Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Proposed Rules 10781

restrictions on carrier entry or capacity

in any market; and

(iv) Whether the country’s

government is honoring the provisions

of the bilateral aviation agreement and

there are no significant bilateral

problems.

(b) By petition or on the Department’s

own initiative, new country-pair

markets will be listed in the appropriate

category, and existing country-pair

markets may be transferred between

categories.

(c) Air carriers and foreign air carriers

are exempted from the duty to file

governing rules tariffs containing

general conditions of carriage with the

Department of Transportation, as

required by 49 U.S.C. 41504 and 14 CFR

part 221. An initial description of the

general conditions of carriage will be

included in the Assistant Secretary’s

notice.

(d) Notwithstanding paragraph (c) of

this section, air carriers and foreign air

carriers shall file and maintain a tariff

with the Department to the extent

required by 14 CFR § 203.4 and other

implementing regulations.

(f) Authority for determining what

rules are covered by paragraph (c) and

for determining the filing format for the

tariffs required by paragraph (d) is

delegated to the Director of the Office of

International Aviation.

§ 293.11 Required statement.

Each governing rules tariff shall

include the following statements:

(a) ‘‘Rules herein containing general

conditions of carriage are not part of the

official U.S. D.O.T. tariff.’’

(b) ‘‘The rules and provisions

contained herein apply only to the

passenger fares and charges that the U.S.

Department of Transportation requires

to be filed as tariffs.’’

§ 293.12 Revocation of exemption.

(a) The Department, upon complaint

or upon its own initiative, may,

immediately and without hearing,

revoke, in whole or in part, the

exemption granted by this part with

respect to a carrier or carriers, when

such action is in the public interest.

(b) Any such action will be taken in

a notice issued by the Assistant

Secretary for Aviation and International

Affairs, and will identify the tariff

matter to be filed, and the deadline for

carrier compliance.

(c) Revocations under this section will

have the effect of reinstating all

applicable tariff requirements and

procedures specified in the

Department’s Regulations for the tariff

material to be filed, unless otherwise

specified by the Department.

Subpart C—Effect of Exemption

§ 293.20 Rule of construction.

To the extent that a carrier holds an

effective exemption from the duty to file

tariffs under this part, it shall not,

unless otherwise directed by order of

the Department, be subject to tariff

posting, notification or subscription

requirements set forth in 49 U.S.C.

41504 or 14 CFR part 221, except as

provided in § 293.21.

§ 293.21 Incorporation of contract terms

by reference.

Carriers holding an effective

exemption from the duty to file tariffs

under this part may incorporate contract

terms by reference (i.e., without stating

their full text) into the passenger ticket

or other document embodying the

contract of carriage for the scheduled

transportation of passengers in foreign

air transportation, provided that:

(a) The notice, inspection,

explanation and other requirements set

forth in 14 CFR 221.107, paragraphs (a),

(b), (c) and (d) are complied with, to the

extent applicable;

(b) In addition to other remedies at

law, a carrier may not claim the benefit

under this section as against a

passenger, and a passenger shall not be

bound by incorporation of any contract

term by reference under this part unless

the requirements of paragraph (a) of this

section are complied with, to the extent

applicable; and

(c) The purpose of this section is to

set uniform disclosure requirements,

which preempt any conflicting State

requirements on the same subject, for

incorporation of terms by reference into

contracts of carriage for the scheduled

transportation of passengers in foreign

air transportation.

§ 293.22 Effectiveness of tariffs on file.

(a) Ninety days after the date of

effectiveness of the Assistant Secretary’s

notice, passenger tariffs on file with the

Department covered by the scope of the

exemption will cease to be effective as

tariffs under 49 U.S.C. 41504 and 41510,

and the provisions of 14 CFR part 221,

and will be canceled by operation of

law.

(b) Ninety days after the date of

effectiveness of the Assistant Secretary’s

notice, pending applications for filing

and/or effectiveness of any passenger

tariffs covered by the scope of the

exemption, will be dismissed by

operation of law. No new filings or

applications will be permitted after the

date of effectiveness of the Assistant

Secretary’s notice except as provided

under § 293.12.

Issued in Washington, DC, on February 27,

1997.

Charles A. Hunnicutt,

Assistant Secretary for Aviation and

International Affairs.

[FR Doc. 97–5361 Filed 3–7–97; 8:45 am]

BILLING CODE 4910–62–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Food and Drug Administration

21 CFR Part 163

[Docket Nos. 86P–0297 and 93P–0091]

White Chocolate; Proposal to Establish

a Standard of Identity

AGENCY: Food and Drug Administration,

HHS.

ACTION: Proposed rule.

