47648 Federal Register / Vol. 74, No. 178 / Wednesday, September 16, 2009 / Proposed Rules 

DEPARTMENT OF AGRICULTURE 

Food Safety and Inspection Service 

9 CFR Parts 321, 332, and 381 

[Docket No. FSIS–2008–0039] 

RIN 0583–AD37 

Cooperative Inspection Programs: 

Interstate Shipment of Meat and 

Poultry Products 

AGENCY: Food Safety and Inspection 

Service, USDA. 

ACTION: Proposed rule. 

SUMMARY: The Food Safety and 

Inspection Service (FSIS) is proposing 

regulations to implement a new 

voluntary cooperative program under 

which State-inspected establishments 

with 25 or fewer employees will be 

eligible to ship meat and poultry 

products in interstate commerce. In 

participating States, State-inspected 

establishments selected to take part in 

this program will be required to comply 

with all Federal standards under the 

Federal Meat Inspection Act (FMIA) and 

the Poultry Products Inspection Act 

(PPIA), as well as with all State 

standards. These establishments will 

receive inspection services from State 

inspection personnel that have been 

trained in the enforcement of the FMIA 

and PPIA. Meat and poultry products 

produced under the program that have 

been inspected and passed by 

designated State personnel will bear an 

official Federal mark of inspection and 

will be permitted to be distributed in 

interstate commerce. FSIS will provide 

oversight and enforcement of the 

program. 

FSIS is proposing these regulations in 

response to the Food, Conservation, and 

Energy Act, enacted on June 18, 2008. 

Section 11015 of the law amended the 

FMIA and PPIA to provide for these 

cooperative programs. 

DATES: Submit comments on or before 

November 16, 2009. 

ADDRESSES: FSIS invites interested 

persons to submit comments on this 

proposed rule. Comments may be 

submitted by either of the following 

methods: 

Federal eRulemaking Portal: Go to 

http://www.regulations.gov and follow 

the online instructions at that site for 

submitting comments. 

Mail, including floppy disks or CD– 

ROM’s, and hand- or courier-delivered 

items: Send to Docket Clerk, U.S. 

Department of Agriculture, Food Safety 

and Inspection Service, Room 2–2127 

George Washington Carver Center, 5601 

Sunnyside Avenue, Beltsville, MD 

20705. 

Instructions: All items submitted by 

mail or electronic mail must include the 

Agency name and docket number FSIS– 

2008–0039. Comments received in 

response to this docket will be made 

available for public inspection and 

posted without change, including any 

personal information, to: http:// 

www.regulations.gov. 

Docket: For access to background 

documents or comments received, go to 

the FSIS Docket Room at the address 

listed above between 8:30 a.m. and 4:30 

p.m., Monday through Friday. 

FOR FURTHER INFORMATION CONTACT: 

Philip Derfler, Assistant Administrator, 

Office of Policy and Program 

Development, Room 350–E, Jamie L. 

Whitten Building, 1400 Independence 

Avenue, SW., Washington, DC 20250; 

Telephone (202) 720–2709, Fax (202) 

720–2025. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. Federal-State Cooperative Inspection 

Programs 

FSIS has been delegated the authority 

to carry out the functions of the 

Secretary of Agriculture as provided in 

the Federal Meat Inspection Act (FMIA) 

(21 U.S.C. 601, et seq.) and the Poultry 

Products Inspection Act (PPIA) (21 

U.S.C. 451, et seq.). These statutes 

mandate that FSIS protect the public by 

ensuring that meat and poultry products 

are safe, wholesome, unadulterated, and 

properly labeled and packaged. 

The FMIA and the PPIA (‘‘the Acts’’) 

provide for FSIS to cooperate with State 

agencies in developing and 

administering their own meat or poultry 

inspection programs (21 U.S.C. 661 and 

454). The FMIA and the PPIA restrict 

each cooperative State meat or poultry 

products inspection program to the 

inspection and regulation of products 

that are produced and sold within the 

State (21 U.S.C. 661(a)(1) and 454(a)(1)). 

Under section 661 of the FMIA and 

section 454 of the PPIA, cooperative 

State inspection programs are required 

to operate in a manner and with 

authorities ‘‘at least equal to’’ the 

provisions set out in the Acts (21 U.S.C. 

661(a)(1) and 454(a)(1)). 

The Acts provide for FSIS to 

contribute up to 50 percent of the cost 

of the cooperative State inspection 

programs, as long as the State programs 

are effectively enforcing requirements 

that are ‘‘at least equal to’’ the Federal 

program (21 U.S.C. 661(a)(3) and 

454(a)(3)). States that have enacted a 

mandatory State meat or poultry 

inspection law must apply to FSIS to 

enter into a cooperative State inspection 

program agreement with the Agency. 

If a State is unable or unwilling to 

continue to operate a cooperative State 

inspection program on an ‘‘at least equal 

to’’ basis, FSIS designates the State as 

not having an ‘‘at least equal to’’ 

program by publishing this designation 

in the Federal Register. After the 

expiration of thirty days of such 

publication, the State establishments are 

subject to Federal inspection (21 U.S.C. 

661(c)(1) and 454(c)(1)). 

The Talmadge-Aiken Act authorizes 

the Secretary of Agriculture to enter into 

cooperative arrangements with State 

departments of agriculture and other 

State agencies to assist the Secretary in 

the enforcement of relevant Federal 

laws and regulations to the extent and 

in the manner appropriate to the public 

interest (7 U.S.C. 450). Pursuant to the 

Talmadge-Aiken Act, FSIS enters into a 

separate agreement with a State agency 

for the State program to conduct meat, 

poultry, or egg products inspection or 

other regulatory activities on behalf of 

FSIS. FSIS provides 50 percent funding 

to the State programs for these services. 

B. The Food, Conservation, and Energy 

Act of 2008 

On June 18, 2008, Congress enacted 

The Food, Conservation, and Energy Act 

of 2008 (also referred to as ‘‘the 2008 

Farm Bill’’) (Pub. L. 110–246, 112 Stat. 

1651). Section 11015 of Title XI of the 

2008 Farm bill amended the FMIA to 

add a new title V—‘‘Inspections by 

Federal and State Agencies,’’ which 

contains a new section 501, ‘‘Interstate 

Shipment of Meat Inspected by Federal 

and State Agencies for Certain Small 

Establishments (122 Stat. 2124; codified 

at 21 U.S.C. 683). Section 11015 also 

amended the PPIA to add a new section 

31, ‘‘Interstate Shipment of Poultry 

Inspected by Federal and State Agencies 

for Certain Small Establishments’’ (122 

Stat. 2127; codified at 21 U.S.C. 472). 

These new sections supplement the 

existing cooperative State meat and 

poultry inspection programs by 

establishing a new cooperative program 

under which certain State-inspected 

establishments would be permitted to 

ship meat and poultry products in 

interstate commerce. 

The new law provides that the 

Secretary of Agriculture, ‘‘in 

coordination with the appropriate State 

agency of the State in which the 

establishment is located,’’ may select 

State-inspected establishments with 25 

or fewer employees to ship meat and 

poultry products interstate (Sec. 501(b) 

and Sec. 31(b)). Inspection services for 

these establishments must be provided 

by State inspection personnel that have 

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‘‘undergone all necessary inspection 

training and certification to assist the 

Secretary with the administration and 

enforcement of [the FMIA or PPIA]’’ 

(Sec. 501(a)(2) and Sec. 31(a)(2)). Meat 

and poultry products inspected and 

passed by these State inspection 

personnel would bear a ‘‘Federal mark, 

stamp, tag, or label of inspection’’ (Sec. 

501(b)(1) and Sec. 31(b)(1)). The law 

provides for the Secretary to ‘‘designate 

an employee of the Federal 

government’’ to ‘‘provide oversight and 

enforcement’’ of the program (Sec. 

501(d)(1) and Sec. 31(d)(1)). 

The law is to take effect ‘‘on the date 

on which the Secretary * * * 

promulgates final regulations to carry 

out [section 11015]’’ (Sec. 501(j)(1) and 

Sec. 31(i)(1)). The law requires that the 

Secretary promulgate final regulations 

‘‘not later than 18 months after the date 

of enactment’’ (Sec. 501(j)(2) and Sec. 

31(i)(2)). 

FSIS is issuing this proposed rule to 

implement section 11015 of the 2008 

Farm Bill. Following is a summary of 

the provisions of section 11015 that are 

addressed in this proposed rule. 

Selected establishments. The law 

applies to certain establishments that 

are already operating under a 

cooperative State meat or poultry 

inspection program. The law defines an 

‘‘eligible establishment’’ as ‘‘an 

establishment that is in compliance 

with * * * the State inspection program 

of the State in which the establishment 

is located’’ and the Acts, including the 

rules and regulations issued under the 

Acts (Sec. 501(a)(3) and Sec. 31(a)(3)). A 

‘‘selected establishment’’ is defined as 

‘‘an establishment that is authorized by 

the Secretary, in coordination with 

* * * the appropriate State agency of 

the State in which the establishment is 

located * * * to ship [meat or poultry] 

items in interstate commerce’’ (Sec. 

501(a)(5) and Sec. 31(a)(5)). 

The law prohibits the Secretary from 

selecting an establishment for interstate 

shipment that ‘‘on average, employs 

more than 25 employees (including 

supervisory and nonsupervisory 

employees), as defined by the 

Secretary’’ (Sec. 501(b)(2)(A) and Sec. 

31(b)(2)(A)). The law also prohibits the 

selection of establishments that 

currently ship interstate, as well as 

certain former and future Federal 

establishments (Sec. 501(b)(2)(B), Sec. 

501(b)(2)(C), Sec. 31(b)(2)(B), and Sec. 

31(b)(2)(C)). 

Transition to a Federal establishment. 

The law permits the Secretary to select 

establishments with ‘‘more than 25 

employees but less than 35 employees’’ 

to participate in the program (Sec. 

501(b)(3)(B)(i) and Sec. 31(b)(3)(B)(i)). 

However, if selected, these 

establishments must transition to 

Federal establishments ‘‘beginning on 

the date that is 3 years after the effective 

date’’ if they consistently employ, on 

average, more than 25 employees (Sec. 

501(b)(3)(B)(ii) and Sec. 31(b)(3)(B)(ii)). 

The law authorizes the Secretary to 

develop a procedure to transition 

certain selected establishments to a 

Federal establishment (Sec. 501(b)(3)(A) 

and Sec. 31(b)(3)(A)). The law also 

requires that ‘‘[a]ny selected 

establishment that the Secretary 

determines to be in violation of any 

requirement of the Act, be transitioned 

to a Federal establishment’’ (Sec. 501(h) 

and Sec. 31(g)). 

Federal-State coordination. Under the 

law, the Secretary is authorized to 

designate a Federal employee as ‘‘State 

coordinator’’ for each State to ‘‘provide 

oversight and enforcement’’ of the 

interstate shipment program and to 

‘‘oversee the training and inspection 

activities’’ of the State personnel 

providing inspection services to 

selected establishments (Sec. 501(d)(1) 

and Sec. 31(d)(1)). The law provides 

that if the State coordinator determines 

that a selected establishment under the 

State coordinator’s jurisdiction is in 

violation of the Acts, the State 

coordinator must ‘‘immediately notify 

the Secretary of the violation’’ and 

‘‘deselect the selected establishment or 

suspend inspection at the selected 

establishment’’ (Sec. 501(d)(3)(C) and 

Sec. 31(d)(3(C)). 

This proposed rule refers to the ‘‘State 

coordinator’’ established in section 

11015 of the 2008 Farm Bill as the FSIS 

‘‘selected establishment coordinator’’ to 

maintain consistency with the other 

terminology in this proposed rule and to 

make clear that the ‘‘State coordinator’’ 

is a Federal employee. The term ‘‘State 

coordinator’’ is often used to refer to a 

State employee under the TalmadgeAiken program, so FSIS has tentatively 

decided not to use this term in these 

proposed regulations. 

Federal reimbursement of State costs. 

The law requires that the Secretary 

‘‘reimburse a State for costs related to 

the inspection of selected 

establishments * * * in an amount of 

not less than 60 percent of eligible State 

costs’’ (Sec. 501(c) and Sec. 31(c)). 

Inspection training division. The law 

amended the FMIA to provide that not 

later than 180 days after the effective 

date of section 11015 of the 2008 Farm 

Bill, the Secretary shall establish in 

FSIS an inspection training division to 

provide outreach, education, and 

training to, and provide grants to 

appropriate State agencies to provide 

outreach, technical assistance, 

education, and training to small and 

very small establishments (as defined by 

the Secretary) (Sec. 501(f)). FSIS 

implemented this provision by 

establishing an Office of Outreach, 

Education and Training. A substantive 

part of the program’s function is to 

provide training, education, and 

outreach services to small and very 

small plants. 

Transition grants. The law permits the 

Secretary to provide grants to States to 

assist them in helping establishments 

operating under a cooperative State 

meat or poultry inspection program 

transition to selected establishments 

(Sec. 501(g) and Sec. 31(f)). 

II. The Proposed Rule 

A. General 

FSIS is proposing to amend 9 CFR 

part 321 of the Federal meat inspection 

regulations and 9 CFR part 381, subpart 

R, of the poultry products inspection 

regulations to add new sections that 

describe the cooperative interstate 

shipment program established in section 

11015 of the 2008 Farm Bill. FSIS is also 

proposing to add a new 9 CFR part 332 

to the Federal meat inspection 

regulations and a new 9 CFR part 381, 

subpart Z, to the poultry products 

inspection regulations that prescribe the 

conditions under which States and 

establishments operating under a Stateinspection program will be permitted to 

participate in a cooperative interstate 

shipment program. 

When FSIS completes the rulemaking 

process and issues a final rule, the 

Federal meat and poultry products 

regulations will provide for three 

separate cooperative State meat and 

poultry products inspection programs: 

(1) Cooperative State meat or poultry 

products inspection programs under the 

FMIA and PPIA; (2) cooperative 

agreements for State programs to 

conduct meat or poultry products 

inspection or other regulatory activities 

on behalf of the Agency under the 

Talmadge-Aiken Act; and (3) 

cooperative programs for the interstate 

shipment of State-inspected meat and 

poultry products under the FMIA and 

PPIA as amended by section 11015 of 

the 2008 Farm Bill. 

The proposed regulations to 

implement section 11015 are described 

in detail below. 

B. Description of Cooperative 

Programs—9 CFR Part 321 and 9 CFR 

Part 381, Subpart R 

9 CFR part 321 of the Federal meat 

inspection regulations and 9 CFR part 

381, subpart R, of the poultry products 

inspection regulations describe 

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47650 Federal Register / Vol. 74, No. 178 / Wednesday, September 16, 2009 / Proposed Rules 

cooperative meat and poultry products 

inspection programs authorized under 

the FMIA, PPIA, and the TalmadgeAiken Act. These regulations reference 

the legal authority for each cooperative 

inspection program and provide a 

general description of each program. 

FSIS is proposing to amend part 321 

and part 381, subpart R, to add a new 

§ 321.3 and a new § 381.187 to describe 

the cooperative interstate shipment 

program established under section 

11015 of the 2008 Farm Bill. 

The amendments to the FMIA in 

section 501 of section 11015 of the 2008 

Farm Bill have been codified at 21 

U.S.C. 683, and the amendments to the 

PPIA in section 31 have been codified 

at 21 U.S.C. 472 (122 Stat. 2124, 2127). 

Therefore, proposed § 321.3(a) provides 

that under 21 U.S.C. 683(b), FSIS is 

authorized to coordinate with States 

that have cooperative State meat 

inspection programs to select certain 

establishments operating under these 

programs to ship carcasses, parts of 

carcasses, meat, and meat food products 

in interstate commerce. Similarly, 

proposed § 381.187(a) provides that 

under 21 U.S.C. 472(b), FSIS is 

authorized to coordinate with States 

that have cooperative State poultry 

products inspection programs to select 

certain establishments operating under 

these programs to ship poultry products 

in interstate commerce. Proposed 

§§ 321.3(a) and 381.187(a) both explain 

that this type of cooperative program is 

called a ‘‘cooperative interstate 

shipment program.’’ 

Proposed §§ 321.3(b) and 381.187(b) 

contain a general description of the 

cooperative interstate shipment program 

and make clear that the Federal 

contribution for inspection services 

provided by States that have entered 

into such a program will be at least 60 

percent of eligible State costs. Under the 

FMIA and PPIA, FSIS is required to 

contribute up to 50 percent of the cost 

of a cooperative State meat or poultry 

products inspection program (21 U.S.C. 

661(a)(3) and 454(a)(3)). Thus, States 

that participate in the new cooperative 

interstate shipment program will receive 

additional reimbursement for costs 

related to inspection of selected 

establishments in the State. 

As required under the statute, the 

Federal contribution for inspection 

services provided by States that enter 

into a cooperative interstate shipment 

program under this proposal will be at 

least 60 percent of eligible State costs. 

When the program is implemented, 

FSIS does not intend to reimburse States 

for more than 60 percent of their eligible 

costs unless Congress directs it, and 

provides the money for it, to do so. 

