[Federal Register Volume 61, Number 86 (Thursday, May 2, 1996)]
[Proposed Rules]
[Pages 19578-19590]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10795]



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DEPARTMENT OF AGRICULTURE
9 CFR Parts 304, 308, 317, 318, 319, and 381

[Docket No. 95-032P]
RIN 0583-AB93


Elimination of Prior Approval Requirements for Establishment 
Drawings and Specifications, Equipment, and Certain Partial Quality 
Control Programs

AGENCY: Food Safety and Inspection Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Food Safety and Inspection Service (FSIS) is proposing to 
amend the Federal meat and poultry products inspection regulations by 
removing current requirements for prior approval by FSIS of 
establishment drawings, specifications, and equipment prior to their 
use in official establishments. Requirements involving the comparison 
of blueprints and specifications with actual facilities and equipment 
would end. These amendments would provide the regulated industry with 
the flexibility to design facilities and equipment in the manner they 
deem best to maintain a sanitary environment for food production. FSIS 
would continue to verify through inspection that good sanitation is 
being achieved. Similarly, FSIS is proposing to end its prior approval 
of most establishment-operated partial quality control programs, which 
are used by establishments to control certain kinds of food processing 
and product characteristics. This change would make it possible for 
establishments to develop and implement quality control programs 
without first having to receive permission from FSIS to do so. This 
action is being taken to streamline and modernize the meat and poultry 
food safety regulations, to separate the roles of Government and the 
regulated industry, to encourage innovations that will improve food 
safety, and to remove unnecessary regulatory burdens on inspected meat 
and poultry establishments. In addition, the proposal represents an 
important shift away from FSIS's ``command-and-control'' regulatory 
approach and toward a less bureaucratic approach consistent with the 
Agency's food safety mission.

DATES: Comments must be received on or before: July 1, 1996.

ADDRESSES: Please send an original and two copies of comments on this 
proposed rule to FSIS Docket Clerk, DOCKET #93-032P, Room 4352 South 
Agriculture Building, Washington, DC 20250-3700. Oral comments, as 
provided under the Poultry Products Inspection Act, should be directed 
to the person listed under FOR FURTHER INFORMATION CONTACT. Copies of 
FSIS reference materials cited in this proposal are available for 
review in the FSIS docket room.

FOR FURTHER INFORMATION CONTACT: Ms. Patricia F. Stolfa, Acting Deputy 
Administrator, Science and Technology, FSIS, Room 402 Annex Building, 
Washington, DC 20250-3700; (202) 205-0699.

SUPPLEMENTARY INFORMATION:

Background

    The Federal Meat Inspection Act (FMIA) (21 U.S.C. 601 et seq.), and 
the Poultry Products Inspection Act (PPIA) (21 U.S.C. 451 et seq.) 
direct the Secretary of Agriculture to maintain inspection programs 
designed to assure the public that meat and meat food products (meat 
products) and poultry and poultry products (poultry products) are safe, 
wholesome, not adulterated, and properly marked, labeled, and packaged. 
FSIS carries out the mandates of these statutes by administering a 
continuous in-establishment inspection program for meat and poultry 
products that are shipped in interstate and foreign commerce or in 
``designated'' States. A number of the States operate meat and poultry 
inspection programs for product shipped intrastate. Under the FMIA and 
PPIA, such programs must impose requirements ``at least equal'' to the 
Federal requirements.
    The FMIA and PPIA require the Secretary to provide, among other 
things, for the inspection of establishments to assure that the 
conditions under which meat and poultry products are produced are 
sanitary. The Acts also require the Secretary to prescribe rules and 
regulations governing the sanitary conditions of official 
establishments (21 U.S.C. 608 and 456). Pursuant to these provisions, 
the meat and poultry inspection regulations currently prescribe ``prior 
approval'' or approval-before-use by FSIS of facility drawings and 
specifications and of equipment used in official establishments. The 
regulations also provide for the prior approval of certain quality 
control programs, known as partial quality control (PQC) programs, 
before their use by official establishments.

Current Prior Approval Procedures

    Currently, applicants seeking Federal inspection must submit to 
FSIS blueprints and drawings with specifications that exactly 
illustrate the applicant's establishment as it exists or is proposed to 
exist (9 CFR 304.2(a), 308.2, and 381.19). Before inspection is 
granted, FSIS officials in the field and in Washington, D.C., review 
the blueprints and drawings and the facility they represent to 
determine whether the facility meets the requirements of the meat and 
poultry inspection regulations, which are intended to ensure that 
products can be produced in a sanitary environment. Owners or operators 
of establishments intending to add structures or remodel their existing 
facility must also submit blueprints and drawings with specifications 
to FSIS for review before beginning any new construction (9 CFR 404.2, 
308.2, and 381.19). During FY 1994, FSIS technical personnel reviewed 
about 2,900 sets of blueprints for new or modified facilities.
    Federally inspected establishments or equipment manufacturers must 
go through a similar process of prior submission for review and 
approval of most equipment used in preparing or handling edible meat 
and poultry products or ingredients (9 CFR 308.5 and 381.53). FSIS 
requires that establishment owners or operators wishing to use new 
equipment submit any information FSIS needs to review new equipment, 
including assembly-type drawings and a list showing the materials of 
which parts are made. The primary objectives of the FSIS review are to 
determine whether the equipment can be readily cleaned and inspected 
for its sanitary condition. In some instances, FSIS also requires that 
the equipment be used on a trial basis before approval is granted (9 
CFR 308.5(d) and 381.53(a)(4)). FSIS technical personnel review more 
than 2,500 submissions of equipment specifications each year, and 
approximately 650 pieces of new equipment require a trial installation 
before being accepted for use.

[[Page 19579]]

    Also, prior-approval procedures exist for numerous establishment-
operated partial quality control programs. This means that companies 
must come to FSIS for permission before they can initiate or modify 
processes or controls intended to ensure that products have desired 
characteristics and that processes are stable.
    The prior-approval process is a feature of FSIS's traditional 
``command-and-control'' regulatory approach. While prior approval 
provides assurance that equipment, facilities, or processes, as 
designed, meet certain requirements that are intended to assure food 
safety or quality, they reflect the emphasis of the current system on 
closely observing the means by which establishments maintain sanitation 
and produce safe food. This feature of the current system is an 
inappropriate allocation of responsibility between the Agency and 
establishments. It is an obstacle and too often a deterrent to 
innovation by establishments seeking to improve operations, and 
contributes to unproductive use of FSIS resources both in managing the 
approval system and policing establishment compliance with approved 
facility and equipment specifications.
    In addition, elimination of prior-approval requirements is 
consistent with the principles articulated in FSIS's February 3, 1995, 
Pathogen Reduction/Hazard Analysis and Critical Control Points (HACCP) 
proposal (60 FR 6774). HACCP and the FSIS food safety strategy are 
based on the principle that sanitary measures and science-based 
preventive process controls should be built into the food production 
system to reduce or eliminate food safety hazards. Establishment 
management should be responsible for designing and implementing such 
process controls, as well as for developing and maintaining standard 
operating procedures (SOP's) for its sanitation programs. However, the 
current system imposed by FSIS inappropriately allocates responsibility 
between the Agency and the industry and impedes the ability of 
establishment management to implement innovative food safety 
strategies. Establishments conducting their own hazard analyses and 
developing the HACCP plans to meet FSIS's food safety objectives will 
determine whether facility layouts, equipment operating 
characteristics, and other technical components of the manufacturing 
process will result in products that meet required standards.
    FSIS's reliance on prior approvals also contrasts with both the 
practices of the remainder of the food industry as regulated by the 
U.S. Food and Drug Administration and the practices of a significant 
number of countries that have meat and poultry inspection systems that 
provide a level of food safety assurance equivalent to that of the 
United States. With the single exception of Canada, whose meat and 
poultry regulatory system is intertwined with that of the United 
States, none of these other countries relies on prior-approval systems 
to ensure that equipment does not adulterate product.

Anticipated Changes in Inspection

    The elimination of the prior approval systems proposed here would 
change the manner in which FSIS conducts certain aspects of its 
inspection. Under the current prior approval system, FSIS focuses 
substantial attention on identifying specific design-related conditions 
affecting food safety, which should be the responsibility of the 
establishment. For example, FSIS not only performs prior approval of 
facility blueprints and equipment, but also inspection tasks to verify 
that the facility as constructed conforms to the blueprint and that 
equipment meets approved design specifications. This reflects the fact 
that the FSIS regulatory system has, in effect, taken responsibility 
for these matters. Similarly, many establishments currently lack a 
written sanitation plan and do not systematically ensure daily 
maintenance of good sanitation. In order to compensate for this lack, 
FSIS inspectors focus considerable attention on sanitation conditions 
and practices that are more appropriately the establishment's 
responsibility.
    Under this proposal, FSIS would no longer control through prior 
approval the design specifications for buildings and equipment. 
Instead, FSIS would focus its regulatory and inspectional attention on 
determining whether an establishment is successfully meeting sanitation 
standards. Establishments would ensure that the design of buildings and 
equipment is appropriate for sanitary food production and for 
maintaining good sanitary conditions in accordance with broad 
sanitation principles. In addition, the FSIS proposal to require 
establishments to adopt sanitation SOP's of their own design, requires 
establishments to identify the elements of good sanitation required to 
prevent direct product contamination, carry out the SOP's on a daily 
basis, and achieve acceptable sanitation results. Concurrent with this 
action, FSIS inspection activities under SOP's and HACCP would be 
restructured to focus not on the building or equipment design, or on 
FSIS approval status, but on whether good sanitation is, in fact, being 
maintained.
    In concert with this proposal, FSIS would review and revise its 
existing regulations and guidelines to avoid real or de facto 
prescriptions that are inconsistent with the approach outlined here. 
This review is underway and public comments on this process were 
invited in an advance notice of proposed rulemaking, the ``FSIS Agenda 
for Change,'' published in the December 29, 1995, issue of the Federal 
Register (60 FR 67469).