SUMMARY: The Food and Drug

Administration (FDA) is proposing to

establish a standard of identity for white

chocolate. The proposed standard will

provide for the use of the term ‘‘white

chocolate’’ as the common or usual

name of products made from cacao fat,

milk solids, nutritive carbohydrate

sweeteners, and other safe and suitable

ingredients, but containing no nonfat

cacao solids. This action responds

principally to citizen petitions

submitted separately by the Hershey

Foods Corp. (Hershey) and by the

Chocolate Manufacturers Association of

the United States of America (CMA).

FDA tentatively concludes that this

action will promote honesty and fair

dealing in the interest of consumers

and, to the extent practicable, will

achieve consistency with existing

international standards of identity for

white chocolate.

DATES: Written comments by May 27,

1997. The agency proposes that any

final rule that may be issued based upon

this proposal become effective January

1, 1998.

ADDRESSES: Submit written comments

to the Dockets Management Branch

(HFA–305), Food and Drug

Administration, 12420 Parklawn Dr.,

rm. 1–23, Rockville, MD 20857.

FOR FURTHER INFORMATION CONTACT:

Geraldine A. June, Center for Food

Safety and Applied Nutrition (HFS–

158), Food and Drug Administration,

200 C St. SW., Washington, DC 20204,

202–205–5099.

SUPPLEMENTARY INFORMATION:

I. Background

In the Federal Register of June 5, 1992

(57 FR 23989), FDA published a
10782 Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Proposed Rules

tentative final rule (hereinafter referred

to as the 1992 tentative final rule) to

amend the standards of identity for

cacao products in part 163 (21 CFR part

163). In section II.B. of the 1992

tentative final rule, FDA noted that it

had received a comment that requested

that the agency adopt a standard of

identity for white chocolate. In support

of that request, the comment argued that

the absence of a standard of identity for

this food had limited the introduction of

‘‘white chocolate’’ products into the

market. The comment also noted the

likelihood that consumer confusion

would develop about the content of

products informally referred to as

‘‘white chocolate’’ that may or may not

contain any cacao-derived ingredients.

The comment observed that, in the

absence of a standard of identity for this

product, the term ‘‘white chocolate’’

would be prohibited under the existing

standards of identity in part 163.

Further, the comment stated that when

such products have been introduced,

firms have been forced to use alternative

names to avoid the labeling constraints

in the standards of identity.

In response to the comment, FDA

recognized the dilemma faced by U.S.

manufacturers of those confections that

may be labeled ‘‘white chocolate’’ in

other countries but stated that the

adoption of a standard of identity for

white chocolate was outside the scope

of that rulemaking. The agency

suggested that the manufacturer petition

the agency to adopt a standard for this

food. FDA pointed out that, in fact, in

the Federal Register of September 16,

1991 (56 FR 46798), the agency had

granted Hershey a temporary marketing

permit (TMP) to test market a product

called ‘‘white chocolate.’’ The permit

provided for the temporary market

testing of 23,608 kilograms (kg) (52,000

pounds (lb)) of the product for a period

of 15 months.

Since publication of the 1992

tentative final rule, the agency has

received several applications from

chocolate manufacturers for TMP’s for

‘‘white chocolate.’’ In the Federal

Register of November 5, 1993 (58 FR

59050), the agency granted Hershey a

new TMP for test products designated as

‘‘white chocolate.’’ The purpose of the

new permit was to permit Hershey to

collect data on consumer acceptance of

the product over a wider area of

distribution. Hershey said that it

intended to use these data to support its

citizen petition (filed December 15,

1992, Docket No. 86P–0297/CP2)

(hereinafter referred to as the 1992

Hershey petition) for a standard of

identity for white chocolate. In the

November 5, 1993 notice, the agency

announced that it had received a citizen

petition from CMA (filed March 2, 1993,

Docket No. 93P–0091) (hereinafter

referred to as the 1993 CMA petition)

that also requested that FDA establish a

standard of identity for white chocolate.

In addition to Hershey, the agency has

granted TMP’s to Ganong Bros., Ltd., St.

Stephen NB, Canada E3L 2X5 (58 FR

59050, November 5, 1993), the Pillsbury

Co. (59 FR 32443, June 23, 1994), and

Kraft General Foods, Inc. (59 FR 33976,

July 1, 1994).

In the Federal Register of December

29, 1994 (59 FR 67302), FDA published

a notice extending Hershey’s TMP

(Docket No. 93P–0310) and inviting

interested persons to participate in the

extended market test under the same

conditions that applied under that TMP.

