Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Rules and Regulations 56825 

Three-year average actual 

costs 

Three-year 

percentage of 

volume 

Average year 

2005 fee 

Chicago Board of Trade .............................................................................................................. $5,127 33.4148 $5,127 

Chicago Mercantile Exchange ..................................................................................................... 256,683 51.6763 256,683 

New York Mercantile Exchange .................................................................................................. 186,234 11.4811 125,378 

New York Board of Trade ............................................................................................................ 61,296 1.9919 36,245 

Kansas City Board of Trade ........................................................................................................ 22,034 1.0113 13,859 

Minneapolis Grain Exchange ....................................................................................................... 24,591 0.1409 12,691 

OneChicago ................................................................................................................................. 6,011 0.0718 3,207 

Subtotal ................................................................................................................................. 561,977 99.7881 453,190 

National Futures Association ....................................................................................................... 33,692 N/A 33,692 

Total ............................................................................................................................... 589,657 99.7881 486,882 

An example of how the fee is 

calculated for one exchange, the 

Minneapolis Grain Exchange, is set forth 

here: 

a. Actual three-year average costs 

equal $24,591 

b. The alternative computation is: 

(.5) ($24,591) +(.5)(.001409)($561,977) = 

$12,691. 

c. The fee is the less of a or b; in this 

case $12,691. 

As noted above, the alternative 

calculation based on contracts traded is 

not applicable to the NFA because it is 

not a contract market and has no 

contracts traded. The Commission’s 

average annual cost for conducting 

oversight review of the NFA rule 

enforcement program during fiscal year 

2002 through 2004 was $33,692 (onethird of $101,076). The fee to be paid by 

the NFA for the current fiscal year is 

$33,692. 

Payment Method 

The Debt Collection Improvement Act 

(DCIA) requires deposits of fees owed to 

the government by electronic transfer of 

funds (See 31 U.S.C. 3720). For 

information about electronic payments, 

please contract Stella Lewis at (202) 

418–5186 or slewis@cftc.gov, or see the 

CFTC Web site at http://www.cftc.gov, 

specifically http://www.cftc.gov/cftc/ 

cftcelectronicpayments.htm. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act, 5 

U.S.C. 601, et seq., requires agencies to 

consider the impact of the rules on 

small business. The fees implemented 

in this release affect contract markets 

(also referred to as exchanges) and 

registered futures associations. The 

Commission has previously determined 

that contract markets and registered 

futures associations are not ‘‘small 

entities’’ for purposes of the Regulatory 

Flexibility Act. Accordingly, the 

Chairman, on behalf of the Commission, 

certifies pursuant to 5 USC 605(b) that 

the fees implemented here will not have 

a significant economic impact on a 

substantial number of small entities. 

Issued in Washington, DC on September 

23, 2005, by the Commission. 

Edward W. Colbert, 

Deputy Secretary of the Commission. 

[FR Doc. 05–19461 Filed 9–28–05; 8:45 am] 

BILLING CODE 6351–01–M 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Parts 210, 228, 229, 240 and 

249 

[Release Nos. 33–8618; 34–52492; File Nos. 

S7–40–02; S7–06–03] 

RIN 3235–AI66 and 3235–AI79 

Management’s Report on Internal 

Control Over Financial Reporting and 

Certification of Disclosure in Exchange 

Act Periodic Reports of Companies 

That Are Not Accelerated Filers 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Final rule; extension of 

compliance dates; request for comment. 

SUMMARY: We are extending the 

compliance dates that were published 

on March 8, 2005, in Release No. 33–

8545 [70 FR 11528], for companies that 

are not accelerated filers, for certain 

amendments to Rules 13a–15 and 15d–

15 under the Securities Exchange Act of 

1934, Items 308(a) and (b) of 

Regulations S–K and S–B, Item 15 of 

Form 20–F and General Instruction B of 

Form 40–F. These amendments require 

companies, other than registered 

investment companies, to include in 

their annual reports a report of 

management and accompanying 

auditor’s report on the company’s 

internal control over financial reporting. 

The amendments also require 

management to evaluate, as of the end 

of each fiscal period, any change in the 

company’s internal control over 

financial reporting that occurred during 

the period that has materially affected, 

or is reasonably likely to materially 

affect, the company’s internal control 

over financial reporting. We are also 

extending the compliance dates 

applicable to companies that are not 

accelerated filers for amendments to 

certain representations that must be 

included in the certifications required 

by Exchange Act Rules 13a–14 and 15d–

14 regarding a company’s internal 

control over financial reporting. Finally, 

we are soliciting comment about the 

implementation of these rules. 

