76092 Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Food and Drug Administration

21 CFR Parts 16, 101, and 115

[Docket Nos. 98N–1230, 96P–0418, and

97P–0197]

RIN 0910–AB30

Food Labeling, Safe Handling

Statements, Labeling of Shell Eggs;

Refrigeration of Shell Eggs Held for

Retail Distribution

AGENCY: Food and Drug Administration,

HHS.

ACTION: Final rule.

SUMMARY: The Food and Drug

Administration (FDA) is revising its

food labeling regulations to require a

safe handling statement on cartons of

shell eggs that have not been treated to

destroy Salmonella microorganisms.

The agency also is requiring that, when

held at retail establishments, shell eggs

be stored and displayed under

refrigeration at a temperature of 7.2 °C

(45 °F) or less. FDA is taking these

actions because of the number of

outbreaks of foodborne illnesses and

deaths caused by Salmonella Enteritidis

(SE) that are associated with the

consumption of shell eggs. These

actions also respond, in part, to

petitions from Rose Acres Farm, Inc.,

and the Center for Science in the Public

Interest (CSPI). Safe handling statements

will help consumers take measures to

protect themselves from illness or

deaths associated with consumption of

shell eggs that have not been treated to

destroy Salmonella (all serotypes).

Refrigeration of shell eggs that have not

been treated to destroy Salmonella will

help prevent the growth of SE in shell

eggs.

DATES: This rule is effective September

4, 2001, except § 115.50, which is

effective June 4, 2001.

FOR FURTHER INFORMATION CONTACT: For

the labeling provisions: Geraldine A.

June, Center for Food Safety and

Applied Nutrition (HFS–822), Food and

Drug Administration, 200 C St. SW.,

Washington, DC 20204, 202–205–4561.

For refrigeration provisions: Nancy S.

Bufano, Center for Food Safety and

Applied Nutrition (HFS–306), Food and

Drug Administration, 200 C St. SW.,

Washington, DC 20204, 202–401–2022.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background

II. Shell Egg Labeling

A. Rationale for the Safe Handling

Statement

B. Safe Handling Statement

1. Comments on the Focus Group Research

2. Description of the Hazard

3. Description of At-Risk Consumers

4. Cooking Instructions

5. Other Comments on the Text of the Safe

Handling Statement

6. Alternatives to the Proposed Label

Statement

7. Placement and Prominence

a. Placement and Type Size of the Safe

Handling Statement

b. Use of Graphics

c. Labeling for Shell Eggs Not for Direct

Sale to Consumers

8. Other Labeling Issues

C. Comments on Effective Date

III. Refrigeration of Shell Eggs in Retail

Establishments

A. Refrigeration Temperature

Requirements

B. Enforcement of the Refrigeration

Requirement

C. Changes to the Proposal

IV. Final Regulatory Impact Analysis

A. Benefit-Cost Analysis

1. Regulatory Options

2. Benefits

3. Costs

a. Labeling

b. Refrigeration

c. Changes in Consumer Practices

4. Summary of Costs and Benefits

B. Small Entity Analysis

1. Introduction

2. Economic Effects on Small Entities

a. Number of Small Entities Affected

b. Costs for Small Entities.

3. Regulatory Options

a. Exemption for Small Establishments.

b. Longer Compliance Periods.

4. Recordkeeping and Recording

Requirements

5. Worst Case for a Small Establishment

6. Summary of Small Entity Analysis

V. Federalism

VI. Environmental Impact

VII. Paperwork Reduction Act of 1995

VIII. References

I. Background

FDA and the Food Safety and

Inspection Service (FSIS) of the U.S.

Department of Agriculture (USDA) share

Federal authority to regulate eggs. The

two agencies published in the Federal

Register of May 19, 1998 (63 FR 27502),

an advanced notice of proposed

rulemaking seeking information on how

to identify farm-to-table actions that

would decrease food safety risks

associated with shell eggs. On July 1,

1999, FDA and FSIS, in testimony

before the Subcommittee on Oversight

of Government Management,

Restructuring, and the District of

Columbia of the Senate Committee on

Governmental Affairs, committed to

developing by November 1, 1999, an

action plan to address the presence of

SE in shell eggs using a farm-to-table

approach. On August 26, 1999, FDA and

FSIS jointly held a public meeting to

gather stakeholders’ input and to

discuss the development of the action

plan. On December 10, 1999, FDA and

FSIS presented the Egg Safety Action

Plan (Ref. 1) to the President. The plan

identifies the systems and practices

from production to consumption that

must be implemented to reduce and,

ultimately, eliminate eggs as a source of

human SE illnesses. This plan includes

requirements for refrigeration at retail

and requirements for the safe handling

statement being issued in this

rulemaking. FDA, along with FSIS,

intends to use information gathered by

both agencies to develop and implement

a comprehensive program to address the

safety of shell eggs from farm to table.

In the Federal Register of July 6, 1999

(64 FR 36492), FDA published a

proposed rule (hereinafter referred to as

‘‘the proposal’’) to require safe handling

label statements on shell eggs that have

not been treated to destroy Salmonella

microorganisms and refrigeration of

these shell eggs while held by retail

establishments. In a separate document

in the same issue of the Federal Register

(64 FR 36516), FDA published a

Preliminary Regulatory Impact Analysis

(PRIA) and Initial Regulatory Flexibility

Analysis of the proposal. FDA proposed

these regulations because of the number

of outbreaks and deaths associated with

the consumption of shell eggs that have

not been treated to destroy Salmonella.

Interested parties were given until

September 20, 1999, to comment on the

proposal.

FDA received approximately 790

responses, each containing one or more

comments, to the proposal. These

responses were received from the egg

industry, egg packaging companies,

trade associations, consumers,

consumer interest groups, animal

interest groups, academia, State

Government agencies, members of

Congress, and a foreign Government

agency. More than 700 of these

comments addressed forced molting,

which is directed at the production of

shell eggs, and, therefore, outside of the

scope of this rulemaking, and will not

be addressed in this document. Other

comments also addressed issues that are

outside the scope of this rule and will

not be addressed in this document (e.g.,

implementation of national standards

for quality assurance (QA) programs,

implementation of Hazard Analysis and

Critical Control Points (HACCP)

programs, use of sanitary standard

operating procedures, Good Agricultural

Practices/Good Manufacturing Practices,

and other intervention procedures such

as manipulation of feeds and

competitive exclusion to control SE,

sell-by dates, uniform coding, repacking

of shell eggs, refrigeration of nest run

Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations 76093

1The moderator of the focus groups asked

participants about their knowledge of the possible

health effects associated with eggs as well as their

personal experiences with handling eggs. After

assessing the participants’ knowledge and attitudes,

the moderator gave the participants a series of safe

handling statements for shell eggs on individual

sheets of 8.5 x 11-inch white paper. The moderator

engaged the participants in discussions on the

impact of the statements and asked them to

compare each statement with the other statements.

The moderator also asked participants to comment

on the format of the statements. The focus of the

discussions was whether they understood the

message.

shell eggs, and creation of a single food

safety agency responsible for eggs).

These comments were considered by the

agency in its action plan to address the

presence of SE in shell eggs and will be

considered in the development of

subsequent proposed measures aimed at

improving egg safety.

Some of the remaining comments

supported the proposal. Others opposed

the proposal or suggested modifications

to the proposal. The relevant comments

and the agency’s responses to the

comments are discussed below.

II. Shell Egg Labeling

A. Rationale for the Safe Handling

Statement

In the proposal, FDA discussed the

risk of foodborne illness associated with

the consumption of shell eggs. In 1997,

there were 7,924 SE isolates reported to

the Centers for Disease Control and

Prevention (CDC). In 1998, 58 percent of

the SE outbreaks reported to CDC where

a food vehicle was identified implicated

foods containing eggs. Although recent

CDC data show a 44 percent decrease in

the isolation rate of SE, FDA believes

that the incidence of SE is still too high.

As discussed in the proposal (64 FR

36492 at 36501), FDA believes that it

could take considerable time to design

and implement a complete program that

would eliminate eggs as a source of

human SE illnesses, and indeed the Egg

Safety Action Plan has a 10-year

timeframe to achieve that goal (Ref. 1).

However, as part of this program, FDA

determined that there are measures that

can be put in place quickly that can

reduce the risks to consumers:

refrigeration, which lengthens the

effectiveness of the eggs’ natural

defenses against SE and slows the

growth rate of SE, and thorough

cooking, which kills viable SE that may

be present. The agency maintained in

the proposal that, unless informed about

the risks presented by eggs

contaminated with SE and ways that

they may reduce these risks, consumers

could suffer serious illness or death

from consumption of raw or

undercooked eggs. Accordingly, FDA

proposed to require safe handling

statements on shell eggs to inform

consumers that there may be a risk

associated with consumption of eggs

and ways that they can properly handle

and prepare eggs in order to reduce such

risks.

(Comment 1) Several comments

maintained that FDA overstated the

magnitude of the risk associated with

SE. One comment contended that the

incidence of illness cited in the

proposal was misleading. For example,

the comment stated that information on

all cases of salmonellosis was cited with

the implication that it has a direct

application to salmonellosis from SE.

The comment stated that information on

foodborne disease data from the years

where salmonellosis associated with SE

was increasing were included in the

proposal, whereas, data from 1995 to

1998 showing a decrease in

salmonellosis associated with SE were

omitted. Some comments pointed out

that recent data from CDC showing a 44

percent decrease in the isolation rate of

SE from 1996 to 1998 do not support

FDA’s conclusion of a continued

predominance of SE. Furthermore, one

comment pointed out that there was

only a 14 percent decrease in the

isolation rate of all Salmonella

serotypes in the same time period as the

44 percent decrease in the isolation rate

of SE.

FDA disagrees that it overstated the

magnitude of the risk associated with

SE. The comment misunderstood how

the data were presented in the proposal.

FDA did not present the data regarding

the incidence of all cases of

salmonellosis to imply that these cases

were reflective of SE-associated cases of

salmonellosis. Rather, FDA used this

information to place SE-associated

salmonellosis in context of the

epidemiology of Salmonella overall.

First, in the proposal, FDA discussed

the severity of salmonellosis and the

magnitude of the disease, i.e., numbers

of reported illnesses. Next, the agency

discussed the numbers of SE-associated

cases of salmonellosis and the fact that

shell eggs are the major source of SErelated cases of salmonellosis where a

food vehicle is identified.

The agency also disagrees with the

comment stating that FDA did not

include information on the decrease in

the rate of infections caused by SE from

1996 to 1998. On the contrary, in the

proposal (64 FR 36492 at 36493), FDA

stated that recent CDC data showed a 44

percent decrease in the isolation rate of

SE. However, the agency concluded

that, even with the decrease in the

isolation rate of SE reported by CDC, the

incidence of SE associated with eggs

was still too high and additional

measures could and should be put in

place to reduce the incidence even

further.

B. Safe Handling Statement

In the proposal, FDA tentatively

concluded that certain elements were

essential to an effective safe handling

statement, i.e., an informational

statement that describes the hazard and

the at-risk consumers, an instructional

statement that describes measures that

consumers can take to reduce or

eliminate the risk, and a linking

statement that relates the informational

statement to the instructional statement.

Applying the essential elements, FDA

crafted several examples of label

statements. FDA conducted focus group

research to evaluate consumer

understanding of the safe handling

statements to test their effectiveness in

informing consumers of the risks

associated with shell eggs and of the

safe handling practices that may be used

to mitigate the risks.1 Based on

information from the focus groups, FDA

proposed to require the following safe

handling statement on shell eggs that

have not been treated to destroy

Salmonella:

SAFE HANDLING INSTRUCTIONS:

Eggs may contain harmful bacteria

known to cause serious illness,

especially in children, the elderly, and

persons with weakened immune

systems. For your protection: keep eggs

refrigerated; cook eggs until yolks are

firm; and cook foods containing eggs

thoroughly.

1. Comments on the Focus Group

Research

(Comment 2) Several comments

questioned FDA’s focus group research.

One comment maintained that, although

focus groups are helpful tools to obtain

feedback on food safety messages, FDA

tested four very similar versions of the

same label statement and, therefore,

could not judge whether its proposed

statement provided consumers with

information they thought was necessary.

The comment concluded that the label

statements tested by FDA did not

adequately reflect how consumers

perceived FDA’s proposed safe handling

statement versus any other statement.

FDA disagrees with this comment.

The comment misunderstood the intent

of the focus group research. The intent

of the research was for FDA to gauge

how best to word the safe handling

statement so that it is understood by

consumers, not to determine what

information is necessary in the

statement. FDA developed several

statements containing information

76094 Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations

judged by FDA subject matter experts to

be most necessary to consumers. These

subject matter experts arrived at their

determination of necessary information

content after considering suggestions for

messages that were submitted by

outside organizations (Ref. 2). FDA

provided five different safe handling

statements for discussion in the focus

groups. During the focus groups,

participants discussed specific phrasing

or message elements within each

statement to gauge the effect of both the

specific elements of the message and the

overall message. Participants also

provided input on how formatting could

make the statement more readable.

Thus, while adhering to the content

judged necessary by FDA subject matter

experts, the agency assessed numerous

variations in how to best word and

format the statement to communicate

effectively with consumers.

(Comment 3) One comment stated

that, although FDA did conduct some

focus group testing, it should conduct

direct testing such as mall-intercept

studies to further refine the statement.

This comment maintained that

considering the susceptibility of older

persons to foodborne illness, FDA

should direct its message testing to this

group.

FDA disagrees that it needs to

conduct mall-intercept studies to fine

tune the statement. If focus group

results are not clear cut, then an

experimental quantitative method such

as mall-intercept studies could be used

to fine tune the message. In this case,

however, the focus group results were

so consistent that FDA did not deem it

necessary to conduct experimental

testing. In addition, the focus group

testing of the safe handling statements

included consumers 60 years of age and

older. These older consumers did not

differ greatly from younger consumers

in their responses to the safe handling

statements that were tested.

Consequently, FDA sees no need to

conduct additional testing on older

persons.

2. Description of the Hazard

Most of the comments that responded

to the proposed labeling supported the

concept of safe handling instructions for

shell eggs. However, some of these

comments opposed the specific

language in the proposed statement for

the reasons discussed below.

(Comment 4) Many of these comments

asserted that including a description of

the hazard, i.e., ‘‘eggs may contain

harmful bacteria known to cause serious

illness, especially in children, the

elderly, and persons with weakened

immune systems,’’ is unwarranted.

Several comments contended that the

hazard description will distract

consumers from the safe handling

instructions. To support this assertion,

one comment presented consumer

research from the American Egg Board

(AEB) and concluded from it that most

respondents saw FDA’s proposed label

statement as a warning that eggs are

harmful rather than a message to

promote safe handling. Some comments

asserted that consumers have become

weary of labels and warnings and no

longer pay attention to them. Other

comments expressed their concern that,

because of the length of the hazard

description, consumers may not read

the entire statement and, thus, would

not read the safe handling instructions.

Several comments that opposed the

inclusion of the hazard statement

maintained that consumers are aware of

risks associated with SE in eggs and,

therefore, the description is

unnecessary. One of these comments

presented data from a survey conducted

by the California Department of Public

Health Services that showed that 84

percent of the respondents were aware

that eggs contained bacteria that could

cause illness. The comment also pointed

out that a consumer survey in Iowa

reported that 93 percent of those

surveyed were aware of Salmonella in

eggs. Another survey in California

showed that 86 percent of the Englishlanguage respondents were aware of

Salmonella in eggs. The comment noted

that a FDA survey in 1998 showed that

2⁄3 of respondents had heard of

Salmonella and knew that cooking

would kill it. This represented a 60

percent increase from a survey done in

1993. According to another comment,

before FDA implements such a strongly

worded safe handling instruction, it

should determine whether consumers

are really uninformed about the

possibility of the presence of illnesscausing bacteria in eggs.

Several comments maintained that the

proposed safe handling statement for

eggs is more harsh than the safe

handling statement on meat and poultry

and, therefore, unfairly targets the egg

industry. One comment pointed out that

USDA’s risk assessment estimated that

the contamination rate for eggs is 1 egg

in 20,000, which, according to the

comment, is several orders of magnitude

lower than most animal products. Thus,

the comment maintained that because

the risk of becoming ill can be

eliminated completely with proper

handling and cooking, such a harsh

hazard description for a product with a

small risk is not justified.

In the proposal, FDA discussed its

concern that unless consumers are

advised of the risks presented by eggs

contaminated with SE and ways that

they could reduce these risks,

consumers, especially those that are at

greatest risk, could suffer serious illness

or death from the consumption of raw

or undercooked eggs. The agency’s

primary intent in proposing the label

statement for eggs was to give

consumers ways to reduce their risk,

without having to avoid the product. In

addition, consumer research available to

the agency indicated that label messages

generally are more credible when

consumers know the reason for the

message (Ref. 3). Therefore, the agency

tentatively concluded that to adequately

inform consumers there was a need to

include information on why there was

a risk associated with consumption of

raw or improperly cooked shell eggs.

