in the United 
States. AMS does not include estimates of impacts on consumer food 
prices in the RIA for two reasons. First, in the case of BE labeled 
products, it is unlikely that manufacturers will pass labeling costs on 
to consumers (manufacturers will not want to jeopardize demand for 
these newly labeled products). Second, in the case of non-BE labeled 
products, there is no evidence that the extra costs for production and 
segregation are any higher than currently paid by consumers who prefer 
non-BE products. As a result, while availability of these products 
could rise as a result of the NBFDS, non-BE prices could remain 
constant or actually decline in the long run as production expands.
    Comment: Some comments found the RIA inadequately assessed societal 
costs associated with electronic and digital disclosure. Such input 
asserted these disclosure methods would ultimately burden consumers who 
would not have sufficient product information, given retailers will be 
reluctant to purchase expensive scanning equipment. Consumers in low-
income rural areas already lacking connective capabilities equivalent 
to urban areas would be especially burdened.
    AMS Response: Potential impact associated with electronic and 
digital disclosure is more fully addressed by comment responses 
directly assessing electronic and digital link disclosures herein. AMS 
strikes a reasonable balance between offering various label disclosure 
alternatives, realizing stakeholder phone, internet or digital access 
may vary by locale, customer expertise, income or related factors. Not 
all BE food packaging and presentation will be amenable to electronic 
or digital disclosure. By offering several disclosure alternatives, AMS 
seeks least burdensome commercial impact consistent with the regulatory 
objective to meet public demand for consistent accurate label 
information.
    Comment: Several comments identified specific burden to small

[[Page 65865]]

entities from labeling and associated requirements, asserting food 
retailers would also be selectively burdened by labelling and other 
regulatory aspects. Other negative input alleged inconsistency and 
conflict with international norms, potentially promoting trade 
disputes.
    AMS Response: On analysis of comments and other data, including 
studies, AMS concludes impacts to producers are mitigated by exemptions 
for qualifying ``small'' and ``very small'' entities, by offsetting 
efficiencies of a uniform standard, and by consideration to 
international norms and trade. The proposed rule subjects importers to 
the same disclosure and compliance regimen as domestic entities. AMS's 
interest is to facilitate imports and exports under arrangements where 
BE labeling is consistent with the NBFDS. Under such arrangements, 
countries could agree to recognize each other's BE labeling 
requirements as comparable. This would allow foreign food products with 
comparable BE labeling to be sold in the US, assuming they meet all 
other labeling and safety requirements. Overall, AMS's economic 
analysis indicates it is likely this rule would not have a significant 
impact on a substantial number of small businesses.
    Comment: A number of commenters referred to an assessment conducted 
by the Grocery Manufacturers Association (GMA) in 2017 that found that 
the exclusion of refined ingredient would result in 78 percent (78%) 
fewer products being disclosed, as opposed to USDA's assessment that 
exclusion of refined ingredients would result in 25 percent (25%) fewer 
products being disclosed.
    AMS Response: The GMA assessment considered a categorical exemption 
of all refined ingredients. In contrast, USDA's estimate for scenario 2 
considered an exemption for only sugar and oil and in scenario 3, an 
exemption for ingredients that test negative for rDNA (not a blanket 
exemption of all refined ingredients). In both cases, since the 
exemptions are smaller than assumed in the GMA study, it is reasonable 
to expect that the number of exempted food products would also be 
smaller. In addition, the USDA study considered ``nesting'' when 
calculating the impact of exempting refined ingredients such as sugar. 
Nesting recognizes that most labeled foods contain more than one 
ingredient. If products are not required to label due to the presence 
of sugar, for example, that does not mean that the product itself does 
not need to be labeled if it contains other ingredients that are not 
part of the categorical sugar exemption. For example, just looking at 
the first product that shows up on a search of food products that 
contain ``sugars'' as an ingredient in LabelInsight, we find a breaded 
chicken product. The first few ingredients listed on the product label 
include Salt, Spice, Sugars, Water, Onion Powder, Garlic Powder, 
Dextrose, and Modified Food Starch. The categorical exemption would 
apply to Sugars and Dextrose, but the product would still require 
disclosure to the presence of Spice and Modified Food Starch. Nesting 
results in fewer products being exempted from labeling than might be 
assumed from a count of refined ingredients. Since the USDA and GMA 
assessments are based on two different data sets, it is impossible to 
directly compare results.
    Also, the two estimates are based on different data sources. USDA 
relied on ingredient data reported on food labels while GMA relied on a 
survey of its membership. It is not surprising that the two approaches 
might come up with somewhat different results.
    That said, the final version of the RIA takes another look at which 
ingredients are likely to be exempt under the condition that mandatory 
disclosure only applies to foods or ingredients that meet the statutory 
definition of bioengineering. This reevaluation has led us to remove 
some ingredients that we had assumed would universally require 
disclosure. This has resulted in an estimate that is closer to the GMA 
estimate.
    Comment: One commenter specifically took issue with the USDA's use 
of shielding to explain why administrative costs could increase for 
products still required to disclose in the instance of an exemption of 
refined products. The commenter argued that since manufacturers look at 
the BE status of all ingredients when they develop a new product the 
existence of low administrative costs ingredients does not obviate the 
need for manufacturers to understand the BE status of administratively 
higher cost ingredients especially for products seeking non-GMO project 
certification.
    AMS Response: AMS disagrees with the commenter. First, the rule 
requires a disclosure determination to be made for existing as well as 
new products and the RIA is based exclusively on the costs associated 
with making this determination for existing products. As the commenter 
points out, making this determination for new products is lower because 
the BE status of ingredients is something that manufacturers do today 
as a matter of course. However there is no reason to believe that a 
product that is already on the market looked at the issue in as much 
detail as new products might. Manufacturers of existing products would 
therefore need to evaluate their ingredients and would be able to stop 
doing so as soon as they discovered an ingredient that caused the 
product to require disclosure. The fact that manufacturers may 
voluntarily subject themselves to costs beyond what the rule requires 
is not relevant to the RIA. Also, the RIA assumes that products that 
have obtained non-GMO project certification incur no costs as a result 
of this rule.
    Comment: One commenter noted that the RIA makes many references to 
uncertainty in the estimates, and often provides upper and lower 
estimates to account for some level of uncertainty. The commenter goes 
on to note, however, that the RIA does not include a formal uncertainty 
analysis.
    AMS Response: As noted by the commenter, in the RIA we provided 
upper and lower bound estimates where necessary to account for 
uncertainty. We incorporated more formal uncertainty analysis where 
distributional information was available, such as for the estimates for 
printing and label design costs (the upper bound represents the 95th 
percentile of the distribution of costs estimated by FDA for its 
Labeling Cost Model while the lower bound represents the 5th 
percentile) and for the analytical testing costs for bioengineered 
ingredients (with lower bound estimate set at the 5th percentile of the 
cost distribution and the upper bound at the 95th percentile, as per 
FDA's Labeling Cost Model).
    Comment: One commenter stated that for the most part, the RIA is 
based on quality data but that the supporting documentation for the RTI 
(FDA) labeling cost model was not available to the public.
    AMS Response: AMS posted the description of the FDA Labeling Cost 
Model in the supporting documentation for the rule.
    Comment: One commenter stated that OMB requires a discount rate of 
0.2 percent and that because AMS used discount rates of three percent 
and seven percent, the discounting performed for the RIA was not 
properly conducted.
    AMS Response: AMS used the discount rates specified in OMB Circular 
A-4 that are still commonly used for regulatory analysis. The 0.2 
percent discount rate referenced in the comment is from OMB Circular A-
94 and represents the cost of money to the Federal Government to be 
used in cost-effectiveness analysis of Federal projects, not the 
average before-tax rate

[[Page 65866]]

of return to private capital in the U.S. that is appropriate for 
regulatory analysis.