Since January 1995, FDA has issued

letters to The Proctor and Gamble Co.,

Brach and Brock (formerly E. J. Brach

Corp.), Mauna Loa Macadamia Nut

Corp., Nestle ́ Food Co., Kraft General

Foods, MacFarms of Hawaii, Van Leer

Chocolate Corp., and Wilbur Chocolate

Co. acknowledging the firms’

acceptance of the agency’s invitation to

participate in the extended market test

of products identified as being or

containing white chocolate. The

aggregate effect of these TMP’s is that up

to 75 million kg (166 million lb) per

annum of product consisting, in large

part, of white chocolate has been, or

will be, market tested. The majority of

the firms are conducting nationwide

market tests. The agency is currently

evaluating requests from other firms to

participate in the extended market test.

II. Petitions and Grounds

A. The 1992 Hershey Petition

Hershey, in its 1992 petition

requesting that FDA establish a standard

of identity for white chocolate,

described the product named ‘‘white

chocolate’’ as a food that deviates from

the standardized cacao products in part

163 in that: (1) It is prepared without

the nonfat components of the ground

cacao nibs but contains the fat (cocoa

butter) expressed from the ground cacao

nibs; and (2) it may contain safe and

suitable antioxidants. The petition

further described ‘‘white chocolate’’ as

the solid or semiplastic food prepared

by mixing and grinding cocoa butter

with one or more nutritive sweeteners

and one or more of the optional dairy

ingredients provided in part 163. It

contains not less than 20 percent cocoa

butter, not less than 14 percent of total

milk solids, not less than 3.5 percent

milkfat, and not more than 55 percent

nutritive carbohydrate sweeteners. It

may contain emulsifying agents, spices,

natural and artificial flavorings and

other seasonings, and antioxidants

approved for food use. It contains no

coloring material.

In support of its request, Hershey

contended that, because there is

currently no standard of identity for

white chocolate, virtually all uses of the

term ‘‘white chocolate’’ would be

prohibited by the existing standards of

identity for chocolate because they

prescribe the presence of chocolate

liquor (ground cacao nibs). Hershey

argued that this requirement has acted

as a practical deterrent to companies

that have considered developing and

marketing white chocolate products in

the United States. The Hershey petition

noted that when such products have

been introduced and marketed in the

United States, manufacturers have had

to resort to labeling such products with

descriptive terms other than ‘‘white

chocolate’’ (e.g., ‘‘white confection’’) to

avoid standardized food labeling issues.

Hershey contended that, in many cases,

the use of such alternative terminology

has obscured the true nature of the

product and could potentially mislead

consumers. Therefore, Hershey

maintained that the absence of a

standard of identity for white chocolate,

and the resulting uncertainty over

nomenclature on labeling, have proven

to be factors limiting the introduction of

new products to meet consumer

demand.

In further support of its petition,

Hershey maintained that there exists a

good likelihood of consumer confusion

with regard to the content of products

that are referred to informally as ‘‘white

chocolate’’ but that may or may not

contain any cacao-derived ingredients.

According to Hershey, consumers

expecting to purchase a white chocolate

product may, in fact, be purchasing a

vegetable fat coating-type product made

from fats other than cacao fat, which

may contain little or no cacao

ingredients.

The Hershey petition also included a

summary of the results of a consumer

survey conducted in 1990 to determine

the most common name used by adult

candy consumers when shown a variety

of confection products, including a

white confection bar. The survey was

conducted by personal interviews with

216 adults who eat candy regularly.

After an introductory statement on how

people use different names for the same

product, respondents were shown a

product and asked what they would call

it. The procedure was repeated for two

or more products—jelly beans,

lollipops, and a white confection bar.

Over 61 percent of the respondents used

the term ‘‘white chocolate’’ to describe
Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Proposed Rules 10783

the white confection bar that they were

shown. An additional 10 percent of the

respondents associated the bar product

to chocolate. Hershey contended that,

based on these results, it appears that

the majority of candy consumers tend to

identify the white confection as either

‘‘white chocolate’’ specifically or as

some variety of chocolate.

Hershey pointed out that many

countries that have adopted standards

for cacao products have also recognized

and established a standard of identity

for white chocolate. Hershey argued

that, in countries that have established

a standard of identity for white

chocolate, in contrast to the United

States, consumers are able to evaluate

the quality and value of the white

chocolate products they purchase

without having to resort to an analysis

of the product ingredient declaration.

Hershey maintained that establishing

a U.S. standard of identity for white

chocolate would promote honesty and

fair dealing in the interest of consumers

and build consumer confidence in the

food supply by establishing minimal

criteria for a class of products that is

becoming popular with consumers.

According to Hershey, adoption of the

suggested standard of identity for white

chocolate will also enhance the ability

of American manufacturers to compete

in world markets. Hershey maintained

that a U.S. standard will result in greater

consistency in the international

regulation of cacao products, while

ensuring that domestic consumers are

buying and consuming ‘‘the real thing.’’