Prior-Approval Requirements To Be Eliminated

A. Establishment Facilities

    The demand for Federal inspection of sanitary conditions of 
slaughterhouses was one of the principal concerns leading to enactment 
of the 1906 Meat Inspection Act. Leading experts of the day in the 
field of meat inspection advocated the approval of slaughterhouse plans 
by qualified veterinary inspectors. Facilities for slaughtering, 
dressing, and meat preparation that were properly designed and built 
with sound materials that could be effectively cleaned and not 
contaminate product were considered essential to help prevent the 
spread of disease and protect the health and safety of the animal and 
human populations. While the Meat Inspection Act itself did not mandate 
prior approval of drawings as a condition of inspection, early 
regulations issued under that law required the submission to the Agency 
of plans for new and remodeled establishments for review and approval 
before inspection could be granted.
    The FMIA, the current law governing meat inspection, continues with 
slight modification the provision in the original meat act assigning to 
USDA the responsibility for regulating the sanitary conditions of 
inspected establishments (see 21 U.S.C. 608). The PPIA contains similar 
provisions, but neither of the Acts mandates prior approval of 
establishment blueprints.
    As a means of assuring sanitary conditions in inspected 
establishments, the meat and poultry inspection regulations require 
that applicants for inspection submit to FSIS the drawings and 
specifications of establishments where inspected operations are to be 
conducted for review and approval (9 CFR 304.2, 381.19). The 
regulations also require that drawings reflecting any remodeling be 
submitted in advance of construction (Secs. 308.2 and 381.18), and 
prescribe specifications for facilities of inspected establishments (at 
Secs. 307, 308, and 381, subparts G and H). This procedure was required 
to help avoid costly changes in construction in the

[[Page 19580]]

event that FSIS determined facilities could create insanitary 
conditions that could lead to food adulteration.
    To comply with the prior-approval regulations, the applicant 
completes a request form and provides a blueprint with specifications 
to the FSIS inspector-in-charge. The blueprint and specifications are 
then reviewed by the inspection circuit supervisor, the first level of 
supervision outside inspected establishments, and sent directly to FSIS 
headquarters in Washington, D.C. FSIS's area office--the second level 
of supervision in the field organizational structure, which stands 
between the circuit supervisors and the five Regional Offices--may also 
review plans referred to it by the circuit supervisor before sending 
them on to FSIS headquarters. In Washington, FSIS's facilities branch 
reviews the information and decides whether to approve or reject the 
drawings and specifications, seek further information, or return the 
materials to the applicant. When changes are made in the facilities of 
an establishment, the changes must be reflected in revised blueprints 
for the establishment. The remodeled facilities are then reviewed by 
the FSIS inspector-in-charge and the circuit supervisor to assure 
compliance with the approved blueprints and that there will be no 
product adulteration.
    Currently, about 2,900 blueprints (both from new applicants and 
from establishments remodeling their facilities) are reviewed each 
fiscal year. About 38% of the submissions, or about 1,100 sets, are 
rejected due to various deficiencies. Most rejections result from 
errors in paperwork rather than design flaws that will compromise food 
safety. The Agency works with the submitting establishments to see that 
the deficiencies are corrected. Under prior approval, establishments 
are urged to delay construction until drawings and specifications have 
been approved, in order to avoid costly changes in construction or 
remodeling.
    Experience has shown that FSIS prior approvals are of limited value 
in assuring good sanitation, because they are limited in both scope--
dealing only with establishment facilities as presented in drawings--
and time--they are given once, on the condition that establishments 
will maintain a sanitary operating environment after their facilities 
are approved. Ultimately, the establishments' implementation of good 
sanitation operating procedures on a continuing basis is more critical 
than the actual design of a facility. Also, with the elimination of 
prior approval requirements, production time that previously was lost 
in obtaining FSIS approval of blueprints and specifications would 
become available to the industry.
    Under the proposal, establishments would continue to be expected to 
establish and maintain a sanitary environment for slaughtering and 
processing by adhering to the general principles and requirements for 
lighting, ventilation, drainage, plumbing, toilets, and condensation 
found in Secs. 308.3(a)-(c), 308.4, 308.7, 308.8 (a) and (b), 381.46, 
and 381.47 of the meat and poultry inspection regulations.
    All official establishments (about 6,200 establishments), would be 
affected by the proposal, except food irradiation facilities. There is 
no requirement for prior approval of blueprints for food irradiation 
facilities, because only prepackaged product is permitted to be 
irradiated under current regulations.
    Although FSIS's prior-approval procedures for drawings and 
specifications would change under the proposal, its sanitation 
standards would not. Establishments would be responsible for ensuring 
that the design of facilities creates a sanitary environment and that 
such an environment can be and is maintained. If field inspectors 
carrying out their routine inspection tasks found product to be 
adulterated or prepared, packed, or held under insanitary conditions 
whereby it may have been contaminated with filth or may have been 
rendered injurious to health because of deficient facilities, all 
product subject to such conditions would be either retained and 
reworked or condemned, and the establishment would be required to take 
corrective action or cease operations. As under current regulations, 
such corrective action, which might involve repair or reconstruction of 
facilities, would be triggered only by an actual finding of product 
adulteration or insanitary conditions. Such a finding would constitute 
evidence of deviation from regulatory standards. Therefore, FSIS is 
proposing to remove the current requirements for prior approval of 
facility drawings and specifications. Requirements at 9 CFR 304.2(a), 
308.2, and 381.19(a)-(f) for submission of blueprints and drawings 
before inspection can be granted or changes made in facilities at 
official establishments would be eliminated. Establishments would 
initiate and complete construction without prior approval by FSIS.
    Although there would no longer be a requirement for an 
establishment to submit facility drawings and specifications in 
applying for a grant of Federal inspection, FSIS would continue to have 
a specific process through which the decision on granting inspection 
would be made. This process would still include an on-site review, or 
``walk-through,'' of the establishment's facilities by the FSIS circuit 
supervisor as part of the predecisional review of the establishment's 
capability to produce ``complying'' product. However, the 
decisionmaking process would no longer include the review and prior 
approval of establishment facility blueprints and specifications by the 
Agency. The on-site review would not involve matching items on the 
blueprints with the actual facilities represented. Instead, the focus 
of the review would be on the extent to which the establishment is able 
to maintain a sanitary environment for food production. This change 
would be intended to parallel other changes in establishment-inspector 
relationships that FSIS is contemplating in its reinvention of meat and 
poultry inspection.
    If this proposal is adopted, FSIS would plan to:
    (1) maintain a small number of personnel who would assist 
inspectors in performing in their in-plant roles. These roles would 
eventually include the monitoring of establishment-operated sanitation 
SOP's and HACCP systems;
    (2) provide general guidance regarding establishment layout and 
design to assist establishments in meeting food safety standards; and,
    (3) publish one final edition of Agriculture Handbook 570, ``U.S. 
Inspected Meat and Poultry Packing Establishments: A Guide to 
Construction and Layout'', <SUP>1 and make it available to industry as 
a guidebook to construction of facilities. Handbook 570, an FSIS 
reference guide (not a set of regulatory requirements per se), is 
provided to assist industry, architects, and inspectors.
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    \1\ A copy of Agriculture Handbook 570 is on file for review in 
the FSIS Docket Clerk's office, 4352 South Agriculture Building, 
Washington DC, 20250.
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    A small staff in Washington would maintain FSIS's technical 
expertise and capability in this important aspect of food science and 
technology. This staff would be responsible for keeping abreast of 
developments in the field and updating FSIS's new, HACCP-oriented 
guidelines and communicating technical information to Agency personnel. 
The Agency will not approve industry decisions in these areas.
    In addition, implementation of the proposed Pathogen Reduction/
HACCP rule's sanitation standard operating procedures, would render 
prior-approval procedures unnecessary.

[[Page 19581]]

Establishment-operated sanitation procedures and HACCP systems would 
accomplish, without prior approval, the same objectives as the FSIS 
prior approvals. Thus, under HACCP-based inspection, the FSIS prior 
approvals could no longer be considered an efficient and cost-effective 
way to achieve sanitation objectives.