VI. Rulemaking Analyses and Notices

A. Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3520), AMS published a 60-day notice on reporting and 
recordkeeping requirements related to the proposed NBFDS published in 
the Federal Register on May 4, 2018. AMS submitted a request to OMB on 
May 7, 2018, for approval for a new information collection totaling 
7,973,566 hours. OMB subsequently assigned reference number 0581-0315 
to the reporting and recordkeeping requirements. As part of the 
preparation of the final rule, AMS has recalculated the information 
collection estimates based on the final requirements of the NBFDS. 
Based on this, AMS is requesting approval of a new information 
collection totaling 20,512,720 hours. Comments received on the 
reporting and recordkeeping burden are referenced below.
1. Comments on Information Collection and Recordkeeping
    AMS solicited comments concerning the information collection and 
recordkeeping required as a result of this rule. Specifically, AMS 
wanted to know if the proposed collection of information had a 
practical use and if the information would be needed for the agency to 
properly conduct its functions. AMS requested feedback regarding its 
estimate of the burden the proposed information collection and process 
would pose on businesses. The proposed rule also sought comments on 
ways to enhance the quality, utility, and clarity of the information to 
be collected, as well as ways to minimize the burden of the information 
collection on those required to respond.
    Comment: Many commenters generally support the required collection 
of records to demonstrate compliance with the NFBDS, including the 
requirement for entities to maintain records for two years after a 
food's distribution for retail sale. Many commenters also agree that 
required records should rely on existing records that are customary, 
reasonable, and regularly kept and maintained in the ordinary course of 
business, and urge AMS to retain these principles in the final rule. 
One commenter asked for clarification on the rule's definition of 
``sufficient detail.''
    While many commenters support using the twelve categories of 
documentation AMS identified as appropriate to verify that foods are 
not bioengineered and not subject to disclosure, several have requested 
AMS offer flexibility in the types of records required to document BE 
status as long as the documentation can sufficiently prove that foods 
are not subject to mandatory disclosure. A few commenters suggest 
supplier documentation is the most important recordkeeping component 
since the disclosure requirement for finished products are based on how 
the component ingredients are derived. For foods subject to disclosure, 
some commenters believe that maintaining a record documenting the 
presence of BE ingredients should be sufficient.
    Many commenters support AMS's decision to exempt foods certified 
under the National Organic Program from BE disclosure so manufacturers 
of these certified products would not be required to maintain 
additional records to demonstrate a certified product is not 
bioengineered. Similarly, a commenter suggests AMS should also exempt 
from disclosure any foods verified as ``non-GMO'' through commercial 
verification systems, like the Non-GMO Project, whose standards may 
meet or exceed the proposed BE standard. The commenter further suggests 
this type of verification suffices as records that establish a food or 
ingredient is not bioengineered. For other exempt foods--such as those 
derived from animals fed BE food--another commenter strongly agrees no 
records should be required from the entity producing these products.
    Some commenters believe BE labeling requirements on BE products on 
the ``highly adopted'' or ``not highly adopted'' lists are appropriate 
and what Congress intended. These commenters also believe that, as 
proposed, the BE recordkeeping requirements inappropriately place the 
burden of proof on conventional food producers that have chosen not to 
use or produce BE products. The commenters contend the expense, time 
and responsibility of additional recordkeeping should fall on the 
entities that use or produce BE products, not those who have chosen not 
to use BE products. As such, they suggest the rule provides for an 
alternate approach to the currently proposed recordkeeping burden. The 
new approach would allow AMS to challenge foods not properly labeled as 
BE.
    Several commenters support the rule's requirement for imported 
foods to provide the same recordkeeping documentation as food produced 
domestically. According to this input, without such requirements, U.S. 
food manufacturers would be at a profound disadvantage to international 
food manufacturers. Another commenter suggests the rule may not need to 
require a mutual recognition agreement when a prior processing 
agreement exists between the U.S. and a foreign country, unless a BE 
ingredient is introduced to a product during processing in that foreign 
country. For example, when products are shipped to a foreign country 
for further processing, shipped back to the U.S. for secondary 
processing, and then sold in the U.S. market, the mutual recognition 
agreement would not be needed.
    AMS Response: AMS appreciates the range of comments provided 
regarding recordkeeping requirements resulting from this rule and notes 
commenters generally support AMS's need to collect customary business 
records to establish a regulated entity's compliance with the NBFDS. 
AMS agrees that regulated entities may need flexibility in the types of 
records required to document compliance with the NBFDS. As such, AMS 
does not specify the records that must be maintained, but allows 
regulated entities discretion in determining what records will 
demonstrate compliance. AMS also notes that, for the purposes of this 
rule, any food manufacturer, importer or retailer offering for retail 
sale foods on the List of Bioengineered Foods is considered a regulated 
entity. Regulated entities must maintain records on foods that trigger 
a BE disclosure and to verify food without a disclosure is not 
bioengineered. Section IV.A.1 further details AMS's position on 
recordkeeping.
    Comment: Commenters suggest, in the final rule, AMS establish an 
exemption from the NBFDS for raw fruits and vegetables, consistent with 
the exemption in FDA's traditional nutrition facts panel (NFP) labeling 
requirements. Commenters contend labeling raw fruits and vegetables is 
not practical and would be burdensome to the regulated entities. They 
further explain fruits and vegetables of the same variety may be 
sourced from different suppliers and are often mixed together in large 
bins. As such, requiring BE disclosure for these unpackaged foods would 
be difficult and may lead to consumer confusion.
    In addition, commenters suggest AMS should explore other methods of 
traceability similar to those used by major U.S. trading partners. 
Because highly refined products may not always have detectable modified 
genetic material, this input suggests AMS seek recordkeeping, reporting 
and compliance methods that validate a

[[Page 65867]]

food's BE status based on the entire food production process that led 
to the final product's labeling.
    AMS Response: AMS appreciates comments suggesting raw fruits and 
vegetables be excluded from the BE disclosure requirements. AMS 
believes that such an exemption would conflict with the statutory 
requirement that foods subject to FDCA's labeling requirements are 
subject to disclosure under the NBFDS. We also appreciate that some 
commenters would like AMS to explore other traceability methods to 
detect modified genetic material in highly refined products, thereby 
causing the products to be subject to BE disclosure. However, AMS 
believes that determinations about what constitutes BE food for the 
purposes of the NBFDS should focus on the characteristics of the 
biotechnology product and not on the process by which the product is 
created. As such, highly refined products remain outside the scope of 
products subject to mandatory BE disclosure.
    Comment: Many commenters did not specifically address accuracy of 
the estimated cost of compliance. A commenter averred prescriptive 
requirements such as the mandatory placement of disclosure text or 
symbol would add significant costs for label redesign or revamping of 
handling practices. The commenter suggests BE disclosure requirements 
remain adequately flexible to facilitate practical implementation.
    AMS Response: AMS agrees that regulated entities may need some 
flexibility when determining the size and placement of a BE disclosure. 
The NBFDS allows flexibility for both. For further details regarding 
AMS's position on the appearance and placement of the BE disclosure, 
refer to Section III.A.3 and Section III.A.4 of this rule, 
respectively.
    Comment: Most commenters believe foods on or containing ingredients 
from either of the proposed lists of commercially available foods are 
BE or contain BE ingredients, thereby requiring no additional 
documentation. Many also believe AMS should not create recordkeeping 
requirements for foods not on nor containing ingredients from either 
list. Other feedback supports the proposed presumption foods on or 
containing ingredients from either list are BE or contain BE 
ingredients, unless the regulated entity maintains records to 
demonstrate non-disclosure is appropriate.
    AMS Response: AMS agrees that regulated entities may be able to 
demonstrate compliance with the NBFDS for foods on or containing 
ingredients from the consolidated List of Bioengineered Foods using 
their customary business records. AMS contends that, for the purposes 
of this rule, any food manufacturer, importer or retailer offering for 
retail sale foods on the List of Bioengineered Foods is considered a 
regulated entity. As stated in an earlier comment response, regulated 
entities must maintain records on foods that trigger a BE disclosure 
and must keep records to verify food without a disclosure is not 
bioengineered. Section IV.A.1 further details AMS's position on 
recordkeeping.
    Comment: In the proposed rule, AMS provided flexibility to 
responsible record keepers by enabling use of multiple documentation 
sources. As such, several commenters asked that AMS incorporate 
examples of appropriate records into final rule text. Suggested 
examples include identity preserved (IP) certification, supplier 
affidavits, continuing guarantees, and statements from suppliers. 
Commenters also requested AMS clarify in the final regulation that 
appropriate records to support non-disclosure when foods contain 
ingredients from either list are not limited to testing results and 
should include traceability records. For example, if a regulated entity 
does not make a disclosure for a food containing a soy ingredient, it 
could maintain supplier records demonstrating non-BE soybeans were used 
in a product or records showing the soy ingredient accounts for less 
than 0.9% of total product weight. The commenter suggested that by 
recognizing traceability records are sufficient to support non-
disclosure, AMS would help ensure recordkeeping requirements are 
consistent with records customary or reasonable to maintain in the food 
industry. The commenter contended food manufacturers generally do not 
maintain or receive from their suppliers testing records for 
ingredients or finished foods that demonstrate presence or absence of 
rDNA.
    One commenter asserted AMS should clarify what ``supplier 
attestations'' refers to when regulated entities opt not to disclose 
under the rule, but choose to rely on such attestations. This input 
suggests ``supplier attestations'' is intended to refer to contractual 
documents, confirmations or other certifications entered into or 
provided by suppliers, and does not require buyers to engage in 
supplier verification programs for a marketing rather than food safety 
standard which would impose significant costs and regulatory burdens.
    Some commenters requested AMS clarify disclosure and recordkeeping 
requirements for foods included on the commercially available, but not 
highly adopted list, be more narrowly focused on cultivars directly the 
result of bioengineering. More specifically, several commenters 
highlighted the need for AMS to avoid consumer confusion and incorrect 
labeling of certain cultivated varieties of apples by clarifying 
correct application of the definition of cultivar.
    A commenter urged AMS to adopt the 5% total BE food substance 
option in the final rule as the threshold for exempting foods from BE 
disclosure. Since records for BE status of ingredients, as well as 
amounts of any ingredients present in a food already exist as common 
business practice, this option would not present an excessive 
recordkeeping or cost burden on regulated entities.
    AMS Response: AMS appreciates the range of comments offering ways 
to improve the information collection and recordkeeping processes. For 
information regarding recordkeeping flexibilities, see our responses to 
other comments in the Paperwork Reduction Act section. In addition, 
Section IV.A.1 further details AMS's position on recordkeeping.
    Comment: Commenters generally support many of the proposed rule's 
recordkeeping and information collection requirements. Some, however, 
identified requirements that would pose undue burden on entities; 
others proposed ways AMS could minimize the burden. Several commenters 
proposed AMS simplify recordkeeping requirements for food manufacturers 
by establishing one consolidated list of BE foods. Some requested any 
information necessary for verification of compliance be limited to 
protect confidential business information like product formulations and 
recipes. Since organic food processors and manufacturers regularly 
secure written verification from ingredient suppliers that highly 
refined sugars and oils are not derived from genetically engineered 
crops or organisms, commenters from that industry contend stakeholders 
across the food supply chain have already developed necessary 
recordkeeping systems to provide this type of verification regarding 
ingredients. Thus, including these types of ingredients under labeling 
disclosure requirements would not introduce new burdens or 
complications for the food industry.
    Other commenters suggest it would be burdensome to require entities 
provide specific attestation or testing