B. The 1993 CMA Petition

In all substantive respects, the 1993

CMA petition agrees with the 1992

Hershey petition. In support of its

request for a white chocolate standard,

CMA noted that the standards of

identity for cacao products permit only

those products that contain a minimum

level of chocolate liquor to be identified

as chocolate. CMA maintained that,

because there exists a product that

consumers identify as ‘‘white

chocolate,’’ it is essential that the

industry define this product, and that

FDA establish and enforce a standard of

identity for white chocolate products to

avoid economic deception and promote

honesty and fair dealing in the interest

of consumers.

Like Hershey, CMA contended that

consumers are being presented with

products that often contain low levels of

cocoa butter (if any at all) and relatively

high levels of noncacao vegetable fats

which, except for coatings made with

vegetable fats, are not permitted in

standardized chocolate products. CMA

further stated that products that identify

themselves as ‘‘white chocolate,’’ but

that do not meet CMA’s suggested

standard, represent a true deception of

the consumer. According to CMA,

consumer deception distorts individual

purchasing decisions and prevents

consumers from satisfying their product

preferences. CMA asserted that FDA can

reduce or prevent the continuation of

such deception by establishing a

standard of identity for white chocolate.

CMA further maintained that the

absence of a standard of identity for

white chocolate denies consumers the

benefit of knowing that a white

chocolate-type product that they

purchase is, indeed, a true cacao

product. In the absence of such a

standard, the U.S. chocolate industry is

unable to provide consumers with an

identifiable white chocolate product

that meets both their expectations and

the industry’s definition of quality.

CMA stated that the adoption of their

suggested standard would have a

positive effect on the marketability of,

and competition among, chocolate

products. CMA also acknowledged the

submission to FDA of a similar petition

by Hershey and noted that CMA’s

suggested white chocolate standard of

identity is generally consistent with that

in the Hershey petition. CMA further

noted that while its suggested standard

is generally based on FDA standards of

identity for cacao products, the specific

minimum levels of cacao fat, milkfat,

and total milk solids are based on those

found in the European Union (EU)

white chocolate standard published in

the Official Journal of European

Communities.

CMA explained that although

antioxidants are not permitted in cacao

products under the current standards of

identity for these foods, they are needed

in the proposed white chocolate

standard. CMA maintained that in

making white chocolate, cocoa butter is

typically deodorized to achieve the

desired flavor. In the process, the

natural antioxidants are removed.

Therefore, CMA contended, the addition

of antioxidants to white chocolate is

necessary to preserve the product flavor.

CMA suggested that because Canada

is proposing a standard for white

chocolate that is also based on the EU

standard, adoption of its proposed

standard would increase harmonization

of U.S. requirements with those of

Canada. Such harmonization, CMA

maintained, is consistent with the goals

of the North American Free Trade

Agreement.

III. The Proposal

Both petitioners agree that a standard

of identity for white chocolate would

promote honesty and fair dealing in the

interests of consumers, eliminate a

deterrent to firms introducing new

products, enhance international

marketability of the product, and be

consistent with the white chocolate

standard of the EU and that proposed by

Canada.

The agency finds merit in the

petitioners’ request and tentatively

concludes that creating a standard of

identity for white chocolate would

promote honesty and fair dealing in the

interests of consumers because the

standard would eliminate the potential

for economic fraud and consumer

deception through the substitution of

cheaper ingredients for cacao-derived

ingredients.

Establishing a standard of identity for

white chocolate will alleviate the need

for companies to request TMP’s to

market products bearing the name

‘‘white chocolate’’ that deviate from the

standards of identity for other chocolate

products or, in lieu of requesting a TMP,

crafting identity statements using

descriptive names other than

‘‘chocolate.’’ A standard also will

enhance international marketability of

the product and increase harmonization

with the EU and Canada.

While the agency tentatively agrees

with the petitioners that a standard for

white chocolate should be established,

it notes that it is reviewing its existing

standards of identity in response to the

Administration’s Regulatory

Reinvention Initiative that seeks to

streamline Government to ease the

burden on regulated industry and

consumers. In the Federal Register of

December 29, 1995 (60 FR 67492), FDA

published an advance notice of

proposed rulemaking (ANPRM) in

which it requested comments on

whether food standards of identity

should be retained, revised, or revoked.