To be reimbursed under this proposed 

rule, States will be expected to submit 

their budgets for their cooperative 

interstate shipment programs to FSIS for 

approval prior to receiving Federal 

funds. States will also be expected to 

submit a separate justification for any 

costs related to the cooperative 

interstate shipment program that were 

not included in their initial budget 

request. FSIS will also need to approve 

a State’s request for additional funds 

before the Agency will reimburse the 

State for not less than 60% of the cost. 

FSIS has tentatively decided that, for 

purposes of this proposed rule, eligible 

State costs will be those costs that a 

State has justified and FSIS has 

approved as necessary for the State to 

provide inspection services to selected 

establishments in the State. The Agency 

requests comments on whether the final 

rule resulting from this proposal should 

codify this definition or any other 

requirements related to State 

reimbursement for eligible costs related 

to inspection of selected establishments. 

Proposed §§ 321.3(c) and 381.187(c) 

identify 9 CFR part 332 and 9 CFR part 

381, subpart Z, as the regulations that 

prescribe conditions under which States 

and establishments may participate in 

the cooperative interstate shipment 

program. Proposed §§ 321.3(d) and 

381.187(d) provide that the 

Administrator will terminate an 

agreement for a cooperative interstate 

shipment program with a State if the 

Administrator determines that the State 

is not conducting inspection at selected 

establishments in a manner that 

complies with the Acts and their 

implementing regulations. 

C. Requirements for a Cooperative 

Interstate Shipment Program—9 CFR 

Part 332 and 9 CFR 381 Subpart Z 

1. General 

FSIS is proposing to amend title 9, 

Chapter III, Subchapter A of the Code of 

Federal Regulations (CFR) to add a new 

part 332 titled ‘‘Selected 

Establishments; Cooperative Program for 

Interstate Shipment of Carcasses, Parts 

of Carcasses, Meat, and Meat Food 

Products,’’ and to add to part 381 a new 

subpart Z titled ‘‘Selected 

Establishments; Cooperative Program for 

Interstate Shipment of Poultry 

Products.’’ The regulations in the 

proposed new part 332 and the 

proposed new subpart Z prescribe the 

requirements for a cooperative interstate 

shipment program. 

2. Definitions and Purpose 

Proposed §§ 332.1 and 381.511 define 

the terms ‘‘cooperative interstate 

shipment program,’’ ‘‘cooperative State 

meat inspection program,’’ ‘‘cooperative 

State poultry products inspection 

program,’’ ‘‘selected establishment,’’ 

and ‘‘designated personnel.’’ Terms 

used in the proposed regulations that 

are defined in 9 CFR 301.2 and 9 CFR 

381.1 retain their same meaning. 

Under proposed §§ 332.1 and 381.511, 

‘‘cooperative interstate shipment 

program,’’ ‘‘cooperative State meat 

inspection program,’’ and ‘‘cooperative 

poultry products inspection program’’ 

are defined by providing a crossreference to the description of these 

cooperative programs in 9 CFR part 321 

and 9 CFR part 381 subpart R, described 

above. Under this proposal, ‘‘selected 

establishment’’ is defined as ‘‘an 

establishment operating under a State 

cooperative [meat or poultry products] 

inspection program that has been 

selected by the Administrator, in 

coordination with the State where the 

establishment is located, to participate 

in a cooperative interstate shipment 

program.’’ 

FSIS is proposing to define 

‘‘designated personnel’’ as ‘‘State 

inspection personnel that have been 

trained in the enforcement of the Acts 

and any additional State program 

requirements in order to provide 

inspection services to selected 

establishments.’’ 

In addition to proposing new 

definitions, proposed §§ 332.1 and 

381.511 make clear that the term 

‘‘interstate commerce,’’ as used in the 

proposed regulations has the same 

meaning as ‘‘commerce’’ under 9 CFR 

301.2 and 381.1. The regulations in 9 

CFR 301.2 and 381.1 define 

‘‘commerce’’ as ‘‘[c]ommerce between 

any State, any Territory, or the District 

of Columbia, and any place outside 

thereof * * *.’’ Thus, under this 

proposal, State-inspected 

establishments that are selected to 

participate in a cooperative interstate 

shipment program will be permitted to 

distribute and sell meat or poultry 

products across State lines and to export 

these products to foreign countries. 

Proposed §§ 332.2 and 381.512 state 

that the purpose of part 332 and part 

381, subpart Z, is to prescribe the 

conditions under which States that 

administer cooperative State meat or 

poultry products inspection programs 

and establishments that operate under 

such programs may participate in a 

cooperative interstate shipment 

program. 

3. Requirements for Establishments 

The proposed regulations in §§ 332.3 

and 381.513 prescribe conditions that 

establishments operating under a 

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Federal Register / Vol. 74, No. 178 / Wednesday, September 16, 2009 / Proposed Rules 47651 

cooperative State meat or poultry 

products inspection program must 

comply with in order to apply to 

participate in a cooperative interstate 

shipment program. Proposed §§ 332.3 

and 381.513 also describe 

establishments that are ineligible to be 

selected for such a program. 

Number of employees. Under 

proposed §§ 332.3(a)(1) and 

381.513(a)(1), an establishment 

operating under a cooperative State 

meat or poultry products inspection 

program may apply to participate in a 

cooperative interstate shipment program 

if the establishment employs, on 

average, no more than 25 employees. 

Standards for determining the average 

number of employees for purposes of 

this proposal are described in proposed 

§§ 332.3(b) and 381.513(b) below. 

Under proposed §§ 332.3(a)(2) and 

381.513(a)(2), establishments that 

employed more than 25 but fewer than 

35 employees as of June 18, 2008, are 

also permitted to apply for a cooperative 

interstate shipment program. However, 

§§ 332.3(a)(2) and 381.513(a)(2) provide, 

reflecting the amended FMIA and PPIA, 

that if selected, these establishments 

must employ, on average, 25 or fewer 

employees as of the date three years 

from the date that the final rule 

resulting from this proposal becomes 

effective. If they do not, proposed 

§§ 332.3(a)(2) and 381.513(a)(2) require 

that they be deselected from the 

program and transition to become 

official establishments. 

Standards for determining number of 

employees. Proposed §§ 332.3(b) and 

381.513(b) establish standards for 

determining whether an establishment 

employs, on average, 25 or fewer 

employees for purposes of this proposed 

rule. FSIS developed these proposed 

standards to carry out Congress’ intent 

that ‘‘[t]he term ‘average’ should be 

interpreted to provide some flexibility 

to these selected establishments that 

require seasonal employees for certain 

parts of the year, as long as the increase 

in employees are [sic] manageable by 

the establishment and the increase 

* * * does not undermine food safety 

standards’’ (S. Rep. No. 220, 110th 

Cong., 1st Sess., at 211 (2007)). 

For the most part, the proposed 

standards in §§ 332.3(b) and 381.513(b) 

reflect applicable methods used by the 

Small Business Administration (SBA) to 

calculate the number of employees of a 

business concern where the size 

standard is number of employees (13 

CFR 121.105 and 121.106). In addition, 

as explained below, FSIS is also 

proposing to limit the total number of 

employees at any given time to 35 

individuals. Under this proposal, the 

standards developed by FSIS will apply 

to the employees of an individual 

establishment. The proposed standards 

are as follows: 

• All individuals, both supervisory 

and non-supervisory, employed by the 

establishment on a full-time, part-time, 

or temporary basis are to be counted 

when calculating the total number of 

employees; 

• All individuals employed from a 

temporary employee agency, 

professional employee organization, or 

leasing concern are to be counted; 

• The average number of employees 

is calculated for each of the pay periods 

for the preceding calendar year; 

• Part-time and temporary employees 

are to be counted the same as full-time 

employees; 

• If an establishment has not been in 

business for 12 months, the average 

number of employees is calculated for 

the pay periods in which the 

establishment has been in business; 

• Volunteers who receive no 

compensation are not considered 

employees; and 

• The total number of employees can 

never exceed 35 individuals at any 

given time, regardless of the average 

number of employees. 

As noted above, the standard that 

limits the total number of employees on 

any given day to 35 individuals is not 

derived from SBA’s methods for 

calculating the number of employees. 

FSIS is proposing to limit the number of 

individuals employed by a selected 

establishment at any given time to carry 

out Congress’ intent that any increase in 

the number of employees be 

‘‘manageable by the selected 

establishment’’ and that the increase 

‘‘does not undermine food safety 

standards.’’ FSIS is proposing that this 

number never exceed 35 because section 

11015 of the 2008 Farm Bill permits the 

Agency to select certain establishments 

that employ as many as 35 employees to 

participate in a cooperative interstate 

shipment program (Sec. 501(b)(3)(i) and 

Sec. 31(b)(3)(i)). Therefore, FSIS 

believes that a temporary increase in the 

number of employees of up to 35 

individuals is likely to be considered 

‘‘manageable’’ under the law, provided 

that the average number of employees 

remains at 25 or fewer. 

FSIS requests comments on the 

proposed standards for determining an 

establishment’s average number of 

employees. The Agency specifically 

requests comment on whether part-time 

and temporary employees should be 

counted the same as full-time 

employees. 

Ineligible establishments. Proposed 

§§ 332.3(c) and 381.513(c) describe 

establishments that are ineligible to 

participate in a cooperative interstate 

shipment program. For the most part, 

these establishments reflect the 

‘‘prohibited establishments’’ described 

in section 11015 of the 2008 Farm Bill 

(Sec. 501(b)(2) and 31(b)(2)). These 

establishments include: 

• Establishments that employ more 

than 25 employees on average, with a 

limited exception for establishments 

that had between 25 and 35 employees 

as of June 18, 2008 and that have 25 or 

fewer employees as of the date three 

years from the date that the final rule 

resulting from this rule becomes 

effective; 

• Establishments operating under a 

cooperative inspection program under 

the Talmadge-Aiken Act; 

• Official establishments; 

• Establishments that were official 

establishments as of June 18, 2008, but 

that were reorganized on a later date by 

the person that controlled the 

establishment as of June 18, 2008; 

• State-inspected establishments that 

employed more than 35 employees as of 

June 18, 2008, but that were later 

reorganized by the person that 

controlled the establishment as of June 

18, 2008; 

• Establishments that are 

transitioning to become official 

establishments; 

• Establishments that are in violation 

of the FMIA or PPIA; and 

• Establishments located in a State 

without a cooperative meat or poultry 

products inspection program. 

In addition, the proposed regulations 

also include among the establishments 

ineligible to participate in a cooperative 

interstate shipment programs, 

establishments located in a State whose 

agreement for an interstate shipment 

program was terminated by the 

Administrator. 

Proposed §§ 332.3(d) and 381.513(d) 

provide that an eligible establishment 

may apply for selection into a 

cooperative interstate shipment program 

through the State where the 

establishment is located. FSIS is 

proposing that establishments apply for 

selection into a cooperative interstate 

shipment program through the State 

because the State will be responsible for 

providing inspection services to the 

establishment if the establishment is 

selected for the program. Thus, 

establishment participation in the 

cooperative interstate shipment program 

will depend on whether the State is 

able, and willing, to provide the 

necessary inspection services to the 

establishment. However, if a State enters 

into an agreement with FSIS for a 

cooperative interstate shipment 

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program, FSIS, in coordination with the 

State, will make the final determination 

on whether to select an establishment to 

participate in the program. 

4. State Request for a Cooperative 

Interstate Shipment Program 

Under this proposed rule, a State that 

does not have a cooperative interstate 

shipment program, but that is interested 

in establishing one, may submit a 

request for such a program to FSIS. 

Proposed §§ 332.4 and 381.514 

prescribe the procedures for States to 

request an agreement for a cooperative 

interstate shipment program. Under this 

proposal, a State will submit the request 

through the FSIS District Office that 

covers the State. Proposed §§ 332.4(a) 

and 381.514(a) make clear that State 

participation in a cooperative interstate 

shipment program is limited to States 

that have cooperative State meat or 

poultry products inspection programs. 

Required information. Proposed 

§§ 332.4(b) and 381.514(b) describe the 

information that States will need to 

include in their requests for an 

agreement for a cooperative interstate 

shipment program. Because a 

cooperative interstate shipment program 

requires participation from both States 

and establishments, the State’s request 

for an agreement for a cooperative 

interstate shipment program must 

identify establishments in the State that 

have requested to be selected and that 

the State recommends for initial 

selection into the program (proposed 

§§ 332.4(b)(1) and 381.514(b)(1)). If FSIS 

and the State enter into an agreement for 

a cooperative interstate shipment 

program under this proposal, these 

establishments will be the first to be 

considered for the program. Other 

establishments operating under the 

State’s meat or poultry products 

inspection program may apply to 

become selected establishments after the 

cooperative interstate shipment program 

has been implemented within the State. 

A State’s request for a cooperative 

interstate shipment program must also 

include documentation to demonstrate 

that the State is able to provide 

necessary inspection services to selected 

establishments in the State and conduct 

any related activities that would be 

required under a cooperative interstate 

shipment program (proposed 

§§ 332.4(b)(2) and 381.514(b)(2)). Under 

this proposal, this documentation 

would be similar to the documentation 

that States provide when they request 

an agreement for a cooperative State 

meat or poultry products inspection 

program. However, instead of 

demonstrating that the State’s 

inspection program is ‘‘at least equal to’’ 

the Federal inspection program, the 

statute requires that the State 

demonstrate that inspection services 

provided to selected establishments will 

be ‘‘the same as’’ the inspection services 

provided under the Federal program. 

Thus, to qualify for a cooperative 

interstate shipment program under this 

proposal, States will need to 

demonstrate, among other things, that 

they have the authority under State law 

to provide the same inspection services 

to selected establishments in the State 

as the inspection services that FSIS 

provides to official Federal 

establishments. States will also need to 

demonstrate that they have staffing 

sufficient to conduct the same 

inspection activities in selected 

establishments that FSIS conducts in 

official Federal establishments, and that 

designated personnel have been 

properly trained in Federal inspection 

methodology. FSIS currently offers 

training courses in Federal inspection 

methodology to State inspection 

personnel. Under this proposal, States 

that are interested in participating in a 

cooperative interstate shipment program 

will be responsible for making 

arrangements for their inspection 

personnel to attend these courses. FSIS 

will also expect States to demonstrate 

that they can provide the necessary 

equipment for State personnel to 

provide the same inspection services to 

selected establishments that FSIS 

provides to official Federal 

establishments, including computers 

and supplies for collecting product 

samples. 

Because the statute requires 

compliance with all Federal standards, 

meat and poultry products produced in 

selected establishments will be subject 

to the same regulatory sampling 

programs as those established in the 

Federal inspection program. Thus, to be 

eligible to participate in a cooperative 

interstate shipment program, States will 

need to demonstrate that State 

personnel will collect the same number 

and type of regulatory product samples 

from selected establishments as are 

collected under FSIS’s inspection 

sampling program. 

In addition, the State will need to 

demonstrate that the laboratory services 

that it intends to use to analyze product 

samples from selected establishments 

are capable of conducting the same 

chemical, microbiological, physical, and 

pathology testing as are required under 

the Federal meat and poultry products 

inspection programs. FSIS’s Office of 

Public Health Science will provide 

audit assistance to the State to verify 

that the methodologies used by a State’s 

laboratory services to analyze samples 

from selected establishments are 

capable of producing the same results as 

the methodologies used by FSIS 

laboratories. FSIS will not enter into an 

agreement for a cooperative interstate 

shipment program with a State that does 

not meet the conditions described 

above. 

Additional conditions. Proposed 

§§ 332.4(b)(3) and 381.514(b)(3) 

prescribe additional conditions that 

States applying for a cooperative 

interstate shipment program must agree 

to in order to qualify for the program. 

These proposed regulations provide that 

when a State submits a request to 

establish a cooperative interstate 

shipment program, the State must agree 

that, if it enters into an agreement with 

FSIS for such a program, that the State 

will: 

• Provide FSIS with access to the 

results of all laboratory analyses 

conducted on product samples from 

selected establishments in the State; 

• Notify the selected establishment 

coordinator (SEC) for the State of the 

results of any laboratory analyses that 

indicate that a product prepared or 

processed in a selected establishment 

may be adulterated or may otherwise 

present a food safety concern; and 

• If necessary, cooperate with FSIS to 

transition selected establishments in the 

State that have been deselected from a 

cooperative interstate shipment program 

to become official establishments. FSIS 

will not enter into an agreement for a 

cooperative interstate shipment program 

if a State does not agree to these terms. 

Qualified States. Under this proposal, 

after a State submits a request for a 

cooperative interstate shipment 

program, the FSIS Administrator will 

review the request and determine 

whether the State qualifies for such a 

program. If, based on the information 

submitted in the request the 

Administrator determines that a State is 

eligible to enter into a cooperative 

agreement for an interstate shipment 

program, the Administrator and the 

State will sign a cooperative agreement 

that sets forth the terms and conditions 

under which each party will cooperate 

to provide inspection services to 

selected establishments in the State 

(proposed §§ 331.4(c) and 381.514(c)). 

