issue-1995-12-29•Federal Register proposed rules — 1995-12-29
Federal Register proposed rules — 1995-12-29
issue-1995-12-29Federal Register proposed rules — 1995-12-29Proposed Regulation
Published Federal Register documents, not public-inspection drafts. The GPO XML/text rendition is a research aid; the linked complete official PDF retains the printed layout and all graphics. Graphics are retained in that PDF and are not independently reproduced in this text rendition. Publication does not establish that every provision remains legally in force.
FR Doc. 95-31521 Drawbridge Operation Regulations; South Slough, OR
[Federal Register Volume 60, Number 250 (Friday, December 29, 1995)]
[Proposed Rules]
[Pages 67346-67348]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31521]
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DEPARTMENT OF TRANSPORTATION
33 CFR Part 117
[CGD13-95-050]
Drawbridge Operation Regulations; South Slough, OR
AGENCY: Coast Guard, DOT.
ACTION: Notice of proposed rulemaking.
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SUMMARY: At the request of the Oregon Department of Transportation
(ODOT), the Coast Guard is considering an amendment to the regulations
governing the operation of the South Slough Bridge at Charleston,
Oregon. The proposed change would require one hour notice at all times
when requesting openings of the drawspan of the bridge for the passage
of vessels.
DATES: Comments must be received on or before February 27, 1996.
[[Page 67347]]
ADDRESSES: Comments should be mailed to Commander (oan), Thirteenth
Coast Guard District, 915 Second Avenue, Seattle, Washington 98174-
1067. The comments and other materials referenced in this notice will
be available for inspection and copying at 915 Second Avenue, Room
3410, Seattle, Washington. Normal office hours are between 7:45 a.m.
and 4:15 p.m., Monday through Friday, except federal holidays. Comments
may also be hand-delivered to this address.
FOR FURTHER INFORMATION CONTACT:
John E. Mikesell, Chief, Plans and Programs Section, Aids to Navigation
and Waterways Management Branch, (Telephone: (206) 220-7270).
SUPPLEMENTARY INFORMATION:
Request for Comments
The Coast Guard encourages interested persons to participate in
this rulemaking by submitting written data, views, or arguments.
Persons submitting comments should include their names and addresses,
identify this rulemaking (CGD13-95-050) and the specific section of
this proposal to which each comment applies, and give the reason for
each comment. Please submit two copies of all comments and attachments
in unbound format, no larger than 8\1/2\ by 11 inches, suitable for
copying and electronic filing. Persons wanting acknowledgment of
receipt of comments should enclose stamped, self-addressed postcards or
envelopes.
The Coast Guard will consider all comments received during the
comment period. It may change this proposal in view of the comments.
The Coast Guard plans no public hearing. Persons may request a
public hearing by writing to the Commander, Thirteenth Coast Guard
District at the address under ADDRESSES. The request should include the
reasons why a hearing would be beneficial. If it determines that the
opportunity for oral presentations will aid this rulemaking, the Coast
Guard will hold a public hearing at a time and place announced by a
later notice in the Federal Register.
Drafting Information
The drafters of this notice are Austin Pratt, Project Officer,
Thirteenth Coast Guard District Aids to Navigation and Waterways
Management Branch, and Lieutenant Commander John C. Odell, Project
Attorney, Thirteenth Coast Guard District Legal Office.
Background and Purpose
At the request of the Oregon Department of Transportation (ODOT),
the Coast Guard is considering an amendment to the regulations
governing the operation of the South Slough Bridge at Charleston,
Oregon. The proposed change would require one hour notice at all times
when requesting openings of the drawspan of the bridge for the passage
of vessels. Current regulations require the drawspan to open on signal,
except that the drawspan need only open on the hour and half hour from
7 a.m. to 7 p.m. from June 1 through September 30. The current
regulations provide an exception to the summertime on-the-hour-and-
half-hour provisions for vessels in distress, commercial tugs and/or
tows, and public vessels of the United States.
In recent years the total number of annual openings has decreased
continuously from 2014 in 1988 to 765 in 1995. This year the greatest
number of openings occurred in April. During April, 1995, there were a
total of 89 openings, averaging somewhat less than 3 per day.
Because of the decreased number of openings during the summer
months, ODOT no longer feels that the on-the-hour-and-half-hour
provision is necessary for the efficient operation of the bridge. In
recent years, ODOT has voluntarily waived the on-the-hour-and-half-hour
restriction and has opened the bridge on signal whenever requested.
Under the proposed change, the provision that allows the bridge to open
only on the hour or half hour during the summer months would be
removed. The exception for vessels in distress, commercial tugs and/or
tows, and public vessels of the United States would also be removed.
Under the proposed change, vessels needing emergency openings would
still be able to request such openings under the general provisions of
Sec. 117.31 of this part. No new exception to the one-hour notice
requirement will be created for commercial tugs and tows or public
vessels because transit of the bridge by these types of vessels have
become rare.
The decreased number of requested openings throughout the year has
also made it unnecessary and cost-inefficient to require that a draw
operator be present at the bridge at all hours. Under the proposed
change, the one-hour notice requirement would allow time for the draw
operator to travel to the bridge for requested openings.
Discussion of Proposed Rule
The proposed rule would amend 33 CFR 117.892 to state that the draw
shall open on signal if at least one hour notice is provided. This one-
hour notice requirement would apply year-around. The provision that
allows the bridge to open only on the hour or half hour during the
summer months would be removed along with the exception for vessels in
distress, commercial tugs and/or tows, and public vessels of the United
States.
Regulatory Evaluation
This proposed rule is not a significant regulatory action under
3(f) of Executive Order 12866 and does not require an assessment of
potential cost and benefits under section 6(a)(3) of that order. It has
been exempted from review by the Office of Management and Budget under
that order. It is not significant under the regulatory policies and
procedures of the Department of Transportation (DOT) (44 FR 11040;
February 26, 1979). The Coast Guard expects the economic impact of this
proposed rule to be so minimal that a full regulatory evaluation under
paragraph 10e of the regulatory policies and procedures of DOT is
unnecessary. This expectation is based on the fact that vessel
operators would not be unreasonably impeded or incur additional expense
by a requirement to provide one hour notice for draw openings.
Small Entities
Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the
Coast Guard must consider whether this proposal will have a significant
effect on a substantial number of small entities. ``Small entities''
include independently owned and operated small businesses that are not
dominant in their field and that otherwise qualify as ``small business
concerns'' under section 3 of the Small Business Act (15 U.S.C. 632).
The Coast Guard certifies under 5 U.S.C. 605(b) that this proposal, if
adopted, will not have a significant impact on a significant number of
small entities.
Collection of Information
This proposal contains no collection of information requirements
under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).
Federalism
The Coast Guard has analyzed this proposal under the principles and
criteria contained in Executive Order 12612, and it has been determined
that the proposed rulemaking does not have sufficient federalism
implications to warrant the preparation of a Federalism Assessment.
Environment
The Coast Guard considered the environmental impact of this
proposal and concluded that, under section 2.B.2. of Commandant
Instruction M16475.B,
[[Page 67348]]
this proposal is categorically excluded from further environmental
documentation. A ``Categorical Exclusion Determination'' is available
in the docket for inspection or copying.
List of Subjects in 33 CFR Part 117
Bridges.
Proposed Regulations
For the reasons set out in the preamble, the Coast Guard proposes
to amend part 117 of title 33, Code of Federal Regulations, as follows:
PART 117--DRAWBRIDGE OPERATION REGULATIONS
1. The authority citation for Part 117 continues to read as
follows:
Authority: 33 U.S.C. 499; 49 CFR 1.46; 33 CFR 1.05-1(g); section
117.255 also issued under the authority of Pub. L. 102-587, 106
Stat. 5039.
2. Section 117.892 is revised to read as follows:
Sec. 117.892 South Slough.
The draw of the Oregon State highway bridge across South Slough at
Charleston, Oregon, shall open on signal for the passage of vessels if
at least one hour notice is given.
Dated: December 19, 1995.
J.W. Lockwood,
Rear Admiral, U.S. Coast Guard Commander, 13th Coast Guard District.
[FR Doc. 95-31521 Filed 12-28-95; 8:45 am]
BILLING CODE 4910-14-M
Complete official Federal Register PDF
FR Doc. 95-31511 Federal Motor Vehicle Safety Standard; Steering Control Rearward Displacement
[Federal Register Volume 60, Number 250 (Friday, December 29, 1995)]
[Proposed Rules]
[Page 67348]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31511]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 571
[Docket 95-79, Notice 2]
RIN 2127-AG01
Federal Motor Vehicle Safety Standard; Steering Control Rearward
Displacement
AGENCY: National Highway Traffic Safety Administration (NHTSA), DOT.
ACTION: Proposed Rule, extension of comment period.
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SUMMARY: On November 16, 1995, (60 FR 57565) the agency published a
proposal to exclude certain vehicles from the application of Federal
Motor Vehicle Safety Standard No. 204, Steering Control Rearward
Displacement. The excluded vehicles would be passenger cars and other
light vehicles that are certified to comply with the frontal barrier
crash test requirements of the agency's occupant crash protection
standard by means of an airbag. A 60-day comment period was announced
for that proposal. Advocates for Highway and Auto Safety requested an
extension of the period to submit written comments. Advocates urged the
agency to extend the time to comment, due to significant demands on
their staff, responding to other NHTSA dockets and participation in
NHTSA Negotiated Rulemaking meetings in January. The agency agrees that
the unusual coincidence of numerous agency activities of interest to
Advocates may result in inadequate time to respond to this notice.
Additionally the agency recognizes the limited resources available to
commenters during this holiday season. Therefore, by this notice, the
agency extends the comment period for another 30 days.
DATES: Written comments must be received by February 15, 1996.
ADDRESSES: All written comments should be mailed to the Docket Section,
National Highway Traffic Safety Administration, Room 5109, 400 7th
Street, SW, Washington, DC 20590. Please refer to the docket number of
the original docket, that is Docket 95-79; Notice 1, when submitting
written comments.
FOR FURTHER INFORMATION CONTACT: Mr. Clarke B. Harper, Office of
Vehicle Safety Standards, NPS-12, NHTSA, 400 7th Street, SW,
Washington, DC 20590 (telephone 202-366-2264, fax 202-366-4329). By
electronic mail: [email protected].
Authority: 49 U.S.C. 322, 30111, 30115, 30117, and 30166;
delegation of authority at 49 CFR 1.50.
Barry Felrice,
Associate Administrator for Safety Performance Standards.
[FR Doc. 95-31511 Filed 12-28-95; 8:45 am]
BILLING CODE 4910-59-P
Complete official Federal Register PDF
FR Doc. 95-31492 Food Standards of Identity, Quality and Fill of Container; Common or Usual Name Regulations; Request for Comments on Existing Regulations
[Federal Register Volume 60, Number 250 (Friday, December 29, 1995)]
[Proposed Rules]
[Pages 67492-67503]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31492]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Parts 102, 130, 131, 133, 135, 136, 137, 139, 145, 146, 150,
152, 155, 156, 158, 160, 161, 163, 164, 165, 166, 168, and 169
[Docket No. 95N-0294]
Food Standards of Identity, Quality and Fill of Container; Common
or Usual Name Regulations; Request for Comments on Existing Regulations
AGENCY: Food and Drug Administration, HHS.
ACTION: Advance notice of proposed rulemaking.
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[[Page 67493]]
SUMMARY: The Food and Drug Administration (FDA) is announcing that it
intends to review its regulations pertaining to identity, quality, and
fill of container for standardized foods and its common or usual name
regulations for nonstandardized foods. As part of this review, the
agency is soliciting comments from all interested parties on whether
these regulations should be retained, revised, or revoked. FDA solicits
comments on the benefits or lack of benefits of such regulations in
facilitating domestic, as well as international, commerce and on the
value of these regulations to consumers. The agency also solicits
comments on alternative means of accomplishing the statutory objective
of food standards, i.e., to promote honesty and fair dealing in the
interest of consumers in the manufacture and sale of food products
covered by these regulations. This review responds in part to President
Clinton's memorandum to heads of departments and agencies, entitled
``Regulatory Reinvention Initiative,'' dated March 4, 1995.
DATES: Written comments by April 29, 1996.
ADDRESSES: Submit written comments to the Dockets Management Branch
(HFA-305), Food and Drug Administration, rm. 1-23, 12420 Parklawn Dr.,
Rockville, MD 20857.
FOR FURTHER INFORMATION CONTACT: Nannie H. Rainey, Center for Food
Safety and Applied Nutrition (HFS-158), Food and Drug Administration,
200 C St. SW., Washington, DC 20204, 202-205-5099.
SUPPLEMENTARY INFORMATION:
I. Background
A. Introduction
On March 4, 1995, the President issued a memorandum to heads of
departments and agencies, entitled ``Regulatory Reinvention
Initiative'' (RRI memorandum) that, among other things, directed them
to continue to work toward making Government more effective. In the RRI
memorandum, the President noted that all Americans want the benefits of
effective regulation, such as clean water, safe work places, wholesome
food, and sound financial institutions, but stated that too often the
rules are drafted with such detailed lists of do's and don'ts that the
objectives they seek to achieve are undermined. Thus, the RRI
memorandum directed that departments and agencies conduct a page-by-
page review of all of their regulations and eliminate or revise those
that are outdated or otherwise in need of reform.
A prime focus of FDA's review under the RRI memorandum has been the
agency's food standard and common or usual name regulations. These
provisions, which cover approximately 260 pages in the Code of Federal
Regulations, appear to be exactly the kind of regulations that need
reform. Intended to protect the integrity of the food supply, these
regulations provide detailed definitions of various types of food,
ranging from milk to canned fruits and vegetables to seafood cocktails.
Some are extremely detailed and have the potential to limit
technological advances. Virtually all of these regulations were adopted
before the passage of the Nutrition Labeling and Education Act of 1990
(Pub. L. 101-535) (the 1990 amendments) and, thus, were developed
without reference to the significant informational function that the
food label can play. Therefore, the food standards and common or usual
name regulations are a candidate for revision or reform.
As a result of its page-by-page review of its regulations in
response to the RRI memorandum, FDA tentatively concluded that several
food standards of identity should be revoked for various reasons
including that they are obsolete, or that their provisions are being
adequately covered by other regulations. On November 9, 1995 (60 FR
56513), FDA published a final rule repealing a stayed standard (canned
fruit nectars, formerly codified as Sec. 146.113 (21 CFR 146.113)). In
that same issue of the Federal Register (60 FR 56541), the agency
published a proposed rule to revoke the standards of identity for
certain lower-fat milk, sour cream, and yogurt products in part 131 (21
CFR part 131) and the standard of identity for lowfat cottage cheese in
part 133 (21 CFR part 133) so that these foods can be produced and
labeled under the general standard in Sec. 130.10 (21 CFR 130.10). That
proposal also would amend the nutrient content claims regulations in
Sec. 101.62 (21 CFR part 101.62) to provide for ``skim'' as a synonym
for ``nonfat,'' thereby allowing the use of the names ``skim milk,''
``acidified skim milk,'' ``cultured skim milk,'' and ``sweetened
condensed skim milk.'' In addition, FDA has proposed (60 FR 53480,
October 13, 1995) to revoke a number of regulations because they are
obsolete or of no current interest to industry or consumers. Among
those regulations are several standards of identity in part 161 (21 CFR
part 161) that specify sizes for certain oyster products, the standards
of identity in part 163 (21 CFR part 163) for coatings made from cocoa,
sweet chocolate, or milk chocolate and vegetable fats other than cacao
fat, and the standards of identity in part 137 (21 CFR part 137) for
the corn grits products (i.e., corn grits, enriched corn grits, quick
grits, and yellow grits).
The agency's review of the remaining food standards in parts 130
through 169 (21 CFR parts 130 through 169) and the common or usual name
regulations in part 102 (21 CFR part 102) forms the basis of this
advanced notice of proposed rulemaking.
B. History: Pre-1938
In providing for standards of identity, quality, and fill of
container in section 401 of the Federal Food, Drug, and Cosmetic Act of
1938 (the act) (21 U.S.C. 341), Congress sought to correct a deficiency
in the 1906 Food and Drugs Act (the 1906 act). The 1906 act established
definitions for adulteration and misbranding and subjected foods to
seizure if they were found to be in violation of these definitions.
Section 7 of the 1906 act was intended to prevent adulteration in the
form of dilution or substitution of a valuable ingredient, concealment
of inferiority, or use of harmful ingredients in foods. It deemed that
a food was adulterated if, among other things, the food's strength or
quality had been lowered, or if it had been cheapened. However, the
1906 act contained no provision requiring foods to bear a statement of
ingredients on the label and, thus, offered no means of comparing foods
to determine whether dilution or substitution had occurred.
The misbranding provisions of the 1906 act actually contributed to
the proliferation of cheap or debased foods that could be sold legally
by reason of its so called ``distinctive name proviso.'' This provision
permitted the marketing of foods that would have been adulterated and
misbranded if sold under the name of the food they purported to be by
allowing their sale under meaningless ``distinctive'' names such as
``Bred-Spred.'' Bred-Spred products were made in imitation of fruit
preserves produced by adding acid and pectin to about 15 percent fruit.
This quantity of fruit was far less than that used by the homemaker or
by reputable manufacturers to make fruit preserves at that time.
The lack of a provision to establish mandatory standards under the
1906 act handicapped the Government in its attempts to maintain the
integrity of the food supply by making it difficult for the Government
to proceed against a debased food product, particularly a fabricated
food. (See U.S. v. 10 Cases ``Bred-Spred,'' 49 F.2d 87 (8th Cir.
1931).)
[[Page 67494]]
Under the 1906 act, the Government established advisory definitions
and standards for use in food inspections. However, these definitions
and standards had no effect on the enforcement of the law. To establish
a violation of law, the Government had to introduce testimony showing
that an undeclared variation was not one expected by consumers in an
article bearing the name of the food. It was also necessary for the
Government to show that the variation was not the prevailing good
commercial practice. Without standards or guidelines, judgments under
the 1906 act varied widely. Manufacturers could not be assured that
their products would not be found to be violative, nor were consumers'
interests effectively protected. Manufacturers were not protected
against disreputable competitors who could affect competitive pressures
and, more importantly, reduce consumer confidence in the food supply.
Eventually, the Government and the industry came to the conclusion
that a new statute was needed to ensure the integrity of food by
keeping economically adulterated foods off the market. This recognition
resulted in inclusion of three key provisions (sections 401, 403, and
701 of the act (21 U.S.C. 341, 343, and 371) for standardization of
foods.
C. History: Post-1938
1. The 1938 Act
a. Authority to establish standards. The authority to establish
standards is set forth in section 401 of the act. This section provides
that:
Whenever in the judgment of the Secretary such action will
promote honesty and fair dealing in the interest of consumers, he
shall promulgate regulations fixing and establishing for any food,
under its common or usual name so far as practicable, a reasonable
definition and standard of identity, a reasonable standard of
quality, and/or reasonable standards of fill of container: Provided,
That no definition and standard of identity and no standard of
quality shall be established for fresh or dried fruits, fresh or
dried vegetables, or butter, except that definitions and standards
of identity may be established for avocados, cantaloupes, citrus
fruits, and melons. * * *
Early standards of identity established under the act were
primarily ``recipe standards,'' defining in considerable detail the
specific ingredients (both mandatory and optional ingredients) to be
used and, in many instances, the procedure to be followed in
manufacturing the food, much like home recipes. In addition, they
provided assurance that only ``harmless'' ingredients would be used in
the food and designated which optional ingredients must be declared on
the label.
Standards were intended to prevent economic deception. They were
intended to protect consumers from receiving debased or watered down
food products in which water or other fillers had been substituted for
more valuable constituents. For example, the early standards for flour
products established a maximum level of not more than 15 percent
moisture in these foods. They also included a referenced method of
analysis for moisture content to allow the manufacturer to use the same
procedure as the Government inspector in testing the food for
compliance with the standard.
In defining the composition of foods, the definitions and standards
of identity provided an added measure of assurance that the food supply
would be safe. The standards designated the specific ingredients that
should be used by name or limited them as ``harmless ingredients''
where class names were used. For example, only harmless and assimilable
forms of iron or calcium salts could be added to enrich farina, and, in
the case of vitamin D addition, only harmless carriers that do not
impair the enriched farina could be used (Sec. 137.305). Because the
statute did not have in place, at that time, a mechanism for
preclearance of food additives or other functional optional ingredients
that were used in foods, inclusion of such a limitation on ingredients
provided further assurance that the foods would be wholesome and not
adulterated.
b. Misbranding provisions of the act. To ensure compliance with the
definitions and standards established under section 401 of the act,
Congress included two paragraphs under the misbranding provisions that
effect food standards.
Section 403(g) of the act, states that a food shall be deemed to be
misbranded:
If it purports to be or is represented as a food for which a
definition and standard of identity has been prescribed by
regulations as provided by section 401, unless: (1) It conforms to
such definition and standard, and (2) its label bears the name of
the food specified in the definition and standard, and, insofar as
may be required by such regulations, the common names of optional
ingredients (other than spices, flavoring, and coloring) present in
such food.
In addition, section 403(i) of the act, as originally enacted, provided
that a nonstandardized food (i.e., ``If it is not subject to the
provisions of paragraph (g) of this section) was misbranded * * *
unless its label bears (1) the common or usual name of the food, if any
there be, and (2) in case it is fabricated from two or more
ingredients, the common or usual name of each such ingredient; * * *.''
Thus, the act, as originally enacted, required that foods
purporting to be, or represented as, the standardized food comply with
the compositional provisions of the applicable standard and bear the
name designated in the definition and standard for the food. However,
the act only provided for label declaration of the optional ingredients
used in standardized foods and not the mandatory ingredients.
Nonstandardized foods, on the other hand, had to list all ingredients
used in the food, except that ``spices,'' ``flavorings,'' and
``colorings'' could be declared collectively using those terms.
c. The standards setting process. As enacted in 1938, section 701
of the act (21 U.S.C. 371) provided in paragraph (e)(1) and (e)(2) that
``any action for the issuance, amendment, or repeal'' of any standard
of identity must be accomplished under formal rule making procedures
where interested persons are given an opportunity to participate in a
trial-type hearing.
d. Preemption. As enacted in 1938, the act contained no provision
providing that Federal food standards preempt State laws. While the
standards provided a minimum below which the States could not go, it
did not prevent the States from adopting more stringent standards. (See
Grocery Manufacturers of America v. Gevace, 581 F. Supp. 658 (S.D.N.Y.
1984), aff'd in part and rev'd in part, 75S F.2d 993 (2d Cir.), cert.
denied 474 U.S. 820 (1985).)
2. Agency Implementation of the Standards Provisions
a. Standards of identity. FDA has implemented section 401 of the
act by adopting over 280 standards of identity. These standards
establish the common or usual name for a food and define the nature of
the food, generally in terms of the types of ingredients that it must
contain (i.e., mandatory ingredients), and that it may contain (i.e.,
optional ingredients). Standards may specify minimum levels of the
valuable constituents and maximum levels for fillers and water. They
may also designate the manufacturing process when that process has a
bearing on the identity of the finished food. Finally, standards
provide for label declaration of ingredients used in the food and may
require other specific labeling, such as the declaration of the form of
the food, packing medium, and flavorings or other characterizing
ingredients as part of the name of the food or elsewhere on the
principal display panel of the label.
[[Page 67495]]
Individual food standards vary widely in their content. These
variations have developed because of the different aspects of food
technology that are responsible for providing the defining
characteristics of a food. Some foods are defined and distinguished by
their ingredients. The standards for these foods set specific limits on
the levels of ingredients that must be used in them. For example, the
standard of identity for fruit preserves and jams (Sec. 150.160) states
that these foods must contain a minimum of 45 parts or 47 parts of
fruit (depending on the type of fruit used) to each 55 parts of sugar
or other sweetener, and that they may contain other ingredients such as
pectin, acidifying agents, buffering agents, preservatives, and
antifoaming agents. In this way, the standard ensures that when
consumers purchase ``jam,'' they receive a product that contains a
level of fruit that meets their expectations.
Other foods standards focus on compositional characteristics of the
food, rather than on the specific ingredients. The standards of
identity for fruit juice products in part 146, for example, define
these juices in terms of minimum juice soluble solids contents rather
than on the ingredients used to make the food. Thus, the standard of
identity for orange juice from concentrate (Sec. 146.145) requires that
the food contain not less than 11.8 percent orange juice soluble
solids, exclusive of any added sweetener. In this way, the standard
helps to ensure that all products marketed as ``orange juice''
approximate, in the most important respects, the juice that comes
directly from the fruit, and that consumers will receive a consistent
orange juice product.
The standards of identity for milk products in part 131 list the
minimum milkfat and minimum milk solids not fat levels that must be
contained in these foods. These specific compositional requirements
protect against addition of water or other substances that could dilute
the value of the nutrients in the food. In the case of certain
dehydrated products, such as lowfat dry milk, the standard of identity
(Sec. 131.123) specifies a maximum moisture level to protect against
microbiological growth and to enhance the overall keeping quality of
the product. To ensure that these compositional requirements are met,
the standards reference specific methods of analysis.
Other foods owe their distinctive characteristics to the manner in
which they are produced. Thus, the standards for these foods reflect
this fact. Standards of identity for some cheeses in part 133, for
example, specify the manufacturing process, in addition to establishing
minimum milkfat and maximum moisture requirements, to distinguish one
cheese from another. These standards may also prescribe a curing
process or specific species of mold to be used on or in the cheese to
ensure that the finished cheese has the characteristic organoleptic
properties commonly associated with that cheese.
Some foods are defined by the physical characteristics of the food
itself. For example, the particle size is an important factor in
distinguishing cracked wheat from crushed wheat. Thus, the standards of
identity for cracked wheat in Sec. 137.190 and crushed wheat in
Sec. 137.195 include methods of analysis for the determination of the
particle size of these foods. The test methods are used by
manufacturers and regulators to ensure that foods labeled with these
standardized names will possess the same physical properties from
purchase to purchase. They also ensure that bakers will not have to do
additional particle sizing of the ingredients before they are used for
a specific baking operation. Similarly, standards of identity for flour
(Sec. 137.105), instantized flour (Sec. 137.170), and whole wheat flour
(Sec. 137.200) rely in part on the particle size determination as a
distinguishing feature of these foods. Although the primary purpose of
the particle size designation is to aid in establishing the identity of
the food, it also serves as a quality factor and ensures that consumers
will receive the same physical characteristics in all of these cereal
grain products, regardless of where they are purchased or by whom they
are produced.
The distinctive property of other foods is provided by their
nutrient levels. For example, the standards of identity for certain
juices provide for the addition of vitamin C, some for milk products
provide for the addition of vitamins A and D, while standards of
identity for certain bakery products, enriched bread, rolls and buns,
and cereal products, such as enriched macaroni and noodle products,
enriched flours, and enriched corn meals provide for addition of
thiamin, riboflavin, niacin, iron, and calcium. The enriched cereal
grain products also provide for the optional addition of vitamin D.
Such standards provide for consistency in fortification levels when
nutrients are added to these foods and also serve as guidance to
industry on what the agency believes are reasonable target levels for
these nutrients in foods.
b. Standards of quality and fill of container. Standards of quality
set minimum specifications for such factors as tenderness, color, and
freedom from defects in canned fruits and vegetables. Quality
standards, established primarily for canned foods, place limits on
defects, such as limits on the amounts of peel in canned peeled
tomatoes, or on the number of pit fragments that may be in canned
peaches, on the levels of seriously blemished (shriveled, hard,
discolored, etc.) peas in canned peas, and on the number of pits in
pitted canned cherries. Such characteristics would not be readily
apparent to the purchaser of these foods because of the nature of the
foods and the manner in which they are presented to the consumer
(inside of a can). In the case of certain juice products, they may also
establish criteria for percent juice soluble solids and maximum acidity
to ensure that the juice product will have an acceptable flavor
profile.
Standards of fill of container set out requirements as to how much
food must be in a container. These requirements are particularly
important when foods are packed in liquids and sealed in opaque
containers. The types of fill requirements differ for various products,
depending on the characteristics of the food. Some fill-of-container
standards specify minimum weights of solid food that must be present
after the drainable liquid has been poured off (referred to as
``minimum drained weight''). For example, the fill of container for
canned corn in Sec. 155.130(c) is not less than 61 percent of the water
capacity of the container. Other standards provide a simple stipulation
that the container, with or without added liquid, must be filled with
solid ingredients to a maximum that will still permit the lid to be
attached and the food processed by heat to prevent spoilage, without
crushing or breaking the solid ingredients. This type of standard was
established for several canned fruits, i.e., apricots, cherries,
peaches, and pears (see Secs. 145.115(c), 145.125(c), 145.170(c), and
145.175(c), respectively), because the size, shape or textural
properties of the foods will affect the fill of the raw food and the
drained weight of the finished product. For example, the firmness,
size, and shape of the peach or pear pieces (e.g., halves, slices,
chunks) before heat processing in the container makes them difficult to
pack to uniform fill-in weights. The fill of container for such foods
is further complicated by the tendency of the pieces to soften on
cooking and ``pack down,'' giving the appearance of a slack-filled
container.
The minimum fill-of-container requirements in standards provide
guidance to the manufacturer, as well as
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to the food inspector, as to what constitutes a well-filled container.
For some products, such as crushed pineapple, applesauce, pineapple
juice, and packed nuts, where the consistency of the product is more
uniform, or where there is no added packing medium that could serve to
dilute the product contents, the required minimum fill of container is
the total food contents, expressed as a percentage of the capacity of
the container.
In the case of canned tuna (Sec. 161.190), which may be packed in
oil or water, FDA has established minimum fill of container
requirements, expressed in terms of the pressed cake weight, in ounces,
depending on the size of the container used to pack the tuna. The
minimum pressed cake weight requirement assures consumers that they
will obtain a minimum amount of tuna flesh in each can. The measure of
tuna obtained in the laboratory by the pressed cake weight procedure
described in the standard approximates the measure that the homemaker
would observe when the lid of the tuna can is removed and is used to
press the tuna and drain the liquid. In the case of canned Pacific
salmon (Sec. 161.170), in which no packing medium is added, the minimum
fill of container is expressed in terms of a minimum net weight of
salmon for each container size. The minimum net weight requirements
established in the standard are slightly less than the water capacity
of the container, thereby taking into account the irregular shapes of
the salmon pieces, but at the same time, providing assurance that the
containers will not be underfilled.
FDA regulations require that consumers be informed when foods do
not comply with the applicable standard of quality or fill of
container. Under Sec. 130.14 (21 CFR 130.14), foods that fail to comply
with the quality standards must bear bold label statements, such as
``BELOW STANDARD IN QUALITY,'' followed by a statement such as ``GOOD
FOOD--NOT HIGH GRADE,'' or in the case of products that are substandard
in fill, the statement ``BELOW STANDARD IN FILL,'' wherever the name of
the food or any pictorial representation of the food appears so
conspicuously as to be easily seen under customary conditions of
purchase. The individual quality standards provide for an alternate
label statement of the quality factor which makes the food substandard,
such as ``EXCESSIVE COB'' on canned corn or ``EXCESSIVELY MEALY'' in
canned peas instead of the general label statement, ``GOOD FOOD-- NOT
HIGH GRADE.''
Both the standards of quality and of fill of container provide
detailed methodology for determining compliance. Because most of the
methods included in the standards pertain only to the specific food
identified by that standard, the agency has been of the opinion that
this is the most efficient way to provide for such methods, e.g., the
pressed cake weight method of analysis that pertains only to canned
tuna. In some cases where the same method is used for multiple
products, for example, the drained weight method of analysis for
certain vegetables, FDA has simply referenced the method without
repeating it in each of the standards (see Sec. 155.3(a)). However, in
the case of canned fruit cocktail, the drained weight method of
analysis is incorporated in the standard of fill of container
(Sec. 145.135(c)).
c. Temporary marketing permits. Under the agency's food standards
program, FDA established a regulation providing for the issuance of
temporary marketing permits (TMP's) in Sec. 130.17. TMP's allow
manufacturers to make products that deviate from applicable standards
in specified ways and to test consumer acceptance of those foods in the
marketplace. TMP's allow the manufacturer to market the product in
interstate commerce to obtain data on the commercial viability of a
change in a standard of identity before petitioning the agency to amend
the applicable standard to provide for the deviation. Products marketed
under temporary permits must be labeled in a manner whereby the
consumer can distinguish between the food being tested and the food
complying with the applicable standard.
FDA usually grants permits for a period not to exceed 15 months.
However, with good reason, the agency may provide for a longer initial
test market. Notice of the issuance of a permit, including a
description of the deviations from the standardized food and the
marketing conditions, is published in the Federal Register.
Under Sec. 130.17, the TMP applicant may request an extension of
the firm's permit, when such extension is necessary to obtain
sufficient data to evaluate the test product. Requests for extensions
must be accompanied by a description of the experiments conducted thus
far under the permit, tentative conclusions reached, and reasons why
further experimental shipments are considered to be necessary. Such
requests must also be accompanied by a petition to amend the applicable
standard to provide for the deviation.
If FDA concludes, based on the information supplied, that extension
of the time for test marketing the product is in the interest of
consumers, the agency publishes a notice in the Federal Register
stating this fact and inviting other interested firms to participate in
the test market under the same conditions as set forth for the original
applicant, except that the designated distribution area for the test
product would not apply. These extensions usually continue until FDA
publishes a final regulation either modifying the standard of identity
in the manner sought or terminating the proposed rulemaking, whichever
is the case.
This procedure has worked well in providing manufacturers the
flexibility to test the commercial viability of new, reformulated
versions of traditional standardized foods. It has also served
consumers well, allowing new and nutritionally advantageous products to
be marketed before rulemaking. The data generated under TMP's also
assist the agency in its rulemaking decisions. For example, before the
passage of the 1990 amendments, the agency responded to more than 100
applications for TMP's for modified dairy products, such as nonfat sour
cream, nonfat cottage cheese, and light eggnog. The success of these
test products assured the agency that these nutritionally modified
foods were viable products, which could be made to resemble and
substitute for the traditional standardized food and in a manner so as
not to be nutritionally inferior to the traditional standardized food.
Recently, FDA has issued TMP's for white chocolate, a food that
deviates from the cacao product standards in part 163 because it
contains none on the nonfat cacao solids usually present in chocolate
products.
3. Developments Affecting the Food Standard Regulations
a. Safe and suitable policy. Passage of the Food Additives
Amendment of 1958 and the Color Additive Amendments of 1960 instituted
premarket approval of new food and color additives. These amendments
allowed FDA to develop its ``safe and suitable'' policy, codified in
Sec. 130.3(d), concerning functional ingredients used in foods. This
policy provides that ingredients used in food must be listed food or
color additives, or generally recognized as safe (GRAS) substances, and
used at levels no higher than necessary to accomplish their intended
functional effect in the food.
FDA first used this policy in 1961 in the standard of identity for
frozen raw breaded shrimp (Sec. 161.175). At that time, it represented
a significant change in the manner in which permitted
[[Page 67497]]
ingredients were designated in food standards. The standard simply
provided for ``safe and suitable batter and breading ingredients,''
without listing the names of the specific permitted ingredients. This
departure from the traditional food standards concept provided
manufacturers with considerably more flexibility in the selection of
ingredients to be used in the food. Along with this provision, the
agency also required that each such safe and suitable optional
ingredient used in the food be declared on the label.