In the ANPRM, the agency specifically

asked for comments on whether, if it

institutes a broad rulemaking on

reinventing food standards, it is

appropriate in the interim to have a

moratorium on food standard actions,

i.e., on the issuance of TMP’s and on the

development of new or revised food

standard regulations. Several comments

submitted by industry to the ANPRM

opposed a moratorium on the creation

of new standards of identity while the

agency is reviewing existing food

standards in response to the Regulatory

Reinvention Initiative. The comments

asserted that a moratorium would

disadvantage firms by delaying the

introduction of new products and

would not be in the consumer’s best

interest.
10784 Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Proposed Rules

Although FDA is reviewing existing

food standards in response to the

Regulatory Reinvention Initiative, the

agency tentatively concludes that there

are compelling reasons to establish a

standard for white chocolate at this

time. First, the number of requests for

TMP’s for white chocolate has

demonstrated to the agency that there is

a consumer demand for this product. As

discussed in section I. of this document,

the agency has granted TMP’s for the

market testing of up to 166 million lb of

product containing white chocolate.

Second, the establishment of a standard

for white chocolate seemingly will

benefit industry by making it easier to

introduce new products containing

white chocolate. It will eliminate the

need for firms to obtain a TMP to market

the products and to send labels to the

agency for review whenever they wish

to market a new product containing

white chocolate or a different size

product than those allowed by their

TMP. Third, as stated above, the

establishment of the standard will

benefit U.S. firms by enhancing the

international marketability of their

product. Finally, the adoption of a

standard will ease FDA’s burden

because it will end the flow of paper

from firms seeking, or operating under

a TMP. Thus, the agency tentatively

concludes that establishing a standard

of identity for white chocolate will be

beneficial to consumers and to industry

and will also result in more efficient use

of the agency’s limited resources.

However, FDA advises that if a

standard of identity for white chocolate

is established, the agency will review it

along with all other standards of

identity as part of the Regulation

Reinvention Initiative. The standard of

identity for white chocolate would be

retained, revised, or revoked consistent

with decisions regarding other

standards of identity for cacao products.

The proposed standard of identity for

white chocolate is slightly different

from the standards of identity for other

chocolate products in part 163. As

described in the 1993 CMA petition,

safe and suitable antioxidants are

needed to help preserve the product’s

flavor. The agency has no information

that shows that the addition of safe and

suitable antioxidants to this product

should be prohibited. Therefore, FDA is

proposing to provide for the use of

antioxidants in proposed

§ 163.124(b)(5).

FDA tentatively concludes that it is

reasonable to establish the term ‘‘white

chocolate’’ as the common or usual

name for the standardized food

described below. The public has become

familiar with the term ‘‘white

chocolate’’ through the recent market

testing of products that consist, in

whole or in part, of this food. The

agency further tentatively concludes

that use of this term will aid consumer

recognition of the food and will promote

honesty and fair dealing in the interest

of consumers by eliminating the

potential for economic fraud and

consumer deception through the

substitution of cheaper ingredients for

cacao-derived ingredients. Finally, the

agency tentatively concludes that the

consumer confusion engendered by the

use of alternative names for white

chocolate-type confections will also be

eliminated, and that the use of the

standardized term ‘‘white chocolate’’ in

the product name will enhance the

international marketability of such

products.

Therefore, the agency is proposing to

revise part 163 by establishing a

standard of identity for white chocolate

in new § 163.124. Specifically, FDA is

proposing to provide that ‘‘white

chocolate’’ have the following

description:

1. White chocolate is the solid or

semiplastic food prepared by intimately

mixing and grinding cacao fat with one

or more of the optional dairy ingredients

and one or more optional nutritive

carbohydrate sweeteners and may

contain one or more of the other

optional ingredients specified in the

standard. White chocolate shall be free

of coloring material.

2. White chocolate shall contain not

less than 20 percent by weight of cacao

fat, not less than 3.5 percent by weight

of milkfat, not less than 14 percent by

weight of total milk solids, and not more

than 55 percent by weight nutritive

carbohydrate sweetener.

3. White chocolate may contain the

following optional ingredients:

a. Nutritive carbohydrate sweeteners;

b. Dairy ingredients:

i. Cream, milkfat, butter;

ii. Milk, dry whole milk, concentrated

milk, evaporated milk, sweetened

condensed milk;

iii. Skim milk, concentrated skim

milk, evaporated skim milk, sweetened

condensed skim milk, nonfat dry milk;

iv. Concentrated buttermilk, dried

buttermilk; and

v. Malted milk;

c. Emulsifying agents, used singly or

in combination, the total amount of

which does not exceed 1 percent by

weight;

d. Spices, natural and artificial

flavorings, ground whole nut meats,

ground coffee, dried malted cereal

extract, salt, and other seasonings that

do not either singly or in combination

impart a flavor that imitates the flavor

of chocolate, milk, or butter; or

e. Antioxidants.