After the Administrator and a State have 

signed an agreement for a cooperative 

interstate shipment program, the 

Administrator will: (1) Appoint an FSIS 

employee as the selected establishment 

coordinator (SEC) for the State and (2) 

coordinate with the State to select the 

establishments that will participate in 

the program (proposed §§ 332.4(d) and 

381.514(d)). 

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Summary of actions needed to 

establish a cooperative interstate 

shipment program under the proposed 

regulations. 

The proposed regulations discussed 

above describe conditions that both 

establishments and States must meet to 

participate in a cooperative interstate 

shipment program. If FSIS adopts these 

proposed regulations in a final rule, the 

steps for establishing a new cooperative 

interstate shipment program will be the 

following. 

• An establishment that is eligible for 

the interstate shipment program, and 

that is interested in participating in the 

program, will apply for the program 

through the State agency that 

administers the State meat and poultry 

products inspection program under 

which the establishment operates. States 

will develop their own application 

procedures. 

• The State will then evaluate the 

establishment’s application to 

determine whether the State will 

recommend the establishment for 

selection into the cooperative interstate 

shipment program. 

• If the State determines that an 

establishment qualifies for selection into 

the program, and the State is able, and 

willing, to provide the necessary 

inspection services to the establishment, 

the State will recommend the 

establishment for selection into the 

program. The State will need to submit 

its recommendation through the FSIS 

District Office whose jurisdiction 

includes the State. 

• If the State has not entered into an 

agreement with FSIS for a cooperative 

interstate shipment program, but is 

qualified to participate in such a 

program, it will need to submit a request 

for a cooperative agreement for the 

program to the FSIS District Office that 

covers the State. 

• In its request for a cooperative 

interstate shipment program, a State 

will need to: (1) Identify those 

establishments that have submitted a 

request for, and that the States 

recommends for, initial selection into 

the program and (2) demonstrate that it 

is able to provide the necessary 

inspection services to these 

establishments if they are selected for 

the program. The State will also need to 

agree to comply with certain conditions 

associated with FSIS oversight and 

enforcement of the program. 

• After a State submits a request for 

a cooperative interstate shipment 

program, the FSIS Administrator will 

evaluate the request and determine 

whether the State qualifies for the 

program. 

• If the Administrator determines that 

the State qualifies for the cooperative 

interstate shipment program, the 

Administrator and the State will sign a 

cooperative agreement that sets forth the 

terms and conditions under which each 

party will cooperate to provide 

inspection services to selected 

establishments in the State. 

• The Administrator will then 

appoint an SEC for the State, and the 

Administrator, in coordination with the 

State, will begin selecting 

establishments for participation in the 

program. 

5. Selection of Establishments 

As discussed above, under this 

proposal, State-inspected 

establishments that are interested in 

participating in a cooperative interstate 

shipment program will apply for 

selection into the program through the 

State agency that administers the State’s 

meat or poultry products inspection 

program. When, and if, an establishment 

applies to participate in a cooperative 

interstate shipment program, the State 

will evaluate the establishment to 

determine whether it qualifies to 

become a selected establishment. 

Proposed §§ 332.5(a) and 381.515(a) 

provide that a State-inspected 

establishment will qualify for selection 

into a cooperative interstate shipment 

program if the establishment: 

• Has submitted a request to the State 

to be selected for the program; 

• Has the appropriate number of 

employees; 

• Is not ineligible for a cooperative 

interstate shipment; 

• Is in compliance with all 

requirements under the State inspection 

program; and 

• Is in compliance with the all 

Federal meat or poultry products 

inspection requirements. 

Establishments that do not meet all of 

these criteria will not qualify, and will 

not be selected, for the program. To 

participate in a cooperative interstate 

shipment program, an establishment 

that qualifies for such a program must 

be selected by the Administrator, in 

coordination with the State where the 

establishment is located (proposed 

§§ 332.5(b) and 381.515(b)). 

Thus, under this proposal, if a State 

determines that an establishment 

operating under the State’s meat or 

poultry products inspection program 

qualifies for selection into a cooperative 

interstate shipment program, and the 

State is able, and willing, to provide the 

necessary inspection services to the 

establishment, the State is to submit its 

evaluation of the establishment through 

the FSIS District Office that covers the 

State. The FSIS Administrator, in 

coordination with the State, will decide 

whether to select the establishment for 

the program. When deciding whether to 

select and establishment for the 

program, the Administrator will 

consider whether the establishment 

meets the criteria needed to qualify for 

the program and whether the Agency 

has the resources that it needs to 

provide the required oversight of the 

establishment if it is selected for the 

program. 

As stated above, to qualify to 

participate in a cooperative interstate 

shipment program, an establishment 

must be in compliance with all Federal 

inspection requirements under the 

FMIA, PPIA, and their implementing 

regulations in title 9, chapter III, of the 

CFR. Thus, as part of the selection 

process, the SEC, in coordination with 

the State, will verify that each 

establishment that has applied to 

participate in a cooperative interstate 

shipment program: (1) Meets the Federal 

regulatory performance standards 

established in 9 CFR 416.1 through 

416.6; (2) has submitted all labeling 

material to the State for approval, and 

that the materials meet all Federal 

requirements in 9 CFR parts 316, 317, 

and 319 and Part 381, subparts M, N, 

and P; (3) has obtained the same water 

source and sewage system approval that 

FSIS requires for official establishments; 

(4) has developed Sanitation Standard 

Operating Procedures (Sanitation SOPs) 

that comply with 9 CFR 416.11–416.17; 

and (5) has conducted a hazard analysis 

and developed a validated Hazard 

Analysis and Critical Control Points 

(HACCP) plan that complies with 9 CFR 

part 417. 

These criteria reflect the standards 

that meat and poultry products 

establishments are required to meet to 

obtain a Federal grant of inspection 

under 9 CFR part 304 and 9 CFR part 

381. Establishments that do not meet all 

of these requirements are not in 

compliance with all Federal standards 

and thus will not be selected for the 

program. 

If an establishment qualifies for, and 

is selected to participate in, a 

cooperative interstate shipment program 

under this proposed rule, proposed 

§§ 332.5(c) and 381.515(c) provide that 

the State is to assign the establishment 

an official number that reflects the fact 

that the establishment is a participant in 

the cooperative interstate shipment 

program. These proposed regulations 

provide that the State is to advise the 

SEC of the number assigned to each 

selected establishment in the State. 

Proposed §§ 332.5(c) and 381.515(c) go 

on to state that the official numbers 

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assigned to selected establishments 

need to contain the suffix ‘‘SE’’ to 

identify the establishments as selected 

establishments. FSIS is proposing this 

requirement to ensure that 

establishments participating in the 

cooperative interstate shipment program 

can be identified by reference to their 

establishment number. It will also 

ensure that meat and poultry products 

prepared in selected establishments are 

identified as articles produced under a 

cooperative interstate shipment 

program. 

Proposed §§ 332.5(c) and 381.515(c) 

also provide that the selected 

establishment numbers must include, as 

a suffix, the abbreviation for the State in 

which the establishment is located. In 

addition, proposed § 381.515(c) 

provides that the suffix of the number 

for a selected poultry products 

establishments needs to contain the 

letter ‘‘P’’ to identify the establishment 

as one that processes poultry products. 

Thus, under this proposal, an official 

number for a selected establishment in 

Texas that prepares meat products 

would contain the suffix ‘‘SETX,’’ while 

an official number for an establishment 

in North Dakota that process poultry 

products would contain the suffix 

‘‘SEPND.’’ 

As discussed below, articles that have 

been inspected and passed in a selected 

establishment will bear an official 

USDA mark, stamp, tag, or label of 

inspection. 

Finally, proposed §§ 332.5(d) and 

381.515(d) provide that failure of a State 

to comply with §§ 332.5(c) and 

381.515(c) will disqualify that State 

from participation in a cooperative 

interstate shipment program. Full 

compliance by a State with these 

provisions is essential if the program is 

to succeed. 

6. Inspection at Selected 

Establishments, Official Mark, and 

Interstate Shipment 

Proposed §§ 332.6(a) and 381.516(a) 

provide that a cooperative interstate 

shipment program will commence when 

the Administrator, in coordination with 

a State that has entered into an 

agreement for a cooperative meat or 

poultry products inspection program, 

have selected establishments in the 

State to participate in the program. 

Proposed §§ 332.6(b) and 381.516(b) 

provide that inspection services for 

selected establishments participating in 

a cooperative interstate shipment 

program must be provided by 

designated personnel, who will be 

under the direct supervision of a State 

employee. As discussed below, the FSIS 

SEC will oversee the inspection 

activities of the designated personnel. 

Proposed §§ 332.6(c) and 381.516(c) 

provide that articles prepared or 

processed in a selected establishment 

that have been inspected and passed by 

designated personnel must bear an 

official USDA mark, stamp, tag, or label 

of inspection as specified in 9 CFR 

312.2 or 9 CFR 381.96. 9 CFR 312.2 and 

9 CFR 381.96 are the regulations that 

prescribe the appropriate wording and 

form for use of the official Federal 

inspection legend on meat or poultry 

products. In addition, the establishment 

number contained in the Federal mark, 

stamp, tag, or label of inspection must 

comply with all the conditions 

proposed in §§ 332.5(c) or 381.515(c). 

Under proposed §§ 332.6(d) and 

381.516(d) meat or poultry products 

prepared in selected establishments may 

be shipped in interstate commerce if 

they have been inspected and by 

selected State personnel and bear the 

Federal mark of inspection. 

7. Federal Oversight of Cooperative 

Interstate Shipment Programs 

Section 11015 of the 2008 Farm Bill 

requires that the Secretary designate an 

employee of the Federal government as 

a ‘‘State coordinator’’ for each State that 

has a cooperative State meat or poultry 

products inspection program (Sec. 

501(d) and Sec. 31(d)). The State 

coordinator is required to ‘‘provide 

oversight and enforcement’’ of the 

program and ‘‘to oversee the training 

and inspection activities’’ of State 

personnel designated to provide 

inspection services to selected 

establishments (Sec. 501(d)(1) and Sec. 

31(d)(1)). As noted above, when, and if, 

a State qualifies to participate in a 

cooperative interstate shipment 

program, proposed §§ 332.4(c)(1) and 

381.514(c)(1) provide that the 

Administrator will appoint an FSIS 

employee as the FSIS SEC for the State. 

The SEC is the ‘‘State coordinator’’ 

prescribed by the statute. 

FSIS has tentatively decided that the 

SEC will be an employee of the FSIS 

Office of Field Operations (OFO) and 

will be assigned to an FSIS District 

Office. The SEC will likely be under the 

direct supervision of an FSIS District 

Manager. The number of States in an 

FSIS district assigned to an SEC will 

likely depend on several factors, 

including, but not limited to: (1) The 

number of States and selected 

establishments, if any, that participate 

in the cooperative interstate shipment 

program; (2) the location of each 

selected establishment; (3) the number 

of State inspection personnel providing 

inspection services to selected 

establishments in a State; (4) the 

complexity of the operations conducted 

at each selected establishment; and (5) 

the schedule of operations for each 

selected establishment. The number of 

States assigned to an SEC would also 

need to be based on consideration of the 

most effective allocation of available 

Agency resources. 

SEC initial responsibilities. One of the 

SEC’s initial responsibilities will be, in 

conjunction with the District Office, to 

coordinate with the State to select 

establishments to participate in the 

program. The SEC will coordinate with 

the State to verify that all State 

personnel selected to provide inspection 

services to these establishments have 

successfully completed the same 

training in the fundamentals of meat 

and poultry inspection, covering the 

Sanitation Performance Standards, 

Sanitation Standard Operating 

Procedures (SOPs), HACCP, and 

enforcement procedures, that is required 

for FSIS inspection personnel. The SEC 

will also coordinate with the State to 

verify that designated personnel have 

successfully completed the appropriate 

customized food safety training required 

for FSIS inspection personnel based on 

the types of products being produced at 

the establishments where designated 

personnel are assigned. 

SEC’s oversight responsibilities. 

Proposed §§ 332.7 and 381.517 

prescribe how the FSIS SEC is to 

provide Federal oversight of the 

cooperative interstate shipment 

program. 

Proposed §§ 332.7(a) and 381.517(a) 

provide that the SEC is to visit each 

selected establishment in the State on a 

regular basis to verify that these 

establishments are operating in a 

manner that is consistent with the Acts 

and the implementing regulations in 

title 9, chapter III, of the CFR. The SEC’s 

frequency of visits and oversight 

activities for each selected 

establishment will need to reflect the 

type of operations conducted by a 

selected establishment, as well as the 

establishment’s production processes. 

FSIS requests comments on how 

frequently the SEC should visit each 

establishment under his or her 

jurisdiction. Proposed §§ 332.7(a) and 

381.517(a) also provide that if 

necessary, the SEC, in consultation with 

the District Manager that covers the 

State, may designate qualified FSIS 

personnel to visit a selected 

establishment on behalf of the SEC. 

Under proposed §§ 332.7(b) and 

381.517(b), the SEC, in coordination 

with the State, will verify that selected 

establishments in the State are receiving 

the necessary inspection services from 

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designated personnel, and that these 

establishments are eligible, and remain 

eligible, to participate in the cooperative 

interstate shipment program. These 

proposed regulations provide that the 

SEC’s verification activities may 

include: 

• Verifying that each selected 

establishment in the State employs, and 

continues to employ, 25 or fewer 

employees on average, unless the 

establishment is transitioning to become 

an official establishment; 

• Verifying that the designated 

personnel are providing inspection 

services to selected establishments in an 

manner that complies with the Acts and 

implementing regulations; 

• Verifying that the State staffing 

levels for each selected establishment 

are appropriate to carry out the required 

inspection activities; and 

• Assessing each selected 

establishment’s compliance with the 

Acts and implementing regulations 

under title 9, chapter III, of the CFR. 

To verify that designated personnel 

are providing inspection services in 

compliance with the Acts, the SEC for 

the establishment, in coordination with 

the State, will verify that the designated 

personnel are correctly applying Federal 

inspection methodology, making 

decisions based upon the correct 

application of this methodology, 

accurately documenting their findings, 

and, when authorized to do so, 

implementing enforcement actions in 

accordance with the FSIS Rules of 

Practice in 9 CFR part 500. 

To assess each selected 

establishment’s compliance with 

Federal food safety standards, the SEC 

will observe the condition of the 

establishment, observe establishment 

employees performing their duties, 

review the establishment’s records, and 

submit product samples for analysis to 

determine that product produced by the 

establishment meets Federal food safety 

standards. 

The SEC will have discretion to 

increase the frequency of visits to a 

selected establishment if the SEC, in 

consultation with the District Manager 

for the State where the selected 

establishment is located, determines 

that such action is necessary to ensure 

that the establishment is operating in a 

manner consistent with the Acts. The 

SEC will also be authorized to conduct 

a comprehensive food safety assessment 

(FSA) for a selected establishment, or to 

request that an FSIS Enforcement, 

Investigation, and Analysis Officer 

(EIAO) conduct an FSA, if the SEC, in 

consultation with the District Manager, 

determines that such action would help 

determine whether the establishment is 

operating in compliance with the Acts. 

A comprehensive food safety 

assessment is an assessment that 

considers all the food safety aspects that 

relate to an establishment and all the 

products the plant produces. 

If the SEC determines that designated 

personnel are not providing inspection 

services to selected establishments in a 

manner that complies with the Acts, 

proposed §§ 332.7(c) and 381.517(c) 

provide that FSIS will provide an 

opportunity consistent with these 

regulations for the State to develop and 

implement a corrective action plan to 

address inspection deficiencies 

identified by the SEC. These proposed 

regulations also provide that if the State 

fails to develop a corrective action plan, 

or if the SEC determines that the State’s 

corrective action plan is inadequate, the 

Administrator will terminate the 

cooperative agreement with the State. 

As discussed above, selected 

establishments in a State whose 

agreement for a cooperative interstate 

shipment program has been terminated 

by the Administrator are among the 

establishments that are ineligible to 

participate in the program. As such, 

these establishments will be deselected 

from the program and transitioned to 

become Federal establishments as 

described below. 

Quarterly reports. As required under 

section 11015 of the 2008 Farm Bill 

(Sec. 501(d)(3)(b) and Sec. 31(d)(3)(b)), 

the SEC is to prepare a report on a 

quarterly basis that describes the status 

of each selected establishment under the 

SEC’s jurisdiction (proposed §§ 332.8(a) 

and 381.518(a)). 

The SEC’s quarterly report will 

include the SEC’s assessment of the 

performance of the designated 

personnel in conducting inspection 

activities (proposed §§ 332.8(b)(1) and 

381.518(b)(1)). The quarterly report will 

also identify the selected establishments 

that the SEC has verified are in 

compliance with all Federal 

requirements, those that have been 

deselected, and those that are 

transitioning to become Federal 

establishments (proposed §§ 332.8(b)(1) 

and 381.518(b)(1)). The SEC will submit 

the report to the Administrator through 

the District Manager for the State in 

which the selected establishments 

identified in the report are located 

(proposed §§ 332.8(c) and 381.518(c)). 