DATES: Effective Date: The effective date 

published on June 18, 2003, in Release 

No. 33–8238 [68 FR 36636] remains 

August 14, 2003. The effective date of 

this document is September 29, 2005. 

Comment Date: Comments should be 

received on or before October 31, 2005. 

Compliance Dates: The compliance 

dates are extended as follows: A 

company that is not an accelerated filer 

must begin to comply with these 

requirements for its first fiscal year 

ending on or after July 15, 2007. 

Companies must begin to comply with 

the provisions of Exchange Act Rule 

13a–(d) or 15d–(d), whichever applies, 

requiring an evaluation of changes to 

internal control over financial reporting 

requirements with respect to the 

company’s first periodic report due after 

the first annual report that must include 

management’s report on internal control 

over financial reporting. 

In addition, during the extended 

compliance period, a company that is 

not an accelerated filer may continue to 

omit the amended portion of the 

introductory language in paragraph 4 of 

the certification required by Exchange 

Act Rules 13a–14(a) and 15d–14(a) that 

refers to the certifying officers’

responsibility for establishing and 

maintaining internal control over 

financial reporting for the company, as 

well as paragraph 4(b). This language, 

however, must be provided in the first 

annual report required to contain 

56826 Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Rules and Regulations 

1See Release No. 33–8238 (June 5, 2003) [68 FR 

36636]. 

2 15 U.S.C. 7262. 

3 17 CFR 249.20f and 249.40f. 

4See Release No. 33–8392 (February 24, 2004) [69 

FR 9722]. 

5 17 CFR 240.12b–2. An ‘‘accelerated filer’’ means 

an issuer after it first meets the following conditions 

as of the end of its fiscal year: (i) the aggregate 

market value of the voting and non-voting common 

equity held by non-affiliates of the issuer is $75 

million or more; (ii) the issuer has been subject to 

the requirements of Section 13(a) or 15(d) of the 

Exchange Act for a period of at least twelve 

calendar months; (iii) the issuer has filed at least 

one annual report pursuant to Section 13(a) or 15(d) 

of the Exchange Act; and (iv) the issuer is not 

eligible to use Forms 10–KSB and 10–QSB for its 

annual and quarterly reports. In a separate release 

that we are issuing today, we are proposing to add 

a definition of ‘‘large accelerated filer’’ to Exchange 

Act Rule 12b–2. If we adopt that proposal, the 

extension of compliance dates for internal control 

reports affected by this release would apply to 

companies, including foreign private issuers, that 

are neither accelerated filers nor large accelerated 

filers. See Release No. 33–8617 (September 22, 

2005). 

6 15 U.S.C. 78a et. seq. 

7See Release No. 34–49884 File No. PCAOB 

2004–03 (June 17, 2004) [69 FR 35083]. Auditing 

Standard No. 2 provides the professional standards 

and related performance guidance for independent 

auditors to attest to, and report on, the effectiveness 

of companies’ internal control over financial 

reporting. 

8See Release No. 33–8545 (March 2, 2005) [70 FR 

11528]. 

9 In March 2004, we proposed amendments to 

Form 20–F under the Exchange Act to provide 

foreign private issuers a one-time accommodation 

relating to financial statements prepared under the 

International Financial Reporting Standards. These 

amendments were adopted in April 2005. See 

Release No. 34–49403 (March 11, 2004) [69 FR 

12904] and Release No. 34–51535 (April 12, 2005) 

[70 FR 20674]. 

management’s internal control report 

and in all periodic reports filed 

thereafter. The extended compliance 

dates also apply to the amendments of 

Exchange Act Rules 13a–15(a) and 15d–

15(a) relating to the maintenance of 

internal control over financial reporting. 

The compliance dates relating to 

accelerated filers and registered 

investment companies published in 

Release No. 33–8392 [69 FR 9722] are 

not affected by this release. 