B. Equipment Approval

    As in the case of the facilities regulations, the regulations 
governing equipment (9 CFR 308.5, 381.53) were promulgated with a view 
to having the Agency assure sanitation in slaughtering, dressing, and 
processing operations. Requirements for sanitary equipment and utensils 
have been in force since the 1906 Meat Inspection Act. However, unlike 
prior approval of facility blueprints and drawings, the approval of 
types of equipment prior to use has not always been a requirement.
    Under regulations that have been in force since 1975 (9 CFR 308.5, 
and 381.53), the FSIS Equipment Branch formally evaluates equipment and 
utensils proposed by manufacturers or suppliers before they can be used 
in official establishments to assure they can be maintained in a 
sanitary condition. The program focuses on identifying and correcting 
problems during the initial development of equipment, instead of 
resolving problems after equipment is put into widespread use.
    FSIS's acceptance of new, modified, or reconditioned equipment for 
use in federally inspected meat and poultry establishments is a two-
step process. First, FSIS Equipment Branch personnel evaluate the 
design and construction of equipment by reviewing assembly-type 
drawings and corresponding parts and material lists submitted to the 
Branch by the equipment manufacturer. Then, if necessary, FSIS 
inspectors review the in-establishment operation of the equipment and 
report their findings to the Equipment Branch. Commercially available 
equipment is accepted and listed in an FSIS reference guide, ``Accepted 
Meat and Poultry Equipment,'' \1\ known as the FSIS Equipment Book. 
Once equipment is listed in this reference as acceptable, no further 
approval is needed on an establishment-by-establishment basis. Certain 
categories of equipment, such as simple tools and cleaning equipment, 
are exempt from prior approval. Among the types of equipment that are 
evaluated through FSIS's prior-approval procedure are clean-in-place 
systems, piping used with establishment machinery, automatic 
eviscerators, heat exchangers, smokehouses and ovens, air compressors, 
and water recycling equipment.
    FSIS processes about 2,500 equipment applications, rejections, and 
acceptances each year. About 200 equipment applications are rejected on 
first review for lack of sufficient information. About 650 acceptance 
decisions are based on the results of in-plant trials. About 18 
equipment applications are rejected after in-plant trials reveal 
deficiencies.
    The principal cost of the prior-approval process to the private 
sector is considered to be that resulting from lost or delayed 
equipment sales caused by delay in obtaining approval. This cost falls 
mainly on equipment sellers and manufacturers and can be considerable 
if the introduction of promising new technology is delayed. The 
productivity of meat and poultry establishments could also be adversely 
affected by delays in approving efficient new equipment.
    Furthermore, FSIS's one-time approval does not address daily 
operational issues such as proper maintenance and adjustment of 
equipment to prevent product contamination. Such issues are covered by 
the requirement that equipment and utensils be of such material and 
construction that they can be easily cleaned to prevent product 
adulteration (9 CFR 308.5, 381 subpart H), as well as by other general 
requirements, independently of any prior approval.
    The prior-approval review for equipment may sometimes involve the 
evaluation of machinery, including scientific instrumentation, that 
will not itself have contact with a food product or have other direct 
effects on health or safety, but that may be part of an innovative 
approach to food processing or product safety. The Agency's review may 
delay testing or introduction of the innovation by weeks or months. The 
delay can be costly to a company in a highly competitive environment.
    FSIS is therefore proposing to eliminate the requirement at 9 CFR 
308.5 and 381.53 for prior evaluation and approval of equipment and 
utensils used in official meat and poultry establishments. The general 
principles and requirements for such equipment and utensils provided at 
9 CFR 308.5(a) and 381.53(a) would be preserved.
    Under this proposal, equipment and utensils would still have to be 
constructed so as to facilitate thorough cleaning and operational 
cleanliness and not adulterate edible product. Also, they would still 
have to be constructed, maintained, and used in a manner that does not 
interfere with inspection.
    However, FSIS would no longer conduct its acceptance program before 
equipment could be used in an official establishment. Establishments 
would be able to use equipment based on their own evaluation of their 
ability to utilize the equipment in a sanitary way. The general 
requirements for equipment already in the regulations (9 CFR 308.5 and 
381.53) would not change. In its inspection activities, FSIS would 
continue to judge establishment equipment by those same general 
standards. Equipment must be cleanable, it must be capable of being 
disassembled and inspected, and it must not interfere with inspection 
or adulterate product. FSIS inspectors would continue to reject 
equipment they find posing a sanitary hazard.
    For calendar year 1996, the Agency will separate the general 
guidance material from its list of approved equipment and publish the 
guidance material separately. The final edition of the equipment list, 
which FSIS published in 1995, is available to current subscribers and 
to anyone who requests a copy before the effective date of the final 
rule.
    Operational procedures and appropriate sanitation process controls 
would be developed by the inspected establishment. In this area, as in 
facilities, official establishments would be required to meet the 
general requirements prescribed in the regulations, but would be 
allowed the flexibility to determine the specific steps to be taken to 
comply with those requirements. The sanitation SOP's proposed for 
official establishments in FSIS's Pathogen Reduction/HACCP proposal 
would provide plans for applying the general principles for maintaining 
sanitary conditions to specific establishment situations. The 
establishment would also be required to maintain any controls 
appropriate to the HACCP plans for the establishment's products (e.g., 
raw beef), such as making sure the facilities and equipment (structures 
and machinery for evisceration) are designed, built, and operated so 
that any necessary action (sanitary dressing procedures) can be taken 
at critical control points in the HACCP plan.
    The equipment prior-approval process proposed here for elimination 
is to be distinguished from the program, announced by FSIS last year, 
for reviewing experimentation with new technologies (``Guidelines for 
Preparing and Submitting Experimental Protocols for In-Plant Trials of 
New Technologies and Procedures; 60 FR 27714; May 25, 1995) under 
commercial conditions. The purpose of the new program is to

[[Page 19582]]

encourage the adoption by industry of innovative technologies that will 
help reduce the risk of foodborne disease. The Agency has established 
procedures (see FSIS Directive 10,700.1) for reviewing protocols for 
experimentation with new technologies in official establishments if 
there is a possibility the experimentation could adversely affect 
product, environmental, or worker safety, or interfere with inspection.
    For example, in experiments involving the artificial contamination 
of carcasses with fecal matter to test the effectiveness of a carcass 
cleaning process, any products from these carcasses must be removed 
from commercial channels or reconditioned to be wholesome or fit for 
sale. Protocols for experiments involving the use of materials that 
could pollute the environment or affect worker safety must include 
appropriate regulatory citations or be accompanied by written approval 
of the Environmental Protection Agency or the Occupational Safety and 
Health Administration. Although new technologies can be expected to 
include the use of equipment, the FSIS review program is primarily 
intended to enable the experimentation to proceed rather than to 
approve the equipment used.

Further Regulatory Reform

    As stated in FSIS Docket #95-008A, ``FSIS Agenda for Change; 
Regulatory Review'' (60 FR 67469; December 29, 1995), FSIS is reviewing 
all of its regulations, policies, and inspection procedures, including 
those concerning establishment sanitation (as presented in handbooks, 
notices, directives, etc.). Although implementation of FSIS's proposal 
for sanitation SOP's would not depend on revisions to the Agency's 
sanitation regulations, because this is an area where inspectors have 
traditionally exercised discretion and provided direct oversight and 
direction to establishments, the Agency recognizes the need to more 
clearly state its performance standards in this area. The Agency 
believes that the regulations can be made much clearer in describing 
the establishments' responsibilities, that doing so will relieve 
inspectors of much of the routine work they do that should be done by 
establishment employees, and that inspection resources can then be 
freed up and reapplied in performing new, HACCP-related food safety 
functions.

C. Partial Quality Control Programs

    Quality control, in general, is a planned, documented system of 
activities intended to assure the stability of processes and uniformity 
of products. Quality control programs are based on the assumption that 
there is normal variation in any process and that the process is under 
control if that variation is not exceeded. Quality control is used in 
manufacturing to assure that components and products from ball bearings 
to microcomputer circuits, which are made in huge quantities, will all 
have the same desired characteristics. In the food industry, quality 
control systems are used in processing operations to make sure that 
each product produced, from TV dinners to hotdogs, will be exactly the 
same--will have the same content, flavor, color, texture, and so forth, 
no matter how many thousands are made in a production run.
    In applications relevant to food safety, quality control programs 
can be used to maintain normal process variation around a standard, 
such as a time-temperature standard for cooked beef or a moisture-
protein ratio for dry sausage. If the expected variation is exceeded, 
corrective action must be taken to restore process stability and ensure 
food safety.
    Under current FSIS regulations, a company may choose to place all 
of the processes and products in an establishment under a comprehensive 
quality control system. Such a system, known as total quality control 
(TQC), integrates an establishment's quality development, maintenance, 
and improvement efforts to enable engineering, production, marketing, 
and service to take place at the most efficient levels that meet 
consumer expectations. A quality control system for only one process or 
product in an establishment is known as a partial quality control 
system (PQC). The quality control systems are, in a sense, precursors 
of the HACCP system FSIS envisions in that they are establishment-
operated process control systems.
    In 1980, FSIS promulgated regulations establishing procedures for 
meat and poultry establishments to follow in obtaining Agency approval 
of their voluntary TQC and PQC systems. FSIS approved several thousand 
PQC programs during the 1980's. Since 1990, FSIS has approved an 
additional 4,000 PQC programs and more than 3,000 amendments to those 
programs. There are now more than 8,200 approved PQC programs.
    An approved quality control program is typically a voluntary 
activity in which an establishment is allowed to establish its own 
control procedures (provided these conform with the regulations). 
Approved PQC programs have provided FSIS with a tool or method for 
maintaining assurances that label claims, composition declarations, and 
many other standards are met, and that food products are safe. They 
also allow FSIS to regulate processes for which specific criteria have 
not been prescribed by the regulations. Verification inspection of the 
PQC programs enables FSIS to determine whether or not the programs are 
functioning. If they are shown to be malfunctioning, the establishment 
takes corrective action.
    There are several types of FSIS-approved PQC programs; most are 
voluntary, some are mandatory. Voluntary PQC's generally fit into two 
broad categories. The first type includes those that need not be used 
to produce a product. For example, an approved PQC program for 
controlling the percentage of fat and water in a product is not 
necessary for an establishment to be allowed to make hotdogs. The 
establishment could produce the product without the PQC program. 
However, the PQC program helps assure that the establishment produces 
the hotdog and other products in accordance with the regulatory 
standards. Without a PQC program, an establishment runs a higher risk 
of producing noncompliant product subject to retention by the FSIS 
inspector.
    The second type of voluntary PQC includes product labeling-related 
programs intended to ensure production of a product that is in 
compliance with a compositional requirement. For example, some PQC's 
are designed to meet the requirements of vignette labeling (labeling 
that shows an image of the food product either as it is in the 
container or as served, such as labeling that shows a specific number 
of meatballs in or pepperoni slices on a product); other PQC's are 
designed to comply with product composition requirements that must be 
met if certain labeling is used (such as the protein-fat-free 
requirement for a product labeled ``ham, water added'').
    There are also mandatory PQC programs. Some are compulsory for 
certain types of food processing or are required to produce certain 
products; others are required for an establishment to operate under a 
certain inspection system. For example, the PQC for on-line carcass 
quality control is a mandatory component of the New Line Speeds (NELS) 
poultry inspection system. FSIS also requires approved PQC programs for 
the testing of new or not-previously-approved antimicrobial treatments 
in slaughtering establishments (to monitor equipment and process 
controls for experimental design and safety reasons); for product