However, in light of the comments that

asserted that the hazard description: (1)

Is not new information, (2) is not

consistent with safe handling statements

on other raw animal products, and (3)

may distract consumers from the safe

handling instructions, the agency is

persuaded that it should reconsider the

necessity of the hazard description as

proposed.

The agency is persuaded by

information provided by FDA’s

consumer research and comments to the

proposal that the risks associated with

consumption of SE-contaminated eggs is

not new information to consumers. FDA

survey data indicate that the percentage

of consumers eating raw eggs has

declined in recent years, as appropriate

food safety practices have received more

publicity (Ref. 4). FDA’s own focus

group research indicated that many

consumers were aware that Salmonella

is the major cause of foodborne illness

associated with egg consumption.

Because many of the consumers stated

that they knew of the risk associated

with eggs, they considered the safe

handling statement to be more of a

reminder than to provide new

information.

FDA recognizes that the proposed

label statement is different than that for

meat and poultry. In crafting the label

statement, the agency relied on previous

focus group research that indicates

consumers prefer messages that are

more specific to the nature of the hazard

and the appropriate action to take

because of the hazard (Ref. 3). The

agency points out, however, that there

are differences in the labeling issues

involved, which result in some

differences in wording. For example, in

the meat/poultry safe handling

statement there is no specific mention of

the food, rather the statement uses

‘‘some products’’ whereas, the proposed

Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations 76095

statement for eggs refers to ‘‘eggs.’’ The

agency points out that the meat/poultry

statement was designed to appear on a

very wide range of products, therefore,

it needed to be more general in the way

that it identifies foods. The egg label

statement will appear only on eggs and,

therefore, can be more specific.

However, FDA acknowledges that the

proposed hazard description on the

labels of eggs may appear more harsh

than the hazard description on the

packages of meat/poultry. The agency

does not want consumers to be confused

about the level of risk associated with

the consumption of raw or undercooked

eggs versus consumption of any other

raw or undercooked animal product.

FDA has decided to revise the safe

handling statement by removing the

proposed hazard description, i.e., ‘‘eggs

may contain harmful bacteria known to

cause serious illness especially in

children, the elderly, and persons with

weakened immune systems’’ and

replace it with a shorter hazard

description. FDA continues to believe

that the safe handling statement would

be more effective if consumers knew

that the reason for following the safe

handling instructions was to prevent

illness from bacteria. Consequently,

FDA has decided to minimize the

potential for misunderstanding by

shortening the introductory hazard

description to ‘‘to prevent illness from

bacteria.’’ As was the case with the

proposed hazard statement, this

statement alerts consumers to the reason

why it is important to adhere to the safe

handling instructions and does not have

the same potential as the proposed

statement to distract consumers from

the safe handling message.

Accordingly, based on the findings of

the agency’s consumer focus group

research and comments to the proposal,

FDA is revising the safe handling

statement in proposed § 101.17(h)(1) to

read as follows:

SAFE HANDLING INSTRUCTIONS:

To prevent illness from bacteria: keep eggs

refrigerated, cook eggs until yolks are firm,

and cook foods containing eggs thoroughly.

3. Description of At-Risk Consumers

(Comment 5) A few comments

opposed the description of at-risk

groups in the hazard statement.

According to one comment, consumers

would perceive that the safe handling

instructions are targeted only at the

groups listed in the statement. Another

comment pointed out that the safe

handling labels on meat and poultry do

not list at-risk groups. This comment

contended that because of the low

probability of contamination of eggs,

vulnerable populations are no more at

risk from eggs, and probably at less risk,

than they are from any other raw animal

product. One comment requested

removal of the at-risk groups from the

proposed safe handling statement

because the reference to at-risk groups

may heighten the misperception that

eggs are a dangerous food.

FDA points out that the new hazard

description does not include the listing

of at-risk consumers. While FDA survey

data indicated that most consumers do

not know that some people are at a

higher risk of foodborne illness than

others and that focus group participants

thought that the information on at-risk

groups was an important aspect of

communicating the nature of the hazard,

the agency has reconsidered whether, in

this case, it is necessary to provide that

information on the labels of eggs. The

agency acknowledges that the labels of

meat/poultry do not include the listing

of at-risk consumers. Because

vulnerable populations are at greater

risk of most foodborne illnesses, FDA

believes that it would be better to

provide this information to these

consumers through educational

channels rather than to tie the

information to specific products. FDA

does not want at-risk populations to be

misled to believe that eggs present a

greater risk to them than other raw

animal products. Thus, the agency

decided to remove the at-risk consumers

from the proposed safe handling

statement on eggs to be consistent with

label statements on other raw animal

products.

FDA believes that the information that

eggs may be harmful to certain

vulnerable populations is important

information that must be conveyed to

these consumers. Therefore, FDA will

continue to provide information about

food safety to consumers, including

those at greater risk. In addition, FDA

plans to develop an educational and

outreach campaign after the publication

of this final rule to bring attention to the

new requirements for shell eggs and to

disseminate information to consumers,

particularly at-risk populations and

those that prepare their meals.

4. Cooking Instructions

(Comment 6) Most comments agreed

that there should be an instruction on

proper cooking. Although some of the

comments supported the language in the

cooking instruction, i.e., ‘‘cook eggs

until yolks are firm, and cook foods

containing eggs thoroughly,’’ a few

comments objected to the cooking

instruction. One comment stated that

the phrase ‘‘cook thoroughly’’ may be

too vague, but offered no alternative

language. Another comment contended

that FDA should eliminate the phrase

‘‘cook foods containing eggs

thoroughly’’ because it is impossible to

cook some egg-containing foods

thoroughly, e.g., meringue and Caesar

salad. The comment asserted that these

foods can be made safe by using

pasteurized eggs or avoiding the food.

Therefore, the comment concluded that

because the proposed phrase cannot be

followed in all cases, it should be

removed.

FDA disagrees with the elimination of

the phrase ‘‘cook foods containing eggs

thoroughly.’’ FDA believes that it is

necessary to inform consumers that,

when cooking or preparing a food that

contains raw eggs, the food must be

cooked thoroughly to reduce the risk of

illness. The agency rejects the notion

that the cooking instruction should be

removed because it is not possible to

cook all egg-containing foods

thoroughly. The intent of the cooking

instruction is to give consumers

information generally on how to

properly cook eggs and egg-containing

foods to reduce risks. The intent of the

message is not to cover every possible

scenario as it relates to eggs. The agency

concludes that if consumers recognize

that they are at risk of illness if they

consume a food that is made with a raw

or undercooked egg, they would avoid

the food or use a substitute, e.g.,

pasteurized egg product, to reduce the

risk. Thus, FDA is retaining the cooking

instructions, as proposed, in the safe

handling statement.

In the proposal, FDA requested

comment on whether it should require

a statement that the product should not

be used for certain purposes, e.g., ‘‘use

pasteurized eggs for recipes requiring

raw or partially cooked eggs.’’ The

agency also requested comment on

whether it should include on the label

an explicit instruction to avoid the

product for at-risk consumers or for

individuals preparing food for at-risk

consumers.

(Comment 7) One comment stated

that FDA should not use the phrase ‘‘use

pasteurized eggs for recipes requiring

raw or partially cooked eggs’’ because

consumers cannot readily purchase

certain pasteurized egg products in

retail stores, e.g., egg whites. However,

the comment did not provide data on

the availability of the product. There

were no comments that supported use of

the statement ‘‘use pasteurized eggs for

recipes requiring raw or partially

cooked eggs.’’

Because there was no support for the

subject statement, the agency is not

requiring it in the safe handling

statement. In addition, FDA did not

receive any comments on whether it

76096 Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations

should include an explicit instruction

for at-risk consumers to avoid the

product, and therefore, is not requiring

such a statement. However, as

announced in the Egg Safety Action

Plan, FDA plans to take additional steps

to protect at-risk consumers by

establishing safe egg handling and

preparation practices consistent with

provisions in the Food Code. (Refs. 1

and 5).

5. Other Comments on the Text of the

Safe Handling Statement

(Comment 8) Some comments

maintained that the description of the

hazard will frighten consumers and will

discourage consumers from eating eggs.

According to one comment, eggs have a

history of consumer avoidance because

of the fear of heart disease from dietary

cholesterol provided by eggs. This

comment asserted that, given the history

and perception that eggs are a dangerous

food, the proposed statement may likely

lead to further avoidance of eggs. The

comment suggested that additional

language be placed on the carton to

combat the negative connotation of the

safe handling statement.

It is not the agency’s intent to frighten

consumers or discourage consumption

of eggs. Rather, the main purpose of the

proposed label statement is to provide

consumers with information on how to

prepare eggs safely. FDA focus group

research did not indicate that the

proposed hazard description frightened

consumers. Rather, the research

indicated that consumers perceived the

hazard statement as a helpful reminder

about why they should handle eggs

safely. Thus, FDA is not persuaded that

additional language to combat a

negative connotation of the safe

handling statement is warranted.

Nevertheless, the agency believes that it

is less likely that the revised safe

handling statement would frighten

consumers.

(Comment 9) A few comments

asserted that the hazard description is

unwarranted for eggs produced under a

proven risk-reduction program.

According to one of these comments,

consumer perception of the frightening

or negative nature of the message would

negate the effort put forth by producers

who use these food-safety programs.

Another comment contended that the

proposed label statement with the

hazard description has the potential to

increase foodborne illness because

producers would be less likely to

participate in risk reduction programs if

their products would still be required to

bear the hazard component of the safe

handling statement. The comments

suggested a two-tiered label system, i.e.,

one label statement for eggs produced

under QA systems and another for eggs

that are not produced under QA

systems. Another comment that

supported the two-tiered concept

contended that although the safe

handling statement on eggs produced

under on-farm QA programs could have

a less stringent hazard description, it

should not omit the reference to the

potential hazard. The comment offered

the following two tiered labeling

scheme:

For eggs not in QA programs:

Caution: Eggs may contain illness-causing

bacteria. Keep refrigerated. Do not eat raw.

Cook until yolk is firm.

For those in QA programs:

SAFE HANDLING INSTRUCTIONS:

To prevent illness, keep refrigerated. Do not

eat raw. Cook until yolk is firm.

As an alternative to the proposed

label statement, one comment suggested

that FDA develop and adopt a

‘‘positive’’ label system that would

recognize eggs produced under proven

risk reduction programs.

FDA recognizes and applauds the

work being done by States and industry

to address egg safety. However, FDA

believes that two different label

statements in the marketplace may be

confusing to consumers. A different safe

handling statement for eggs produced

under QA programs could mislead

consumers to believe that those eggs do

not require safe handling when, in fact,

both categories of eggs should be

handled safely. However, in light of the

agency’s decision to revise the hazard

description to ‘‘to prevent illness from

bacteria,’’ the question of a two tiered

labeling scheme with a less stringent

hazard description for eggs produced

under QA plans becomes moot. Finally,

the agency is not persuaded to develop

a ‘‘positive’’ labeling scheme for eggs

produced under QA plans, since like the

two-tiered approach, it could create

confusion. However, FDA would not

object to ‘‘positive’’ statements, or any

other voluntary information on the

labels of eggs, as long as the information

is truthful and not misleading. This

information may not appear inside of

the box with the required safe handling

statement. FDA points out that

information may be considered

misleading, for example, if it implies

that a food is safer than other similar

products that may not be labeled.

(Comment 10) One comment from a

foreign government stated that it uses

QA programs and HACCP principles to

ensure egg safety and that its eggs for

export into the United States must be

SE-free. Thus, the comment asserted

that the proposed label statement is

unnecessary for its products.

The agency does not agree with the

comment that a foreign government

requirement that eggs for export into the

United States be SE-free negates the

necessity for safe handling instructions.

Unless eggs have been specifically

treated to destroy Salmonella, FDA

believes that there still is a chance that

the eggs contain transovariantransmitted SE. Further, FDA notes that

it regulates both domestic and imported

foods on an equal basis. As discussed

above in this section, FDA is not

permitting a different safe handling

statement for eggs produced under QA

plans. Thus, FDA is not establishing

different labeling criteria for imported

eggs based on the requirements of the

country of origin.

(Comment 11) A few comments stated

that the safe handling statement should

begin with the terms ‘‘caution’’ or

‘‘notice.’’ One of these comments stated

that the word ‘‘caution’’ or ‘‘notice’’

would attract the consumer’s attention.

Another comment asserted that the

serious public health threat posed by SE

warrants a cautionary statement on

labels that informs consumers that the

way they are accustomed to eating eggs

may no longer be safe. This comment

contended that the term ‘‘safe handling

instructions’’ does not achieve the

objective of communicating to

consumers quickly and unambiguously

that eggs may be unsafe. Further,

according to the comment, the word

‘‘caution’’ unlike ‘‘warning’’ or ‘‘danger’’

would not cause the consumer to avoid

the product altogether.

Consumer research indicates that the

word ‘‘caution’’ has the same

connotation to consumers as ‘‘warning’’

and is, therefore, inappropriate for a safe

handling statement (Ref. 6). Because

FDA’s focus group research indicates

that consumers believe that there are

practical, simple things they can do to

control the risk from eggs, a safe

handling statement is more appropriate

and, consequently, the most appropriate

signal words are ‘‘safe handling

instructions.’’ In addition, as discussed

in the proposal (64 FR 36492 at 36505),

FDA considered the term ‘‘notice’’ to

introduce the safe handling statement

and concluded that the term would not

draw attention to the important fact that

there are ways to reduce the risks of

foodborne illness other than avoidance

of the product. Therefore, FDA is not

changing the phrase ‘‘safe handling

instructions’’ to ‘‘caution’’ or ‘‘notice.’’

(Comment 12) One comment

expressed the concern that the safe

handling statement would be difficult to

Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations 76097

understand because it is above a fifth

grade reading level.

FDA points out that considerable

effort was made to ensure that the

language in the statement would be

understandable to consumers. Specific

phrases or message elements were tested

for comprehensibility either in the egg

focus groups or in previous consumer

research on food safety issues. For

example, results of the focus group

research indicated that some

participants were confused by the term

‘‘shell eggs’’ and found ‘‘eggs’’ more

understandable. They also found the

phrase ‘‘cook eggs until yolks are firm’’

more understandable than ‘‘cook

thoroughly.’’ These findings were used

to craft the proposed statement.

Although focus group participants had

varying educational levels, those with

high level of education, e.g., graduate

degrees, were excluded from

participation. None of the participants

appeared to find the message difficult to

understand. Thus, the agency is not

persuaded by the comment that the safe

handling statement would be difficult to

understand.

Other comments addressing the

length of the safe handling statement

and the specific wording of the hazard

description in the safe handling

statement have become moot because

FDA has revised the statement.

Therefore, those comments will not be

addressed.

6. Alternatives to the Proposed Label

Statement

(Comment 13) A few comments stated

that the label statement on eggs for

household consumers should be

different from that on eggs for food

service. One of the comments offered

the following suggested labeling in a

two tiered labeling scheme:

For household eggs:

Keep refrigerated and cook thoroughly

For eggs in food service:

Handle Safely: refrigerate promptly; don’t

cross contaminate; clean hands and surfaces

often; cook to proper temperature.

FDA believes that the statement

suggested by the comment for

household consumers does not provide

adequate information. For example, the

statement required by § 101.17(h)(1)

uses the phrase ‘‘cook eggs until yolks

are firm’’ which is more descriptive

than ‘‘cook thoroughly.’’ Furthermore,

FDA was not persuaded by these

comments that food service

establishments need additional

information on cartons of eggs.

Although the agency recognizes that

many of the SE-associated outbreaks

occur in food service establishments, it

does not agree that additional labeling is

the best way to address this issue. Thus,

the agency is not persuaded to change

the safe handling statement to those

suggested by the comment.

(Comment 14) One comment stated

that a lengthy safe handling statement is

unnecessary and, alternatively,

supported the use of the following on

shell eggs:

IMPORTANT: Must Be Kept Refrigerated to

Maintain Safety

or

IMPORTANT: Must Be Kept Refrigerated

According to this comment, if FDA

determines that the labels of shell eggs

need safe handling instructions, then

those instructions should be in addition

to the statement above.

The agency is not persuaded that this

suggested label statement is all that is

needed on eggs to inform consumers of

ways that they may protect themselves.

As discussed in the proposal, two

measures that would mitigate the risk of

SE in shell eggs are refrigeration and

proper cooking. The suggested message

does not instruct consumers that proper

cooking is a measure that they can take

to protect themselves. The agency also

rejects the comment’s suggestion that

the suggested statement appear on the

label in addition to FDA’s proposed safe

handling instructions. Two statements

on the label informing consumers to

keep eggs refrigerated would be

redundant. FDA believes that the phrase

‘‘to prevent illness from bacteria’’

informs consumers that refrigeration is

one measure they can take to reduce or

eliminate the risk of foodborne illness.

Thus, FDA concludes that it is implicit

in the safe handling statement that

refrigeration helps maintain safety.