Since the establishment of this policy, the agency has revised most
of its standards to provide for the use of safe and suitable
ingredients, by category, that perform the needed technical effect in
the food, e.g., safe and suitable emulsifiers. However, a few of the
standards have not been so updated to increase flexibility in the
manufacture of those foods. These standards include the standards of
identity for certain cheese products (e.g., Secs. 133.169, 133.173,
133.179, 133.187, and 133.188), which specify antimycotics by name
(e.g., sorbic acid, potassium sorbate, sodium sorbate, calcium
propionate, and sodium propionate) and the levels at which they may be
used in the food, and the standards of identity for artificially
sweetened fruit products (e.g., Secs. 145.116, 145.126, 145.131,
145.136, 145.171, 145.176, and 145.181), which designate the specific
artificial sweeteners (saccharin and sodium saccharin) that may be
used.
b. The 1990 amendments--i. Ingredient labeling. In the 1990
amendments Congress amended the ingredient labeling provisions in
section 403(i) of the act by removing the language that limited full
ingredient labeling to nonstandardized foods. The 1990 amendments also
amended section 403(i) to require that certified color additives be
declared by their common or usual names, rather than by the collective
term ``colorings.'' The framers of the act in 1938 apparently believed
that consumers would know what mandatory ingredients would be used in
staple food products covered by standards of identity and, thus, only
provided that the optional ingredients used in such food would need to
be declared on the label. However, with advance in food product
formulation and processing, the ingredients used in standardized foods
in the 1990's are more varied, and many are less familiar to consumers
than the ingredients that were being used in 1938. This fact, along
with consumers' desire to know the nature of all ingredients used in
foods, led to the amendment of section 403(i). In response, the agency
amended the food standards, as necessary, in parts 131 through 169 to
require label declaration of each ingredient used in these foods (58 FR
2850 at 2876 through 2887; and 58 FR 2888 at 2890 through 2896, January
6, 1993).
ii. The standard setting process. The 1990 amendments removed most
section 401 proceedings from the list of rulemakings in which formal
rulemaking is required under section 701(e) of the act. As a result,
proceedings to establish, amend, or repeal food standards are subject
to the requirements of informal notice and comment rulemaking. The only
exception to this change is for actions to amend or repeal standards of
identity for dairy products.
iii. Preemption. The 1990 amendments added section 403A(a)(1) to
the act (21 U.S.C. 343-1(a)(1)). Under this provision, a State may not
establish or continue in effect a standard of identity for a food that
is the subject of a standard of identity under section 401 of the act
if the standard is not identical to the Federal standard. One of
Congress' goals in passing this provision was to provide industry with
some relief from State requirements that interfere with its ability to
market products in all 50 States in an efficient and cost effective
manner (statement of Rep. Madigan, 136 Congressional Record H12954
(October 26, 1990)). Thus, as a result of the 1990 amendments, FDA's
food standards are preemptive of State standards.
iv. Other changes. In addition to these provisions that bear
directly on food standards, Congress made a number of fundamental
changes in how virtually all foods are labeled that bear directly on
the issue of the continuing need for some or all food standards. The
1990 amendments require that virtually all foods bear nutrition
labeling. This information, plus the full ingredient list that is now
required, ensures that consumers will have vastly more information
about the make-up of a particular food product than was available in
1938. This information should make it immediately apparent if a
marketer is attempting to sell a debased or watered down food. Because
the standards were originally intended to prevent this type of economic
deception, the nutrition labeling requirement raises a question as to
whether food standards are still necessary.
The 1990 amendments also provide authority for FDA to adopt
regulations defining nutrient content claims, such as ``reduced fat,''
``low fat,'' and ``fat free'' in Sec. 101.62 (January 6, 1993, 58 FR
2302 at 2418). Having established uniform definitions for these terms,
the agency was able to establish a general definition and standard of
identity in Sec. 130.10, which permits the modification of a
traditional standardized food to achieve a nutrition goal, such as a
reduction in fat or calories. Such modified foods, complying with the
requirements of Sec. 130.10, may be named by the use of a nutrient
content claim defined by FDA in part 101, such as ``reduced fat,'' and
a standardized term, such as ``cheddar cheese'' (i.e., reduced fat
cheddar cheese).
This general definition and standard of identity requires that the
modified food: (1) Not be nutritionally inferior to the traditional
standardized food that it resembles and for which it substitutes, (2)
possess performance characteristics that are similar to the reference
food, (3) contain a significant amount of any mandatory ingredient that
is required to be in the traditional standardized food, and (4) not
contain an ingredient that is prohibited in the traditional
standardized food. However, under Sec. 130.10, safe and suitable
ingredients not specifically provided for in the standard for the
traditional food may be added to ensure that the modified food will not
be inferior in performance characteristics (e.g., physical properties,
flavor characteristics, and shelf life) when compared to those of the
traditional food. This one standard (Sec. 130.10) has provided enormous
flexibility in the manufacture of foods that deviate from the
traditional standards and in providing many healthful and informatively
labeled food products to consumers. It has also eliminated the need for
use of complex alternative names for foods, as well as the need for the
industry to request establishment of new standards or TMP's to deviate
from existing standards to make new foods to meet consumers' needs and
desires.
In the past, many dairy products were defined by the level of
milkfat in the food. Milkfat was considered to be one of the valuable
constituents in the food, and if the minimum established level for
milkfat was not met in the finished food, the product was deemed to be
misbranded under section 403(g) of the act and adulterated under
section 402(b) of the act. However, with the increased concern about
fat and cholesterol in the diet, many consumers view milkfat in some
dairy products as a negative factor or a constituent to be avoided
rather than one that is sought after or highly valued. Under the
general standard in Sec. 130.10, manufacturers are able to meet
consumers demands for reduced fat dairy products. Many new foods, e.g,
[[Page 67498]]
nonfat sour cream, reduced fat cheeses, and light or reduced fat ice
cream products, to name a few, have been made available to consumers
throughout the country in the past few years.
To assist manufacturers in producing informatively labeled reduced
fat ice cream products, FDA published a final rule in the Federal
Register of September 14, 1994 (59 FR 47072) that removed the standard
of identity for ice milk and goat's milk ice milk. Products formerly
labeled as ice milk may be labeled as ``reduced fat'' or ``lowfat ice
cream,'' depending on the total fat content of the food. Manufacturers
may make other versions of ice cream, such as ``nonfat ice cream'' or
``light ice cream.'' In that final rule, FDA also extended the optional
sweeteners provision in the ice cream standard to include use of
alternative sweeteners in reduced calorie ice cream products. For the
next 3 years, until September 14, 1998, FDA is requiring that the name
of the alternative sweeteners used in an ice cream be declared as part
of the name of the food.
When Congress issued the 1990 amendments, it recognized that some
standards of identity contained nutrient content claims as a part of
their names and specifically exempted them from regulations
implementing the requirements of the amendments. To ensure consistency
in the use of such claims on food labels, the agency announced that it
intended to amend as soon as possible those standards of identity that
require that the use of the claim in the name of the standardized food
be consistent with use of the claim on nonstandardized food labels.
Elsewhere in this issue of the Federal Register, to effect that intent,
FDA is proposing to rescind virtually every standard for a dairy
product whose name includes a ``low fat'' or ``no fat'' claim.
D. Common or Usual Name Regulations
In the Federal Register of March 14, 1973 (38 FR 6964), FDA issued
regulations in part 102 governing the establishment of ``common or
usual names for nonstandardized foods.'' The agency stated in the
preamble to the final rule that standards of identity are appropriate
and useful where there is a need to prescribe the entire compositional
requirement for a food, in addition to the name of the food. Often,
however, the agency pointed out, there is a need simply to establish a
uniform and informative name for food without the compositional aspects
of a food standard.
In issuing this regulation, FDA did not intend to establish common
or usual names for all foods. Many foods already have established
names, for example, apples, carrots, or potatoes and the diced, sliced,
dehydrated, or frozen versions of these foods. There is no need for
regulations to define the nature of these foods. If these foods are
labeled inappropriately or in a misleading manner, it is a simple
violation of the misbranding provisions of the act. However, when these
foods are fabricated with other ingredients or modified in ways that
are unfamiliar to consumers, and when the same formulated products are
being marketed with different names by different firms, the nature of
the foods may become less obvious, and there may be need for regulation
to ensure that consumers are not misled or deceived.
In the early 1970's, FDA received a petition requesting that it
establish a regulation stating that onion rings were made from fresh
onion bulbs, sliced and separated into rings, coated with batter or
breading, and fried in a suitable fat or oil bath. The purpose of this
regulation was to distinguish onion rings, so prepared, from an onion
ring product that is made from fresh or dehydrated chopped onion,
shaped by an extruder into ring shapes, breaded, and fried. This
petition led to the establishment of the common or usual name
regulation for ``onion rings made from diced onion'' in Sec. 102.39.
This regulation distinguishes onion rings made from comminuted onions
from those made with intact slices. It also requires that, if the onion
ingredient has been dehydrated, the name include this fact, i.e.,
``onion rings made from dried diced onions.'' FDA received similar
petitions for potato chips made from comminuted potatoes or dehydrated
potato products leading to the establishment of another common or usual
name regulation in Sec. 102.41, ``potato chips made from dried
potatoes.''
The 1969 White House Conference on Food, Nutrition, and Health had
recommended that the agency establish by regulation uniform common or
usual names for foods that accurately reflect the reasonable
expectations of consumers. The Conference recommendation focused on
concern that the amount of the characterizing ingredient, if any, be
represented on the label in percentage form or some other uniform
method. In the preamble to the final rule, FDA acknowledged that
disclosure of the amount of a characterizing ingredient is often
necessary for the consumer to choose between two competing products
when the amount of the ingredient is important to the value of the
food.
Part 102 consists of general principles for common or usual names
for classes or subclasses of foods and several regulations that set
requirements for naming specific nonstandardized foods. The general
principles in Sec. 102.5 require that the common or usual name of a
food accurately describe, in as simple and direct terms as possible,
the basic nature of the food or its characterizing properties or
ingredients. The name must include the percentage of a characterizing
ingredient or component or a statement of its presence or absence when
the portion of that substance has material bearing on the value of the
food, or when the appearance of the food might otherwise mislead the
consumer as to the amount of the substance present.
FDA has issued common or usual name regulations for nonstandardized
foods only when necessary to fully inform consumers, or where different
names were being used for the same product by different manufacturers.
The first common or usual name regulation that required percentage
declaration of the valuable characterizing ingredient was for seafood
cocktails consisting of two or more seafood constituents or for
cocktails with one seafood constituent. FDA had received consumer
complaints concerning both the amount of seafood present in such
cocktails and the use of labeling that suggested a greater proportion
of seafood than was present. The common or usual name sought to correct
this situation. Because the proportion of the seafood in such cocktails
has material bearing on price and consumer acceptance, this regulation
allowed consumers to make better purchasing decisions.
At the time they were established, one of the benefits of the
common or usual name provisions in part 102 was that names of new
products could be established by regulation using informal notice and
comment rulemaking procedures, rather than the lengthy formal
rulemaking procedures required for food standards. With passage of the
1990 amendments, however, as explained above, new standards of identity
also may be established by notice and comment rulemaking proceedings.
In view of this change in the act, the agency requests comments on the
need to retain the dual mechanisms of standards and common or usual
name regulations for establishing the definition of a food. Comments
who support retention of both should describe the circumstances in
which common or usual names should be chosen over standards of
[[Page 67499]]
identity. If standards of identity are deemed more appropriate, the
agency requests comments on whether the common or usual name
regulations for specific foods in part 102 should be retained in that
part, transferred to the appropriate food standards parts, or repealed.
II. Reinventing Government
Congress directed FDA to establish and implement food standards
because there was a real need to protect consumers from economic fraud
and to promote honesty and fair dealing in the interest of consumers.
Food standards have been beneficial through their long history of
providing assurance to consumers of product uniformity, with the
resulting expectation and belief by consumers that all products bearing
a particular name will possess the same characteristics irrespective of
where they are purchased, or by whom they are manufactured or
distributed. Food standards have also been an efficient mechanism for
addressing public health problems through mandatory fortification
requirements. In addition, standards have provided manufacturers with
guidance in the production, naming, and labeling of products and with
assurance that competitors will have to meet the same guidelines for
the same foods.
However, the agency recognizes that food standards may serve as an
impediment to the food industry to the degree to which they fail to
reflect advances in food science and technology. New ingredients and
plant varieties that allow manufacturers to enhance a food's
organoleptic or functional properties, alter its nutritional profile,
or extend its shelf life, are being developed and used in
nonstandardized food products. Incorporation of these advances into
standardized foods may be difficult or impossible without laborious
amendment of the relevant standard. FDA believes that manufacturers of
standardized foods should have the ability to make use of advances in
food technology, provided the basic nature of the food remains
essentially the same.
Also, consumer expectations may have changed dramatically in the
past two decades. Busy, active consumers put a premium on convenience
when purchasing foods, and this emphasis may have also altered their
expectations relative to basic, staple food products. Additionally,
with the growing body of scientific evidence linking diet and health,
consumers are demanding modified versions of traditional products that
have lower amounts of constituents associated with negative health
implications, such as fat, saturated fat, cholesterol, and sodium.
Some critics have suggested that the agency revoke all food
standards and allow market forces to control the composition of the
products that are currently regulated by standards. On the other hand,
industry and consumer spokespersons have expressed support for
standards, believing them necessary to ensure that all manufacturers
operate in a spirit of fairness and to ensure consistency in the
products consumers are purchasing. They also state that standards
promote consistency in labeling and to serve as a basis for nutrient
content claims. For example, standards for traditional dairy products
with established minimum fat levels can be used as the bases for
``reduced fat'' claims on labels of modified versions of these foods.
FDA believes that the two actions described previously, namely: (1)
Amending standards to provide for the use of ``safe and suitable''
ingredients rather than explicit designation of all ingredients and (2)
establishment of the general standard in Sec. 130.10 for foods named by
the use of a nutrient content claim and a standardized term, have
lifted some of the restrictiveness of standards. However, the agency is
considering further steps for providing flexibility in how foods are
formulated and named, including, if appropriate, eliminating food
standards, while continuing to promote honesty and fair dealing in the
interest of consumers, and while continuing to ensure that food is not
adulterated or misbranded. In light of the President's memorandum, FDA
is looking critically at food standards.
The agency notes that the Food Safety and Inspection Service (FSIS)
of the U.S. Department of Agriculture has established a number of food
standards, under the authority of the acts that it administers. Many of
these standards define the nature of meat and poultry products in a
manner similar to FDA standards described previously. In a separate
document, FSIS is announcing that it too is critically reviewing its
standards in accordance with President Clinton's directive. Comments to
this document are urged to consider, and provide comments separately
to, FSIS's document.
III. International Standards
The United States is a charter member (dating back to 1963) and
strong supporter of the Codex Alimentarius Commission (Codex) and its
food standards program. The aim of the Codex, which is sponsored
jointly by the United Nations' Food and Agriculture Organization (FAO)
and World Health Organization (WHO), is to promote the health and
economic interests of consumers, while encouraging fair international
trade in food. One of the general provisions of FDA's food standards
program is the review of Codex food standards, following the procedure
described in Sec. 130.6(a): ``All food standards adopted by the Codex
Alimentarius Commission will be reviewed by the Food and Drug
Administration and will be accepted without change, accepted with
change, or not accepted.''
It has been FDA's policy to publish new Codex food standards in an
advance notice of proposed rulemaking in the Federal Register for
review and informal comment. If the comments support adoption of the
Codex standard or amendment of an existing standard to incorporate
changes based on the Codex standard, FDA publishes a proposal in the
Federal Register to adopt the Codex standard's provisions insofar as
practicable. A proposal of this type could also be begun on the
agency's own initiative. These procedures are described in Sec. 130.6.
To date, the agency has considered 83 Codex standards for adoption. (As
a part of its initiative on international harmonization, FDA is
considering a separate rulemaking to amend and update procedures in
Sec. 130.6 to make them more consistent with current Codex policies.)
FDA notes that U.S. delegates participating in the development of
the international standards at Codex Committee meetings have often
relied upon criteria established in the U.S. food standards in deciding
on compositional requirements to be included in Codex standards. The
agency believes that this procedure is a reasonable course of action
because the U.S. standards, for the most part, reflect current
commercial practice in this country. In the absence of U.S. food
standards, would the position of the U.S. delegates in the Codex
Committee meetings be weakened? How important is it to exporters and
importers that the compositional provisions of the U.S. food standards
be reflected in international specifications such as those established
by the Codex Alimentarius?
IV. Economic Issues
Executive Order 12866 directs FDA to maximize the net benefits
(benefits minus costs) of its regulations. The agency generally
considers the following seven factors in determining the net benefits
of a food standard:
1. Net benefits are likely to be higher for standards involving the
product
[[Page 67500]]
characteristics about which consumers are most concerned. FDA has no
formal method of determining the level of consumer concern about
various characteristics, however and, thus, seeks information on this
issue. In particular, consumer concerns may change over time. FDA
requests comments on how it should factor changing consumer concerns
into the economic assessments that it does for any rulemaking that may
result from this advance notice of proposed rulemaking.
2. Net benefits are likely to be higher for standards that
consumers are best able to understand and interpret. Thus, it becomes
significant if there are any cases in which standards of identity
produce confusion rather than provide information. FDA requests
comments as to whether any such standards exist. For example, might
consumers believe that products similar to standardized products but
which fail to meet the standard are necessarily inferior to products
that meet the standard? Such confusion may deter consumers from
purchasing nonconforming products, even though those products may have
all the characteristics some consumers usually associate with that type
of product or all the characteristics desired by consumers. This
confusion could lead to a reduction in the development of new products,
a reduction in competition between similar products, and a reduction in
product variety. FDA requests comments and information on whether
consumers may be confused when comparing standardized foods to other
foods and on the importance of product variety in particular markets.
3. Net benefits are likely to be higher for standards dealing with
characteristics that are least amenable to direct informational
labeling, including both labeling required by FDA and voluntary
labeling by manufacturers. Characteristics that are not amenable to
direct informational labeling are those for which direct labeling would
be particularly complex or lengthy, such as the relative proportion of
various ingredients, particular functional or organoleptic
characteristics, or particular methods of manufacture. Other
characteristics, such as the presence of particular ingredients,
nutritional facts, and the contents of containers, are now labeled for
most products. FDA requests comments on which characteristics are most
and least amenable to direct labeling.
4. Net benefits are likely to be higher for standards involving
product characteristics that cannot be detected after purchase.
Although information on characteristics that can be detected after, but
not before, purchase can prevent post-purchase dissatisfaction, the
value of this information is likely to be less. If a consumer purchases
a brand name product and is not satisfied with that product, that
consumer will purchase a different brand name in the future. Thus, food
manufacturers have an economic incentive to produce products with the
characteristics consumers desire, and that they can ensure are present.
The agency believes that information about characteristics that cannot
be detected after purchase is more valuable because consumers cannot
acquire this information on their own. FDA requests comments on how
much value the consumer places on being able to detect product
characteristics before purchase so as to avoid post-purchase
dissatisfaction.
5. Net benefits of federally established standards are likely to be
higher for those standards least amenable to implementation by private
organizations. If consumers are willing to pay for assurances that
products have certain characteristics, it may be possible for private
organizations to certify the presence of those characteristics in some
cases.
6. Net benefits are likely to be higher for standards that are
short, simple, and flexible. The lengthier and more complex a given
standard, the more difficult it is likely to be for FDA to issue, and
it may be more difficult to enforce. Shorter and less complex standards
are also less costly for manufacturers to interpret and comply with.
The more flexible a standard, the less likely FDA will have to revise
or amend that standard in the future, and the less costly it will
likely be for manufacturers to comply with that standard. FDA requests
comments on the proper degree of flexibility for particular standards.
7. The net benefits of particular Federal standards may be larger
or smaller than those of State standards preempted by those Federal
standards. Conflicting State standards generate compliance costs
because manufacturers selling products under conflicting standards must
either provide alternative product formulations or labeling for those
products. However, Federal standards are not necessarily superior to
State standards because Federal and State standards may have different
costs or benefits with respect to any of the factors listed previously,
that is, State standards may provide more or less information than
Federal standards, may restrict competition to a greater or lesser
degree than Federal standards, and so on. Consumers in different
States, however, may have conflicting ideas over the proper definition
of various products, and some State standards may provide some
consumers with better information on the characteristics that most
concerned them. The benefits and costs of harmonizing Federal or State
standards with international standards can be analyzed in the same
manner as the benefits and costs of harmonizing State standards through
the use of Federal standards.
V. Request for Information
Given this background on past standards activities and the agency's
commitment to review all of its standards, FDA is soliciting comments
on the following issues, as well as any other ideas that would assist
the agency in fulfilling its mission to protect the interest of
consumers. FDA particularly requests comments that reflect the
following concerns of broad segments of industry, food manufacturers,
and distributors, including importers and exporters, individuals and
consumer groups, academia, State and local governments, and the
international community:
A. Overall Operation of Food Standards
1. Utility of the System
a. Some persons have argued that there should be a partial or total
dissolution of food standards. Do you agree? If so, why? What, if
anything, should take their place? Are some standards obsolete? Are
there different types of standards, some of which are more meaningful
than others? Could the objective of food standards, ``to promote
honesty and fair dealing in the interest of consumers,'' be
accomplished by other, more effective means? If so, how would it be
accomplished within the limits of current and anticipated FDA
resources?
b. Are there any data that indicate whether consumers find the
current system of standards meaningful, or whether significant
alteration of standards would significantly affect consumers' ideas
about the integrity of food products?
c. Does industry need compositional standards for orderly marketing
of foods? Are food standards needed to control the composition of
fabricated foods such as cheeses, ice cream, and enriched cereal and
bakery products?
2. Naming Conventions
a. Food standards of identity are a means of defining the
composition of a food that is marketed under a designated common or
usual name. What criteria should be used for determining when a food
standard is
[[Page 67501]]
appropriate? How should FDA interpret the phrase in section 401 of the
act ``to promote honesty and fair dealing in the interest of
consumers''? Should evidence of the existence of consumer confusion or
dissatisfaction be required as a precondition before FDA undertakes the
standards setting process?
b. In which markets does the potential misinterpretation of
standards of identity generate a significant tradeoff between
consumers' desire for product consistency and product variety? Given
that standards define the trade-off between product consistency and
product variety, for which products or characteristics is variety least
important to consumers, and, hence, which products or characteristics
are most appropriate to be standardized?
c. In section II.A. of this document, FDA discussed the different
kinds of defining characteristics that serve as the basis for a
standard of identity. Are food standards distinguishable by these
characteristics? Can they be divided into categories, and should these
categories be evaluated separately? For example, should standards for
foods defined by physical characteristics, such as cracked wheat, be
retained? Should they be revised by retaining the criterion for the
defining characteristic, e.g., particle size, and removing the specific
instructions for measuring the defining characteristic? Can the
criterion be used effectively if the method to be used for measuring it
is not specified? How can FDA best determinethe characteristics of food
with which consumers are most concerned?
d. In addition to promoting honesty and fair dealing, standards
also promote the health and safety of the general public. As noted
above, in section I.C.2.a. of this document, a number of the standards
of identity contain provisions for restoration of nutrients which may
be lost during processing of the food or addition of nutrients to
correct a nutritional deficiency, such as the addition of certain B
vitamins and iron in cereal grain products. The agency requests
comments on whether food standards are the best means of providing for
the addition of such nutrients, and, if not, on what those other means
are.
3. Products Sold to Manufacturers
Some standards of identity govern products that are sold primarily
to other manufacturers, such as the standards for lactose in
Sec. 168.122 and dried glucose sirup in Sec. 168.121. These standards
define the purity of these ingredients. The agency requests comments on
the need to retain these standards. Are standards that govern products
that are sold primarily to manufacturers for use as ingredients in
formulating other foods necessary to promote honesty and fair dealing
in the interest of consumers? Would purity specifications for products,
such as lactose, be more properly provided in food additive
regulations, GRAS affirmation regulations, or other nonregulation
sources such as the Food Chemicals Codex?
4. Test Marketing of Products
Should the agency continue to issue temporary marketing permits? Is
there another way that the food industry could label, for test
marketing purposes, products that deviate from the applicable standard
of identity that would ensure that consumers will not be misled about
the nature of the food and alert the consumer that the food is not the
traditional standardized food? For example, could a product be labeled
with a bold statement that ``this food deviates from the standard of
identity established by the Food and Drug Administration because
____________________,'' and not be considered to be misleading to
consumers? Would such a statement be meaningful to consumers? Can such
a system be reconciled with section 403(g) of the act?
5. Methods of Analysis
FDA often provides detailed methods of analysis in its standards of
identity, quality, and fill of container. Given that Federal food
standards are preemptive, FDA believes that providing such detail for
specific products in the standards appears to be an efficient way to
convey to state and local enforcement agencies, as well as the food
industry, information on the procedures the agency will use in its
enforcement actions. In some of the food standards, where the same
analytical method is used across many different foods, the agency may
reference the method in a text such as the International AOAC's
Official Methods of Analysis or a method that appears elsewhere in the
Code of Federal Regulations. However, in the interest of having less
complex standards, the agency requests comments on the need to continue
to incorporate specific methods of analysis in food standards. Would
incorporation of these methods in a separate manual or section of the
Code of Federal Regulations be preferable to the current procedures?
Are there other procedures that would provide for easier updating of
the methods than amendment of the standards of identity? FDA points out
that its current policy is to require that the methods it uses for
enforcement of the provisions of the standards go through the
rulemaking procedures applicable to all other provisions of the
standards. Any change in how methods of analysis are dealt with must
take into consideration the legal status of the resultant
specification.
6. Elimination of Federal Preemption; Impact on State Jurisdiction
FDA specifically requests comments on the preemption aspects of
standards of identity. If Federal standards of identity were
discontinued, the States would be able to establish their own
compositional requirements, a situation that would be contrary to the
congressional move toward national uniformity in food standards and
labeling. Is this desirable? How significant are costs associated with
conflicting state regulations to firms marketing products interstate
commerce?
In light of the preemption provisions of section 403A of the act,
the agency requests comments as to whether it is in the interest of the
general public that the agency retain a Federal food standards program.
If so, should the operation of that program deviate from the existing
system of standards of identity and common or usual names regulations?
If it is not deemed to be in the interest of the public, what changes
should be made in the act and in the regulations to effect the
necessary changes in food regulation? Comments should be supported by
data where available on the issues relating to the economics of
production and marketing of commodities currently covered by food
standards or common or usual name regulations, including the costs and
benefits to consumers, industry, and international trade.
7. Impact on International Trade
a. How significant are the costs associated with State or Federal
standards of identity that do not conform to international food
standards?
b. In recommending an alternative to the current system of
regulating the manufacture and sale of food using standards of identity
and common or usual name regulations, comments should take into account
the impact of the alternative on FDA's ability to participate in the
development and harmonization of international standards. For example,
how effective would U.S. delegates be in debating the merits of
specific provisions in a Codex standard if the United States had no
comparable standards?
[[Page 67502]]
8. FDA-FSIS Harmonization
FDA recognizes the need for consistency between FDA and FSIS in the
development and implementation of food standards that set forth minimum
compositional requirements. The agency believes that manufacturers will
be better able to comply with the requirements of both agencies if
similar approaches are used. Thus, to the extent possible, one of the
agency's goals is to harmonize its regulations with those of FSIS. The
agency requests comments on how this goal might be accomplished. Is
consistency in the two agencies' policies sufficient harmonization to
make regulations easier to use, or should the standards established by
both agencies be listed together and in similar formats? For example,
would codification of the FSIS and FDA standards of identity in the
same Title of the Code of Federal Regulations be beneficial to users of
these regulations? Commenters responding to this issue should consider
the different authorities granted to FDA under the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 321 et seq.) and to FSIS under the Federal
Meat Inspection Act (21 U.S.C. 601 et seq.) and the Poultry Products
Inspection Act (21 U.S.C. 451 et seq.) in promulgation and enforcement
of the standards, particularly the premarket clearance and inspection
authority that is available to FSIS and not to FDA.
FDA regulations cover a wider range of food products than those of
FSIS. In addition, FDA standards appear in a number of different
formats, some of which also encompass quality and fill of container
requirements. Should these differences continue, or should the two
agencies strive to have a consistent format for their food standards?
9. Agency Budget Constraints
Because of budget constraints, FDA must prioritize its resources.
In such a situation, matters affecting food safety and public health
take precedence over those concerning issues of economic deception,
such as the development and revision of food standards. If comments
support a continuance of the existing food standards program, FDA
requests comments on where resources for the program would be obtained.
Should it be changed to a fee supported program in which petitioners
for new standards or amendments to existing standards, including
applicants for temporary marketing permits, would pay a filing fee that
would cover the agency's cost of petition or application review and
evaluation and the subsequent Federal Register document preparation?
10. Imitation Foods
A related matter that would arise should FDA decide to retain food
standards in some form or another is the question of whether FDA should
modify its treatment of imitation foods. Under Sec. 101.3(e), a food
shall be deemed to be an imitation, and thus subject to the
requirements of section 403(c) of the act, if it is a substitute for
and resembles another food but is nutritionally inferior to that food.
If a food is an imitation, then the label of the food shall bear the
word ``imitation'' and, immediately thereafter, the name of the food
imitated. FDA requests comments on whether, if it retains food
standards, it should modify its treatment of imitation foods in any
way.
B. Alternatives
1. Regulate All Foods as Nonstandardized Foods
Revoke the existing food standards. Under this alternative, all
foods would be labeled as nonstandardized foods in accordance with the
regulations in parts 101 and 102. This alternative would provide
maximum flexibility to manufacturers and would provide for a wider
variety of foods to consumers. At the same time, it would mean that
consumers would no longer be able to rely on the definitions of
familiar foods established by foodstandards. FDA requests comment on
the value of this alternative.
2. Declaration of Percentage of All Major Ingredients
Some persons have suggested label declaration in the ingredients
list of the percentage of all ingredients used in a food as an
alternative to minimum compositional requirements in food standards.
Historically, FDA has not required such quantitative labeling of
ingredients.
FDA now seeks comment on whether such quantitative ingredient
labeling is a desirable and feasible alternative to food standards. If
it is, how extensive should this labeling be? Should the percentages of
all ingredients be listed? Should the declarations be limited to only
the major ingredients in the food or to those ingredients that are
present at a level greater than a certain designated limit, for
example, 2 percent or more? What impact would this have on industry's
ability to be flexible in its formulations if the labels must specify
accurately the percentage of each ingredient or of each major
ingredient? Would percentage ingredient labeling be adequate to allow
consumers to distinguish between products with similar appearance? How
important is percentage declaration of ingredients now that nutrition
labeling of foods is mandatory? In considering the alternatives to the
current system of standards of identity and common or usual name
regulations, the agency requests that commenters consider the costs to
industry, enforcement agencies, and consumers, as well as the benefits,
of the alternatives.
3. Percentage Labeling of Characterizing Ingredients in the Food Name
Could a simpler system of nomenclature be established such as one
based on a percentage declaration of the valuable characterizing
ingredient in the food, for example, ``strawberry jelly, 30%
strawberries,'' or ``peanut butter, 80% peanuts?''. (FDA standards for
these foods require that strawberry jelly contain not less than 45
parts strawberries and 55 parts sweetener and that peanut butter
contain not less than 90 percent peanut ingredient.) This approach
would allow manufacturers to include greater or lesser amounts of the
characterizing ingredients with the consumer being the ultimate
decisionmaker regarding the product's acceptability. Would such a
system be similar to common or usual name regulations in Part 102?
Should a level be established below which a product could not be called
by the traditional name? For example, should a product labeled as
containing 5 percent strawberries be allowed to be called ``strawberry
jelly,'' if the percentage of strawberries is declared as part of the
name? Should this approach be limited to only certain types of foods?
If so, what types of FDA regulated food products would be amenable to
this type of labeling?
In multicomponent, fabricated food products, what determines the
components whose percentage would be declared? Should the percentage of
more than one component be declared? For example, in an egg noodle
product, should the percentage of the flour and the egg be declared as
part of the name of the food? Should the amount of milk used in the
formulation or manufacture of a cheese be declared on the label even
though not all of the components of the milk remain in the cheese?
Would a declaration of the percentage of certain constituents of the
finished food, e.g., the fat and protein contents of the cheese, be
more informative than the percentage of the ingredients used to make
the food?
4. Compositional Standard for the Parent Product
If percentage characterizing ingredient declaration were adopted
for traditional
[[Page 67503]]
foods, such as fruit jellies, jams, and preserves, would it be
necessary to identify a ``parent'' product, for example, a standardized
jam or jelly that complies with minimum compositional requirements
established by regulation, to avoid misleading use of the percentage
declaration on the food label? For example, if products with less than
45 parts fruit were allowed to be called ``jam'' or ``preserves,''
provided the percentage of fruit were required to be declared, would a
standard of identity for jam and preserves specifying the types of
ingredients the foods contain and requiring a minimum fruit content,
minimum sweetener content, or minimum soluble solids in the finished
product be necessary? If so, would it be desirable that the standard of
identity also require declaration of the percentage of fruit in the
parent product for comparison purposes?
5. Establishment of Generic Food Standards
FDA has established several generic food standards, such as the
class standards of identity in part 133 for certain types of cheeses
for which the agency has not established individual varietal standards
(e.g., Sec. 133.150 Hard cheeses, and Sec. 133.193 Spiced, flavored
standardized cheeses) and the generic standard for nutritionally
modified versions of traditional standardized foods in Sec. 130.10
Requirements for foods named by the use of a nutrient content claim and
a standardized term. Could the generic food standard concept be
extended to other classes of food standards, e.g., canned fruits and
canned fruit juices? Could these standards be written as
``performance'' standards rather than as recipes? If so, provide
illustrative examples.
6. Private Certification of Food Products
Which characteristics of food products are most amenable to
certification by private organizations rather than by local, State, or
Federal government? Which factors render private certification
impractical or inappropriate?
7. Labeling Qualifications That Product Differs From Government
Standard
a. Should products that do not conform to FDA quality standards be
labeled ``BELOW STANDARD IN QUALITY--GOOD FOOD, NOT HIGH GRADE?'' Is
there better labeling that would provide more useful distinctions?
Would alternative labeling be more readily interpreted in the case of
substandard fill labeling?
b. FDA notes that most of the previous questions are directed
primarily at standards of identity or common or usual name regulations.
However, the agency requests that commenters also consider the need for
standards of fill of container and standards of quality. How important
are these regulations to consumers and the food industry? As in the
case of standards of identity, FDA requests comments on whether these
standards should be retained, revised, or revoked. Some of the quality
factors of the standards were based on acceptance of the Codex
Alimentarius international food standards and others on good commercial
practice in this country. Thus, comments should consider as part of
their analysis the impact of such standards relative to exported and
imported food, as well as food produced and sold domestically.
8. Moratorium on Food Standards
FDA requests comment on whether, if it institutes a broad
rulemaking on foods standards, a moratorium on foods standards actions,
e.g., issuance of temporary marketing permits and the development of
regulations to amend, repeal, or establish new standards, would be
appropriate.
9. Are There Any Other Ideas?
a. Is there a better way to protect consumer expectations about
food products without the market entry delays and demands on agency
resources that frequently occur under the current system? If the
existing system of standards is deemed to be outdated and no longer
serving a useful purpose in the marketplace, is there a middle ground?
Is there a different system for standards that would be useful? What,
if anything, should be done about section 401 of the act? If this
provision is not repealed, the agency will continue to receive
petitions to issue standards of identity, quality, and fill of
container.
b. The agency is particularly interested in the cost/benefit
aspects of food standards. Do the benefits of standards of identity,
quality, and fill of container to consumers and to the regulated
industry outweigh the costs of such regulations? If the existing
programs need to be restructured, how should this be accomplished, and
how would such a change affect the costs and benefits to consumers?
c. What factors affect the benefits and costs of food standards,
other than the factors listed previously? Are there considerations
relating to the cost/benefit factors listed above that have not been
acknowledged? How can FDA best estimate the benefits and costs of
particular standards? Which standards are particularly beneficial or
costly, and why?
Interested persons may, on or before April 29, 1996, submit to the
Dockets Management Branch (address above) written comments regarding
this advanced notice of proposed rulemaking. Two copies of any comments
are to be submitted, except that individuals may submit one copy.
Comments are to be identified with the docket number found in brackets
in the heading of this document. Received comments may be seen in the
office above between 9 a.m. and 4 p.m., Monday through Friday.
Dated: December 22, 1995.
William B. Schultz,
Deputy Commissioner for Policy.