While the definition of an accelerated 

filer in Exchange Act Rule 12b–2 

previously has had applicability only 

for a foreign private issuer that files its 

Exchange Act periodic reports on Forms 

10–K and 10–Q, the definition by its 

terms does not exclude foreign private 

issuers. As of December 1, 2005, a 

foreign private issuer that is an 

accelerated filer and files its annual 

report on Form 20–F will become 

subject to a requirement in new Item 4A 

of Form 20–F to disclose unresolved 

staff comments. This change was part of 

our recently adopted Securities Offering 

Reform final rules published in Release 

No. 33–8591 [70 FR 44722]. A foreign 

private issuer that is an accelerated filer 

under the Exchange Act Rule 12b–2 

definition, and that files its annual 

reports on Form 20–F or Form 40–F, 

must begin to comply with the internal 

control over financial reporting and 

related requirements in the annual 

report for its first fiscal year ending on 

or after July 15, 2006. A foreign private 

issuer that is not an accelerated filer 

under the Exchange Act Rule 12b–2 

definition must begin to comply in its 

annual report for its first fiscal year 

ending on or after July 15, 2007. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/other.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number S7–06–03 on the subject line; 

or 

• Use the Federal eRulemaking Portal 

(http://www.regulations.gov). Follow the 

instructions for submitting comments. 

Paper Comments 

• Send paper comments in triplicate 

to Jonathan G. Katz, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–9303. 

All submissions should refer to File 

Number S7–06–03. This file number 

should be included on the subject line 

if e-mail is used. To help us process and 

review your comments more efficiently, 

please use only one method. The 

Commission will post all comments on 

the Commission’s Internet Web site 

(http://www.sec.gov/rules/other.shtml). 

Comments are also available for public 

inspection and copying in the 

Commission’s Public Reference Room, 

100 F Street, NE., Washington, DC 

20549. All comments received will be 

posted without change; we do not edit 

personal identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. 

FOR FURTHER INFORMATION CONTACT: 

Sean Harrison, Special Counsel, Office 

of Rulemaking, Division of Corporation 

Finance, at (202) 551–3430, U.S. 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–3628. 

SUPPLEMENTARY INFORMATION: On June 5, 

2003,1 the Commission adopted several 

amendments to its rules and forms 

implementing Section 404 of the 

Sarbanes-Oxley Act of 2002.2 Among 

other things, these amendments require 

companies, other than registered 

investment companies, to include in 

their annual reports a report of 

management on the company’s internal 

control over financial reporting and an 

accompanying auditor’s report, and to 

evaluate, as of the end of each fiscal 

quarter, or year in the case of a foreign 

private issuer filing its annual report on 

Form 20–F or Form 40–F,3 any change 

in the company’s internal control over 

financial reporting that occurred during 

the period that has materially affected, 

or is reasonably likely to materially 

affect, the company’s internal control 

over financial reporting. 

On February 24, 2004, we approved 

an extension of the original compliance 

dates for the amendments related to 

internal control reporting.4 Specifically, 

we extended the compliance dates for 

companies that are accelerated filers, as 

defined in Rule 12b–2 5 under the 

Securities Exchange Act of 1934,6 to 

fiscal years ending on or after November 

15, 2004, and for companies that are not 

accelerated filers and for foreign private 

issuers, to fiscal years ending on or after 

July 15, 2005. We believed that 

providing additional time for 

compliance was appropriate in light of 

both the substantial time and resources 

needed to properly implement the rules 

and to provide additional time for 

companies and their auditors to 

implement Auditing Standard No. 2, 

which set forth new standards for 

conducting an audit of internal control 

over financial reporting performed in 

conjunction with an audit of the 

financial statements.7

On March 2, 2005, we approved a 

further one-year extension of the 

compliance dates for companies that are 

not accelerated filers and for foreign 

private issuers filing annual reports on 

Form 20–F or 40–F.8 In granting this 

relief, we noted that an extension was 

warranted, in part, in view of the 

significant effort being expended by 

many foreign private issuers to begin 

complying with new International 

Financial Reporting Standards.9

In addition, we thought it was 

appropriate to provide an additional 

extension for non-accelerated filers in 

recognition of other efforts in the market 

place that might affect the 

implementation of internal control 

reporting by smaller companies. For 

example, at the request of Commission 

staff, the Committee of Sponsoring 

Organizations of the Treadway 

Commission (‘‘COSO’’) established a 

task force to provide more guidance on 

how the COSO Internal ControlIntegrated Framework (the 

Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Rules and Regulations 56827 

10Under Commission rules, a reporting company 

is required to use a suitable, recognized control 

framework that is established by a body or group 

that has followed due-process procedures, such as 

the COSO Framework, to assess the effectiveness of 

the company’s internal control over financial 

reporting. See Exchange Act Rules 13a–15(c) and 

15d–15(c) [17 CFR 240.13a–15(c) and 240.15d–

15(c)]. 