[[Page 65868]]

documentation from suppliers to confirm a highly adopted crop is BE 
based on merely being on the list of highly adopted, commercially 
available BE foods. Several other commenters believe 5 business days is 
not a reasonable timeframe for companies to produce records to AMS on 
the bioengineered status of a food/food ingredient; instead, they 
suggest AMS should provide businesses four to six weeks to respond to 
records requests. Some input explains the longer timeframe, consistent 
with FDA's Menu Labeling requirements, recognizes the Disclosure 
Standard is a marketing standard not requiring the priority of a health 
and safety concern. Another commenter states maintaining records for 
two years is burdensome for regulated entities, and suggests the final 
rule should establish a one year maintenance period as is the case for 
COOL.
    Some commenters stated analytical testing to detect presence of 
modified genetic material would present undue financial burden on the 
industry and unnecessarily increase food prices without significantly 
increasing reliability of proof in support of non-disclosure. Such 
input encouraged AMS to allow recordkeeping to focus on traceability 
and segregation, rather than analytical testing. Another commenter 
states unless a ``non-GMO''-type claim is made about a food or 
ingredient, manufacturers do not typically test for, nor maintain 
documentation about, genetic material content. The testing is costly 
when performed and it is cost-prohibitive to buy equipment and hire 
skilled laboratory personnel for in-house testing. According to the 
commenter, screening tests, which are less expensive, are often 
unreliable or inappropriate for certain products.
    If AMS decides to exempt refined ingredients from disclosure when 
they do not contain modified genetic material, one commenter suggests 
AMS establish and maintain a list of refined ingredients considered to 
be devoid of modified genetic material. This list would significantly 
reduce the burden on entities and eliminate the need for testing and 
maintaining documentation to demonstrate an ingredient is refined.
    Some commenters believe AMS efforts to align effective date of this 
rule with compliance date for FDA's Nutrition Facts and Supplement 
Facts label final rule will have limited effectiveness in reducing cost 
and burden of this rule. In their view, implementation of this rule 
will require completely separate cost and burden.
    Some commenters request the proposed rule not require complicated 
calculations to demonstrate if a food falls below the set threshold 
level to be maintained. The commenters further explain dairy 
manufacturers were subject to such requirements to demonstrate 
compliance with Vermont's disclosure law. According to commenters, 
these records were time-consuming and extremely burdensome to compile.
    AMS Response: AMS appreciates the many comments submitted offering 
ways to minimize the recordkeeping burden resulting from this rule, and 
we have made changes to the final rule to reflect commenters input. We 
consolidated the List of Bioengineered Foods to simplify recordkeeping 
requirements. We agree that recordkeeping requirements under the NBFDS 
should align with those under other AMS programs to minimize the 
recordkeeping burden on regulated entities, and we have provided 
recordkeeping flexibilities, as outlined in responses to previous 
comments in this section.

B. E-Gov

    USDA is committed to complying with the E-Government Act by 
promoting the use of the internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

C. Civil Rights Review

    AMS has considered the potential civil rights implications of this 
rule on minorities, women, or persons with disabilities to ensure that 
no person or group shall be discriminated against on the basis of race, 
color, national origin, gender, religion, age, disability, sexual 
orientation, marital or family status, political beliefs, parental 
status, or protected genetic information. This review included persons 
that are employees of the entities that are subject to these 
regulations.
    A 60-day comment period was provided to allow interested persons to 
respond to the proposed rule. All written comments received in response 
to the proposed rule by the date specified were considered. A number of 
commenters expressed concern that the proposed labeling options were 
discriminatory in some fashion. The major issue expressed was that the 
lack of a smart phone would inhibit older, more rural, poorer, and/or 
minority groups from being able to access bioengineering information 
that is not visible and available directly on the packaging. Some 
commenters argued that the USDA study, conducted by Deloitte, on access 
to bioengineering disclosures using electronic and digital link 
disclosures showed that the alternatives to on-package labeling (QR 
codes, website URLs, text messaging numbers, and other alternatives) 
will be ineffective and are discriminatory. A commenter cited a Pew 
Research Center study from 2015 which purportedly shows that of the 
U.S. citizens owning a smartphone at the time, 23% had to cancel or 
suspend service due to financial constraints. The same study, being 
cited by the same commenter, is said to show that ``African Americans 
and Latinos are around twice as likely as whites to have canceled or 
cut off their smartphone service.''
    Other commenters argued that there are access problems even for 
those who have a smartphone. Some asserted that where stores don't 
provide internet access, it could be difficult for people to access 
information provided by alternatives to on-package labeling. A 
commenter pointed to the 2015 Pew Research data alleging that African 
Americans have disproportionate functionality problems with 
smartphones, some of which is related to ``running out of data during 
the month.'' It was also pointed out that the Deloitte report showed 
certain tribal lands had limited broadband capabilities, thus 
preventing consumers in those areas from obtaining adequate access to 
the BE disclosure outside of on-package labels.
    This final rule does not require regulated entities to alter their 
operations in ways that could adversely affect such persons or groups, 
in a discriminatory fashion. Although the electronic or digital 
disclosure option is mandated by the amended Act, the amended Act does 
not require regulated entities to utilize that disclosure option. 
Rather, the amended Act allows regulated entities to select a 
disclosure method from among several options (text, symbol, electronic 
or digital link, or text message). Regulated entities that select the 
electronic or digital disclosure option must also provide options for 
the consumer to access the BE disclosure, regardless of time of day, by 
calling a phone number. Requiring the electronic or digital disclosure 
to be accompanied by a telephone number that consumers may call to 
access the BE disclosure provides the disclosure in an accessible 
manner. Accordingly, this final rule offers several distinct avenues of 
compliance for regulated entities that can be catered to the needs of 
their consumers. Applying this approach does not deny any persons or 
groups the benefits of the program or subject any persons or groups to 
discrimination.