[FR Doc. 95-31492 Filed 12-26-95; 3:37 pm]
BILLING CODE 4160-01-P
Complete official Federal Register PDF
FR Doc. 95-31491 Substances Approved for Use in the Preparation of Meat and Poultry Products
[Federal Register Volume 60, Number 250 (Friday, December 29, 1995)]
[Proposed Rules]
[Pages 67490-67492]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31491]
[[Page 67489]]
_______________________________________________________________________
Part V
Department of Health and Human Services
_______________________________________________________________________
Food and Drug Administration
_______________________________________________________________________
21 CFR Part 71, et al.
Substances Approved for Use in the Preparation of Meat and Poultry
Products; Food Standards of Identity, Quality and Fill of Container;
Common or Usual Name Regulations; Proposed Rules
Federal Register / Vol. 60, No. 250 / Friday, December 29, 1995 /
Proposed Rules
[[Page 67490]]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Parts 71, 170, and 171
[Docket No. 95N-0220]
RIN 0910-AA66
Substances Approved for Use in the Preparation of Meat and
Poultry Products
AGENCY: Food and Drug Administration, HHS.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA) is proposing to amend
its regulations governing the review of petitions for the approval of
food and color additives and substances generally recognized as safe
(GRAS) to provide for joint review of such petitions by the Food Safety
and Inspection Service (FSIS), U.S. Department of Agriculture (USDA),
when meat or poultry product uses are proposed. By agreement between
USDA and FDA, such listings would eliminate the need for a separate
FSIS rulemaking to allow the use in meat and poultry products of FDA-
approved substances.
DATES: Written comments by March 14, 1996.
ADDRESSES: Submit written comments to the Dockets Management Branch
(HFA-305), Food and Drug Administration, rm. 1-23, 12420 Parklawn Dr.,
Rockville, MD 20857.
FOR FURTHER INFORMATION CONTACT: George H. Pauli, Center for Food
Safety and Applied Nutrition (HFS-200), Food and Drug Administration,
200 C St. SW., Washington, DC 20204, 202-418-3090.
SUPPLEMENTARY INFORMATION:
I. Background
FDA, under the Federal Food, Drug, and Cosmetic Act (the act), is
responsible for regulating foods generally. FSIS, under the Federal
Meat Inspection Act (FMIA) and the Poultry Products Inspection Act
(PPIA), regulates products consisting wholly or in part of meat or
poultry.
Over the years, FDA has generally deferred to FSIS in matters
concerning the regulation of meat and meat food products (hereinafter
referred to collectively as meat products) and poultry products,
despite FDA's broad jurisdiction over all food. This approach is
consistent with the proposition that in cases of possible
jurisdictional overlap, an agency with a broad grant of statutory
authority will normally defer to an agency with a more specific grant
of authority. FSIS has primary jurisdiction over meat and poultry
products and is tasked with ensuring that all those products are
inspected before they are permitted in commerce. FSIS regulations and
guidelines govern all aspects of meat and poultry products that are
subject to such inspection. These include regulations and guidance on
substances that may be added to those products.
Since the 1958 Food Additives Amendment to the act, FSIS has come
to rely on FDA in most matters concerning the safety of food and color
additives and other substances that may be used in meat and poultry
products. FDA regulates food additives and color additives through a
premarket approval system established respectively by sections 409 and
721 of the act
(21 U.S.C. 348 and 379e). FDA has developed the scientific staff, the
institutional expertise, and the regulatory structure to ensure the
safety of substances that may be added to foods. The act requires that
both food additives and color additives be shown to be safe before
marketing
(21 U.S.C. 348(c)(3) and 379e(b)(4)). In addition, FDA may not approve
any use of a food additive that would ``promote deception of the
consumer * * * or would otherwise result in adulteration or misbranding
of food * * * '' (21 U.S.C. 348(c)(3)(B)). Similarly, a color additive
must also be shown to be suitable for its intended use (21 U.S.C.
379e(b)(1)).
Over the years, the two agencies have cooperated on food ingredient
issues on an as-needed, substance-specific, and case-by-case basis.
Nonetheless, because of their different regulatory needs, the two
agencies' regulations governing the use of these substances in foods
are cast in formats and terms that are not fully consistent with one
another. This absence of consistency causes difficulty and
inconvenience to persons who need to refer to both agencies'
regulations on approved substances and substance uses.
Furthermore, it is not clear from the regulations where one
agency's jurisdiction ends and the other's begins. The public
frequently sends FSIS requests for approval of the use of substances in
food that must be referred to FDA, and sends FDA requests involving
meat or poultry uses that must be referred to FSIS.
Finally, FSIS's current regulations require that those seeking
approval of a substance for use in or on meat or poultry products first
establish that the substance is safe for the intended use under section
409 or section 721 of the act, and second, that it is suitable for the
intended use under the FMIA or PPIA (9 CFR 318.7(a) and 381.147(f)). As
a result, both agencies conduct separate, sequential reviews and
rulemakings before a new meat or poultry use can be permitted. Many
years can elapse between the time a manufacturer petitions FDA for the
approval of a food additive or a color additive under the act and the
appearance in FSIS's regulations of approval for meat and poultry uses.
FDA and FSIS have also concluded that their respective regulations
concerning food and color additives and other substances that may be
added to meat and poultry products should be more consistent with one
another and easier to use and access.
II. The Proposal
This proposed rule, together with an FSIS proposed rule appearing
elsewhere in this issue of the Federal Register, would require a single
petition, joint reviews, and a single rulemaking procedure to replace
the current time consuming, duplicative, sequential rulemaking
procedures governing the use in meat or poultry products of food
additives, color additives, and GRAS substances. It is intended to
clarify the two agencies' responsibilities and regulatory interests.
Future FSIS listings for meat and poultry uses would be harmonized with
those of FDA and incorporated into FDA's regulations in Title 21 of the
Code of Federal Regulations (CFR), providing a basis for the eventual
elimination of FSIS's separate listings from Title 9 CFR.
Substances would be authorized for use in products under the
jurisdiction of FSIS on the basis of FDA's regulations permitting such
uses. For a substance not authorized for meat or poultry use under
existing FDA regulations, only one petition for rulemaking--to FDA--
would be required. Future FDA food additive, color additive, and GRAS
substance listings would specify any approved meat or poultry product
uses, and any conditions of such uses, in accord with FSIS
recommendations, to the extent those recommendations are consistent
with the act.
Substances whose use is GRAS, however, are exempt from the
premarket approval requirements of the act and need not be listed in
FDA's regulations in 21 CFR. For a substance that is not affirmed by
FDA as GRAS or otherwise listed in part 182 or 184 (21 CFR part 182 or
184) of FDA's regulations, or for a GRAS substance listed by FDA for
general food use, where meat or poultry uses are neither specified nor
prohibited, FSIS would continue to
[[Page 67491]]
consider a manufacturer's basis for claiming GRAS status and
suitability for use in meat or poultry products. In such cases, FSIS
would make the determination in consultation with FDA as needed to
ensure that appropriate advice is given and that FDA has notice of the
determination.
This proposal would require, and lead to, greater harmonization,
i.e., closer and more consistent cooperation, between FDA and FSIS. The
agencies propose to enter into a memorandum of understanding (MOU)
concerning the specifics of the agencies' working relationship under
the proposed regulations. A draft of the MOU is appended to the FSIS
proposal appearing elsewhere in this issue of the Federal Register.
FSIS and FDA believe that the public will be better served by
having all permitted uses for food additives, color additives, and GRAS
substances consolidated in one place--in Title 21 CFR--and intend to
work toward that end. However, existing regulations on specific
substances and substance uses in Titles 9 and 21 CFR would not be
immediately affected by this proposal. Because of resource constraints,
current FDA regulations would be amended to accommodate meat and
poultry uses only in response to a food additive, color additive, or
GRAS petition. FSIS will review its listings accordingly and eliminate
those that are redundant with FDA's Title 21 listings.
This proposed rule would amend FDA regulations to provide for: (1)
Specifying any meat, meat food product, or poultry product uses of
substances approved by FDA for food use and listed in 21 CFR; and (2)
petitioning FDA for listing in 21 CFR of substances intended to be used
in meat, meat food products, or poultry products. FDA's regulations
would be amended so that all petitions to permit new substances, new
uses, or new use levels of substances in meat, meat food products, or
poultry products would be filed only with FDA. FDA's regulations
governing color additive petitions, petitions to affirm substances as
GRAS, and food additive petitions in parts 71, 170, and 171 (21 CFR
parts 71, 170, and 171), respectively, would be revised to provide for
joint review by FSIS of petitions filed with FDA that propose use of
the substance in meat or poultry products. (In the agencies' view, it
is the petitioner's burden to identify the intended meat and poultry
uses of a substance.)
III. Environmental Impact
The agency has determined under 21 CFR 25.24(a)(8) that this action
is of a type that does not individually or cumulatively have a
significant effect on the human environment. Therefore, neither an
environmental assessment nor an environmental impact statement is
required.
IV. Analysis of Impacts
FDA has examined the impacts of the proposed rule to amend 21 CFR
parts 71, 170, and 171 under Executive Order 12866 and the Regulatory
Flexibility Act (Pub. L. 96-354). Executive Order 12866 directs
agencies to assess all costs and benefits of available regulatory
alternatives and, when regulation is necessary, to select regulatory
approaches that maximize net benefits (including potential economic,
environmental, public health, and safety effects; distributive impacts;
and equity). The Regulatory Flexibility Act requires analysis of
options for regulatory relief for small entities.
The principal benefit of this proposed rule is to eliminate
duplicative Federal effort. Under the proposed amendments and
amendments FSIS is concurrently proposing to its regulations published
elsewhere in this issue of the Federal Register, separate petitions to
FSIS for use of substances in meat or poultry products would no longer
be required. Obtaining approval for the use in meat and poultry
products of new substances or for new uses of previously approved
substances would be simpler, faster, and less costly for both industry
and the Federal Government than under the current system.
With this proposed rule, those substances not authorized for meat
and poultry use under existing FDA regulations would require only one
petition for rulemaking--to FDA. (For a substance that is not affirmed
as GRAS by FDA or otherwise listed in 21 CFR part 182 or 184, or a
substance listed by FDA for general food use, FSIS would continue to
consider the manufacturer's basis for claiming GRAS status of the
substance and its suitability for a specified use in meat or poultry
products.) Furthermore, all users of the Federal regulations concerning
the addition of substances to foods should benefit by having fewer,
clearer regulations. Thus, there would be a reduction in the
duplication of effort and attendant costs for all concerned.
Therefore, FDA finds that this proposed rule would not have a
significant adverse economic impact. In addition, FDA certifies that
there is not a significant impact on a substantial number of small
entities.
Nevertheless, this proposed rule has been deemed by the Office of
Information and Regulatory Affairs (OIRA) of the Office of Management
and Budget to be a significant regulatory action as defined by section
3(f)(4) of Executive Order 12866 because it raises novel legal and/or
policy issues arising out of the President's priorities, namely the
reinvention of government and regulatory reform initiatives. Therefore,
this proposed rule has been formally reviewed by OIRA in accordance
with the provisions of Executive Order 12866.
V. Paperwork Reduction Act of 1995
This proposed rule contains information collections which are
subject to review by the Office of Management and Budget (OMB) under
the Paperwork Reduction Act of 1995 (Pub. L. 104-13). Information
collection requirements have been approved by OMB for color additive
petitions, petitions to affirm substances as GRAS, and food additive
petitions under OMB Nos. 0910-0185, 0910-0132, and 0910-0016,
respectively. FDA has determined that the proposed rulemaking would
entail no new information collection from the regulated industry or
other private entities. Persons seeking Federal Government approval of
substances for use in meat or poultry foods would not have to submit
any information not currently required for approval. However, such
persons would only have to submit petitions to FDA, rather than to both
FDA and FSIS, as they do now. Thus, a current, duplicative information
collection requirement would be eliminated.
FDA requests comments regarding its tentative conclusions on the
paperwork burden.
VI. Comments
Interested persons may, on or before March 14, 1996, submit to the
Dockets Management Branch (address above) written comments regarding
this proposal. Two copies of any comments are to be submitted, except
that individuals may submit one copy. Comments are to be identified
with the docket number found in brackets in the heading of this
document. Received comments may be seen in the office above between 9
a.m. and 4 p.m., Monday through Friday.
List of Subjects
21 CFR Part 71
Administrative practice and procedure, Color additives,
Confidential business information, Cosmetics, Drugs, Reporting and
recordkeeping requirements.
[[Page 67492]]
21 CFR Part 170
Administrative practice and procedure, Food additives, Reporting
and recordkeeping requirements.
21 CFR Part 171
Administrative practice and procedure, Food additives.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, it is
proposed that 21 CFR parts 71, 170, and 171 be amended as follows:
PART 71--COLOR ADDITIVE PETITIONS
1. The authority citation for 21 CFR part 71 continues to read as
follows:
Authority: Secs. 201, 402, 409, 501, 505, 506, 507, 510, 512-
516, 518-520, 601, 701, 721, 801 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 321, 342, 348, 351, 355, 356, 357, 360,
360b-360f, 360h-360j, 361, 371, 379e, 381); secs. 215, 351 of the
Public Health Service Act (42 U.S.C. 216, 262).
2. Section 71.1 is amended in paragraph (c) in the petition by
revising the introductory paragraph preceding paragraph A., and by
adding new paragraph (j) to read as follows:
Sec. 71.1 Petitions.
* * * * *
(c) * * *
Attached hereto in triplicate (quadruplicate, if intended uses
include use in meat, meat food product, or poultry product), and
constituting a part of this petition are the following:
* * * * *
(j)(1) If intended uses of the color additive include uses in meat,
meat food product, or poultry product subject to regulation by the U.S.
Department of Agriculture (USDA) under the Poultry Products Inspection
Act (PPIA) (21 U.S.C. 451 et seq.) or Federal Meat Inspection Act
(FMIA) (21 U.S.C. 601 et seq.), FDA shall, upon filing of the petition,
forward a copy of the petition or relevant portions thereof to the Food
Safety and Inspection Service, USDA, for simultaneous review under the
PPIA and FMIA.
(2) FDA will ask USDA to advise whether the proposed meat and
poultry uses comply with the FMIA and PPIA, or if not, whether use of
the substance would be permitted in products under USDA jurisdiction
under specified conditions or restrictions.
3.Section 71.20 is amended by adding new paragraph (a)(3) to read
as follows:
Sec. 71.20 Publication of regulation.
* * * * *
(a) * * *
(3) The regulation shall list any use or uses in meat, meat food
product, or poultry product subject to the Federal Meat Inspection Act
(FMIA)(21 U.S.C. 601 et seq.) or Poultry Products Inspection (PPIA)(21
U.S.C. 451 et seq.) for which the color additive has been found
suitable and for which it may safely be employed.
* * * * *
PART 170--FOOD ADDITIVES
4. The authority citation for 21 CFR part 170 continues to read as
follows:
Authority: Secs. 201, 401, 402, 408, 409, 701 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 321, 341, 342, 346a, 348,
371).
5. Section 170.35 is amended by redesignating paragraphs (c)(3)
through (c)(6) as paragraphs (c)(4) through (c)(7), respectively, and
by adding new paragraph (c)(3) to read as follows:
Sec. 170.35 Affirmation of generally recognized as safe (GRAS) status.
* * * * *
(c) * * *
(3)(i) If intended uses of the substance include uses in meat, meat
food product, or poultry product subject to regulation by the U. S.
Department of Agriculture (USDA) under the Poultry Products Inspection
Act (PPIA) (21 U.S.C. 451 et seq.) or Federal Meat Inspection Act
(FMIA) (21 U.S.C. 601 et seq.), FDA shall, upon filing of the petition,
forward a copy of the petition or relevant portions thereof to the Food
Safety and Inspection Service, USDA, for simultaneous review under the
PPIA and FMIA.
(ii) FDA will ask USDA to advise whether the proposed meat and
poultry uses comply with the FMIA and PPIA, or if not, whether use of
the substance would be permitted in products under USDA jurisdiction
under specified conditions or restrictions.
* * * * *
PART 171--FOOD ADDITIVE PETITIONS
6. The authority citation for 21 CFR part 171 continues to read as
follows:
Authority: Secs. 201, 402, 409, 701 of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 321, 342, 348, 371).
7. Section 171.1 is amended in paragraph (c) in the petition by
revising the introductory paragraph preceding paragraph A., and by
adding new paragraph (n) to read as follows:
Sec. 171.1 Petitions.
* * * * *
(c) * * *
Attached hereto, in triplicate (quadruplicate, if intended uses
include use in meat, meat food product, or poultry product), and
constituting a part of this petition, are the following:
* * * * *
(n) (1) If intended uses of the food additive include uses in meat,
meat food product, or poultry product subject to regulation by the U.S.
Department of Agriculture (USDA) under the Poultry Products Inspection
Act (PPIA) (21 U.S.C. 451, et seq.) or Federal Meat Inspection Act
(FMIA) (21 U.S.C. 601, et seq.), FDA shall, upon filing of the
petition, forward a copy of the petition or relevant portions thereof
to the Food Safety and Inspection Service, USDA, for simultaneous
review under the PPIA and FMIA.
(2) FDA will ask USDA to advise whether the proposed meat and
poultry uses comply with the FMIA and PPIA, or if not, whether use of
the substance would be permitted in products under USDA jurisdiction
under specified conditions or restrictions.
8. Section 171.100 is amended by redesignating paragraph (b) as
paragraph (c) and by adding new paragraph (b) to read as follows:
Sec. 171.100 Regulation based on petition.
* * * * *
(b) The regulation shall describe the conditions under which the
substance may be safely used in any meat product, meat food product, or
poultry product subject to the Federal Meat Inspection Act (FMIA) (21
U.S.C. 601 et seq.) or the Poultry Products Inspection Act (PPIA) (21
U.S.C. 451 et seq.).
* * * * *
Dated: October 11, 1995.
William B. Schultz,
Deputy Commissioner for Policy.
[FR Doc. 95-31491 Filed 12-26-95; 3:37 pm]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 95-31490 Proposed Airspace and Flight Operations Requirements for the 1996 Summer Olympic Games, Atlanta, GA
[Federal Register Volume 60, Number 250 (Friday, December 29, 1995)]
[Proposed Rules]
[Pages 67506-67512]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31490]
[[Page 67505]]
_______________________________________________________________________
Part VI
Department of Transportation
_______________________________________________________________________
Federal Aviation Administration
_______________________________________________________________________
14 CFR Part 91
Proposed Airspace and Flight Operations Requirements for the 1996
Summer Olympic Games, Atlanta, GA; Proposed Rule
Federal Register / Vol. 60, No. 250 / Friday, December 29, 1995 /
Proposed Rules
[[Page 67506]]
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 91
[Docket No. 28420 Notice No. 95-19]
Proposed Airspace and Flight Operations Requirements for the 1996
Summer Olympic Games, Atlanta, GA
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Notice of proposed rulemaking (NPRM).
-----------------------------------------------------------------------
SUMMARY: This document proposes a Special Federal Aviation Regulation
(SFAR), applicable for the period July 5 through August 11, 1996, to
establish temporary flight restricted (TFR) areas overlying the various
competition venues for the XXVI Olympic Games. This action also
proposes to require slot reservations for arrivals and departures at
specified airports in the vicinity of the Olympic Games. The FAA
believes this action is necessary for the security of the venues, safe
operation and management of aircraft operating to, within, and from
these areas, and to prevent any unsafe congestion of sightseeing and
other aircraft over the various game sites.
DATES: Comments must be received on or before January 22, 1996. Due to
time constraints, the FAA is requiring a 21-day comment period.
ADDRESSES: Send comments on the rule in triplicate to the Federal
Aviation Administration, Office of the Chief Counsel, Attn.: Rules
Docket (AGC-204, Docket No.), 800 Independence Avenue, SW., Washington,
DC 20591, United States of America (USA). Comments may also be sent
electronically to the following Internet address:
[email protected]. Comments may be examined in Room 915G,
weekdays, between 8:30 a.m. and 5:00 p.m. except Federal holidays.
FOR FURTHER INFORMATION CONTACT:
Janet Apple, Air Traffic Rules Branch, ATP-230, Airspace Rules and
Aeronautical Information Division, Federal Aviation Administration, 800
Independence Avenue, SW, Washington, DC 20591; telephone (202) 267-
8783.
SUPPLEMENTARY INFORMATION:
Comments Invited
Interested persons are invited to participate in this regulatory
action by submitting such written data, views, or arguments, as they
may desire. Comments that provide the factual basis supporting the
views and suggestions presented are particularly helpful in developing
reasoned regulatory decisions. Communications should identify the
regulatory docket number and be submitted in triplicate to the above
specified address. All communications received on or before the closing
date for comments will be considered by the Administrator. Commenters
who wish the FAA to acknowledge receipt of their comments must submit
with those comments a self addressed, stamped postcard on which the
following statement is written: ``Comments to Docket Number.'' The
postcard will be date/time stamped and returned to the commenter. The
provisions in this rule may be changed in the light of comments
received. All comments submitted will be available both before and
after the closing date for the comments, in the Rules Docket for
examination by interested persons. A report summarizing substantive
public contact with FAA personnel concerned with this rulemaking will
be filed in the docket.
Availability of NPRM
Any person may obtain a copy of this NPRM by submitting a request
to the Federal Aviation Administration, Office of Public Affairs,
Attention: Public Information Center, APA-430, 800 Independence Avenue,
SW., Washington, DC 20591, or by calling (202) 426-8058. Communications
must identify the notice number of this NPRM. Persons interested in
being placed on the mailing list for future NPRM's should also request
a copy of Advisory Circular No. 11-2 which describes the application
procedure.
Comment Period Justification
The FAA is requesting a comment period of 21 days to allow for the
incorporation of comments and the expeditious charting of the TFR
areas. The early charting of the TFR areas would reduce the potential
confusion of pilots since the SFAR restriction will significantly
change the normal operating procedures of the affected areas.
Furthermore, early charting of the TRF areas would result in security
of the Olympic venues, safe operation and management of aircraft, and
the prevention of any unsafe congestion of sightseeing and other
aircraft over the various game sites and Olympic Villages.
Background/Need for Rulemaking
The 1996 Olympic Games will be held from July 19 through August 4,
1996, primarily in the Atlanta, Georgia, area and will mark the 100th
anniversary of the modern Olympic Games. The event is the largest
single, peace-time event in the history of the world. Over 350,000
visitors a day are expected to attend the games. In terms of air
traffic demand, the pregame, game, and postgame activities from July 19
through August 4 are expected to generate substantial increases in
aircraft operations in the Atlanta area as well as other sites in the
United States. Those sites are:
The Olympic Village--Atlanta, GA
The Olympic Ring--Atlanta, GA
Wolf Creek Skeet Range--Atlanta, GA
Atlanta Beach--Jonesboro, GA
International Horsepark--Covington, GA
Stone Mountain Park--Stone Mountain, GA
Lake Sidney Lanier--Gainesville, GA
Sanford Stadium--Athens, GA
Golden Park--Columbus, GA
Lee College--Cleveland, TN
U.S. Highway 64--Tennessee
Ocoee River--Tennessee
Legion Field--Birmingham, Al
The Olympic Village--Savannah, GA
Sail Harbor and Wilmington River Transit Zone--Savannah, GA
Sailing Venue--Savannah, GA
The Citrus Bowl--Orlando, FL
The Orange Bowl--Miami, FL
RFK Stadium--Washington, DC
The Olympic Village--Davie, FL
The Olympic Village--Columbus, GA
The Special Federal Aviation Regulation (SFAR)
This notice proposes an SFAR to provide for the security of persons
and property in the air and on the ground, and for the safe and
efficient movement of air traffic during the Olympic period. To
accomplish this goal, the SFAR is designed for flexibility and
adaptability.
Traffic Management Arrival/Departure Slot Reservation System
During the busy Olympic period, the FAA must ensure continued safe
and efficient use of airspace and air traffic control capacity. To
achieve this objective while minimizing disruption to the air traveling
public, the FAA proposes and arrival/departure slot reservation system
to manage air traffic into and out of key airports in the Atlanta area.
The proposed slot reservation system would be applicable to visual
flight rules (VFR) arrivals at four specified airports, VFR departures
at four specified airports, and to non-scheduled instrument flight
rules (IFR) operations at 11 specified airports. As with most special
events, airborne holding would not be authorized in lieu of a ground
delay. Thus, aircraft without reservations may anticipate lengthy
delays at departure airports.
VFR arrival slot reservations are required for: Cobb County-
McCollum Field Airport (RYY), Marietta, GA; DeKalb-Peachtree Airport
(PDK), Atlanta, GA; Fulton County-Brown
[[Page 67507]]
Field Airport (FTY), Atlanta, GA; and Gwinnett County-Briscoe Field
Airport (LZU), Lawrenceville, GA.
VFR departure slot reservations are required for: Cobb County
Airport-McCollum Field (RYY), Marietta, Ga; DeKalb-Peachtree Airport
(PDK), Atlanta, GA; Fulton County-Brown Field Airport (FTY), Atlanta,
GA; and Gwinnett County-Briscoe Field Airport (LZU), Lawrenceville, GA.
Non-Scheduled IFR slot reservations are required for:
Non-scheduled IFR slot reservations are required for: Clayton
County-Tara Field Airport (4A7), Hampton, GA; Cobb County-McCollum
Field Airport (RYY), Marietta, GA; Covington Municipal Airport (9A1),
Covington, GA; DeKalb-Peachtree Airport (PDK), Atlanta, GA; Ben Epps
Field Airport (AHN), Athens, GA; Peachtree City-Falcon Field Airport
(FFC), Peachtree City, GA; Fulton County Airport-Brown Field Airport
(FTY), Atlanta, GA; Lee Gilmer Memorial Airport (GVL), Gainesville, GA;
Gwinnett County-Briscoe Field Airport (LZU), Lawrenceville, GA; The
William B. Hartsfield Atlanta International Airport (ATL), Atlanta, GA;
and Richard B. Russell Airport (RMG), Rome, GA.
Beginning July 14, 1996, 7:00 a.m. (EDT), pilots can reserve VFR
arrival and departure of IFR arrival and departure slots at these
airports by calling 1-800-96FAA96 (963-2296) 24 hours a day.
Reservation slots may be reserved no sooner than 72 hours before your
estimated time of arrival or departure. Be prepared to provide the
following information: Arrival reservations: destination airport,
estimated time of arrival, call sign, direction of arrival to the
Atlanta area and type aircraft; Departure Reservations: departure
airport, estimated time of departure, call sign, destination airport,
first fix after departure and type aircraft.
Temporary Flight Restrictions
The FAA proposes to establish TFR areas over the Olympic Villages
and competition sites. The establishment of TFR areas over the
competition venues would result in the restriction of aircraft
operations in these areas, however, access to these areas may be
accommodated with an appropriate authorization from the designated
using agency. ATC would retain the ability to manage aircraft through
the TFR areas in accordance with normal traffic flows.
Operating restrictions within the airspace overlying competition
venues are proposed for the period from three hours before to three
hours after each event. The additional time that the restrictions are
proposed to be imposed, before and after each match, would accommodate
the observation and planning of ground traffic movement as well as
facilitate the orderly movement of aircraft in and through the airspace
above each event. Flight operations would be restricted within the
airspace from the surface to approximately 2500 feet above the ground
(AGL) to provide a safe environment.
These TFR areas generally would be circular areas of 1 to 4 NM in
radius from the surface to approximately 2,500 AGL. Aircraft operations
through, into, or out of these TFR areas would not be allowed during
the effective dates and times unless specifically authorized by the
designated using agency or ATC.
The locations, dimensions, and effective times of the TFR areas
would be published for use by all pilots on air navigation charts and
in the Federal Register with specific details disseminated by NOTAM.
Requests for access to the airspace areas can be obtained by contacting
the using agency for the particular venue as designated via NOTAM.
Certain Olympic venues fall within Class B surface area;
specifically, RFK Stadium in Washington, DC and the Orange Bowl in
Miami, Fl. These venues will be charted along with those outside of
Class B airspace to ensure consistency.
Exceptions
This SFAR would contain provisions to provide flexible and
efficient management and control of air traffic, such as the authority
to give priority to or exclude from requirements of the special
regulation, flight operations dealing with or containing essential
military, medical emergency, rescue, law enforcement, public health and
welfare, Presidential, Olympic family, and heads of state.
Obtainign U.S. Air Navigation Charts
The following provides information on how to obtain the special air
navigation charts for the Olympic Games as well as other air navigation
charts for use in the U.S.
The National Ocean Service (NOS) publishes and distributes
aeronautical charts of the U.S. National airspace system (NAS). Charts
are readily available through a network of sales agents located at and
near principal civil airports. Because of the large variety, all NOS
products may not be available locally; users can procure these products
directly from NOS. Chart prices, subscription rates, and catalogs of
related publications are available on request and are obtainable by
writing to: National Oceanic and Atmospheric Administration, National
Ocean Service, Distribution Branch, N/CG33, Riverdale, Maryland 20737,
USA, Phone (301) 436-6990--General Information (301) 436-6993,
Subscription Only: (301) 436-8194--One Time Sales Only.
NOS products will be shipped via United Parcel Service, First Class
Mail, or priority package within the U.S. For foreign surface shipment
to addresses in other countries, please add 5 percent to the total cost
of order. Please write to NOS for a transportation cost quotation if
faster foreign delivery is required. All mail order purchases must be
accompanied by check or money order made payable to ``NOS, Department
of Commerce, N/CG33''. Remittance must be made in U.S. funds; i.e., by
check payable on a U.S. bank, or by international money order. Returned
checks will result in cancellation of orders.
Chart sales offices are maintained at the following locations:
National Ocean Service, Chart Sales & Control Data Office, 701 C
Street, Anchorage, Alaska 99513, USA
National Ocean Service, Chart Sales Office, 6501 Lafayette Avenue,
Riverdale, Maryland 20737, USA
Pacific Marine Center, National Ocean Service, 1801 Fairview Avenue
East, Seattle, Washington 98102, USA
Atlantic Marine Center, National Ocean Service, 439 West York
Street, Norfolk, Virginia 23510, USA
Chart prices are subject to recomputation, based on cost of
production, in accordance with Federal law. Price changes, when
required, will be published 60 days in advance of the effective date.
The first of 13 charts that would show some of the Olympic TFR's
would be published beginning with a February 1, 1996 effective date.
Notice to Airmen (NOTAM) Information
ATC and air traffic flow management systems will monitor and assess
the air traffic demand so that restrictions are kept to an essential
minimum. To assure maximum flexibility, the SFAR proposes the issuance
of NOTAMs to announce all restrictions and other actions including the
lifting of any restrictions taken by the FAA in response to changing
airport and air traffic conditions.
Time-critical aeronautical information that is of a temporary
nature or is not sufficiently known in advance to permit publication on
aeronautical charts or in other operational publications, receives
immediate dissemination via the National NOTAM system. All domestic
[[Page 67508]]
operators planning flight to the Olympics need to pay particular
attention to NOTAM D and Flight Data Center (FDC) NOTAM information.
NOTAM D information could affect a pilot's decision to make a flight.
NOTAM D pertains to information on airports, runways, navigational
aids, radar services, and other information essential to flight. An FDC
NOTAM will contain information which is regulatory in nature, such as
amendments to aeronautical charts and restrictions to flight. FDC NOTAM
and NOTAM D information would also be provided to international
operators in the form of International NOTAMs. NOTAMs are distributed
through the National Communications Center in Kansas City, Missouri,
USA, for transmission to all air traffic facilities having
telecommunications access.
Pilots and operators should consult the biweekly Notices to Airmen
Domestic/International publication. This publication contains the NOTAM
FDC and D NOTAMs. Special information, including graphics, would be
published in the biweekly publication several weeks in advance of the
Olympics. For more detailed information concerning the NOTAM system,
refer to the Aeronautical Information Manual, ``Preflight'' Section.
Other U.S. Laws and Regulations
Aircraft operators should clearly understand that the proposed SFAR
is in addition to other laws and regulations of the U.S. The SFAR would
not waive or supersede any U.S. law or obligation. When operating
within the jurisdictional limits of the U.S., operators of foreign
aircraft must conform with all applicable requirements of U.S. Federal,
State, and local governments. In particular, aircraft operators
planning flights into the U.S. must be aware of and conform to the
rules and regulations established by the:
1. U.S. Civil Aeronautics Board regarding flights entering the
U.S.;
2. U.S. Customs Service, Immigration and other authorities
regarding customs, immigrations, health, firearms, and imports/exports;
3. U.S. FAA regarding flight in or into U.S. airspace. This
includes compliance with Federal Aviation Regulations regarding
operations into or within the U.S. through air defense identification
zones, and compliance with general flight rules; and
4. Airport management authorities regarding use of airports and
airport facilities.
Environmental Effects
This proposed action would establish TFR areas for safety and
security purposes and would curtail or limit certain aircraft
operations within designated areas at defined dates and times, rather
than require aircraft to be operated along specified routings or in
accordance with specific procedures. Additionally, this proposed action
would be temporary in nature and effective only for the dates and times
necessary to provide for the safety and protection of participants and
spectators on the ground, as well as law enforcement and security
personnel operating in the air at Olympic game venues. ATC would retain
the ability to direct aircraft through the restricted areas in
accordance with normal traffic flows. The FAA believes, therefore, that
the proposed establishment of temporary flight restriction areas would
have minimal impact on ATC routings or procedures.
Further, this action would result in a reduction in aircraft
activity in the vicinity of the Olympic games by restricting aircraft
operations. Therefore, there would be fewer aircraft operations in the
vicinity of the Olympic games than would have occurred if the
restricted areas were not in place and noise levels associated with
that greater aircraft activity would also be reduced. Additionally,
aircraft avoiding the restricted areas would not be routed over any
particular area. This action would, therefore, not result in any long-
term action which would routinely route aircraft over noise-sensitive
areas. For the reasons stated above, the FAA concludes that this
proposed rule would not significantly affect the quality of the human
environment.
International Civil Aviation Organization and Joint Aviation
Regulations
In keeping with U.S. obligations under the Convention on
International Civil Aviation, it is FAA policy to comply with
International Civil Aviation organization Standards and Recommended
Practices (SARP) to the maximum extent practicable.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1980 (Pub. L. 96-
511), there are no requirements for information collection associated
with this proposed regulation.
Regulatory Evaluation
This regulatory evaluation examines the costs and benefits of a
proposed SFAR applicable for the period July 19 through August 4, 1996.
The SFAR proposes to establish a TFR overlying the various competition
venues for the 1996 Olympic games. This notice also proposes to require
slot reservations for arrivals and departures at specified airports in
the vicinity of the Olympics. Since the impacts of the proposed change
are relatively minor this economic summary constitutes the analysis and
no regulatory evaluation will be placed in the docket.
Costs and Benefits
There are two major areas where economic impacts are likely: Slot
Reservation System and Temporary Flight Restrictions.
A. Slot Reservation System
During the Olympic period, the FAA must assure the continued safe
and efficient use of airspace over the affected areas. To achieve this
objective while minimizing disruption to the air traveling public, the
FAA proposes an arrival and departure slot reservation system to manage
air traffic into and out of airports serving the Olympic Games.
As a result of the slot reservation system some flights may be
canceled and others rerouted. The cost of the cancellations would be
the value of the flights to airlines and passengers less aircraft
operating cost to conduct the flights. Other flights may be diverted to
other airports in the Olympic Games area. Diversions would result in
additional cost of trips to and from places of intended lodging and
possible extra aircraft operation costs. The major economic impact in
the case of a diversion would be inconvenience to operators who may
have wanted to land at a given airport. Because such occurrences are of
limited duration, the FAA believes that costs associated with any
diversions from one airport to another in the affected area will
probably by small. The additional FAA administrative workload generated
by the proposed rule would be absorbed by current personnel and
equipment resources. The proposed slot provision would not require any
additional air traffic controllers nor additional radar control
equipment.
The benefits of the slot reservation system would be better control
of the airspace over Atlanta and other areas affected by the Olympics.
Arrivals are expected to increase 25 percent during the 3 weeks of the
Olympic season. There would be an increased risk of accidents due to
this unprecedented congestion in the Atlanta area if greater controls
are not implemented. There is also the potential benefit of reduced
delay times for operators attempting to land in the Atlanta area. The
proposed
[[Page 67509]]
slot provision would assure that the FAA will have sufficient capacity
to handle the many possible extra flights carrying spectators,
athletes, media personnel, and dignitaries during the Olympic period
without unnecessary delay.