[[Page 19583]]

identification and control during slaughter, dressing, and processing 
to support labeling statements; and for monitoring chlorine 
concentrations in product intended for export to Canada.
    There are also PQC programs to control products for so-called 
economic factors. These programs are intended to prevent the marketing 
of products that are misbranded or that lack the quality or value that 
the product standard imposes. These economic PQC's are intended to 
serve two main purposes: (1) to take the place of lot inspection of 
product (the sampling and testing of a shift's production for certain 
characteristics) by the FSIS inspector; and (2) to assure that products 
meet requirements associated with their labeling.
    Establishments operating the first type of economic PQC generate 
data that are subject to random verification by the FSIS inspector. 
Examples of these include programs for net weight, fat and water in 
frankfurters, and boneless meat (mainly for aesthetic defects). An 
establishment operating under a PQC for net weight keeps records of its 
checks and corrective actions to avoid lot inspection. Under PQC's for 
fat and water in frankfurters, establishments keep ingredient records 
by lot and results of laboratory tests for random verification by FSIS 
inspectors. An establishment operating a PQC for boneless meat 
inspections does its own on-line inspections and keeps records. The 
FSIS inspector randomly selects samples of product the establishment 
has already inspected to assure that the establishment's records are 
accurate.
    Examples of the second kind of economic PQC include those for 
controlling the amount of added ingredients in corned beef, the amount 
of basting or marinating solutions in certain poultry products, and the 
truthfulness or accuracy of certain label claims. The PQC programs for 
basting or marinating solutions in certain poultry products assure that 
the amount of added solution in such products does not exceed the 
standards set forth in 9 CFR 381.169. The establishment accomplishes 
the objective of these programs by controlling the pumping procedure at 
the time of product formulation.
    The PQC program for an establishment making a product bearing a 
label claim that only sirloin cuts have been used in the meat portion 
of the product must include an approved procedure with records for 
assuring the veracity of the claim. The PQC's for vignette labeling 
assure that product characteristics conform with the graphic display on 
the product label, in accordance with 9 CFR 317.8(a) and 381.121. If a 
product label shows four meat balls, the PQC for the product would have 
to document that each package contains four meat balls. The programs 
are carried out through in-plant sampling and visual inspection, with 
verification checks by FSIS inspectors.
    Although about 70 percent of PQC's are intended to support labeling 
claims, not all have this purpose. Some support alternative processing 
procedures that have become so routine that very specific guidelines 
are followed in preparing the PQC program. FSIS has developed 64 
guidelines detailing the essential elements of the most commonly used 
PQC programs. Many of these are procedures that substitute for more 
direct controls on economic or quality features of products such as 
declared count, vignette labeling, or the ``popping'' of pork rinds. 
These are not connected with food safety.
    Under the current system, no matter how routine the preparation, 
review, and subsequent approval of the PQC program, each must be 
submitted to either the Washington office or a Regional Office and be 
stamped ``approved.'' FSIS has assigned 11 staff-years to the review 
and approval of establishment PQC programs. Approximately 1,800 quality 
control programs and amendments are handled each year by the Regional 
Offices; approximately 50 programs for complex processes or requiring 
specialized knowledge (such as programs for thermal processing) are 
approved each year by the Washington office. The purpose of the review 
is to assure that the programs contain all the necessary elements of a 
quality control program and are appropriate for their intended purpose. 
The programs must describe the product and process for which they are 
intended, and the materials to be used. They must identify any hazards, 
define process deviations, indicate the control points to be monitored, 
and procedures for checking processes. They must also state the methods 
for gathering data and determining results, and the corrective actions 
to be taken if process deviations are found. Finally, the programs must 
bear the names and locations of responsible establishment quality 
control officials and authorized USDA employees must have access to 
records generated by the programs. The time for a PQC prior approval to 
be obtained is typically 2 weeks.
    FSIS considers this administrative burden on the industry and the 
Agency to be unnecessary to achieve food safety or nonadulteration 
objectives. Under HACCP-based inspection, establishments would assume 
responsibility for developing process control procedures in advance 
without having to depend on Agency approval for every step in their 
procedures. FSIS would evaluate or verify the effectiveness of the 
procedures through normal inspection operations and take action when 
necessary to prevent product adulteration.
    By relying on general requirements for the design of all PQC 
programs, but not requiring prior approval of such programs, FSIS could 
use its resources (staff-years) more efficiently and effectively than 
it does now in its PQC prior-approval activities. This approach would 
also provide establishments with ample flexibility to develop their own 
process control techniques.
    For these reasons, FSIS is proposing to eliminate the requirements 
at 9 CFR 318.4(d) and 381.145(d) for prior approval of PQC programs. 
Prior approval of most voluntary or ``economic'' PQC programs would be 
discontinued and an unnecessary regulatory burden would thus be lifted. 
However, the current requirements governing the content of PQC programs 
would remain (Secs. 318.4(d)(2)(i) and 381.145(d)(2)(i)), as would 
existing mandatory-PQC requirements. Prior approval of PQC programs 
would be eliminated for all but a few of the mandatory PQC programs, 
such as those required for certain slaughter inspection systems, or 
those requiring special expertise, such as PQC's for thermal processing 
or other complex processing. The Agency, however, is planning to change 
these areas of its regulations to eliminate prior reviews and make them 
compatible with HACCP. This proposal would eliminate at least 90 
percent of the approximately 1,900 PQC submissions made to FSIS each 
year. Cross-references to the existing prior-approval requirement would 
also be eliminated (in 9 CFR 318.7(b)(3), 318.7(c)(4), 317.21, 318.19, 
318.309, 319.5, 319.104, 381.121d, and 381.309).
    In addition, the regulations would be revised to provide (in 9 CFR 
318.4(d)(2)(ii) and 381.145(d)(2)(ii)) for the design of PQC programs 
to assure, with at least 85 percent statistical confidence, that the 
lot or process means do not exceed the product or label limits to which 
the PQC programs apply. This requirement, which is already observed in 
the design of FSIS-approved PQC programs now in use, would also provide 
for control of individual sublot samples to within plus-or-minus 3 
standard errors (standard deviations of the sampling distribution) of 
the process mean. At least 3 sublot samples representing a

[[Page 19584]]