Enforcement. Section 11015 of the 

2008 Farm Bill provides that if the SEC 

determines that any selected 

establishment is in violation of any 

requirement of the Acts, the SEC is 

required to: (1) Immediately notify the 

Secretary (the FSIS Administrator by 

delegation) of the violation and (2) 

‘‘deselect’’ the establishment or suspend 

inspection at the establishment (Sec. 

501(d)(3)(C) and Sec. 31(d)(3)(C)). In 

adopting this language, Congress 

intended that the SEC ‘‘* * * shall be 

provided all the tools necessary under 

the Secretary to prevent or control any 

food safety issue that would harm 

human health’’ (S. Rep. No. 220, 110th 

Cong., 1st Sess., at 211 (2007)). 

Because many of the SEC’s 

verification and enforcement activities 

require that the SEC have access to a 

selected establishment’s records, 

proposed §§ 332.9(a) and 381.519(a) 

provide that to facilitate oversight and 

enforcement of the cooperative 

interstate shipment program, selected 

establishments must, upon request, give 

SECs or other FSIS officials access to all 

establishment records required under 

the FMIA, PPIA, and the implementing 

regulations in title 9, chapter III, of the 

CFR. These proposed regulations go on 

to state that FSIS will move to deselect 

an establishment that does not comply 

with this requirement. 

Under proposed §§ 332.9(b) and 

381.519(b), the SEC is authorized to 

initiate any appropriate enforcement 

action provided for in the FSIS rules of 

practice in 9 CFR part 500 if he or she 

determines that a selected establishment 

under his or her jurisdiction is operating 

in a manner that is inconsistent with the 

Acts or their implementing regulations. 

Such actions include, among others, 

regulatory control actions, withholding 

actions, and suspensions. The proposed 

regulations provide that selected 

establishments participating in a 

cooperative interstate shipment program 

are subject to the notification and 

appeal procedures set out in part 500 

(proposed §§ 332.9(b) and 381.519(b)). 

Proposed §§ 332.9(c) and 381.519(c) 

provide that if inspection at a selected 

establishment is suspended for any of 

the reasons specified in 9 CFR 500.3 or 

9 CFR 500.4, FSIS will provide an 

opportunity for the establishment to 

implement corrective actions and 

remain in the cooperative interstate 

shipment program, or the Agency will 

move to deselect the establishment. The 

decision to deselect a selected 

establishment under a suspension will 

be made on a case-by-case basis 

(proposed §§ 332.9(d) and 381.519(d)). 

In making this decision, the 

Administrator, in consultation with the 

State where the selected establishment 

is located, will consider, among other 

factors: (1) The non-compliance that led 

to the suspension; (2) the selected 

establishment’s compliance history, 

which will be documented in noncompliance reports prepared by the 

designated personnel and the SEC’s 

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quarterly reports; and (3) the corrective 

actions proposed by the establishment 

(proposed §§ 332.9(d) and 381.519(d)) 

The Administrator will have the 

discretion to allow a selected 

establishment that has been suspended 

to remain in the program if the 

establishment implements corrective 

actions to address any non-compliance. 

The Administrator will consider the 

criteria described above in determining 

whether to provide an opportunity for 

corrective actions. Establishments that 

are given an opportunity to take 

corrective actions but that are unable to 

effectively implement these actions will 

be deselected. 

FSIS will also consider the State’s 

recommendation as to whether a 

selected establishment in the State 

should be deselected. However, the final 

decision to deselect an establishment for 

violations of the FMIA or PPIA will be 

made by FSIS. As discussed below, 

consistent with the law, this proposed 

rule requires that deselected 

establishments be transitioned to 

become official establishments. 

8. Deselection 

There may be circumstances in which 

an establishment that initially qualifies 

to be selected to participate in a 

cooperative interstate shipment program 

later acquires characteristics that would 

cause it to become ineligible for the 

program. For example, an establishment 

may hire additional employees after it 

has been selected, or, as discussed 

above, FSIS may determine that a 

selected establishment is in violation of 

the Acts. Therefore, proposed 

§§ 332.10(a) and 381.520(a) provide that 

the Administrator will deselect an 

establishment that becomes ineligible to 

participate in a cooperative interstate 

shipment program. Proposed 

§§ 332.10(b) and 381.520(b) provide that 

an establishment that has been 

deselected from a cooperative interstate 

shipment program must be transitioned 

to become an official establishment. 

FSIS is proposing to require that 

deselected establishments be 

transitioned to become official Federal 

establishments as provided for in the 

law. Section 11015 of the 2008 Farm 

Bill allows the Agency to establish a 

procedure to transition selected 

establishments that employ, on average, 

more than 25 employees to become 

Federal establishments, and it requires 

that selected establishments that the 

Administrator determines to be in 

violation of any provision of the Acts, 

be transitioned to Federal 

establishments in accordance with the 

procedure developed for establishments 

that employ more than 25 employees 

(Sec. 501(b)(3), 501(h), 31(b)(3) and 

31(g)). 

Thus, as required by the law, under 

this proposal, establishments that 

become ineligible to participate in the 

cooperative interstate shipment program 

because they violated Federal food 

safety standards will not permitted to 

avoid implementing appropriate 

corrective actions by withdrawing from 

the cooperative interstate shipment 

program and reverting back to the State 

inspection program. In addition, 

requiring that deselected establishments 

transition to become official Federal 

establishments will help to ensure that 

the resources that FSIS and the States 

provide to establish and maintain a 

cooperative interstate shipment program 

are used most effectively to provide 

inspection services to establishments 

that are committed to maintaining 

Federal food safety standards. 

9. Transition Procedures for Deselected 

Establishments 

As discussed above, under the law, 

FSIS is authorized to develop a 

procedure to transition selected 

establishments to become official 

establishments if they employ more 

than 25 employees on average, or if the 

Agency determines that they are in 

violation of any provision of the Acts 

(Sec 501(b), Sec. 501(h), Sec. 31(b) and 

Sec. 31(g)). At a minimum, a procedure 

to transition a selected establishment to 

an official establishment would include: 

(1) Adding the establishment to an FSIS 

circuit within the FSIS District that 

covers the State where the 

establishment is located; (2) replacing 

the establishment’s State establishment 

number with a Federal establishment 

number, and (3) replacing the 

designated personnel with FSIS 

inspection personnel. Other actions 

needed to successfully transition a 

selected establishment to become an 

official establishment are likely to 

depend on the reason the establishment 

was deselected. For example, an 

establishment that was deselected from 

a cooperative interstate shipment 

program for violating provisions of the 

Acts would likely need to develop a 

corrective action plan as part of its 

process to transition to an official 

establishment, while an establishment 

that was deselected for hiring additional 

employees would not. 

Therefore, instead of prescribing a 

specific procedure to transition selected 

establishments to official 

establishments, proposed §§ 332.11 and 

381.521 provide that if a selected 

establishment is deselected, FSIS will 

coordinate with the State where the 

establishment is located to develop and 

implement a plan to transition the 

establishment to become an official 

establishment. The SEC with 

jurisdiction over the deselected 

establishment will likely be charged 

with coordinating with the State and the 

FSIS District Office to develop and 

implement the transition plan. 

10. Technical Assistance Division and 

Transition Grants 

Section 11015 of the 2008 Farm Bill 

amended the FMIA to require that FSIS 

establish a ‘‘technical assistance 

division’’ to coordinate the initiatives of 

other USDA agencies to provide 

‘‘outreach, education, and training to 

certain small and very small 

establishments’’ and to provide ‘‘grants 

to States to provide outreach, technical 

assistance, education, and training to 

certain small and very small 

establishments’’ (Sec. 501(f)). As noted 

earlier in this document, FSIS fulfilled 

this requirement by establishing the 

Office of Outreach Employee Education 

and Training (OOEET). 

OOEET is responsible for directing 

outreach, education, and training 

programs for FSIS to ensure public 

health and food safety through both 

inspection and enforcement activities. 

OOEET is also responsible for 

coordinating with other USDA agencies, 

such as the Rural Development Mission 

Area and the Cooperative State 

Research, Education, and Extension 

Service. 

The OOEET State Outreach and 

Technical Assistance Division promotes 

State programs and activities to achieve 

national food safety, food security, and 

other consumer protection goals by 

planning, organizing, coordinating, and 

supporting FSIS cooperative activities 

with State agencies with responsibility 

for State meat, poultry and egg product 

public health assurance inspection 

programs. It also provides technical 

expertise, information, and advice to 

small and very small plant owners and 

operators on the interpretation, 

application, implementation and 

enforcement of the statutes and 

regulations that FSIS implements. 

Transition grants. In addition to 

requiring that FSIS establish a 

‘‘technical assistance division’’ to 

coordinate the initiatives of other USDA 

agencies to provide grants to States, 

section 11015 of the 2008 Farm Bill 

authorizes FSIS to provide ‘‘transition 

grants’’ to States to assist the States in 

helping State-inspected establishments 

transition to selected establishments 

(Sec. 501(g) and Sec. 31(f)). The Agency 

has tentatively decided to use this 

authority, subject to the availability of 

funds, to grant funds to States that 

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1Note that under this proposed rule, 

establishments selected for the program will be 

eligible to be reimbursed the cost to train one 

employee in HACCP and Sanitation SOPs. 

participate in a cooperative interstate 

shipment program to reimburse selected 

establishments in the State for their 

costs to train one individual in HACCP 

and associated training in Sanitation 

SOP requirements. 

The regulations that prescribe 

conditions for receiving Federal 

inspection, which represent the 

conditions that selected establishments 

must meet to be in compliance with 

Federal standards, require that an 

establishment develop written 

Sanitation SOPs as required by 9 CFR 

part 416, and that it have conducted a 

hazard analysis and developed and 

validated a HACCP plan as required in 

9 CFR 417.2 and 417.4 (9 CFR 304.3 and 

381.22). Under 9 CFR 417.7 of the 

HACCP regulations, the individual that 

develops the HACCP plan for an 

establishment must have successfully 

completed a course of instruction in the 

application of the seven HACCP 

principles to meat or poultry product 

processing, including a segment on the 

development of a HACCP plan for a 

specific product and on record review. 

State-inspected establishments that 

apply to participate in a cooperative 

interstate shipment program will be 

required to have an individual trained 

in HACCP in order to transition to a 

selected establishment. Therefore, for 

purposes of this proposed rule, FSIS has 

tentatively concluded that it is 

appropriate to provide funds to a State 

for the purpose of reimbursing selected 

establishments for the cost of this 

training. Accordingly, proposed 

§§ 332.12(a) and 381.522(a) provide that 

these ‘‘transition grants’’ are funds that 

a State participating in a cooperative 

interstate shipment program must use to 

reimburse selected establishments in the 

State for the cost to train one individual 

in the HACCP principles applicable to 

meat or poultry processing as required 

under 9 CFR 417.7 and associated 

training in the development of 

Sanitation SOPs required under 9 CFR 

part 416. 

Proposed §§ 332.12(b) and 381.522(b) 

make clear that States must use 

transition grants only for this described 

purpose. Once a selected establishment 

receives such funding from the State, 

the State may not use additional 

transition grant funds to reimburse that 

establishment’s training costs in the 

future. 

Under this proposal, establishments 

that train an individual in HACCP or 

Sanitation SOP requirements as part of 

their transition to become selected 

establishments may request 

reimbursement for these training costs 

through the State agency that 

administers the State’s cooperative 

interstate shipment program. These 

selected establishments will need to 

submit a training certificate or other 

documentation to demonstrate that an 

individual completed the appropriate 

training. The State would then submit 

the documentation to FSIS, and request 

a ‘‘transition grant’’ to reimburse the 

establishment for its training costs. 

Executive Order 12866 and 

Regulatory Flexibility Act: 

This proposed rule has been reviewed 

under Executive Order 12866. It has 

been determined to be significant, but 

not economically significant for 

purposes of E.O. 12866 and, therefore, 

has been reviewed by the Office of 

Management and Budget (OMB). 

Currently, 27 States administer 

cooperative State meat or poultry 

inspection programs. These States have 

approximately 1,873 establishments that 

would be eligible to apply for selection 

into the new cooperative interstate 

shipment program. However, because 

participation in the new program will be 

voluntary, FSIS will not know how 

many States and establishments will 

apply to participate until final 

implementing regulations become 

effective and establishments are selected 

for the program. Information obtained 

through the Agency’s outreach activities 

indicates that, as of July 2008, about 170 

establishments in sixteen States have 

approached the State Meat and Poultry 

programs to indicate that they are 

interested in the new program. These 

sixteen States have in total 1,133 

establishments that could potentially be 

eligible for the new program. 

Expected Benefits of the Proposed 

Action: State-inspected establishments 

selected to participate in the new 

cooperative interstate shipment program 

will be permitted to ship and sell their 

meat and poultry products in interstate 

and foreign commerce. Thus, the 

proposed action would benefit these 

establishments by opening new markets 

for their products. 

The proposed action would also 

benefit consumers by generating more 

product choices, as more products can 

be shipped to new markets. In addition, 

the Federal inspection legend and 

official State establishment inspection 

number may facilitate traceback of these 

products if such products are ever the 

subject of an investigation or recall. 

States that participate in the program 

would benefit because FSIS would 

reimburse them for at least 60% of their 

costs related to inspection of selected 

establishments in the State. FSIS 

provides up to 50% of the costs of 

existing cooperative State inspection 

programs. The Agency has tentatively 

concluded that most States will benefit 

from the 10% increase in 

reimbursement for the cooperative 

interstate shipment program because, as 

explained below, for many States, the 

costs to administer the new program are 

not expected to exceed the costs to 

administer the State meat and poultry 

inspection programs. 

Expected Costs of the Proposed 

Action: 

Costs to the participating 

establishments. To be eligible to 

participate in the cooperative interstate 

shipment program, a State-inspected 

establishment must be in compliance 

with: (1) The State-inspection program 

of the State in which the establishment 

is located and (2) the FMIA or PPIA, and 

their implementing regulations. Before 

State-inspected establishments can be 

selected to participate in a cooperative 

interstate shipment program, they will 

need to apply for selection into the 

program and demonstrate that they 

comply with both State and Federal 

requirements. 

Thus, an establishment that chooses 

to apply for selection into the program 

will incur one-time start-up costs 

associated with filing an application, 

training employees, meeting regulatory 

performance standards, obtaining label 

approval, and implementing a food 

safety system that complies with all 

Federal requirements (e.g., Sanitation 

SOP and HACCP requirements). 

In addition, to qualify for a 

cooperative interstate shipment 

program, some State-inspection 

establishments may need to invest in 

structural modifications to their 

facilities in order to comply with 

Federal standards. Based on information 

obtained through FSIS’ outreach 

activities with the States, the Agency 

estimates that the cost for Stateinspected establishments to fully 

comply with Federal standards, as 

required by the law, will range from 

$1,500 to $50,000. According to most 

State Directors, the cost to very small 

establishments that do not need to make 

structural modifications to their 

facilities is likely to be in the range of 

$5,000 to $10,000. On the other hand, if 

the establishments need to make 

structural modifications or perform new 

construction then the range would be 

about $15,000 to $30,000.1 However, 

because this is a voluntary program, 

establishments that choose to incur the 

costs associated with participating in 

the program will most likely do so 

because they anticipate that such 

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47658 Federal Register / Vol. 74, No. 178 / Wednesday, September 16, 2009 / Proposed Rules 

2Based on Agency’s most recent (FY 2008) review 

of the 27 States’ self-assessment reports (including 

the State Laboratory Activity Tables) by the Federal 

State Audit Branch, Internal Control and Audit 

Division of the Office of Program Evaluation, 

Enforcement, and Review. 

participation will provide an overall net 

benefit for them. The Agency welcomes 

comments on these estimates. 

Looking at the potential for the 

establishments to experience new 

(incremental) burden or expenses due to 

State inspection under the proposed 

cooperative interstate shipment 

program, FSIS believes that there will be 

essentially no change. FSIS is aware that 

the cooperative State meat and poultry 

products inspection programs are not 

identical to Federal inspection, as they 

must be under the cooperative interstate 

shipment program. So FSIS anticipates 

that State inspection procedures will 

need to be changed somewhat to comply 

with the requirements of the cooperative 

interstate shipment program. However, 

since the State programs are required to 

be equal to the Federal inspection 

programs now, FSIS anticipates that 

changes will largely be procedural, and 

there will not be any particular increase 

or decrease in overall State effort that 

would change the burden of the 

inspection regimen on the 

establishments. 

Costs to the participating States. 

States that choose to participate in the 

program will be required to pay 40 

percent of the eligible costs related to 

inspection of establishments in the State 

that are selected for the program. Under 

the current cooperative program, the 

States are paying 50 percent of the 

eligible inspection costs. Although the 

inspection costs under the new program 

may be different from the costs under 

the existing program, the States’ share of 

40 percent or less is unlikely to be 

higher than its current share. 

States that choose to participate in the 

interstate shipment program may need 

to make certain modifications to their 

State inspection programs to provide 

inspection services to selected 

establishments in a manner that is the 

same as the Federal inspection program. 

However, most States that have 

implemented State meat and poultry 

products inspection (MPI) programs 

have incorporated the Federal 

requirements into their programs.2

Thus, State costs to train State 

personnel are likely to be minimal 

because many State personnel have 

received training in Federal inspection 

methodology as part of the State MPI 

program. 