B. Temporary Flight Restriction Areas
Due to the substantial increase in aircraft operations that are
expected in the Atlanta area as well as other sites, the FAA proposes
to establish TFR areas over the Olympic village and competition sites.
The establishment of TFR's over competition venues would result in the
restriction of aircraft operations from the surface to 2500 feet.
The major economic impact of circumnavigation in this case would be
inconvenience to operators who may have wanted to operate in the area
of the TFR. Because such occurrences are of limited duration and the
restricted areas are limited in size, the FAA believes that any
circumnavigation costs will be negligible. An aircraft operator could
avoid the restricted airspace by flying over it without significantly
deviating from their current routes or by circumnavigating the
restricted airspace.
The potential benefits of the proposed TFR airspace would be
primarily enhanced safety to the public. Enhanced safety would take the
form of the reduced possibility of fatalities and property damage as a
result of a lowered risk of accidents due to increased positive control
of TFR airspace. While benefits cannot be quantified, the FAA believes
the benefits are commensurate with the small costs attributed to the
temporary inconvenience of the flight restrictions for operators near
the TFR.
Regulatory Flexibility Act Determination
The Regulatory Flexibility Act of 1980 (RFA) ensures that
government regulations do not needlessly and disproportionately burden
small businesses. The RFA requires the FAA to review each rule that may
have a significant economic impact on a substantial number of small
entities.
The FAA's criteria for a ``substantial number'' is a number that is
not less than 11 and that is more than one third of the small entities
subject to the rule. The small entities that could be potentially
affected by the implementation of the proposed rule are operators of
aircraft for hire owning nine or fewer aircraft. Because of the
negligible impact of this regulatory action, the FAA initially
determines that this proposed amendment would not have a significant
impact on a substantial number of small entities.
Federalism Implications
The proposed regulation set forth herein would not have substantial
direct effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, in
accordance with Executive Order 12612, it is determined that this
proposed regulation would not have sufficient federalism implications
to warrant the preparation of a Federalism Assessment.
International Trade Impact Assessment
The proposal would not constitute a barrier to international trade,
including the export of U.S. goods and services to foreign countries
and the import of foreign goods and services to the United States. This
proposal would not impose temporary costs on aircraft operators. There
should be no effect on U.S. or foreign aircraft manufacturers.
Therefore, the FAA has determined that the proposed rule would neither
have an effect on the sale of foreign aviation products nor services in
United States, nor would it have an effect on the sale of U.S. products
or services in foreign countries.
Conclusion
For the reasons discussed in the preamble, and based on the
findings in the Regulatory Flexibility Determination and the
International Trade Impact Assessment, the FAA has determined that this
proposed regulation is not a ``significant regulatory action'' under
Executive Order 12866. The FAA has determined that the proposed rule
would impose temporary costs on the public. The magnitude of these
costs, while undetermined, are negligible. The benefits would be
increased aviation safety resulting from a lower risk of accidents due
to increased congestion during the Olympics. In addition, the FAA
certifies that this proposed regulation would not have a significant
economic impact, positive or negative, on a substantial number of small
entities under the criteria of the Regulatory Flexibility Act. This
proposed regulation is not considered significant under DOT Order
2100.5, Policies and Procedures for Simplification, Analysis, and
Review of Regulations. A Regulatory Flexibility Determination and
International Impact Assessment are set out above. Because the economic
impact of this proposal is likely to be minimal, no formal regulatory
evaluation has been prepared.
List of Subjects in 14 CFR Part 91
Aircraft flight, Airspace, Aviation safety, Air Traffic Control.
The Proposed Special Federal Aviation Regulation (SFAR)
In consideration of the foregoing, the Federal Aviation
Administration proposes to amend 14 CFR part 91 as follows:
PART 91--[AMENDED]
1. The authority citation for part 91 continues to read as follows:
Authority: 49 USC 106(g), 1155, 40103, 40113, 40120, 44101,
44111, 44701, 44709, 44711, 44712, 44715, 44716, 44717, 44722,
46306, 46315, 46316, 46502, 46504, 46506, 46507, 47122, 47508,
47528-47531; articles 12 and 29 of the Convention on International
Civil Aviation 861 stat. 1180.
2. By adding Special Federal Aviation Regulation No. 74 to read as
follows:
SFAR No. 74 Airspace and Flight Operations Requirements for the 1996
Summer Olympic Games, Atlanta, Georgia
A. General
1. Each person shall be familiar with all NOTAMs issued pursuant
to this SFAR and all other available information concerning that
operation before conducting any operation into or out of an airport
or area specified in this SFAR or in NOTAMs pursuant to this SFAR.
In addition, each person operating an international flight that will
enter the U.S. shall be familiar with any international NOTAMs
issued pursuant to this SFAR. NOTAMs are available for inspection at
operating FAA air traffic facilities and regional air traffic
division offices.
2. Notwithstanding any provision of the Federal Aviation
Regulations to the contrary, no person may operate an aircraft
contrary to any restriction procedure specified in this SFAR or by
the Administrator, through a NOTAM issued pursuant to this SFAR.
3. As conditions warrant, the Administrator is authorized to--
(a) Restrict, prohibit, or permit IFR/VFR operations at any
airport, terminal, or enroute airspace area designated in this SFAR
or in a NOTAM issued pursuant to this SFAR;
(b) Give priority to or exclude the following flights from
provisions of this SFAR and NOTAMs issued pursuant to this SFAR:
(1) Essential military.
(2) Medical and rescue.
(3) Essential public health and welfare.
(4) Presidential and Vice Presidential.
(5) Flights carrying visiting heads of state.
(6) Flights in the service of the Olympic Committee and media
flights whose planned activities have been coordinated and
accredited by the Atlanta Committee for the Olympic Games.
(7) Law enforcement and security.
(8) Flights authorized by the Director, Air Traffic Service;
and/or
[[Page 67510]]
(c) Implement flow control management procedures.
4. For security purposes, the Administrator may issue NOTAMs
during the effective period of this SFAR to cancel or modify
provisions of this SFAR and NOTAMs issued pursuant to this SFAR if
such action is consistent with the safe and efficient use of
airspace and the safety and security of persons and property on the
ground as affected by air traffic.
5. No person may operate an aircraft to or from an airport
listed in this SFAR or NOTAM issued pursuant to this SFAR unless
that person complies with the requirements of this SFAR and NOTAMs
issued pursuant to this SFAR that are applicable to his/her
operations.
B. Slot Reservation System
1. General Description.
Slot reservations for arrivals and departures at specified
airports in the vicinity of the Olympic Games are required for the
period July 17 through August 6, 1996. The FAA believes this action
is necessary for the security of the venues, safe operation and
management of aircraft operating to, within, and from these areas,
and to prevent any unsafe congestion of sightseeing and other
aircraft over the various venues.
2. For purposes of the SFAR:
(a) Airports and airspace areas associated with Olympic activity
which require restriction or prohibition of aviation activity will
be designated in NOTAMs issued pursuant to this SFAR.
(b) Airports listed below and in NOTAMs issued pursuant to this
SFAR are identified as:
VFR Arrival Slot Reservation Airports
Cobb County-McCollum Field Airport (RYY), Marietta, GA
Dekalb-Peachtree Airport (PDK), Atlanta, GA
Fulton County-Brown Airport Field Airport (FTY),
Atlanta, GA
Gwinnett County-Briscoe Field Airport (LZU),
Lawrenceville, GA
VFR Departure Slot Reservation Airports
Cobb County-McCollum Field Airport (RYY), Marietta, GA
DeKalb-Peachtree Airport (PDK), Atlanta, GA
Fulton County-Brown Airport Field Airport (FTY),
Atlanta, GA
Gwinnett County-Briscoe Field Airport (LZU),
Lawrenceville, GA
Non-scheduled IFR Slot Reservation Airports
Clayton County-Tara Field Airport (4A7), Hampton, GA
Cobb County-McCollum Field Airport (RYY), Marietta, GA
Covington Municipal Airport (9A1), Covington, GA
DeKalb-Peachtree Airport (PDK), Atlanta, GA
Ben Epps Field Airport (AHN), Athens, GA
Peachtree City-Falcon Field Airport (FFC),
Peachtree City, GA
Fulton County Airport-Brown Field Airport (FTY),
Atlanta, GA
Lee Gilmer Memorial Airport (GVL), Gainesville, GA
Gwinnett County-Briscoe Field Airport (LZU),
Lawrenceville, GA
The William B. Hartsfield Atlanta International
Airport (ATL), Atlanta, GA
Richard B. Russell Airport (RMG), Rome, GA
3. Pilots can reserve VFR arrival or IFR arrival and departure
slots at the airports listed in paragraph B.2. of this SFAR by
calling 1-800-96FAA96 (963-2296) 24 hours a day beginning July 14,
1996, 7:00 a.m. (EDT). Reservation slots may be reserved no sooner
than 72 hours before your estimated time of arrival or departure. Be
prepared to provide the following information: Arrival Reservations:
destination airport, estimated time of arrival, call sign, direction
of arrival to the Atlanta area and type aircraft; Departure
Reservations: departure airport, estimated time of departure, call
sign, destination airport, first fix after departure and type
aircraft.
C. Temporary Flight Restriction Areas
The FAA proposes to establish TFR areas over the Olympic Village
and competition sites. The establishment of TFR areas over the
competition venues would result in the restriction of aircraft
operations in these areas, however, access to these areas may be
accommodated with an appropriate authorization from the designated
using agency. ATC would retain the ability to manage aircraft
through the TFR areas in accordance with normal traffic flows.
Operating restrictions within the airspace overlying competition
venues are proposed for the period from 3 hours before to 3 hours
after each event. The additional time that the restrictions are
proposed to be imposed, before and after each event, would
accommodate the observation and planning of ground traffic movement
as well as the facilitation of the orderly movement of aircraft in
and through the airspace above each event. Flight operations would
be restricted within the airspace from the surface to approximately
2500 feet AGL to provide a safe environment.
At the following locations, flight is restricted during the
times of designation:
1. The Olympic Village; Atlanta, Georgia.
That airspace within a 1 NM radius of latitude (lat.)
33 deg.46'35'' N, longitude (long.) 84 deg.23'52'' W (ATL 012R/8.5
NM distance measuring equipment (DME) fix).
Designated altitudes: Surface to but not including 3,500 feet
mean sea level (MSL).
Times of Designation: July 6, 1996 to August 11, 1996, 24 hours
per day.
Using agency: Georgia State Patrol.
Contact: SFC W.S. Smith (770) 919-9929.
2. The Olympic Ring; Atlanta, Georgia.
That airspace within a 3 NM radius of lat. 33 deg.45'27'' N,
long. 84 deg.24'05'' W (ATL 013R/7.4 NM DME fix).
Designated altitudes. Surface to but not including 3,500 feet
MSL.
Times of Designation. July 19, 1996, from 7:00 p.m. local time
to July 20, 1996 at 2:00 a.m.; July 20, 1996 until August 5, 1996,
5:00 a.m. until 2:00 a.m.
Using agency: Georgia State Patrol.
Contact: SFC W.S. Smith (770) 919-9929.
3. Wolf Creek Skeet Range; Atlanta, Georgia.
That airspace within a 1 NM radius of lat. 33 deg.40'12'' N
long. 84 deg.33'54'' W, (ATL 286R/6 NM DME fix).
Designated altitudes: Surface to but not including 2,500 feet
MSL.
Times of Designation:
July 20, 1996, from 8:00 a.m. until 8:00 p.m.
July 21, 1996, from 8:00 a.m. until 8:00 p.m.
July 22, 1996, from 8:00 a.m. until 4:30 p.m.
July 23, 1996, from 8:00 a.m. until 7:00 p.m.
July 24, 1996, from 8:00 a.m. until 5:30 p.m.
July 25, 1996, from 8:00 a.m. until 8:30 p.m.
July 26, 1996, from 8:00 a.m. until 7:00 p.m.
July 27, 1996, from 12:00 p.m. until 7:00 p.m.
Using agency: Georgia State Patrol.
Contact: SFC W.S. Smith (770) 919-9929.
4. Stone Mountain Park, Stone Mountain, Georgia.
That airspace within a 3 NM radius of lat. 33 deg.48'24'' N,
long. 84 deg.08'06'' W (PDK 117R/9 NM DME fix).
Designated altitudes. Surface to and including 2,500 feet AGL.
Times of Designation:
July 22, 1996, from 9:00 a.m. until 9:00 p.m.
July 23, 1996, from 9:00 a.m. until 9:00 p.m.
July 24, 1996, from 9:00 a.m. until 9:00 p.m.
July 25, 1996, from 9:00 a.m. until 9:00 p.m.
July 26, 1996, from 9:00 a.m. until 9:00 p.m.
July 27, 1996, from 8:00 a.m. until 9:00 p.m.
July 28, 1996, from 8:00 a.m. until 9:00 p.m.
July 29, 1996, from 8:00 a.m. until 11:00 p.m.
July 30, 1996, from 8:00 a.m. until 11:00 p.m.
July 31, 1996, from 9:00 a.m. until 7:00 p.m.
August 1, 1996, from 9:00 a.m. until 8:00 p.m.
August 2, 1996, from 9:00 a.m. until 9:00 p.m.
August 3, 1996, from 9:00 a.m. until 12:00 a.m.
Using agency: Georgia State Patrol.
Contact: SFC W.S. Smith (770) 919-9929.
5. Atlanta Beach; Jonesboro, Georgia.
That airspace within a 1 NM radius of lat. 30 deg.31'23'' N,
long. 84 deg.18'39'' W (ATL 137R/9 NM DME fix).
Designated altitudes. Surface to but not including 3,500 feet
MSL.
Times of Designation:
July 23, 1996, from 6:00 a.m. until 9:00 p.m.
July 24, 1996, from 6:00 a.m. until 9:00 p.m.
July 25, 1996, from 6:00 a.m. until 9:00 p.m.
July 26, 1996, from 6:00 a.m. until 9:00 p.m.
July 27, 1996, from 6:00 a.m. until 9:00 p.m.
July 28, 1996, from 8:00 a.m. until 9:00 p.m.
Using agency Georgia State Patrol.
Contact: SFC W.S. Smith (770) 919-9929.
6. International Horsepark; Convington, Georgia.
That airspace within a 3 NM radius of lat. 33 deg.40'28'' N,
long. 83 deg.56'58'' W (ATL 084R/24 NM. DME fix) excluding that
airspace along and south of Interstate 20.
Designated altitudes. Surface to and including 2,500 feet AGL.
Times of Designation:
July 21, 1996, from 9:00 a.m. until 6:00 p.m.
July 22, 1996, from 9:00 a.m. until 6:00 p.m.
July 23, 1996, from 9:00 a.m. until 5:00 p.m.
July 24, 1996, from 8:30 a.m. until 11:00 p.m.
July 25, 1996, from 9:00 a.m. until 4:00 p.m.
[[Page 67511]]
July 26, 1996, from 9:00 a.m. until 1:00 p.m.
July 27, 1996, from 8:00 a.m. until 6:00 p.m.
July 28, 1996, from 9:00 a.m. until 6:00 p.m.
July 29, 1996, from 9:00 a.m. until 6:00 p.m.
July 30, 1996, from 8:00 a.m. until 9:30 p.m.
July 31, 1996, from 9:00 a.m. until 5:00 p.m.
August 1, 1996, from 8:00 a.m. until 7:30 p.m.
August 4, 1996, from 9:00 a.m. until 4:00 p.m.
Using agency: Georgia State Patrol.
Contact: SFC W.S. Smith (770) 919-9929.
7. Lake Sidney Lanier; Gainesville, Georgia.
That airspace within a 2 NM radius of lat. 34 deg.21'00'' N,
long. 83 deg.47'11'' W (PDK 042R/38 NM DME fix).
Designated altitudes. Surface to and including 2,500 feet AGL.
Times of Designation.
July 21, 1996, from 8:00 a.m. until 2:00 p.m.
July 22, 1996, from 8:00 a.m. until 1:30 p.m.
July 23, 1996, from 8:00 a.m. until 1:00 p.m.
July 24, 1996, from 8:00 a.m. until 11:30 a.m.
July 25, 1996, from 8:00 a.m. until 12:30 p.m.
July 26, 1996, from 8:00 a.m. until 12:30 p.m.
July 27, 1996, from 7:30 a.m. until 1:30 p.m.
July 28, 1996, from 7:30 a.m. until 1:30 p.m.
Using agency: Georgia State Patrol.
Contact: SFC W.S. Smith (770) 919-9929.
8. Sanford Stadium; Athens, Georgia.
That airspace within a 1 NM radius of lat. 33 deg.56'59'' N,
long. 83 deg.22'24'' W (AHN 258R/2 NM DME fix).
Designated altitudes: Surface to and including 2,500 feet AGL.
Times of Designation:
July 31, 1996, from 2:00 p.m. until 7:00 p.m.
August 1, 1996, from 9:00 a.m. until 7:00 p.m.
August 2, 1996, from 9:00 a.m. until 6:00 p.m.
August 3, 1996, from 12:00 p.m. until 6:00 p.m.
Using agency: Georgia State patrol.
Contact: SFC W.S. Smith (770) 919-9929.
9. Golden Park; Columbus, Georgia.
That airspace within a 1 NM radius of lat. 32 deg.27'09'' N,
long. 84 deg.59'30'' W (CSG 172R/10 NM DME fix).
Designated altitudes: Surface to and including 2,500 feet AGL.
Times of Designation:
July 21, 1996, through July 27, 1996, 8:00 a.m. until 11:30 p.m.
July 29, 1996, from 5:30 p.m. until 11:30 p.m.
July 30, 1996, from 3:30 p.m. until 11:00 p.m.
Using agency: Columbus Police Department.
Contact: Lt. Butch Beach (706) 596-7237.
10. Olympic Village; Columbus, GA.
That airspace within a 1 NM radius of lat. 32 deg.21'44'' N,
long. 84 deg.58'15'' W (CSG 171R/16 NM DME fix).
Designated altitudes. Surface to and including 2,000 feet AGL.
Times of Designation:
July 5, 1996, through August 8, 1996, when Ft. Benning Class D
airspace is not effective.
Using agency: Ft. Benning Provost Marshall.
Contact: Capt. Nason (706) 545-5915.
11. Lee College; Cleveland, Tennessee.
That airspace within a 0.5 NM radius of lat. 35 deg.09'58'' N,
long. 84 deg.52'13'' W (CHA 049R/18 NM DME fix).
Designated altitudes. Surface to and including 2,500 feet AGL.
Times of Designation:
July 6, 1996, from 6:00 a.m. until July 30, 1996, at 12:00 a.m.
Using agency: Ocoee River Venue Law Enforcement Committee
(ORVLEC).
Contact: William J. Ferris III (423) 265-3601.
12. U.S. Highway 64; Tennessee.
0.5 NM on either side of U.S. Highway 64 from Cleveland, Lee
College, TN., latitude 35 deg.09'58'' N, longitude 84 deg.51'13'' W,
thence following U.S. Highway 64 to latitude 35 deg.04'02'' N,
longitude 84 deg.27'37'' W.
Designated altitudes. Surface to and including 2,500 feet AGL.
Times of Designation:
July 26, 1996, through July 28, 1996, from dawn until dusk
Using agency: ORVLEC.
Contact: William J. Ferris III (423) 265-3601.
13. Ocoee River; Tennessee.
That airspace within a 2 NM radius of lat. 35 deg.04'02'' N,
long. 84 deg.27'37'' W (CHA 080R/34 NM DME fix).
Designated altitudes. Surface to and including 2,500 feet AGL.
Times of Designation:
July 26, 1996, through July 28, 1996, from dawn until dusk
Using agency: ORVLEC.
Contact: William J. Ferris III (423) 265-3601.
14. Legion Field; Birmingham, Alabama.
That airspace within a 1 NM radius of lat. 33 deg.30'42'' N,
long. 86 deg.50'34'' W (VUZ 160R/10 NM DME fix).
Designated altitudes. Surface to 2,000 feet AGL.
Times of Designation:
July 20, 1996, from 3:30 p.m. until 11:00 p.m.
July 24, 1996, from 10:30 a.m. until 8:30 p.m.
July 22, 1996, from 3:30 p.m. until 11:00 p.m.
July 23, 1996, from 1:30 p.m. until 11:30 p.m.
July 24, 1996, from 3:30 p.m. until 11:00 p.m.
July 25, 1996, from 2:30 p.m. until 12:30 a.m. July 26, 1996
July 27, 1996, from 3:30 p.m. until 11:00 p.m.
July 28, 1996, from 12:00 p.m. until 7:30 p.m.
Using agency: Federal Bureau of Investigation
Contact: Jim Brant (205) 252-7705.
15. The Olympic Village; Savannah, Georgia.
That airspace within a 1 NM radius of lat. 32 deg.04'45'' N,
long. 81 deg.04'50'' W (SAV 158R/6 NM DME fix).
Designated altitudes. Surface to and including 2,000 feet AGL.
Times of Designation: July 6, 1996, until August 7, 1996, 24
hours a day.
Using agency: Chatham County Police Department.
Contact: Capt. Doug Burkhalter (912) 652-6500.
16. Sail Harbor and Wilmington River Transit Zone; Savannah,
Georgia.
That airspace within a 1 NM radius of lat. 32 deg.00'20'' N,
long. 81 deg.00'00''W (SAV 147R/11 NM DME fix). Airspace within a 1
NM radius of the Sheraton Hotel, and airspace over the Wilmington
River from this point south to Wassaw Sound.
Designated altitudes. Surface to and including 2,000 feet AGL.
Times of Designation: July 12, 1996, until August 4, 1996,
during daylight hours.
Using agency: Chatham County Police Department.
Contact: Capt. Doug Burkhalter (912) 652-6500.
17. Sailing Venue; Savannah, Georgia.
That airspace within a 4 NM radius of lat. 31 deg.55'00'' N,
long, 80 deg.53'00'' W (SAV 141R/19 NM DME fix).
Designated altitudes. Surface to and including 2,000 feet AGL.
Times of Designation: July 22, 1996, until August 1, 1996,
during daylight hours.
Using agency: Chatham County Police Department.
Contact: Capt. Doug Burkhalter (912) 652-6500.
18. The Citrus Bowl; Orlando, Florida.
That airspace within a 1 NM radius of lat. 28 deg.32'20'' N,
long. 81 deg.24'10''W (ORL 260R/4 NM DME fix).
Designated altitudes. Surface to but not including 1,600 feet
MSL.
Times of Designation:
July 20, 1996, from 2:00 p.m. until 8:00 p.m.
July 21, 1996, from 2:00 p.m. until 10:30 p.m.
July 22, 1996, from 5:00 p.m. until 11:00 p.m.
July 23, 1996, from 5:00 p.m. until 1:30 p.m.
July 24, 1996, from 5:00 p.m. until 11:00 p.m.
July 25, 1996, from 5:00 p.m. until 1:30 p.m.
Using agency: Orange County Sheriff Office.
Contact: Cmdr. Richard Silverman (407) 836-3820.
19. Olympic Village; Davie, FL.
That airspace within a 1 NM radius of lat. 26 deg.04'29'' N,
long. 80 deg.14'31''W (FLL 266R/05 NM DME fix).
Designated altitudes. Surface to and including 2,000 feet MSL.
Times of Designation:
July 6, 1996, until July 31, 1996, 24 hours a day
Using Agency. Davie Police Department
Contact: Lt. Steve Seefchak (305) 797-1224.
20. The Orange Bowl; Miami, Florida.
That airspace within a 1 NM radius of lat. 25 deg.46'40'' N,
long. 80 deg.13'12'' W (DPH 100R/7 NM DME fix).
Designated altitudes. Surface to and including 2,500 feet MSL.
Times of Designation:
July 20, 1996, from 12:00 p.m. until 11:00 p.m.
July 21, 1996, from 1:00 p.m. until 11:00 p.m.
July 22, 1996, from 4:00 p.m. until 12:00 a.m.
July 23, 1996, from 3:00 p.m. until 1:00 a.m.
July 24, 1996, from 4:00 p.m. until 12:00 a.m.
July 25, 1996, from 3:00 p.m. until 2:00 a.m.
July 27, 1996, from 3:00 p.m. until 11:00 p.m.
July 28, 1996, from 3:00 p.m. until 11:00 p.m.
[[Page 67512]]
Using agency. Miami Police Department.
Contact: Capt. Paul Shepard (305) 579-6181.
21. RFK Stadium; Washington, DC.
That airspace with a 1 NM radius of lat. 38 deg.53'23'' N, long.
76 deg.58'19'' W (DCA 067R/3.5 NM DME fix).
Designated altitudes. Surface to and including 2,500 feet AGL.
Times of Designation:
July 20, 1996, from 11:30 a.m. until 5:30 p.m.
July 21, 1996, from 11:30 a.m. until 8:00 p.m.
July 22, 1996, from 5:00 p.m. until 11:00 p.m.
July 23, 1996, from 5:00 p.m. until 1:30 a.m.
July 24, 1996, from 5:00 p.m. until 11:00 p.m.
July 25, 1996, from 5:00 p.m. until 1:30 a.m.
Using agency: Special Operations Division of the Washington, DC,
Metropolitan Police.
Contact: Don Pope (202) 727-4582 or Aviation Division (301) 248-
7585.
D. Expiration Date
This SFAR expires on August 12, 1996.
Issued in Washington, DC on December 22, 1995.
Harold W. Becker,
Acting Program Director for Air Traffic Rules and Procedures.
[FR Doc. 95-31490 Filed 12-26-95; 3:50 pm]
BILLING CODE 4910-13-M
Complete official Federal Register PDF
FR Doc. 95-31460 Orthopedic Devices: Classification, Reclassification, and Codification of Pedicle Screw Spinal Systems; Extension of Comment Period
[Federal Register Volume 60, Number 250 (Friday, December 29, 1995)]
[Proposed Rules]
[Page 67345]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31460]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Part 888
[Docket No. 95N-0176]
Orthopedic Devices: Classification, Reclassification, and
Codification of Pedicle Screw Spinal Systems; Extension of Comment
Period
AGENCY: Food and Drug Administration, HHS.
ACTION: Proposed rule; extension of comment period.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA) is extending to March
4, 1996, the comment period for the proposed rule that published in the
Federal Register of October 4, 1995 (60 FR 51946). The document
proposed to classify certain unclassified preamendments pedicle screw
spinal systems into class II (special controls), and to reclassify
certain postamendments pedicle screw spinal systems from class III
(premarket approval) to class II. FDA is taking this action in response
to several requests for an extension to assure adequate time for
preparation of comments.
DATES: Written comments by March 4, 1996.
ADDRESSES: Submit written comments to the Dockets Management Branch
(HFA-305), Food and Drug Administration, 12420 Parklawn Dr., rm. 1-23,
Rockville, MD 20857.
FOR FURTHER INFORMATION CONTACT: Mark N. Melkerson, Center for Devices
and Radiological Health (HFZ-410), Food and Drug Administration, 9200
Corporate Blvd., Rockville, MD 20850, 301-594-2036.
SUPPLEMENTARY INFORMATION: In the Federal Register of October 4, 1995
(60 FR 51946), FDA published a proposed rule to classify certain
unclassified preamendments pedicle screw spinal systems into class II
(special controls), and to reclassify certain postamendments pedicle
screw spinal systems from class III (premarket approval) to class II.
FDA is proposing to place certain pedicle screw spinal systems in class
II because the agency believes that sufficient information exists to
establish special controls to provide reasonable assurance of its
safety and effectiveness.
Interested persons were invited to comment by January 2, 1996. FDA
received several requests to extend the comment period, including a
request from a United States District Court Judge presiding over
product liability actions concerning orthopedic bone screw products.
The court requested that FDA allow a 60-day extension because court
orders relating to the disclosure of certain information about pedicle
screws may make it difficult for parties involved in the litigation to
submit relevant information to FDA by January 2, 1996.
Because FDA wants to provide adequate time for the submission of
all relevant information related to these important public health
issues, FDA is extending the comment period for 60 days. Accordingly,
FDA finds under section 520(d) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 360j(d)) that there is good cause for such an extension.
Interested persons may, on or before March 4, 1996, submit to
Dockets Management Branch (address above) written comments regarding
this proposal. Two copies of any comments are to be submitted, except
that individuals may submit one copy. Comments are to be identified
with the docket number found in brackets in the heading of this
document. Received comments may be seen in the office above between 9
a.m. and 4 p.m., Monday through Friday.
Dated: December 21, 1995.
Joseph A. Levitt,
Deputy Director for Regulations Policy, Center for Devices and
Radiological Health.
[FR Doc. 95-31460 Filed 12-28-95; 8:45 am]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 95-31453 RUS Specification for Aerial Service Wires
[Federal Register Volume 60, Number 250 (Friday, December 29, 1995)]
[Proposed Rules]
[Pages 67340-67345]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31453]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 60, No. 250 / Friday, December 29, 1995 /
Proposed Rules
[[Page 67340]]
DEPARTMENT OF AGRICULTURE
Rural Utilities Service
7 CFR Part 1755
RUS Specification for Aerial Service Wires
AGENCY: Rural Utilities Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Rural Utilities Service (RUS) proposes to amend its
regulations on Telecommunications Standards and Specifications for
Materials, Equipment and Construction, by codifying the RUS
Specification for Aerial Service Wires. The new specification sets
forth the engineering and technical standards that are required by RUS
in outside plant environments.
DATES: Comments concerning this proposed rule must be received by RUS
or postmarked no later than January 29, 1996.
ADDRESSES: Comments should be mailed to the Orren E. Cameron III,
Director, Telecommunications Standards Division, Rural Utilities
Service, room 2835, AG Box 1598, South Building, U.S. Department of
Agriculture, Washington, DC 20250-1598. RUS requests an original and
three copies of all comments (7 CFR part 1700). All comments received
will be made available for public inspection at room 2835, South
Building, U.S. Department of Agriculture, Washington, DC 20250-1598
between 8:00 a.m. and 4:00 p.m. (7 CFR 1.27(b)).
FOR FURTHER INFORMATION CONTACT: Chief, Outside Plant Branch,
Telecommunications Standards Division, Rural Utilities Service, room
2844, AG Box 1598, South Building, U.S. Department of Agriculture,
Washington, DC 20250-1598, telephone number (202) 720-0667.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This proposed rule has been determined to be not significant and
therefore has not been reviewed by the Office of Management and Budget.
Executive Order 12778
This proposed rule has been reviewed under Executive Order 12778,
Civil Justice Reform. If adopted, this proposed rule will not:
(1) Preempt any State or local laws, regulations, or policies;
(2) Have any retroactive effect; and
(3) Require administrative proceedings before parties may file suit
challenging the provisions of this rule.
Regulatory Flexibility Act Certification
The Administrator of RUS has determined that this proposed rule
will not have a significant economic impact on a substantial number of
small entities, as defined by the Regulatory Flexibility Act (5 U.S.C.
601 et seq.). This proposed rule involves standards and specifications,
which may increase the direct short-term costs to RUS borrowers.
However, the long-term direct economic costs are reduced through
greater durability and lower maintenance cost over time.
Information Collection and Recordkeeping Requirements
The reporting and recordkeeping requirements contained in the
proposed rule were approved by the Office of Management and Budget
(OMB) pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35, as amended) under control number of 0572-0059.
Send questions or comments regarding this burden or any other
aspect of these collections of information, including suggestions for
reducing the burden, to F. Lamont Heppe, Jr., Deputy Director, Program
Support Staff, Rural Utilities Service, Ag Box 1522, Washington, DC
20250-1522.
National Environmental Policy Act Certification
The Administrator of RUS has determined that this proposed rule
will not significantly affect the quality of the human environment as
defined by the National Environmental Policy Act of 1969 (42 U.S.C.
4321 et seq.) Therefore, this action does not require an environmental
impact statement or assessment.
Catalog of Federal Domestic Assistance
The program described by this proposed rule is listed in the
Catalog of Federal Domestic Assistance programs under No. 10.851, Rural
Telephone Loans and Loan Guarantees; and No. 10.852, Rural Telephone
Bank Loans. This catalog is available on a subscription basis from the
Superintendent of Documents, the United States Government Printing
Office, Washington, DC 20402.
Executive Order 12372
This proposed rule is excluded from the scope of Executive Order
12372, Intergovernmental Consultation, which may require consultation
with State and local officials. A Notice of Final rule titled
Department Programs and Activities Excluded from Executive Order 12372
(50 FR 47034) exempts RUS and RTB loans and loan guarantees, and RTB
bank loans, to governmental and nongovernmental entities from coverage
under this Order.
Background
RUS issues publications titled ``Bulletin'' which serve to guide
borrowers regarding already codified policy, procedures, and
requirements needed to manage loans, loan guarantee programs, and the
security instruments which provide for and secure RUS financing. RUS
issues standards and specifications for the construction of telephone
facilities financed with RUS loan funds. RUS Bulletin 345-36, ``RUS
Specification for Parallel Conductor Drop Wire,'' PE-7, dated January
25, 1983 presently contains the engineering and technical requirements
for aerial service wires that are considered necessary for satisfactory
performance in outside plant environments. Because of the technological
advancements made in aerial service wire designs over the past eleven
years, RUS proposes to incorporate and update the information contained
in RUS Bulletin 345-36 into 7 CFR 1755.700 through 7 CFR 1755.704, RUS
Specification for Aerial Service Wires, and to rescind RUS Bulletin
345-36 upon the effective date of 7 CFR 1755.700 through 7 CFR
1755.704.
The specification allows aerial service wire designs consisting of
one pair through six pairs. The specification also allows aerial
service wire designs
[[Page 67341]]
containing copper coated steel and nonmetallic reinforcing members.
The specification contains mechanical, electrical, and
environmental requirements, and test methods for evaluation of these
aerial service wire designs.
This action establishes RUS requirements for a wider range of
aerial service wires without affecting current designs or manufacturing
techniques. This wider selection of aerial service wires will afford
RUS telephone borrowers the opportunity to increase subscriber services
in an economical and efficient manner through enhanced wire designs
brought about by technological advancements made during the past eleven
years.
List of Subjects in 7 CFR Part 1755
Loan programs-communications, Reporting and recordkeeping
requirements, Rural areas, Telephone.
For the reasons set out in the preamble, RUS proposes to amend
Chapter XVII of title 7 of the Code of Federal Regulations as follows:
PART 1755--TELECOMMUNICATIONS STANDARDS AND SPECIFICATIONS FOR
MATERIALS, EQUIPMENT AND CONSTRUCTION.
1. The authority citation for part 1755 continues to read as
follows:
Authority: 7 U.S.C. 901 et seq., 1921 et seq., Pub. L. 103-354,
108 Stat. 3178 (7 U.S.C. 6941 et seq.).
2. Section 1755.98 is amended by adding a new entry to the table in
numerical order to read as follows:
Sec. 1755.98 List of telephone standards and specifications included
in other 7 CFR parts.
* * * * *
----------------------------------------------------------------------------------------------------------------
Section Issue date Title
----------------------------------------------------------------------------------------------------------------
1755.700 through 1755.704............. [Effective date of final rule] RUS Specification for Aerial Service
Wires.
* * * * * *
*
----------------------------------------------------------------------------------------------------------------
3. Sections 1755.700 through 1755.704 are added to read as follows:
Sec. 1755.700 RUS specification for aerial service wires.
Secs. 1755.701 through 1755.704 cover the requirements for aerial
service wires.
Sec. 1755.701 Scope.
(a) This section covers the requirements for aerial service wires
intended for aerial subscriber drops.
(1) The aerial service wires can be either copper coated steel
reinforced or nonmetallic reinforced designs.
(2) For the copper coated steel reinforced design, the reinforcing
members are the conductors.
(i) The conductors are solid copper-covered steel wires.
(ii) The wire structure is completed by insulating the conductors
with an overall extruded plastic insulating compound.
(3) For the nonmetallic reinforced design, the conductors are solid
copper individually insulated with an extruded solid insulating
compound.
(i) The insulated conductors are either layed parallel (two
conductor design only) or twisted into pairs (a star-quad configuration
is permitted for two pair wires).
(ii) The wire structure is completed by the application of
nonmetallic reinforcing members and an overall plastic jacket.