[[Page 65869]]

D. Executive Orders 12866, 13563, and 13771

    USDA is issuing this rule in conformance with Executive Orders 
12866 and 13563, which direct agencies to assess all costs and benefits 
of available regulatory alternatives and, if regulation is necessary, 
to select regulatory approaches that maximize net benefits, which 
include potential economic, environmental, public health and safety 
effects, distributive impacts, and equity. Executive Order 13563 
emphasizes the importance of quantifying both costs and benefits, 
reducing costs, harmonizing rules, and promoting flexibility.
    USDA estimates that the costs of the NBFDS would range from $569 
million to $3.9 billion for the first year, with ongoing annual costs 
of between $51 million and $117 million. The annualized costs in 
perpetuity would be $68 million to $234 million at a three percent 
discount rate and $91 million to $391 million at a seven percent 
discount rate.
    These cost estimates represent the cost of the standard relative to 
a baseline in which there are no requirements for the labeling of food 
containing bioengineered foods or ingredients.
    The NBFDS is not expected to have any benefits to human health or 
the environment. Any benefits to consumers from the provision of 
reliable information about BE food products are difficult to measure. 
Under some, but not all, potentially informative analytic baselines 
(see the accompanying regulatory impact analysis for this rule), a more 
clear-cut benefit of the NBFDS is that it eliminates costly 
inefficiencies of a state-level approach to BE disclosure. We estimate 
the size of these benefits by focusing on Vermont's BE labeling law 
because that law had been signed into law before the NBFDS was passed. 
The annualized net benefit from replacing the Vermont BE labeling law 
would be between $40 million and $49 million at a three percent 
discount rate and between $70 million and $84 million at a seven 
percent discount rate. This is our best estimate of these potential 
benefits, but we note that there is uncertainty in these estimates 
given the difficulty in predicting how implementation of the Vermont BE 
labeling law would have occurred absent the prospect of a national 
labeling law.
    This rule meets the definition of an economically significant 
regulatory action under Executive Order 12866, as it is likely to 
result in a rule that would have an annual effect on the economy of 
$100 million or more, and thereby triggers the requirements contained 
in Executive Order 13771. See OMB's Memorandum titled ``Interim 
Guidance Implementing Section 2 of the Executive Order of January 30, 
2017, titled `Reducing Regulation and Controlling Regulatory 
Costs'[thinsp]'' (February 2, 2017).
    The status of the rule under Executive Order 13771 depends on its 
costs relative to the regulatory requirements that would have applied 
to the regulated community before enactment of the new Federal 
standard. The analysis presented here finds that in comparison to a 
state-level approach to mandatory BE labeling, the NBFDS would impose 
less cost on the regulated community and would therefore be 
deregulatory. While acknowledging the uncertainties associated with 
estimating the magnitude of the actual reduction in costs, we use the 
midpoint of the estimated net benefits as an approximation of the 
primary estimate of annualized savings in perpetuity. This results in 
an estimated annual savings of $77 million using a discount rate of 
seven percent ($45 million using a discount rate of three percent).

E. Final Regulatory Flexibility Analysis

1. Introduction
    We have examined the economic implications of this rule as required 
by the Regulatory Flexibility Act (5 U.S.C. 601-612). If a rule has 
significant economic impact on a substantial number of small entities, 
the Regulatory Flexibility Act requires agencies to analyze regulatory 
options that would lessen the economic effect of the rule on small 
entities consistent with statutory objectives. We have concluded that 
the rule will not have a significant economic impact on a substantial 
number of small entities.
2. Economic Effects on Small Entities
    Guidance on rulemaking recommends SBA's definition of small 
business as it applies to the relevant economic sector, which for this 
rule are NAICS 311, 312, and 325, with indirect effects on sectors 115, 
424, 445 and 446. SBA recently revised the definition for small 
businesses. Under SBA's definition of small firms within the each 6-
digit NAICS code expected to be impacted by the rule--164,329, or 98 
percent of 166,975 total firms. With the new SBA definitions of small 
business, the share of potentially affected manufacturers now 
classified as small is 96 percent (26,213 out of 27,176 total 
manufacturing firms).
3. Definition of Small Business
    The definition of small business for the Regulatory Flexibility 
Analysis are those codified in 13 CFR 121.201.
4. Coordination of Definition of Small Food Manufacturers With FDA 
Definition
    For the purposes of the implementation of the delay for ``small 
food manufacturers,'' AMS proposed that USDA adopt a definition of 
small food manufacturer that would align with FDA. AMS has attempted to 
be as consistent as possible with other similar existing regulations in 
order to minimize the cost burden on the industry.
    The definition of small food manufacturer is ``any food 
manufacturer with annual receipts of at least $2,500,000, but less than 
$10,000,000.'' This definition would be similar to FDA's criteria for 
allowing an extended compliance period in its recent revision 
requirements for food labeling (Docket numbers FDA-2012-N-1210 and FDA-
2004-N0258).
    The final rule maintains this definition of small food 
manufacturer.
    This maintains consistency between the NBFDS and the FDA nutrition 
labeling requirements. The delay provided to small food manufacturers 
applies only to the initial compliance date. Where the final rule 
provides additional time to use up existing label stock the deadline 
for exercising this additional flexibility is the same for all 
manufacturers regardless of size.
5. Exemptions for Very Small Food Manufacturers
    AMS proposed to define very small food manufacturer as ``any food 
manufacturer with annual receipts of less than $2,500,000.'' We also 
analyzed the following scenarios for comparison:
    Alternative A: A food manufacturer with less than $500,000 in 
annual receipts.
    Alternative B: A food manufacturer with less than $5,000,000 in 
annual receipts.
    Currently, there are roughly 18,530 businesses that would fall into 
the very small category under the proposed definition; 11,170 
businesses that would fall into the very small category under 
Alternative A; and, 20,440 businesses that would fall into the very 
small category under Alternative B. This is out of an estimated 27,176 
total firms.
    Table 3 presents data showing the number of establishments by size 
classification according to the different definitions of very small, 
small, and large manufacturers.

[[Page 65870]]



                      Table 3--Number of Manufacturers for Alternative Size Classifications
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
          Size classification options for manufacturers                           Number of firms
----------------------------------------------------------------------------------------------------------------
All manufacturing establishments................................                      27,176
----------------------------------------------------------------------------------------------------------------
                                                                    Very small         Small           Large
----------------------------------------------------------------------------------------------------------------
Small Firm Criteria:
    Firms with less than $10 million in annual food sales (FDA               N/A          23,029           4,147
     definition)................................................
Very Small Firm Alternatives:
Very small alternative A:
    Firms with less than $500,000 in annual receipts............          11,527          11,502           4,147
Very small alternative B:
    Firms with less than $5,000,000 in annual receipts..........          21,581           1,448           4,147
Very small proposed definition:
    Firms with less than $2,500,000 in annual receipts..........          19,455           3,574           4,147
----------------------------------------------------------------------------------------------------------------

6. Costs to Small Entities
    We compared the maximum annualized cost in our analysis of the rule 
to the revenue of firms in each size category (by receipts) using 2012 
Census data. There was no covered size category of firms for which 
costs were greater than one percent of revenues.
7. Summary
    Under the Regulatory Flexibility Act (5 U.S.C. 606(b)), we conclude 
that the rule will not have a significant economic impact on a 
substantial number of small entities. The statutory exemption of very 
small food manufacturers further reduces the impact on the entities 
that are likely to face the highest costs relative to revenue.

F. Executive Order 13175

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, Consultation and Coordination with Indian Tribal 
Governments. Executive Order 13175 requires Federal agencies to consult 
and coordinate with tribes on a government-to-government basis on: (1) 
Policies that have tribal implications, including regulations, 
legislative comments or proposed legislation; and (2) other policy 
statements or actions that have substantial direct effects on one or 
more Indian tribes, on the relationship between the Federal Government 
and Indian tribes, or on the distribution of power and responsibilities 
between the Federal Government and Indian tribes.
    AMS has assessed the impact of this rule on Indian tribes and 
determined that this rule would not, to our knowledge, have tribal 
implications that require tribal consultation under E.O. 13175. AMS 
hosts a quarterly teleconference with Tribal Leaders where matters of 
mutual interest regarding the marketing of agricultural products are 
discussed. Information about the congressionally mandated NBFDS was 
shared during those quarterly calls, and Tribal leaders were invited to 
provide input into the development of the new national Standard. As 
well, in the NPRM that was published on May 4, 2018 (83 FR 19860), AMS 
invited Tribal Leaders to consult on the Tribal implications of the 
proposed rule. AMS received no requests for a consultation. On June 21, 
2018, AMS hosted a quarterly conference call with Tribal 
representatives to update them on upcoming policies, regulations, 
programs, and services that could have a substantial effect on or 
benefit to Tribes. During the call, AMS provided fourteen (14) Tribal 
representatives with an overview of the proposed rule and extended 
opportunities for questions or requests for more information. At that 
time, none were expressed.
    On July 3, 2018, the comment period for the proposed rule closed. 
None of the approximately 14,000 responses received on the NPRM were 
identified as being submitted from Tribal representatives. AMS did 
receive public comments in response to the NPRM's request for input 
about the use of electronic or digital disclosures to convey 
information about bioengineered food content to consumers. Commenters 
asserted that Native Americans, along with elderly Americans and other 
U.S. minority populations, may lack adequate access to smartphone 
technology that would enable them to use electronic or digital 
disclosures. The Secretary acknowledged this potential lack and 
determined to provide a comparable bioengineered food disclosure option 
to allow greater access to food information for all consumers. Such 
provision is made in Sec.  66.108 of the final rule.
    Based on the above, AMS has concluded that this final rule will not 
have Tribal implications that require a consultation. In implementing 
the final rule, AMS will develop and deliver outreach and education for 
and to all regulated entities. In addition, AMS will work with the 
Office of Tribal Relations to ensure ongoing meaningful consultation is 
provided, where needed or requested. If a tribe requests consultation, 
AMS will work with the USDA Office of Tribal Relations to ensure 
meaningful consultation is provided where changes, additions, and 
modifications identified herein are not expressly mandated by Congress.

G. Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. The final rule is not intended to have 
retroactive effect. The amended Act specifies that no State or 
political subdivision of a State may directly or indirectly establish 
under any authority or continue in effect as to any food or seed in 
interstate commerce any requirement relating to the labeling or 
disclosure of whether a food is bioengineered or was developed or 
produced using bioengineering for a food subject to the national 
bioengineered food disclosure standard that is not identical to the 
mandatory disclosure requirements under that standard. With regard to 
other Federal statutes, all labeling claims made in conjunction with 
this regulation must be consistent with other applicable Federal 
requirements. There are no administrative procedures that must be 
exhausted prior to any judicial challenge to the provisions of this 
rule.

H. Executive Order 13132

    This rule has been reviewed under Executive Order 13132, 
Federalism. Executive Order 13132 directs agencies to construe, in 
regulations and otherwise, a Federal statute to preempt State law only 
where the statute contains an express preemption provision or there is 
some other clear evidence to conclude that Congress

[[Page 65871]]

intended preemption of State law, or where the exercise of State 
authority conflicts with the exercise of Federal authority under the 
Federal statute. The amended Act includes an express preemption of 
State law. Sections 293(e) and 295(b) provide that no State may 
directly or indirectly establish or continue with any food or seed 
requirement relating to the labeling or disclosure of whether the food 
or seed is bioengineered or was developed or produced using 
bioengineering, including any requirement for claims that a food or 
seed is or contains an ingredient that was developed by or produced 
using bioengineering.
    Upon establishment of the NBFDS, States may adopt standards that 
are identical to the NBFDS, and States may impose remedies for 
violations of their standards, such as monetary damages and injunctive 
relief.
    With regard to consultation with States, as directed by Executive 
Order 13132, USDA notified the governors of each U.S. State of the 
amended Act's purpose and preemption provisions by letter in August 
2016. Copies of the letters may be viewed at https://www.ams.usda.gov/rules-regulations/be.

List of Subjects in 7 CFR Part 66

    Agricultural commodities, Bioengineering, Food labeling, Reporting 
and recordkeeping requirements.

0
For the reasons set forth in the preamble, 7 CFR chapter I is amended 
by adding part 66 to read as follows:

PART 66--NATIONAL BIOENGINEERED FOOD DISCLOSURE STANDARD

Subpart A--General Provisions
Sec.
66.1 Definitions.
66.3 Disclosure requirement and applicability.
66.5 Exemptions.
66.6 List of Bioengineered Foods.
66.7 Updates to the List of Bioengineered Foods.
66.9 Detectability.
66.11 Severability.
66.13 Implementation and compliance.
Subpart B--Bioengineered Food Disclosure
66.100 General.
66.102 Text disclosure.
66.104 Symbol disclosure.
66.106 Electronic or digital link disclosure.
66.108 Text message disclosure.
66.109 Required disclosure with actual knowledge.
66.110 Small food manufacturers.
66.112 Small and very small packages.
66.114 Food sold in bulk containers.
66.116 Voluntary disclosure.
66.118 Other claims.
Subpart C--Other Factors and Conditions for Bioengineered Food
66.200 Request or petition for determination.
66.202 Standards for consideration.
66.204 Submission of request or petition.
Subpart D--Recordkeeping
66.300 Scope.
66.302 Recordkeeping requirements.
66.304 Access to records.
Subpart E--Enforcement
66.400 Prohibited act.
66.402 Audit or examination of records.
66.404 Hearing.
66.406 Summary of results.

    Authority: 7 U.S.C. 1621 et seq.

Subpart A--General Provisions


Sec.  66.1  Definitions.

    Act means the Agricultural Marketing Act of 1946 (7 U.S.C. 1621 et 
seq.), as amended to include Subtitle E--National Bioengineered Food 
Disclosure Standard and Subtitle F--Labeling of Certain Food.
    Administrator means the Administrator of the Agricultural Marketing 
Service, United States Department of Agriculture, or the representative 
to whom authority has been delegated to act in the stead of the 
Administrator.
    AMS means the Agricultural Marketing Service of the United States 
Department of Agriculture.
    Bioengineered food means--
    (1) Subject to the factors, conditions, and limitations in 
paragraph (2) of this definition:
    (i) A food that contains genetic material that has been modified 
through in vitro recombinant deoxyribonucleic acid (rDNA) techniques 
and for which the modification could not otherwise be obtained through 
conventional breeding or found in nature; provided that
    (ii) Such a food does not contain modified genetic material if the 
genetic material is not detectable pursuant to Sec.  66.9.
    (2) A food that meets one of the following factors and conditions 
is not a bioengineered food.
    (i) An incidental additive present in food at an insignificant 
level and that does not have any technical or functional effect in the 
food, as described in 21 CFR 101.100(a)(3).
    (ii) [Reserved]
    Bioengineered substance means substance that contains genetic 
material that has been modified through in vitro recombinant 
deoxyribonucleic acid (rDNA) techniques and for which the modification 
could not otherwise be obtained through conventional breeding or found 
in nature.
    Compliance date means--
    (1) Mandatory compliance date. Entities responsible for 
bioengineered food disclosure must comply with the requirements of this 
part by January 1, 2022.
    (2) Updates to the List of Bioengineered Foods. When AMS updates 
the List of Bioengineered Foods pursuant to Sec.  66.7, entities 
responsible for bioengineered food disclosures must comply with the 
updates no later than 18 months after the effective date of the update.
    Food means a food (as defined in section 201 of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 321)) that is intended for human 
consumption.
    Food manufacturer means an entity that manufactures, processes, or 
packs human food and labels the food or food product for U.S. retail 
sale.
    Importer means the importer of record, as determined by U.S. 
Customs and Border Protection (19 U.S.C. 1484(a)(2)(B)), who engages in 
the importation of food or food products labeled for retail sale into 
the United States.
    Information panel means that part of the label of a packaged 
product that is immediately contiguous to and to the right of the 
principal display panel as observed by an individual facing the 
principal display panel, unless another section of the label is 
designated as the information panel because of package size or other 
package attributes (e.g. irregular shape with one usable surface).
    Label means a display of written, printed, or graphic matter upon 
the immediate container or outside wrapper of any retail package or 
article that is easily legible on or through the outside container or 
wrapper.
    Labeling means all labels and other written, printed, or graphic 
matter:
    (1) Upon any article or any of its containers or wrappers; or
    (2) Accompanying such article.
    List of Bioengineered Foods means a list, maintained and updated by 
AMS and provided in Sec.  66.6, of foods for which bioengineered 
versions have been developed.
    Marketing and promotional information means any written, printed, 
audiovisual, or graphic information, including advertising, pamphlets, 
flyers, catalogues, posters, and signs that are distributed, broadcast, 
or made available to assist in the sale or promotion of a product.
    Predominance means an ingredient's position in the ingredient list 
on a product's label. Predominant ingredients are those most abundant 
by weight in the product, as required under 21 CFR 101.4(a)(1).

[[Page 65872]]

    Principal display panel means that part of a label that is most 
likely to be displayed, presented, shown, or examined under customary 
conditions of display for retail sale.
    Processed food means any food other than a raw agricultural 
commodity, and includes any raw agricultural commodity that has been 
subject to processing, such as canning, cooking, freezing, dehydration, 
or milling.
    Raw agricultural commodity means any agricultural commodity in its 
raw or natural state, including all fruits that are washed, colored, or 
otherwise treated in their unpeeled natural form prior to marketing.
    Regulated entity means the food manufacturer, importer, or retailer 
that is responsible for making bioengineered food disclosures under 
Sec.  66.100(a).
    Secretary means the United States Secretary of Agriculture or a 
representative to whom authority has been delegated to act in the 
Secretary's stead.
    Similar retail food establishment means a cafeteria, lunch room, 
food stand, food truck, transportation carrier (such as a train or 
airplane), saloon, tavern, bar, lounge, other similar establishment 
operated as an enterprise engaged in the business of selling prepared 
food to the public, or salad bars, delicatessens, and other food 
enterprises located within retail establishments that provide ready-to-
eat foods that are consumed either on or outside of the retailer's 
premises.
    Small food manufacturer means any food manufacturer with annual 
receipts of at least $2,500,000, but less than $10,000,000.
    Small package means food packages that have a total surface area of 
less than 40 square inches.
    Very small food manufacturer means any food manufacturer with 
annual receipts of less than $2,500,000.
    Very small package means food packages that have a total surface 
area of less than 12 square inches.