production lot would have to be drawn for each lot of product subject 
to the PQC program. Further, each sublot sample would have to contain 
at least 5 samples representing the sublot. No individual sample mean 
or sublot-sample mean could be more than 3 standard errors above or 
below the process mean. (A lot is ordinarily a shift's production, but 
may be defined differently by different establishments. A sublot is a 
fraction of a lot, and may represent an hour's production, or a 
quarter-hour's production, or other portion of a production lot from 
which quality control samples may be drawn.)
    For example, a PQC program prepared according to the FSIS guideline 
for the injection of corned beef labeled as having 30-percent added 
solution would be designed to assure with greater than 85 percent 
confidence that the 30-percent limit is not exceeded. In other words, 
the lot average must not be above this limit. A batch, a portion of the 
lot, must not be more than 1.2 percent above the declared value on the 
label. Samples drawn from individual batches of the production lot 
would have to show that the 3-standard-errors limit (in this example, 
1.2 percent, or 31.2 percent added solution) is not exceeded.
    PQC programs thus designed would provide process control, and hence 
a degree of food safety or food nonadulteration assurance, that is 
comparable to that provided currently by PQC programs individually 
approved by FSIS. Official establishments would have a less 
prescriptive set of conditions to meet in designing and implementing 
their PQC programs, and more latitude for innovation. Because the 
unnecessary regulatory burden of prior approval would no longer exist, 
establishments would be able to implement their programs sooner than 
the current prior-approval process allows.
    Establishments would be required to comply with the requirements in 
proposed 9 CFR 318.4(d)(2)(ii) and 381.145(d)(2)(ii) in designing their 
PQC programs. Prior approval would still be required for quality 
control programs and systems referred to elsewhere in the regulations 
(e.g., 9 CFR 318.4 (c), (e), (f), and (h); and 381.145 (c), (e), (f), 
and (h)), including those associated with, and required for, such 
slaughter inspection systems as the NELS and the NTIS (9 CFR 
381.76(c)). Proposals addressing these programs and systems will be 
published in the near future. This proposed rule would amend paragraphs 
9 CFR 318.4(e) and 381.145(e) to delete references to prior approval 
requirements for PQC programs.
    Proposed 9 CFR 318.4(d)(1) and 381.145(d)(1) would retain the 
current requirement for official establishments with PQC's to make the 
programs and data and information generated by them available to FSIS 
inspectors. Formal notification would not be required because 
establishment operators typically notify FSIS personnel of the products 
and processes operated under establishment-operated PQC programs during 
their regular interactions with FSIS personnel. Establishment operators 
recognize the advantage of making their quality control programs and 
data available to FSIS. FSIS personnel who have not been advised that a 
product is being produced under a PQC program would perform traditional 
lot inspection procedures, rather than quality control evaluation and 
verification tasks. The results of lot inspection may differ 
technically from those obtained under a PQC inspection. A product lot 
could be subject to retention even though the process for the product 
is under control, requiring no corrective action to restore controls.
    FSIS, therefore, is not proposing to terminate the use of PQC's as 
a mechanism for organizing the collection and review of data which 
document outcomes. FSIS is, however, proposing to end its role as the 
approver of paperwork describing data collection to support alternative 
processing procedures.
    Establishments operating under approved PQC programs would continue 
to keep the programs on file and available for use by FSIS employees. 
FSIS would adjust verification inspection tasks to reflect an approach 
that is appropriate to the process control procedure being used by the 
establishment.
    It is likely that establishments will find the continued use of PQC 
programs to be advantageous under the inspection system envisioned by 
the Agency in its ``Pathogen Reduction/HACCP'' proposal. Although most 
PQC programs currently used by inspected establishments control 
products and processes for economic factors, e.g., fat and moisture 
content or the amount of marinating solution a product can absorb, 
there are some that have public health implications. Such PQC programs 
would be compatible with establishment-operated HACCP plans and 
establishments would continue to use them under HACCP-oriented 
inspection. Moreover, because establishments operating HACCP plans 
would be concerned about maintaining stability in all their processes, 
they would be likely to continue many of their economic PQC's or 
develop new ones. But they would no longer need prior approval from 
FSIS before implementing them.
    FSIS considers relief from the prior-approval aspect of these PQC's 
to be the first in a series of steps to realign inspection and company 
responsibilities in the area of process control systems. As FSIS 
progresses in its review and adjustment of its inspection regulations, 
it will take more steps in this area. Regulations will be rewritten as 
performance standards, facilitating innovation. Establishments will be 
free to develop establishment-specific approaches as long as the 
regulatory objectives are met. Therefore, as FSIS reinvents its 
regulations in accordance with its stated plans (see docket #95-008A, 
``FSIS Agenda for Change; Regulatory Review''), the need for Agency-
developed guidelines should decrease. Companies will be able to call on 
a full range of technical resources to develop alternatives and design 
systems to demonstrate their efficacy.

Other Prior Approvals

    This proposal addresses the removal of the requirements for prior 
approval of facility blueprints, equipment, and PQC programs for 
inspected meat and poultry establishments. In addition to the prior 
approvals discussed in this proposal, FSIS plans to eliminate its 
remaining centralized prior approval procedures. These include the 
procedures for: PQC's for water reuse, on-line PQC's used in the NELS 
and NTIS poultry inspection systems, nonfood compounds and proprietary 
additives, and possibly labeling. FSIS intends to publish proposals on 
these topics in the near future.
    Like the regulations governing meat and poultry inspection, the egg 
products inspection regulations, promulgated under the Egg Products 
Inspection Act (21 U.S.C. 1031, et seq.) (EPIA), also contain prior-
approval procedures for facilities and blueprints (7 CFR 59.146, 
59.500, 59.506, 59.520, 59.538, 59.540, and 59.550), labels (7 CFR 
59.411), equipment and utensils (7 CFR 59.502, 59.506, 59.515, 59.520, 
59.522, 59.540, 59.540, 59.547, and 59.552), nonfood compounds (7 CFR 
59.504 and 59.552), and various processing procedures for egg products. 
FSIS is not prepared to propose to remove these requirements because 
FSIS has only recently acquired responsibility for administering the 
EPIA and the egg products inspection regulations promulgated under that 
Act. FSIS has just begun reviewing the prior-approval requirements in 
the egg products regulations to see which, if any, are still necessary 
and should be maintained, and which are obsolete or burdensome and 
should be amended or

[[Page 19585]]

rescinded. As appropriate, FSIS will propose changes in the egg 
products inspection regulations.

Executive Order 12778

    This proposed rule has been reviewed under Executive Order 12778, 
Civil Justice Reform. States and local jurisdictions are preempted 
under the Federal Meat Inspection Act (FMIA) and the Poultry Products 
Inspection Act (PPIA) from imposing any marking or packaging 
requirements on federally inspected meat and poultry products that are 
in addition to, or different than, those imposed under the FMIA or 
PPIA. States and local jurisdictions may, however, exercise concurrent 
jurisdiction over meat and poultry products that are outside official 
establishments for the purpose of preventing the distribution of meat 
and poultry products that are misbranded or adulterated under the FMIA 
or PPIA or, in the case of imported articles, which are not at such an 
establishment after their entry into the United States.
    This proposed rule is not intended to have retroactive effect.
    If this proposed rule is adopted, administrative proceedings will 
not be required before parties may file suit in court challenging this 
rule. However, the administrative procedures specified in 9 CFR 
Secs. 306.5 and 381.35 must be exhausted prior to any judicial 
challenge of the application of the provisions of this rule, if the 
challenge involves any decision of an FSIS employee relating to 
inspection services provided under the FMIA or PPIA.

Executive Order 12866 and Effect on Small Entities

    This proposed rule has been determined to be significant and was 
reviewed by OMB under Executive Order 12866.
    FSIS is proposing to eliminate prior approval requirements for 
establishment drawings and specifications, equipment, and certain 
partial quality control programs. Concurrent with this proposal, FSIS 
would restructure inspection activities to focus more attention on the 
ability of establishments to maintain a sanitary environment. These 
actions, in addition to implementation of the sanitary standard 
operating procedures, which were proposed by the Agency as part of the 
Pathogen Reduction/HACCP proposal, would provide the industry the 
flexibility for creating and maintaining a sanitary working environment 
without prescriptive command-and-control requirements.
    Removing these requirements would affect establishments subject to 
official inspection, firms producing and selling equipment currently 
subject to prior approval, firms providing expediting services to 
businesses seeking prior approval, and consumers. The proposal would 
reduce demands on FSIS resources which could be redirected to functions 
more critical to improving food safety.
    Alternatives to this rulemaking that FSIS considered for facilities 
and equipment prior approvals included development by FSIS of detailed 
standards to be published in booklets with periodic updates, 
recognizing industry organizations as prior approval authorities, and 
establishing general performance standards similar to FDA-recognized 
good manufacturing practices. Another alternative which would have 
provided these services on a voluntary, user-fee basis, was considered 
but not adopted. FSIS has chosen the option of eliminating prior 
approval requirements while maintaining the general food safety 
standards in the existing regulations.
    For PQC prior approvals, the alternatives to no rulemaking were 
market sampling of finished products, mandating additional in-plant 
controls, sampling of finished products for chemical analysis, and 
maintaining general requirements and a standard for the design of PQC 
programs. The last option was chosen because it would provide official 
establishments with the most flexibility in implementing PQC programs.

Benefits of the Rule

    Approximately 6,200 federally inspected meat and poultry 
establishments would no longer be required to submit blueprints, 
drawings, and specifications to FSIS for review and approval. FSIS 
reviewed about 2,900 submissions in FY 1994. The cost of receiving FSIS 
approval for drawings and specifications and changes they represent 
includes the administrative, mailing, and labor costs associated with 
preparing the required Agency forms. The labor cost is estimated at 30 
minutes for each submission. Assuming an hourly wage or per-hour salary 
of $20-$25 for each person submitting blueprints and specifications and 
the FSIS form, the annual cost to the industry for making these 
submissions is in the range of $30,000 to $40,000. This, then, is an 
estimate of the savings accruing to industry from removing the 
requirement for prior approval that FSIS is proposing.
    As many as 1,500 establishments per year submit for approval PQC 
programs or amendments to PQC programs. FSIS receives a total of 1,900 
submissions each year. A typical PQC program, prepared according to 
FSIS guidelines, can be written up in about 4 hours by an individual 
earning $20 to $25 per hour. Thus, removing the requirement for prior 
approval of PQC plans is estimated to save the industry $150,000 to 
$190,000 per year.
    FSIS receives approximately 2,500 submissions for approval of 
equipment each year. The costs of these applications generally fall on 
equipment manufacturers rather than the meat and poultry firms subject 
to inspection, although a few meat and poultry establishments make some 
of their own equipment or equipment modifications. FSIS has no estimate 
that specifically pertains to the costs to manufacturers of applying 
for equipment approval, but these costs are assumed to be comparable to 
the costs to official establishments of submitting blueprint and 
establishment specification approvals. FSIS recognizes that actual 
costs to firms seeking equipment approval may differ and welcomes 
comments on this. Based on 30 minutes per submission, a labor cost of 
$20-$25 per hour, and 2,500 submissions annually, the annual cost 
savings from removing the prior approval requirement for equipment 
would be in the range of $25,000 to $32,500. In addition, approximately 
650 applications for approval are contingent on in-plant trials. These 
trials involve some added costs to manufacturers and meat and poultry 
establishments, but the Agency has no estimates of these costs to 
include in this analysis. FSIS invites commenters to present 
information indicating what these costs are.
    The proposal to eliminate blueprint prior approvals would remove a 
source of income for approximately 20 small firms that represent 
official establishments for the purpose of labeling and blueprint 
approval. These firms are known as ``expediters.'' It is estimated that 
approximately 20 percent of the annual blueprint submissions (about 
600) are made to the Agency using the services of expediters. The 
estimated annual total value of blueprint expediting is about $240,000 
for the companies involved. While this would be lost income to the 
expediters, it would be a transfer to meat and poultry firms, which is 
not a social cost of the proposed rule.
    The social benefits directly resulting from the elimination of 
prior approval requirements as proposed in this rulemaking are 
indicated in Table 1. There would be additional but unquantifiable 
social benefits from the proposals to eliminate prior approvals.