(Comment 15) A few comments

preferred statements that were very

short, clear, and aimed at all consumers

such as ‘‘do not eat raw or undercooked

eggs’’ and ‘‘keep refrigerated, cook

thoroughly, and do not eat raw’’ with

each of the instructions preceded by

bullets. Other comments supported the

following label statement that

incorporates the basics of the Fight Bac

campaign:

Safe Handling Instructions

CLEAN: Wash hands and surfaces often.

SEPARATE: Don’t cross contaminate

COOK: Cook to proper temperatures.

CHILL: Refrigerate Promptly

This statement, according to one

comment is a simple and positive

message and was designed based on

consumer focus research. Furthermore,

the comment maintained that it does not

single out a specific food item.

FDA is not persuaded to adopt the

safe handling statements suggested by

these comments. The agency believes

that the suggested statements do not

inform consumers why the safe

handling instructions should be

followed. Also, the agency notes that the

statement incorporating the basics of the

Fight Bac campaign educates consumers

about food safety in general. However,

FDA’s proposal to require a safe

handling instruction is being issued

under 201(n) and 403(a) of the Federal

Food, Drug, and Cosmetic (FD&C Act)

(21 U.S.C. 321(n) and 343(a)). Under

section 201(n) of the FD&C Act, in

determining whether labeling is

misleading, it must be taken into

account, among other things, the extent

to which labeling fails to reveal material

information with respect to

consequences that may result from the

usual use of the product. FDA believes

that, although instructions to wash

hands and not to cross contaminate

products are useful pieces of

information, such information is not

specific to eggs. Therefore, FDA is not

persuaded to adopt this suggested

alternative phrasing.

7. Placement and Prominence

a. Placement and type size of the safe

handling statement. As discussed in the

proposal, section 403(f) of the FD&C Act

requires that mandatory label

information be placed on the label with

such conspicuousness as to render it

likely to be read and understood by

ordinary individuals under customary

conditions of use. In the past, FDA has

generally required label statements

required by § 101.17 (21 CFR 101.17) to

be placed on the information panel. The

agency noted that the principal display

panel (PDP) would provide even more

prominence. Accordingly, the agency

tentatively concluded to require the

proposed safe handling statement either

on the information panel or the PDP.

The agency also noted in the proposal

that § 101.2(c) (21 CFR 101.2(c)) requires

that mandatory information appearing

on the PDP and information panel,

including information required by

§ 101.17, appear prominently and

conspicuously in type size no less than

1⁄16 inch. Consequently, the agency

concluded that it was not necessary to

repeat the requirements in this

rulemaking.

(Comment 16) Some of the comments

stated that there is not enough room on

the egg carton to print such a lengthy

safe handling statement with the other

Federal and State mandated labeling

requirements such as nutrition labeling,

USDA grade and quality logos, product

code, registration numbers to identify

packers, date of pack, sell-by date, and

count and weight. Some comments

76098 Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations

maintained that the lack of space is

greater for small (six or eight count)

cartons and pulp/open view cartons.

Further, one comment pointed out that

some of the manufacturers of smaller

egg cartons are incapable of printing on

the side of the lid. For those who have

space to print on the side of the lid, the

comment pointed out that the cost to

purchase equipment needed to print on

the side of the lid would cost several

million dollars. Some comments

asserted that the space on the label is

used by some firms for promotional

material, which is a critical selling

feature for the firm. Therefore,

according to these comments, further

regulation would limit a firm’s ability to

market its own products. While one

comment stated that the safe handling

statement should be on the outside of

the lid, other comments requested some

flexibility for placement of the label

statement. Two comments maintained

that FDA should conduct more research

to see if the statement should appear on

the information panel and whether

consumers would notice the statement

there. One comment requested that for

small cartons the safe handling

information be communicated with an

800 telephone number printed on the

carton, e.g., ‘‘FOR SAFE HANDLING

INSTRUCTIONS, PLEASE CALL 1–

(800)ll–ll.’’

FDA recognizes that manufacturers

may have to redesign their labels, but

believes that, in many instances and,

particularly in light of the fact that the

safe handling statement that will be

required is about one-half the length of

the one proposed, simply reducing the

type size of non-mandatory information

will provide sufficient space to

accommodate the safe handling

statement in § 101.17(h)(1). Further,

FDA believes that there is enough space

on the foam type cartons of shell eggs

(both the small, i.e., 6 to 8 egg carton,

and larger cartons) to bear all other

Federal and State mandated information

as well as FDA’s safe handling

statement. In fact, some of those cartons

now contain safe handling information

that is comparable in length or more

lengthy than FDA’s revised safe

handling statement. Therefore, for these

cartons, FDA concludes that, as revised,

there is ample space for its safe

handling statement.

FDA also recognizes the limitation of

label space on pulp style egg cartons.

However, FDA believes that the pulp/

open view cartons also have ample

space for the shorter revised safe

handling statement as evidenced by

existing nonmandatory labeling. Thus,

FDA is not revising the requirement in

§ 101.17(h)(2) that the safe handling

statement must appear either on the

PDP or the information panel of the

label. The agency concludes that

because there is ample space for the safe

handling statement on both large and

small cartons of shell eggs, FDA is not

providing a telephone referral for the

safe handling instructions for these

cartons. In addition, FDA rejects the

comments suggesting that it should

conduct more research to determine

whether consumers would notice safe

handling instructions on the

information panel. The comments did

not provide any information that

consumers would not notice the safe

handling statement on the information

panel and, therefore, FDA is not

changing the provision of allowing the

safe handling statement on the

information panel.

(Comment 17) A few comments

requested that FDA require a minimum

type size. For example, one comment

stated that 12-point type is best for older

persons to read. The comment

acknowledged that some egg cartons

may not be able to accommodate 12-

point type and stated that type size of

less than 8-point would be difficult to

read. One comment maintained that

other formatting requirements would

enhance the readability of the statement.

For example, the comment suggested

that FDA consider requirements for the

use of simple type and use of ink and

paper with sufficient contrast. Another

comment suggested that FDA require

that the statement appear in a hairline

box with adequate space around the

statement and appear in dark words on

light background to enhance the

visibility.

FDA does not agree that it should

require a minimum type size. The

agency reiterates that § 101.2(c) requires

that mandatory information appearing

on the PDP and the information panel,

including information in § 101.17,

appear prominently and conspicuously

in a type size of no less than 1⁄16 inch.

Although comments recommended 12

point font for the safe handling

statement to make it easier for older

persons to read, one of these comments

acknowledged that there may be

insufficient space to accommodate the

statement in that type size on the egg

carton. Furthermore, the comments did

not provide data to support the

contention that older consumers are

unable to read information on the

information panel and PDP that appear

in 1⁄16 type size. Accordingly, FDA is

not requiring a minimum type size for

the safe handling statement that is

different from the minimum type size

requirements in § 101.2(c). The agency

also notes that 21 CFR 101.15 describes

conditions that would make a label

statement lack the prominence and

conspicuousness required by § 101.2(c).

Some of these include insufficient

background contrast, and crowding with

other written, printed, or graphic matter.

Because these provisions are already in

place for prominence and

conspicuousness for information

required by § 101.17, the agency finds

that it is not necessary to repeat these

requirements in this rulemaking.

b. Use of graphics. In the proposal,

FDA recognized that safe handling

instructions on meat and poultry

utilized graphic illustrations. The

agency tentatively concluded that its

focus group research did not indicate

that graphic illustrations were necessary

to convey the safe handling instructions

to consumers. However, the focus

groups did respond favorably to bullets

and the agency requested comment on

whether graphics would enhance the

visibility of the statement and whether

it should require them.

(Comment 18) Some comments

maintained that icons depicting actions

to be taken (e.g., a refrigerator to

indicate that product should be

refrigerated) make the safe handling

statement easier to understand. Other

comments supported the use of bullets

to enhance the safe handling statement.

One comment supported use of a

graphic symbol to attract the consumer’s

attention to the label such as an

exclamation point in a triangle. This

symbol, the comment maintained, could

become a universal symbol for foods

that present a hazard.

The agency is not requiring these

suggested labeling options. None of the

comments provided data that showed

that consumers would be better

informed with graphics and, thus, did

not call into question FDA’s testing that

showed that consumers would be

adequately informed of safe handling

information without the use of graphics.

However, the agency would not object

to the use of bullets or graphic

illustrations in addition to what is

required. Accordingly, graphic

illustrations and bullets may appear

with the safe handling statement to

draw greater attention to the statement.

However, other wording may not appear

in the box with the prescribed label

statement. As stated in the proposal (64

FR 36492 at 36504), FDA believes that

prescribing the specific language of the

safe handling statement gives

manufacturers a level playing field by

requiring the same language for all

products covered by the regulation,

while giving consumers a message that

is not confusing, misleading, or

ineffective.

Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations 76099

1The baseline for the cases of samonellosis was

estimated in three different ways. The USDA risk

assessment estimated the number of illnesses with

a full farm-to-table model. The model included an

estimate of the number of eggs infected, the number

of infected eggs likely to be consumed, and an

estimate of the number and severity of illnesses

caused by SE. In the second model, FDA modified

the USDA risk assessment model by using a 5

percent probability that shell eggs are refrigerated

at 7.2 °C (45 °F) in retail establishments and

institutions. FDA modified the original model based

on more recent information on the numbers of

establishments not refrigerating eggs at 7.2 °C (45

°F). The CDC model estimates the number of

illnesses based on the number of confirmed cases

as indicated by the number of SE isolates reported

to CDC plus estimated unreported cases.

c. Labeling for shell eggs not for direct

sale to consumers. In the proposal, FDA

stated that the safe handling statement

on cartons of shell eggs that are not for

direct sale to consumers, e.g., shell eggs

that are to be repacked at a site other

than originally processed or are to be

shipped for use in food service

establishments, would serve as a means

to inform repackers and food preparers

of the safe handling instructions. The

agency tentatively concluded that the

same goal of conveying the message

could also be accomplished by

customary practices of the trade. Thus,

FDA proposed that the safe handling

statement on shell eggs that are not for

direct sale to consumers may be

provided on cartons or in labeling, e.g.,

invoices or bills of lading in accordance

with the practice of the trade.

(Comment 19) Some comments

opposed labeling in invoices and bills of

lading because, they asserted, the

labeling may be separated from the

product and not read by food handlers.

The comments maintained that the safe

handling instructions must be read and

understood by the food handler because

they are the ones who must use the safe

handling instructions when storing and

preparing egg dishes. Moreover,

according to one comment, the majority

of eggs shipped to food service

establishments are in 15 or 30 dozen

cases that have ample room for labeling

and, therefore, there is no need for the

flexibility. One comment asserted that

the proposed safe handling instructions

should be on shipping containers and

other food service packages because

most incidents of SE-contamination in

eggs occur in food service

establishments.

The agency agrees that the safe

handling instructions must be conveyed

and understood by the food handler.

However, the agency is not persuaded

by comments that the safe handling

statement would not reach the food

preparers if it is not on the label. FDA

believes that it is the responsibility of

the owner/operator of the establishment

to make sure that food preparers receive

the safe handling instructions as well as

training on how to implement the

instructions. Moreover, the agency

points out that it intends to ensure that

food preparers receive safe handling

information for shell eggs by

establishing safe egg handling and

preparation practices at retail consistent

with the Food Code (Refs. 1 and 5).

Thus, FDA is not persuaded to prohibit

the use of labeling such as invoices and

bills of lading as a means for meeting

the requirements of this rule when the

eggs are to be repacked, relabeled, or

further processed.

8. Other Labeling Issues

(Comment 20) Some comments

contended that the label statement will

not significantly reduce the numbers of

SE-associated illnesses.

The agency disagrees that the label

statement will not significantly reduce

the numbers of SE-associated illnesses.

In the PRIA, FDA used a Food

Marketing Institute study (Ref. 7) of the

effects of USDA’s meat and poultry safe

handling instructions to estimate the

effect of the safe handling label

statement for shell eggs. The agency

estimated that the likelihood that shell

eggs would be undercooked or

consumed raw would decline by

approximately 5 percent. FDA also

estimated that the likelihood that

consumers would fail to refrigerate shell

eggs would decline by 2 percent. These

percentages continue to be the agency’s

best estimate of the approximate effects

of the safe handling label for shell eggs.

In a separate simulation, FDA used its

modification of USDA’s SE risk

assessment model 1 and CDC’s

surveillance model to estimate the effect

of the safe handling label. With the

FDA-modified SE risk assessment

baseline, FDA estimated the number of

illnesses that would be prevented by

labeling to be 4,948 to 162,846 with a

mean of 46,339. Using the CDC baseline,

the estimate of the number of illnesses

prevented by labeling was 2,813 to

42,892, with a mean of 14,775. As

discussed below in section IV.A of this

document, FDA used more recent data

to adjust the CDC surveillance model

used in the proposal. Thus, FDA’s

estimate of the number of illnesses

prevented by labeling using the revised

CDC baseline is 1,570 to 25,196 with a

mean of 8,784. Comments did not

provide FDA with other estimates of the

prevention of salmonellosis. FDA

maintains that its estimates represent a

significant reduction in illness.

(Comment 21) Some comments

contended that most outbreaks occur in

food service establishments and,

therefore, FDA’s focus should be on

educating and providing safe handling

instructions for food service workers,

not household consumers. On the other

hand, one comment maintained that

label statements are not going to change

the behavior of food service workers

who take shortcuts.

FDA disagrees with these comments.

The agency believes that information

about food safety should be given to

both household consumers and food

service workers. Previously in section

II.A of this document, FDA discussed its

rationale for providing safe handling

instructions for consumers. The agency

recognizes that food service is an

additional component of the farm-totable continuum and points out that, as

part of FDA’s and FSIS’ Egg Safety

Action Plan, FDA intends to initiate

rulemaking to establish safe handling

and preparation practices for food

service establishments based on sections

of the Food Code related to egg safety

(Refs. 1 and 5). FDA also points out that

the requirement for refrigeration of eggs

at retail, including food service

establishments (see discussion below in

section III of this document) will be

mandatory upon the effective date of

this regulation.

FDA agrees that education is an

important factor in providing

instructions on food safety. Thus, the

agency intends to develop an

educational and outreach campaign

related to this final rule to inform the

public, including both consumers and

food service employees.

(Comment 22) Several comments

pointed out that many existing egg

cartons already bear safe handling

instructions. To eliminate costly

relabeling, these comments requested

that FDA permit existing safe handling

label statements if they meet or exceed

the statement required by the final rule.

One comment requested that if a carton

already has a ‘‘keep refrigerated’’ label

on the carton that it be allowed to delete

the phrase from the safe handling

statement.

The agency is not persuaded to

exempt eggs that have existing safe

handling instructions from requirements

in § 101.17(h)(1). FDA has concluded

that prescribing the language for a safe

handling statement for shell eggs would

give consumers a clear and consistent

message and provide a ‘‘level playing

field’’ for industry by requiring that all

products covered by the regulation bear

the same information. Further, FDA

concludes that a prescribed safe

handling statement would ensure a

message that is not misleading or

confusing.

In addition, the agency is not

persuaded to delete the phrase ‘‘keep

76100 Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations

eggs refrigerated’’ from the safe handling

statement on cartons that already have

a keep refrigerated statement. The

agency recognizes that many cartons

already have refrigeration instructions

and notes that USDA requires in 9 CFR

590.50 that eggs packed for the ultimate

consumer be labeled to indicate that

refrigeration is required. However, FDA

believes that the refrigeration

instruction is an essential component of

the safe handling statement and, as

such, should not be taken out of the

context of the rest of the statement.

Further, FDA’s safe handling statement

permits manufacturers to uniformly

comply with both FDA’s safe handling

statement and FSIS’ refrigeration

labeling requirement because FSIS’

requirement is that cartons be labeled to

indicate that refrigeration is required.

Consequently, this safe handling

statement can replace that required by

FSIS. The agency recognizes the

redundancy in having two refrigeration

statements and points out that, while

firms are revising labels to add the safe

handling statement, they can delete the

additional ‘‘keep refrigerated’’ statement

that is not a part of the safe handling

statement required in § 101.17.

Although FDA is not exempting eggs

that have existing safe handling

instructions from requirements in

§ 101.17(h)(1), the agency does see merit

in using enforcement discretion with

firms that want to exhaust existing

labels provided that the labeling meets

or exceeds the requirement for the

instructional element, which includes:

(1) A refrigeration instruction and (2) a

cooking instruction. FDA believes that

this would reduce the costs for some

firms while still providing consumers

information on how to properly handle

eggs. Firms with existing inventories as

of the effective date of this final rule

may exhaust those inventories as long as

they contain the essential elements

listed above. Upon their next printing,

however, these firms must comply with

the requirements in § 101.17(h)(1).

Lastly, the agency is revising

proposed § 101.17(h)(1) and deleting

proposed § 101.17(h)(6) to be consistent

with the changes made in § 115.50 (as

discussed in section III.C of this

document). The remainder of

§ 101.17(h) is renumbered to reflect this

change.

C. Comments on Effective Date

(Comment 23) A few comments

asserted that the implementation time

for the proposed labeling requirement is

insufficient. These comments

maintained that given the logistics of

redesigning cartons, replacing

inventory, making necessary

adjustments to distribution channels,

and accommodating seasonal product

demand fluctuations, the egg industry

needs a 360-day implementation period.