States may incur some costs 

associated with the processing and 

evaluation of applications submitted by 

establishments requesting to be selected 

for the cooperative interstate shipment 

program. However, because the States 

will develop their own application 

procedures, FSIS is unable to estimate 

these costs with any certainty. The 

Agency requests comments on potential 

State costs associated with the 

processing and evaluation of these 

applications. 

FSIS anticipates that State inspection 

procedures will need to be changed 

somewhat to comply with the 

requirements of the proposed 

cooperative interstate shipment 

program. However, since the State 

programs are required to be at least 

equal to the Federal inspection 

programs now, FSIS anticipates that 

changes will largely be procedural, and 

there will not be any particular increase 

or decrease in overall State effort or 

cost. FSIS has no basis on which to 

assume anything else. FSIS requests 

input from State Program officials that 

might be useful to refine this estimate. 

Expected FSIS Budgetary Effects: 

The new Federal-State cooperative 

inspection program option which 

section 11015 of the 2008 Farm Bill 

requires the Secretary to create and 

which we propose to implement via this 

regulatory action is expected to have 

budgetary effects on FSIS to support 

about 16 full-time equivalent new staff. 

This section discusses the baseline costs 

and activities, i.e., what is happening 

now before the cooperative interstate 

shipment program option is available, 

and then lays out the incremental effects 

on FSIS. FSIS staff have worked with 

the 27 directors of the Federal-State 

meat and poultry inspection program to 

gauge the level of interest at the State 

and establishment level. Their input has 

been incorporated into the assumptions 

here. 

Baseline: 

Federal-State cooperative inspection 

programs operated in 27 States and 

1,873 establishments in FY 2008, the 

baseline year for this analysis. Actual 

Federal spending for the Federal-State 

cooperative inspection programs was 

$63,959,709 for FY 2008 as reported in 

the FY 2010 President’s Budget, which 

also projected $64,703,000 for FY 2009 

and $65,654,000 for FY 2010. By statute, 

the States may be reimbursed for up to 

50 percent of the cost of their State 

cooperative inspection programs. 

Federal reimbursements to State 

programs reported in the FY 2010 

budget, included in the above figures, 

are $49,061,068 for FY 2008, 

$50,332,000 for FY 2009, and 

$50,332,000 for FY 2010. In fact, actual 

total State spending for the FederalState cooperative inspection programs 

for FY 2008 was $104 million with $49 

million of that reimbursed by FSIS, as 

noted above. 

FSIS extends these figures into years 

2010 through 2014, see table below, the 

5-year analysis period for this rule, by 

assuming that, had the cooperative 

interstate shipment program option not 

been enacted, State cooperative 

programs operations would continue 

through the period on a generally stable 

basis. The Agency assumes that the 

same 27 States would continue to 

participate and the program would 

inspect about the same number of 

establishments as were inspected in FY 

2008, i.e., 1,873. This appears 

reasonable because, among the 27 States 

in the program the number of 

establishments has been relatively 

stable. Since the number of 

establishments and States is assumed to 

remain unchanged, and no significant 

changes in program requirements are 

expected, baseline program costs are 

assumed to change only with the cost of 

inflation. 

Turning to FSIS administrative costs, 

we note that FSIS staffing has been 

stable in the 28 to 33 person range for 

the past decade, and is expected to 

remain at 29 for the foreseeable future. 

Consistent with State level activities, 

since the number of States is expected 

to remain the same with no particular 

change in the number of establishments, 

and since no significant changes in 

program requirements are expected, 

FSIS administrative costs are expected 

to change consistent with the cost of 

inflation, i.e., the Agency anticipates no 

significant increase or decrease in FSIS 

administrative activity during the five 

years in the baseline scenario (i.e., the 

baseline assumes no cooperative 

interstate shipment program). FSIS 

spending to administer Federal-State 

cooperative inspection programs, 

excluding the reimbursement costs, was 

$14,898,641 for FY 2008 as reported in 

the FY 2010 budget, and is projected at 

$14,371,000 for FY 2009 and 

$15,322,000 for FY 2010. For the years 

out to 2014, these costs would change 

with inflation and are shown in the 

following table. 

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Federal Register / Vol. 74, No. 178 / Wednesday, September 16, 2009 / Proposed Rules 47659 

TABLE 1—BASELINE: COST FEDERAL-STATE COOP PROGRAM WITH NO CHANGE

FSIS Level Costs, Fiscal Year 2010 

(Budget) 2011 2012 2013 2014 Total 5-year 

FSIS costs .............................................................. $15 .3 $15 .9 $16 .5 $17 .1 $17 .8 $82.5 

Reimburs. to States ............................................... 50 .3 52 .1 54 .1 56 .2 58 .4 271.1 

Total ................................................................ 65 .7 68 .0 70 .5 73 .3 76 .1 353.6 

FSIS Staff Years .................................................... 29 29 29 29 29 ....................

State Level Costs, Fiscal Year 2010 

(Budget) 2011 2012 2013 2014 Total 5-year 

Federal reimbursement .......................................... $50 .3 $52 .1 $54 .1 $56 .2 $58 .4 $271.1 

State program spending ........................................ 50 .3 52 .1 54 .1 56 .2 58 .4 271.1 

Total MPI program .......................................... 100 .7 104 .2 108 .1 112 .4 116 .7 542.1 

Number of plants ................................................... 1,873 1,873 1,873 1,873 1,873 ....................

Economic Assumptions From OMB for the 2010 Budget 

State & Local Exp, % ............................................. 3 .1 3 .5 3 .8 3 .9 3 .9 ....................

FSIS civilian pay, % ............................................... 5 .1 4 .1 4 .1 4 .1 4 .1 ....................

Non-Pay Expenditure, % ....................................... 0 .8 1 .2 1 .4 1 .6 1 .6 ....................

Interstate Scenario: 

To evaluate this scenario, we must 

estimate the number of establishments 

and States that will seek to participate 

and be selected for the new cooperative 

interstate shipment program. Then we 

will discuss the likely incremental 

changes in activity that could 

reasonably suggest any changes in cost 

or burden for FSIS, the States, or 

establishments. 

Here is how we determined the 

number of establishments that are likely 

to participate in the proposed 

cooperative interstate shipment 

program. The first cut is to look at all 

establishments and determine the 

number with fewer than 25 employees. 

The statute limits participation to these 

smaller establishments. Of the total 

1,873 plants in the current Federal-State 

cooperative inspection program there 

are 1,811 that meet the size criterion for 

eligibility for the cooperative interstate 

shipment program. However, as noted 

earlier, sixteen States have expressed an 

interest in the new cooperative 

interstate shipment program, and these 

States have a total of 1,133 

establishments that could potentially be 

eligible for the new program. The eleven 

States that have not indicated an 

interest in the cooperative interstate 

shipment program include all nine 

States that have establishments 

operating under the Talmadge-Aiken 

(TA) program. The TA States account 

for the remaining 678 eligible 

establishments. 

Because participation in the 

cooperative interstate shipment program 

is voluntary, the Agency cannot 

estimate with certainty the number of 

eligible establishments that will choose 

to participate. Therefore, for illustration 

purposes, and to obtain a reasonable 

range of possible budget impacts, given 

the uncertainty, the Agency estimated 

the costs for three scenarios: 200, 400 

and 600 establishments. A five-year cost 

estimate was completed covering the FY 

2010 through FY 2014. We further 

assume that the participating 

establishments will be evenly 

distributed among the participating 

States and, just as the baseline assumes, 

we anticipate no particular change in 

the numbers of establishments in the 

overall program over the 5 years and no 

change in the cooperative interstate 

shipment program establishments. 

At this time, we turn to the change in 

Federal costs for the program caused by 

the new statutory reimbursement level. 

For the cooperative interstate shipment 

program the law requires that FSIS 

reimburse State for costs related to the 

inspection of selected establishments in 

an amount not less than 60 percent of 

eligible State costs, as opposed to 

current law which allows 

reimbursement of up to 50 percent of 

costs for the regular, and continuing, 

Federal-State cooperative inspection 

program. This analysis projects the 

effects of the different reimbursement 

rate on FSIS fiscal requirements 

assuming no change in State level 

activity over the baseline. FSIS assumes 

that States will not change their level of 

activity associated with selected 

establishments in the cooperative 

interstate shipment program as 

discussed above. FSIS determined that 

Agency reimbursements to States would 

increase by about $2.2 million in a fully 

operational cooperative interstate 

shipment program in FY 2011 (not all 

plants will be in the cooperative 

interstate shipment program for all of 

FY 2010). 

In all years, the amount of increase in 

this component of Federal 

reimbursement would offset State 

spending by the same amount. (FY 2011 

is used because it is the first, fully 

operational year, explained further 

below.) To calculate this figure, FSIS 

estimated average per establishment 

spending for the Federal-State 

Cooperative Inspection Program by 

States for the 1,873 establishments in 

the baseline scenario. For FY 2011, the 

average per establishment is $55,626, 

including State and Federal 

reimbursement. Reviewing the budget 

for FY 2008 and 2009, we see that 

average Federal reimbursement is 

currently running about 50 percent of 

total State costs. The reimbursement 

ratio is expected to remain stable for the 

5-year period both for inspecting 

establishments in the baseline scenario, 

and for inspecting establishments that 

stay with the existing program, while 

400 establishments seek and are 

selected to operate with the cooperative 

interstate shipment program. 

Reimbursement will increase to 60 

percent for inspection services to the 

400 establishments that move into the 

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47660 Federal Register / Vol. 74, No. 178 / Wednesday, September 16, 2009 / Proposed Rules 

cooperative interstate shipment program 

option. So, for example, FY 2011 State 

reimbursement for inspection of the 

average Interstate establishment would 

change from the average $27,813 it 

would receive for an establishment 

continuing in the regular Federal-State 

cooperative inspection programs, to 

$33,376 per establishment for 

inspection of an Interstate plant, an 

increase of $5,563 per plant, which 

yields $2.2 million for the 400 

establishments. This and analogous 

figures are reflected in the tables below 

in the ‘‘Total grants to States’’ line for 

the 200, 400 and 600 establishment 

scenarios. 

Under section 11015 of the Farm Bill, 

in addition to the increased 

reimbursement rates that will increase 

the grants to States for inspection of 

establishments participating in the 

cooperative interstate shipment 

program, FSIS is required to oversee the 

State inspectors doing the inspections 

for the cooperative interstate shipment 

program more intensively than the 

Agency typically does for the current, 

and the continuing MPI program. FSIS 

also expects to incur new costs for 

outreach and training. This will result 

in increased demand for FSIS staff and 

resources. In summary, this includes 

state coordinators, Deputy District 

Managers (DDM), outreach and training 

staff, and lab analysts to certify State 

laboratories, transition grants to hone 

establishment staff skills with HACCP 

and SOPs and associated operating 

expenses and travel expenses. 

The statute requires FSIS to appoint a 

Federal employee to be a State 

Coordinator. As explained earlier in this 

document, the State Coordinator 

prescribed by the statute is referred to 

as the ‘‘selected establishment 

coordinator’’ (SEC) in this proposed 

rule. The SEC is required by statute to 

visit selected establishments with a 

frequency that is appropriate to ensure 

that such establishments are operating 

in a manner that is consistent with the 

FMIA and PPIA, including regulations 

and policies there under and to: (1) 

Provide oversight and enforcement of 

the program, and (2) to oversee the 

training and inspection activities of 

State-personnel designated to provide 

inspection services to the selected 

establishments. SECs will further 

provide quarterly reports on each 

selected establishment under his or her 

jurisdiction to document their level of 

compliance with the requirements of the 

Acts. 

We estimate that a total of 13 full time 

equivalent FSIS employees will be able 

to perform the SEC functions for the 16 

States expected to participate in the 

cooperative interstate shipment 

program. We anticipate that about onequarter of the total establishments will 

enter the cooperative interstate 

shipment program each quarter during 

FY 2010, reaching the full complement 

toward the end of that year. So, for 

example, in the 400 establishment 

scenario, 100 establishments will 

initiate inspection under a cooperative 

interstate shipment program sometime 

in the first quarter, another 100 in the 

second quarter, another in the third 

quarter, and the final group of 100 in the 

fourth quarter. It is expected that early 

in 2010 SEC time will initially focus on 

outreach and start-up activities 

(including establishment selection) and 

shift over until it is more completely the 

oversight activities stipulated in the 

Acts. While there may be one SEC per 

State from the beginning, we believe 

that contiguous States and 

establishments that are in relative close 

proximity could make it appropriate to 

have less than 16 full time equivalent 

SECs. Note that if 400 establishments 

convert into the cooperative interstate 

shipment program in FY 2010 and 

continue in the following years, each 

SEC will be responsible for 31 

establishments in a geographicallylimited area. This is approximately 

equal to the number of Federal 

establishments over which frontline 

FSIS supervisors have oversight 

responsibilities. 

In the start-up period, in FY 2009 and 

FY 2010, the first year of the cooperative 

interstate shipment program, in addition 

to SEC outreach efforts, FSIS expects to 

incur costs for outreach and training, 

and administration from OOEET for the 

small and very small establishments 

that are considering the cooperative 

interstate shipment program, that decide 

to apply for the program, and for those 

who are selected to participate in the 

program. OOEET will conduct face-toface workshops in every State to provide 

information to establishment owners 

and operators about the requirements of 

the new cooperative interstate shipment 

program. These workshops will not only 

educate the interested owners and 

operators about the requirements, they 

will also help them meet the 

requirements. This allocation will cover 

the cost of developing, printing, and 

shipping the workshop materials, as 

well as the cost of traveling Agency 

personnel to conduct the workshops, 

and the cost of meeting space. The cost 

is reflected in the tables below in the 

‘‘Training/Outreach’’ line. The reason 

these costs do not change in the various 

scenarios—200, 400 or 600 

establishments—is because the 

information will be provided in a 

classroom. Costs are expected to be 

largely the same whether attendance is 

high or low. Also note that these costs 

drop sharply for each subsequent year 

as the cooperative interstate shipment 

program specific effort changes to 

operating training for establishments 

selected to participate in the program. 

In the start-up period, transition grant 

authority under 9 CFR 332.12 and 9 CFR 

381.522 will be used to provide States 

funds to reimburse selected 

establishments in the State for their 

costs to train one individual in HACCP 

and associated training in Sanitation 

SOP requirements. The Agency 

estimates that the cost of training each 

establishment specialist will average 

about $5,000, including staff time and 

travel necessary for the training. Since 

this is a new expense necessary to 

implement the cooperative interstate 

shipment program and since statute 

authorizes it without State matching 

funds, these costs will be entirely new 

costs for FSIS that are part of ‘‘Total 

grants to States’’ in FY 2010 in Table 2 

below. Thus, the cost to FSIS will total 

about $1 million, $2 million and $3 

million for the 200, 400 and 600 

establishment scenarios respectively. 

This training will only be needed in the 

start-up period and, accordingly, 

appears only in FY 2010 in Table 2. 

SECs are likely to be supervised by 

Deputy District Managers (DDMs) at the 

equivalent of about 1 DDM per 300 

establishments. This is similar to the 

ratio of DDM effort used to manage 

frontline FSIS supervisors in the Federal 

programs. For the three establishment 

levels, this would mean 1 DDM for 200 

establishments and 2 DDMs for 400 or 

600 establishments. This is reflected in 

the ‘‘DDM’’ line of the tables below. 

FSIS estimates that two laboratory 

staff will be needed to complete 

periodic audits of the State inspection 

program laboratory systems and 

otherwise coordinate with the 

laboratories to ensure the sampling and 

testing programs are equivalent to the 

Federal program. It is anticipated that 

the two lab staff will be needed 

regardless of whether 200, 400 or 600 

establishments eventually participate 

since the same number of State labs will 

need to be reviewed regardless of the 

volume of work they do under the 

cooperative interstate shipment 

program. This is reflected in the ‘‘Lab 

staff’’ line of the tables below. 

Travel costs are included on the 

‘‘Travel—SC & lab staff’’ line in the 

tables below. The SECs will need to 

travel a fair amount to complete their 

duties and the lab staff will need to 

travel some. Travel for SECs and lab 

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staff starts in FY 2010 and will run 

higher for the first year, after which time 

the start-up effort will diminish. Since 

we are assuming the selected 

establishments are evenly distributed in 

the participating States, we anticipate 

that the number of participating 

establishments would only have slight 

impact on the cost of travel for each 

SEC. We project about $6,150 for 

training and travel for each SEC in the 

first and $630 for subsequent years. 

For the lab staff we based our trips to 

the State program laboratories on one 

audit of each laboratory to make an 

initial assessment, so that would be one 

trip to the labs for each of the 27 eligible 

States. Because most of the labs 

typically have a chemistry residue 

program and a microbiology program, 

two lab-auditors will go on each trip— 

one chemist and one microbiologist. 