11See SEC Press Release 2004–174 (December 16, 

2004) and Release No. 33–8514 (December 16, 2004) 

[69 FR 76498]. The Advisory Committee held its 

first meeting on April 12, 2005. 

12 15 U.S.C. 78m(b)(2). 

13See Auditing Standards Board, AICPA, 

Statement on Auditing Standards No. 78, 

Consideration of Internal Control in a Financial 

Statement Audit: An Amendment to Statement on 

Auditing Standards No. 55 (1995), adopted by the 

PCAOB in Rule 3200T, Interim Auditing Standards, 

and as amended by the PCAOB on September 15, 

2004 in Conforming Amendments to PCAOB 

Interim Standards Resulting From the Adoption of 

PCAOB Auditing Standard No. 2, ‘‘An Audit of 

Internal Control Over Financial Reporting 

Performed in Conjunction With an Audit of 

Financial Statements.’’

14See Section 553(b)(3)(B) of the Administrative 

Procedure Act [5 U.S.C. 553(b)(3)(B)] (stating that 

an agency may dispense with prior notice and 

comment when it finds, for good cause, that notice 

and comment are ‘‘impracticable, unnecessary, or 

contrary to the public interest.’’). 

15See, for example, the statement of William A. 

Loving, Jr., Executive Vice President and Chief 

Executive Officer of Pendleton County Bank that he 

submitted on behalf of the Independent Community 

Bankers of America. In his statement, Mr. Loving 

indicated that his bank already has spent 

approximately $40,000 in consultancy and outside 

vendor costs, $10,000 in training and education, 

and 160 staff hours to comply with Sarbanes-Oxley 

Act requirements. It anticipated incurring an 

additional 1,600 staff hours to prepare for 

compliance with the internal control requirements. 

Mr. Loving estimated the costs of the testing alone 

to be $50,000, not including internal staffing costs 

and additional external audit costs. Mr. Loving’s 

statement is available at: http://www.sec.gov/rules/ 

other/265–23/icba060805.pdf. 

16On August 10, 2005, the Advisory Committee 

adopted a resolution recommending that the 

Commission extend the compliance dates of the 

internal control reporting requirements for 

companies that are not accelerated filers. The 

Advisory Committee is of the opinion that there is 

overall consensus and widely-held support for its 

recommendation and suggested that we implement 

it as soon as possible. See The Advisory 

Committee’s Letter to Securities and Exchange 

Commission Chairman Christopher Cox, dated 

August 18, 2005. 

17 During the first 11 months of the Commission’s 

current fiscal year which ends on September 30, 

2005, we received 2,320 notifications of late Form 

10–K filings on Form 12b–25. This represented a 

13% increase over the total number of similar 

notifications that we received during all of our 2004 

fiscal year. 

‘‘framework’’)10 can be applied to 

smaller public companies. Moreover, 

the Commission organized the Advisory 

Committee on Smaller Public 

Companies in March 2005 to examine 

the impact of the Sarbanes-Oxley Act 

and other federal securities laws on 

smaller companies.11 These efforts were 

just commencing at the time we 

approved the extension. 

Today we are again extending the 

dates for complying with our internal 

control over financial reporting 

requirements for companies, including 

foreign private issuers, that are not 

accelerated filers. The extended 

compliance period does not in any way 

alter requirements regarding internal 

control that are in effect, including, 

without limitation, Section 13(b)(2) of 

the Exchange Act 12 and the rules 

thereunder. In this regard, 

notwithstanding the deferral of the 

applicability of the specific 

requirements of our rules under Section 

404 of the Sarbanes-Oxley Act (and also, 

as a result, the deferral of the 

applicability of Auditing Standard No. 2 

of the Public Company Accounting 

Oversight Board), non-accelerated filers 

must continue to assess whether the 

company’s internal accounting controls 

are sufficient to meet applicable 

requirements under federal securities 

laws, and we would expect that officers 

with responsibility for financial 

reporting and internal control and audit 

committees (or in the absence of audit 

committees, boards of directors) would 

continue to work together in this area. 