(4) All wires sold to RUS borrowers for projects involving RUS loan
funds under Secs. 1755.700 through 1755.704 must be accepted by RUS
Technical Standards Committee ``A'' (Telecommunications). For wires
manufactured to the specification of Secs. 1755.700 through 1755.704,
all design changes to an accepted design must be submitted for
acceptance. RUS will be the sole authority on what constitutes a design
change.
(5) Materials, manufacturing techniques, or wire designs not
specifically addressed by Secs. 1755.700 through 1755.704 may be
allowed if accepted by RUS. Justification for acceptance of modified
materials, manufacturing techniques, or wire designs must be provided
to substantiate product utility and long term stability and endurance.
(b) The American National Standard Institute/Insulated Cable
Engineers Association, Inc. (ANSI/ICEA) S-89-648-1993 Standard For
Telecommunications Aerial Service Wire, Technical Requirements
referenced throughout Secs. 1755.700 through 1755.704 is incorporated
by reference by RUS. This incorporation by reference was approved by
the Director of the Federal Register in accordance with 5 U.S.C. 552(a)
and 1 CFR part 51. Copies of ANSI/ICEA S-89-648-1993 are available for
inspection during normal business hours at RUS, room 2845, U.S.
Department of Agriculture, Washington, DC 20250-1500 or at the Office
of the Federal Register, 800 North Capitol Street, NW., suite 700,
Washington, DC. Copies are available from ICEA, P. O. Box 440, South
Yarmouth, MA 02664, telephone number (508) 394-4424.
Sec. 1755.702 Copper coated steel reinforced (CCSR) aerial service
wire.
(a) Conductors. (1) Each conductor shall comply with the
requirements specified in ANSI/ICEA S-89-648-1993, paragraphs 2.1
through 2.1.5.
(2) Factory joints in conductors shall comply with the requirement
specified in ANSI/ICEA S-89-648-1993, paragraph 2.1.6.
(b) Conductor insulation. (1) The raw materials used for the
conductor insulation shall comply with the requirements specified in
ANSI/ICEA S-89-648-1993, paragraph 3.1.1.
(2) The raw materials shall be accepted by RUS prior to their use.
(3) The finished conductor insulation shall be free from holes,
splits, blisters, or other imperfections and shall be as smooth as is
consistent with best commercial practice.
(4) The finished conductor insulation shall comply with the
requirements specified in ANSI/ICEA S-89-648-1993, paragraphs 3.1.5
through 3.1.5.4.
(5) The insulation shall have a minimum spot thickness of not less
than 0.9 millimeters (mm) (0.03 inches (in.)) at any point.
(c) Wire assembly. (1) The two conductors shall be insulated in
parallel to form an integral configuration.
(2) The finished wire assembly shall be either a flat or a notched
oval. Other finished wire assemblies may be used provided that they are
accepted by RUS prior to their use.
(3) The overall dimensions of the finished wire assembly shall be
in accordance with the following requirements:
[[Page 67342]]
------------------------------------------------------------------------
Dimensions
-----------------------------------
Diameter Minimum Maximum
-----------------------------------
mm in. mm in.
------------------------------------------------------------------------
Major............................... 5.5 0.22 8.0 0.31
Minor............................... 3.0 0.12 5.0 0.19
------------------------------------------------------------------------
(d) Conductor marking. The insulated conductors of a finished wire
shall be marked in accordance with the requirements specified in ANSI/
ICEA S-89-648-1993, paragraph 3.1.4.
(e) Electrical requirements. (1) Conductor resistance. The direct
current (dc) resistance of each conductor in a completed CCSR aerial
service wire shall comply with the requirement specified in ANSI/ICEA
S-89-648-1993, paragraph 7.1.2.
(2) Wet mutual capacitance. The wet mutual capacitance of the
completed CCSR aerial service wire shall comply with the requirement
specified in ANSI/ICEA S-89-648-1993, paragraph 7.1.3.
(3) Wet attenuation. The wet attenuation of the completed CCSR
aerial service wire shall comply with the requirement specified in
ANSI/ICEA S-89-648-1993, paragraph 7.1.4.
(4) Wet insulation resistance. The wet insulation resistance of the
completed CCSR aerial service wire shall comply with the requirement
specified in ANSI/ICEA S-89-648-1993, paragraph 7.1.5.
(5) Dielectric strength. (i) The wet dielectric strength between
conductors and between each conductor of the completed CCSR aerial
service wire and the surrounding water shall comply with the
requirement specified in ANSI/ICEA S-89-648-1993, paragraph 7.1.6.
(ii) The dry dielectric strength between conductors of the
completed CCSR aerial service wire shall comply with the requirement
specified in ANSI/ICEA S-89-648-1993, paragraph 7.1.7.
(6) Fusing coordination. The completed CCSR aerial service wire
shall comply with the fusing coordination requirement specified in
ANSI/ICEA S-89-648-1993, paragraph 7.1.8.
(7) Insulation imperfections. Each length of completed CCSR aerial
service wire shall comply with the requirement specified in ANSI/ICEA
S-89-648-1993, paragraph 7.1.9.
(f) Mechanical requirements. (1) Impact test. (i) All CCSR aerial
service wires manufactured in accordance with this section shall comply
with the unaged impact test specified in ANSI/ICEA S-89-648-1993,
paragraph 8.1.2.
(ii) All CCSR aerial service wires manufactured in accordance with
this section shall comply with the aged impact test specified in ANSI/
ICEA S-89-648-1993, paragraph 8.1.3.
(2) Abrasion resistance test. All CCSR aerial service wires
manufactured in accordance with this section shall comply with the
abrasion resistance test specified in ANSI/ICEA S-89-648-1993,
paragraph 8.1.4.
(3) Static load test. All CCSR aerial service wires manufactured in
accordance with this section shall comply with the static load test
specified in ANSI/ICEA S-89-648-1993, paragraph 8.1.5.
(4) Plasticizer compatibility test. All CCSR aerial service wires
manufactured in accordance with this section shall comply with the
plasticizer compatibility test specified in ANSI/ICEA S-89-648-1993,
paragraph 8.1.8.
(g) Environmental requirements. (1) Cold temperature handling test.
(i) All CCSR aerial service wires manufactured in accordance with this
section shall comply with the unaged cold temperature handling test
specified in ANSI/ICEA S-89-648-1993, paragraph 8.2.1.
(ii) All CCSR aerial service wires manufactured in accordance with
this section shall comply with the aged cold temperature handling test
specified in ANSI/ICEA S-89-648-1993, paragraph 8.2.2.
(2) Light absorption test. All CCSR aerial service wires
manufactured in accordance with this section shall comply with the
light absorption test specified in ANSI/ICEA S-89-648-1993, paragraph
8.2.3.
(3) Low temperature separation test. All CCSR aerial service wires
manufactured in accordance with this section shall comply with the low
temperature separation test specified in ANSI/ICEA S-89-648-1993,
paragraph 8.2.4.
(4) Flammability test. All CCSR aerial service wires manufactured
in accordance with this section shall comply with the flammability test
specified in ANSI/ICEA S-89-648-1993, paragraph 8.3.
(5) Wire listing. All CCSR aerial service wires manufactured in
accordance with this section shall comply with the listing requirements
specified in ANSI/ICEA S-89-648-1993, paragraph 8.4.
(h) Identification marker. Each length of CCSR aerial service wire
shall be identified in accordance with ANSI/ICEA S-89-648-1993,
paragraph 9.1.4. When surface marking is employed, the color of the
initial marking shall be either white or silver.
(i) Length marking (optional). (1) Sequentially numbered length
marking of the completed CCSR aerial service wire may be used at the
option of the manufacturer unless specified by the end user.
(2) When sequentially numbered length markings are used, the length
markings shall be in accordance with ANSI/ICEA S-89-648-1993, paragraph
9.1.5. The color of the initial marking shall be either white or
silver.
(j) Durability of marking. The durability of the marking of the
CCSR aerial service wire shall comply with the requirements specified
in ANSI/ICEA S-89-648-1993, paragraph 9.1.6.
Sec. 1755.703 Nonmetallic reinforced (NMR) aerial service wire.
(a) Conductors. (1) Each conductor shall comply with the
requirements specified in ANSI/ICEA S-89-648-1993, paragraphs 2.2 and
2.2.1.
(2) Factory joints made in the conductors during the manufacturing
process shall comply with the requirement specified in ANSI/ICEA S-89-
648-1993, paragraph 2.2.2.
(b) Conductor insulation. (1) The raw materials used for the
conductor insulation shall comply with the requirements specified in
ANSI/ICEA S-89-648-1993, paragraphs 3.2 through 3.2.2.
(2) The finished conductor insulation shall comply with the
requirements specified in ANSI/ICEA S-89-648-1993, paragraph 3.2.3.
(3) The dimensions of the insulated conductors shall comply with
the requirements specified in ANSI/ICEA S-89-648-1993, paragraph
3.2.3.1.
(4) The colors of the insulation shall comply with the requirements
specified in ANSI/ICEA S-89-648-1993, paragraph 3.2.3.2.
(5) A permissible overall performance level of faults in conductor
insulation shall comply with the requirement specified in ANSI/ICEA S-
89-648-1993, paragraph 3.2.4.6. The length count and number of faults
shall be recorded. The information shall be retained for a period of 6
months and be available for review by RUS when requested.
(6) Repairs to the conductor insulation during manufacture are
permissible. The method of repair shall be accepted by RUS prior to its
use. The repaired insulation shall comply with the requirement
specified in ANSI/ICEA S-89-648-1993, paragraph 3.2.3.3.
(7) All repaired sections of insulation shall be retested in the
same manner as originally tested for compliance with paragraph (b)(5)
of this section.
(8) The colored insulating material removed from or tested on the
conductor, from a finished wire shall comply with the requirements
specified in ANSI/ICEA S-89-648-1993, paragraphs 3.2.4 through 3.2.4.5.
[[Page 67343]]
(c) Identification of pairs and layup of pairs. (1) The insulation
shall be colored coded to identify:
(i) The tip and ring conductor of each pair; and
(ii) Each pair in the completed wire.
(2) The colors to be used in the pairs together with the pair
numbers shall be in accordance with the table specified in ANSI/ICEA S-
89-648-1993, paragraph 4.1.1.
(3) The insulated conductors shall be either layed parallel (two
conductor design only) or twisted into pairs.
(4) When using parallel conductors for the two conductor design,
the parallel conductors shall be designed to enable the wire to meet
the electrical requirements specified in paragraphs (g) introductory
text through (g)(9)(ii) of this section.
(5) When twisted pairs are used, the following requirements shall
be met:
(i) The pair twists shall be designed to enable the wire to meet
the electrical requirements specified in paragraphs (g) introductory
text through (g)(9)(ii) of this section; and
(ii) The average length of pair twists in any pair in the finished
wire, when measured on any 3 meter (10 foot) length, shall not exceed
the requirement specified in ANSI/ICEA S-89-648-1993, paragraph 4.1.
(6) An alternative method of forming the two-pair wire is the use
of a star-quad configuration.
(i) The assembly of the star-quad shall be such as to enable the
wire to meet the electrical requirements specified in paragraphs (g)
introductory text through (g)(9)(ii) of this section.
(ii) The star-quad configuration shall be assembled in accordance
with ANSI/ICEA S-89-648-1993, paragraph 4.1.2.
(iii) The average length of twist for the star-quad in the finished
wire, when measured on any 3 meter (10 foot) length, shall not exceed
the requirement specified in ANSI/ICEA S-89-648-1993, paragraph 4.1.
(iv) The color scheme used to provide identification of the tip and
ring conductors of each pair in the star-quad shall comply with the
table specified in ANSI/ICEA S-89-648-1993, paragraph 4.1.2.
(d) Strength members. The strength members shall comply with the
requirements specified in ANSI/ICEA S-89-648-1993, paragraphs 6.1 and
6.1.1.
(e) Wire jacket. (1) The jacket shall comply with the requirements
specified in ANSI/ICEA S-89-648-1993, paragraphs 5.1 and 5.1.1.
(2) The jacket raw materials shall be accepted by RUS prior to
their use.
(f) Wire assembly. The finished wire assembly shall be in
accordance with ANSI/ICEA S-89-648-1993, paragraph 5.1.3 and Figure 5-
1.
(g) Electrical requirements. (1) Conductor resistance. The dc
resistance of each conductor in a completed NMR aerial service wire
shall comply with the requirement specified in ANSI/ICEA S-89-648-1993,
paragraph 7.2.2.
(2) Resistance unbalance. (i) The dc resistance unbalance between
the two conductors of any pair in a completed NMR aerial service wire
and the average resistance unbalance of all pairs in a Quality Control
Lot shall comply with the requirements specified in ANSI/ICEA S-89-648-
1993, paragraph 7.2.3.
(ii) The resistance unbalance between tip and ring conductors shall
be random with respect to the direction of unbalance. That is, the
resistance of the tip conductors shall not be consistently higher with
respect to the ring conductors and vice versa.
(3) Dry mutual capacitance. The dry mutual capacitance of the
completed NMR aerial service wire shall comply with the requirements
specified in ANSI/ICEA S-89-648-1993, paragraph 7.2.4, Type 1.
(4) Pair-to-pair capacitance unbalance. The pair-to-pair
capacitance unbalance as measured on the completed NMR aerial service
wire shall comply with the requirements specified in ANSI/ICEA S-89-
648-1993, paragraph 7.2.5.
(5) Attenuation. (i) The dry attenuation of the completed NMR
aerial service wire shall comply with the requirement specified in
ANSI/ICEA S-89-648-1993, paragraph 7.2.7.
(ii) The wet attenuation of the completed NMR aerial service wire
shall comply with the requirement specified in ANSI/ICEA S-89-648-1993,
paragraph 7.2.8.
(6) Insulation resistance. (i) The dry insulation resistance of the
completed NMR aerial service wire shall comply with the requirement
specified in ANSI/ICEA S-89-648-1993, paragraph 7.2.9.
(ii) The wet insulation resistance of the completed NMR aerial
service wire shall comply with the requirement specified in ANSI/ICEA
S-89-648-1993, paragraph 7.2.10.
(7) Wet Dielectric strength. The wet dielectric strength between
conductors and between each conductor of the completed NMR aerial
service wire and the surrounding water shall comply with the
requirement specified in ANSI/ICEA S-89-648-1993, paragraph 7.2.11.
(8) Fusing coordination. The completed NMR aerial service wire
shall comply with the fusing coordination requirement specified in
ANSI/ICEA S-89-648-1993, paragraph 7.2.13.
(9) Crosstalk loss. (i) The output-to-output far-end crosstalk loss
(FEXT) for any pair of completed NMR aerial service wire shall comply
with the requirement specified in ANSI/ICEA S-89-648-1993, paragraph
7.2.14.
(ii) The input-to-input near-end crosstalk loss (NEXT) for any pair
of completed NMR aerial service wire shall comply with the requirement
specified in ANSI/ICEA S-89-648-1993, paragraph 7.2.14.
(h) Mechanical requirements. (1) Impact test. (i) All NMR aerial
service wires manufactured in accordance with this section shall comply
with the unaged impact test specified in Sec. 1755.702(f)(1)(i).
(ii) All NMR aerial service wires manufactured in accordance with
this section shall comply with the aged impact test specified in
Sec. 1755.702 (f)(1)(ii).
(2) Abrasion resistance test. All NMR aerial service wires
manufactured in accordance with this section shall comply with the
abrasion resistance test specified in Sec. 1755.702 (f)(2).
(3) Static load test. All NMR aerial service wires manufactured in
accordance with this section shall comply with the static load test
specified in Sec. 1755.702(f)(3).
(4) Elongation test. All NMR aerial service wires manufactured in
accordance with this section shall comply with the elongation test
specified in ANSI/ICEA S-89-648-1993, paragraph 8.1.7.
(5) Plasticizer compatibility test. All NMR aerial service wires
manufactured in accordance with this section shall comply with the
plasticizer compatibility test specified in Sec. 1755.702(f)(4).
(i) Environmental requirements. (1) Cold temperature handling test.
(i) All NMR aerial service wires manufactured in accordance with this
section shall comply with the unaged cold temperature handling test
specified in Sec. 1755.702(g)(1)(i).
(ii) All NMR aerial service wires manufactured in accordance with
this section shall comply with the aged cold temperature handling test
specified in Sec. 1755.702(g)(1)(ii).
(2) Light absorption test. All NMR aerial service wires
manufactured in accordance with this section shall comply with the
light absorption test specified in Sec. 1755.702(g)(2).
(3) Flammability test. All NMR aerial service wires manufactured in
accordance with this section shall comply with the flammability test
specified in Sec. 1755.702(g)(4).
(4) Wire listing. All NMR aerial service wires manufactured in
[[Page 67344]]
accordance with this section shall comply with the listing requirements
specified in Sec. 1755.702(g)(5).
(j) Ripcord (optional). (1) A ripcord may be used in the NMR aerial
service wire structure at the option of the manufacturer unless
specified by the end user.
(2) When a ripcord is used it shall comply with the requirements
specified in ANSI/ICEA S-89-648-1993, paragraphs 4.2 through 4.2.3.
(k) Identification marker. Each length of NMR aerial service wire
shall be identified in accordance with ANSI/ICEA S-89-648-1993,
paragraphs 9.1 through 9.1.4. When surface marking is employed, the
color of the initial marking shall be either white or silver.
(1) Length marking (optional). (1) Sequentially numbered length
marking of the completed NMR aerial service wire may be used at the
option of the manufacturer unless specified by the end user.
(2) When sequentially numbered length markings are used, the length
markings shall be in accordance with Sec. 1755.702(i)(2).
(m) Durability of marking. The durability of the marking of the NMR
aerial service wire shall comply with the requirements specified in
Sec. 1755.702(j).
Sec. 1755.704 Requirements applicable to both CCSR and NMR aerial
service wires.
(a) Acceptance testing. (1) The tests described in Secs. 1755.700
through 1755.704 are intended for acceptance of wire designs and major
modifications of accepted designs. What constitutes a major
modification is at the discretion of RUS. These tests are intended to
show the inherent capability of the manufacturer to produce wire
products having long life and stability.
(2) For initial acceptance, the manufacturer shall:
(i) Certify that the product fully complies with each paragraph in
Secs. 1755.700 through 1755.704;
(ii) Agree to periodic plant inspections by RUS;
(iii) Certify whether the product complies with the domestic origin
manufacturing provisions of the ``Buy American'' requirements of the
Rural Electrification Act of 1938 (7 U.S.C. 903 note), as amended (the
``REA Buy-American provision'');
(iv) Submit at least three written user testimonials concerning
field performance of the product; and
(v) Provide any other nonpropriety data deemed necessary by the
Chief, Outside Plant Branch (Telecommunications).
(3) In order for RUS to consider a manufacturer's request that a
product be requalified, the manufacturer shall certify not later than
June 30 of the year in which requalification is required, that the
product:
(i) Fully complies with each paragraph in 7 CFR Secs. 1755.700
through 1755.704; and
(ii) Does or does not comply with the domestic origin manufacturing
provisions of the REA Buy American provisions. The required
certifications shall be dated within 90 days of the submission.
(4) Initial and requalification acceptance requests should be
addresses to: Chairman, Technical Standards Committee ``A''
(Telecommunications), Telecommunications Standards Division, Rural
Utilities Service, AG Box 1598, Washington, DC 20250-1598.
(b) Extent of testing. (1) Tests on 100 percent of completed wire.
(i) Each conductor in the completed CCSR and NMR aerial service wire
shall be tested for continuity in accordance with ANSI/ICEA S-89-648-
1993, paragraphs 7.1.1 and 7.2.1, respectively;
(ii) Each conductor in the completed CCSR and NMR aerial service
wire shall be tested for shorts in accordance with ANSI/ICEA S-89-648-
1993, paragraphs 7.1.1 and 7.2.1, respectively; and
(iii) Each length of completed CCSR and NMR aerial service wire
shall be tested for insulation imperfections in accordance with
Sec. 1755.702, paragraph (e)(7) and Sec. 1755.703, paragraph (b)(5),
respectively.
(2) Capability tests. Tests on a quality assurance basis shall be
made as frequently as is required for each manufacturer to determine
and maintain compliance with:
(i) Performance of the conductors;
(ii) Performance of the conductor insulation and jacket material;
(iii) Sequential marking and lettering;
(iv) Mutual capacitance, capacitance unbalance, attenuation, and
crosstalk;
(v) Conductor resistance, resistance unbalance, and insulation
resistance;
(vi) Dielectric strength and fusing coordination;
(vii) Impact, abrasion, static load, elongation, and plasticizer
compatibility tests; and
(viii) Cold temperature handling, light absorption, low temperature
separation, and flammability tests.
(c) Summary of records of electrical and physical tests.
(1) Each manufacturer shall maintain suitable summary records for a
period of at least 3 years of all electrical and physical tests
required on completed wire as set forth in paragraphs (b)(1) and (b)(2)
of this section. The test data for a particular lot of aerial service
wire shall be in a form such that it may be readily available to the
purchaser or to RUS upon request.
(2) Measurements and computed values shall be rounded off to the
number of places or figures specified for the requirement according to
ANSI/ICEA S-89-648-1993, paragraph 1.3.
(d) Manufacturing irregularities. (1) Repairs to the insulation of
CCSR aerial service wires are not permitted in wires supplied to end
users under Secs. 1755.700 through 1755.704.
(2) Repairs to the jacket of NMR aerial service wires are not
permitted in wires supplied to end users under Secs. 1755.700 through
1755.704.
(e) Splicing. Splicing of completed CCSR and NMR aerial service
wires shall comply with the requirement specified in ANSI/ICEA S-89-
648-1993, paragraph 8.1.1.
(f) Preparation for shipment. (1) CCSR and NMR aerial service wire
shall be shipped either in coils or on reels.
(2) When CCSR and NMR aerial service wires are shipped on reels the
following provisions shall apply:
(i) The diameter of the drum shall be large enough to prevent
damage to the wire from reeling or unreeling. The reels shall be
substantial and so constructed as to prevent damage to the wire during
shipment and handling;
(ii) A waterproof corrugated board or other suitable means of
protection accepted by RUS prior to its use may be applied to the reel.
If the waterproof corrugated board or other suitable material is used
for protection, it shall be suitably secured in place to prevent damage
to the wire during storage and handling. The use of the waterproof
corrugated board or other suitable means of protection shall be at the
option of the manufacturer unless specified by the end user;
(iii) The outer end of the wire shall be securely fastened to the
reel head so as to prevent the wire from becoming loose in transit. The
inner end of the wire shall be securely fastened in such a way as to
make it readily available if required for electrical testing. Spikes,
staples, or other fastening devices which penetrate the conductor
insulation of the CCSR aerial service wire and the jacket of the NMR
aerial service wire shall not be used. The method of fastening the wire
ends shall be accepted by RUS prior to their use.
(iv) Each length of wire shall be wound on a separate reel;
(v) Each reel shall be plainly marked to indicate the direction in
which it should be rolled to prevent loosening of the wire on the reel;
and
(vi) Each reel shall be stenciled or labeled on either one or both
sides with the following information:
[[Page 67345]]
(A) Customer order number;
(B) Manufacturer's name and product code;
(C) Factory reel number and year of manufacture;
(D) Gauge of conductors and pair size of wire;
(E) Length of wire; and
(F) RUS designation letter ``K.''
(3) When CCSR and NMR aerial service wires are shipped in coils the
following provisions shall apply:
(i) The diameter of the coil shall be large enough to prevent
damage to the wire from coiling or uncoiling;
(ii) The nominal length of the wire in a coil shall be 305 meters
(1,000 feet). No coil shall be less than 290 meters (950 feet) long or
more than 460 meters (1,500 feet) long; however, 25 percent of the
total number of coils may be less than 305 meters (1,000 feet);
(iii) The coils of wire shall be wound securely with strong tape in
four separate evenly spaced places;
(iv) The coils may be protected from damage by wrapping the coil
with heavy paper, burlap, or other suitable material accepted by RUS
prior to its use. The use of the heavy paper, burlap, or other suitable
means of protection shall be at the option of the manufacturer unless
specified by the end user; and
(v) Each coil shall be tagged with the following information:
(A) Customer order number;
(B) Manufacturer's name and product code;
(C) Year of manufacture;
(D) Gauge of conductors and pair size of wire;
(E) Length of wire; and
(F) RUS designation letter ``K.''
(4) In lieu of wrapping the coil with heavy paper, burlap, or other
suitable material, the coil may be packaged in a moisture resistant
carton.
(5) When the coils are shipped in moisture resistant cartons, each
carton shall be marked with the information specified in paragraphs
(f)(3)(v)(A) through (f)(3)(v)(F) of this section.
(6) Other methods of shipment may be used if accepted by RUS prior
to their use.
(7) When NMR aerial service wire is shipped, the ends of the wire
shall be sealed in accordance with ANSI/ICEA S-89-648-1993, paragraph
9.2.
Dated: December 19, 1995.
Jill Long Thompson,
Under Secretary, Rural Economic and Community Development.
[FR Doc. 95-31453 Filed 12-28-95; 8:45 am]
BILLING CODE 3410-15-P
Complete official Federal Register PDF
FR Doc. 95-31393 FSIS Agenda for Change: Regulatory Review
[Federal Register Volume 60, Number 250 (Friday, December 29, 1995)]
[Proposed Rules]
[Pages 67469-67474]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31393]
=======================================================================
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DEPARTMENT OF AGRICULTURE
Food Safety and Inspection Service
9 CFR Parts 301, 304, 305, 306, 307, 318, 325, and 381
[Docket No. 95-008A]
RIN 0583-AB89
FSIS Agenda for Change: Regulatory Review
AGENCY: Food Safety and Inspection Service, USDA.
ACTION: Advance Notice of Proposed Rulemaking; Request for Comments.
-----------------------------------------------------------------------
SUMMARY: The Food Safety and Inspection Service (FSIS) has begun a
comprehensive review of its regulatory procedures and requirements to
determine which are still needed and which ought to be modified,
streamlined, or eliminated. This review is an integral part of the FSIS
initiative to improve the safety of meat and poultry products by
modernizing the Agency's system of food safety regulation. It also
moves beyond the page-by-page review of FSIS regulations carried out
earlier this year under the President's Reinvention of Government
Initiative. A thorough review of FSIS's regulations is needed to
prepare for implementation of the Agency's proposed Hazard Analysis and
Critical Control Points (HACCP) regulations and a new food safety
strategy that will reduce reliance on command-and-control regulations
and increase reliance on science-based preventive measures and
performance standards to improve food safety. This review and any
changes in FSIS regulations that are necessary to make them compatible
with HACCP will be completed prior to implementation of HACCP. FSIS
invites comment from the public and all interested parties on the
Agency's preliminary review of its regulations and specific suggestions
on which regulations need to be eliminated or changed to be compatible
with HACCP, and how they should be changed, or to achieve Reinvention
of Government goals of having fewer, clearer, and more user-friendly
regulations.
Some of the rulemakings needed to streamline existing requirements
and carry out the FSIS food safety strategy are being initiated or
effectuated in documents that appear elsewhere in this issue of the
Federal Register: A proposed rule that would eliminate the FSIS prior
approval system for substances added to meat and poultry products; a
proposed rule that would facilitate marketing of nutritionally improved
alternatives to standardized meat and poultry food products; and a
final rule streamlining the prior approval system for meat and poultry
labels.
As FSIS progresses in its comprehensive regulatory review, FSIS
will publish further proposals to eliminate unnecessary regulations and
modify remaining regulations, replacing, to the extent possible,
command-and-control regulations with performance standards, clarifying
the role of inspectors in enforcing those standards, and reorganizing
and simplifying the regulations to make them easier to understand and
use.
DATES: Comments must be received on or before February 27, 1996.
ADDRESSES: Please send an original and two copies of written comments
to Policy, Evaluation, and Planning Staff, Attn: FSIS Docket Clerk,
DOCKET No. 95-008A, Room 4352 South Building, Food Safety and
Inspection Service, U.S. Department of Agriculture, Washington, DC
20250. Oral comments, as permitted under the Poultry Products
Inspection Act, should be directed to the person listed under FOR
FURTHER INFORMATION CONTACT.
[[Page 67470]]
FOR FURTHER INFORMATION CONTACT: Dr. Paula M. Cohen, Director,
Regulations Development, at (202) 720-7164.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. FSIS Regulatory Reform Strategy
II. Comprehensive Review and Reorganization of FSIS Regulations
III. Initial Review of Regulations; Consistency with HACCP
IV. Request for Comments
I. FSIS Regulatory Reform Strategy
The Food Safety and Inspection Service is responsible for carrying
out the mandates of the Federal Meat Inspection Act (21 U.S.C. 601 et
seq.), the Poultry Products Inspection Act (21 U.S.C. 451 et seq.), and
most recently, the Egg Products Inspection Act (21 U.S.C. 1031 et
seq.), by ensuring that meat, meat food, poultry, and egg products are
safe, wholesome, not adulterated, and properly marked, labeled, and
packaged. FSIS and its predecessor agencies have protected consumers
for nearly a century primarily through in-plant inspection procedures
to assure that raw animal tissues are free of disease and visible
contamination, that further processed products are processed under
appropriate controls and meet applicable composition requirements, and
that all products are produced under sanitary conditions and are
packaged and labeled in a manner that is not misleading.
The Agency's inspection programs have contributed significantly to
the safety and quality of meat and poultry products consumed in this
country. Increasingly, however, the need to reassess these programs and
to reshape them to meet the challenges of the future has become
apparent. Today, FSIS is confronting three imperatives: (1) The need to
improve food safety to meet persistent as well as changing threats to
public health; (2) the need to make better use of scarce resources in
meeting those public health challenges; and (3) the need to reexamine
its regulations, culling out or reforming those that are obsolete,
impose unnecessary burdens or are inconsistent with Agency food safety
initiatives, and restructure the essential regulations that remain to
make them easier to understand and use.
Need To Improve Food Safety
The need to take steps to improve food safety has been underscored
by events of recent years. The early-1993 outbreak of illness in the
Western United States, linked to hamburger patties contaminated with
the bacterium E. coli O157:H7, showed that there are gaps in the
inspection system--most significantly the lack of measures to target,
control, and reduce contamination of raw meat and poultry products with
pathogenic microorganisms. Since 1993, the Agency has adopted
regulatory control, research, and education measures to help fill these
gaps in the system and address the public health problem of foodborne
illness associated with such contamination. Among these measures are
regulations mandating safe handling labels on all raw, not ready-to-
eat, meat and poultry products (9 CFR 317.2(l); 381.125(b)(1)(i)). The
Agency has strongly encouraged the regulated industry to find ways of
reducing and controlling the levels of microbial pathogens on meat and
poultry products. The Agency also has begun a program to test raw
ground beef for E. coli O157:H7 and to take regulatory action on
product found to be adulterated with this dangerous organism.
Pathogen Reduction/HACCP Proposal
On February 3, 1995, FSIS published a rulemaking proposal,
``Pathogen Reduction; Hazard Analysis Critical Control Point (HACCP)
Systems'' (60 FR 6774), which begins a fundamental transformation of
the Agency's program designed to reduce significantly the incidence of
foodborne illness associated with meat and poultry products. The notice
enunciated the FSIS food safety goal: To reduce the risk of foodborne
illness associated with the consumption of meat and poultry products to
the extent possible by ensuring that appropriate and feasible measures
are taken at each step in the food production process where hazards can
enter and where procedures and technologies exist or can be developed
to prevent the hazard or reduce the likelihood it will occur.
HACCP is conceptually a simple system by which food processors
identify and evaluate hazards to the production of safe products,
institute controls necessary to reduce or eliminate these hazards,
monitor the performance of these controls, and maintain records of this
monitoring, as a matter of routine. HACCP embodies the principle that
the management of every plant is responsible for building into its food
production process systematic measures to ensure the safety of the food
the plant produces.
For HACCP to be successful, it must be accompanied by appropriate
food safety performance standards, which can provide a means to
determine whether a plant's HACCP plan is adequate and working
effectively to achieve an acceptable level of food safety performance.
Such standards have long existed for chemical food additives and
pesticide residues, in the form of tolerances or legal limits on the
level of additive or residue that may be safely present in food. FSIS
has also maintained performance standards for pathogenic microorganisms
on cooked or ready-to-eat meat and poultry products, typically in the
form of zero tolerances (or prohibitions) on the presence of such
harmful bacteria as Salmonella and Listeria monocytogenes. In
conjunction with HACCP and the Agency's new food safety strategy, FSIS
is now moving for the first time toward performance standards for
pathogenic microorganisms on raw products.
With this approach, slaughter plants will have an additional
incentive to improve their processes to reduce the risk of harmful
contamination and greater flexibility to adopt innovative new pathogen
reduction procedures and technologies in a more efficient and effective
manner than under the current system.
Where appropriate and useful, and to mitigate any negative impact
of proposed rules, FSIS intends to propose performance standards which,
while affording plants the freedom to innovate, could be met by
following the procedures in the current regulations.
Performance standards are consistent with the HACCP philosophy,
which more clearly delineates the roles and responsibilities of
industry and Government than does the current regulatory approach. With
establishments free to develop plant-specific means of achieving FSIS-
defined food safety objectives, the Agency will be able to better focus
inspection resources on essential HACCP-related functions and other
tasks more focused on process than product.
II. Comprehensive Review and Reorganization of FSIS Regulations
To be better prepared to pursue its food safety goals, FSIS has
thoroughly reexamined its regulatory oversight roles, resource
allocation, and organizational structure. This top-to-bottom review of
the Agency was conducted in parallel with and in support of the
Pathogen Reduction/HACCP rulemaking. FSIS made the preliminary reports
on this review available to the public and, in a Federal Register
notice (60 FR 47346; September 12, 1995), invited comment on the
analysis and options that had been developed. How to redeploy
inspectional resources to more
[[Page 67471]]
productively focus on food safety objectives was a key component of the
top-to-bottom review, and continues to engage the Agency.
The inspection regulations have accumulated over many years. The
meat inspection regulations (9 CFR subchapter A), the poultry
inspection regulations (9 CFR subchapter C), and the egg product
inspection regulations, under FSIS jurisdiction since June 1995 (7 CFR
part 59), were developed independently of one another; all began
separately as programs administered by different agencies. These
distinct sets of regulations have retained their separate identities in
the Code of Federal Regulations, despite the fact that they are now
administered by the same agency and a large proportion of the
regulations are virtually identical. Because of this structure, when a
change is made to one of these inspection programs, the same or a
similar change must usually be made to the others.
Many of the provisions in the meat and poultry (and now egg
products) regulations should be, but are not, identical. The
differences in the provisions addressing similar topics are largely
historical artifacts which should be eliminated. These differences
frequently cause confusion, making the administration of inspection
more difficult and resource-intensive than it ought to be. For example,
a time limit for appealing inspection decisions exists under the
poultry regulations but not under the meat regulations (9 CFR 306.5;
381.35). Similarly, there is a 180 deg.F temperature requirement for
water used to clean and disinfect meat slaughterhouses (9 CFR
308.3(d)(4), 308.8) but not poultry establishments (9 CFR 381.50(b),
381.58(a)).
Although there are necessary differences in how products of the
different industries are regulated, there are many differences for
which there is no clear necessity. In some cases, it is argued, these
differences are not only unjustified, but they are unfair in favoring
one industry at the expense of the other.
In 1992, FSIS contracted with the Research Triangle Institute (RTI)
to conduct a review and comparison of the Agency's meat and poultry
regulations. The report, delivered to the Agency in June 1993, found 12
areas with substantive differences in the regulations that might be
``potentially significant in terms of relative costs of administering
the two regulatory programs.''
A review of that report suggests at least three areas of regulation
where this may currently be the case: slaughter inspection controls
(only poultry has detailed finished product standards, which permit
faster line speeds and other plant efficiencies), removal of
contamination (poultry can be reprocessed by washing, but meat must be
trimmed), and exemptions from inspection (there are more categories of
exempted poultry establishments than there are exempted meat
establishments, and the poultry regulations are more definitive in
describing products not subject to inspection). Significant differences
in a fourth area, ``mechanically separated product,'' were resolved in
a final rule published in the Federal Register on November 3, 1995 (60
FR 55962).