Sec.  66.3  Disclosure requirement and applicability.

    (a) General. (1) A label for a bioengineered food must bear a 
disclosure indicating that the food is a bioengineered food or contains 
a bioengineered food ingredient consistent with this part.
    (2) Except as provided in Sec.  66.116 for voluntary disclosure, a 
label shall not bear a disclosure that a food is a bioengineered food 
or contains a bioengineered food ingredient if the records maintained 
in accordance with Sec.  66.302 demonstrate that the food is not a 
bioengineered food or does not contain a bioengineered food ingredient.
    (b) Application to food. This part applies only to a food subject 
to:
    (1) The labeling requirements under the Federal Food, Drug, and 
Cosmetic Act (``FDCA''); or
    (2) The labeling requirements under the Federal Meat Inspection 
Act, the Poultry Products Inspection Act, or the Egg Products 
Inspection Act only if:
    (i) The most predominant ingredient of the food would independently 
be subject to the labeling requirements under the FDCA; or
    (ii) The most predominant ingredient of the food is broth, stock, 
water, or a similar solution and the second-most predominant ingredient 
of the food would independently be subject to the labeling requirements 
under the FDCA.


Sec.  66.5  Exemptions.

    This part shall not apply to the food and entities described in 
this section.
    (a) Food served in a restaurant or similar retail food 
establishment.
    (b) Very small food manufacturers.
    (c) A food in which no ingredient intentionally contains a 
bioengineered (BE) substance, with an allowance for inadvertent or 
technically unavoidable BE presence of up to five percent (5%) for each 
ingredient.
    (d) A food derived from an animal shall not be considered a 
bioengineered food solely because the animal consumed feed produced 
from, containing, or consisting of a bioengineered substance.
    (e) Food certified under the National Organic Program.


Sec.  66.6  List of Bioengineered Foods.

    The List of Bioengineered Foods consists of the following: Alfalfa, 
apple (Arctic\TM\ varieties), canola, corn, cotton, eggplant (BARI Bt 
Begun varieties), papaya (ringspot virus-resistant varieties), 
pineapple (pink flesh varieties), potato, salmon 
(AquAdvantage[supreg]), soybean, squash (summer), and sugarbeet.


Sec.  66.7  Updates to the List of Bioengineered Foods.

    (a) Updates to the List. AMS will review and consider updates to 
the List on an annual basis and will solicit recommendations regarding 
updates to the List through notification in the Federal Register and on 
the AMS website.
    (1) Recommendations regarding additions to and subtractions from 
the List may be submitted to AMS at any time or as part of the annual 
review process.
    (2) Recommendations should be accompanied by data and other 
information to support the recommended action.
    (3) AMS will post public recommendations on its website, along with 
information about other revisions to the List that the agency may be 
considering, including input based on consultation with the government 
agencies responsible for oversight of the products of biotechnology: 
USDA's Animal and Plant Health Inspection Service (USDA-APHIS), the 
U.S. Environmental Protection Agency (EPA), and the Department of 
Health and Human Services' Food and Drug Administration (FDA), and 
appropriate members of the Coordinated Framework for the Regulation of 
Biotechnology or a similar successor.
    (4) AMS will consider whether foods proposed for inclusion on the 
List have been authorized for commercial production somewhere in the 
world, and whether the food is currently in legal commercial production 
for human food somewhere in the world.
    (5) If AMS determines that an update to the List is appropriate 
following its review of all relevant information provided, AMS will 
modify the List.
    (b) Compliance period. Regulated entities will have 18 months 
following the effective date of the updated List of Bioengineered Foods 
to revise food labels to reflect changes to the List in accordance with 
the disclosure requirements of this part.


Sec.  66.9  Detectability.

    (a) Recordkeeping requirements. Modified genetic material is not 
detectable if, pursuant to the recordkeeping requirements of Sec.  
66.302, the entity responsible for making a BE food disclosure 
maintains:
    (1) Records to verify that the food is sourced from a non-
bioengineered crop or source; or
    (2) Records to verify that the food has been subjected to a 
refinement process validated to make the modified genetic material in 
the food undetectable; or
    (3) Certificates of analysis or other records of testing 
appropriate to the specific food that confirm the absence of modified 
genetic material.
    (b) Validated refining process. (1) Analytical testing that meets 
the standards described in paragraph (c) of this section must be used 
to validate that a refining process renders modified genetic material 
in a food undetectable.
    (2) Once a refining process has been so validated, additional 
testing is not necessary to confirm the absence of detectable modified 
genetic material in food subsequently refined through that process, 
provided that no significant changes are made to the validated

[[Page 65873]]

process and provided that records are maintained to demonstrate that 
the refining process has been validated and that the validated refining 
process is followed.
    (c) Standards of performance for detectability testing. Analytical 
testing for purposes of detecting the presence of modified genetic 
material in refined foods pursuant to paragraph (a) of this section 
shall meet the following standard:
    (1) Laboratory quality assurance must ensure the validity and 
reliability of test results;
    (2) Analytical method selection, validation, and verification must 
ensure that the testing method used is appropriate (fit for purpose) 
and that the laboratory can successfully perform the testing;
    (3) The demonstration of testing validity must ensure consistent 
accurate analytical performance; and
    (4) Method performance specifications must ensure analytical tests 
are sufficiently sensitive for the purposes of the detectability 
requirements of this part.


Sec.  66.11  Severability.

    If any provision of this part is declared invalid or the 
applicability thereof to any person or circumstances is held invalid, 
the validity of the remainder of this part or the applicability thereof 
to other persons or circumstances shall not be affected thereby.


Sec.  66.13  Implementation and compliance.

    (a) Implementation. Except for small food manufacturers, the 
implementation date for this part is January 1, 2020. For small food 
manufacturers, the implementation date is January 1, 2021.
    (b) Voluntary compliance. (1) Regulated entities may voluntarily 
comply with the requirements in this part until December 31, 2021.
    (2) During this period, regulated entities may use labels that meet 
requirements of preempted State labeling regulations for genetically 
engineered food. Stickers or ink stamps may be applied to existing 
labels to provide appropriate bioengineered food disclosures provided 
that the stickers or ink stamps do not obscure other required label 
information.
    (c) Mandatory compliance. All regulated entities must comply with 
the requirements of this part beginning on January 1, 2022.

Subpart B--Bioengineered Food Disclosure


Sec.  66.100  General.

    (a) Responsibility for disclosure. (1) For a food that is packaged 
prior to receipt by a retailer, the food manufacturer or importer is 
responsible for ensuring that the food label bears a bioengineered food 
disclosure in accordance with this part.
    (2) If a retailer packages a food or sells a food in bulk, that 
retailer is responsible for ensuring that the food bears a 
bioengineered food disclosure in accordance with this part.
    (b) Type of disclosure. If a food must bear a bioengineered food 
disclosure under this part, the disclosure must be in one of the forms 
described in this paragraph (b), except as provided in Sec. Sec.  
66.110 and 66.112.
    (1) A text disclosure in accordance with Sec.  66.102.
    (2) A symbol disclosure in accordance with Sec.  66.104.
    (3) An electronic or digital link disclosure in accordance with 
Sec.  66.106.
    (4) A text message disclosure in accordance with Sec.  66.108.
    (c) Appearance of disclosure. The required disclosure must be of 
sufficient size and clarity to appear prominently and conspicuously on 
the label, making it likely to be read and understood by the consumer 
under ordinary shopping conditions.
    (d) Placement of the disclosure. Except as provided in Sec.  66.114 
for bulk food, the disclosure must be placed on the label in one of the 
manners described in this paragraph (d).
    (1) The disclosure is placed in the information panel directly 
adjacent to the statement identifying the name and location of the 
handler, distributor, packer, manufacturer, importer, or any statement 
disclosing similar information.
    (2) The disclosure is placed in the principal display panel.
    (3) The disclosure is placed in an alternate panel likely to be 
seen by a consumer under ordinary shopping conditions if there is 
insufficient space to place the disclosure on the information panel or 
the principal display panel.
    (e) Uniform Resource Locator (URL). Except for disclosures made by 
small manufacturers and for disclosures on very small packages, a 
bioengineered food disclosure may not include an internet website URL 
that is not embedded in an electronic or digital link.


Sec.  66.102  Text disclosure.