Moreover, independent auditors of nonaccelerated filers must consider filers’

internal accounting controls in 

connection with the conduct of audits of 

financial statements in accordance with 

the standards of the Public Company 

Accounting Oversight Board.13

The Commission, for good cause, 

finds that notice and solicitation of 

comment regarding extension of the 

compliance dates is impractical, 

unnecessary and contrary to the public 

interest.14 First, comments regarding 

current requirements under Section 404, 

including comments provided at, and in 

connection with our Roundtable on 

Implementation of Internal Control 

Reporting Provisions held on April 13, 

2005, raise issues as to whether a 

broadly accepted or demonstrably 

suitable framework is currently in place 

for evaluating internal control at smaller 

public companies, including nonaccelerated filers. As stated above, the 

Commission staff has sought an 

enhanced framework for smaller public 

companies, including by calling on 

COSO to evaluate its existing framework 

and possible adjustments, modifications 

or supplemental guidance for smaller 

public companies. 

We believe that the COSO task force 

has devoted significant time and effort 

to this matter and appreciate their 

contribution in an important area. We 

also believe, however, that the task has 

proven challenging and more timeconsuming than anticipated. The COSO 

task force has indicated to the 

Commission staff that it is approaching 

the point when an exposure draft will 

be made available for public comment. 

Any conclusions are a number of 

months away. 

Second, by that time, significant work 

will have been done, and significant 

expenses incurred, by many nonaccelerated filers to comply with the 

existing requirement for their first fiscal 

year ending on or after July 15, 2006, 

unless the current compliance date is 

extended. We believe that only an 

immediate deferral of the current 

compliance date can forestall that result. 

Due to the significant costs that smaller 

companies are likely to incur to prepare 

for initial compliance with the internal 

control requirements, we think that it is 

critical to make the extension effective 

as soon as possible so that they have the 

certainty of knowing that they can rely 

on it. We believe that many smaller 

companies already have begun to 

prepare for compliance with the internal 

reporting control requirements.15

In addition, the Advisory Committee 

on Smaller Public Companies continues 

to study the internal control over 

financial reporting requirements for 

smaller public companies and is 

scheduled to complete its work by April 

2006. In the interim, the Advisory 

Committee recently has recommended 

that the Commission further extend the 

compliance date for companies that are 

not accelerated filers.16

The Commission further notes that 

many accelerated filers who became 

subject to the internal control over 

financial reporting requirements for the 

first time this year had difficulty filing 

their Form 10–K annual reports on 

time.17 Moreover, several of the 

responses that we received from 

accelerated filers in connection with our 

internal control roundtable indicated 

that many of the costs that they incurred 

in the initial year of compliance would 

not be recurring costs; they expected the 

internal control reporting process to 

become more efficient and less costly in 

subsequent years. Companies that are 

not accelerated filers may be able to 

benefit from the experiences of 

accelerated filers in the second year of 

compliance with the internal control 

reporting requirements as best practices 

emerge and increased efficiencies are 

realized. Finally, the Commission notes 

that the overwhelming majority of 

market capitalization of U.S. public 

companies is subject to our 

requirements under Section 404 

notwithstanding this deferral. On the 

basis of the foregoing, for good cause 

and because the extension will relieve a 

56828 Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Rules and Regulations 

restriction, the extension will be 

effective on September 29, 2005. 

To assist us in our ongoing 

consideration of Section 404 of the 

Sarbanes-Oxley Act in the context of 

smaller public companies, we are 

including a list of questions below to 

solicit public comment on some 

substantive issues regarding the 

application of our internal control over 

financial reporting requirements to 

these companies. We also are soliciting 

public comment on the amount of time 

and expense that companies that are not 

accelerated filers have incurred to date 

to prepare for compliance with the 

internal control reporting requirements. 

These comments will assist us in any 

future proposals regarding our rules 

under Section 404. We would expect to 

provide formal notice and an additional 

opportunity for public comment on any 

such proposals. 

In this regard, we note that the 

Advisory Committee recently also has 

solicited public input on a range of 

issues related to the current securities 

regulatory system for smaller 

companies, including the impact on 

smaller public companies of the internal 

control reporting requirements 

mandated by Section 404 of the 

Sarbanes-Oxley Act of 2002. In 

formulating any possible proposed 

revisions to the internal control 

reporting requirements that would affect 

smaller reporting companies, we intend 

to consider relevant recommendations 

made to the Commission by the 

Advisory Committee. 

Request for Comment 

• Should there be a different set of 

internal control over financial reporting 

requirements that applies to smaller 

companies than applies to larger 

companies? Would it be appropriate to 

apply a different set of substantive 

requirements to non-accelerated filers, 

or for management of non-accelerated 

filers to make a different kind of 

assessment? Why or why not? If you 

think that there should be a different set 

of requirements for companies that are 

not accelerated filers, what should those 

requirements be? What would be the 

impact of any such differences in the 

requirements on investors? 