[[Page 19586]]

These benefits derive from efficiencies arising from fewer demands on 
management, greater incentives to adopt innovative practices, and the 
enhanced ability to make changes quickly which the prior approval 
system and its inherent delays inhibit. Also, the delays inherent in 
the prior approval process, which can be translated into lost 
production time, would be eliminated.
    However, it is unlikely that an inspection finding of adulterated 
product or insanitary conditions under the amended regulations would 
result in increased costs to the industry for rebuilding or remodeling 
facilities. Establishments planning substantial investments in new 
construction typically consult with local authorities and experts with 
up-to-date knowledge of food establishment construction before 
beginning major projects.
    In addition to the benefits to firms from elimination of these 
prior approval requirements, FSIS could be expected to benefit by 
reallocating about $2.3 million to high priority food safety needs. 
Currently, the Agency allocates about 15 staff-years ($750,000) to 
reviews of equipment, 20 staff-years (about $1 million) to reviews of 
drawings and specifications, and 11 staff-years ($550,000) to review 
and approval of PQC programs. The true social benefits to be expected 
are the improvements in food safety that would logically flow from 
reallocating these resources to more important food safety-related 
tasks.

Costs of the Proposed Rule

    As is currently the practice, inspectors would continue to require 
establishments to take corrective action or cease operations if any 
product has been adulterated or prepared, packed or held under 
insanitary conditions whereby it may have been contaminated with filth 
or may have been rendered injurious to health, because of deficient 
facilities and equipment. Corrective action, which might include 
reconstruction, remodeling, and redesign would only be triggered by an 
actual finding of product adulteration or insanitary conditions. 
However, it is unlikely that this proposal will increase the level of 
inspection findings that result in reconstruction, remodeling, and 
redesign of facilities and equipment.
    Currently, facility and equipment plans submitted to FSIS for prior 
approval are rejected due either to errors in paperwork or to deviation 
from specific design criteria developed by FSIS. Under the proposal, 
establishments would not have to submit applications for approval. 
Instead, establishments would be permitted to initiate and complete 
construction or introduce new equipment without submitting any 
paperwork to FSIS. In addition, FSIS would eliminate design-related 
criteria currently utilized to evaluate the acceptability of facilities 
and equipment. Inspectors would no longer require establishments to 
incur costs for reconstruction, remodeling, and redesign, because the 
actual facility or piece of equipment does not match a specified design 
criterion, blueprint, or equipment specification.
    In the absence of prior approval, FSIS would focus inspection on 
whether establishments are maintaining a sanitary environment. Under 
this proposal and the proposed rule on sanitation standard operating 
procedures, establishments would assume greater control over their 
production practices to ensure that a sanitary environment is 
maintained. Currently, many establishments utilize the services of 
knowledgeable architects, engineers, and other experts to design 
facilities and equipment for use in meat and poultry establishments. 
Under prior approval, these experts ensure, among other things, that 
FSIS design specifications are met. Without prior approval, 
establishments may require these experts to provide more information on 
the procedures necessary for maintaining facilities and equipment in a 
sanitary condition, which could increase the costs for these services. 
However, this is consistent with the need for the industry to assume 
greater responsibility for its operations. Any cost increases for these 
services would be commensurate with the transfer of responsibility from 
FSIS to the industry, and would not be a social cost attributable to 
the rule.

                    Table 1.--Benefits to Firms From Eliminating Prior Approval Requirements                    
----------------------------------------------------------------------------------------------------------------
                                                Firms with more than    Firms with fewer                        
                    Action                          500 employees      than 500 employees         All firms     
----------------------------------------------------------------------------------------------------------------
Remove blueprint and specification approval...         $1,800-$2,400       $28,200-$37,600       $30,000-$40,000
Remove equipment approval.....................         $2,500-$3,250       $22,500-$29,250       $25,000-$32,500
Remove PQC approval...........................        $9,000-$11,400     $141,000-$178,600     $150,000-$190,000
                                               -----------------------------------------------------------------
      Total...................................        $13,300-17,050     $191,700-$245,450      $205,000-262,500
----------------------------------------------------------------------------------------------------------------

Regulatory Flexibility Assessment

    The Administrator has determined that, for the purposes of the 
Regulatory Flexibility Act (5 U.S.C. 601-12), this proposed rule would 
not have a significant economic impact on a substantial number of small 
entities. The entities that would be affected by this proposal are 
inspected meat and poultry establishments, equipment suppliers, and 
companies representing official establishments to the Agency for the 
purpose of obtaining blueprint approvals. Most of these are small 
entities.
    The proposed rule is expected to have a beneficial effect on small 
and large entities, on both those regulated under the FMIA and PPIA and 
some that are not regulated under the inspection laws but which are 
affected by the Agency's review of their products, e.g., suppliers of 
equipment used in inspected meat and poultry establishments.
    There are about 5,800 federally inspected small establishments. In 
this analysis, FSIS is using the Small Business Administration (SBA) 
business size standards (at 13 CFR 121.601) for meat packing 
establishments, establishments that produce sausages and other prepared 
meats, and poultry slaughtering and processing establishments. A small 
establishment in any of these categories is considered to be one with 
500 or fewer employees. Under current regulations, all official 
establishments are required, as a condition of receiving inspection 
services, to submit blueprints, drawings, and specifications of new or 
remodeled facilities to FSIS for review and approval. Under this 
proposal, the establishments would, of course, not be spared the cost 
of preparing for themselves blueprints and specifications for 
construction and major installations. However, they would no longer 
bear the cost of submitting these drawings and specifications to the 
Agency for review

[[Page 19587]]

because the requirement to do so would be eliminated.
    The savings to be obtained by eliminating FSIS approval for 
drawings and specifications and the changes they represent includes the 
administrative and mailing costs and the time (resources) required to 
fill out the required Agency form (``Submission and Approval of Plans 
and Specifications,'' FSIS -5200-S), which is estimated at 30 minutes 
each submission. As mentioned above, the annual savings to the meat and 
poultry products industry from eliminating the requirement of making 
the submissions would be in the neighborhood of $30,000-40,000. FSIS 
does not consider this savings to be significant. But in addition to 
such direct savings, the largest potential savings to the industry 
resulting from the prior approval process for blueprints and 
specifications would be those associated with the elimination of 
delays--of up to several weeks per submission--in obtaining approval. 
This estimated delay includes the time needed to resolve disagreements 
over plans and specifications, should such disagreements arise between 
the Agency and the establishment. This savings could be significant for 
some small entities, but there is no information to indicate that it 
would be so for a substantial number of them.
    The savings would not be significant for at least two reasons. 
First, establishments engaged in construction projects plan for the 
eventuality of an FSIS review, or at least are advised by knowledgeable 
food establishment architects and engineers to build FSIS review time 
into their project timelines. Costs are minimized because delays that 
do occur are anticipated. Second, under the current prior review and 
approval system, the Agency is able to exercise discretion expediting 
reviews of blueprints and facilities in specific cases to prevent 
economic hardship from occurring. The proposal is intended to eliminate 
the costs attributable to the delays associated with prior review and 
approval.
    While eliminating the cost of blueprint prior approvals to small 
establishments producing meat and poultry products, the proposal would 
at the same time remove a source of income for about 20 small 
expediting firms that represent official establishments for the purpose 
of labeling and blueprint approvals. These expediters are frequently 
able to shorten the time for these approvals and reduce the rejection 
rate on submissions because of their knowledge of Agency requirements 
and proximity to Agency offices. As mentioned above, the estimated 
annual total value of blueprint expediting is about $240,000 for the 
companies involved. This is a small part of the expediters' total 
business, which is mainly that of expediting label approvals and 
consulting work. These 20 entities, in any event, do not constitute a 
substantial number of small entities unfavorably affected by this rule.
    By the same reasoning that the Agency used to determine that these 
prior approvals do not serve to increase the safety of meat and poultry 
products, the expediting activities of these firms that will be reduced 
by the rule would no longer be a productive use of resources. These 
firms may, however, experience an increased demand for their consulting 
services from inspected establishments who depended upon the 
Government's prior approval to assure they were in compliance with the 
regulations, who now need help from a third party to assure they are in 
compliance with the regulations.
    The equipment acceptance procedure principally affects 
manufacturers or other vendors of equipment. The equipment 
manufacturers range in size from small to large concerns and, under the 
current regulations, depend on FSIS prior approval to be able to sell 
their products to inspected establishments. It is estimated that up to 
90 percent of the equipment manufacturers and other applicants for FSIS 
equipment acceptance are small entities. According to the SBA business 
size standards (13 CFR 121.601), a small food products machinery 
manufacturer is one that employs 500 or fewer people.
    Also favorably affected by the approval process are inspected 
establishments that may require machinery or other equipment to improve 
or continue their operations. As is the case in the blueprint review 
process for inspected facilities, the savings from avoiding a delay 
before installation and operation of a newly developed piece of 
equipment, although it could be significant for a few entities, large 
or small, but will not be significant for most establishments.
    Finally, FSIS has determined that the proposal to eliminate prior 
approval of most voluntary PQC programs would not have a significant 
economic impact on a substantial number of small entities. Both large 
and small establishments subject to FSIS inspection would be permitted 
to continue to develop and implement PQC programs for their products 
and processes but would no longer be required to submit the PQC's to 
FSIS for review and approval in advance of use. Accordingly, the 
administrative delay for review that occurs under the present system 
would be eliminated.
    It takes a minimum of 2 weeks for the Agency to review a typical 
PQC program, and as many as 1,500 establishments per year submit such 
programs or amendments to programs--a total of nearly 1,900 submissions 
per year--and about 90 percent of these establishments could be 
regarded as small entities. Therefore, roughly 1,100 establishments 
would avoid the costs associated with having to wait a minimum of 2 
weeks for PQC approval, but it is not possible to identify what costs 
would be saved under these circumstances.
    For these reasons, the Administrator has determined that this 
proposal would not result in a significant economic impact on a 
substantial number of small entities. The economic impact on such 
entities would in most cases involve the elimination of certain costs--
some quantifiable, some not quantifiable--associated with doing 
business subject to Federal regulation and hence would be beneficial to 
those entities. Though non-quantifiable, increasing the benefits that 
come from reducing an establishment's dependence on Government 
decisions is an important objective of the proposed rule.