IV. Effective Date

To allow companies time to make any

mandatory changes, the agency

proposes that any final rule that may be

issued based on this proposal become

effective January 1, 1998. The final rule

would apply to affected products

initially introduced or initially

delivered for introduction into interstate

commerce on or after the effective date.

V. Analysis of Impacts

FDA has examined the impacts of the

proposed rule under Executive Order

12866 and the Regulatory Flexibility Act

(5 U.S.C. 601–612). Executive Order

12866 directs agencies to assess all costs

and benefits of available regulatory

alternatives and, when regulation is

necessary, to select the regulatory

approaches that maximize net benefits

(including potential economic,

environmental, public health and safety,

and other advantages; distributive

impacts; and equity). 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 in a material

way a sector of the economy,

competition, or jobs, or raising novel

legal or policy issues. If a rule has a

significant impact on a substantial

number of small entities, the Regulatory

Flexibility Act requires agencies to

analyze options that would minimize

the economic impact of that rule on

small entities. FDA finds that this

proposed rule is not a significant rule as

defined by Executive Order 12866. The

agency acknowledges that under some

circumstances this proposed rule may

have significant impact on a substantial

number of small entities. It has been

determined that this rule is not a major

rule for the purpose of congressional

review (Pub. L. 104–121).

A. Alternatives

FDA is proposing to establish a

standard of identity for white chocolate

so that only products meeting the

criteria described in the proposal may

be called ‘‘white chocolate.’’ One

alternative is to not establish a standard

and allow manufacturers to market

products bearing the name ‘‘white

chocolate’’ only with TMP’s. Another

alternative is to establish a standard for

white chocolate that is consistent with

the standard described in the petitions

where the levels of the ingredients are

prescribed. A third alternative is to

establish a standard of identity for white
Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Proposed Rules 10785

chocolate with different criteria than

those proposed in the petitions. While

the agency has no explicit information

on the exact formulations or attributes

that consumers associate with the term

‘‘white chocolate,’’ the agency has

written the proposed standard of

identity to be as consistent as possible

with the existing standards of identity

for chocolate products while making the

necessary allowances to accommodate

the formulations described in the

petitions. FDA requests comments on

these and other alternatives to the

proposed standard of identity.

B. Benefits

The largest benefit of this proposed

standard of identity for white chocolate

is that it will eliminate a manufacturer’s

need to prepare and submit requests for

TMP’s in order to market products

bearing the name ‘‘white chocolate.’’

Another benefit is that it would

eliminate the need to divert scarce

agency resources to the evaluation of

these TMP requests. Currently,

manufacturers are required to obtain

TMP’s to use the term ‘‘chocolate’’ to

market products that meet the proposed

standard because they deviate from the

existing standards of identity for

chocolate products. The agency has

received more than 1 dozen requests for

TMP’s for white chocolate in the last

year. The establishment of the proposed

standard of identity would save hours of

manufacturer and FDA time required for

the preparation and evaluation of each

TMP.

Additionally, the benefits usually

attributed to the establishment of

standards of identity are reductions in

the potential for consumer confusion

and deception. Well defined standards

of identity, which establish consistent

product names, can assist consumers in

finding and comparing products by the

name of the food. Finally, the proposed

standard will establish a new product

name that, according to the petitions, is

consistent with the name that a majority

of consumers are already using to

describe this product.

C. Costs

The establishment of a standard of

identity requires that all products that

meet the standard bear the standardized

name. If there are products that are

formulated in accordance with the

proposed standard but are not currently

marketed under a TMP allowing use of

the term ‘‘white chocolate,’’ then those

products will have to be relabeled.

Because ‘‘white chocolate’’ will need to

appear on each product’s principal

display panel, the cost for label changes

will depend on the number of products

needing to be relabeled and the amount

of time manufacturers are given to

complete the label changes. The actual

cost of relabeling will be determined

largely by the length of time between

the date that the proposed rule becomes

final and the effective date of the final

rule (the compliance period). In general,

the large chocolate manufacturers are

already marketing their products under

TMP’s. For small firms the cost of

relabeling ranges from $12,750 with a 6-

month compliance period to $1,550

with a 24-month compliance period.

The agency has no information on the

number of products that will need to be

relabeled. There are approximately 250

firms that produce chocolate products

in the United States, however, the

number of products that meet the

proposed standard of identity is

unknown. This proposal will not affect

products that do not meet the standard,

because they may continue to be

produced and marketed as they

currently are. FDA is not able to

estimate the total cost of this proposal

and requests that comments supply

information on this issue.