    A text disclosure must bear the text as described in this section. 
A text disclosure may use a plural form if applicable, e.g. if a food 
product includes more than one bioengineered food, then ``bioengineered 
foods'' or ``bioengineered food ingredients'' may be used.
    (a) Bioengineered foods. If a food (including any ingredient 
produced from such food) is on the List of Bioengineered Foods, and 
records maintained by a regulated entity demonstrate that the food is 
bioengineered, the text disclosure must be one of the following, as 
applicable:
    (1) ``Bioengineered food'' for bioengineered food that is a raw 
agricultural commodity or processed food that contains only 
bioengineered food ingredients; or
    (2) ``Contains a bioengineered food ingredient'' for multi-
ingredient food that is not described in paragraph (a)(1) of this 
section but contains one or more bioengineered food ingredients.
    (b) Predominant language in U.S. Food subject to disclosure that is 
distributed solely in a U.S. territory may be labeled with statements 
equivalent to those required in this part, using the predominant 
language used in that territory.


Sec.  66.104  Symbol disclosure.

    A symbol disclosure must replicate the form and design of Figure 1 
to this section.
    (a) The symbol is a circle with a green circumference, and a white 
outer band. The bottom portion of the circle contains an arch, filled 
in green to the bottom of the circle. The arch contains two light green 
terrace lines, sloping downward from left to right. On the left side of 
the arch is a stem arching towards the center of the circle, ending in 
a four-pointed starburst. The stem contains two leaves originating on 
the upper side of the stem and pointing towards the top of the circle. 
In the background of the leaves, at the top of the circle and to the 
left of center, is approximately one-half of a circle filled in yellow. 
The remainder of the circle is filled in light blue. The symbol must 
contain the words ``BIOENGINEERED.''
    (b) If a food (including any ingredient produced from such food) is 
on the List of Bioengineered Foods, and records maintained by a 
regulated entity demonstrate that the food is bioengineered, or do not 
demonstrate whether the food is bioengineered, the symbol disclosure 
must be the following:

[[Page 65874]]

[GRAPHIC] [TIFF OMITTED] TR21DE18.000

    (c) The symbol may be printed in black and white.
    (d) Nothing can be added to or removed from the bioengineered food 
symbol design except as allowed in this part.


Sec.  66.106  Electronic or digital link disclosure.

    If a required bioengineered food disclosure is made through an 
electronic or digital link printed on the label, the disclosure must 
comply with the requirements described in this section.
    (a) Accompanying statement. (1) An electronic or digital disclosure 
must be accompanied by, and be placed directly above or below, this 
statement: ``Scan here for more food information'' or equivalent 
language that only reflects technological changes (e.g., ``Scan 
anywhere on package for more food information'' or ``Scan icon for more 
food information'').
    (2) The electronic or digital disclosure must also be accompanied 
by a telephone number that will provide the bioengineered food 
disclosure to the consumer, regardless of the time of day. The 
telephone number instructions must be in close proximity to the digital 
link and the accompanying statement described in paragraph (a)(1) of 
this section, must indicate that calling the telephone number will 
provide more food information, and must be accompanied by the statement 
``Call [1-000-000-0000] for more food information.''
    (b) Product information page. When the electronic or digital link 
is accessed, the link must go directly to the product information page 
for display on the electronic or digital device. The product 
information page must comply with the requirements described in this 
paragraph (b).
    (1) The product information page must be the first screen to appear 
on an electronic or digital device after the link is accessed as 
directed.
    (2) The product information page must include a bioengineered food 
disclosure that is consistent with Sec.  66.102 or Sec.  66.104.
    (3) The product information page must exclude marketing and 
promotional information.
    (4) The electronic or digital link disclosure may not collect, 
analyze, or sell any personally identifiable information about 
consumers or the devices of consumers; however, if this information 
must be collected to carry out the purposes of this part, the 
information must be deleted immediately and not used for any other 
purpose.


Sec.  66.108  Text message disclosure.

    The regulated entity must not charge a person any fee to access the 
bioengineered food information through text message and must comply 
with the requirements described in this section.
    (a) The label must include this statement ``Text [command word] to 
[number] for bioengineered food information.'' The number must be a 
number, including a short code, that sends an immediate response to the 
consumer's mobile device.
    (b) The response must be a one-time response and the only 
information in the response must be the appropriate bioengineered food 
disclosure described in Sec.  66.102 or Sec.  66.116.
    (c) The response must exclude marketing and promotional 
information.
    (d) A regulated entity that selects the text message option must 
comply with the requirements of this paragraph (d).
    (1) The regulated entity must not collect, analyze, or sell any 
personally identifiable information about consumers or the devices of 
consumers.
    (2) The regulated entity must not use any information related to 
the text message option for any marketing purposes.
    (3) If any information must be collected to carry out the purposes 
of this part, the information must be deleted as soon as possible and 
not be used for any other purpose.


Sec.  66.109  Required disclosure with actual knowledge.

    Notwithstanding any provision in this subpart, if a food 
manufacturer (other than a very small food manufacturer), a retailer, 
or an importer has actual knowledge that the food is a bioengineered 
food or contains a bioengineered food ingredient, it must disclose that 
the food is bioengineered or contains a bioengineered food ingredient, 
as applicable, using appropriate text, symbol, electronic or digital 
link disclosure, or text message.


Sec.  66.110  Small food manufacturers.

    A small food manufacturer must make the required bioengineered food 
disclosure using one of the bioengineered food disclosure options 
permitted under Sec. Sec.  66.102, 66.104, 66.106, and 66.108 or as 
described in this section.
    (a) The label bears the statement: ``Call for more food 
information,'' which accompanies a telephone number that will provide 
the bioengineered food disclosure to the consumer, regardless of the 
time of day. Disclosure via telephone number must include a 
bioengineered food disclosure that is consistent with Sec.  66.102 in 
audio form and may be pre-recorded.
    (b) The label bears the statement: ``Visit [URL of the website] for 
more food information,'' which accompanies a website that meets the 
requirements of Sec.  66.106(b). Disclosure via website must include a 
bioengineered food disclosure that is consistent with Sec.  66.102 or 
Sec.  66.104 in written form.


Sec.  66.112  Small and very small packages.

    In addition to the disclosures described in this subpart, for food 
in small and very small packages, the required disclosure may be in the 
form described in paragraph (a), (b), or (c) of this section.
    (a) The label bears the electronic or digital disclosure described 
in Sec.  66.106, and replaces the statement and phone number required 
in Sec.  66.106(a) with the statement ``Scan for info.''
    (b) The label bears a number or short code as described in Sec.  
66.108(a), and replaces the statement with ``Text for info.''
    (c) The label bears a phone number as described in Sec.  66.110(a), 
and replaces the statement with ``Call for info.''
    (d) For very small packages only, if the label includes a 
preexisting Uniform Resource Locator for a website or a telephone 
number that a consumer can use to obtain food information, that website 
or telephone number may also be used for the required bioengineered 
food disclosure, provided that the disclosure is consistent with Sec.  
66.102 or Sec.  66.104 in written or audio form, as applicable.


Sec.  66.114  Food sold in bulk containers.

    (a) Bioengineered food sold in bulk containers (e.g., display case, 
bin, carton, and barrel), used at the retail level to present product 
to consumers, including a display at a fresh seafood counter, must use 
one of the disclosure options described in Sec.  66.102, Sec.  66.104, 
Sec.  66.106, or Sec.  66.108.
    (b) The disclosure must appear on signage or other materials (e.g., 
placard, sign, label, sticker, band, twist tie, or other similar 
format) that allows consumers to easily identify and understand the 
bioengineered status of the food.


Sec.  66.116  Voluntary disclosure.

    (a) Disclosure of bioengineered food by exempt entities. If a food 
on the List of Bioengineered Foods is subject to

[[Page 65875]]

disclosure, a very small food manufacturer, restaurant, or similar 
retail food establishment may voluntarily provide that disclosure. The 
disclosure must be in one or more of the forms described in this 
paragraph (a).
    (1) A text disclosure, in accordance with Sec.  66.102.
    (2) A symbol disclosure, in accordance with Sec.  66.104.
    (3) An electronic or digital link disclosure, in accordance with 
Sec.  66.106.
    (4) A text message disclosure, in accordance with Sec.  66.108.
    (5) Appropriate small manufacturer and small and very small package 
disclosure options, in accordance with Sec. Sec.  66.110 and 66.112.
    (b) Disclosure of foods derived from bioengineering. For foods or 
food ingredients that do not meet paragraph (1) of the definition of 
bioengineered food in Sec.  66.1, that do not qualify as a factor or 
condition under paragraph (2) of the definition of bioengineered food 
in Sec.  66.1, that are not exempt from disclosure under Sec.  66.5, 
and that are derived from a food on the List of Bioengineered Foods, 
regulated entities may disclose such foods with one of the disclosures 
described in this paragraph (b).
    (1) A text disclosure with the following statement: ``derived from 
bioengineering'' or ``ingredient(s) derived from a bioengineered 
source.'' The word ``ingredient(s)'' may be replaced with the name of 
the specific crop(s) or food ingredient(s).
    (2) A symbol disclosure using the following symbol:
    [GRAPHIC] [TIFF OMITTED] TR21DE18.001
    
    (3) An electronic or digital link disclosure, in accordance with 
Sec.  66.106, provided that the disclosure is the text described in 
paragraph (b)(1) of this section or the symbol in Figure 1 to this 
section.
    (4) A text message disclosure, in accordance with Sec.  66.108, 
provided that the response is the text described in paragraph (b)(1) of 
this section or the symbol in Figure 1 to this section.
    (5) Appropriate small manufacturer and small and very small package 
disclosure options, in accordance with Sec. Sec.  66.110 and 66.112, 
provided that the disclosure is the text described in paragraph (b)(1) 
of this section or the symbol in Figure 1 to this section.
    (c) Appearance of disclosure. The disclosure should be of 
sufficient size and clarity to appear prominently and conspicuously on 
the label, making it likely to be read and understood by the consumer 
under ordinary shopping conditions.
    (d) Recordkeeping. Reasonable and customary records should be 
maintained to verify disclosures made under this section, in accordance 
with Sec.  66.302.