Paperwork Requirements

    FSIS has reviewed the paperwork and recordkeeping requirements in 
this proposed rule in accordance with the Paperwork Reduction Act. This 
proposed rule would substantially reduce ``reporting'' requirements for 
official establishments and other entities. FSIS estimates the total 
reduction in reporting to be 4,291 burden hours. The reductions would 
occur in the following information collection reports:
    <bullet> 0583-0082, ``Meat and Poultry Inspection; Application for 
Inspection, Sanitation, and Equipment Requirements and Exemptions'': 
Establishments subject to inspection would no longer have to submit 
blueprints and specifications along with Form FSIS-5200-5. The response 
time is estimated to be 30 minutes, and there are 701 total burden 
hours approved by the Office of Management and Budget (OMB) for this 
activity. Therefore, FSIS would request OMB to remove the 701 approved 
burden hours.
    <bullet> 0583-0082, ``Meat and Poultry Inspection; Application for 
Inspection, Sanitation, and Equipment Requirements and Exemptions'': 
FSIS prior approval would no longer be required for the products of 
these companies that are used in official establishments. The response 
time is

[[Page 19588]]

estimated to be 30 minutes for the prior approval of equipment. There 
are 2,990 total burden hours approved by OMB for this activity. 
Therefore, FSIS would request OMB to remove the 2,990 approved burden 
hours.
    <bullet> 0583-0089, ``Processing Procedures and Quality Control 
Systems'': Establishments could continue to develop and implement PQC 
programs according to Agency guidelines. These establishments, with the 
exception of poultry irradiation facilities, would no longer be 
required to submit a letter requesting approval of a proposed PQC 
program and a copy of the program to the Agency for approval prior to 
implementation. The response time is estimated to be 30 minutes for 
writing the request letter and sending the PQC program to FSIS. There 
are 600 total burden hours approved by OMB for this activity. In 
consideration of poultry irradiation facilities 60 hours of burden 
would remain. FSIS does not foresee more than two irradiation 
facilities requesting FSIS approval of PQC programs. Therefore, FSIS 
would request OMB to remove 540 approved burden hours. The burden hours 
for PQC program development and reporting would remain the same.
    Copies of this information collection assessment can be obtained 
from Lee Puricelli, Paperwork Specialist, Food Safety and Inspection 
Service, USDA, South Agriculture Building, Room 3812, Washington, DC 
20250.
    Comments are invited on: (a) whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the Agency, including whether the information will have practical 
utility; (b) the accuracy of the Agency's estimate of the burden of the 
proposed collection of information including the validity of the 
methodology and assumptions used; (c) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (d) ways 
to minimize the burden of the collection of information on those who 
are to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology. Comments may be sent to Lee 
Puricelli, Paperwork Specialist (see address above), and to the Desk 
Officer for Agriculture, Office of Information and Regulatory Affairs, 
Office of Management and Budget, Washington, DC 20253.
    Comments are requested by July 1, 1996. To be most effective, 
comments should be sent to OMB within 30 days of the publication date 
of this proposed rule.

List of Subjects

9 CFR 304

    Drawings, Information to be furnished, Grant or refusal of 
inspection, Meat inspection.

9 CFR 308

    Meat inspection, Sanitation.

9 CFR 317

    Meat inspection, Reporting and recordkeeping requirements.

9 CFR 318

    Meat inspection, Establishment-operated quality control.

9 CFR 319

    Food grades and standards, food labeling.

9 CFR 381

    Poultry and poultry products.

    For the reasons set forth in the preamble, FSIS is proposing to 
amend 9 CFR Chapter III, the Federal meat and poultry inspection 
regulations, as follows:

PART 304--APPLICATION FOR INSPECTION; GRANT OR REFUSAL OF 
INSPECTION

    1. The authority citation for Part 304 would be revised to read as 
follows:

    Authority: 21 U.S.C. 601-695; 7 CFR 2.18, 2.53.

    2. The heading of section 304.2 would be revised to read as 
follows:


Sec. 304.2   Information to be furnished; grant or refusal of 
inspection.

 * * * * *
    3. Section 304.2 would be amended by removing paragraph (a) and 
redesignating paragraphs (b) through (f) as paragraphs (a) through (e), 
respectively.

PART 308--SANITATION

    4. The authority citation for Part 308 would be revised to read as 
follows:

    Authority: 21 U.S.C. 601-695; 7 CFR 2.18, 2.53.


Sec. 308.2   [Removed]

    5. Section 308.2 would be removed and reserved.
    6. Section 308.5 would be amended by removing ``, in the judgment 
of the Administrator,'' from the first and third sentences of paragraph 
(a); removing paragraphs (b) through (f); redesignating paragraph (g) 
as (b); and revising the section heading to read as follows:


Sec. 308.5   Equipment and utensils to be easily cleaned; those for 
inedible products to be so marked; PCB-containing equipment.

 * * * * *

PART 317--LABELING, MARKING DEVICES, AND CONTAINERS

    7. The authority citation for part 317 would continue to read as 
follows:

    Authority: 21 U.S.C. 601-695; 7 CFR 2.18, 2.53.

    8. Section 317.21 would be amended by removing the words ``or 
Partial Quality Control Program'' from paragraph (b).

PART 318--ENTRY INTO OFFICIAL ESTABLISHMENTS; REINSPECTION AND 
PREPARATION OF PRODUCTS

    9. The authority citation for part 318 would be revised to read as 
follows:

    Authority: 7 U.S.C. 138f, 450, 1901-1906; 21 U.S.C. 601-695; 7 
CFR 2.18, 2.53.

    10. Paragraph (d) of Sec. 318.4 would be revised to read as 
follows:


Sec. 318.4   Preparation of products to be officially supervised; 
responsibilities of official establishments; plant operated quality 
control.

* * * * *
    (d) Partial Quality Control Programs. (1) Any owner or operator of 
an official establishment preparing meat food products who is using a 
quality control program for a product, operation, or part of an 
operation shall make the written program and data and information 
generated by the program available to Program employees.
    (2) (i) Such quality control program shall include, as appropriate 
for the product, operation, or part of an operation which the program 
concerns, detailed information on: raw material control, the critical 
check or control points, the nature and frequency of tests to be made, 
the charts and records that will be used, the length of time such 
charts and records will be maintained in the custody of the official 
establishment, the limits which will be used and the points at which 
corrective action will be taken to prevent recurrence of a loss of 
control, and the nature of the corrective action--ranging from the 
least to the most severe.
    (ii) Such quality control program shall be designed so as to 
provide, with at least 85 percent statistical confidence, that the lot 
mean (process mean) is within the product or label limit used and that, 
of a minimum of 3 sublot samples representing the lot, with each sublot 
sample containing at least 5 samples representing the sublot, no

[[Page 19589]]

individual sample mean or sublot-sample mean shall be greater than 
three standard errors above, nor less than three standard errors below, 
the process mean.
 * * * * *
    11. Paragraph (e) of Sec. 318.4 would be amended by removing the 
words ``or Partial Quality Control'' from the paragraph heading, the 
words ``or (d)'' from the first sentence of paragraph (e)(1) and both 
occurrences of the words ``or partial quality control program'' from 
the second sentence of the same paragraph (e)(1); by removing the words 
``or program'' from the first and second sentences of paragraph (e)(2); 
by removing the words ``or partial quality control program'' from 
paragraph (e)(3); and by revising the heading of paragraph (g) and 
removing the words ``or partial quality control program'' from 
paragraphs (g)(1) and the introductory text of (g)(2) and revising 
paragraph (g)(3) to read as follows:


Sec. 318.4   Preparation of products to be officially supervised; 
responsibilities of official establishments; establishment operated 
quality control.