D. Initial Regulatory Flexibility Analysis

If finalized, this proposed rule will

establish a standard of identity for white

chocolate. Depending upon the length of

the compliance period, this proposal

may or may not impose significant

compliance costs on industry and there

may or may not be a significant impact

of these provisions on a substantial

number of small businesses. However,

because there is some uncertainty

related to the costs of compliance, FDA

is voluntarily doing this Initial

Regulatory Flexibility Analysis. The

agency requests comment on this

judgment.

FDA believes that the only provision

of this proposed rule that may have a

significant impact on a substantial

number of small businesses is related to

the compliance period. There are

approximately 250 firms that produce

chocolate products (Standard Industry

Classification Code 206603) in the

United States. Almost all of these

businesses have fewer than 500

employees. The agency has no data on

the number of products that will meet

the proposed standard and that,

therefore, may need to be relabeled. The

relabeling costs are the primary costs of

the rule. Relabeling costs vary inversely

to the length of the compliance period.

FDA has estimated the compliance costs

based on three alternatives for the

length of the compliance period.

With a 6-month compliance period

the costs to small firms that produce one

product that would meet the proposed

standard are estimated to be $12,750

($3,400 for administrative costs, $3,200

for printing costs, and $6,150 for costs

of lost label inventory). With a 12-

month compliance period the costs to

small firms that produce one product

that would meet the proposed standard

are estimated to be $3,300 ($1,700 for

administrative costs, $1,100 for printing

costs, and $500 for costs of lost label

inventory). With a 24-month

compliance period the costs to small

firms that produce one product that

would meet the proposed standard are

estimated to be $1,550 ($850 for

administrative costs, $700 for printing

costs, and nothing for costs of lost label

inventory). The agency requests

comments on the impact of the

compliance period on small chocolate

producers and suggestions for

minimizing the impact of this proposed

rule on small businesses.

VI. Environmental Impact

The agency has determined under 21

CFR 25.24(b)(1) that this action is of a

type that does not individually or

cumulatively have a significant effect on

the human environment. Therefore,

neither an environmental assessment

nor an environmental impact statement

is required.

VII. Paperwork Reduction Act

FDA tentatively concludes that this

proposed rule contains no reporting,

recordkeeping, labeling, or other third

party disclosure requirements. Thus,

there is no ‘‘information collection’’

necessitating clearance by the Office of

Management and Budget. However, to

ensure the accuracy of this tentative

conclusion, FDA is asking for comment

on whether this proposed rule imposes

any paperwork burden.

VIII. Comments

Interested persons may, on or before

May 27, 1997, submit to the Dockets

Management Branch (address above)

written comments regarding this

proposal. Two copies of any comments

are to be submitted, except that

individuals may submit one copy.

Comments are to be identified with the

docket number found in brackets in the

heading of this document. Received

comments may be seen in the office

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

Monday through Friday.

List of Subjects in 21 CFR Part 163

Cacao products, Food grades and

standards.

Therefore, under the Federal Food,

Drug, and Cosmetic Act and under

authority delegated to the Commissioner

of Food and Drugs and redelegated to
10786 Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Proposed Rules

the Director, Center for Food Safety and

Applied Nutrition, it is proposed that 21

CFR part 163 be amended as follows:

PART 163—CACAO PRODUCTS

1. The authority citation for 21 CFR

part 163 continues to read as follows:

Authority: Secs. 201, 301, 401, 403, 409,

701, 721 of the Federal Food, Drug, and

Cosmetic Act (21 U.S.C. 321, 331, 341, 343,

348, 371, 379e).

2. New § 163.124 is added to subpart

B to read as follows:

§ 163.124 White chocolate.

(a) Description. (1) White chocolate is

the solid or semiplastic food prepared

by intimately mixing and grinding cacao

fat with one or more of the optional

dairy ingredients and one or more

optional nutritive carbohydrate

sweeteners and may contain one or

more of the other optional ingredients

specified in paragraph (b) of this

section. White chocolate shall be free of

coloring material.

(2) White chocolate contains not less

than 20 percent by weight of cacao fat

as calculated by subtracting from the

weight of the total fat the weight of the

milkfat, dividing the result by the

weight of the finished white chocolate,

and multiplying the quotient by 100.

The finished white chocolate contains

not less than 3.5 percent by weight of

milkfat and not less than 14 percent by

weight of total milk solids, calculated by

using only those dairy ingredients

specified in paragraph (b)(2) of this

section, and not more than 55 percent

by weight nutritive carbohydrate

sweetener.