According to one comment, once the

rule is finalized, new designs will need

to be developed, then sent to customers

for label approval. The comment stated

that production of the label could not

take place until the design is approved,

which according to the comment, could

take 60 to 90 days. The comment

maintained that once production begins,

it will involve label changes for

thousands of stockkeeping units (SKU’s)

of hundreds of different customers,

which would be a burden given only the

approximately 90 days left to comply.

The comment estimated that personnel

would take 11,386 to 19,880 hours to

redesign the label; retool all carton

labels, including artwork; communicate

with customers; order plates; and

complete other required activities.

Further, the comment contended that

it is not likely that egg producers will

have begun to use the proposed

statement before the compliance date in

order to take advantage of FDA’s

willingness, as stated in the proposal

(64 FR 36492 at 36510), to allow

producers to use the safe handling

statement as proposed and if printed

before the publication of the final rule.

The comment asserted that producers

would not want to take the chance of

changing labels twice. The comment

explained that egg carton stock is

prepared well in advance and

customers’ needs may be less than

expected. Therefore, if cartons are not

used prior to the effective date, they will

need to be discarded. The comment

stated that, on the other hand, a large

inventory may be needed to

accommodate peak periods, such as

Christmas and Easter and if large stocks

are not maintained, the inventory may

run out. Additionally, the comment

expressed concern that, depending on

when the rule is published, the labeling

requirement could be implemented

during the time of peak production, and,

therefore would make compliance with

the requirement extremely difficult.

Another comment disagreed with FDA’s

assessment that a longer compliance

period would delay benefits of the rule

because many cartons currently contain

safe handling instructions and,

therefore, benefits are being realized

now.

The agency notes that the purpose of

the safe handling labeling requirement

is to protect the public health by

providing consumers with material

information, i.e., instructions on how to

safely handle and prepare eggs in order

to reduce the risk of illness. Therefore,

FDA believes that the safe handling

statement should be placed on egg

cartons as soon as possible. However,

FDA is persuaded by the comments that

it may be extremely burdensome for

some producers to comply with the

labeling requirements in 180 days. The

agency acknowledges the difficulty in

designing new labels, receiving label

approval from customers, and building

up inventories. The agency also

recognizes the costliness of destroying

inventories that do not comply with

FDA’s requirements. The agency is

persuaded by the economic concerns

raised in the comments that it should

provide some flexibility to

manufacturers. As discussed below in

more detail in section IV.A of this

document, the longer compliance period

will generate savings in costs that would

exceed the reduction in benefits thus

still meeting the agency’s need to

address the public health concern.

Therefore, FDA is providing an

additional 90 days for firms to come

into compliance with the requirements

in § 101.17(h).

III. Refrigeration of Shell Eggs in Retail

Establishments

As discussed in section II of this

document, SE in eggs is a significant

public health concern. As discussed in

the proposal, FDA concluded that one

practicable measure to limit the number

of viable SE in shell eggs is refrigeration

because it extends the effectiveness of

the egg’s natural defenses against SE

and slows the growth rate of SE. USDA

published a final rule (63 FR 45663,

August 27, 1998) to require that shell

eggs packed for consumer use be stored

and transported at an ambient

temperature not to exceed 7.2 °C (45 °F).

This regulation, however, does not

apply to eggs while held at all retail

establishments. FDA is concerned that

without continued refrigeration up until

the time that the eggs are cooked, there

would be an opportunity for the egg’s

defenses to degrade and growth of SE to

occur. The agency reviewed research

indicating that SE multiplies at

temperatures of 10 °C (50 °F) and above

but can be inhibited at lower

temperatures, e.g., 8 °C (46 °F), 7.2 °C

(45 °F) and 4 °C (39 °F). Based on this

research and USDA’s temperature

requirement during transport, FDA

proposed a maximum ambient

temperature of 7.2 °C (45 °F) for eggs

stored and displayed at retail

establishments.

A. Refrigeration Temperature

Requirements

(Comment 24) Most comments

regarding the proposal to require

Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations 76101

refrigeration of shell eggs supported a

requirement for refrigeration. Some of

these comments supported the proposed

maximum temperature requirement, i.e.,

7.2 °C (45 °F), whereas other comments

disagreed with this temperature

requirement. Several comments

suggested that the agency set the

maximum ambient temperature for shell

eggs held at retail at 5 °C (41 °F), instead

of 7.2 °C (45 °F). Some of these

comments suggested that this would

provide a margin of safety, especially for

eggs packed tightly together in large

trays or in large retail coolers. Other

comments noted that a requirement of 5

°C (41 °F) would ensure consistency

with the requirement in FDA’s Food

Code that potentially hazardous foods

be refrigerated at 5 °C (41 °F) (Ref. 5).

The agency is not persuaded that the

temperature requirement should be 5 °C

(41 °F), rather than 7.2 °C (45 °F). As

discussed in section I.F of the proposal,

research indicates that SE multiplies at

temperatures of 10 °C (50 °F) and above

but that multiplication is inhibited at

lower temperatures. Therefore, by

requiring a refrigeration temperature

lower than 10 °C (50 °F), the agency is

already providing a margin of safety for

shell eggs. FDA concludes that

refrigeration at 7.2 °C (45 °F), i.e., the

same temperature required by USDA

under the Egg Products Inspection Act

(EPIA) for the storage and transportation

of shell eggs, is sufficient to protect the

public health. Because eggs cool down

only slightly faster when held at 5 °C

(41 °F) as opposed to 7.2 °C (45 °F), as

discussed in the PRIA (64 FR 36516 at

36518), requiring eggs to be stored at the

lower temperature would have a

negligible effect on the SE risk.

Requiring a temperature of 5 °C (41 °F)

as the maximum ambient temperature

would increase costs to the producer

without producing significant

additional food safety benefits.

Furthermore, the agency notes that

the storage temperature of shell eggs

addresses growth of SE in shell eggs,

whereas the refrigeration temperature

required by the Food Code, i.e., 5 °C (41

°F), addresses growth of all pathogens

that may be present in potentially

hazardous foods. Thus, in addressing

holding temperatures for potentially

hazardous foods in general, the Food

Code requires a temperature for retail

storage that will prevent or slow the

growth of most pathogens, including

cold-tolerant pathogens such as Listeria

monocytogenes that have been shown to

grow at 5 °C (41 °F). The agency does

not have data suggesting that L.

monocytogenes or other pathogens are a

potential concern in shell eggs. The

agency concluded that a maximum

storage temperature of 7.2 °C (45 °F) will

be effective in inhibiting the growth of

SE that may be present in shell eggs. Of

course, this requirement does not

preclude States or retailers from

maintaining shell eggs at lower

refrigeration temperatures.

(Comment 25) One comment

contended that FDA based the 7.2 °C (45

°F) ambient temperature requirement on

studies that do not provide a sound

scientific foundation for the

requirement. The comment stated that

none of the articles FDA cites in support

of the proposed refrigeration

requirement examined SE growth in

eggs stored under conditions that

simulate actual commercial storage

conditions. The comment maintained

that, because commercially stored egg

cartons are often placed on pallets in

large numbers and stacked to high levels

in high-volume coolers, the eggs’

internal temperature may be

substantially higher than the coolers’

ambient temperature, especially for

centrally located eggs that are insulated

by surrounding eggs and, therefore,

exposed to warmer temperatures.

FDA disagrees with the comment. The

studies noted by the comment were not

cited as evidence that eggs in

commercial storage conditions would

achieve a certain temperature when

refrigerated. Rather, these studies

provide evidence that SE growth is

inhibited when eggs are at the

temperature studied. While the agency

agrees that eggs packed near the center

of a large pallet may not cool as quickly

as those near the perimeter, the

temperature of eggs, when refrigerated,

will progress towards the ambient

temperature of the refrigeration unit. As

discussed above in this section, FDA

has provided its rationale for why an

ambient temperature of 7.2 °C (45 °F) for

storage of eggs is the best available

option for protecting the public health.

(Comment 26) One comment

recommended that States be allowed to

require ambient temperatures lower

than 7.2 °C (45 °F) for shell eggs if they

believe their citizens will be better

protected by a lower temperature, such

as 5 °C (41 °F), particularly if gaps exist

in the scientific data on this issue.

The agency recognizes that some

States and localities may have

temperature requirements lower than

7.2 °C (45 °F). As stated in the proposal

(64 FR 36492 at 36499), the agency does

not intend that this regulation would

preempt recommendations of the Food

Code or other State or local

requirements that require a lower

temperature. The regulation would,

however, preempt any State or local

requirements that allow a temperature

greater than 7.2 °C (45 °F).

(Comment 27) One comment

supported the 7.2 °C (45 °F) ambient

temperature requirement, but urged the

agency and others to communicate

effectively with retail establishments to

minimize any confusion that may result

from the temperature difference

between this proposed requirement and

the requirement in the Food Code.

While the new temperature

requirement may create some confusion

initially, the Food Code will be revised

to reflect this new temperature for

storage of shell eggs in its next

reprinting (currently anticipated to be

2001). The revision will include not

only the new temperature requirement,

but also the scientific references and

public health reasons for the change in

annexes 2 and 3, respectively, of the

Code. In the meantime, FDA will rely,

as it has in the past, on State and local

authorities to assist retail establishments

in complying with the agency’s

regulations. The agency holds annual

training courses for State personnel and

food service directors that focus on

changes in the Food Code. FDA will

work closely with the States to ensure

that they communicate effectively with

retail establishments to minimize any

confusion that may result from the

temperature difference between this

requirement and the requirement in the

1999 Food Code and to ensure that

compliance assistance is consistent

nationwide.

(Comment 28) One comment

supported the refrigeration of shell eggs

at 7.2 °C (45 °F) provided that minor

variations in ambient temperature do

not result in condemnation of eggs. The

comment suggested that FDA make

refrigeration mandatory, but make the

temperature of 7.2 °C (45 °F) a voluntary

standard, or establish a level of

temperature variation (e.g., 5 °F) that

would be tolerated before the eggs

would be subject to regulatory action.

Another comment objected to the fact

that FDA made no provision in its

proposal for eggs that are out of

compliance for a limited amount of

time, and suggested that the allowance

of a reasonable amount of time to place

eggs in a cooler after delivery would not

compromise their safety.

FDA disagrees with the comment that

the temperature for refrigeration of eggs

be a voluntary standard, rather than a

mandatory requirement. The agency has

proposed 7.2 °C (45 °F) as the maximum

ambient temperature for storage and

display of shell eggs at retail

establishments. Realizing that minor

variations in ambient temperature are

unavoidable, retailers may choose to

76102 Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations

maintain shell eggs at temperatures

below the maximum established

temperature to provide for a margin for

variation. As with any regulation, the

enforcement of this temperature

requirement will depend on the

particular circumstances regarding the

situation (including the temperature of

the eggs themselves) as well as the

discretion of the agency. In

§ 115.50(b)(1), FDA provided that ‘‘shell

eggs held for retail distribution shall

promptly be placed under refrigeration

* * * upon receipt at a retail

establishment.’’ The agency believes

that retailers should make every effort to

promptly place shell eggs under

refrigeration upon receipt. In most

cases, this can be done. However, FDA

recognizes that there may be some

circumstances in which short delays are

unavoidable. For example, when eggs

are delivered to a grocery store, the

stock clerk responsible for moving the

eggs into the cooler could be briefly

delayed in the task because he is

cleaning up after an accident in one of

the aisles involving a glass breakage. To

allow for a practical application of the

refrigeration requirement in such

situations, FDA is adding a provision to

§ 115.50(b)(1) that provides that where

short delays are unavoidable, the eggs

should be placed under refrigeration as

soon as reasonably possible.

B. Enforcement of the Refrigeration

Requirement

(Comment 29) One comment

expressed concern that consequences

for violation of FDA’s refrigeration

requirement are inconsistent with

violation of FSIS’ refrigeration

requirement for shell eggs during

transportation. The comment noted that

FSIS issues a facility violation but does

not retain the product if eggs are found

to be held above 7.2 °C (45 °F), whereas

FDA would require diversion or

destruction of the eggs.

As set out in the final rule, FDA has

the authority, under sections 301 and

402(a)(4) of the FD&C act, to seize eggs

that are held at retail at an ambient

temperature above 7.2 °C (45 °F), on the

grounds that those eggs have been held

under insanitary conditions whereby

they may be rendered injurious to

health and are, therefore, adulterated.

FDA may also use administrative

procedures set out in this rule to order

that the eggs that have been held in

violation of the 7.2 °C (45 °F)

requirement established in this rule, be

destroyed or diverted. FSIS has the

authority, under the EPIA, to detain eggs

that are transported at an ambient

temperature above 7.2 °C (45 °F),

pending judicial seizure. FSIS also has

the option of seeking civil money

penalties against violators of the

transport temperature requirement. The

two agencies will coordinate

enforcement efforts as closely as the

different statutes allow. Both agencies

agree that enforcement of the

temperature requirement will depend

on the particular circumstances

regarding the situation (including the

temperature of the eggs themselves) as

well as the discretion of each agency.

(Comment 30) Two comments stated

that they oppose complete preemption

of State and local egg safety provisions.

One of these comments from an

association of State food and drug

officials agreed that temperature

requirements should be uniform, but

also argued that the States should be

free to enforce equivalent State

requirements under State laws and

regulations. This comment also stated

that States should be permitted to

require refrigeration temperatures lower

than 7.2 °C (45 °F).

In the proposal, FDA tentatively

concluded that the regulation should

preempt less stringent State and local

requirements because allowing them

would interfere with the important

public health objective of refrigerating

eggs at 7.2 °C (45 °F). FDA does not

intend that this regulation preempt State

requirements that are the same as or

more stringent, i.e., 7.2 °C (45 °F) or

lower. The regulation does, however,

preempt any State or local temperature

requirements greater than 7.2 °C (45 °F).

FDA would like to clarify that States

will be permitted to enforce their own

temperature requirements that are

equivalent to or lower than FDA’s

proposed requirement. For example, if a

State has a temperature requirement of

5 °C (41 °F) and eggs were found at a

storage temperature of 6.7 °C (44 °F),

then the eggs would be in compliance

with the Federal regulations, but not the

State regulations and the State could

take enforcement action to enforce its

own regulations.

(Comment 31) One comment also

opposed preemption of State

administrative procedures. The

comment asserted that, the

administrative procedures provided in

the proposal would impose a lengthy

process on States and localities. The

comment maintained that it is doubtful

that State or local jurisdictions would

follow FDA’s proposed procedures, e.g.,

they would not call FDA district or

regional directors to remove adulterated

eggs from establishments traditionally

under their jurisdiction. Nevertheless,

the comment asks for clarification on

whether the proposed regulations

preempt State administrative

procedures.

The agency is clarifying that the

administrative procedures in proposed

§ 115.50 do not preempt State or local

administrative procedures. On the

contrary, FDA explicitly provides in

§ 115.50(d) that State and localities may

follow the hearing procedures set out in

§ 115.50(e) substituting, where

necessary, appropriate State or local

officials for FDA officials, or they may

follow comparable State and local

procedures as long as such procedures

satisfy basic due process. Thus, FDA

intends that States could use their own

administrative procedures to enforce the

regulation. FDA is removing the word

‘‘comparable’’ to make it clearer that

State and local administrative

procedures do not need to track FDA’s

procedures.

(Comment 32) One comment raised

concerns about the breadth of the

preemptive effect of the proposed

regulation. It questioned whether the

proposed rule might preempt all State

laws relating to egg safety and substitute

FDA’s regulation. This comment

contended that States already have

systems in place that expeditiously

remove unsafe foods from commercial

channels and that those should not be

preempted.

FDA agrees with the comment. States

do have systems already in place that

expeditiously remove adulterated food

from the marketplace. In the proposal,

FDA acknowledged that States and

localities, more than FDA, currently

enforce regulations in retail

establishments. When examining

options for the enforcement of

refrigeration requirements, FDA

tentatively concluded that a FederalState cooperative approach would be

the best approach to enforce the

refrigeration requirements. Thus, FDA

proposed to allow States and localities

to enforce the Federal regulation, along

with FDA, if the States and localities so

desired.

FDA wants to make it very clear that

the intended preemptive effect of this

regulation is very narrow. FDA does not

intend to preempt general food safety

laws that apply to eggs, such as State

food and drug acts, or State or local

laws, regulations, or ordinances

applying to retail establishments, e.g.,

the Food Code. A State or local food

safety agency can continue to enforce its

own refrigeration requirements or other

egg safety requirements under its own

administrative or judicial enforcement

procedures as long as the retail

refrigeration requirements for eggs are

(equal to or less than 7.2 °C (45 °F). FDA

is including State and local agencies in

Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations 76103

the enforcement of this regulation to

broaden their enforcement tools, not to

narrow them. To ensure that the limited

preemptive effect of these regulations is

clear, FDA has added a statement on the

preemptive effect of the regulations to

the codified text.