FSIS will carefully scrutinize all meat, poultry, and egg
inspection regulations with a view to merging and restructuring the
regulations and to unifying most of the provisions that are common to
them. As each regulatory area is reviewed, FSIS will carefully consider
the validity of any differences in how the industries are regulated and
will keep separate only those provisions that must remain separate. The
merging and restructuring would simplify the regulations; enhance
administrative efficiency; and remove unnecessary, often confusing, and
sometimes burdensome, differences in the regulatory treatment of FSIS-
inspected establishments and their products.
During the next few years, the Agency will review and restructure
all of its regulations to make them easier to use. This reflects the
Agency's position that its regulations could be more clearly understood
if better organized and written in ``plain English.''
In conjunction with the comprehensive regulatory review now in
progress, FSIS is undertaking a review of its manuals, bulletins,
directives, notices, and instructions to its employees on how to
implement specific regulations. FSIS will address longstanding concerns
that, as the inspection program has evolved, procedural changes have
been introduced without systematic consideration of whether the new
procedures overlap or are inconsistent with other procedures. The
result has been the creation of redundant or conflicting procedures on
top of one another, causing confusion and the potential for nonuniform
application of inspection requirements from place to place. Further,
FSIS questions whether the many kinds of issuances continue to be
useful, and requests comment on how the Agency can best communicate
instructions for implementing regulations.
III. Initial Review of Regulations; Consistency With HACCP
As discussed in conjunction with the FSIS regulatory proposal of
February 3, 1995 (60 FR 6774), FSIS does not intend simply to add the
new HACCP system to the current system of inspection and regulation.
FSIS intends to integrate HACCP into a modernized system of inspection
and regulation that will harness the power of prevention and
performance standards to improve food safety and make better use of the
Agency's resources. To accomplish this, FSIS must review all of its
existing regulatory requirements and procedures and modify, streamline,
or eliminate them, as appropriate, to be compatible with the new food
safety strategy. FSIS has already targeted a number of its regulations
for elimination or reform and is seeking in this document public input
as a first step in the rulemaking required to achieve the needed
changes.
Earlier this year, partly to identify rule changes needed for
HACCP-based inspection and partly to meet requirements of the
President's Reinventing Government Initiative, FSIS conducted an
initial page-by-page review of existing regulations. The Agency
identified for possible revision or elimination more than 400 pages of
regulations. Almost three-quarters of the regulations administered by
FSIS were projected to be eliminated or changed to make them simpler,
less burdensome, or more performance-based.
As part of its overall food safety initiative, the Agency is
committed to moving beyond that initial review to making specific
proposals for the near term and to comprehensive regulatory reform to
be completed during the next few years.
Reporting and Recordkeeping
Further, in line with the Administration's policy to reduce
reporting requirements in Government programs, FSIS invites comment on
its paperwork or recordkeeping requirements. The Agency seeks specific
recommendations for eliminating, simplifying, or otherwise changing
information collection requirements. FSIS also seeks recommendations
for improving or eliminating currently required forms (FSIS Form 7234-
1, the form accompanying label submissions, for example, or FSIS Form
8820-2, the form meat and poultry establishment personnel complete if
inspectors find deficiencies in processing operations).
Questions of particular concern include the following:
Despite efforts to prevent this, has FSIS issued
duplicative or redundant
[[Page 67472]]
requirements? Do FSIS' information and recordkeeping requirements
overlap with those of other Federal, State, or local agencies?
Should individual FSIS forms be modified or combined? If
so, how?
Should FSIS allow respondents to use facsimiles,
computers, or other automated collection systems or information
transfer technologies? If so, for which information requirements?
Would it be helpful for FSIS to accompany information
requirements with format suggestions?
Generally, how might FSIS make information collection
activities less burdensome?
Current Activity
FSIS has decided to publish the following documents at this time:
Rulemaking to make FSIS food safety regulations compatible
with HACCP and to eliminate redundant or unnecessary rules, initiated
in this Advance Notice of Proposed Rulemaking (ANPR);
Rulemaking to eliminate the FSIS prior-approval system for
substances added to meat and poultry products, a process initiated in a
proposed rule, ``Substances Approved for Use in the Preparation of Meat
and Poultry Products,'' docket #88-026P, published elsewhere in this
issue of the Federal Register;
Rulemaking to amend existing standards of identity to give
manufacturers greater flexibility in marketing nutritionally improved
(e.g., reduced-fat) meat and poultry products, ``Food Standards:
Processed Meat and Poultry Products Named by Use of an Expressed
Nutrient Content Claim and Standardized Name'' (docket #92-024P),
published elsewhere in this issue of the Federal Register); and
A final rule streamlining the prior-approval system for
meat and poultry labels, ``Prior Labeling Approval System,'' docket
#92-012F, published elsewhere in this issue of the Federal Register.
Further, FSIS is actively developing the following: a proposal to
convert remaining rules as much as possible from command-and-control
prescriptions to performance standards (``Performance Standards for the
Production of Certain Cooked Meat and Poultry Products''); a proposal
to eliminate prior-approval programs for facility blueprints,
processing equipment, and most quality control plans (``Elimination of
Prior Approval Requirements for Establishment Drawings and
Specifications, Equipment, and Certain Partial Quality Control
Programs''); and an advance notice of proposed rulemaking soliciting
comments and information on whether to modify or eliminate specific
standards and whether, and if so how, to modify the Agency's overall
approach to product standards (``Meat and Poultry Standards of Identity
and Composition'').
Planned Actions
Review of all prior-approval regulations not addressed in
the above-mentioned documents, with related rulemaking proposals
projected for publication during 1996;
Restructuring of FSIS meat inspection regulations and
poultry inspection regulations, which are currently in different
subchapters of the Code of Federal Regulations, to eliminate
duplicative and redundant requirements and make the regulations easier
to use (initiated in this ANPR).
FSIS invites public comment on all aspects of this regulatory
reform initiative based on the discussion contained in the ANPR and in
the companion rulemaking proposals.
Command-and-Control Regulations and Consistency With HACCP
The Pathogen Reduction/HACCP proposal referred to above reflects a
basic shift in FSIS's approach to overseeing the safety of meat and
poultry products. FSIS intends to rely less on command-and-control
requirements, which specify, often in great detail, how a plant is to
achieve a particular food safety objective, and more on performance
standards, which state an objective or level of performance plants are
expected to achieve, and allow for greater flexibility on the part of
the plant in determining how to achieve them. This shift to performance
standards and greater flexibility for meat and poultry plants is the
basis of FSIS's intention to further stimulate the innovative capacity
of the meat and poultry industry to improve the safety of its products.
This shift is also compelled by the philosophy underlying HACCP.
HACCP enables plant management to build science-based controls to
prevent food safety hazards into its food production processes, and
recognizes that the specific controls and related measures--the HACCP
plans--required to ensure food safety can vary from plant to plant.
Where appropriate, command-and-control regulations must be changed
to provide greater flexibility for industry to design and implement
processes and HACCP systems of control, tailored to the circumstances
of each plant. This is consistent with the HACCP approach, which
clearly delineates industry and Government responsibility for food
safety, with plants establishing procedures they will follow to ensure
the production of safe food. FSIS must carefully reconsider all of its
regulations that mandate specific actions, techniques, or processing
parameters designed to achieve a food safety objective and determine
whether they should be eliminated or modified to provide the
flexibility required to be consistent with HACCP. However, any changes
will not compromise food safety standards or objectives required to
protect public health.
FSIS must also modify its regulations in varying respects to
reflect the anticipated changes in the roles FSIS inspectors will play
in plants operating under HACCP.
Table 1 lists the regulations FSIS has identified as candidates for
modification or elimination to be consistent with HACCP. Comments
submitted during that public comment period also identified candidates
for modification or elimination. The comments are being evaluated by
FSIS and will be taken into account as the Agency proceeds with the
necessary rulemaking. Any changes in these or other FSIS regulations
that are required to be consistent with HACCP will be completed before
plants are required to comply with new HACCP requirements.
Notably, the following categories of regulations in title 9 of the
CFR are being reviewed for consistency with HACCP:
Definitions (Secs. 301.2 and 381.1);
Inauguration, suspension, and withdrawal of inspection
(Secs. 305.4, 305.5, and 381.19-381.21, and 381.29);
Appeals procedures and related administrative procedures
(Secs. 306.5, 335.40, and 381.35);
Reinspection of product entering establishments, and
retention and disposition of product (Secs. 318.2 and 381.145);
Restrictive, command-and-control-type regulations which
delimit processing and treatment methods intended to eliminate specific
food safety hazards such as trichinae in pork; mechanically separated
product, and various poultry products; and the potential hazards of
improper thermal processing of meat and poultry products and
irradiation of poultry (Secs. 318.6, 318.10, 318.12-318.20, 318.22-
318.24, and 318.300-318.311; and 381.148-381.152 and 318.300-381.311);
and
Recordkeeping and access to records under the Freedom of
Information Act (Secs. 320.5-320.7, 381.179-381.181; 390.1-390.8).
FSIS is also reviewing all of its regulations, policies, and
inspection
[[Page 67473]]
procedures concerning plant sanitation (Secs. 308.3-308.16 and
Secs. 381.45-381.61). Although implementation of the requirement
proposed on February 3, 1995, for sanitation standard operating
procedures (SOP's) would not depend on revisions to the Agency's
sanitation regulations, the Agency recognizes the need to more clearly
state the performance standards in this area. Basic sanitation and
plant hygiene practices are, from a food-safety perspective, among the
most important requirements in the regulations. The Agency believes
that the regulations can be made much clearer in describing the
establishments' roles and their responsibility for much of the routine
work in this area, so that Federal inspection resources can be
allocated to new, HACCP-related functions.
FSIS also invites comment on the relationship between HACCP and the
existing regulations governing postmortem inspection in slaughter
plants (9 CFR parts 310 and 381.76 et seq.). HACCP is intended to
address all significant avenues of hazard affecting the safety of meat
and poultry products. The FSIS postmortem inspection program, which
carries out the statutory mandate for carcass-by-carcass examination by
Federal inspectors, is designed to achieve an array of consumer
protection values, including exclusion of diseased animals from the
food supply and enforcement of standards regarding visible carcass
defects and contamination with visible filth, fecal matter, or other
extraneous materials, some of which affect the safety of the product
and some of which do not. HACCP plans for slaughter plants will include
one or more critical control points in the slaughter and carcass
dressing process, which will require inspectional oversight by FSIS
and, possibly, some modification of the current postmortem inspection
regulations. FSIS invites comment on what the relationship should be
between HACCP and the current postmortem inspection regulations and
activity, including specific suggestions for the manner in which
current regulations should be modified to be consistent with HACCP.
Table 1.--Regulations That Are Candidates for Revision or Removal Prior to HACCP Implementation
----------------------------------------------------------------------------------------------------------------
Regulations--FMIA, PPIA Subject Possible action
----------------------------------------------------------------------------------------------------------------
9 CFR Part
301, 381, Subpart A......... Definitions...................... Include general HACCP-related terms and
redefine inspection organization and
activity terms.
304, 381, Subpart D......... Application for and grant or Revise prior approval procedures (e.g.,
refusal of inspection. eliminating provisions of Sec. 381.19);
shift to performance standards.
305 and 306, 381, Subparts E Inauguration and withdrawal of Clarify role of inspection program. (See,
and F. inspection; inspection program e.g., Sec. 305.4). Integrate Secs. 305.5
employees. and 381.29 with rules for suspending and
withdrawing inspection. (See Part 335 and
Part 381, Subpart W.)
Assure that appeal procedures in Secs.
306.5 and 381.35 comport with enforcement
under HACCP.
307, 381, Subpart G......... Facilities for inspection........ Clarify standards for essential facilities.
(See, e.g., Secs. 307.1, 307.2, and
381.36.)
Convert requirements for sanitation and
facilities to performance standards or
decision criteria; supplement with
guidelines as needed. (See, e.g., Secs.
308.3, 308.4, and 381.46-381.52.)
Simplify detailed requirements for
equipment and cleanliness, for example;
convert to performance standards and/or
decision criteria; supplement with
guidelines as needed. (See Secs. 308.6-
308.9, 308.12, 308.13, and 308.16.)
Convert equipment and cleaning requirements
to performance standards and/or decision
criteria; supplement with guidelines as
needed. (See Secs. 381.54-381.61.)
Remove obsolete provisions for slack
barrels, similar containers and means of
conveyance, and burlap wrapping. (See
Secs. 308.10 and 308.11.)
Clarify decision criteria concerning
employment of diseased persons. (See Sec.
308.14.)
Convert tagging insanitary equipment,
utensils, rooms, and compartments
provisions to performance standards;
clarify role of inspection program
employees. (See Secs. 308.15 and 381.99.)
Update rules for temperatures and chilling
and freezing procedures for poultry and
make changes to accommodate HACCP (i.e.,
changes in addition to pathogen reduction
amendments proposed 2/3/95). (See Sec.
381.66 paragraphs (c)(5) and (c)(6).)
318, 381, Subparts O and X.. Entry into official Convert rules for articles entering
establishments; reinspection; establishments, and product disposal to
reinspections, preparing and performance standards and clarify role of
processing establishments. inspection program employees. (See Secs.
318.3 and 381.45(a),(b), and (i).)
Eliminate prior approval procedures for
total quality control systems. (See Secs.
318.4(c)-(h) and 381.145(c)-(g).)
Convert requirements for processing
procedures and articles used in preparing
products to performance standards and
clarify role of inspection program
employees. (See Secs. 318.5, 318.6,
318.8, and 381.148.)
[[Page 67474]]
Eliminate command-and-control type
requirements for the use of nitrite and
sodium ascorbate or erythorbate in bacon;
convert these requirements to performance
standards and clarify role of inspection
program employees. (See Sec. 318.7(b).)
Convert requirements for the treatment of
pork and pork products to destroy
trichinae in to performance standards;
supplement with guidelines as needed. (See
Sec. 318.10.)
Convert requirements for preparing articles
not for use as human food (e.g., dog food)
to performance standards; clarify role of
inspection program employees; eliminate
command-and-control type requirements.
(See Secs. 318.12 and 381.152.)
Eliminate redundancy with other provisions
(mixtures containing product that are not
classed as meat food products). (See Sec.
318.13.)
Convert procedure for handling product
adulterated by polluted water to
performance standards and decision
criteria; supplement with guidelines as
needed. (See Secs. 318.14 and 381.151.)
Convert requirements for tagging chemicals,
preservatives, cereals, spices, etc., to
performance standards; clarify role of
inspection program employees. (See Sec.
318.15.)
Convert rules for substances such as
pesticide chemical residues, food
additives, and color additives to
performance standards and role of
inspection program employees. (See Sec.
318.16.)
Make requirements for handling of certain
material for mechanical deboning
consistent with any new time-temperature
requirements. (See Sec. 318.18.)
Convert compliance procedures for meat
derived from advanced meat/bone separation
machinery and recovery systems to
performance standards and clarify role of
inspection program employees. (See Sec.
318.24.)
Convert requirements for canning and canned
products to performance standards and
clarify role of inspection program
employees. (See Secs. 318.300-318.311 and
381.300-381.311.)
325, 381, Subpart S......... Transportation................... Eliminate obsolete provisions; focus on and
clarify policies and performance
standards.
----------------------------------------------------------------------------------------------------------------
IV. Request for Comments
This ANPR is intended to elicit comments, suggestions, and
information that will enable FSIS to provide more efficient and
effective service and to focus its organizational resources more
closely on health and safety matters, which are of vital concern to all
Americans. FSIS specifically requests comment on its efforts to
transform its regulations from heavy reliance on command-and-control
approaches to greater reliance on performance standards, and solicits
detailed suggestions concerning which existing regulations need to be
changed to be consistent with HACCP, and how those regulations should
be changed. The Agency notes that several individuals and groups,
including at least one trade association, responded to a similar
request in the February 3, 1995, proposal. FSIS would also appreciate
comments on the economic burdens and the paperwork, recordkeeping, or
other information collection burdens associated with the regulations
discussed in this document.
Comments supported by scientific or other data on the impacts, such
as the public health effects, of changing or eliminating existing
regulations, would be especially valuable.
Executive Order 12866
This advance notice of proposed rulemaking has been reviewed under
Executive Order 12866. This rule has been determined to be significant
for the purposes of Executive Order 12866 and, therefore, has been
reviewed by the Office of Management and Budget.
FSIS does not have data necessary to assess how the regulatory
changes discussed in this document might affect various sectors of the
meat and poultry industries. Therefore, the Agency invites comment on
potential effects, including economic costs or benefits, of any
specific changes that may be suggested.
Done, at Washington, D.C., on December 21, 1995.
Michael R. Taylor,
Acting Under Secretary for Food Safety.
[FR Doc. 95-31393 Filed 12-26-95; 3:36 pm]
BILLING CODE 3410-DM-P
Complete official Federal Register PDF
FR Doc. 95-31391 Food Standards: Requirements for Processed Meat and Poultry Products Named by Use of an Expressed Nutrient Content Claim and a Standardized Term
[Federal Register Volume 60, Number 250 (Friday, December 29, 1995)]
[Proposed Rules]
[Pages 67474-67487]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31391]
=======================================================================
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DEPARTMENT OF AGRICULTURE
DEPARTMENT OF AGRICULTURE
Food Safety and Inspection Service
9 CFR PART 319 and 381
[Docket No. 92-024P]
RIN: 0583-AB51
Food Standards: Requirements for Processed Meat and Poultry
Products Named by Use of an Expressed Nutrient Content Claim and a
Standardized Term
AGENCY: Food Safety and Inspection Service, USDA.
[[Page 67475]]
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 to
establish a general definition and standard of identity for
standardized meat food and poultry food products that have been
modified to qualify for use of an expressed nutrient content claim in
their product name. These products would be identified by an expressed
nutrient content claim, such as ``Fat Free,'' ``Low Fat,'' and
``Light,'' in conjunction with an appropriate standardized product
name. FSIS is taking this action to: (1) Assist consumers in
maintaining healthy dietary practices by providing for substitute
versions of standardized processed meat food and poultry food products
that have reductions of certain constituents that are of health concern
to consumers, such as fat and cholesterol, (2) increase regulatory
flexibility and support product innovation in accord with Executive
Orders 12861 and 12866 and with President Clinton's Memorandum to Heads
of Departments and Agencies, ``Regulatory Reinvention Initiative,''
dated March 4, 1995, and (3) provide consumers with an informative
nutrition labeling system.
DATES: Comments must be received on or before February 27, 1996.
ADDRESSES: Written comments should be sent in triplicate to, Policy,
Evaluation and Planning Office, Attn: FSIS Docket Clerk, DOCKET No. 92-
024P, Room 4352, South Building, Food Safety and Inspection Service,
U.S. Department of Agriculture, Washington, DC 20250. Oral comments as
provided by the Poultry Products Inspection Act should be directed to
Mr. Charles R. Edwards, Director, Product Assessment Division, at (202)
254-2565. (See also ``Comments'' under Supplementary Information.)
FOR FURTHER INFORMATION CONTACT: Mr. Charles R. Edwards, Director,
Product Assessment Division, Regulatory Programs, Food Safety and
Inspection Service, U.S. Department of Agriculture, Washington, DC
20250, (202) 254-2565.
SUPPLEMENTARY INFORMATION:
Background
I. Introduction
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.)
authorize the Secretary of Agriculture to establish and maintain
inspection programs designed to assure consumers that meat and poultry
products distributed in commerce or within designated States are
wholesome, not adulterated, and are properly marked, labeled and
packaged.
Under section 7(c) of the FMIA (21 U.S.C. 607 (c)) and section 8(b)
of the PPIA (21 U.S.C. 457(b)), FSIS develops and promulgates
regulations that prescribe definitions and standards of identity and
composition for meat and poultry products (9 CFR parts 319 and 381,
subpart P). FSIS also promulgates regulations that prescribe the
content and design of labels for meat and poultry products (9 CFR parts
317 and 381, subpart N). Food and Drug Administration (FDA) has
responsibility for all other food products.
Food standards have existed in various forms since food was first
produced for distribution in commerce to people. In fact, the U.S.
Department of Agriculture, which was established in 1862, promulgated
about 200 ``standards of purity'' by 1906, which included definitions
of adulteration and misbranding. Meat and poultry standards have been
developed for various reasons, including (1) to prevent nutritional and
economic dilution (i.e., economic adulteration) of the expected,
characterizing, or valued components of meat and poultry products, such
as the amount of beef needed for a product to be considered a ``beef
stew,'' and (2) to establish standardized names for products, such as
``frankfurter,'' ``bologna,'' ``hamburger,'' ``chili con carne,'' and
``corned beef hash,'' that consumers can understand and, in turn, to
establish standardized requirements for the composition of these
products to assure, in general, that the products will contain certain
expected compositional components. For example, a product named
``corned beef hash'' is expected to contain cured beef, potatoes, and
seasonings. Providing standards for meat and poultry products serves
the needs of industry to produce, and the desires of consumers to
purchase products that contain the characteristics and ingredients that
are expected in a product represented by a particular name.
Parts 319 and 381, subpart P, of the meat and poultry inspection
regulations (9 CFR parts 319 and 381, subpart P, respectively) contain
standards of identity or composition for about 60 meat and poultry
product categories. Standards of identity and composition can be like a
recipe and may establish specific requirements for a product such as
the kind of ingredients and/or the amount of ingredients allowed in it;
and/or the methods by which the product must be prepared; and/or the
criteria the finished product must meet, such as a specified salt
content of 4 percent that can affect the wholesomeness or shelf-life of
a product, such as a dried ham.
The standard for ``pizza'' (9 CFR 319.600), for example, defines
the product ``pizza with meat'' as ``a bread base meat food product
with tomato sauce, cheese, and meat topping,'' and indicates the
minimum amount of the meat it must be made from, which is not less than
15 percent raw meat. The standard for corned beef hash (9 CFR 319.303)
sets the minimum amount of meat (i.e., meat content) that this product
must contain, and in addition, lists other required and optional
ingredients for the product. The standard for ``Country Ham'' (9 CFR
319.106) states that this product is an uncooked, cured, dried, smoked
or unsmoked meat food product made up of a single piece of meat from a
pork ``ham'' (i.e., hind leg of a hog) or pork shoulder. This standard
also states that a ``Country Ham'' must be prepared using a dry
application of salt and curing agents in order to have a prescribed
salt, brine concentration, or water activity in the finished product.
The standard for ``meat pies'' (9 CFR 319.500), for example, a beef or
pork pie, requires that the product have not less than 25 percent meat
based on the amount of all the product's ingredients. Hereafter, in
this document, ``standards'' will refer to both the meat and poultry
product standards of identity or composition codified in 9 CFR parts
319 and 381, subpart P.1
\1\ FSIS has also established policy guides in its Standards and
Labeling Policy Book for many processed meat and poultry food
products for which there are no specific regulatory standards, e.g.,
``Chinese Pepper Steak.'' These policy guides address the criteria,
the characteristics, and/or the expected composition of a particular
poultry or meat food product that is associated with a particular
product name. These policy guides may identify minimum meat and/or
poultry contents, maximum fat and water contents, methods of
processing or cooking, expected or characterizing ingredients, and/
or finished product criteria (such as salt content or cooking yield)
for various meat or poultry products. A copy of the Standards and
Labeling Policy Book is available for inspection in the FSIS Docket
Clerk's Office, Room 4352, South Agriculture Building, Washington,
DC 20250.
---------------------------------------------------------------------------
Meat and poultry products that are subject to FSIS' regulatory
standards make up a substantial portion of the nation's food supply.
The Agency believes that there is a desire among consumers to be able
to purchase healthful, alternative standardized meat and poultry food
products that have been modified to reduce the level of constituents
that are of health concern to some people, such as fat, cholesterol, or
sodium, below that which occurs under existing FSIS regulatory
[[Page 67476]]
standards. Industry has previously petitioned FSIS for permission to
market these products. The Agency's objective, through this proposal,
is to help facilitate the industry's ability to produce these
substitute standardized products and, in turn, to facilitate consumers'
selections of a variety of alternative products that are wholesome and
properly labeled, as required by the FMIA and the PPIA.
II. IOM Report
Federal regulatory agencies responsible for food safety and food
labeling have been interested in modernizing labeling and food
standards for some time. In 1989, FSIS and the Public Health Service,
U.S. Department of Health and Human Services, which includes FDA,
jointly sponsored a study by the Institute of Medicine (IOM) of the
National Academy of Sciences (NAS), to provide options for improving
food labeling. The NAS in its 1990 final report, Nutrition Labeling,
Issues and Directions for the 1990's 2 (IOM Report), expressed the
concern that some of FDA's standards of identity impeded a
manufacturer's ability to offer more nutritious foods.
\2\ This report is available for public inspection in the FSIS
Docket Clerk's office.
---------------------------------------------------------------------------
Although both FSIS and FDA were encouraged to review their food
standards, the IOM Report pointed out that there was a distinct
difference between FDA standards and those of FSIS. FDA standards for
certain products in which fat has traditionally been considered a
valuable or characterizing ingredient require a minimum amount of fat
to be present in a product before the product can be identified by the
standardized name established in FDA regulations. On the other hand,
generally speaking, FSIS standards set maximum limits on fat, water, or
other added substances that can be present in a product in order to use
the name established by the standards. For example, in FDA's standards,
a product using the name ``ice cream'' is required by regulation (21
CFR 135.110) to have a minimum of 10 percent milkfat in order to bear
that name. However, FSIS standards for products identified by the names
``Frankfurter,'' ``Wieners,'' or ``Hot Dog'' (9 CFR 319.180(b)), for
example, limit the combination of fat and added water to no more than
40 percent of the product's formulation. The IOM Report noted that,
historically, a high milkfat content was considered a desirable
characteristic in dairy products, whereas, in meat and poultry
products, an excess amount of fat, water, and other added substances
were considered to dilute the protein contributed by the meat or
poultry portion (which was the ``valued'' component of a meat and
poultry product).
The Agency agrees with the IOM Report, which stated, ``In 1990,
less skepticism exists about consumers' abilities, aided by informative
labeling, to protect themselves against debased or diluted products * *
* Attention is now focused on the consumption of too much fat rather
than the possibility that some products will be made using less of an
ingredient [less fat] than was historically considered a valuable
constituent. Accordingly, it seems clear to the [IOM] Committee that
any system that significantly impedes the marketing of reduced-, low-,
and non- or no-fat substitutes should be examined and, presumably,
changed.''
Processed meat and poultry products are important sources of many
nutrients, especially protein, vitamin B-6, vitamin B-12, iron, and
zinc. Meat is rich in heme iron, which is more readily absorbed by the
body than is iron from many other foods. Heme iron also enhances the
absorption of iron from other sources. Meat and poultry products will
continue to be an important part of the total American diet. FSIS
believes that it is appropriate to provide consumers with the largest
variety of processed meat and poultry products that can be made
available to them, from which consumers can then make healthful food
purchasing choices. Therefore, FSIS believes that reform of labeling
for meat and poultry products and reform of regulatory standards for
these products should include implementing the regulatory changes
needed to provide the meat and poultry industry the flexibility
necessary to create and market an increased variety of healthful
processed meat and poultry products, such as those lower in fat, which
have the beneficial nutrients, flavor, texture and appearance desired
by consumers.
III. NLEA and Regulatory Actions
As a result of increased interest in the benefits of more healthful
diets, consumer groups, Congress, the FDA, and FSIS began to actively
focus on food label reform during the late 1980's and early 1990's. In
November 1990, Congress passed the ``Nutrition Labeling and Education
Act of 1990'' (NLEA). The NLEA, which applies to foods under FDA's
jurisdiction, gave legislative emphasis to an already on-going effort
by the FDA and FSIS to reform food labeling. It included direction for
improving ingredient labeling and addressing issues concerning
standards of identity reform.
The NLEA addressed food labeling only for foods under the
jurisdiction of the FDA. However, in the interest of providing
consumers with uniform nutrition labeling for all foods, FSIS published
an advance notice of proposed rulemaking (ANPR) in the Federal Register
on April 2, 1991 (56 FR 13564), advising of its intent to publish a
proposed rule for nutrition labeling of meat and poultry products. In
regard to meat and poultry product standards of identity, FSIS stated
that it would reassess this issue after completing its rulemaking on
nutrition labeling.
Final nutrition labeling rules for food under the jurisdiction of
FDA and FSIS were published in the January 6, 1993, Federal Register.
The January 6, 1993 Federal Register contained final rules for
nutrition labeling for most meat and poultry products under FSIS'
jurisdiction (58 FR 632), and FDA final nutrition labeling rules for
most food products under its jurisdiction. The nutrition labeling rules
were comprehensive. They addressed both required nutrients and food
components which were to be listed in the ``Nutrition Facts'' panel of
food products, as well as optional nutrient and food components that
could be listed on the panel. Rules were also issued that specified
food product labeling formats and food category serving sizes, as well
as defined nutrient content claims such as ``Low,'' ``Light,'' and
``Free.''
In the same Federal Register (58 FR 2431), FDA published a final
rule that affected many FDA standardized foods. Section 130.10 (21 CFR
130.10), prescribes conditions under which foods that substitute for a
standardized food can deviate from the standard of identity and still
use the standardized name as part of the product name. Provisions in 21
CFR 130.10 prescribe a general definition and standard of identity for
foods that substitute for FDA-regulated standardized foods and use the
name of the standardized food in their statement of identity but do not
comply with the standard of identity because of a deviation that is
described by an expressed nutrient content claim defined by FDA's
regulations. These foods are named by use of an expressed nutrient
content claim, such as ``Fat Free'' ``Light,'' and ``Lean,'' in
conjunction with an applicable standardized name. Based on an informal
market review conducted by FSIS, FDA's rule has resulted in the
appearance in supermarkets of an array of new food products that
qualify for use of an expressed nutrient content
[[Page 67477]]
claim and standardized names, e.g., ``Fat Free Ice Cream,'' ``Low Fat
Cheddar Cheese,'' and ``Reduced Fat Egg Nog,'' because of allowable
deviations from FDA food standards permitted by 21 CFR 130.10.
The FDA regulation requires that the performance characteristics of
the substitute standardized food be similar to those of the
standardized food, except as discussed below. Performance
characteristics are the physical properties (e.g., the ability to
freeze), flavor, functional properties (e.g., spreadability), and
shelf-life (i.e., the time the product exists in a wholesome condition
under acceptable handling practices) of a food. If, however, there are
any significant differences in the performance characteristics of the
modified version of the standardized food that materially limit the
uses of the food, as compared to the uses of the standardized food,
these must be disclosed on the product's labeling. For example, if a
``Fat Free Cream Cheese'' cannot be used in baking, that fact must be
stated on the product's labeling, e.g., ``not recommended for baking.''
The FDA regulation also provides that the ingredients used in the
substitute food product must be those ingredients provided for by the
standard, except that safe and suitable ingredients may be used to
improve texture, add flavor, prevent syneresis, extend shelf life,
improve appearance, or add sweetness so that the product is not
inferior in performance characteristics to the standardized food. The
FDA regulation also requires that ingredients not provided for, and
ingredients used in excess of those levels provided for by the
standards, must be identified by an asterisk in the ingredients
statement of a product and the meaning of the asterisk must be
explained immediately following the ingredients statement.
The FDA regulation facilitated new markets and new opportunities
for FDA-regulated food companies to develop modified versions of
standardized foods. Although 21 CFR 130.10 addressed only FDA-regulated
foods, meat and poultry food manufacturers were quick to respond to the
potential market for modified standardized meat and poultry products.
According to the meat and poultry industries, they intensified their
research and development activities in order to be able to respond to
potential consumer demands for meat and poultry products with
reductions in various constituents, such as fat and cholesterol, where
current standards may limit the marketing of such products.
Technological developments and new ingredient uses now allow the
industry to develop new meat and poultry products, including substitute
standardized products with decreased amounts of fat, such as, ``Fat
Free Bologna.''
Manufacturers of these new meat and poultry products wanted to
market them without labeling them by what they considered to be
pejorative terms such as ``alternative,'' ``replacement,'' and
``substitute.'' The manufacturers indicated that such products were not
of lesser value compared to their traditional standardized
counterparts. They asserted that these products, including new lower
fat products, were better and should be allowed to be identified with
an appropriate nutrient content descriptor and a commonly understood
standardized name that would be familiar to consumers. They requested
that FSIS allow labeling for these products similar to that provided
for in FDA's general standard of identity in 21 CFR 130.10 for modified
standardized products.
FSIS responded to this request by issuing Policy Memo 123 3
(dated January 20, 1995) as an interim policy to allow some
standardized or traditional meat and poultry food products that have
been formulated to reduce their fat content to enter the marketplace
while appropriate regulatory actions related to the modernization of
standards were developed. Policy Memo 123 allowed modified versions of
cooked sausage (e.g., frankfurters), fermented sausages (e.g.,
pepperoni, salami) and breakfast sausage products to be identified by a
nutrient content claim that reflected a reduction in fat content in
conjunction with a standardized or traditional name, e.g., ``Fat Free
Bologna,'' ``Low Fat Pepperoni.'' Policy Memo 123 included provisions
for labeling which were similar to those established by FDA's general
standard of identity in 21 CFR 130.10. In a prior related policy, on
May 10, 1991, FSIS issued Policy Memo 121, ``Labeling of Low Fat Ground
Beef and Low Fat Hamburger Containing Added Ingredients.'' Policy Memo
121 allowed for such products to be named with a standardized name
along with other descriptive labeling, e.g., ``Low Fat Hamburger With a
X% Solution of Water and Carrageenan'' or ``Low Fat Hamburger, Water
and Carrageenan Product.'' Policy Memo 121 has been updated (See Policy
Memo 121B, dated January 20, 1995) 4 to reflect current changes in
nutrition labeling regulations.
\3\ This paper is available for public inspection in the FSIS
Docket Clerk's office.
\4\ This paper is available for public inspection in the FSIS
Docket Clerk's office.
---------------------------------------------------------------------------
Both Policy Memo 121B and Policy Memo 123 were issued as interim
policies intended to accommodate certain lower fat substitute meat and
poultry products until such time that rulemaking was completed. Both of
these policy memoranda will be rescinded if provisions proposed in 9
CFR 319.10 and 381.172 become final rules.
FSIS is now, in this rulemaking, proposing to establish a general
regulatory standard of identity for modified meat and poultry products
which substitute for meat and poultry food products defined by a
regulatory standard of identity or composition in 9 CFR parts 319 and
381, subpart P. FSIS believes that this general standard of identity
will be beneficial to consumers because it will (1) assist consumers by
providing for substitute versions of standardized processed meat and
poultry products that have reductions of certain constituents that are
of health concern to consumers, such as fat and cholesterol, and which
bear accurate descriptive names that are meaningful to consumers, (2)
increase regulatory flexibility and support product innovation in
accord with Executive Orders 12861 and 12866 and with President
Clinton's Memorandum to Heads of Departments and Agencies, entitled
``Regulatory Reinvention Initiative,'' dated March 4, 1995, and (3)
provide consumers with an informative nutrition labeling system that
will parallel, to a significant extent, the nutrition food labeling
initiatives of FDA. FSIS believes that this proposed general standard
of identity is fully consistent with FSIS's statutory responsibilities
under the FMIA and PPIA to assure that the labeling of meat and poultry
products is accurate and truthful and not false or misleading. The
substitute meat food and poultry food products covered by this proposal
will be identified by familiar product names and will be labeled to
inform consumers about their general compositional changes from
standardized products by use of a nutrient content claim as part of the
product's name.
IV. Discussion of Regulatory Proposal
FSIS is proposing to amend the Federal meat and poultry products
inspection regulations to establish a definition and general standard
of identity for modified versions of standardized meat and poultry food
products, i.e., ``substitute standardized products.'' These products
will be formulated and processed with ingredients otherwise not in or
in
[[Page 67478]]
amounts greater than that allowed by FSIS regulatory food standards in
9 CFR parts 319 and 381, subpart P, in order that the product's make-up
is consistent with the nutrient content claim made about the product.
The names of these products will be composed of an expressed nutrient
content claim that, in general, reflects the necessary ingredient
modifications made for the product to be accurately identified by such
a claim, along with an established appropriate standardized term.