These labs would also need a follow-up 

the next year and then we would make 

a judgment as to whether there needed 

to be annual visits after that. The audit 

will be based on the program that FSIS 

developed several years ago, which is 

similar to the program that the Agency 

uses to assess the Pasteurized Egg 

Product Recognized Laboratory 

program. We based the number of audits 

on the figures that we had regarding the 

number of states that will participate, 

16. Each trip ran about $1,500 for each 

auditor. 

Finally, there are the normal 

operating expenses associated with field 

operations including office space, 

communications costs, information 

technology costs (such as laptop 

computers), other equipment, office 

supplies, etc. FSIS estimates $3,500 per 

new staff for laptop, LincPass, Black 

Berries, etc. These costs are generally 

stable over time, although they inflate 

and, of course, are a little higher in the 

start-up year. These costs are found in 

the ‘‘Equipment and admin’’ line of the 

tables below. 

Table 2, below, summarizes the 

incremental costs to FSIS to operate the 

new cooperative interstate shipment 

program in the three scenarios 200, 400 

and 600 establishments, with the 400 

establishment level assumed to be the 

likely level. 

TABLE 2—COOPERATIVE INTERSTATE SHIPMENT PROGRAM COST ESTIMATES—THREE SCENARIOS

Interstate Program—Summary of Incremental Cost Estimates ($ Millions) 

Fiscal Year 2009 2010 2011 2012 2013 2014 5-Year 

Costs if 200 establishments ........... $1.93 $5 .55 $4 .07 $4 .22 $4 .40 $4 .58 $22.83 

Costs if 400 establishments ........... 1.93 7 .11 5 .34 5 .55 5 .77 6 .00 29.77 

Costs if 600 establishments ........... 1.93 8 .79 6 .53 6 .79 7 .06 7 .33 36.50 

Interstate Program with 200 Establishments ($ Millions) 

Fiscal Year 2009 2010 2011 2012 2013 2014 5-Year 

Number of establishments * ........... .................... 200 200 200 200 200 ....................

Total grants to States ** ................. .................... $1 .54 $1 .11 $1 .15 $1 .20 $1 .25 ....................

Total salaries & benefits ................ .................... 2 .20 2 .17 2 .25 2 .35 2 .45 ....................

DDM ............................................... .................... 0 .15 0 .16 0 .16 0 .17 0 .18 ....................

State coordinator (SC) ................... .................... 1 .69 1 .76 1 .83 1 .91 1 .98 ....................

Lab staff ......................................... .................... 0 .24 0 .25 0 .26 0 .27 0 .29 ....................

Operating expenses ....................... .................... 1 .81 0 .79 0 .82 0 .85 0 .89 ....................

Travel-SC & lab staff ..................... .................... 0 .16 0 .09 0 .09 0 .10 0 .10 ....................

Training/Outreach .......................... 1.43 1 .25 0 .35 0 .36 0 .38 0 .39 ....................

Equipment and admin .................... 0.50 0 .40 0 .35 0 .36 0 .38 0 .39 ....................

Total ........................................ 1.93 5 .55 4 .07 4 .22 4 .40 4 .58 22.83 

Interstate Program with 400 Establishments ($ Millions) 

Fiscal Year 2009 2010 2011 2012 2013 2014 5-Year 

Number of establishments * ........... .................... 400 400 400 400 400 ....................

Total grants to States ** ................. .................... $3 .07 $2 .23 $2 .31 $2 .40 $2 .49 ....................

Total salaries & benefits ................ .................... 2 .23 2 .32 2 .42 2 .52 2 .62 ....................

DDM ............................................... .................... 0 .30 0 .31 0 .33 0 .34 0 .35 ....................

State coordinator (SC) ................... .................... 1 .69 1 .76 1 .83 1 .91 1 .98 ....................

Lab staff ......................................... .................... 0 .24 0 .25 0 .26 0 .27 0 .29 ....................

Operating expenses ....................... .................... 1 .81 0 .79 0 .82 0 .85 0 .89 ....................

Travel-SC & lab staff ..................... .................... 0 .16 0 .09 0 .09 0 .10 0 .10 ....................

Training/Outreach .......................... 1.43 1 .25 0 .35 0 .36 0 .38 0 .39 ....................

Equipment and admin .................... 0.50 0 .40 0 .35 0 .36 0 .38 0 .39 ....................

Total ........................................ 1.93 7 .11 5 .34 5 .55 5 .77 6 .00 29.77 

Interstate Program with 600 Establishments ($ Millions) 

Fiscal Year 2009 2010 2011 2012 2013 2014 5-Year 

Number of establishments * ........... .................... 600 600 600 600 600 ....................

Total grants to States ** ................. .................... $4 .67 $3 .34 $3 .46 $3 .60 $3 .74 ....................

Total salaries & benefits ................ .................... 2 .23 2 .32 2 .42 2 .52 2 .62 ....................

DDM ............................................... .................... 0 .30 0 .31 0 .33 0 .34 0 .35 ....................

State coordinator (SC) ................... .................... 1 .69 1 .76 1 .83 1 .91 1 .98 ....................

Lab staff ......................................... .................... 0 .24 0 .25 0 .26 0 .27 0 .29 ....................

Operating expenses ....................... .................... 1 .89 0 .87 0 .90 0 .94 0 .97 ....................

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TABLE 2—COOPERATIVE INTERSTATE SHIPMENT PROGRAM COST ESTIMATES—THREE SCENARIOS—Continued 

Travel-SC & lab staff ..................... .................... 0 .24 0 .17 0 .18 0 .18 0 .19 ....................

Training/Outreach .......................... 1.43 1 .25 0 .35 0 .36 0 .38 0 .39 ....................

Equipment and admin .................... 0.50 0 .40 0 .35 0 .36 0 .38 0 .39 ....................

Total ........................................ 1.93 8 .79 6 .53 6 .79 7 .06 7 .33 36.50 

Economic Assumptions from OMB for the 2010 Budget 

State & Local Exp, % ..................... .................... 3 .1 3 .5 3 .8 3 .9 3 .9 ....................

FSIS Civilian pay, % ...................... .................... 5 .1 4 .1 4 .1 4 .1 4 .1 ....................

Non-Pay Expenditure, % ............... .................... 0 .8 1 .2 1 .4 1 .6 1 .6 ....................

State Grant Incremental Increase in FSIS Reimbursement to the State 

Per Establishment .......................... .................... $5,374 $5,563 $5,774 $5,999 $6,233 ....................

* Note that in FY 2010 about one quarter of establishments are expected to enroll each quarter. In subsequent fiscal years, all establishments 

will be in the program for the full year. 

** Note ‘‘Total grants to States’’ includes funding for Transition Grants in 2010 for States to use to help plants train one person in HACCP and 

SOPs per § 332.12 and § 381.522. 

Effect on Small Entities 

This proposed action will primarily 

affect very small and certain small 

establishments that operate under 

cooperative State meat or poultry 

inspection programs. Under section 

11015, State-inspected establishments 

that employ on average 25 or fewer 

employees would be permitted to be 

selected to participate in a cooperative 

interstate shipment program. The law 

also permits the Secretary to select 

State-inspected establishments that 

employ, on average, more than 25 but 

less than 35 employees to participate in 

the program. However, to remain in the 

program, these establishments must 

employ, on average, 25 or fewer 

employees three years after the 

regulations implementing the new 

cooperative interstate shipment program 

become effective. FSIS provides for the 

selection of State-inspected 

establishments that employ, on average, 

more than 25 but fewer than 35 

employees in the proposed 

implementing regulations. Thus, this 

proposed rule will benefit these very 

small and small State-inspected 

establishments by allowing them to ship 

meat and poultry products in interstate 

and foreign commerce, thereby opening 

new markets for their products. 

Executive Order 12988 

This proposed rule has been reviewed 

under Executive Order 12988, Civil 

Justice Reform. This rule: (1) Preempts 

State and local laws and regulations that 

are inconsistent with this rule; (2) has 

no retroactive effect; and (3) does not 

require administrative proceedings 

before parties may file suit in court 

challenging this rule. 

Additional Public Notification 

Public awareness of all segments of 

rulemaking and policy development is 

important. Consequently, in an effort to 

ensure that minorities, women, and 

persons with disabilities are aware of 

this proposed rule, FSIS will announce 

it online through the FSIS Web page 

located at http://www.fsis.usda.gov/ 

Regulations_&_Policies/2009_Proposed 

_Rules_Index/index.asp. FSIS will also 

make copies of this Federal Register 

publication available through the FSIS 

Constituent Update, which is used to 

provide information regarding FSIS 

policies, procedures, regulations, 

Federal Register notices, FSIS public 

meetings, and other types of information 

that could affect or would be of interest 

to constituents and stakeholders. The 

Update is communicated via Listserv, a 

free electronic mail subscription service 

for industry, trade groups, consumer 

interest groups, health professionals, 

and other individuals who have asked 

to be included. The Update is also 

available on the FSIS Web page. 

Through the Listserv and Web page, 

FSIS is able to provide information to a 

much broader and more diverse 

audience. In addition, FSIS offers an email subscription service which 

provides automatic and customized 

access to selected food safety news and 

information. This service is available at 

http://www.fsis.usda.gov/ 

news_and_events/email_subscription/. 

Options range from recalls to export 

information to regulations, directives 

and notices. Customers can add or 

delete subscriptions themselves, and 

have the option to password protect 

their accounts. 

Paperwork Reduction Act 

In accordance with section 3507(d) of 

the Paperwork Reduction Act of 1995, 

the information collection or 

recordkeeping requirements included in 

this proposed rule have been submitted 

for approval to the Office of 

Management and Budget (OMB). 

Title: ‘‘Cooperative Inspection 

Programs: Interstate Shipment of Meat 

and Poultry Products’’ 

Type of collection: New. 

Abstract: FSIS has reviewed the 

paperwork and recordkeeping 

requirements in this proposed rule in 

accordance with the Paperwork 

Reduction Act. Under this proposed 

rule, FSIS is requiring certain 

information collection and 

recordkeeping activities. 

FSIS is proposing that States that are 

interested in participating in the 

cooperative interstate shipment program 

submit a request for an agreement to 

establish such a program through the 

appropriate FSIS District Office. In their 

requests, States must: (1) Identify 

establishments in the State that the State 

recommends for initial selection into 

the program; (2) include documentation 

to demonstrate that the State is able to 

provide necessary inspections services 

to selected establishments in the State 

and conduct any related activities that 

would be required under a cooperative 

interstate shipment program; and (3) 

agree to comply with certain conditions 

to assist with enforcement of the 

program. FSIS is also proposing that 

States that have entered into an 

agreement with FSIS for a cooperative 

interstate shipment program submit, 

through the FSIS District Office, an 

evaluation of each State-inspected 

establishment that has applied, and that 

the State recommends be selected, for 

the cooperative interstate shipment 

program. 

Under this proposal, State inspected 

establishments selected to participate in 

the cooperative interstate shipment 

program will be required to develop and 

maintain the same records that are 

required under the Acts and their 

implementing regulations. Selected 

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establishment will also be required to 

give the FSIS selected establishment 

coordinator (SEC) access to all 

establishment records required under 

the Acts and implementing regulations. 

Most States that have cooperative State 

meat or poultry products inspection 

programs have incorporated the Federal 

standards into their programs. Thus, 

most establishments selected to 

participate in the interstate shipment 

program are currently required to 

maintain records that comply with 

Federal standards. However, 

establishments located in States that 

have implemented recordkeeping 

requirements that are ‘‘at least equal to’’ 

but not identical to Federal 

requirements will need to modify their 

recordkeeping procedures to comply 

with Federal standards. All selected 

establishments will be required to give 

the FSIS SEC access to their records 

upon request. 

Estimate of Burden: FSIS estimates 

that 16 of the 27 States that currently 

have agreements for cooperative State 

meat or poultry products inspection 

programs will prepare and submit a 

request to FSIS to establish a 

cooperative interstate shipment 

program. The Agency also estimates that 

approximately 400 establishments will 

apply for the program. Thus, FSIS 

estimates that each of the 16 States 

mentioned above will need to prepare 

and submit, on average, 25 evaluations 

for the State-inspected establishments 

that have applied for, and that the State 

recommends, for selection into the 

program, for an estimated total of 400 

evaluations. 

FSIS estimates that it will take 

approximately 40 hours for each State to 

prepare and submit a request to 

establish a cooperative interstate 

shipment program, for a total burden of 

640 hours. The Agency estimates that it 

will take each State approximately 24 

hours to prepare an evaluation of a 

State-inspected establishment’s 

qualifications to be selected for a 

cooperative interstate shipment 

program, for a total burden of 9,600 

hours. 

FSIS estimates that if all of the 400 

establishments that apply are selected 

for the program, approximately 100 of 

these establishments will need to 

modify their recordkeeping procedures 

to come into compliance with Federal 

standards. The extent to which these 

establishments will need to modify their 

recordkeeping procedures will depend 

on requirements under the State 

inspection program. Because 

recordkeeping requirements under the 

State inspection program must be ‘‘at 

least equal to’’ the Federal requirements, 

these modifications should be minor. 

FSIS estimates that it will take 

approximately 16 hours for each 

establishment that is currently 

maintaining records under State 

standards to review and revise its 

recordkeeping procedures, and about 5 

minutes for each establishment to file 

these records, for a total burden of 

approximately 1,608.3 hours. 

All of the estimated 400 

establishments that participate in the 

program will be required to give the SEC 

access to all records required under the 

Federal Acts. FSIS estimates that it will 

take each establishment approximately 

15 minute to assist the SEC to locate the 

necessary records for review on the 

initial visit, for a total burden of 100 

hours. FSIS estimates that these 

establishments will need to spend and 

approximately 5 minute to assist the 

SEC locate records for review for each 

subsequent visit. If the SEC visits each 

selected establishment at least one a 

month, the total burden per 

establishment per year will be 1 hour, 

for a total estimated annual burden of 

400 hours. 

Respondents: State agencies that 

administer cooperative State meat and 

poultry products inspection programs 

and State-inspected establishments 

selected to participate in a cooperative 

interstate shipment program. 

Estimated number of respondents: 

416 (16 States and 400 State-inspected 

establishments). 

Estimated number of responses per 

respondent: One request to establish a 

cooperative interstate shipment program 

per State and 25 evaluations of Stateinspected establishments per State, on 

average. 

A one-time modification of records for 

each selected establishment whose 

recordkeeping does not comply with all 

Federal standards. One initial SEC visit 

in which each selected establishment 

will need to provide the SEC with 

access to all required records. Each 

establishment selected for the program 

will need to provide the FSIS access to 

its records on an ongoing basis. 

Estimated Total Annual Burden on 

Respondents: 12,348.3 hours to 

establish and implement the cooperative 

interstate shipment program in 16 

States. Once the program has been 

implemented, an estimated annual 

burden of 400 hours for selected 

establishments to provide the SEC 

access to establishment records on-going 

basis. 

Copies of this information collection 

assessment can be obtained from John 

O’Connell, Paperwork Reduction Act 

Coordinator, Food Safety and Inspection 

Service, USDA, 1400 Independence 

Avenue, SW., Room 3532 South 

Building, Washington, DC 20250. 

Comments are invited on: (a) Whether 

the proposed collection of information 

is necessary for the proper performance 

of FSIS’ functions, including whether 

the information will have practical 

utility; (b) the accuracy of FSIS’ estimate 

of the burden of the proposed collection 

of information, including the validity of 

the methodology and assumptions used; 

(c) ways to enhance the quality, utility, 

and clarity of the information to be 

collected; ways to minimize the burden 

of the collection of information on those 

who are to respond, including through 

the use of appropriate automated, 

electronic, mechanical, or other 

technological collection techniques, or 

other forms of information technology. 

Comments may be sent to both John 

O’Connell, Paperwork Reduction Act 

Coordinator, at the address provided 

above, and the Desk Officer for 

Agriculture, Office of Information and 

Regulatory Affairs, Office of 

Management and Budget, Washington, 

DC 20253. 

To be most effective, comments 

should be sent to OMB within 60 days 

of the publication date of this proposed 

rule. 

In accordance with section 3507(d) of 

the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the information 

collection or record keeping 

requirements included in this proposed 

rule have been submitted for approval to 

the Office of Management and Budget 

(OMB). 

Proposed Regulations 

List of Subjects 

9 CFR Part 321 

Grant programs—agriculture, 

Intergovernmental relations, Meat 

inspection. 

9 CFR Part 332 

Grant programs—agriculture, 

Intergovernmental relations, Meat 

inspection. 

9 CFR Part 381 

Grant programs—agriculture, 

Intergovernmental relations, Poultry and 

poultry products. 

For the reasons discussed in the 

preamble, FSIS is proposing to amend 9 

CFR Chapter III as follows: 

PART 321—COOPERATION WITH 

STATES AND TERRITORIES 

1. The authority citation for part 321 

is revised to read as follows: 

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

2.53. 

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2. A new § 321.3 is added to read as 

follows: 

§ 321.3 Cooperation of States for the 

interstate shipment of carcasses, parts of 

carcasses, meat, and meat food products. 