(Comment 33) A comment contended

that the provisions in the proposal that

allow States and localities to enforce the

provisions ‘‘until FDA notifies the State

or locality in writing that such

assistance is no longer needed’’ appear

to place State regulatory actions

subordinate to those of FDA. The

comment maintained that it knew of no

other situation where regulatory actions

of State or localities constituted

‘‘assistance’’ to a Federal agency,

especially when intrastate commerce is

involved. The comment asked for

clarification of this issue.

The provision that allows State and

local agencies to enforce FDA’s

regulations draws its terms from section

311 of the Public Health Service Act

(PHS Act). FDA does not consider State

and local food safety activities to be

subordinate to Federal activities. In fact,

FDA created this cooperative model to

ensure that State and local officials

continue to be the primary enforcement

officials in retail establishments while

being provided the ability to enforce

this Federal requirement for egg

refrigeration.

(Comment 34) One comment also

expressed concern regarding the

precedent of using the PHS Act for

enforcement of communicable disease

regulations when there are other

collaborative and integrated

mechanisms available, e.g., the Food

Code. The comment maintained that

many States adopt the provisions of title

21 of the Code of Federal Regulations

(CFR) and, therefore, the comment

noted that it previously requested that

FDA adopt relevant sections of the Food

Code as regulations. The comment

asserted that adopting relevant sections

of the Food Code as a Federal regulation

would lower the risk of illness, while

promoting uniformity without

preempting State and local authority.

The agency notes that this regulation

is not the first regulation issued by FDA

that utilized the PHS Act to address

prevention of communicable diseases.

FDA used the PHS Act as its legal

authority to issue: (1) Regulations to

control the interstate shipment of

molluscan shellfish (21 CFR 1240.60);

(2) regulations to control the interstate

and intrastate commerce of turtles

(§ 1240.62 (21 CFR 1240.62)); (3)

requirements for mandatory

pasteurization of milk and milk

products (21 CFR 1240.61); and

regulations to control blood and tissue

products (21 CFR 640 and 1270).

However, the agency acknowledges that

this regulation represents a new

approach to food safety as it relates to

matters traditionally addressed by the

States. The agency believes that the

Federal-State cooperative approach that

it is adopting in this final rule for the

regulation of eggs is the most effective

and efficient use of Federal, State, and

local food safety authorities.

Further, FDA recognizes that many

States adopt parts of 21 CFR by

reference. However, the agency is not

persuaded by the comment that it

should adopt relevant sections of the

Food Code in lieu of issuing this

regulation. FDA notes that its policy on

the refrigeration of eggs, i.e., that

refrigeration at 7.2 °C (45 °F) is adequate

to maintain the safety of shell eggs

would be the same whether or not the

agency issued rulemaking to codify in

21 CFR sections of the Food Code

relevant to shell eggs. Nevertheless, as

announced in the Egg Safety Action

Plan, the agency plans to take additional

steps to protect at-risk consumers by

establishing safe egg handling and

preparation practices at retail,

consistent with provisions in the Food

Code.

(Comment 35) One comment

contended that FDA should evaluate

each State and local program to ensure

that they have the expertise and

resources to enforce the regulations.

This comment contended that if the

States and local programs do not have

the capability to enforce the rule, FDA

should provide training or resources, or

enforce the rule itself. Furthermore, the

comment stated that FDA should

perform comprehensive annual reviews

and permit only those agencies that

satisfy strict performance standards to

continue to enforce the rule.

FDA disagrees with this comment. As

discussed in the proposal, the agency

recognizes that the inspection of retail

establishments traditionally has been

the province of State and local food

safety agencies. FDA expects that these

agencies would continue to inspect

these establishments and will be able to

enforce the refrigeration requirement.

FDA considered a requirement that the

States report to FDA on their

enforcement activities. However, the

agency concluded that, because of the

vast number of food safety agencies at

the State and local level, reporting to

FDA would be too resource intensive.

Further, the agency concluded that

requiring States and localities to report

to FDA would remove valuable

resources from egg safety enforcement

and place them into administrative

activities. Consequently, FDA decided

to not require enforcement reports from

State and local agencies. Moreover,

FDA, in keeping with the principles of

Executive Order 13132 on federalism,

thought it prudent to allow States the

maximum administrative discretion

possible in enforcing this rule. However,

the agency intends to stay informed of

the enforcement of State and local

agencies. Where State or local coverage

needs to be augmented, FDA intends to

act.

(Comment 36) One comment opposed

the allowance of 10-working days after

the order is given for the destruction of

eggs that are not in compliance with the

temperature requirement as proposed in

§ 115.50(e)(1)(i). This comment

maintained that FDA provided no

rationale for the time period. Moreover,

the comment contended that 10 days

was an unnecessarily long period of

time and could allow for inadvertent

repacking. The comment suggested that

only 3 to 5 days be allowed.

The agency disagrees with the

comment. The time period of 10-

working days is consistent with other

regulations that address the prevention

of communicable disease, e.g.,

regulations in § 1240.62 that control the

interstate and intrastate commerce of

turtles. Moreover, the agency believes

that 10-working days allows sufficient

time for interested parties to appeal the

detention order as provided in

§ 115.50(e)(2)(i). In addition, the agency

points out that the administrative

procedures provide for sufficient

safeguards against inadvertent repacking

of shell eggs that were not held in

compliance with the temperature

requirement. Section 115.50(e)(1)(iv)

provides that eggs that are detained be

labeled with official tags stating that

they not be sold, distributed, or

otherwise disposed of except that they

be diverted or destroyed, or moved

pending appeal. The comment did not

persuade FDA that there is sufficient

cause to be concerned that eggs will be

inadvertently repacked if they are held

for 10-working days before they are

destroyed or diverted. Thus, the agency

is retaining the provision in

§ 115.50(e)(1)(i) for 10-working days

before eggs are diverted or destroyed.

(Comment 37) One comment

suggested that inspectors check the

temperature of the shell eggs’

environments at least twice a year. The

comment also suggested that, to ensure

that retail establishments are

maintaining accurate temperatures,

continuous temperature recording

devices be required and records made

available to inspectors.

76104 Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations

The agency agrees that the inspection

of retail establishments twice a year is

reasonable. In fact, the Food Code

recommends that retail establishments

be inspected once every 6 months.

These inspections include checking the

temperature at which potentially

hazardous foods, including eggs, are

being held. However, the agency does

not find that it is necessary to make the

inspection a requirement as part of this

rulemaking. The agency expects that

when State and local agencies routinely

inspect retail establishments, they will

check the temperature at which shell

eggs are held. In addition, for any

establishment that FDA inspects, it will

also check the temperature at which

shell eggs are held. Thus, FDA is not

persuaded by the comment to require a

specific interval for checking the

temperature at which shell eggs are

held.

FDA disagrees that it should require

that retail establishments maintain

continuous recording devices. The

agency notes that neither the Food Code

nor FSIS, in its directive regarding the

enforcement of refrigeration

requirements for shell eggs (Ref. 8),

recommends that such devices be used.

Furthermore, FDA notes that

requirement of such devices may be

very costly, especially for small

businesses. Consequently, the agency is

not persuaded by the comment to

require establishments to maintain

continuous recording devices.

C. Other Changes to the Proposal

FDA is revising proposed § 115.50 by

deleting paragraph (d) and revising

paragraph (b) for clarification. The

agency concludes that § 115.50(d)

stating that the requirements of this

section apply to all eggs may be

confusing in light of the fact that

paragraph (b) states that all

requirements of the section, except

paragraph (c) apply to shell eggs. FDA

is revising paragraph § 115.50(b) to state

‘‘except as provided in paragraph (c) of

this section; shell eggs held for retail

distribution, whether in intrastate or

interstate commerce, shall bear the

following statement: ’’ With this

revision, § 115.50(d) becomes

redundant. The rest of the section is

renumbered to reflect this change.

IV. Final Regulatory Impact Analysis

A. Benefit-Cost Analysis

FDA has examined the economic

implications of this final rule as

required by Executive Order 12866.

Executive Order 12866 directs agencies

to assess all costs and benefits of

available regulatory alternatives and,

when regulation is necessary, to select

regulatory approaches that maximize

net benefits (including potential

economic, environmental, public health,

safety, distributive, and equity effects).

Executive Order 12866 classifies a rule

as significant if it meets any one of a

number of specified conditions,

including having an annual effect on the

economy of $100 million; adversely

affecting some sector of the economy in

a material way; or adversely affecting

jobs or competition. A regulation is also

considered a significant regulatory

action under Executive Order 12866 if it

raises novel legal or policy issues.

Under the Unfunded Mandates Reform

Act of 1995 (Public Law 104–4)

requiring cost-benefit and other

analyses, a significant rule is defined in

section 1531(a) as ‘‘a Federal mandate

that may result in the expenditure by

State, local, and tribal governments in

the aggregate, or by the private sector, of

$100,000,000 (adjusted annually for

inflation) in any 1 year * * *.’’ Finally,

the Small Business Regulatory

Enforcement Fairness Act of 1996

(Public Law 104–121) defines a major

rule for the purpose of congressional

review as having caused or being likely

to cause one or more of the following:

An annual effect on the economy of

$100 million; a major increase in costs

or prices; significant effects on

competition, employment, productivity,

or innovation; or significant effects on

the ability of U.S.-based enterprises to

compete with foreign-based enterprises

in domestic or export markets.

FDA finds that this final rule is

economically significant under

Executive Order 12866. FDA

determined that this final rule, based on

the median estimate of cost contained in

the economic analysis, does not

constitute a significant rule under the

Unfunded Mandates Reform Act of 1995

(Public Law 104–4). Furthermore, in

accordance with the Small Business

Regulatory Enforcement Fairness Act of

1995 (Public Law 104–121) FDA

determined that this final rule will be a

major rule for the purpose of

congressional review.

This section contains the regulatory

impact analysis of the final rule. A more

complete analysis and a list of

references is available in a separate

document entitled ‘‘Preliminary

Regulatory Impact Analysis and Initial

Regulatory Flexibility Analysis of the

Proposed Rule to Require Refrigeration

of Shell Eggs at Retail and Safe

Handling Labels’’ (64 FR 36516, July 6,

1999).

FDA received no comments that

directly addressed the cost-benefit

analysis of the proposed rule. Several

comments, however, discussed aspects

of the rule that would affect the costbenefit analysis. In this final regulatory

impact analysis, FDA responds to those

comments.

1. Regulatory Options

FDA considered several regulatory

options for dealing with SE in shell

eggs. The options considered include:

(1) No new regulatory action, (2)

labeling only, (3) refrigeration at 7.2 °C

(45 °F) only, (4) refrigeration at 5 °C (41

°F), (5) labeling and refrigeration as

proposed, (6) HACCP for shell eggs, (7)

in-shell pasteurization, (8) longer

compliance periods, and (9) limited

retail sell-by periods. FDA received

comments on the proposal that directly

or indirectly dealt with the economic

analyses of some of these options.

(Comment 38) Several comments

discussed the costs of in-shell

pasteurization (option 7). In the analysis

of the proposal, FDA assumed that the

annual cost of pasteurization was $0.30

per dozen eggs. If 47 billion shell eggs

were consumed per year, the annual

cost of pasteurizing all of them would

be about $1.2 billion. One comment

estimated the cost to be $0.26 to $0.38

per dozen eggs, which implies that the

annual cost of pasteurizing 47 billion

shell eggs would be $1 to $1.5 billion.

Another comment estimated that

pasteurization would increase the price

of a dozen eggs by 35 to 40 percent. The

comment listed no prices, but at an

average price of $0.80, the additional

cost of pasteurizing 47 billion eggs

would be $0.28 to $0.32 per dozen, or

$1.1 to $1.3 billion per year. FDA did

not estimate the transition, or set-up

costs, (e.g., costs of equipment, redesign

of processing facilities, training) for

processors switching to pasteurization,

so these estimates understate the full

cost of in-shell pasteurizing all shell

eggs.

Although in-shell pasteurization

would greatly reduce SE, the agency

concludes that other interventions

between farm and table will reduce SE

at lower cost. The egg safety action plan

includes these other interventions, such

as on-farm controls, controls at packer/

processor, and retail controls, in

addition to in-shell pasteurization.

(Comment 39) Several comments

requested a longer compliance period

for the new egg label.

The main disadvantage of longer

compliance periods for the labeling

provision (option 8) is that the option

would delay the realization of the

benefits of the rule. In this final rule, the

agency will allow 9 months (instead of

the proposed 6 months) for producers to

comply with the labeling provision. The

Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations 76105

2 In the analysis of the proposed rule, FDA

estimated the number of SE illnesses from shell

eggs with a Monte Carlo simulation. In one

simulation, FDA used CDC surveillance data from

1988 through 1997 to calculate that the annual

average number of SE isolates was 8,400. FDA then

applied the probability that an isolate would be

reported that was used in the USDA SE risk

assessment, i.e., 0.014, to estimate the total number

of SE cases. FDA assumed, based on outbreak and

other information, that 10 to 60 percent of all SE

cases were associated with shell eggs. In the revised

CDC surveillance model, FDA used CDC

surveillance data from 1989 through 1998 to

calculate an average annual number of SE isolates

of 8,300. The agency applied the probability of

reporting used in the new CDC foodborne illness

estimates, 0.026, to estimate the total number of SE

cases (Ref. 10). As in the proposed rule, FDA

assumed that 10 to 60 percent of all SE cases were

associated with shell eggs. Part d of table 1 shows

the results of the simulation based on the revised

CDC data.

longer compliance period will probably

generate savings in costs that exceed the

reduction in benefits (as measured with

the revised CDC surveillance baseline).

FDA discusses the effects of the longer

compliance period in more detail in the

sections on benefits and costs.

2. Benefits

Benefits from the final rule to require

a safe handling label and the

refrigeration of shell eggs at 7.2 °C (45

°F) come from reducing egg-related

illness. The formula FDA used for

estimating benefits is:

Marginal health benefits = baseline risk

(number of SE illnesses related to shell eggs)

x expected reduction in the number of

illnesses brought about by the final rule x

health cost per illness.

(Comment 40) Although there were no

comments directly on the estimated

benefits, several comments argued that

FDA used too high a baseline number of

SE illnesses. In addition, some

comments cited new data from CDC on

SE. In the economic analysis in the

proposal, FDA used the results of the

USDA SE risk assessment for one

estimate of the baseline risk and the

CDC Salmonella surveillance data for

another estimate of the baseline (64 FR

36516 at 36520). The CDC active

surveillance data showed a 44 percent

fall in SE between 1996 and 1998 (Ref.

9). CDC also released a new estimate of

the total number of illness associated

with Salmonella (Ref. 10). The new

estimate of the total number of illnesses

from Salmonella is lower than previous

estimates, which implies that the

baseline number of SE-related illnesses

is also lower. In response to the

comments on FDA’s baseline number of

illnesses, FDA adjusted the CDC

surveillance baseline to incorporate the

recent CDC surveillance data and

estimated number of SE-related

illnesses.2 The SE risk assessment

model baseline did not use CDC cases,

so it does not change. Table 1 of this

document shows the USDA SE risk

assessment baseline, the FDA-modified

USDA SE risk assessment baseline (for

explanation of this modification, see

footnote 1 in section II.A.8 of this

document), the CDC surveillance

baseline, and the adjusted CDC

surveillance baseline.

TABLE 1.—FOUR ANNUAL ILLNESSES FROM ESTIMATES OF SALMONELLA ENTERITIDIS (SE) IN SHELL EGGS

5th Percentile Median Mean 95th Percentile

a. USDA SE Risk Assessment

Illnesses 126,374 504,082 661,633 1,742,592

Arthritis 3,631 14,864 19,994 55,915

Deaths 68 301 391 1,050

b. USDA SE Risk Assessment as Modified by FDA

Illnesses 115,645 416,156 569,231 1,508,814

Arthritis 3,372 12,548 17,175 48,594

Deaths 66 250 354 985

c. CDC Surveillance Model

Illnesses 63,884 189,599 191,511 319,275

Arthritis 1,330 5,533 5,727 12,202

Deaths 37 122 115 197

d. Revised CDC Surveillance Model

Illnesses 36,523 112,138 114,271 194,796

Arthritis 762 3,011 3,410 7,251

Deaths 21 66 68 117

FDA used the USDA SE risk

assessment model to estimate the

expected reduction in illnesses

attributed to the rule. The design of the

USDA SE risk assessment model

allowed the agency to estimate the

number of illnesses prevented by

comparing the baseline number of

illnesses with the number of illnesses

under the rule.

FDA calculated the health cost per

illness prevented by classifying SE

illnesses by the severity of outcome:

Mild, moderate, and severe acute

gastrointestinal illnesses; resolved and

chronic reactive arthritis; and death.

The agency then multiplied the

estimated monetary health cost per type

of illnesses by the number of illnesses

prevented of each type. FDA calculated

total health benefits from the final rule

with the following formula:

Total health benefits = (number of mild

cases prevented x $ per case) + (number of

moderate cases prevented x $ per case) +

(number of severe-acute cases prevented x $

per case) + (number of resolved cases of

arthritis prevented x $ per case) + (number

of chronic cases of arthritis prevented x $ per

case) + (number of deaths x $ per death).