This proposed rule would: (1) Define ``substitute processed meat or
poultry food products''; (2) allow an expressed nutrient content claim
to be used to identify substitute meat and poultry products, in
conjunction with the name of a standardized product; (3) require
substitute processed meat and poultry food products to have similar
performance characteristics such as physical and functional properties
to the standardized products for which they substitute, except for
significant differences that materially limit the use of the product as
compared to the use of the standardized food, which will be allowed if
the differences are identified by special labeling statements next to
the product's name; (4) require that ingredients used in substitute
standardized products be those provided for use by the regulatory
standard for which the product is a substitute, except that safe and
suitable ingredients approved for use in meat and poultry food products
will be allowed to be used at the minimum level necessary to improve
texture and prevent syneresis, in order that the product does not have
inferior performance characteristics to the standardized product it
modifies; (5) require other ingredient requirements for the substitute
product including not replacing or exchanging an ingredient
specifically required by the standard with a similar ingredient from
another source and requiring such required ingredients to be present in
the same amounts as required by the standard; (6) prescribe
nomenclature for identifying substitute standardized processed meat and
poultry products; and (7) establish labeling requirements for
identifying ingredients used in the substitute standardized processed
meat and poultry products that are not provided for or are used in
excess of the level provided for by the standard for which the product
substitutes.
FSIS believes that this proposed action is needed to provide
consumers with accurate, descriptive, and fully informative labeling
that will promote honesty and fair dealing in the distribution of
products of interest to consumers. This proposed rule is needed to
facilitate the development and availability of substitute processed
meat and poultry products that have reductions in constituents that are
of health concern to some people, e.g, fat, cholesterol, and sodium.
The proposed rule would enable FSIS to rely more on labeling
requirements, and less on recipe-type standards that are restrictive,
in carrying out its mandate to assure that the labels of meat and
poultry food products are accurate and not misleading to consumers.
FSIS believes that today's consumer is better able to evaluate the
merits of standardized processed meat and poultry food products when
provided with labeling that is guided by rules that require, for most
products (1) a commonly recognized product name, (2) nutritional
information about what one serving of the food contains (i.e.,
Nutrition Facts), and (3) a listing of ingredients in the order of
predominance by weight used to make the product (i.e., the ingredients
statement).
Meat and poultry food products that satisfy the criteria for use of
nutrient content claims defined in 9 CFR parts 317 and 381 can also
make claims other than those that reflect reductions of constituents of
health concern to some people, such as ``high in'' or ``good source
of.'' FSIS believes current meat and poultry product standards do not
preclude the making and marketing of substitute products that qualify
to use these claims. Therefore, FSIS is not, in this proposal,
proposing regulations to provide for the production and distribution of
these products, since it believes new regulations are not needed for
these products to be manufactured and distributed. FSIS would, however,
like comments from members of the public, including consumers,
industry, and scientists as to whether or not current regulatory
standards prevent the distribution of products with nutrient content
claims, other than those that reflect a reduction of constituents of
health concern to some people. If after a review of this issue, FSIS
determines its standards impede the development of these products, FSIS
will consider amending the scope of coverage in its proposal.
A. General Standard
FSIS recognizes that valuable and helpful information concerning
the nutrient content of meat and poultry food products can be conveyed
to consumers if defined nutrient content claims can be used in a
consistent and accurate manner in the names of certain substitute meat
and poultry food products. Substitute meat and poultry products are
defined in FSIS nutrition labeling regulations in 9 CFR 317.313(d) and
381.413(d), respectively. These products are defined as a product that
may be used interchangeably with another product that it resembles,
i.e., that it is organoleptically, physically, and functionally
(including shelf-life) similar to, and that it is not nutritionally
inferior to unless it is labeled as an ``imitation.'' Those same
regulations provide that products that have performance characteristics
that materially limit the use of the product may still be considered a
substitute product if the label of the product includes a disclaimer
informing the consumer of such a difference, such as ``not suitable for
frying.''
As part of its nutrition labeling regulations (9 CFR parts 317 and
381, subpart Y), the Agency defined the terms for certain expressed
nutrient content claims, including terms such as ``free,'' ``low,''
``reduced,'' and ``light'' (9 CFR 317.313, 317.356, 317.361, 317.362,
381.413, 381.456, 381.461, and 381.462) that are associated with
reductions in constituents of health concern to some people. These
claims are useful in helping consumers choose a healthy diet.
Manufacturers that wish to use other nutrient content claims on labels
of meat and poultry products that are not currently defined by FSIS
regulations can utilize the procedures set forth in 9 CFR 317.369 and
381.469, ``Labeling Applications for Nutrient Content Claims,''
respectively to seek permission to use other nutrient content claims on
labels of meat and poultry products.
Given these developments, FSIS believes that it is now appropriate
to set forth general requirements governing the establishment of a
general standard of identity for substitute meat and poultry food
products. The proposed general requirements in 9 CFR 319.10 and 381.172
specify the conditions under which names of standardized foods set
forth in 9 CFR parts 319 and 381, subpart P, and appropriate expressed
nutrient content claims may be used to identify new substitute
standardized meat and poultry food products.
FSIS recognizes that the establishment of individual new standards
may, in some cases, be necessary for certain meat and poultry food
products, but, it believes, that in general, the promulgation of a
large number of individual regulations for substitute meat and poultry
food products would be an unnecessarily wasteful use of the Agency's
resources. FSIS believes that the development of a
[[Page 67479]]
general standard applicable to the vast majority of substitute meat and
poultry food products offers the most reasonable and effective
regulatory approach for substitute products that contain reductions of
constituents of health concern for various people. Proposed provisions
9 CFR 319.10 and 381.172 describe the conditions under which a variety
of substitute meat and poultry food products may use expressed nutrient
content claims and standardized terms.
B. Substitute Meat and Poultry Food Products Defined by This Proposal
FSIS is proposing to define substitute processed meat and poultry
products as: any processed meat and/or poultry product whose
formulation has been minimally modified to enable it to be used as a
substitute for another meat and/or poultry product that it resembles
and which has a standard of identity in the regulations (9 CFR parts
319 and 381, subpart P). The substitute meat or poultry food product
would be eligible to use an expressed nutrient content claim to
identify it; would resemble the standardized product in appearance,
form, taste, and texture; and, would use safe, suitable, and approved
substitute ingredients at proper levels and functions, i.e., the lowest
level necessary to satisfy the criteria for use of the expressed
nutrient content claim provided in regulations.
The substitute meat or poultry product will substantially meet the
regulatory requirements and consumer expectations of the standardized
product for which it substitutes (i.e., the product will not be
dissimilar in general appearance, form, taste, and texture and will be
prepared with the ingredients used in the standard of identity or
composition identified in 9 CFR parts 319 and 381, subpart P), unless
the product is labeled in a manner that conveys allowable ingredient
differences to consumers. The ingredient differences that will be
allowed relate to the use of ingredients needed to make a product that
complies with the specific expressed nutrient content claim related to
a reduction in a constituent that has negative health implications that
is used, i.e., fat, cholesterol, and sodium. The substitute meat or
poultry food product will be allowed to be named using a standardized
term because it either will be similar to the standardized product in
its performance characteristics and the ingredients used, or it will,
through appropriate labeling terminology, describe how it differs from
the standardized product for which it substitutes. The Agency believes
that consumers will be protected from false or misleading labeling by
requiring labeling for the substitute product that reflects its
deviations from the standardized product for which it substitutes.
When a Product Will Not Be Considered a Substitute Standardized
Product. There are certain aspects of the standards that are essential
to the identity of the standardized product and deviations from these
aspects would result in products that would not meet FSIS's definition
of substitute products set forth in 9 CFR 317.313(d) and 381.413(d). In
this regard, some of the standards in 9 CFR parts 319 and 381, subpart
P, specify that the standardized product must be prepared using meat or
poultry from a specific anatomical location and/or of a specific kind
and/or amount, and must undergo specified processing procedures that
are essential to the identity of the product. Deviations from these
types of requirements would result in a product that does not come
within the established definition for substitute products because they
would result in a product that is physically dissimilar and, thus, not
a substitute product. Therefore, modified versions of standardized
products which purport to be substitutes of them must adhere to the
original regulatory standards requirements set forth in parts 319 and
381, subpart P regarding the use of meat and poultry from specified
anatomical locations, the use of a specific kind and/or amount of meat
or poultry tissue to prepare the product, and the use of specified
processing procedures. It is FSIS' belief that deviation from these
specified meat or poultry requirements and processing procedures would
result in products that do not meet the definition of substitute
products. To allow such products to affirmatively represent themselves
as substitute standardized products would be false and misleading
labeling in violation of the provisions of the FMIA and PPIA.
For example, in 9 CFR 319.304, beef stew must contain at least 25
percent meat (i.e., beef). Since the meat or poultry content of such a
product is integral to its identity, the label for a substitute of this
product would be false or misleading if the substitute was named, in
part, by a standardized term, but contained less than the amount of
meat and/or poultry required by the standard. Consumers have come to
expect certain meat and/or poultry contents of products they purchase
that bear a standardized term. For example, a product identified with
the standardized name ``Chicken A-La-King'' is required to contain a
minimum of 20% cooked chicken meat and a substitute for this product
would also be required to contain the same amount of chicken meat.
Furthermore, a product identified with the standardized name ``Beef
Stew'' would continue to be required to contain not less than 25% meat
computed on the weight of the fresh meat. In addition, for example, in
9 CFR 381.171, ``Turkey Ham'' must be made from turkey thigh meat and
be cured, and in 9 CFR 319.107, ``Bacon'' must be made from pork
bellies and be cured and substitute products would be required to be
made from those same anatomical parts and by the same processing
procedures.
Although this proposal would not alter the minimum meat and poultry
content requirements in current FSIS standards, FSIS is considering
broader reform of its standards system that would provide firms greater
flexibility in product formulation while fully informing consumers
regarding the meat or poultry content of the product. FSIS plans to
invite comment on possible alternative regulatory approaches in this
area in an ANPR to be published in the Federal Register.
C. Expressed Nutrient Content Claims
FSIS believes that an issue of importance to many consumers is the
lowering of the amount of fat, cholesterol, and/or sodium in meat and
poultry food products. FSIS has the responsibility, under the FMIA and
PPIA to assure that meat and poultry products with reduced amounts of
such constituents are accurately and truthfully labeled. FSIS is,
therefore, proposing in 9 CFR 319.10 and 381.172 the conditions under
which substitute meat and poultry products (as defined in 9 CFR
317.313(d) and 381.469(d)) that do not comply with a standard of
identity in 9 CFR parts 319 and 381, subpart P, because of a deviation
that is described by an expressed nutrient content claim, that
represents reductions in constituents associated with negative health
implications, i.e., fat, cholesterol, and sodium, may be named using an
expressed nutrient content claim and a standardized term.
Final FSIS nutrition labeling regulations published in the January
6, 1993, Federal Register (58 FR 632) provided definitions for various
nutrient content claims that can be used on the label of meat and
poultry products, e.g., ``Fat Free,'' ``Low Fat,'' and ``Low
Cholesterol.'' Those same regulations, which were recodified in January
3, 1995, (60 FR 174), define an expressed nutrient content claim as any
direct statement about the level (or range) of a nutrient in the
product, e.g., ``low fat''
[[Page 67480]]
or ``reduced fat turkey ham.'' Since the proposed product name of a
substitute standardized product is intended to distinguish it from the
standardized product based on its improved nutritional attribute, a
nutrient content claim along with a standardized term must be used to
name the substitute products in order for consumers to understand how
the modified product differs from the standardized product. FSIS is
proposing that only expressed nutrient content claims, i.e., claims
that have been defined and are related to reductions in constituents
having negative health implications, be permitted in conjunction with
the standardized name, in the name of the substitute meat and poultry
products provided for in this proposal. Because such products cannot be
formulated under some existing regulatory standards, FSIS is proposing
to allow additional flexibility for industry to manufacture meat and
poultry products whose compositions has been modified to qualify for
use of an expressed nutrient content claim that asserts that a
constituent of a product, of health concern to some people, has been
reduced in amount. Examples of the applicable nutrient content claims
are: ``low,'' ``lower,'' ``lite,'' ``reduced,'' ``lean,'' ``extra
lean,'' and ``free,'' as defined in 9 CFR 317.313, 317.356, 317.361,
317.362, 381.413, 381.456, 381.461, and 381.462.
D. Performance Characteristics of Substitute Foods
FSIS believes that in order for a product that bears a standardized
name to be considered to be accurately labeled it must not only
resemble the traditional standardized meat and poultry food product but
also must perform similarly to the traditional standardized products
unless, the product is specifically labeled to show any significant
performance usage differences it has, such as a frankfurter not being
suitable for freezing. Unless this is done, consumers might assume that
the substitute product could be used interchangeably with the
traditional standardized food in all applications.
Therefore, in order not to mislead consumers, FSIS is proposing in
9 CFR 319.10(b) and 381.172(b) to require that a substitute
standardized product that bears a standardized name have similar
performance characteristics to the standardized meat and poultry food
product defined in 9 CFR parts 319 and 381, subpart P for which it
substitutes, except as discussed below. FSIS is proposing that the
performance characteristics by which a substitute food be judged in
terms of its similarity include its physical properties (e.g., texture,
cooking qualities, freezing qualities, its functional properties (e.g.,
body, spreadability), and shelf-life.
FSIS recognizes, however, that when a standardized product is
modified so that its composition accurately supports the nutrient
content claim intended to be made, it may not be possible, in all
cases, to produce a substitute product that performs similarly in
regard to all uses of the regulated standardized meat or poultry food
product of which it is a modification. The product would be considered
a substitute product allowed under this proposal if the limitation on
use does not affect the fundamental nature of the product and is
disclosed in labeling.
The FMIA and PPIA require that the label or labeling of a meat or
poultry food product must be accurate and not misleading and that such
labels and labeling must accurately disclose to consumers what they are
buying when they purchase any meat and poultry food product.
Information disclosing differences in use performance characteristics
(e.g., cooking quality, freezing quality, spreadability of product, and
shelf-life) of substitute standardized products is a fact FSIS believes
should be specifically disclosed on labels of substitute products
identified partially by a standardized term because without such
labeling consumers would be misled about the uses the product has in
comparison to the standardized product for which it substitutes.
Accordingly, this information must be communicated to consumers on the
product's label, or the label would be misleading, and the product
would be misbranded under the FMIA and PPIA.
Therefore, the provision in proposed 9 CFR 319.10(d) and 381.172(d)
that requires disclosure of material differences in uses in regard to
the performance characteristics between the substitute product and the
standardized product for which it is a substitute is fully consistent
with FSIS statutory responsibility under the FMIA and PPIA to prevent
false or misleading labeling. If there is a difference in performance
characteristics that materially limits the use of the product, the
product may still be considered a substitute if the label includes a
disclaimer adjacent to the most prominent claim in accordance with 9
CFR 317.313(d) (1) and (2) and 381.413(d) (1) and (2), informing the
consumer of such difference. The statement must appear on the label
with such conspicuousness and in such terms as to render it likely to
be read and understood by the consumer under customary conditions of
purchase and use, in accordance with requirements of 9 CFR 317.313(d)
(1) and (2) and 381.413(d) (1) and (2).
For example, according to the provisions of this proposal, a
product identified as a ``fat free frankfurter'' would have to meet the
criteria for using the nutrient content claim ``fat free'' and would
have to have similar performance characteristics to a ``frankfurter,''
unless a statement of any difference(s) in uses appears on the label of
the substitute frankfurter product; and if it does not, the product
would be considered to be misbranded. A ``frankfurter'' produced
according to the standard for frankfurters would be expected by
consumers to have certain physical and functional characteristics, such
as a ``link'' form, a cured pink color, a spongy texture, and the
ability for refrigeration or freezing for an appropriate time period to
keep the product wholesome. It would also be expected that it could be
prepared in a variety of ways, i.e., by boiling, broiling, grilling,
and frying.
When fat, however, in a frankfurter or another standardized product
is replaced by one or more other ingredients, it may not be possible,
in all cases, to produce substitute products that perform identically
to the traditional standardized meat and poultry products. Successful
fat reduction in meat and/or poultry products requires a firm
understanding of the functions of fat in a product, i.e., to provide
texture, flavor, and palatability, and how those functions can be
replicated with nonfat ingredients. Fats exhibit unique physical
properties in meat and poultry products, e.g., their ability to combine
with protein to form emulsions and their ability to enhance tenderness.
In order to make a substitute product that qualifies for a ``fat free''
nutrient content claim, it may be necessary to replace fat with water
and binders (i.e., additives that hold water and protein) which may
result in a substitute meat or poultry food product with limitations in
performance related to product uses because water and binders may not
provide all of the physical and functional properties related to
product use that are associated with fat, e.g., ability to be stored
frozen. In products such as frankfurters, the increase in moisture
which may be a direct result of fat replacement, and the way water is
held by binders and dispersed in the product, can lead to the formation
of large ice crystals because a higher level of available moisture
makes the product less stable when thawed from the frozen state, i.e.,
water leaks from the product. Therefore, if a ``fat free frankfurter''
does
[[Page 67481]]
not tolerate frozen storage for long periods of time, because the
ingredients needed to make the substitute product do not withstand the
same conditions of storage as the standardized product for which it is
a substitute, a non-performance statement would inform the consumer of
that fact, e.g, ``Do Not Freeze.''
E. Ingredients Used in Substitute Products
1. Ingredients Provided for by Proposed Regulation. FSIS believes
that the ingredients used in a substitute version of a standardized
product should be those ingredients provided for by the traditional
standard with only those deviations necessary to attain an acceptable
substitute product that meets the requirements of the expressed
nutrient content claim that is intended to be used to reflect a
reduction in a constituent that has negative health implication, e.g.
fat, cholesterol, and sodium. Therefore, FSIS is proposing in 9 CFR
319.10(c) and 381.172(c) that ingredients used in a substitute product
be those ingredients provided for by the traditional standard except
that, in addition, ``safe and suitable'' ingredients, as defined in 9
CFR 318.7 and 381.147, may be used to improve texture and prevent
syneresis so that the product has similar characteristics to the
traditional standardized meat or poultry food product, e.g., taste and
appearance.
This proposed rule would have the most significant impact on the
use of water and binders as a ``fat replacement system'' for substitute
products intending to use nutrient content claims related to reductions
in fat and cholesterol. FSIS is providing the following list as
examples of ``fat replacing'' binders, i.e., ingredients or additives
historically classified as binders by food scientists, to aid
commenters in understanding the types of ingredients the Agency
believes are applicable to making substitute products that have
reductions in fat and associated cholesterol. These ingredients have
typically been restricted in standardized meat and poultry food product
formulations, but will now be allowed in substitute products under the
conditions described in this proposal. Examples of these substances
are: Agar-agar; Algin; Sodium alginate; calcium carbonate, lactic acid,
and calcium lactate (or glucono delta-lactone); Calcium reduced dried
skim milk; Carrageenan; Carboxymethyl cellulose (Cellulose gum); Dried
milk; Enzyme (rennet)-treated calcium reduced dried skim milk and
calcium lactate; Food starch modified; Gelatin; Guar gum; Methyl
cellulose; Isolated soy protein; Sodium caseinate; Dry or dried whey;
Reduced lactose whey; Reduced minerals whey; Whey protein concentrate;
Starchy vegetable flour (e.g., potato flour, rice flour, and pea
flour); Vegetable starch (e.g., corn starch, potato starch, and wheat
starch); Wheat gluten; Tapioca dextrin; Soy flour; Soy protein
concentrate; and Xanthan gum.
Emulsifying agents also aid water and binders in replacing fat and
associated cholesterol by holding water, binders, and muscle tissue
together. Therefore, they will be permitted in combination with water
and binders as part of a fat-replacement system. Emulsifying agents
identified in 9 CFR 318.7(c)(4) and 381.147(f)(4), e.g., lecithin, mono
and diglycerides, and polyglycerol esters of fatty acids, commonly used
as emulsifying agents in shortenings and margarines, can be used as
part of the fat-replacement system in combination with approved binders
and water, but are not considered to be ``fat replacing'' ingredients
when used alone. This is because such substances are derived from fat
and do not, themselves, mimic fat. However, emulsifying agents approved
for use in meat and poultry products can be used in amounts consistent
with the regulations, in combination with approved binders and water,
and functioning as part of the ``fat replacing system.''
Humectants are another class of substances that assist water and
binders to mimic fat. They are substances that attract and hold water,
e.g., glycerine and corn syrup solids. Humectants would not be
considered by themselves to be fat replacers, but would be allowed as
part of a ``fat-replacement system.'' Humectants do not by themselves
mimic the functions of fat, but assist in fat-replacement systems by
enhancing water binding.
2. Use of Similar Ingredients. The provision for the use of safe
and suitable ingredients in substitute standardized meat and poultry
products, which is proposed in 9 CFR 319.10(c)(1) and 381.172(c)(1), is
not intended to allow for replacement or exchange of any required
ingredients or component of a required ingredient in the standardized
product with functionally similar ingredients from other sources not
provided for by the standard. This intent is reflected in the
provisions proposed in 9 CFR 319.10(c)(2) and 381.172(c)(2).
For example, FSIS believes that replacing the expected meat or
poultry ingredient(s) of a standardized product with textured vegetable
protein (TVP) to meet the requirements of a lower fat nutrient content
claim of a substitute standardized product should not be allowed
because it would be misleading since such food ingredients are meat
analogues. FSIS believes that consumers expect the meat or poultry in a
meat or poultry product to be its primary source of protein and they
view the meat as the valued component in a meat or poultry product. The
Agency views textured vegetable protein as a ``meat or poultry
replacer.'' A multitude of ``meat substitute'' or ``meat alternative''
foods are currently marketed, e.g., ``Veggie Burgers,'' ``Veggie
Patties,'' ``Garden Links,'' and ``Vegetarian Meat Loaf,'' and are
primarily composed of textured vegetable protein. Textured vegetable
protein is used as a meat or poultry alternative because it looks like
and has texture like meat or poultry, and is virtually
indistinguishable from meat or poultry in mixtures. FSIS believes that
the use of textured vegetable protein as a ``fat replacing'' ingredient
in a substitute product would be inappropriate because its use in such
a product would change the nature of the product to such an extent that
it would no longer be a substitute product within the parameters of
this regulatory proposal.
In a similar manner, FSIS also considers foods, such as bread,
rice, potatoes, cheese, fruits, and vegetables, to be characterizing
ingredients that replace or exchange meat or poultry ingredients in
meat or poultry food products. The Agency is aware that products
currently exist that use such food ingredients because they blend in
with the meat or poultry component of the product and ``look like'' the
meat or poultry component. For example, cherries or beets used in a
fresh ground beef mixture would have the appearance of lean beef. Rice
or grits used in a ground sausage product would give the appearance of
fat. Because these food ingredients have virtually no fat, their
presence in products would result in a finished product with a lowered
fat content. However, the lowered fat content would be a result of the
food ``filling'' or ``extending'' the product rather than as a result
of the food merely functioning as a fat replacer.
3. Ingredients Prohibited by the Standard. Ingredients that are
prohibited from use in standardized products identified in 9 CFR parts
319 and 381, subpart P, would also be prohibited from use in substitute
meat and poultry food products, e.g., poultry kidneys or sex glands are
prohibited from use in certain cooked sausages (9 CFR 319.180(b)) and
would likewise be prohibited for modified versions of traditional
standardized products.
[[Page 67482]]
Ingredients that are restricted from use in formulating any meat or
poultry food product, as addressed in 9 CFR 318.7 and 381.147, would
continue to be prohibited in substitute meat and poultry food products
because they are not approved as safe or suitable for use in meat and
poultry. For example, 9 CFR 318.7(d)(2) prohibits sorbic acid and its
salts from use in formulating meat products and, thus, would continue
to be prohibited in substitute products.
F. Nomenclature
How Substitute Meat and Poultry Food Products are Named. FSIS is
proposing in 9 CFR 319.10(d) and 381.172(d) that the name of a
substitute meat or poultry food product that complies with 9 CFR 319.10
and 381.172 will be an appropriate expressed nutrient content claim, in
conjunction with (i.e., next to) the respective appropriate
standardized term (e.g., fat free bologna). If a food meets the
requirements of 9 CFR 319.10 and 381.172, it is itself a standardized
food. Therefore, even though it does not meet all of the requirements
of the standard underlying the term included in its name, its name will
not be required to contain the term ``substitute'' or ``alternate.''
These meat and poultry food products will not purport to be the
traditional standardized meat or poultry food product currently defined
in 9 CFR parts 319 and 381, subpart P. Rather, these products will
purport to be a food that satisfies the requirement of the standard in
9 CFR 319.10 and 381.172. Thus, these products will be appropriately
named by use of an expressed nutrient content claim and the appropriate
standardized term.
FSIS believes that the labeling for substitute meat and poultry
food products should distinguish them from traditional standardized
products for which they are substitutes in order to provide consumers
with accurate and nonmisleading information, as required by the FMIA
and PPIA, with which to make a purchase decision. Because the
substitute product's identity is the expressed nutrient content claim
adjacent to the standardized term, these words must be presented in the
same style, color, and size of type, to further distinguish the
substitute meat and poultry food product from other products that bear
nutrient content claims, but that are not substitute meat and poultry
products meeting the requirements presented in this proposal.
Furthermore, the substitute product must comply with general labeling
provisions established by regulations in 9 CFR 317 and 381, subpart N
in order to assure that its labeling is not false or misleading.
G. Ingredient Labeling
FSIS is proposing in 9 CFR 319.10(e) and 381.172(e) that each of
the ingredients used in the substitute meat and poultry food product
shall be declared on the label as required by applicable regulations in
9 CFR parts 317 and 381, subpart N. Under 9 CFR parts 317 and 381,
subpart N, in general, all ingredients must be listed by common or
usual name in descending order of predominance by weight on either the
principal display panel or the information panel.
To assist the consumer in differentiating between the traditional
standardized meat or poultry food product and the substitute version of
the traditional standardized product, FSIS is proposing in 9 CFR
319.10(e) and 381.172(e) that all ``safe and suitable'' ingredients not
provided for by the traditional standard, as well as permitted
ingredients added at levels in excess of those allowed by the
traditional standard, must be appropriately identified as such with an
asterisk in the ingredients statement to assure that the labeling of
the substitute product will not be false or misleading. Therefore, the
statement ``Ingredients not in regular (name of the traditional
standardized food),'' or ``Ingredients in excess of amount permitted in
regular (name of the traditional standardized food),'' or both
statements as appropriate, shall immediately follow the ingredients
statement in the same type size. The asterisk statements must clearly
distinguish between ``those ingredients not permitted in'' and ``those
ingredients used in excess of amounts permitted'' in a standardized
product.
FSIS believes that the product name on the principal display panel
of the substitute meat and poultry food product, as well as its
ingredients statement, are the pertinent labeling features that
identify the difference between the traditional standardized product
and the modified version bearing the standardized name. The following
simplified label sketches illustrate how labeling of a standardized
product (Figure 1, GROUND BEEF) would differ from labeling of a
substitute version (Figure 2, LOW FAT GROUND BEEF) and how labeling of
a standardized product (Figure 3, BEEF FRANKS) would differ from a
substitute version (Figure 4, REDUCED FAT BEEF FRANKS) according to
provisions proposed by this rule.
BILLING CODE 3410-DM-P
[[Page 67483]]
Figure 1.--Illustration of a Label for a Standardized Product--
GROUND BEEF, according to 9 CFR 319.15
[GRAPHIC][TIFF OMITTED]TP29DE95.006
Figure 2.--Illustration of Label for Substitute Product--LOW FAT
GROUND BEEF, according to Proposed 9 CFR 319.10
[GRAPHIC][TIFF OMITTED]TP29DE95.007
Figure 3.--Illustration of Label for a Standardized Product--BEEF
FRANKS, according to 9 CFR 319.180
[GRAPHIC][TIFF OMITTED]TP29DE95.008
[[Page 67484]]
Figure 4.--Illustration of Label for Substitute Product--REDUCED
FAT BEEF FRANKS, according to Proposed 9 CFR 319.10
[GRAPHIC][TIFF OMITTED]TP29DE95.009
BILLING CODE 3410-DM-C
Nutrition labeling and the listing of ingredients in order of
predominance for substitute products, along with its product name and
special ingredient labeling for certain differences between it and a
traditional standardized product will allow consumers to be able to
evaluate the merits of substitute meat and poultry food products using
an expressed nutrient content claim and a standardized name. As
discussed, this labeling approach for establishing a general standard
of identity is similar to the labeling scheme established by FDA in
final rules (21 CFR 130.10) published January 6, 1993 (58 FR 2431).
V. Advance Notice of Proposed Rulemaking on Standards Reform
The Agency is planning to publish an ANPR that explores alternative
approaches to defining and standardizing meat and poultry products to
assure that they bear truthful and accurate names, are labeled in a
manner that is not false or misleading, and contain only safe and
suitable ingredients. The ANPR will consider the broader issues
concerning the role regulatory standards of identity and composition
should play in today's market.
Executive Order 12866
This proposed rule has been determined to be significant for
purposes of Executive Order 12866. This proposed rule would allow for
substitute meat and poultry food products to deviate from current
standards, provided certain conditions are met.
FSIS issued Policy Memo 121B and Policy Memo 123 as interim
policies to accommodate development and distribution of certain lower
fat substitute meat and poultry products while undergoing this
rulemaking process. To date, industry already has taken advantage of
this policy by introducing new products. This rule is necessary to
encourage and continue the development of more meat and poultry
products with reductions in food constituents having health
implications, e.g., lower in fat and cholesterol.
Today's consumers are looking for versions of popular standardized
processed meat and poultry food products that have reductions in fat
and cholesterol. To take advantage of advances in ingredient and
processing technologies, meat and poultry food processors would be
provided with the flexibility to formulate and market new meat and
poultry products with reductions in fat content, cholesterol, and
sodium--constituents which are of concern to today's health conscious
consumers--and identify them by an expressed nutrient content claim and
by names that are familiar to consumers.
If the proposed rule encourages firms to market a greater variety
of nutritious meat and poultry products, then consumers will enjoy the
benefit of greater product choices. Consumers will also benefit from a
healthier diet by the availability of products with lower fat and
cholesterol contents if the market is sufficiently strong to sustain
increased sales of these products. Research conducted by the Economic
Research Service of the U.S. Department of Agriculture has shown that
when healthier diets lead to reductions in incidence of heart disease,
cancer, stroke, diabetes, or other health problems, then economic
benefits accrue in the form of reduced medical costs and productivity
losses due to medical infirmity and premature death. While it is not
yet possible to determine the extent to which the rule would lead to
healthier diets and lower medical costs, there could be a benefit to
society.
This proposed rule would not mandate any changes to the way meat
and poultry products must be labeled, but would provide the meat and
poultry industry with the option of producing
[[Page 67485]]
substitute meat and poultry food products. Therefore, any cost incurred
would be voluntary.
If firms chose to make ingredient substitutions to bring newer,
healthful products to market, they may incur some short run costs.
However, these are the normal costs of marketing and production. If
they are incurred, they arise because a firm expects the new product to
be profitable. The costs of bringing these new products to market
would, in the long run, be less than the benefits to firms of increased
sales and profits. If the market for substitute foods is substantial
enough for firms to successfully market these new products, then there
may be a net economic benefit to the industry.
The net effect of the proposed rule would be beneficial to the meat
and poultry industry as a whole and would provide consumers with a
greater diversity of meat and poultry products. Consumers would benefit
from the proposed rule because it is expected to increase the variety
of processed meat and poultry products that would be available from
which to make the most healthful dietary choices for each individual.
At the same time, the proposed rule would safeguard the integrity of
traditional standardized meat and poultry food products that have
served the market well and for which there is expected to continue to
be a strong demand. Consumers would be informed by the product labeling
of the differences between the traditional standardized product and the
modified version.
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, labeling, packaging,
or ingredient requirement 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. Under the FMIA and PPIA, States that maintain
meat and poultry inspection programs must impose requirements that are
at least equal to those required under the FMIA and PPIA. The States
may, however, impose more stringent requirements on such State
inspected products and establishments.
No retroactive effect will be given to this proposed rule. The
administrative procedures specified in 9 CFR 306.5 and 381.35 must be
exhausted prior to any judicial challenge of the application of the
provisions of this proposed rule, if the challenge involves any
decision of an inspector relating to inspection services provided under
the FMIA or PPIA. The administrative procedures specified in 9 CFR
parts 335 and 381, subpart W, must be exhausted prior to any judicial
challenge of the application of the provisions of this proposed rule
with respect to labeling decisions.
Effect on Small Entities
The Administrator, FSIS, has made an initial determination that
this proposed rule would not have a significant economic impact on a
substantial number of small entities, as defined by the Regulatory
Flexibility Act (5 U.S.C. 601). Small manufacturers would be provided
the flexibility to create more meat and poultry products that have
reductions in certain food constituents that have health implications.
Small businesses who choose to market the new substitute meat and
poultry food products would be required to design new labels or make
certain revisions to their existing product labels, thereby, incurring
some costs. These costs could be outweighed by the potential revenue
increases from sales of the new substitute products.
Paperwork Requirements
Abstract: FSIS has reviewed the paperwork and recordkeeping
requirements in this proposed rule in accordance with the Paperwork
Reduction Act. This proposed rule would require manufacturers producing
new meat and poultry products in accordance with the definition and
general standard of identity for modified processed meat and poultry
products to design their new product labels and submit such labeling to
FSIS for approval.
Estimate of Burden: Meat and poultry establishments must develop
product labels in accordance with the regulations. To receive approval
of the labels, establishments must complete FSIS Form 7234-1. FSIS
program employees review FSIS Form 7234-1 to ensure that information on
the labels complies with the regulations. FSIS estimates that it will
take 60 minutes to design and develop modified product labels in
accordance with the proposed regulations and 15 minutes to prepare FSIS
Form 7234-1 and submit it, along with the label, to FSIS or to a label
expediter who will deliver the form and label to FSIS.
Respondents: Meat and poultry product establishments.
Estimated Number of Respondents: FSIS estimates that at this time
100 establishments would have to develop new labels.
Estimated Number of Responses per Respondent: FSIS estimates that
each establishment would modify about 5 product labels.
Estimated Total Annual Burden on Respondents: 625 hours.
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 regarding the need for and usefulness of the proposed
requirements, the accuracy of FSIS's burden hour estimate, ways to
minimize the estimated burden, including through the use of automated
collection techniques or other forms of information collection
technology, or any other aspect of this collection of information
discussion, to Lee Puricelli, Paperwork Specialist, at the address
above.
All responses to this notice will be summarized and included in
FSIS's request for the Office Management and Budget (OMB) approval of
the proposed regulation's paperwork requirements. All comments
submitted will also become a matter of public record.
Comments
Interested persons may submit an original and two copies of written
comments concerning this proposed rule to: FSIS Docket Clerk, DOCKET
#92-024P, Room 4352, South Building, Food Safety and Inspection
Service, U.S. Department of Agriculture, Washington, DC 20250. Any
person desiring an opportunity for an oral presentation of views should
make such a request to Mr. Charles R. Edwards so that arrangements can
be made for such views to be presented. A record will be made of all
views orally presented. All comments submitted in response to this
proposal will be available for public inspection in the FSIS Docket
Room, Room 4352, South Building, Food Safety and Inspection Service,
U.S. Department of Agriculture, Washington, DC 20250, 8:30 a.m. to 1:00
p.m., and from 2:00 p.m. to 4:30 p.m., Monday through Friday.
[[Page 67486]]
List of Subjects
9 CFR Part 319
Food grades and standards, Meat inspection.
9 CFR Part 381
Food grades and standards, Meat inspection, Poultry and poultry
products.
Proposed Rule
For the reasons discussed in the preamble, FSIS is proposing to
amend 9 CFR parts 319 and 381 as follows:
PART 319--DEFINITIONS AND STANDARDS OF IDENTITY OR COMPOSITION
1. 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.
2. Part 319, Subpart A would be amended by adding a new Sec. 319.10
to read as follows:
Sec. 319.10 Requirements for substitute processed meat food products
named by use of an expressed nutrient content claim and a standardized
term.