• Would a public float threshold that 

is higher or lower than the $75 million 

threshold that we use to distinguish 

accelerated filers from non-accelerated 

filers be more appropriate for this 

purpose? If so, what should the 

threshold be and why? Would it be 

better to use a test other than public 

float for this purpose, such as annual 

revenues, number of segments or 

number of locations or operations? If so, 

why? 

• Should the independent auditor 

attestation requirements be different for 

smaller public companies? If so, how 

should the requirements differ? 

• Should the same standard for 

auditing internal control over financial 

reporting apply to auditors of all public 

companies, or should there be different 

standards based on the size of the public 

company whose internal control is 

being audited? If the latter, how should 

the standards differ? 

• How can we best assure that the 

costs of the internal control over 

financial reporting requirements 

imposed on smaller public companies 

are commensurate with the benefits? 

• We solicit comment describing the 

actions that non-accelerated filers 

already have taken to prepare for 

compliance with the internal control 

over financial reporting requirements. 

Specific time and cost estimates would 

be particularly helpful. We also would 

be interested in receiving additional 

information about the compliance 

burdens incurred this year by smaller 

accelerated filers that included internal 

control reports in their Form 10–K 

annual reports. 

Dated: September 22, 2005. 

By the Commission. 

Jonathan G. Katz, 

Secretary. 

[FR Doc. 05–19426 Filed 9–28–05; 8:45 am] 

BILLING CODE 8010–01–U 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Part 101 

[Docket Nos. 1991N–0384H and 1996P–

0500] (formerly 91N–384H and 96P–0500) 

RIN 910–AC49 

Food Labeling; Nutrient Content 

Claims, Definition of Sodium Levels for 

the Term ‘‘Healthy’’

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Final rule. 

SUMMARY: The Food and Drug 

Administration (FDA) is amending its 

regulations concerning the maximum 

sodium levels permitted for foods that 

bear the implied nutrient content claim 

‘‘healthy.’’ The agency is retaining the 

currently effective, less restrictive, 

‘‘first-tier’’ sodium level requirements 

for all food categories, including 

individual foods (480 milligrams (mg)) 

and meals and main dishes (600 mg), 

and is dropping the ‘‘second-tier’’ (more 

restrictive) sodium level requirements 

for all food categories. Based on the 

comments received about technological 

barriers to reducing sodium in 

processed foods and poor sales of 

products that meet the second-tier 

sodium level, the agency has 

determined that requiring the more 

restrictive sodium levels would likely 

inhibit the development of new 

‘‘healthy’’ food products and risk 

substantially eliminating existing 

‘‘healthy’’ products from the 

marketplace. After reviewing the 

comments and evaluating the data from 

various sources, FDA has become 

convinced that retaining the higher firsttier sodium level requirements for all 

food products bearing the term 

‘‘healthy’’ will encourage the 

manufacture of a greater number of 

products that are consistent with dietary 

guidelines for a variety of nutrients. The 

agency has also revised the regulatory 

text of the ‘‘healthy’’ regulation to 

clarify the scope and meaning of the 

regulation and to reformat the nutrient 

content requirements for ‘‘healthy’’ into 

a more readable set of tables, consistent 

with the Presidential Memorandum 

instructing that regulations be written in 

plain language. 

DATES: This final rule is effective 

September 29, 2005. 

FOR FURTHER INFORMATION CONTACT: 

Constance Henry, Center for Food Safety 

and Applied Nutrition (HFS–832), Food 

and Drug Administration, 5100 Paint 

Branch Pkwy., College Park, MD 20740, 

301–436–1450. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In the Federal Register of May 10, 

1994 (59 FR 24232), FDA published a 

final rule amending § 101.65 (21 CFR 

101.65) to define the term ‘‘healthy’’ as 

an implied nutrient content claim under 

section 403(r) of the Federal Food, Drug, 

and Cosmetic Act (the act) (21 U.S.C. 

343(r)). The 1994 final rule defined 

criteria for use of the implied nutrient 

content claim ‘‘healthy’’ and its 

derivatives (e.g., ‘‘health’’ and 

‘‘healthful’’) on individual foods, 

including raw, single-ingredient seafood 

and game meat, and on meal and main 

dish products. It also established two 

separate timeframes in which different 

criteria for sodium content would be 

effective for foods bearing a ‘‘healthy’’

claim (i.e., before January 1, 1998, and 

after January 1, 1998). 

According to the 1994 final rule, 

before January 1, 1998, individual foods