The baseline risk, the expected

reduction in risk, and the health costs

per illness are all uncertain. FDA,

therefore, estimated a distribution of

possible health benefits for the final

rule, with the distribution based on the

probability distributions associated with

the main uncertainties. FDA estimated

that this final rule would reduce the

number of egg-related illnesses by 6 to

76106 Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations

49 percent (5th to 95th percentile), with

the median equal to 14.5 percent and

the mean equal to 19 percent. The

ranges (5th to 95th percentile) of

estimated annual benefits for the three

baselines are shown in table 2 of this

document.

TABLE 2.—TOTAL ANNUAL HEALTH BENEFITS FROM THE REDUCTION IN SALMONELLOSIS ATTRIBUTABLE TO THE PROPOSED SHELL EGG RULES: USDA 1 SE 2 RISK ASSESSMENT BASELINE, CDC 3 SURVEILLANCE BASELINE, AND ADJUSTED CDC SURVEILLANCE BASELINE

Variable 5th Percentile Median Mean 95th Percentile

a. Modified USDA SE Risk Assessment Baseline

Illnesses prevented 12,369 65,801 115,848 407,064

Health benefits $86.7 million $703

million

$1,700

million

$6,610

million

b. CDC Surveillance Baseline

Illnesses prevented 7,032 25,132 36,937 107,230

Health benefits $49.2 million $303

million

$501

million

$1,679

million

c. Revised CDC Surveillance Baseline

Illnesses prevented 3,925 14,958 21,961 62,991

Health benefits $32.9 million $259.5 million $466.3 million $1,619

million

1 USDA means U.S. Department of Agriculture.

2SE means Salmonella Enteritidis. 3 CDC means the Centers for Disease Control and Prevention.

FDA estimated the benefits derived

from extending the compliance period

for the labeling regulation. With the

longer compliance period for the

labeling provision, some of the labeling

benefits will be postponed for 3 months.

In the analysis of the proposal, the

agency estimated the median benefits

attributable to labeling alone to be $261

million using the USDA SE risk

assessment baseline and $103 million

using the CDC surveillance baseline.

With the revised CDC surveillance

baseline, median labeling benefits are

$91 million. FDA used a 7 percent rate

of discount to estimate the reduction in

benefits from increasing the compliance

period for labeling by 3 months. The

later effective date will reduce median

health benefits by, at most, $5 million

under the USDA SE risk assessment

baseline and $2 million under either

version of the CDC surveillance baseline

because some labels would be in place

before the effective date. Because it is

based on more recent information, the

agency believes that $2 million is the

best estimate of the reduction in benefits

associated with the later effective date

for the safe handling label.

The benefit estimates above depend

on a number of assumptions including

assumptions about individual response

to the egg labels. Modification of these

assumptions would lead to changes

(increases or decreases) in the estimate

of the benefits of this rule.

3. Costs

FDA received no comments on the

estimated costs of this rule and,

therefore, will use the same estimate

reported in the analysis of the proposal.

The costs of the final rule are the sum

of the costs of changes in manufacturing

practices—labeling and refrigeration—

and changes in consumer practices—egg

preparation and consumption.

a. Labeling. The costs of labeling are

the sum of inventory disposal, label

redesign and administrative costs. FDA

calculated labeling costs with the

following model:

Labeling cost = ($ administrative costs per

firm x number of affected firms) + ($ value

of cartons manufactured x disposal

percentage of carton inventory) + (number of

affected labels x $ redesign cost per label).

In the analysis of the proposed rule,

FDA estimated the total cost of labeling

for a 6-month compliance period to be

a one-time cost of approximately $18

million. The cost included

administrative costs, inventory disposal

costs, and label redesign costs. Several

comments stated that inventory and

redesign costs would be high, but did

not state whether the cost estimates

FDA presented were high. One

comment from a carton manufacturer

stated that redesign costs for its foam

labels would be $2 million. Based on

the market share cited in the comment,

the cost per SKU would be about $500,

which is the cost used in the proposal

for a 6-month compliance period.

Another comment stated that in order

to print on the sides of cartons

manufacturers of smaller egg cartons

would have to purchase new equipment

costing several million dollars. The

agency disagrees that such purchases

will be necessary. With redesign and

reduced type size for non-mandatory

material, sufficient free space will be

available for the safe handling statement

without the need to print on the sides

of the cartons. The shorter safe handling

statement in this final rule (compared to

the statement in the proposal) increases

the agency’s confidence that smaller egg

cartons will have sufficient space.

In light of FDA’s decision to extend

the compliance period to 9 months,

labeling costs will decrease. In the

analysis of the proposal, FDA compared

a 6-month compliance period with a 12-

month compliance period. FDA now

assumes that the labeling costs for a 9-

month compliance will be about

halfway between the costs for 6- and 12-

month periods. As table 3 of this

document shows, this assumption leads

to estimated costs of $15 million.

Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations 76107

3The estimated total number of in-line

establishments is 134, but 52 are branches of firms.

If the total number of in-line firms is 82(=134¥52),

Continued

TABLE 3.—ESTIMATED TOTAL COSTS TO INCORPORATE SAFE HANDLING STATEMENTS (TOTAL COSTS ROUNDED TO

NEAREST MILLION)

Compliance Period 6 Months 9 Months 12 Months

Total administrative costs $280,000 $240,000 $200,000

Total inventory disposal costs $3,000,000 $2,250,000 $1,500,000

Total label redesign costs $15,000,000 $12,500,000 $10,000,000

Total labeling costs $18,000,000 $15,000,000 $12,000,000

FDA believes that the 9-month

compliance period combined with the

shortening of the safe handling

statement may reduce labeling costs by

more than the $3 million difference

shown in table 3. The shorter statement

should eliminate many of the problems

associated with fitting the statement on

cartons with limited flat space. With 3

more months for compliance, many

more establishments will be able to use

up all of their carton inventories before

the effective date.

b. Refrigeration. FDA estimated the

refrigeration costs to be the cost of the

additional equipment required for all

establishments to maintain an ambient

temperature of 7.2 °C (45 °F). The

agency calculated the cost by

multiplying the estimate of the number

of establishments that would require

new (or upgraded) equipment by the

cost of equipment. FDA estimated the

number of establishments that would

require new equipment by assuming

that no establishments in States that

have adopted the Food Code and some

fraction—with one-third the most

likely—of establishments in States that

have not adopted the Food Code would

require new equipment. FDA used

industry sources to obtain estimates of

the range of costs of new or additional

equipment necessary to meet the

refrigeration provision of the final rule.

The estimated costs per establishment

ranged from close to zero for small

equipment upgrades to $6,000 for a

large new refrigerator.

FDA estimated a distribution of the

total possible refrigeration costs for the

final rule. The range (5th to 95th

percentile) of estimated one-time

refrigeration costs was $7 million to

$228 million, with a median of $31

million.

c. Changes in consumer practices.

FDA estimated the annual costs to

consumers of changing the way eggs are

prepared and consumed as:

Cost of changes in consumer practices =

annual number of eggs consumed x baseline

fraction of eggs consumed undercooked x

fractional reduction in undercooked eggs in

response to safe handling label x $ value of

undercooking one egg.

This cost to consumers is uncertain. The

range (5th to 95th percentile) of annual

costs was $2 million to $20 million,

with a median of $10 million. The cost

of changes in consumer practices is an

annual recurring cost of the final rule.

4. Summary of Costs and Benefits

Table 4 of this document shows the

median estimated benefits and costs of

the final rule.

TABLE 4.—MEDIAN ANNUAL ESTIMATED BENEFITS AND COSTS OF THE FINAL RULE (IN MILLIONS OF DOLLARS)

Benefits/Costs First Year All Other Years

Median estimated benefits (USDA1 SE2 risk assessment baseline) $700 $700

Median estimated benefits (original CDC3 surveillance baseline) $300 $300

Median estimated benefits (revised CDC surveillance baseline, final rule) $260 $260

Median estimated costs (proposed rule) $60 $10

Median estimated cost (final rule) $56 $10

1 U.S. Department of Agriculture

2Salmonella Enteritidis 3 Centers for Disease Control and Prevention

B. Small Entity Analysis

1. Introduction

FDA has examined the economic

implications of this final rule as

required by the Regulatory Flexibility

Act (5 U.S.C. 601–612). If a rule has a

significant economic impact on a

substantial number of small entities, the

Regulatory Flexibility Act requires

agencies to analyze regulatory options

that would lessen the economic effect of

the rule on small entities. FDA finds

that, under the Regulatory Flexibility

Act, this final rule will have a

significant economic impact on a

substantial number of small entities.

2. Economic Effects on Small Entities

a. Number of small entities affected.

The final rule will affect many small

entities, including egg processors,

grocery stores and other stores including

roadside stands, restaurants, and other

food service establishments. FDA has

not been able to determine how many of

the 669 egg processors registered with

the USDA are small businesses (Ref. 11).

Egg processors generally fall into two

industrial classifications: Poultry

slaughtering and processing (standard

industrial classification (SIC) code 2015)

and whole poultry and poultry products

(SIC code 5144). The two classifications

roughly correspond to in-line and offline processors. In-line processors

package the eggs at the egg laying

facility. Off-line processors ship the eggs

to packers.

The Small Business Administration

(SBA) defines in-line egg processors

(SIC code 2015–03) to be small

businesses if they employ 500 or fewer

people. According to a search in Dun’s

Market Identifiers (Ref. 12) 25 in-line

egg-processing firms would be defined

as small. SBA defines off-line processors

(SIC code 5144) to be small if they

employ 100 or fewer people. Dun’s

Market Identifiers did not have a

subcategory for egg processors. For the

entire category of poultry and poultry

products (SIC code 5144), 80 percent of

establishments employ fewer than 100

workers. If the same proportion holds

for the subcategory composed of egg

processors, then 470 firms would be

classified as small.3 FDA, therefore,

76108 Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations

and the number of processors is 669, then 587 firms

are off-line processors. If 80 percent are small, then

470 off-line(=0.8 × 587) processors are small.

4 In the analysis of the proposal, FDA estimated

that the average redesign cost for foam cartons

would be $500 for a 6-month compliance period

and $250 for a 12-month compliance period. In the

analysis of the final rule, FDA assumed that the

redesign cost for a 9-month compliance period will

by $375, midway between the two. Similarly, the

agency assumed that the redesign costs for a pulp

carton will be $875 for a 9-month compliance

period, midway between the $1,000 and $750

estimated for 6-month and 12-month compliance

periods.

estimated the total number of small egg

processors to be 495 (= 25 + 470).

The refrigeration provision will affect

small establishments that are not

currently refrigerating at 7.2 °C (45 °F).

SBA defines grocery stores (SIC code

5411) to be small if annual gross

revenue is less than $20 million. Other

food stores (SIC codes 5431, 5451, and

5499), which include fruit and vegetable

markets, dairy product stores, and

miscellaneous food stores, are small if

annual sales are less than $5 million.

Restaurants are small if annual sales are

less than $5 million and institutions are

small if sales are less than $15 million.

As shown in table 5 of this document,

FDA estimated that the number of small

establishments affected by the final

refrigeration provision will be 25,400.

One comment questioned how FDA

derived this estimate. The agency

derived this estimate of small

businesses affected from the estimate for

all establishments affected. FDA

estimated the number of establishments

(small and large) currently not keeping

eggs at an ambient temperature of 7.2 °C

(45 °F) by assuming that some fraction

of establishments in States without

temperature requirements were holding

eggs at temperatures greater than 7.2 °C

(45 °F). FDA does not know the fraction

of establishments holding shell eggs at

temperatures greater than 7.2 °C (45 °F),

so the agency used a Monte Carlo

simulation to estimate a distribution for

the number of establishments affected.

In the simulation, FDA assumed that in

each State without a 7.2 °C (45 °F)

requirement, between 0 and 100 percent

(with 33 percent the most likely

proportion) of the establishments held

shell eggs at a higher temperature. The

mean result of the 1,000 iterations of the

simulation was a total of approximately

44,400 large and small establishments,

which included 10,700 grocery and

other food stores, 24,000 restaurants,

and 9,700 institutions (including

schools, hospitals, nursing homes,

prisons, military establishments, and

universities) (64 FR 36516 at 36536,

July, 9 1999). FDA reported only the

mean of the distribution of simulation

results. The results for the simulated

number of establishments ranged from a

5th percentile of 12,320 to a 95th

percentile of 81,700.

To estimate the number of small

establishments holding eggs at

temperatures above 7.2 °C (45 °F), FDA

assumed that the proportion of small

establishments affected by the

refrigeration provision would be the

same as the fraction of institutions for

the entire category. According to SBA

size standards for small entities, 71

percent of grocery and other food stores

and 54 percent of restaurants are small.

Institutions are more complicated,

because they cut across SIC codes. FDA

assumed that 50 percent of institutions

serving eggs are small. FDA then

estimated the number of small

establishments affected by the

refrigeration provision by multiplying

the fraction assumed to be small by the

total number of establishments affected.

Table 5 of this document shows the

mean number of small establishments

likely to be affected by the refrigeration

provision of the final rule. The agency

also has included the 5th and 95th

percentiles to show the uncertainty

associated with the mean estimates.

FDA emphasizes that these are

estimates, not a count of the actual firms

affected. The agency uses them to

demonstrate that this final rule will

affect a substantial number of small

establishments.

TABLE 5.—NUMBER OF SMALL ENTITIES LIKELY TO BE AFFECTED BY THE REFRIGERATION PROVISION OF THE FINAL RULE

(SIMULATION RESULTS; ROUNDED TO NEAREST 100)

Category 5th Percentile Mean 95th Percentile

Grocery and Other Stores 2,100 7,600 14,000

Restaurants 3,600 13,000 23,900

Institutions 1,300 4,800 8,900

Total 7,000 25,400 46,800

b. Costs for small entities. For the 9-

month compliance period in the final

rule, redesign costs per SKU will be

about $875 for pulp cartons and $375

for foam cartons.4 The cost of the

labeling provision borne by small

processors will vary with the number of

SKU’s and the fraction of the costs

passed to the processors from carton

manufacturers. The average number of

SKU’s per processor for the industry is

30; FDA assumed small processors will

market somewhere between 2 and 20

SKU’s. Additional redesign costs could,

therefore, be as high as $17,500 for a

small processor (= 20 x $875), although

it is unlikely that the processor would

bear all redesign costs.

Refrigeration costs vary across

establishments, depending on the age of

current refrigerators, the planned

replacement cycle, and whether the

small establishments are currently

keeping eggs at or below 7.2 °C (45 °F).

FDA assumed that additional

refrigeration costs for small retailers will

average $633, with $700 the most likely

value. The agency also assumed that the

proportion of additional refrigeration

costs borne by small entities will be the

same as the proportion of small entities

in each category of establishment. The

cost of the refrigeration provision to

small entities is shown in table 6.

TABLE 6.—COSTS TO SMALL ENTITIES OF THE REFRIGERATION PROVISION OF THE FINAL RULE

Category Total Costs for Small Entities Percent of Total

Grocery and Other Stores $4.8 million 30

Restaurants $8.2 million 51

Institutions $3.1 million 19

Total $16.1 million 100

Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations 76109

3. Regulatory Options

a. Exemption for small

establishments. The burden on small

establishments would be lifted if they

were exempt from the provisions of the

final rule. Most of the establishments

affected by this final rule, however, are

small. Exempting small establishments

from its provisions would largely negate

the rule. No comments requested

exemptions from the proposed rule for

small establishments.

b. Longer compliance periods.

Lengthening the labeling compliance

periods for the labeling and refrigeration

provisions would provide regulatory

relief (cost reduction) for small entities.

Lengthening the refrigeration

compliance period from the final rule’s

effective date to 12 months after the

effective date would reduce costs by

allowing establishments to postpone

upgrading their equipment. To estimate

the regulatory relief from lengthening

the refrigeration compliance period,

FDA assumed that the reduction in cost

would equal the interest (discounted at

7 percent per year) on the cost of

refrigeration equipment over the

extension of the compliance period. If

the compliance period were extended

by 12 months, the interest on the cost

of equipment would be over $1 million

(= $16.1 x 0.07). For the most likely

equipment cost of $700 per small

establishment, the interest saving would

be about $50 (= 0.07 x $700). FDA

received no comments requesting longer

compliance periods for the refrigeration

provision.

(Comment 41) Some comments

requested a 12-month compliance

period for the labeling provision. The

agency has responded by increasing the

compliance period to 9 months. In the

cost analysis of this final rule, FDA

estimated that total industry costs

would fall by at least $3 million if the

compliance period for the labeling

provisions were extended from 6

months to 9 months. Most of the relief

will come from the reduced costs of

redesigning the carton label and

reduced inventory disposal costs. For

pulp cartons, extending the compliance

period to 9 months will reduce redesign

costs from $1,000 (for a 6-month

compliance period) to $875 per SKU.