(a) The Administrator is authorized 

under 21 U.S.C. 683(b) to coordinate 

with States that have meat inspection 

programs as provided in § 321.1 of this 

part to select certain establishments 

operating under these programs to 

participate in a cooperative program to 

ship carcasses, parts of carcasses, meat, 

and meat food products in interstate 

commerce. A cooperative program for 

this purpose is called a ‘‘cooperative 

interstate shipment program.’’ 

(b) Establishments selected to 

participate in a cooperative interstate 

shipment program described in this 

section must receive inspection services 

from designated State personnel that 

have been trained in the enforcement of 

the Act. If the designated personnel 

determine that the carcasses, parts of 

carcasses, meat, and meat food products 

prepared in establishments selected to 

participate in the cooperative interstate 

shipment program comply with all 

requirements under the Act, these items 

will bear an official Federal mark of 

inspection and may be shipped in 

interstate commerce. The Administrator 

will assign an FSIS ‘‘selected 

establishment coordinator,’’ who will be 

an FSIS employee, to each State that 

participates in a cooperative interstate 

shipment program to provide Federal 

oversight of the program and 

enforcement of the program’s 

requirements. The Federal contribution 

for inspection services provided by 

States that enter into a cooperative 

interstate shipment program under this 

section will be at least 60 percent of 

eligible State costs. 

(c) Part 332 of this subchapter 

prescribes conditions under which 

States and establishments may 

participate in the cooperative interstate 

shipment program. 

(d) The Administrator will terminate 

a cooperative interstate shipment 

agreement with a State if the 

Administrator determines that the State 

is not conducting inspection at selected 

establishments in a manner that 

complies with the Act and the 

implementing regulations in this 

chapter. 

3. A new Part 332 is added to read as 

follows: 

PART 332—SELECTED 

ESTABLISHMENTS; COOPERATIVE 

PROGRAM FOR INTERSTATE 

SHIPMENT OF CARCASSES, PARTS 

OF CARCASSES, MEAT, AND MEAT 

FOOD PRODUCTS 

Sec. 

332.1 Definitions. 

332.2 Purpose. 

332.3 Requirements for establishments; 

ineligible establishments. 

332.4 State request for cooperative 

agreement. 

332.5 Establishment selection; official 

number for selected establishments. 

332.6 Commencement of a cooperative 

interstate shipment program; inspection 

by designated personnel and official 

mark. 

332.7 Federal oversight of a cooperative 

interstate shipment program. 

332.8 Quarterly reports. 

332.9 Enforcement authority. 

332.10 Deselection of ineligible 

establishments. 

332.11 Transition to official establishments. 

332.12 Transition grants. 

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

2.53. 

§ 332.1 Definitions. 

The following definitions apply to the 

regulations in this part: 

Cooperative interstate shipment 

program. A cooperative meat inspection 

program described in § 321.3 of this 

subchapter. 

Cooperative State meat inspection 

program. A cooperative State-Federal 

meat inspection program described in 

§ 321.1 of this subchapter. 

Designated personnel. State 

inspection personnel that have been 

trained in the enforcement of the Act 

and any additional State program 

requirements in order to provide 

inspection services to selected 

establishments. 

Interstate commerce. ‘‘Interstate 

commerce’’ has the same meaning as 

‘‘commerce’’ under § 301.2 of this 

subchapter. 

Selected establishment. An 

establishment operating under a State 

cooperative meat inspection program 

that has been selected by the 

Administrator, in coordination with the 

State where the establishment is 

located, to participate in a cooperative 

interstate shipment program. 

§ 332.2 Purpose. 

This part prescribes the conditions 

under which States that administer 

cooperative State meat inspection 

programs and establishments that 

operate under such programs may 

participate in a cooperative interstate 

shipment program. 

§ 332.3 Requirements for establishments; 

ineligible establishments. 

(a) An establishment that operates 

under a cooperative State meat 

inspection program may apply to 

participate in a cooperative interstate 

shipment program under this part if: 

(1) The establishment employs on 

average no more than 25 employees 

based on the standards described in 

paragraph (b) of this section, or 

(2) The establishment employed more 

than 25 employees but fewer than 35 

employees as of June 18, 2008. If 

selected to participate in a cooperative 

interstate shipment program, an 

establishment under this paragraph 

must employ on average no more than 

25 employees as of [insert date 3 years 

after effective date of final rule] or it 

must transition to become an official 

establishment as provided in § 332.11 of 

this part. 

(b) An establishment that has 25 or 

fewer employees based on the following 

standards is considered to have 25 or 

fewer employees on average for 

purposes of this part. 

(1) All individuals, both supervisory 

and non-supervisory, employed by the 

establishment on a full-time, part-time, 

or temporary basis are counted when 

calculating the total number of 

employees. 

(2) All individuals employed by the 

establishment from a temporary 

employee agency, professional 

employee organization, or leasing 

concern are counted when calculating 

the total number of employees. 

(3) The average number of employees 

is calculated for each of the pay periods 

for the preceding 12 calendar months. 

(4) Part-time and temporary 

employees are counted the same as fulltime employees. 

(5) If the establishment has not been 

in business for 12 months, the average 

number of employees is calculated for 

each of the pay periods in which the 

establishment has been in business. 

(6) Volunteers who receive no 

compensation are not considered 

employees. 

(7) The total number of employees can 

never exceed 35 individuals at any 

given time, regardless of the average 

number of employees. 

(c) The following establishments are 

ineligible to participate in a cooperative 

interstate shipment program: 

(1) Establishments that employ more 

than 25 employees on average (except as 

provided under paragraph (a)(2) of this 

section); 

(2) Establishments operating under a 

Federal-State program as provided in 

§ 321.2 of this subchapter as of June 18, 

2008; 

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(3) Official establishments; 

(4) Establishments that were official 

establishments as of June 18, 2008, but 

that were re-organized on a later date by 

the person that controlled the 

establishment as of June 18, 2008; 

(5) Establishments operating under a 

cooperative State meat inspection that 

employed more than 35 employees as of 

June 18, 2008, that were reorganized on 

a later date by the person that controlled 

the establishment as of June 18, 2008; 

(6) Establishments that are the subject 

of a transition under § 332.11 of this 

part; 

(7) Establishments that are in 

violation of the Act; 

(8) Establishments located in States 

without a cooperative State meat 

inspection program; and 

(9) Establishments located in a State 

whose agreement for a cooperative 

interstate shipment program was 

terminated by the Administrator as 

provided in § 321.3(d) of this 

subchapter. 

(d) An establishment that meets the 

conditions in paragraph (a) of this 

section and that is not an ineligible 

establishment under paragraph (c) of 

this section may apply for selection into 

a cooperative interstate shipment 

program through the State in which the 

establishment is located. 

§ 332.4 State request for cooperative 

agreement. 

(a) State participation in a cooperative 

interstate shipment program under this 

part is limited to States that have 

implemented cooperative State meat 

inspection programs. 

(b) To request an agreement for a 

cooperative interstate shipment program 

under this part, a State must submit a 

written request to the Administrator 

through the FSIS District Office for the 

FSIS District in which the State is 

located. In the request the State must: 

(1) Identify establishments in the 

State that have requested to be selected 

for the program that the State 

recommends for initial selection into 

the program; 

(2) Demonstrate that the State is able 

to provide the necessary inspection 

services to selected establishments in 

the State and conduct any related 

activities that would be required under 

a cooperative interstate shipment 

program established under this part; and 

(3) Agree that, if the State enters into 

an agreement with FSIS for a 

cooperative interstate shipment 

program, that the State will: 

(i) Provide FSIS with access to the 

results of all laboratory analyses 

conducted on product samples from 

selected establishments in the State; 

(ii) Notify the selected establishment 

coordinator for the State of the results 

of any laboratory analyses that indicate 

that a product prepared in a selected 

establishment may be adulterated or 

may otherwise present a food safety 

concern; and 

(iii) When necessary, cooperate with 

FSIS to transition selected 

establishments in the State that have 

been deselected from a cooperative 

interstate shipment program to become 

official establishments. 

(c) If the Administrator determines 

that a State that has submitted a request 

to participate in a cooperative interstate 

shipment program qualifies to enter into 

a cooperative agreement for such a 

program, the Administrator and the 

State will sign a cooperative agreement 

that sets forth the terms and conditions 

under which each party will cooperate 

to provide inspection services to 

selected establishments located in the 

State. 

(d) After the Administrator and a 

State have signed an agreement for a 

cooperative interstate shipment program 

as provided in paragraph (c) of this 

section, the Administrator will: 

(1) Appoint an FSIS employee as the 

FSIS selected establishment coordinator 

for the State and 

(2) Coordinate with the State to select 

establishments to participate in the 

program as provided in § 332.5(b) of this 

part. 

§ 332.5 Establishment selection; official 

number for selected establishments. 

(a) An establishment operating under 

a cooperative State meat inspection 

program will qualify for selection into a 

cooperative interstate shipment program 

if the establishment: 

(1) Has submitted a request to the 

State to be selected for the program; 

(2) Has the appropriate number of 

employees under § 332.3(a) of this part; 

(3) Is not ineligible to participate in a 

cooperative interstate shipment program 

under § 332.3(c) of this part; 

(4) Is in compliance with all 

requirements under the cooperative 

State meat inspection program; and 

(5) Is in compliance with all 

requirements under the Act and the 

implementing regulations in this 

chapter. 

(b) To participate in a cooperative 

interstate shipment program, an 

establishment that meets the conditions 

in paragraph (a) of this section must be 

selected by the Administrator, in 

coordination with the State where the 

establishment is located. 

(c) If an establishment is selected to 

participate in a cooperative interstate 

shipment program as provided in 

paragraph (b) of this section, the State 

is to assign the establishment an official 

number that reflects the establishment’s 

participation in the cooperative 

interstate shipment program and advise 

the FSIS selected establishment 

coordinator for the State of the official 

number assigned to each selected 

establishment in the State. The official 

number assigned to every selected 

establishment must contain a suffix, 

e.g., ‘‘SE,’’ that identifies the 

establishment as a selected 

establishment and that identifies the 

State, e.g., ‘‘SETX,’’ for ‘‘selected 

establishment Texas.’’ 

(d) Failure of the State to comply with 

paragraph (c) of this section will 

disqualify the State from participation 

in the cooperative interstate shipment 

program. 

§ 332.6 Commencement of a cooperative 

interstate shipment program; inspection by 

designated personnel and official mark. 

(a) A cooperative interstate shipment 

program will commence when the 

Administrator, in coordination with the 

State, has selected establishments in the 

State to participate in the program. 

(b) Inspection services for selected 

establishments participating in a 

cooperative interstate shipment program 

must be provided by designated 

personnel, who will be under the direct 

supervision of a State employee. 

(c) Carcasses, parts of carcasses, meat, 

and meat food products prepared in a 

selected establishment and inspected 

and passed by designated State 

personnel must bear an official Federal 

mark, stamp, tag, or label of inspection 

in the appropriate form prescribed in 

part 312 of this subchapter that includes 

the information specified in § 332.5(c) of 

this part. 

(d) Carcasses, parts of carcasses, meat, 

and meat food products prepared in a 

selected establishment that comply with 

the conditions in paragraph (c) of this 

section may be distributed in interstate 

commerce. 

§ 332.7 Federal oversight of a cooperative 

interstate shipment program. 

(a) The FSIS selected establishment 

coordinator for a State that has entered 

into an agreement for a cooperative 

interstate shipment program will visit 

each selected establishment in the State 

on a regular basis to verify that the 

establishment is operating in a manner 

that is consistent with the Act and the 

implementing regulations in this 

chapter. If necessary, the selected 

establishment coordinator, in 

consultation with the District Manager 

that covers the State, may designate 

qualified FSIS personnel to visit a 

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selected establishment on behalf of the 

selected establishment coordinator. 

(b) The selected establishment 

coordinator, in coordination with the 

State, will verify that selected 

establishments in the State are receiving 

the necessary inspection services from 

designated personnel, and that these 

establishments are eligible, and remain 

eligible, to participate in a cooperative 

interstate shipment program. 

The selected establishment 

coordinator’s verification activities may 

include: 

(1) Verifying that each selected 

establishment employs, and continues 

to employ, 25 or fewer employees, on 

average, as required under § 332.3(a) of 

this part, unless the establishment is 

transitioning to become an official 

establishment; 

(2) Verifying that the designated 

personnel are providing inspection 

services to selected establishments in a 

manner that complies with the Act and 

the implementing regulations in this 

chapter; 

(3) Verifying that that State staffing 

levels for each selected establishments 

are appropriate to carry out the required 

inspection activities; and 

(4) Assessing each selected 

establishment’s compliance with the 

Act and implementing regulations 

under this chapter. 

(c) If the selected establishment 

coordinator determines that designated 

personnel are providing inspection 

services to selected establishments in 

the State in a manner that is 

inconsistent with the Act and the 

implementing regulations in this 

chapter, the Administrator will provide 

an opportunity for the State to develop 

and implement a corrective action plan 

to address inspection deficiencies 

identified by the selected establishment 

coordinator. If the State fails to develop 

a corrective action plan, or the selected 

establishment coordinator for the State 

determines that the corrective action 

plan is inadequate, the Administrator 

will terminate the agreement for the 

cooperative interstate shipment program 

as provided in § 321.3(d) of this chapter. 

§ 332.8 Quarterly reports. 

(a) The selected establishment 

coordinator will prepare a report on a 

quarterly basis that describes the status 

of each selected establishment under his 

or her jurisdiction. 

(b) The quarterly report required in 

paragraph (a) of this section will: 

(1) Include the selected establishment 

coordinator’s assessment of the 

performance of the designated 

personnel in conducting inspection 

activities at selected establishments and 

(2) Identify those selected 

establishments that the selected 

establishment coordinator has verified 

are in compliance with the Act and 

implementing regulations in this 

chapter, those that have been deselected 

under § 332.10 of this part, and those 

that are transitioning to become official 

establishments under § 332.11 of this 

part. 

(c) The selected establishment 

coordinator is to submit the quarterly 

report to the Administrator through the 

District Manager for the State where the 

selected establishments identified in the 

report are located. 

§ 332.9 Enforcement authority. 

(a) To facilitate oversight and 

enforcement of this part, selected 

establishments operating under a 

cooperative interstate shipment program 

must, upon request, give the FSIS 

selected establishment coordinator or 

other FSIS officials access to all 

establishment records required under 

the Act and the implementing 

regulations in this chapter. The 

Administrator may deselect any selected 

establishment that refuses to comply 

with this paragraph. 

(b) Selected establishment 

coordinators may initiate any 

appropriate enforcement action 

provided for in part 500 of this chapter 

if they determine that a selected 

establishment under their jurisdiction is 

operating in manner that is inconsistent 

with the Act and the implementing 

regulations in this chapter. Selected 

establishments participating in a 

cooperative interstate shipment program 

are subject to the notification and 

appeal procedures set out in part 500 of 

this chapter. 

(c) If inspection at a selected 

establishment is suspended for any of 

the reasons specified in § 500.3 or 

§ 500.4 of this chapter, FSIS will: 

(1) Provide an opportunity for the 

establishment to implement corrective 

actions and remain in the cooperative 

interstate shipment program, or 

(2) Move to deselect the establishment 

as provided in § 332.10 of this part. 

(d) The decision to deselect a selected 

establishment under a suspension will 

be made on a case-by-case basis. In 

making this decision, FSIS, in 

consultation with the State where the 

selected establishment is located, will 

consider, among other factors: 

(1) The non-compliance that led to the 

suspension; 

(2) The selected establishment’s 

compliance history; and 

(3) The corrective actions proposed by 

the selected establishment. 

§ 332.10 Deselection of ineligible 

establishments. 

(a) The Administrator will deselect a 

selected establishment that becomes 

ineligible to participate in a cooperative 

interstate shipment program for any 

reason listed under § 332.3(c) of this 

part. 

(b) An establishment that has been 

deselected must transition to become an 

official establishment as provided in 

§ 332.11 of this part. 

§ 332.11 Transition to official 

establishment. 

If an establishment is deselected from 

a cooperative interstate shipment 

program as provided in § 332.10 of this 

part, FSIS, in coordination with the 

State where the establishment is 

located, will develop and implement a 

plan to transition the establishment to 

become an official establishment. 

§ 332.12 Transition grants. 

(a) Transition grants are funds that a 

State participating in a cooperative 

interstate shipment program under this 

part may apply for to reimburse selected 

establishments in the State for the cost 

to train one individual in the seven 

HACCP principles for meat or poultry 

processing as required under § 417.7 of 

this chapter and associated training in 

the development of sanitation standard 

operating procedures required under 

part 416 of this chapter. 

(b) A State participating in a 

cooperative interstate shipment program 

that receives a transition grant must use 

grant funds to reimburse the training 

costs of one employee per each selected 

establishment in the State. Any other 

use of such funds is prohibited. 

PART 381—POULTRY PRODUCTS 

INSPECTION REGULATIONS 

4. The authority citation for part 381 

continues to read as follows: 

Authority: 7 U.S.C. 138f, 450; 21 U.S.C. 

451–470; 7 CFR 2.7, 2.18, 2.53. 

5. A new § 381.187 is added to 

subpart R to read as follows: 

§ 381.187 Cooperation of States for the 

interstate shipment of poultry products. 