Sec.  66.118  Other claims.

    Nothing in this subpart will prohibit regulated entities from 
making other claims regarding bioengineered foods, provided that such 
claims are consistent with applicable Federal law.

Subpart C--Other Factors and Conditions for Bioengineered Food


Sec.  66.200  Request or petition for determination.

    (a) Any person may submit a request or petition for a determination 
by the Administrator regarding other factors and conditions under which 
a food is considered a bioengineered food. A request or petition must 
be submitted in accordance with Sec.  66.204.
    (b) The request or petition may be supplemented, amended, or 
withdrawn in writing at any time without prior approval of the 
Administrator, and without affecting resubmission, except when the 
Administrator has responded to the request or petition.
    (c) If the Administrator determines that the request or petition 
satisfies the standards for consideration in Sec.  66.202, AMS will 
initiate a rulemaking that would amend the definition of 
``bioengineered food'' in Sec.  66.1 to include the requested factor or 
condition.
    (d) The Administrator's determination that the request or petition 
does not satisfy the standards for consideration in Sec.  66.202 
constitutes final agency action for purposes of judicial review.


Sec.  66.202  Standards for consideration.

    In evaluating a request or petition, the Administrator must apply 
the applicable standards described in this section.
    (a) The requested factor or condition is within the scope of the 
definition of ``bioengineering'' in 7 U.S.C. 1639(1).
    (b) The Administrator must evaluate the difficulty and cost of 
implementation and compliance related to the requested factor or 
condition.
    (c) The Administrator may consider other relevant information, 
including whether the requested factor or condition is compatible with 
the food labeling requirements of other agencies or countries, as part 
of the evaluation.


Sec.  66.204  Submission of request or petition.

    (a) Submission procedures and format. A person must submit the 
request to the Agricultural Marketing Service in the form and manner 
established by AMS.
    (b) Required information. The request or petition must include the 
information described in this paragraph (b).
    (1) Description of the requested factor or condition.
    (2) Analysis of why the requested factor or condition should be 
included in considering whether a food is a bioengineered food, 
including any relevant information, publications, and/or data. The 
analysis should include how the Administrator should apply the 
standards for consideration in Sec.  66.202.
    (3) If the request or petition contains Confidential Business 
Information (CBI), the submission must comply with the requirements of 
this paragraph (b)(3).
    (i) The requester or petitioner must submit one copy that is marked 
as ``CBI Copy'' on the first page and on each page containing CBI.
    (ii) The requester or petitioner must submit a second copy with the 
CBI deleted. This copy must be marked as ``CBI Redacted'' on the first 
page and on each page where the CBI was deleted.
    (iii) The submission must include an explanation as to why the 
redacted information is CBI.

Subpart D--Recordkeeping


Sec.  66.300  Scope.

    This subpart applies to records regarding mandatory and voluntary 
disclosures under this part for foods offered for retail sale in the 
United States.


Sec.  66.302  Recordkeeping requirements.

    (a) General. (1) Regulated entities must maintain records that are 
customary or reasonable to demonstrate compliance with the disclosure 
requirements of this part.
    (2) The records must be in electronic or paper formats and must 
contain sufficient detail as to be readily understood and audited by 
AMS.
    (3) Records must be maintained for at least two years beyond the 
date the food or food product is sold or distributed for retail sale.
    (4) Examples of customary or reasonable records that could be used 
to demonstrate compliance with the disclosure requirements of this part 
include, but are not limited to: Supply chain records, bills of lading, 
invoices, supplier attestations, labels, contracts,

[[Page 65876]]

brokers' statements, third party certifications, laboratory testing 
results, validated process verifications, and other records generated 
or maintained by the regulated entity in the normal course of business.
    (b) Recordkeeping requirements. (1) If a food (including an 
ingredient produced from such food) is on the List of Bioengineered 
Foods, the regulated entity must maintain records regarding that food 
or food ingredient.
    (2) If a food (including an ingredient produced from such food) 
bears a bioengineered food disclosure based on actual knowledge and is 
not on the List of Bioengineered Foods, regulated entities must 
maintain records for such food or food ingredient.


Sec.  66.304  Access to records.

    (a) Request for records. When AMS makes a request for records, the 
entity must provide the records to AMS within five (5) business days, 
unless AMS extends the deadline.
    (b) On-site access. If AMS needs to access the records at the 
entity's place of business, AMS will provide prior notice of at least 
three (3) business days. AMS will examine the records during normal 
business hours, and the records will be made available during those 
times. Access to any necessary facilities for an examination of the 
records must be extended to AMS.
    (c) Failure to provide access. If the entity fails to provide 
access to the records as required under this section, the result of the 
audit or examination of records will be that the entity did not comply 
with the requirement to provide access to records and that AMS could 
not confirm whether the entity is in compliance with the bioengineered 
food disclosure standard for purposes of Sec.  66.402.

Subpart E--Enforcement


Sec.  66.400  Prohibited act.

    It is a violation of 7 U.S.C. 1639b for any person to knowingly 
fail to make a bioengineered food disclosure in accordance with this 
part.


Sec.  66.402  Audit or examination of records.

    (a) Any interested person who has knowledge of or information 
regarding a possible violation of this part may file a written 
statement or complaint with the Administrator.
    (1) Written statements or complaints filed with the Administrator 
must include the following:
    (i) Complete identifying information about the product in question;
    (ii) A detailed explanation of the alleged regulatory violation; 
and
    (iii) Name and contact information of the person filing the 
statement or complaint.
    (2) Written statements or complaints should be addressed to 
Director, Food Disclosure and Labeling Division, AMS Fair Trade 
Practices Program, 1400 Independence Avenue SW, Washington, DC 20250; 
or submitted through the NBFDS Compliance Portal on the AMS website at 
https://www.ams.usda.gov/be.
    (3) The Administrator will determine whether reasonable grounds 
exist for an investigation of such complaint.
    (b) If the Administrator determines that further investigation of a 
complaint is warranted, an audit, examination, or similar activity may 
be conducted with respect to the records of the entity responsible for 
the disclosures.
    (c) Notice regarding records audits or examinations or similar 
activities will be provided in accordance with Sec.  66.304(a) and (b).
    (d) At the conclusion of the audit or examination of records or 
similar activity, AMS will make the findings available to the entity 
that was the subject of the investigation.
    (e) If the entity that is the subject of the audit or examination 
of records or similar activity objects to any findings, it may request 
a hearing in accordance with Sec.  66.404.


Sec.  66.404  Hearing.

    (a) Within 30 days of receiving the results of an audit or 
examination of records or similar activity to which the entity that was 
the subject of the investigation objects, the entity may request a 
hearing by filing a request, along with the entity's response to the 
findings and any supporting documents, with AMS.
    (b) The response to the findings of the audit or examination of 
records or similar activity must identify any objection to the findings 
and the basis for the objection.
    (c) The AMS Administrator or designee will review the findings of 
the audit or examination of records or similar activity, the response, 
and any supporting documents, and may allow the entity that was the 
subject of the investigation to make an oral presentation.
    (d) At the conclusion of the hearing, the AMS Administrator or 
designee may revise the findings of the audit or examination of records 
or similar activity.


Sec.  66.406  Summary of results.

    (a) If the entity that was the subject of the audit or examination 
of records or similar activity does not request a hearing in accordance 
with Sec.  66.404, or at the conclusion of a hearing, AMS will make 
public the summary of the final results of the investigation.
    (b) AMS's decision to make public the summary of the final results 
constitutes final agency action for purposes of judicial review.

    Dated: December 12, 2018.
Erin Morris,
Associate Administrator.
[FR Doc. 2018-27283 Filed 12-20-18; 8:45 am]
BILLING CODE P


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