For foam cartons, extending the

compliance period to 9 months will

reduce redesign costs from $500 (for a

6-month compliance period) to $375 per

SKU. The comments stressed the

difficulty of redesign caused by the

length of the statement in the proposal.

Because the safe handling statement in

the final rule has been shortened, FDA

expects that redesign costs will not be

as large a burden as many comments on

the proposed rule implied. Furthermore,

redesign costs are not necessarily passed

on to small processors.

Small processors will, however, bear

inventory disposal costs. In the cost

analysis of the proposal, FDA estimated

disposal costs for label inventories to be

$3 million for a 6-month compliance

period. The agency believes that the

principal relief for small egg packers

and processors will come from the

reduction in inventory costs. For a 9-

month compliance period, the disposal

costs for label inventories will be

$2,250,000. FDA does not know what

fraction of those costs will be borne by

small processors. If the agency assumes

that small processors bear half of the

disposal costs, then the average

inventory cost per small processor

would be $3,000 (= ($3,000,000 x 0.5) /

495) for a 6-month compliance period

and $2,250 (= ($2,250,000 x 0.5) / 495)

for a 9-month compliance period.

Changing the effective date to 9 months

after publication will, therefore, save

$750 per small processor. For processors

holding large inventories, the saving

will be larger. The longer compliance

period will also increase the likelihood

that small processors will use up their

carton inventories and bear no disposal

costs.

4. Recordkeeping and Recording

Requirements

The Regulatory Flexibility Act

requires a description of the

recordkeeping and recording required

for compliance with this rule. This rule

does not require the preparation of a

report or a record.

5. Worst Case for a Small Establishment

The greatest impact to a small retail

establishment as a consequence of the

refrigeration provision would be the

purchase of a new refrigerator. In the

analysis of the proposal, FDA estimated

the cost of a new refrigerator to be

between $2,500 and $6,000. In order to

estimate the worst possible outcome for

a small entity, FDA assumed that some

small retail establishment would

purchase a new refrigerator at the

maximum estimated cost of $6,000. If

this cost were amortized over a 10-year

period (using a discount rate of 7

percent) then the approximate annual

expense would be $850 per year for 10

years. According to Dun and Bradstreet,

85 percent of all grocery stores have

annual sales of less than $20 million,

and 71 percent of all restaurants have

annual sales of less than $5 million (Ref.

12). Among the smallest 10 percent of

these establishments, the average sales

volume is $100,000 per year for a

grocery store and $50,000 per year for a

restaurant. Therefore, an additional

expense of $850 per year amounts to

approximately 1 to 2 percent of average

sales per year for the smallest stores.

Grocery stores and restaurants typically

have profit margins on sales of 1 to 5

percent, so a reduction of the profit

margin by 40 to 100 percent would be

the worst-case outcome for the smallest

retailers.

Because the comments on the

proposed rule emphasized the

importance of inventories, FDA

concludes that the worst outcome from

the labeling provision would occur if a

small packer held large inventories of

cartons that could not be used. If

average inventory costs per small

processor (for a 9-month compliance

period) are $2,250, some establishments

could bear much higher inventory costs.

6. Summary of Small Entity Analysis

FDA estimated that the labeling

provisions could impose average

inventory costs of $2,250 on 495 small

processing establishments. The

refrigeration provision would impose

estimated average costs of $633 on

approximately 25,400 small

establishments. The agency concludes

that this final rule will have a

significant economic impact on a

substantial number of small entities.

V. Federalism

These rules establish national safe

handling labeling and retail refrigeration

requirements for shell eggs under the

FD&C Act and the PHS Act. FDA has

determined that these egg safety final

rules have federalism implications

under Executive Order 13132 because

they will preempt State and local

labeling and retail refrigeration

requirements that are not as stringent as

Federal requirements. Although FDA

proposed this rule before Executive

Order 13132 was issued or became

effective, FDA believes that these final

rules satisfy the requirements of

Executive Order 13132.

The constitutional basis for FDA’s

authority to regulate the safety and

labeling of foods is the statutes created

by Congress to regulate food safety. As

set out in the preamble to the proposed

and final rules, foodborne illness

resulting from SE contaminated eggs is

a public health problem nationwide.

However, only 37 States and the District

of Columbia require refrigeration at 7.2

°C (45 °F) or lower in retail

establishments, the temperature that

FDA has determined is necessary to

prevent growth of SE. No State has a

requirement for complete safe handling

instructions. Accordingly, there is a

76110 Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations

clear need for Federal action to establish

national standards that will ensure the

safety of eggs for all consumers in this

country.

To ensure the safety of eggs for all

consumers in this country, not only

must there be national standards, but

enforcement of these standards must be

uniform across the country. However,

because State and local public health

officials are the primary enforcement

officials in retail establishments, FDA

has recognized that it must rely on these

officials to provide the bulk of the

enforcement of these regulations. FDA

thus believes that it is critical for these

regulations to establish uniform

minimum standards. If less stringent

State or local refrigeration and labeling

requirements are not preempted,

enforcement of those less stringent

requirements—which are not sufficient

to protect the public health—will

interfere with the cooperative

enforcement of the Federal egg

refrigeration and labeling requirements.

FDA believes that the cooperative

enforcement approach utilized in these

rules is critical to effective

implementation of these important food

safety requirements.

Thus, although Congress did not

expressly preempt State law in this area,

FDA finds preemption is needed

because State and local laws that are

less stringent than the Federal

requirements will significantly interfere

with the important public health goals

of these regulations.

FDA does not believe that preemption

of State and local refrigeration and

labeling requirements that are the same

as or more stringent than the

requirements of these regulations is

necessary, as enforcement of such State

and local requirements will not interfere

with the food safety goals of these

regulations. Accordingly, the

preemptive effect of this rule is limited

to State or local requirements that are

not as stringent as the requirements of

these regulations; requirements that are

the same as or more stringent than

FDA’s requirements remain in effect.

Although the proposed rule was

published before Executive Order

13132, FDA gave States and localities

notice of the intended preemptive effect

of these rules in the notice of proposed

rulemaking. In addition, FDA consulted

with representatives of State and local

governments before issuing the

proposal. FDA received one comment

from a State Department of Agriculture,

which did not discuss preemption and

one comment from an organization

representing State and local food safety

officials, which raised questions about

the scope of preemption. These

questions are answered in the body of

the preamble. As set out in the preamble

and this discussion on federalism, the

preemptive effect of these regulations is

very narrow.

VI. Environmental Impact

The agency has previously considered

the environmental effects of this rule as

announced in the proposal (64 FR

36492, July 6, 1999). No new

information or comments have been

received that would affect the agency’s

previous determination that there is no

significant impact on the human

environment and that environmental

impact statement is not required.

VII. Paperwork Reduction Act of 1995

FDA concludes that the labeling

requirements in this document are not

subject to review by the Office of

Management and Budget because they

do not constitute a ‘‘collection of

information’’ under the Paperwork

Reduction Act of 1995 (44 U.S.C. 3501–

3520). Rather, the safe handling

statement is ‘‘public disclosure of

information originally supplied by the

Federal government to the recipient for

the purpose of disclosure to the public’’

(5 CFR 1320.3(c)(2)).

VIII. References

The following references have been

placed on display at the Dockets

Management Branch (HFA–305), Food

and Drug Administration, 5630 Fishers

Lane, rm. 1061, Rockville, MD 20852,

and may be seen by interested persons

between 9 a.m. and 4 p.m., Monday

through Friday.

1. President’s Council on Food Safety, ‘‘Egg

Safety from Production to Consumption: an

Action Plan to Eliminate Salmonella

Enteritidis Illnesses due to Eggs,’’ December

10, 1999.

2. Summary Report on Focus Group

Testing of Safe Handling Statements on Shell

Eggs. Levy, A. S. and A. W. Heaton,

Consumer Studies Team, Office of Scientific

Analysis and Support, Center for Food Safety

and Applied Nutrition, Food and Drug

Administration, March 13, 1998.

3. FDA memorandum, Alan S. Levy to

Kenneth Falci, June 26, 1999.

4. ‘‘FDA: Consumers are Changing,’’ Food

Safety Educator, vol. 3(4), p. 2, 1998.

5. U.S. Public Health Service, ‘‘Food Code:

1999, Recommendations of the United States

Public Health Service, Food and Drug

Administration,’’ Ch. 3.

6. Review of Research Communicating

Warning Information. Consumer Studies

Team, Office of Scientific Analysis and

Support, Center for Food Safety and Applied

Nutrition, Food and Drug Administration, p.

54, July 1998.

7. Food Marketing Institute (conducted by

Abt Associates, Inc.), ‘‘Trends in the United

States: Consumer Attitudes & the

Supermarket,’’ Washington, DC, Food

Marketing Institute, 1996.

8. United States Department of Agriculture,

Food Safety and Inspection Service, FSIS

Directive 8840.1, ‘‘Enforcement of

Refrigeration and Labeling Requirements for

Shell Eggs Packed for Consumer Use,’’ June

18, 1999.

9. Centers for Disease Control and

Prevention, ‘‘Incidence of Foodborne

Illnesses: Preliminary Data from the

Foodborne Diseases Active Surveillance

Network (FoodNet)—United States, 1998,’’

Morbidity and Mortality Weekly Report, vol.

48, pp. 189–194, March 12, 1999.

10. Mead, P. S., L. Slutsker, V. Dietz, L. F.

McCaig, J. S. Bresee, C. Shapiro, P. M. Griffin,

and R. V. Tauxe, ‘‘Food-Related Illness and

Death in the United States,’’ Emerging

Infectious Diseases, vol. 5, pp. 607–625,

September to October 1999.

11. FDA memorandum, Peter Vardon to the

record, October 7, 1998.

12. The Dialog Corp., Dun’s Market

Identifiers, Mountain View, CA, March 19,

1998.

List of Subjects

21 CFR Part 16

Administrative practice and

procedure.

21 CFR Part 101

Food labeling, Nutrition, Reporting

and recordkeeping requirements.

21 CFR Part 115

Eggs, Refrigeration.

Therefore, under the Federal Food,

Drug, and Cosmetic Act and the Public

Health Services Act, and under

authority delegated to the Commissioner

of Food and Drugs, 21 CFR chapter I is

amended as follows:

PART 16—REGULATORY HEARING

BEFORE THE FOOD AND DRUG

ADMINISTRATION

1. The authority citation for 21 CFR

part 16 continues to read as follows:

Authority: 15 U.S.C. 1451–1461; 21 U.S.C.

141–149, 321–394, 467f, 679, 821, 1034; 28

U.S.C. 2112; 42 U.S.C. 201–262, 263b, 364.

2. Section 16.5 is amended by adding

paragraph (a)(4) to read as follows:

§ 16.5 Inapplicability and limited

applicability.

(a) * * *

(4) A hearing on an order for

relabeling, diversion, or destruction of

shell eggs under section 361 of the

Public Health Service Act (42 U.S.C.

264) and §§ 101.17(h) and 115.50 of this

chapter.

* * * * *

PART 101—FOOD LABELING

3. The authority citation for 21 CFR

part 101 is revised to read as follows:

Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations 76111

Authority: 15 U.S.C. 1453, 1454, 1455; 21

U.S.C. 321, 331, 342, 343, 348, 371; 42 U.S.C.

243, 264, 271.

4. Section 101.17 is amended by

revising the section heading and by

adding paragraph (h) to read as follows:

§ 101.17 Food labeling warning, notice,

and safe handling statements.

* * * * *

(h) Shell eggs. (1) The label of all shell

eggs, whether in intrastate or interstate

commerce, shall bear the following

statement:

SAFE HANDLING INSTRUCTIONS:

To prevent illness from bacteria: keep

eggs refrigerated, cook eggs until yolks

are firm, and cook foods containing eggs

thoroughly.

(2) The label statement required by

paragraph (h)(1) of this section shall

appear prominently and conspicuously,

with the words ‘‘SAFE HANDLING

INSTRUCTIONS’’ in bold type, on the

information panel or principal display

panel of the container.

(3) The label statement required by

paragraph (h)(1) of this section shall be

set off in a box by use of hairlines.

(4) Shell eggs that have been, before

distribution to consumers, specifically

processed to destroy all viable

Salmonella shall be exempt from the

requirements of paragraph (h) of this

section.

(5) The safe handling statement for

shell eggs that are not for direct sale to

consumers, e.g., those that are to be

repacked or labeled at a site other than

where originally processed, or are sold

for use in food service establishments,

may be provided on cartons or in

labeling, e.g., invoices or bills of lading

in accordance with the practice of the

trade.

(6) Under sections 311 and 361 of the

Public Health Service Act (PHS Act),

any State or locality that is willing and

able to assist the agency in the

enforcement of paragraphs (h)(1)

through (h)(5) of this section, and is

authorized to inspect or regulate

establishments handling packed shell

eggs, may in its own jurisdiction,

enforce paragraphs (h)(1) through (h)(5)

of this section through inspections

under paragraph (h)(8) of this section

and through administrative enforcement

remedies identified in paragraph (h)(7)

of this section until FDA notifies the

State or locality in writing that such

assistance is no longer needed. When

providing such assistance, a State or

locality may follow the hearing

procedures set out in paragraphs

(h)(7)(ii)(C) through (h)(7)(ii)(D) of this

section, substituting, where necessary,

appropriate State or local officials for

designated FDA officials or may utilize

State or local hearing procedures if such

procedures satisfy due process.

(7) This paragraph (h) is established

under authority of both the Federal

Food, Drug, and Cosmetic Act (the act)

and the PHS Act. Under the act, the

agency can enforce the food

misbranding provisions under 21 U.S.C.

331, 332, 333, and 334. However, 42

U.S.C. 264 provides for the issuance of

implementing enforcement regulations;

therefore, FDA has established the

following administrative enforcement

procedures for the relabeling, diversion,

or destruction of shell eggs and informal

hearings under the PHS Act:

(i) Upon finding that any shell eggs

are in violation of this section an

authorized FDA representative or State

or local representative in accordance

with paragraph (h)(6) of this section

may order such eggs to be relabeled

under the supervision of said

representative, diverted, under the

supervision of said representative for

processing in accordance with the Egg

Products Inspection Act (EPIA) (21

U.S.C. 1031 et seq.), or destroyed by or

under the supervision of an officer or

employee of the FDA, or, if applicable,

of the State or locality, in accordance

with the following procedures:

(A) Order for relabeling, diversion, or

destruction under the PHS Act. Any

district office of the FDA or any State or

locality acting under paragraph (h)(6) of

this section, upon finding shell eggs

held in violation of this regulation, may

serve upon the person in whose

possession such eggs are found a written

order that such eggs be relabeled with

the required statement in paragraph

(h)(1) of this section before further

distribution. If the person chooses not to

relabel, the district office of the FDA or,

if applicable, the appropriate State or

local agency may serve upon the person

a written order that such eggs be

diverted (from direct consumer sale,

e.g., to food service) under the

supervision of an officer or employee of

the issuing entity, for processing in

accordance with the EPIA (21 U.S.C.

1031 et seq.) or destroyed by or under

the supervision of the issuing entity,

within 10-working days from the date of

receipt of the order.

(B) Issuance of order. The order shall

include the following information:

(1) A statement that the shell eggs

identified in the order are subject to

relabeling, diversion for processing in

accordance with the EPIA, or

destruction;

(2) A detailed description of the facts

that justify the issuance of the order;

(3) The location of the eggs;

(4) A statement that these eggs shall

not be sold, distributed, or otherwise

disposed of or moved except as

provided in paragraph (h)(7)(i)(E) of this

section;

(5) Identification or description of the

eggs;

(6) The order number;

(7) The date of the order;

(8) The text of this entire section;

(9) A statement that the order may be

appealed by written appeal or by

requesting an informal hearing;

(10) The name and phone number of

the person issuing the order; and

(11) The location and telephone

number of the responsible office or

agency and the name of its director.

(C) Approval of director. An order,

before issuance, shall be approved by

the director of the office or agency

issuing the order. If prior written

approval is not feasible, prior oral

approval shall be obtained and

confirmed by written memorandum as

soon as possible.

(D) Labeling or marking of shell eggs

under order. An FDA, State, or local

representative issuing an order under

paragraph (h)(7)(i)(A) of this section

shall label or mark the shell eggs with

official tags that include the following

information:

(1) A statement that the shell eggs are

detained in accordance with regulations

issued under section 361(a) of the PHS

Act (42 U.S.C. 264(a)).

(2) A statement that the shell eggs

shall not be sold, distributed or

otherwise disposed of or moved except,

after notifying the issuing entity in

writing, to:

(i) Relabel, divert them for processing

in accordance with the EPIA, or destroy

them, or

(ii) Move them to another location for

holding pending appeal.

(3) A statement that the violation of

the order or the removal or alteration of

the tag is punishable by fine or

imprisonment or both (section 368 of

the PHS Act, 42 U.S.C. 271).

(4) The order number and the date of

the order, and the name of the

government representative who issued

the order.