(a) The Administrator is authorized 

under 21 U.S.C. 472(b) to coordinate 

with States that have poultry products 

inspection programs as provided in 

§ 381.185 of this subpart to select 

certain establishments operating under 

these programs to participate in a 

cooperative program to ship poultry 

products in interstate commerce. A 

cooperative program for this purpose is 

called a ‘‘cooperative interstate 

shipment program.’’ 

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(b) Establishments selected to 

participate in a cooperative interstate 

shipment program described in this 

section must receive inspection services 

from designated State personnel that 

have been trained in the enforcement of 

the Act. If the designated personnel 

determine that the poultry products 

prepared in establishments selected to 

participate in the cooperative interstate 

shipment program comply with all 

requirements under the Act, these items 

will bear an official Federal mark of 

inspection and may be shipped in 

interstate commerce. The Administrator 

will assign an FSIS ‘‘selected 

establishment coordinator,’’ who will be 

an FSIS employee, to each State that 

participates in a cooperative interstate 

shipment program to provide Federal 

oversight of the program and 

enforcement of the program’s 

requirements. The Federal contribution 

for inspection services provided by 

States that enter into a cooperative 

interstate shipment program under this 

section will be at least 60 percent of 

eligible State costs. 

(c) Subpart Z, of this part 381 

prescribes conditions under which 

States and establishments may 

participate in the cooperative interstate 

shipment program. 

(d) The Administrator will terminate 

a cooperative interstate shipment 

agreement with a State if the 

Administrator determines that the State 

is not conducting inspection at selected 

establishments in a manner that 

complies with the Act and the 

implementing regulations in this 

chapter. 

5. A new subpart Z is added to part 

381 to read as follows: 

Subpart Z—Selected Establishments; 

Cooperative Program for Interstate 

Shipment of Poultry Products 

Sec. 

381.511 Definitions. 

381.512 Purpose. 

381.513 Requirements for establishments; 

ineligible establishments. 

381.514 State request for cooperative 

agreement. 

381.515 Establishment selection; official 

number for selected establishments. 

381.516 Commencement of a cooperative 

interstate shipment program; inspection 

by designated personnel and official 

mark. 

381.517 Federal oversight of a cooperative 

interstate shipment program. 

381.518 Quarterly reports. 

381.519 Enforcement authority. 

381.520 Deselection of ineligible 

establishments. 

381.521 Transition to official 

establishment. 

381.522 Transition grants. 

Subpart Z—Selected Establishments; 

Cooperative Program for Interstate 

Shipment of Poultry Products 

§ 381.511 Definitions. 

The following definitions apply to the 

regulations in this part: 

Cooperative interstate shipment 

program. A cooperative poultry 

products inspection program described 

in § 381.187 of this part. 

Cooperative State poultry products 

inspection program. A cooperative 

State-Federal poultry products 

inspection program described in 

§ 381.185 of this part. 

Designated personnel. State 

inspection personnel that have been 

trained in the enforcement of Act and 

any additional State program 

requirements in order to provide 

inspection services to selected 

establishments. 

Interstate commerce. ‘‘Interstate 

commerce’’ has the same meaning as 

‘‘commerce’’ under § 381.1 of this part. 

Selected establishment. An 

establishment operating under a State 

cooperative poultry products inspection 

program that has been selected by the 

Administrator, in coordination with the 

State where the establishment is 

located, to participate in a cooperative 

interstate shipment program. 

§ 381.512 Purpose. 

This subpart Z prescribes the 

conditions under which States that 

administer cooperative State poultry 

products inspection programs and 

establishments that operate under such 

programs may participate in a 

cooperative interstate shipment 

program. 

§ 381.513 Requirements for 

establishments; ineligible establishments. 

(a) An establishment that operates 

under a cooperative State poultry 

products inspection program may apply 

to participate in a cooperative interstate 

shipment program under this subpart if: 

(1) The establishment employs on 

average no more than 25 employees 

based on the standards described in 

paragraph (b) of this section, or 

(2) The establishment employed more 

than 25 employees but fewer than 35 

employees as of June 18, 2008. If 

selected to participate in a cooperative 

interstate shipment program, an 

establishment under this paragraph 

must employ on average no more than 

25 employees as of [insert date 3 years 

after effective date of final rule] or it 

must transition to become an official 

establishment as provided in § 381.521 

of this subpart. 

(b) An establishment that has 25 or 

fewer employees based on the following 

standards is considered to have 25 or 

fewer employees on average for 

purposes of this subpart. 

(1) All individuals, both supervisory 

and non-supervisory, employed by the 

establishment on a full-time, part-time, 

or temporary basis are counted when 

calculating the total number of 

employees. 

(2) All individuals employed by the 

establishment from a temporary 

employee agency, professional 

employee organization, or leasing 

concern are counted when calculating 

the total number of employees. 

(3) The average number of employees 

is calculated for each of the pay periods 

for the preceding 12 calendar months. 

(4) Part-time and temporary 

employees are counted the same as fulltime employees. 

(5) If the establishment has not been 

in business for 12 months, the average 

number of employees is calculated for 

each of the pay periods in which the 

establishment has been in business. 

(6) Volunteers who receive no 

compensation are not considered 

employees. 

(7) The total number of employees can 

never exceed 35 individuals at any 

given time, regardless of the average 

number of employees. 

(c) The following establishments are 

ineligible to participate in a cooperative 

interstate shipment program: 

(1) Establishments that employ more 

than 25 employees on average (except as 

provided under paragraph (a)(2) of this 

section); 

(2) Establishments operating under a 

Federal-State program as provided in 

§ 381.186 of this part as of June 18, 

2008; 

(3) Official establishments; 

(4) Establishments that were official 

establishments as of June 18, 2008, but 

that were re-organized on a later date by 

the person that controlled the 

establishment as of June 18, 2008; 

(5) Establishments operating under a 

cooperative State poultry products 

inspection program that employed more 

than 35 employees as of June 18, 2008, 

that were reorganized on a later date by 

the person that controlled the 

establishment as of June 18, 2008; 

(6) Establishments that are the subject 

of a transition under § 381.521 of this 

subpart; 

(7) Establishments that are in 

violation of the Act; and 

(8) Establishments located in States 

without a cooperative State poultry 

products inspection program. 

(9) Establishments located in a State 

whose agreement for a cooperative 

interstate shipment program was 

terminated by the Administrator as 

provided in § 381.187(d) of this part. 

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(d) An establishment that meets the 

conditions in paragraph (a) of this 

section and that is not an ineligible 

establishment under paragraph (c) of 

this section may apply for selection into 

a cooperative interstate shipment 

program through the State in which the 

establishment is located. 

§ 381.514 State request for cooperative 

agreement. 

(a) State participation in a cooperative 

interstate shipment program under this 

subpart is limited to States that have 

implemented cooperative State poultry 

products inspection programs. 

(b) To request an agreement for a 

cooperative interstate shipment program 

under this subpart, a State must submit 

a written request to the Administrator 

through the FSIS District Office for the 

FSIS District in which the State is 

located. In the request the State must: 

(1) Identify establishments in the 

State that have requested to be selected 

for the program that the State 

recommends for initial selection into 

the program; 

(2) Demonstrate that the State is able 

to provide the necessary inspection 

services to selected establishments in 

the State and conduct any related 

activities that would be required under 

a cooperative interstate shipment 

program established under this subpart; 

and 

(3) Agree that, if the State enters into 

an agreement with FSIS for a 

cooperative interstate shipment 

program, that the State will: 

(i) Provide FSIS with access to the 

results of all laboratory analyses 

conducted on product samples from 

selected establishments in the State; 

(ii) Notify the selected establishment 

coordinator for the State of the results 

of any laboratory analyses that indicate 

that a product prepared in a selected 

establishment may be adulterated or 

may otherwise present a food safety 

concern; and 

(iii) When necessary, cooperate with 

FSIS to transition selected 

establishments in the State that have 

been deselected from a cooperative 

interstate shipment program to become 

official establishments. 

(c) If the Administrator determines 

that a State that has submitted a request 

to participate in a cooperative interstate 

shipment program qualifies to enter into 

a cooperative agreement for such a 

program, the Administrator and the 

State will sign a cooperative agreement 

that sets forth the terms and conditions 

under which each party will cooperate 

to provide inspection services to 

selected establishments located in the 

State. 

(d) After the Administrator and a 

State have signed an agreement for a 

cooperative interstate shipment program 

as provided in paragraph (c) of this 

section, the Administrator will: 

(1) Appoint an FSIS employee as the 

FSIS selected establishment coordinator 

for the State and 

(2) Coordinate with the State to select 

establishments to participate in the 

program as provided in § 381.515(b) of 

this subpart. 

§ 381.515 Establishment selection; official 

number for selected establishments. 

(a) An establishment operating under 

a cooperative State poultry products 

inspection program will qualify for 

selection into a cooperative interstate 

shipment program if the establishment: 

(1) Has submitted a request to the 

State to be selected for the program; 

(2) Has the appropriate number of 

employees under § 381.513(a) of this 

subpart; 

(3) Is not ineligible to participate in a 

cooperative interstate shipment program 

under § 381.513(c) of this subpart; 

(4) Is in compliance with all 

requirements under the cooperative 

State poultry products inspection 

program; and 

(5) Is in compliance with all 

requirements under the Act and the 

implementing regulations in this 

chapter. 

(b) To participate in a cooperative 

interstate shipment program, an 

establishment that meets the conditions 

in paragraph (a) of this section must be 

selected by the Administrator, in 

coordination with the State where the 

establishment is located. 

(c) If an establishment is selected to 

participate in a cooperative interstate 

shipment program as provided in 

paragraph (b) of this section, the State 

is to assign the establishment an official 

number that reflects the establishment’s 

participation in the cooperative 

interstate shipment program and advise 

the FSIS selected establishment 

coordinator for the State of the official 

number assigned to each selected 

establishment in the State. The official 

numbers assigned to every selected 

establishment must contain a suffix, 

e.g., ‘‘SE,’’ that identifies the 

establishment as a selected 

establishment; that includes the letter 

‘‘P,’’ which identifies the establishment 

as a poultry establishment; and that 

identifies the State, e.g., ‘‘SEPND,’’ for 

‘‘selected establishment poultry North 

Dakota.’’ 

(d) Failure of a State to comply with 

paragraph (c) of this section will 

disqualify the State from participation 

in the cooperative interstate shipment 

program. 

§ 381.516 Commencement of a 

cooperative interstate shipment program; 

inspection by designated personnel and 

official mark. 

(a) A cooperative interstate shipment 

program will commence when the 

Administrator, in coordination with the 

State, has selected establishments in the 

State to participate in the program. 

(b) Inspection services for selected 

establishments participating in a 

cooperative interstate shipment program 

must be provided by designated 

personnel, who will be under the direct 

supervision of a State employee. 

(c) Poultry products processed in a 

selected establishment and inspected 

and passed by designated State 

personnel must bear an official Federal 

mark, stamp, tag, or label of inspection 

in the appropriate form prescribed in 

subpart M of this part that includes the 

information specified in § 381.515(c) of 

this subpart. 

(d) Poultry products processed in a 

selected establishment that comply with 

the conditions in paragraph (c) of this 

section may be distributed in interstate 

commerce. 

§ 381.517 Federal oversight of a 

cooperative interstate shipment program. 

(a) The FSIS selected establishment 

coordinator for a State that has entered 

into an agreement for a cooperative 

interstate shipment program will visit 

each selected establishment in the State 

on a regular basis to verify that the 

establishment is operating in a manner 

that is consistent with the Act and the 

implementing regulations in this 

chapter. If necessary, the selected 

establishment coordinator, in 

consultation with the District Manager 

that covers the State, may designate 

qualified FSIS personnel to visit a 

selected establishment on behalf of the 

selected establishment coordinator. 

(b) The selected establishment 

coordinator, in coordination with the 

State, will verify that selected 

establishments in the State are receiving 

the necessary inspection services from 

designated personnel, and that these 

establishments are eligible, and remain 

eligible, to participate in a cooperative 

interstate shipment program. The 

selected establishment coordinator’s 

verification activities may include: 

(1) Verifying that each selected 

establishment employs, and continues 

to employ, 25 or fewer employees, on 

average, as required under §§ 381.513(a) 

of this part, unless the establishment is 

transitioning to become an official 

establishment; 

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(2) Verifying that the designated 

personnel are providing inspection 

services to selected establishments in a 

manner that complies with the Act and 

the implementing regulations in this 

chapter; 

(3) Verifying that that State staffing 

levels for each selected establishment 

are appropriate to carry out the required 

inspection activities; and 

(4) Assessing each selected 

establishment’s compliance with the 

Act and implementing regulations in 

this chapter. 

(c) If the selected establishment 

coordinator determines that designated 

personnel are providing inspection 

services to selected establishments in 

the State in a manner that is 

inconsistent with the Acts and the 

implementing regulations in this 

chapter, the Administrator will provide 

an opportunity for the State to develop 

and implement a corrective action plan 

to address inspection deficiencies 

identified by the selected establishment 

coordinator. If the State fails to develop 

a corrective action plan, or the selected 

establishment coordinator for the State 

determines that the corrective action 

plan is inadequate, the Administrator 

will terminate the agreement for the 

cooperative interstate shipment program 

as provided in § 381.187(d) of this part. 

§ 381.518 Quarterly reports. 

(a) The selected establishment 

coordinator will prepare a report on a 

quarterly basis that describes the status 

of each selected establishment under his 

or her jurisdiction. 

(b) The quarterly report required in 

paragraph (a) of this section will: 

(1) Include the selected establishment 

coordinator’s assessment of the 

performance of the designated 

personnel in conducting inspection 

activities at selected establishments and 

(2) Identify those selected 

establishments that the selected 

establishment coordinator has verified 

are in compliance with the Act and 

implementing regulations in this 

chapter, those that have been deselected 

under § 381.520 of this subpart, and 

those that are transitioning to become 

official establishments under § 381.521 

of this subpart. 

(c) The selected establishment 

coordinator is to submit the quarterly 

report to the Administrator through the 

District Manager for the State where the 

selected establishments identified in the 

report are located. 

§ 381.519 Enforcement authority. 

(a) To facilitate oversight and 

enforcement of this subpart, selected 

establishments operating under a 

cooperative interstate shipment program 

must, upon request, give the FSIS 

selected establishment coordinator or 

other FSIS officials access to all 

establishment records required under 

the Act and the implementing 

regulations in this chapter. The 

Administrator may deselect any selected 

establishment that refuses to comply 

with this paragraph. 

(b) Selected establishment 

coordinators may initiate any 

appropriate enforcement action 

provided for in part 500 of this chapter 

if they determine that a selected 

establishment under their jurisdiction is 

operating in manner that is inconsistent 

with the Act and the implementing 

regulations in this chapter. Selected 

establishments participating in a 

cooperative interstate shipment program 

are subject to the notification and 

appeal procedures set out in part 500 of 

this chapter. 

(c) If inspection at a selected 

establishment is suspended for any of 

the reasons specified in § 500.3 or 

§ 500.4 of this chapter, FSIS will: 

(1) Provide an opportunity for the 

establishment to implement corrective 

actions and remain in the cooperative 

interstate shipment program, or 

(2) Move to deselect the establishment 

as provided in § 381.520 of this subpart. 

(d) The decision to deselect a selected 

establishment under a suspension will 

be made on a case-by-case basis. In 

making this decision, FSIS, in 

consultation with the State where the 

selected establishment is located, will 

consider, among other factors: 

(1) The non-compliance that led to the 

suspension; 

(2) The selected establishment’s 

compliance history; and 

(3) The corrective actions proposed by 

the selected establishment. 

§ 381.520 Deselection of ineligible 

establishments. 

(a) The Administrator will deselect a 

selected establishment that becomes 

ineligible to participate in a cooperative 

interstate shipment program for any 

reason listed under § 381.513(c) of this 

subpart. 

(b) An establishment that has been 

deselected must transition to become an 

official establishment as provided in 

§ 381.521 of this subpart. 

§ 381.521 Transition to official 

establishment. 

If an establishment is deselected from 

a cooperative interstate shipment 

program as provided in § 381.520 of this 

subpart, FSIS, in coordination with the 

State where the establishment is 

located, will develop and implement a 

plan to transition the establishment to 

become an official establishment. 

§ 381.522 Transition grants. 

(a) Transition grants are funds that a 

State participating in a cooperative 

interstate shipment program under this 

subpart may apply for to reimburse 

selected establishments in the State for 

the cost to train one individual in the 

seven HACCP principles for meat or 

poultry processing as required under 

§ 417.7 of this chapter and associated 

training in the development of 

sanitation standard operating 

procedures required under part 416 of 

this chapter. 

(b) A State participating in a 

cooperative interstate shipment program 

that receives a transition grant must use 

grant funds to reimburse the training 

costs of one employee per each selected 

establishment in the State. Any other 

use of such funds is prohibited. 

Done at Washington, DC, on September 7, 

2009. 

Alfred V. Almanza, 

Administrator. 

[FR Doc. E9–21952 Filed 9–14–09; 11:15 am] 

BILLING CODE 3410–DM–P 

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