(b) Optional ingredients. The

following safe and suitable ingredients

may be used:

(1) Nutritive carbohydrate sweeteners;

(2) Dairy ingredients:

(i) Cream, milkfat, butter;

(ii) Milk, dry whole milk,

concentrated milk, evaporated milk,

sweetened condensed milk;

(iii) Skim milk, concentrated skim

milk, evaporated skim milk, sweetened

condensed skim milk, nonfat dry milk;

(iv) Concentrated buttermilk, dried

buttermilk; and

(v) Malted milk;

(3) Emulsifying agents, used singly or

in combination, the total amount of

which does not exceed 1 percent by

weight;

(4) Spices, natural and artificial

flavorings, ground whole nut meats,

ground coffee, dried malted cereal

extract, salt, and other seasonings that

do not either singly or in combination

impart a flavor that imitates the flavor

of chocolate, milk, or butter; or

(5) Antioxidants.

(c) Nomenclature. The name of the

food is ‘‘white chocolate’’ or ‘‘white

chocolate coating.’’ When one or more

of the spices, flavorings, or seasonings

specified in paragraph (b)(4) of this

section are used, the label shall bear an

appropriate statement, e.g., ‘‘Spice

added’’, ‘‘Flavored with lllll’’, or

‘‘With lllll added’’, the blank

being filled in with the common or

usual name of the spice, flavoring, or

seasoning used, in accordance with

§ 101.22 of this chapter.

(d) Label declaration. Each of the

ingredients used in the food shall be

declared on the label as required by the

applicable sections of parts 101 and 130

of this chapter.

Dated: January 6, 1997.

Fred R. Shank,

Director, Center for Food Safety and Applied

Nutrition.

[FR Doc. 97–5734 Filed 3–7–97; 8:45 am]

BILLING CODE 4160–01–F

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

24 CFR Part 982

[Docket No. FR–4149–P–01]

RIN 2577–AB73

Section 8 Rental Voucher and

Certificate Programs Restrictions on

Leasing to Relatives

AGENCY: Office of the Assistant

Secretary for Public and Indian

Housing, HUD.

ACTION: Proposed rule.

SUMMARY: This proposed rule would

limit the circumstances under which a

landlord could lease a unit with Section

8 certificate or voucher assistance to a

relative of the landlord. It would permit

such leasing only if an HA determines

that the leasing would accommodate a

person with disabilities. The rule is

intended to reduce the potential for

misuse of Section 8 assistance. It would

reduce the likelihood of families that

have the ability to assist a family

member from seeking Federal rental

assistance and, thereby, would help to

direct scarce Federal financial

assistance to the more needy.

DATES: Comment due date: May 9, 1997.

ADDRESSES: Interested persons are

invited to submit comments regarding

this proposed rule to the Office of the

General Counsel, Rules Docket Clerk,

room 10276, Department of Housing and

Urban Development, 451 Seventh Street,

SW., Washington, DC 20410–0500.

Comments should refer to the above

docket number and title. Facsimile

(FAX) comments are not acceptable. A

copy of each communication submitted

will be available for public inspection

and copying during regular business

hours (7:30 a.m. to 5:30 p.m. Eastern

time) at the above address.

FOR FURTHER INFORMATION

CONTACT:Gerald Benoit, Director,

Operations Division, Office of Rental

Assistance, Public and Indian Housing,

Department of Housing and Urban

Development, Room 4220, 451 Seventh

Street, SW., Washington, DC 20410,

telephone (202) 708–0477. Hearing or

speech impaired individuals may call

HUD’s TTY number (202) 708–4594 or

1–800–877–8399 (Federal Information

Relay Service TTY). (Other than the

‘‘800’’ number, these are not toll-free

numbers.)

SUPPLEMENTARY INFORMATION:

I. Discussion

Currently, neither the statute nor HUD

regulations place any restriction on an

owner leasing a unit with Section 8

certificate or voucher assistance to a

relative. All parties, of course, would

have to meet requirements generally

applicable to any certificate or voucher

assisted tenancy. These requirements

include: the applicant meets income

and other eligibility requirements; the

applicant is selected in appropriate

order from the HA’s waiting list; the

unit meets housing quality standards,

and the rent to the owner is reasonable.

This policy of no restrictions on

leasing with assistance to relatives has

been in effect since the inception of the

Certificate Program in the mid-1970s.

Historically, it has been viewed by the

Department as consistent with an overarching policy of promoting maximum

housing choice for assisted families.

The Department does not have

systematic data on the extent to which,

or the circumstances under which,

owners have been leasing to family

members. Nonetheless, it must be

recognized that a policy of allowing

leasing between closely related

individuals creates a potential for

misallocation of scarce program

resources. It can encourage families that

can house family members to seek and

obtain Federal assistance that otherwise

would be available for more needy

families. In short, it can shift, too

readily, responsibility for housing a

close relative from a relative with

available housing or financial resources

to the Federal Government.

Recent newspaper articles have

described a number of examples of

relatives leasing to other relatives with