(E) Sale or other disposition of shell

eggs under order. After service of the

order, the person in possession of the

shell eggs that are the subject of the

order shall not sell, distribute, or

otherwise dispose of or move any eggs

subject to the order unless and until the

notice is withdrawn after an appeal

except, after notifying FDA’s district

office or, if applicable, the State or local

agency in writing, to:

(1) Relabel, divert, or destroy them as

specified in paragraph (h)(7)(i) of this

section, or

(2) Move them to another location for

holding pending appeal.

76112 Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations

(ii) The person on whom the order for

relabeling, diversion, or destruction is

served may either comply with the

order or appeal the order to the FDA

Regional Food and Drug Director.

(A) Appeal of a detention order. Any

appeal shall be submitted in writing to

the FDA District Director in whose

district the shell eggs are located within

5-working days of the issuance of the

order. If the appeal includes a request

for an informal hearing, the hearing

shall be held within 5-working days

after the appeal is filed or, if requested

by the appellant, at a later date, which

shall not be later than 20-calendar days

after the issuance of the order. The order

may also be appealed within the same

period of 5-working days by any other

person having an ownership or

proprietary interest in such shell eggs.

The appellant of an order shall state the

ownership or proprietary interest the

appellant has in the shell eggs.

(B) Summary decision. A request for

a hearing may be denied, in whole or in

part and at any time after a request for

a hearing has been submitted, if the

FDA Regional Food and Drug Director

or his or her designee determines that

no genuine and substantial issue of fact

has been raised by the material

submitted in connection with the

hearing or from matters officially

noticed. If the FDA Regional Food and

Drug Director determines that a hearing

is not justified, written notice of the

determination will be given to the

parties explaining the reason for denial.

(C) Informal hearing. Appearance by

any appellant at the hearing may be by

mail or in person, with or without

counsel. The informal hearing shall be

conducted by the FDA Regional Food

and Drug Director or his designee, and

a written summary of the proceedings

shall be prepared by the FDA Regional

Food and Drug Director.

(1) The FDA Regional Food and Drug

Director may direct that the hearing be

conducted in any suitable manner

permitted by law and this section. The

FDA Regional Food and Drug Director

has the power to take such actions and

make such rulings as are necessary or

appropriate to maintain order and to

conduct an informal fair, expeditious,

and impartial hearing, and to enforce

the requirements concerning the

conduct of hearings.

(2) Employees of FDA will first give

a full and complete statement of the

action which is the subject of the

hearing, together with the information

and reasons supporting it, and may

present oral or written information

relevant to the hearing. The party

requesting the hearing may then present

oral or written information relevant to

the hearing. All parties may conduct

reasonable examination of any person

(except for the presiding officer and

counsel for the parties) who makes any

statement on the matter at the hearing.

(3) The hearing shall be informal in

nature, and the rules of evidence do not

apply. No motions or objections relating

to the admissibility of information and

views will be made or considered, but

any party may comment upon or rebut

any information and views presented by

another party.

(4) The party requesting the hearing

may have the hearing transcribed, at the

party’s expense, in which case a copy of

the transcript is to be furnished to FDA.

Any transcript of the hearing will be

included with the FDA Regional Food

and Drug Director’s report of the

hearing.

(5) The FDA Regional Food and Drug

Director shall prepare a written report of

the hearing. All written material

presented at the hearing will be attached

to the report. Whenever time permits,

the FDA Regional Food and Drug

Director may give the parties the

opportunity to review and comment on

the report of the hearing.

(6) The FDA Regional Food and Drug

Director shall include as part of the

report of the hearing a finding on the

credibility of witnesses (other than

expert witnesses) whenever credibility

is a material issue, and shall include a

recommended decision, with a

statement of reasons.

(D) Written appeal. If the appellant

appeals the detention order but does not

request a hearing, the FDA Regional

Food and Drug Director shall render a

decision on the appeal affirming or

revoking the detention within 5-working

days after the receipt of the appeal.

(E) Regional Food and Drug Director

decision. If, based on the evidence

presented at the hearing or by the

appellant in a written appeal, the FDA

Regional Food and Drug Director finds

that the shell eggs were held in violation

of this section, he shall affirm the order

that they be relabeled, diverted under

the supervision of an officer or

employee of the FDA for processing

under the EPIA, or destroyed by or

under the supervision of an officer or

employee of the FDA; otherwise, the

FDA Regional Food and Drug Director

shall issue a written notice that the prior

order is withdrawn. If the FDA Regional

Food and Drug Director affirms the

order he shall order that the relabeling,

diversion, or destruction be

accomplished within 10-working days

from the date of the issuance of his

decision. The FDA Regional Food and

Drug Director’s decision shall be

accompanied by a statement of the

reasons for the decision. The decision of

the FDA Regional Food and Drug

Director shall constitute final agency

action, reviewable in the courts.

(F) No appeal. If there is no appeal of

the order and the person in possession

of the shell eggs that are subject to the

order fails to relabel, divert, or destroy

them within 10-working days, or if the

demand is affirmed by the FDA

Regional Food and Drug Director after

an appeal and the person in possession

of such eggs fails to relabel, divert, or

destroy them within 10-working days,

the FDA district office, or, if applicable,

the State or local agency may designate

an officer or employee to divert or

destroy such eggs. It shall be unlawful

to prevent or to attempt to prevent such

diversion or destruction of the shell eggs

by the designated officer or employee.

(8) Persons engaged in handling or

storing packed shell eggs for retail

distribution shall permit authorized

representatives of FDA to make at any

reasonable time such inspection of the

establishment in which shell eggs are

being held, including inspection and

sampling of the labeling of such eggs as

may be necessary in the judgment of

such representatives to determine

compliance with the provisions of this

section. Inspections may be made with

or without notice and will ordinarily be

made during regular business hours.

(9) No State or local governing entity

shall establish or continue in effect any

law, rule, regulation, or other

requirement requiring safe handling

instructions on unpasteurized shell eggs

that are less stringent than those

required in paragraphs (h)(1) through

(h)(5) of this section.

5. New part 115 is added to read as

follows:

PART 115—SHELL EGGS

Authority: 21 U.S.C. 342, 371; 42 U.S.C.

243, 264, 271.

§ 115.50 Refrigeration of shell eggs held

for retail distribution.

(a) For purposes of this section a

‘‘retail establishment’’ is an operation

that stores, prepares, packages, serves,

vends, or otherwise provides food for

human consumption directly to

consumers.

(b) Except as provided in paragraph

(c) of this section, all shell eggs, whether

in intrastate or interstate commerce,

held for retail distribution:

(1) Shall promptly be placed under

refrigeration as specified in paragraph

(b)(2) of this section upon receipt at a

retail establishment, except that, when

short delays are unavoidable, the eggs

Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations 76113

shall be placed under refrigeration, as

soon as reasonably possible; and

(2) Shall be stored and displayed

under refrigeration at an ambient

temperature not greater than 7.2 °C (45

°F) while held at a retail establishment.

(c) Shell eggs that have been

specifically processed to destroy all

viable Salmonella shall be exempt from

the requirements of paragraph (b) of this

section.

(d) Under sections 311 and 361 of the

Public Health Service Act (PHS Act),

any State or locality that is willing and

able to assist the agency in the

enforcement of paragraph (b) of this

section, and is authorized to inspect or

regulate retail establishments, may, in

its own jurisdiction, enforce paragraph

(b) of this section through inspections

under paragraph (f) of this section and

through administrative enforcement

remedies identified in paragraph (e) of

this section until FDA notifies the State

or locality in writing that such

assistance is no longer needed. When

providing assistance under paragraph

(e) of this section, a State or locality may

follow the hearing procedures set out in

paragraphs (e)(2)(iii) through (e)(2)(iv) of

this section, substituting, where

necessary, appropriate State or local

officials for designated FDA officials or

may utilize State or local hearing

procedures if such procedures satisfy

due process.

(e) This section is established under

authority of both the Federal Food,

Drug, and Cosmetic Act (the act) and the

PHS Act. Under the act, the agency can

enforce the food adulteration provisions

under 21 U.S.C. 331, 332, 333, and 334.

However, 42 U.S.C. 264 provides for the

issuance of implementing enforcement

regulations; therefore, FDA has

established the following administrative

enforcement procedures for the

diversion or destruction of shell eggs

and for informal hearings under the PHS

Act:

(1) Upon finding that any shell eggs

have been held in violation of this

section, an authorized FDA

representative or a State or local

representative in accordance with

paragraph (d) of this section may order

such eggs to be diverted, under the

supervision of said representative, for

processing in accordance with the Egg

Products Inspection Act (EPIA) (21

U.S.C. 1031 et seq.) or destroyed by or

under the supervision of an officer or

employee of the FDA, or, if applicable,

of the State or locality in accordance

with the following procedures:

(i) Order for diversion or destruction.

Any district office of FDA or any State

or local agency acting under paragraph

(d) of this section, upon finding shell

eggs held in violation of this section,

may serve upon the person in whose

possession such eggs are found a written

order that such eggs be diverted, under

the supervision of an officer or

employee of the issuing entity, for

processing in accordance with the EPIA

(21 U.S.C. 1031 et seq.) or destroyed by

or under the supervision of said district

office, within 10-working days from the

date of receipt of the order.

(ii) Issuance of order. The order shall

include the following information:

(A) A statement that the shell eggs

identified in the order are subject to

diversion for processing in accordance

with the EPIA or destruction;

(B) A detailed description of the facts

that justify the issuance of the order;

(C) The location of the eggs;

(D) A statement that these eggs shall

not be sold, distributed, or otherwise

disposed of or moved except as

provided in paragraph (e)(1)(v) of this

section;

(E) Identification or description of the

eggs;

(F) The order number;

(G) The date of the order;

(H) The text of this entire section;

(I) A statement that the order may be

appealed by written appeal or by

requesting an informal hearing;

(J) The name and phone number of

the person issuing the order; and

(K) The location and telephone

number of the office or agency and the

name of its director.

(iii) Approval of District Director. An

order, before issuance, shall be

approved by the Food and Drug

Administration (FDA) District Director

in whose district the shell eggs are

located. If prior written approval is not

feasible, prior oral approval shall be

obtained and confirmed by written

memorandum as soon as possible.

(iv) Labeling or marking of shell eggs

under order. An FDA, State, or local

agency representative issuing an order

under paragraph (e)(1) of this section

shall label or mark the shell eggs with

official tags that include the following

information:

(A) A statement that the shell eggs are

detained in accordance with regulations

issued under section 361(a) of the PHS

Act (42 U.S.C. 264(a)).

(B) A statement that the shell eggs

shall not be sold, distributed or

otherwise disposed of or moved except,

after notifying the issuing entity in

writing, to:

(1) Divert them for processing in

accordance with the EPIA or destroy

them; or

(2) Move them to an another location

for holding pending appeal.

(C) A statement that the violation of

the order or the removal or alteration of

the tag is punishable by fine or

imprisonment or both (section 368 of

the PHS Act, 42 U.S.C. 271).

(D) The order number and the date of

the order, and the name of the

government representative who issued

the order.

(v) Sale or other disposition of shell

eggs under order. After service of the

order, the person in possession of the

shell eggs that are the subject of the

order shall not sell, distribute, or

otherwise dispose of or move any eggs

subject to the order unless and until the

notice is withdrawn after an appeal

except, after notifying FDA’s district

office or, if applicable, the State or local

agency in writing, to:

(A) Divert or destroy them as

specified in paragraph (e)(1)(i) of this

section; or

(B) Move them to another location for

holding pending appeal.

(2) The person on whom the order for

diversion or destruction is served may

either comply with the order or appeal

the order to the FDA Regional Food and

Drug Director in accordance with the

following procedures:

(i) Appeal of a detention order. Any

appeal shall be submitted in writing to

FDA’s District Director in whose district

the shell eggs are located within 5-

working days of the issuance of the

order. If the appeal includes a request

for an informal hearing, the hearing

shall be held within 5-working days

after the appeal is filed or, if requested

by the appellant, at a later date, which

shall not be later than 20-calendar days

after the issuance of the order. The order

may also be appealed within the same

period of 5-working days by any other

person having an ownership or

proprietary interest in such shell eggs.

The appellant of an order shall state the

ownership or proprietary interest the

appellant has in the shell eggs.

(ii) Summary decision. A request for

a hearing may be denied, in whole or in

part and at any time after a request for

a hearing has been submitted, if the

FDA Regional Food and Drug Director

or his or her designee determines that

no genuine and substantial issue of fact

has been raised by the material

submitted in connection with the

hearing or from matters officially

noticed. If the FDA Regional Food and

Drug Director determines that a hearing

is not justified, written notice of the

determination will be given to the

parties explaining the reason for denial.

(iii) Informal hearing. Appearance by

any appellant at the hearing may be by

mail or in person, with or without

counsel. The informal hearing shall be

conducted by the FDA Regional Food

and Drug Director or his designee, and

76114 Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Rules and Regulations

a written summary of the proceedings

shall be prepared by the FDA Regional

Food and Drug Director.

(A) The FDA Regional Food and Drug

Director may direct that the hearing be

conducted in any suitable manner

permitted by law and this section. The

FDA Regional Food and Drug Director

has the power to take such actions and

make such rulings as are necessary or

appropriate to maintain order and to

conduct an informal fair, expeditious,

and impartial hearing, and to enforce

the requirements concerning the

conduct of hearings.

(B) Employees of FDA will first give

a full and complete statement of the

action which is the subject of the

hearing, together with the information

and reasons supporting it, and may

present oral or written information

relevant to the hearing. The party

requesting the hearing may then present

oral or written information relevant to

the hearing. All parties may conduct

reasonable examination of any person

(except for the presiding officer and

counsel for the parties) who makes any

statement on the matter at the hearing.

(C) The hearing shall be informal in

nature, and the rules of evidence do not

apply. No motions or objections relating

to the admissibility of information and

views will be made or considered, but

any party may comment upon or rebut

any information and views presented by

another party.

(D) The party requesting the hearing

may have the hearing transcribed, at the

party’s expense, in which case a copy of

the transcript is to be furnished to FDA.

Any transcript of the hearing will be

included with the FDA Regional Food

and Drug Director’s report of the

hearing.

(E) The FDA Regional Food and Drug

Director shall prepare a written report of

the hearing. All written material

presented at the hearing will be attached

to the report. Whenever time permits,

the FDA Regional Food and Drug

Director may give the parties the

opportunity to review and comment on

the report of the hearing.

(F) The FDA Regional Food and Drug

Director shall include as part of the

report of the hearing a finding on the

credibility of witnesses (other than

expert witnesses) whenever credibility

is a material issue, and shall include a

recommended decision, with a

statement of reasons.

(iv) Written appeal. If the appellant

appeals the detention order but does not

request a hearing, the FDA Regional

Food and Drug Director shall render a

decision on the appeal affirming or

revoking the detention within 5-working

days after the receipt of the appeal.

(v) Regional Food and Drug Director

decision. If, based on the evidence

presented at the hearing or by the

appellant in a written appeal, the

Regional Food and Drug Director finds

that the shell eggs were held in violation

of this section, he shall affirm the order

that they be diverted, under the

supervision of an officer or employee of

the FDA for processing under the EPIA

or destroyed by or under the

supervision of an officer or employee of

the FDA; otherwise, the Regional Food

and Drug Director shall issue a written

notice that the prior order is withdrawn.

If the Regional Food and Drug Director

affirms the order he shall order that the

diversion or destruction be

accomplished within 10-working days

from the date of the issuance of his

decision. The Regional Food and Drug

Director’s decision shall be

accompanied by a statement of the

reasons for the decision. The decision of

the Regional Food and Drug Director

shall constitute final agency action,

reviewable in the courts.

(vi) No appeal. If there is no appeal

of the order and the person in

possession of the shell eggs that are

subject to the order fails to divert or

destroy them within 10-working days,

or if the demand is affirmed by the

Regional Food and Drug Director after

an appeal and the person in possession

of such eggs fails to divert or destroy

them within 10-working days, FDA’s

district office or appropriate State or

local agency may designate an officer or

employee to divert or destroy such eggs.

It shall be unlawful to prevent or to

attempt to prevent such diversion or

destruction of the shell eggs by the

designated officer or employee.

(f) Inspection. Persons engaged in

retail distribution of shell eggs shall

permit authorized representatives of

FDA to make at any reasonable time

such inspection of the retail

establishment in which shell eggs are

being held, including inspection and

sampling of such eggs and the

equipment in which shell eggs are held

and any records relating to such

equipment or eggs, as may be necessary

in the judgement of such representatives

to determine compliance with the

provisions of this section. Inspections

may be made with or without notice and

will ordinarily be made during regular

business hours.

(g) Preemption. No State or local

governing entity shall establish or

continue in effect any law, rule,

regulation, or other requirement

allowing refrigeration of unpasteurized

shell eggs at retail establishments at any

temperature greater than 7.2 °C (45 °F).

Dated: June 2, 2000.

Jane E. Henney,

Commissioner of Food and Drugs.

Donna E. Shalala,

Secretary of Health and Human Services.

[FR Doc. 00–30761 Filed 11–30–00; 10:20

am]

BILLING CODE 4160–01–F