* * * * *
    (g) Termination of Total Establishment Quality Control.
 * * * * *
    (3) If approval of the total establishment quality control system 
has been terminated in accordance with the provisions of this section, 
an application and request for approval of the same or a modified total 
establishment quality control system will not be evaluated by the 
Administrator for at least 6 months from the termination date.
* * * * *
    12. Paragraphs (b)(3)(i) and (b)(3)(ii) of Sec. 318.7 would be 
revised to read as follows:


Sec. 318.7   Approval of substances for use in the preparation of 
products.

* * * * *
    (b) * * *
    (3) * * *
    (i) 100 ppm ingoing (potassium nitrite at 123 ppm ingoing); and 500 
ppm sodium ascorbate or sodium erythorbate (isoascorbate) shall be 
used; provided that the establishment has a partial quality control 
program as provided in Sec. 318.4(d) such as to result in compliance 
with this provision, or
    (ii) A predetermined level between 40 and 80 ppm (potassium nitrite 
at a level between 49 and 99 ppm); 550 ppm sodium ascorbate or sodium 
erythorbate (isoascorbate); and additional sucrose or other similar 
fermentable carbohydrate at a minimum of 0.7 percent and an inoculum of 
lactic acid producing bacteria such as Pediococcus acetolactii or other 
bacteria demonstrated to be equally effective in preventing the growth 
of botulinum toxin at a level sufficient for the purpose of preventing 
the growth of botulinum toxin; provided that the establishment has a 
partial quality control program as provided in Sec. 318.4(d) such as to 
result in compliance with this provision.
 * * * * *
    13. In the table in Sec. 318.7(c)(4) under the Class of substance 
``Miscellaneous,'' the entry under the Substance ``Ascorbic Acid, 
erythorbic acid, citric acid, sodium ascorbate, and sodium citrate'' 
would be revised to read as follows:


Sec. 318.7   Approval of substances for use in the preparation of 
products.

* * * * *
    (c) * * *
    (4) * * *

----------------------------------------------------------------------------------------------------------------
     Class of  substance          Substance         Purpose          Product                  Amount            
----------------------------------------------------------------------------------------------------------------
                                                                                                                
*                  *                  *                  *                  *                  *                
Miscellaneous................  Ascorbic acid,   To delay         Fresh beef       Not to exceed, singly or in   
                                erythorbic       discoloration.   cuts, fresh      combination, 500 ppm or 1.8  
                                acid, citric                      lamb cuts, and   mg/sq inch of product surface
                                acid, sodium                      fresh pork       of ascorbic acid (in         
                                ascorbate and                     cuts.            accordance with 21 CFR       
                                sodium                                             182.3013), erythorbic acid   
                                citrate,                                           (in accordance with 21 CFR   
                                singly or in                                       182.3041), or sodium         
                                combination                                        ascorbate (in accordance with
                                under quality                                      21 CFR 182.3731); and/or not 
                                control.                                           to exceed, singly or in      
                                                                                   combination, 250 ppm or 0.9  
                                                                                   mg/sq inch of product surface
                                                                                   of citric acid (in accordance
                                                                                   with 21 CFR 182.6033), or    
                                                                                   sodium citrate (in accordance
                                                                                   with 21 CFR 182.6751).       
                                                                                                                
*                  *                  *                  *                  *                  *                
                                                        *                                                       
----------------------------------------------------------------------------------------------------------------

    14. Section 318.19 would be amended by removing the words ``or 
partial quality control program'' from paragraph (e).
    15. Paragraph (a) of Sec. 318.309 would be amended by removing the 
words ``an approved'' and ``program'' and paragraphs (b) and (c) of 
Sec. 318.309 would be amended by removing ``and submitted to the 
Administrator for approval''.

PART 319--DEFINITIONS AND STANDARDS OF IDENTITY OR COMPOSITION

    16. The authority citation for Part 319 would continue to read as 
follows:

    Authority: 7 U.S.C. 450, 1901-1906; 21 U.S.C. 601-695; 7 CFR 
2.18, 2.53.

    17. Section 319.5 would be amended by removing the second sentence 
of paragraph (e)(2) and revising the first sentence to read as follows:


Sec. 319.5  Mechanically Separated (Species).

* * * * *
    (e) * * *
    (2) A prerequisite for label approval for products consisting of or 
containing ``Mechanically Separated (Species)'' is that such 
``Mechanically Separated (Species)'' shall have been produced by an 
establishment under a establishment quality control system. * * *
    18. The last sentence in footnote 3 to the chart in Sec. 319.104 
would be amended by removing the words ``approved by the Administrator 
under Sec. 318.4 of this subchapter.''

PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS

    19. The authority citation for Part 381 would be revised to read as 
follows:

    Authority: 7 U.S.C. 138f, 450; 21 U.S.C. 451-470; 7 CFR 2.18, 
2.53.

    20. Section 381.19 would be revised to read as follows:


Sec. 381.19  Application for inspection; irradiation facilities.

    All applicants for inspection whose operations include irradiation 
and other processing would submit, to the Administrator, a proposed 
quality control system as specified in Sec. 381.149.


Sec. 381.20  [Amended]

    21. Section 381.20 would be amended by removing ``the approved 
drawings,

[[Page 19590]]

specifications, and'' from the first sentence.
    22. Section 381.53 would be amended by removing paragraph (b); 
redesignating paragraphs (c) through (m) as paragraphs (b) through (l), 
respectively; and revising paragraph (a) to read as follows:


Sec. 381.53  Equipment and utensils.

    (a) Equipment and utensils used for processing or otherwise 
handling any edible poultry product or ingredient thereof, in any 
official establishment, shall comply with any applicable provisions of 
paragraphs (b) through (l) of this section and otherwise shall be of 
such material and construction as will facilitate their thorough 
cleaning, insure cleanliness in the preparation and handling of all 
edible poultry products, and avoid adulteration and misbranding of such 
products. In addition to these requirements, equipment and utensils 
shall not in any way interfere with or impede inspection procedures. 
Receptacles used for handling inedible products shall be of such 
material and construction that their use will not result in 
adulteration of any edible product or in unsanitary conditions at the 
establishment, and they shall bear conspicuous and distinctive marking 
to identify them as only for such use and shall not be used for 
handling any edible poultry products.
* * * * *


Sec. 381.121d  [Amended]

    23. Section 381.121d would be amended by removing the words ``or 
Partial Quality Control Program'' from paragraph (b).
    24. The section heading and paragraph (d) of Sec. 381.145 would be 
revised to read as follows:


Sec. 381.145  Preparation of products to be officially supervised; 
responsibilities of official establishments; establishment operated 
quality control.

* * * * *
    (d) Partial Quality Control Programs. (1) Any owner or operator of 
an official establishment preparing meat food products who is using a 
quality control program for a product, operation, or part of an 
operation shall make the written program and data and information 
generated by the program available to Program employees.
    (2) (i) Such quality control program shall include, as appropriate 
for the product, operation, or part of an operation which the program 
concerns, detailed information on: raw material control, the critical 
check or control points, the nature and frequency of tests to be made, 
the charts and records that will be used, the length of time such 
charts and records will be maintained in the custody of the official 
establishment, the limits which will be used and the points at which 
corrective action will be taken to prevent recurrence of a loss of 
control, and the nature of the corrective action--ranging from the 
least to the most severe.
    (ii) Such quality control program shall be designed so as to 
provide, with at least 85 percent statistical confidence, that the lot 
mean (process mean) is within the product or label limit used and that, 
of a minimum of 3 sublot samples representing the lot, with each sublot 
sample containing at least 5 samples representing the sublot, no 
individual sample mean or sublot-sample mean shall be greater than 
three standard errors above, nor less than three standard errors below, 
the process mean.
* * * * *
    25. Paragraph (e) of Sec. 381.145 would be amended by removing the 
words ``Programs or'' from the paragraph heading, the words ``or (d)'' 
from the first sentence of paragraph (e)(1) and both occurrences of ``, 
partial quality control program,'' from the second sentence of the same 
paragraph (e)(1); by removing the words ``or program'' from the first 
and second sentences of paragraph (e)(2); by removing ``, partial 
quality control program,'' from paragraph (e)(3); by revising the 
heading of paragraph (g) and removing the words ``or a partial quality 
control program'' from paragraph (g)(1); by removing ``, partial 
quality control program,'' from paragraph (g)(2) introductory text and 
the words ``or program'' from the first sentence of paragraph 
(g)(2)(ii); and by revising paragraph (g)(3) to read as follows:


Sec. 381.145  Preparation of products to be officially supervised; 
responsibilities of official establishments; establishment operated 
quality control.

* * * * *
    (g) Termination of Total Establishment Quality Control.
* * * * *
    (3) If approval of the total establishment quality control system 
has been terminated in accordance with the provisions of this section, 
an application and request for approval of the same or a modified total 
establishment quality control system will not be evaluated by the 
Administrator for at least 6 months from the termination date.
* * * * *


Sec. 381.309  [Amended]

    26. Paragraph (a) of Sec. 381.309 would be amended by removing the 
words ``an approved'' and ``program'' and paragraphs (b) and (c) of 
Sec. 381.309 would be amended by removing ``and submitted to the 
Administrator for approval''.

    Done, at Washington, DC April 25, 1996.
Michael R. Taylor,
Acting Under Secretary for Food Safety.
[FR Doc. 96-10795 Filed 5-1-96; 8:45 am]
BILLING CODE 3410-DM-P