(a) Description. The meat food products prescribed by this general
definition and standard of identity are those products that substitute,
in accordance with Sec. 317.313(d) for a standardized food defined in
this part and use the name of that standardized food in their statement
of identity, but that do not comply with the established standard
because of a compositional deviation that results from reduction of a
constituent that is described by an expressed nutrient content claim
that has been defined by regulation in part 317, subpart B of this
subchapter. The expressed nutrient content claim shall comply with the
requirements of Sec. 317.313 of this subchapter and with the
requirements of part 317, subpart B of this subchapter that define the
particular nutrient content claim that is used. The meat food product
shall comply with the relevant standard in this part in all other
respects, except as provided in paragraphs (b) and (c) of this section.
(b) Performance characteristics. The performance characteristics,
such as physical properties, functional properties and shelf-life, of
the meat food product shall be similar to those of the standardized
meat food product produced under this part. If there is a significant
difference in performance characteristics that materially limits the
uses of the food compared to the uses of the standardized food defined
in this part, the label shall include, adjacent to the product name, a
statement in accordance with Sec. 317.313(d) (1) and (2) of this
subchapter, informing the consumer of such differences (e.g., if
appropriate, ``not recommended for frozen storage'' or ``not suitable
for roller grilling''). Deviations from ingredient provisions of the
standard that must be the minimum necessary to qualify for the nutrient
content claim, while maintaining similar performance characteristics.
(c) Ingredients Used in Substitute Foods. (1) Ingredients used in
the product shall be those ingredients provided for by the standard as
defined in this part, except that safe and suitable ingredients
approved for use in meat food products as described in Sec. 318.7 of
this subchapter may be used at the minimum level necessary to improve
texture and prevent syneresis, so that the substitute product is not
inferior in performance characteristics from the standardized product
defined in this part for which it is a substitute.
(2) An ingredient or component of an ingredient that is
specifically required by the standard prescribed in this part shall not
be replaced or exchanged with a similar ingredient from another source,
for example, textured vegetable protein shall not replace meat, and
turnips shall not replace potatoes in corned beef hash.
(3) An ingredient or component of an ingredient that is
specifically prohibited from use in any meat food product by this part
shall not be added to the substitute meat food product under this
section.
(4) All ingredients that are specifically required by a standard of
identity or composition as defined in this part shall be present in the
substitute product in the same amounts as required by the standard for
which the product is a substitute. The meat portion of the substitute
product must come from the same anatomical location, be of the same
kind and amount, and undergo the same basic processing procedures as
the standardized product in this part for which it substitutes.
(5) Water and fat-replacers (i.e., binders), in combination, may be
added to replace fat in accordance with paragraph (c) of this section.
(d) Nomenclature. The name of a substitute meat food product that
complies with this section is the appropriate expressed nutrient
content claim and the applicable standardized term, which shall be in
the same style, color, and size of type.
(e) Label declaration. (1) Each of the ingredients used in the
substitute meat food product shall be declared on the label as required
by this section and part 317 of this subchapter.
(2) Ingredients not provided for, and ingredients used in excess of
those levels provided for, by the standard as defined in this part,
shall be identified as such with an asterisk in the ingredients
statement. The statement ``*Ingredient(s) not in regular XXXX''
(The blank shall be filled in with the name of the traditional
standardized product) or ``**Ingredient(s) in excess of amounts
permitted in regular ________'' (The blank shall be filled in with the
name of the traditional standardized product), or both as appropriate
shall immediately follow the ingredients statement in the same type and
size.
PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS
3. The authority citation for part 381 would continue to read as
follows:
Authority: 7 U.S.C. 138f; 450, 21 U.S.C. 451-470, 7 CFR 2.18,
2.53.
4. Part 381, subpart P would be amended by adding a new
Sec. 381.172 to read as follows:
Sec. 381.172 Requirements for substitute processed poultry food
products named by use of an expressed nutrient content claim and a
standardized term.
(a) Description. The poultry food products prescribed by this
general definition and standard of identity are those products that
substitute in accordance with Sec. 381.413(d) for a standardized food
defined in this subpart and use the name of that standardized food in
their statement of identity, but that do not comply with the
established standard because of a compositional deviation that results
from reduction of a constituent that is described by an expressed
nutrient content claim that has been defined by regulation in this
subpart. The expressed nutrient content claim shall comply with the
requirements of Sec. 381.413 and with the requirements in subpart Y of
this part that define the particular nutrient content claim that is
used. The poultry food product shall comply with the relevant standard
in this part in all other respects, except as provided in paragraphs
(b) and (c) of this section.
(b) Performance characteristics. The performance characteristics,
such as physical properties, functional properties and shelf-life, of
the poultry food product shall be similar, except in regard to uses, to
those of the standardized poultry food product produced under subpart P
of this part. If there is a significant difference in performance
characteristics that
[[Page 67487]]
materially limits the use of the food compared to the use of the
standardized food defined in subpart P of this part, the label shall
include, adjacent to the product name, a statement in accordance with
Sec. 317.313(d) (1) and (2) of this part, informing the consumer of
such differences (e.g., if appropriate, ``not recommended for frozen
storage'' or ``not suitable for roller grilling''). Deviations from
ingredient provisions of the standard that must be the minimum
necessary to qualify for the nutrient content claim, while maintaining
similar performance characteristics.
(c) Ingredients Used in Substitute Foods. (1) Ingredients used in
the product shall be those ingredients provided for by the standard as
defined in subpart P of this part, except that safe and suitable
ingredients approved for use in poultry food products as described in
Sec. 381.147 of this part may be used at the minimum level necessary to
improve texture and prevent syneresis, so that the substitute product
is not inferior in performance characteristics from the standardized
product defined in subpart P of this part, for which it is a
substitute.
(2) An ingredient or component of an ingredient that is
specifically required by the standard prescribed in subpart P of this
part shall not be replaced or exchanged with a similar ingredient from
another source, for example, textured vegetable protein shall not
replace poultry, and turnips shall not replace potatoes in corned beef
hash.
(3) An ingredient or component of an ingredient that is
specifically prohibited from use in any poultry food product by subpart
P of this part shall not be added to the substitute poultry food
product under this section.
(4) All ingredients that are specifically required by a standard of
identity or composition as defined in subpart P of this part shall be
present in the substitute product in the same amounts as required by
the standard for which the product is a substitute. The poultry portion
of the substitute product must come from the same anatomical location,
be of the same kind and amount, and undergo the same basic processing
procedures as the standardized in subpart P of this part product for
which it substitutes.
(5) Water and fat-replacers (i.e., binders), in combination, may be
added to replace fat in accordance with paragraph (c) of this section.
(d) Nomenclature. The name of a substitute poultry food product
that complies with this section is the appropriate expressed nutrient
content claim and the applicable standardized term, which shall be in
the same style, color, and size of type.
(e) Label declaration. (1) Each of the ingredients used in the
substitute poultry food product shall be declared on the label as
required by this section and subpart N of this part.
(2) Ingredients not provided for, and ingredients used in excess of
those levels provided for, by the standard as defined in subpart P of
this part, shall be identified as such with an asterisk in the
ingredients statement. The statement ``*Ingredient(s) not in regular
________'' (The blank shall be filled in with the name of the
traditional standardized product) or ``**Ingredient(s) in excess of
amounts permitted in regular ________'' (The blank shall be filled in
with the name of the traditional standardized product), or both as
appropriate shall immediately follow the ingredients statement in the
same type and size.
Done at Washington, DC, on: December 21, 1995.
Michael R. Taylor,
Acting Under Secretary for Food Safety.
[FR Doc. 95-31391 Filed 12-26-95; 3:36 pm]
BILLING CODE 3410-DM-P
Complete official Federal Register PDF
FR Doc. 95-31390 Substances Approved for Use in the Preparation of Meat and Poultry Products
[Federal Register Volume 60, Number 250 (Friday, December 29, 1995)]
[Proposed Rules]
[Pages 67459-67469]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31390]
Federal Register / Vol. 60, No. 250 / Friday, December 29, 1995 /
Proposed Rules
[[Page 67459]]
DEPARTMENT OF AGRICULTURE
Food Safety and Inspection Service
9 CFR Parts 310, 318, 319, and 381
[Docket No. 88-026P]
RIN 0583-AB02
Substances Approved for Use in the Preparation of Meat and
Poultry Products
AGENCY: Food Safety and Inspection Service (FSIS), USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: FSIS is proposing to amend the Federal meat and poultry
inspection regulations to harmonize and improve the efficiency of the
procedures used by FSIS and the Food and Drug Administration (FDA) for
reviewing and approving the use of substances in meat and poultry
products. Under the proposed procedures, FSIS would no longer issue its
own regulations listing substances it finds suitable for use in meat
and poultry products. Instead, by agreement between USDA and the FDA,
future FDA regulations would specify whether a substance approved for
use in foods under the Federal Food, Drug, and Cosmetic Act (FFDCA) may
be used in or on meat or poultry products. Current FDA regulations that
approve the use of substances in foods generally and do not preclude
meat and poultry uses will confer authority to use such substances in
meat and poultry products unless expressly prohibited by USDA
regulation.
Requests for meat and poultry uses of substances not permitted
under title 9 or title 21 of the Code of Federal Regulations (CFR)
would have to be made to FDA in the form of a petition for FDA
approval. FDA is simultaneously publishing in this issue of the Federal
Register a proposal that would amend the FDA regulations governing the
review of petitions for the approval of food additives to provide for
simultaneous review of such petitions by FSIS when meat or poultry
product uses are indicated. This would permit FDA listings to specify
whether, and if so under what conditions, such substances may be used
in USDA-inspected meat and poultry products. Such listings would
eliminate the need for separate FSIS rulemaking.
FSIS would limit any future, substance-specific rulemaking to
prohibitions or limitations on meat or poultry uses of specific
substances that may be necessary to protect the public under the
Federal Meat Inspection Act (FMIA) or Poultry Products Inspection Act
(PPIA). FSIS would continue to provide evaluations upon request as to
whether substances permitted for general use under current regulations
are suitable for specific uses in meat and poultry products.
FSIS proposes to adopt the position that substances that are listed
in title 21, CFR, Parts 182 and 184, as generally recognized as safe
(GRAS) for use in food generally, with no limitation other than good
manufacturing practice, would be accepted by USDA as GRAS for use in
meat, meat food products, and poultry products generally, unless
otherwise restricted for such use by regulation in title 9, CFR. Other
GRAS substances currently permitted for general food use would be
evaluated by FSIS as to their suitability for specified uses in meat
food products and poultry products on a case-by-case basis, in
consultation with FDA as appropriate.
DATES: Comments must be received by February 27, 1996.
ADDRESSES: Written comments to: Diane Moore, Docket Clerk, Room 4352,
South Agriculture Building, Food Safety and Inspection Service, U.S.
Department of Agriculture, Washington, DC 20250. Oral comments, as
provided under the Poultry Products Inspection Act (PPIA), should be
directed to Mr. Ralph Stafko at (202) 720-8168. (See also ``Comments''
under SUPPLEMENTARY INFORMATION.)
FOR FURTHER INFORMATION CONTACT: Mr. Ralph Stafko, Deputy Director,
Policy Evaluation and Planning Staff, Food Safety and Inspection
Service, U.S. Department of Agriculture, Washington, DC 20250; (202)
720-8168.
SUPPLEMENTARY INFORMATION:
Comments
Interested persons are invited to submit comments concerning this
proposal. An original and two copies of written comments should be sent
to the Docket Clerk's office at the address shown above and should
refer to docket number 88-026P. Any person desiring opportunity for
oral presentation of views, as provided under the PPIA, should make
such request to Mr. Stafko at (202) 720-8168 so that arrangements may
be made for such views to be presented. Copies of all comments
submitted in response to this proposal will be available for public
inspection in the office of the Docket Clerk between 8:30 and 1:00 a.m.
and between 2:00 and 4:00 p.m., Monday through Friday.
Background
FDA and FSIS are both regulatory agencies mandated to protect
consumers from adulterated or misbranded food products. FDA, under the
FFDCA, is responsible for regulating foods generally. FSIS, under the
FMIA and the PPIA, regulates products consisting wholly or in part of
meat or poultry.
Products regulated by FSIS, for the most part, include those
containing at least 2 percent cooked or 3 percent raw poultry or red
meat. Products that contain meat or poultry only in condimental
quantities or that historically have not been regarded as meat or
poultry products are not regulated under the inspection Acts. Examples
of such products are some cheese spreads with meat, close-faced
sandwiches, bouillon cubes, and dried or dehydrated meat soups.
Even though FDA and FSIS have a common food safety mission, they
have differing statutory mandates and carry out their individual
statutory mandates in different ways. FDA relies primarily on the
promulgation of and compliance with regulations to implement its
mandate concerning substances intentionally added to food, such as food
additives and color additives. FDA also relies on inspections of food
manufacturing and storage facilities to enforce its statutory mandates
relating to sanitation and conditions of manufacture and storage.
Detection and seizure of violative products, and sanctions imposed on
producers or manufacturers responsible for violations are based on
evidence that violative product (or a component of the product) was
introduced into interstate commerce.
The FMIA and PPIA (21 U.S.C. 601 et seq.; 21 U.S.C. 451 et seq.)
require that meat and poultry products be inspected, and USDA
inspection program personnel inspect such products before the products
are placed in commerce. The USDA mark of inspection is placed only on
those products found by USDA to be unadulterated and properly labeled.
Thus, FSIS's primary enforcement activity is the conduct of inspection
activities designed to prevent the production and distribution of
adulterated or misbranded products. FSIS regulations on products under
its jurisdiction are enforced primarily by inspectors and inspection
program support staff on a plant-by-plant basis. Inplant FSIS personnel
may retain suspect product and condemn adulterated product. In
egregious cases, FSIS may withdraw inspection from plants.
This different approach to regulation, based on the statutes
governing the activities of the respective agencies, has required FSIS
and FDA, and their predecessor agencies, to work together closely to
minimize the potential for
[[Page 67460]]
conflict, duplication of effort, or gaps in their regulatory schemes
that could result in inadequate or inappropriate regulation.
Over the years, FDA has generally deferred to FSIS in matters
concerning the regulation of meat, meat food products, and poultry
products, despite its broad jurisdiction over all food. This approach
is consistent with the proposition that in cases of possible
jurisdictional overlap, an agency with a broad grant of statutory
authority will normally defer to an agency with a more specific grant
of authority. FSIS employs veterinarians, trained inspectors, and
technical support staff to carefully and continuously oversee the
production of these products. FSIS regulations and guidelines govern
all aspects of meat and poultry food product that are subject to such
inspection. These include regulations and guidance on substances that
may be added to those products.
Since the 1958 Food Additives Amendment to the FFDCA, FSIS has come
to rely on FDA in most matters concerning the safety of food and color
additives and other substances that may be used in foods--including
meat and poultry products. FDA has developed the scientific staff, the
institutional expertise, and the regulatory structure to ensure the
safety of substances that may be added to foods.
Over the years, FDA and FSIS have cooperated on food-ingredient
issues on an as-needed, substance-specific, case-by-case basis.
Nonetheless, because of their different regulatory needs, the two
agencies' regulations governing the use of these substances in foods
are cast in formats and terms that are not fully consistent with one
another. This inconsistency causes difficulty and inconvenience to
persons who need to refer to both agencies' regulations on approved
substances and approved uses.
Furthermore, it is not clear from the regulations where one
agency's jurisdiction ends and the other's begins. The public
frequently sends FSIS requests for the use of new substances or new
uses of substances that must be referred to FDA, and sends FDA requests
involving meat or poultry uses that must be referred to FSIS.
Finally, FSIS's current regulations require that substances used in
meat or poultry products be listed in FSIS regulations for those uses.
The regulations further require that those wishing to establish a rule
permitting meat or poultry product uses of a substance first must
establish that it is safe for the intended use under the FFDCA, and
second, that it is suitable for the intended use under the FMIA or PPIA
(9 CFR 318.7(a) and 381.147(f)). As a result, both agencies conduct
separate reviews and undertake separate rulemakings, sequentially,
before a new meat or poultry use of a substance can be permitted. This
proposed rule and a concurrent FDA proposed rule, appearing elsewhere
in this issue of the Federal Register, are intended to harmonize and
simplify the agencies' regulations on food ingredients by allowing FSIS
to rely on FDA's listings for food ingredients, and to provide a basis
for the eventual elimination of FSIS's separate listings from the CFR.
There would be a single petition, joint reviews, and a single
rulemaking procedure, as well as continuing consultation on related
issues, to replace the current time-consuming, duplicative, sequential
rulemaking procedures. The agencies would enter into a Memorandum of
Understanding (MOU) concerning the specifics of the agencies' working
relationship. A draft of this MOU appears as an appendix to this notice
of proposed rulemaking.
The following review of the laws and regulations of the two
agencies explains in more detail the agencies' relationship in this
area of regulation.
History of Food Additive Regulation
The Food and Drugs Act of 1906 declared that food containing ``any
added poisonous or other added deleterious ingredient which may render
such article injurious to health'' was adulterated (PL 59-384, 34 Stat.
770), and that sale of adulterated food was a violation of law. The
Meat Inspection Act, passed at the same time as companion legislation,
mandated Federal inspection of meat and meat food products.
Responsibility for implementing and enforcing both these laws was
vested in the Secretary of Agriculture.
In 1938, the FFDCA expanded the scope of the Food and Drugs Act by,
among other things, prohibiting the sale of foods that may be
adulterated by substances other than added ingredients, such as by
environmental contaminants, that could render the food injurious to the
health of the consumer.
In 1940, responsibility for implementation and enforcement of the
FFDCA was removed from the Secretary of Agriculture and was vested in
the Administrator of the Federal Security Agency, which later became
the Department of Health, Education, and Welfare (today, the Department
of Health and Human Services). However, the authority to implement the
meat inspection system was retained by USDA.
By the 1950's, it had become apparent that there were certain
limitations in the authorities provided by the FFDCA. Among these was
the lack of a provision requiring industry to pretest substances
intended for use in food to determine the safety of such use. Also, in
an enforcement action against a violative food, the burden of proof was
on the Government to show that use of a food additive caused the food
to be adulterated or misbranded.
To correct these and other problems, the Food Additives Amendment
was passed in 1958. Processors were thenceforth required to prove that
food additives were safe for their intended use before they could be
used in food. FDA was required to determine the safety of food
additives and regulate their use in foods.
The Food Additives Amendment of 1958 applies to substances added to
all foods, including meat and poultry products subject to USDA
inspection under the FMIA and the PPIA. The FMIA (21 U.S.C. 601 et
seq.) and the PPIA (21 U.S.C. 451 et seq.) give USDA primary
jurisdiction over meat and poultry products to a ensure product
entering commerce is not adulterated or misbranded. FSIS has
interpreted the Food Additives Amendment as giving FDA primary
jurisdiction for the approval of food additives for use in meat and
poultry products, while not precluding continued exercise of USDA/FSIS
jurisdiction to further regulate the use of those substances in meat
and poultry products under the FMIA and PPIA.
Section 1(m)(2) of the FMIA (21 U.S.C. 601(m)(2)) and section
4(g)(2) of the PPIA (21 U.S.C. 453(g)(2)) provide the Secretary of
Agriculture with authority to regulate the use of food and color
additives in meat and poultry products. Section 1(m)(2)(C) of the FMIA
and section 4(g)(2)(C) of the PPIA provide that any meat or poultry
carcass, part, or product is adulterated ``if it bears or contains any
food additive which is unsafe within the meaning of section 409 of the
Federal Food, Drug, and Cosmetic Act (FFDCA).'' Under section 409 of
the FFDCA (21 U.S.C. 348), all food additives are deemed unsafe unless
the FDA finds, by regulation, that they are safe for a particular use.
Section 1(m)(2)(D) of the FMIA (21 U.S.C. 601(m)(2)(D)) and section
4(g)(2)(D) of the PPIA (21 U.S.C. 453(g)(2)(D)) provide that any meat
or poultry carcass, part, or product is adulterated ``if it bears or
contains any color additive which is unsafe within the meaning of
section 721 of the
[[Page 67461]]
FFDCA.'' Under section 721 of the FFDCA (21 U.S.C. 379e), all color
additives are deemed unsafe unless the FDA finds, by regulation, that
they are safe for a particular use. Section 1(m)(2) of the FMIA (21
U.S.C. 601(m)(2)) and section 4(g)(2) of the PPIA (21 U.S.C. 453(g)(2))
also provide that the Secretary of Agriculture may issue regulations
prohibiting the use of a food additive or color additive in a meat or
poultry article in establishments receiving Federal meat or poultry
inspection services.
The Secretary of Agriculture's authority under the FMIA to prohibit
the use of substances in meat products that are otherwise permitted in
foods by FDA was tested in Chip Steak Co. v. Clifford Hardin (332 F.
Supp. 1084 (N.D. Cal. 1971), aff'd., 467 F.2d 481 (9th Cir. 1972)). The
plaintiffs demanded injunctive relief from the prohibition at 9 CFR
318.7(d)(2) against the use of sorbic acid and sorbates in cooked
sausage. The court held that the legislative history of the FMIA showed
that it was the intent of Congress to vest the Secretary of Agriculture
with the authority to prohibit the use of substances in meat food
products notwithstanding their designation as GRAS. The court noted
that under the FMIA, the Secretary had the power to prohibit a
substance for use in meat and meat products even if the substance is
not adulterative under the food additive provisions of the FFDCA. Thus,
the Secretary of Agriculture could impose restrictions for food
ingredients in meat and meat food products that exceeded restrictions
imposed by the Secretary of HHS.
At about the same time that this case was in progress, the Agency
was involved in rulemaking to implement the Wholesome Meat Act (81
Stat. 584) and the Wholesome Poultry Products Act (82 Stat 791-808).
Among the provisions in the new regulations were requirements for
listing substances in the 9 CFR regulations before they could be used
in meat, meat food, or poultry products. The relevant provisions, at 9
CFR 318.7(a)(1) and 381.147(f)(1) in the existing regulations, were
adopted October 3, 1970, and May 16, 1972, respectively. They had the
effect, along with the favorable district court decision, of
strengthening the Administrator's authority to control the use of
substances in meat and poultry products. Nothing in the current
proposal would diminish that authority.
FDA Regulations
Meat and poultry product ingredients are subject to regulation by
the FDA under the FFDCA. Such ingredients may be food additives,
substances that are generally recognized as safe (GRAS) for use in
food, color additives, or ingredients covered by prior sanctions.
The FFDCA defines a food additive as ``any substance the intended
use of which results or may reasonably be expected to result, directly
or indirectly, in its becoming a component or otherwise affecting the
characteristics of any food * * *'' (21 U.S.C. 321(s)). Anyone wishing
to use a new food additive must petition the FDA and obtain approval
before using the substance in food. The sponsor must provide FDA with
information demonstrating safety under the proposed conditions of use.
The extent or amount of the data submitted will depend primarily on the
nature of the substance and its intended uses.
FDA's food additive regulations are codified in several parts of
title 21 of the Code of Federal Regulations. Part 170 contains general
provisions. Part 171 specifies how food additive petitions are
submitted and processed. Part 172 lists food additives approved for
direct addition to food. Part 173 lists food additives permitted in
food, e.g., enzyme preparation, microorganisms, solvents, and
lubricants. Part 179 covers sources of radiation used to process food,
included in the statutory definition of a food additive (21 U.S.C.
321(s)). Part 180 lists certain food additives to be used on an interim
basis until such time as studies can be completed and data made
available to resolve those safety issues if the Commissioner of Food
and Drugs determines that the continued use of those substances
presents no public health concern.
The definition of ``food additive'' excludes certain substances
that are ``prior sanctioned,'' ``generally recognized as safe,'' or
``color additive'' substances. Prior sanctioned ingredients are those
used in accordance with explicit sanctions or approvals granted prior
to the enactment of the Food Additives Amendment in 1958. These prior
sanctions may have been granted by FDA under the FFDCA (21 U.S.C.
321(s)(4)) or by USDA under the FMIA or the PPIA. Such ingredients,
e.g., nitrites used in cured pork products, are exempt from the food
additive provisions of the FFDCA.
A second exemption from the definition of ``food additive'' is
``generally recognized as safe'' or ``GRAS'' substances. These are
defined by the FFDCA as substances generally recognized as safe among
experts qualified by scientific training and experience to evaluate
their safety. Designation as GRAS can come about in either of two ways:
(1) By demonstration of common use of the substance in food prior to
1958 or (2) by scientific procedures.
GRAS substances include a variety of common food ingredients.
Although FDA advises that it would be impracticable to list all
substances that are generally recognized as safe for their intended
use, many GRAS substances are specifically listed in Part 182 of title
21. In addition, FDA has formally affirmed certain substances as GRAS,
and has listed their GRAS uses in Part 184 of title 21.
FDA may also find that a substance or a particular use of a
substance is not generally recognized by qualified experts as safe for
use in food. Such substances or uses may continue to be used under an
``interim food additive'' regulation (21 CFR 180) while specified
studies are performed to resolve the safety question.
A ``color additive'' is a material that, `` * * * when added or
applied to a food, drug, * * * or cosmetic, or to the human body or any
part thereof, is capable * * * of imparting color thereto'' (21 U.S.C.
321(t)). As with food additives, only those color additives listed for
use in food may be so used. Petitions must be submitted to FDA for any
new color additive or uses along with appropriate safety data and other
pertinent information.
FSIS Regulations
FSIS inspectors oversee the production of meat and poultry products
and must assure that product is not adulterated or misbranded by the
addition of unsafe or otherwise improper ingredients, or by
contamination with substances used for other purposes in the plant. To
assist in this activity, FSIS headquarters staff reviews and approves
substances that may be used in meat and poultry products regulated
under the FMIA and PPIA.
Substances added directly to products are strictly regulated. FSIS
regulations provide that no substance may be used in the preparation of
any meat or poultry product unless the use of the substance is approved
by the Administrator and listed in the regulations, or the
Administrator has approved use of the substance in a specific case (9
CFR 318.7(a)(1) and 381.147(f)(1)). The tables of substances in 9 CFR
318.7 and 381.147 list a variety of substances along with their general
classification (e.g., ``antioxidant''), their intended function, the
categories of products in which they may be used, and the permitted use
levels. The tables supplement or complement the product
[[Page 67462]]
standards set forth in 9 CFR 319 and 9 CFR 381.155-171. In order to add
a new substance to these listings, increase the permitted use level, or
expand the category of products in which an approved substance may be
used, FSIS amends these listings by notice-and-comment rulemaking.
FSIS provides guidance on the regulatory status of substances used
in inspected establishments. In the course of day-to-day operations,
FSIS staffs must respond to inquiries, from inspectors and others,
about new uses of substances already approved, or the use of new
substances not previously approved, and must determine whether such
substances are safe and suitable before they are used in specific meat
food or poultry products. Responses to these inquiries generally are
made after review by FSIS's Product Assessment Division (PAD), or, if
appropriate, the Facilities, Equipment, and Sanitation Division (FESD).
The PAD will assess the safety and suitability of direct and
indirect additives. Its assessment involves primarily a determination
of whether the substance has been previously approved for safety by FDA
or USDA. If the substance is a food additive or color additive the safe
use of which has not been approved by FDA, the inquiring party is
directed to petition FDA. If it is a GRAS substance or is asserted to
be prior-sanctioned, a determination of its status is made by PAD, in
consultation with FDA, if appropriate.
PAD will also determine the functionality of substances proposed to
be added to meat or poultry products, and reviews data on amounts
needed to achieve the intended technical effect. PAD looks at the
consistency of the proposed use with standards of identity that may
apply, and whether the substance may be misused in some way to make
product adulterated or misbranded. The Division will restrict uses as
appropriate to prevent adulteration or misbranding.
PAD reviews labels for compliance with FSIS regulations, including
ingredient and additive requirements, and must approve them before they
are used on the packaging of meat and poultry products (9 CFR 317.4,
381.132). The Division is thus in a position to monitor, by looking at
formulations, the ingredients intended to be used with each product. In
addition, the Division conducts a voluntary review of proprietary mixes
intended for use in meat food or poultry products.
Similarly, PAD reviews food-contact materials, such as processing
aids, scalding agents, and chill tank additives. If these substances
are found to be food additives or color additives as defined by the
FFDCA, they also must be approved by FDA before USDA will approve them
for use with inspected products. Other substances, some of which are
not regulated under the FFDCA's food additive provisions, are
nonetheless reviewed by FSIS on an ``as needed'' basis, before their
use in or about inspected products is sanctioned. Inspectors, meat and
poultry processors, food chemical and equipment manufacturers, and
others require guidance on whether inspectors may view substances as
potential adulterants of inspected product. Prior review by FSIS's
technical staff normally will resolve the question. For example, review
and approval for use in official establishments of specific sanitizing
and cleaning agents, and of food-contact equipment and utensils, is
done by the FESD.
FDA Rulemaking Processes
Current FDA rulemaking for food additive and GRAS listings is
essentially a four-part process:
1. A petition for use of a new food additive, a new use or use
level of an existing food additive is received with data demonstrating
the safety of the intended use of the substance, or a petition for
affirmation of a substance as GRAS is received with data or information
demonstrating that the substance is GRAS;
2. A notice of proposed rulemaking (or a notice of the filed
petition--the functional equivalent of a proposed rule) is published in
the FR;
3. A review for safety and technical effect of the new substance,
new use, or new use level of the substance is conducted by the FDA;
and,
4. A final rule is published if FDA determines that the food
additive use or use level is safe or if the substance is GRAS.
FDA listings normally do not specify whether permitted uses include
uses in meat and poultry products or, if so, what conditions or
restrictions apply to such uses. Because USDA has always (prior to the
1958 food additive amendments) regulated the safe use of substances in
meat and poultry products, and because of the need for inspected
establishments, inspection program personnel and others to have uniform
guidance on what substances may be added to inspected product, USDA has
historically listed such substance uses in its own regulations in title
9 of the CFR.
FSIS Rulemaking Procedures
Before July 1983, FSIS conducted its own notice-and-comment
rulemaking, as needed, for the listing of substances approved for use
in meat and poultry products. Industry representatives complained that
these FSIS rulemakings largely duplicate FDA rulemaking. They asserted
that FDA's food additive and GRAS substance affirmation proceedings
address and fully resolve all questions regarding safety, if not
functionality, of ingredients intended to be used in meat and poultry
products. They argued that additional rulemaking by FSIS generated
needless delays and expense, and often resulted in the withholding of
ingredients from the marketplace for months or even years after all
serious questions of safety had been resolved.
Furthermore, notice-and-comment rulemaking by FSIS duplicated FDA's
rulemaking (concerning safety), resulting in needless expenditure of
USDA resources. FSIS concluded that these complaints had merit and
that, if a substance was already listed in title 21, the safety of such
uses had, by law, already been determined by competent authority. The
addition of a substance to title 9 should not require a full
reassessment for the safety of such use by USDA. For those reasons,
FSIS proposed to amend its procedures.
In July 1983, FSIS issued a final rule, ``Meat and Poultry
Products; Approval of Substances'' (proposed June 2, 1982, 47 FR 23941;
final July 19, 1983, 48 FR 32749). Under this rule, full notice-and-
comment rulemaking was no longer required for FSIS to list in its
regulations substance uses or use levels if such uses or use levels
were consistent with those already approved by FDA. A final rule
listing the substance use or use-levels could be promulgated without
first proposing it for comment, provided that:
1. The substance was an approved food additive, color additive, or
substance affirmed as GRAS and permitted for use in food under title
21;
2. The intended use was in accordance with any conditions specified
in the FDA approval and would not violate any other applicable FDA
requirement; and,
3. The Administrator of FSIS determined:
a. That FSIS concurred with FDA regarding the safety of the
substance;
b. That the available data indicated that the use of the substance
would have an appropriate technical effect on the product; and,
c. That the available data indicated that the substance would be
used only in the amount reasonably required to accomplish its intended
technical effect. (9 CFR 318.7 and 381.147.)
[[Page 67463]]
All products in which the substance would be used would be required
to be properly labeled and subject to other applicable requirements of
the meat and poultry products inspection regulations.
This ``fast-track'' listing procedure did result in time and
resource savings by both FSIS and the industry. In August 1988,
however, FSIS discontinued its fast-track procedures because of
concerns that the procedures might not satisfy the requirements of the
Administrative Procedure Act.
While reverting to notice-and-comment procedures for these
rulemaking proceedings, FSIS also decided to investigate other means of
reducing the rulemaking burden. FSIS concluded that duplicative
rulemaking could be avoided if all relevant FMIA and PPIA issues could
be resolved in the context of the rulemaking proceeding already
required under the FFDCA and conducted by FDA. This proposed rule was
conceived at that time, was agreed upon in principle by FDA, and is now
being published for public comment.
Comments submitted in response to USDA's February 25, 1992, notice
(57 FR 6483) requesting public comments on how Departmental regulations
can be improved, updated, or streamlined, support the Agency's decision
to initiate this proposed rulemaking. In a March 13, 1992, letter, the
American Meat Institute (AMI), an organization representing meat
packers and processors of meat and meat food products, noted that the
``industry's current inability to use a wide variety of safe food
ingredients'' because of the Agency's regulatory procedures prevents
the use of least-cost formulations and impedes product development. The
organization estimated that ``direct costs associated with pursuing
unnecessary regulatory changes may exceed $100,000, and such
proceedings generally delay introductions of new products for several
years.''
Proposed New Policy
FDA and FSIS have agreed on a proposed new procedure for regulating
substances intended for use in meat and poultry products. Under this
new procedure, FSIS inspection program personnel will permit meat and
poultry use of substances if such uses are permitted under FDA
regulations, unless otherwise restricted or prohibited by other FDA
regulations or FSIS regulations.
FSIS will no longer issue regulations to list substances found by
the Agency to be acceptable for certain uses in meat and poultry
product. Instead, the Agency will refer to FDA regulations in order to
determine whether a substance may legally be used in or on a meat or
poultry product.
A key point of this new procedure, reflecting provisions of the
FMIA and PPIA and the intent of previous rulemakings, is that
substances added to meat and poultry products, including GRAS or prior-
sanctioned substances, must be permitted under the FFDCA and be used
consistently with any applicable regulations.
Under the proposed procedure, FSIS will be exercising the same
authority and continuing the same reviews that it has been conducting
all along.
FSIS, in carrying out the mandates of the FMIA and PPIA, has
published regulatory requirements and guidelines in the areas of
facilities, equipment, sanitation, and production and process controls
that apply to establishments where meat, meat food, and poultry
products are prepared for distribution in interstate or foreign
commerce. As it has in the past, when FSIS must decide on the
acceptability of a substance approved by FDA for general food use, it
will seek FDA concurrence.
In its future regulatory listings of substances and after
consultation with FSIS, FDA will include, as appropriate, the amounts
and uses of substances permitted for use in meat and poultry products.
This is consistent with current FDA listing format. FDA's
determination of the acceptability of any food additive or GRAS
substance use is conditioned on the substance being used in accordance
with GMP. The general regulations for determining GMP criteria are set
forth in 21 CFR part 110. These regulations set minimum general
requirements for buildings, facilities, equipment, sanitation, and
production and process controls to be observed in food plants where
products are prepared for distribution in interstate or foreign
commerce. Further GMP criteria are set forth in 21 CFR part 172 for
food additives, 21 CFR part 182 for GRAS substances, and 21 CFR part
184 for substances affirmed as GRAS.
FSIS's title 9 listing of authorized substances is incomplete,
inconsistent with, and duplicative of FDA's listings. The Agency plans
to eliminate its current listings over time by rulemaking, as listings
are determined to be duplicative of FDA regulations. However, FSIS will
retain its own regulations on specific substance use prohibitions and
will add new prohibitions as necessary.
To provide guidance to its inspectors, inspected establishments,
and other interested persons, FSIS will maintain a comprehensive
listing, in its directive system, of substances authorized for meat and
poultry uses under title 9 or title 21, CFR. FSIS's listing will
include:
a. Substances currently listed in title 9;
b. Substances currently listed for meat or poultry uses in FDA food
additive, GRAS, or prior-sanction listings;
c. Approved color additives currently listed in 21 CFR Parts 73,
74, and 82, food additives listed in 21 CFR Parts 172-173 and 180,
prior sanctioned substances listed under part 181, GRAS substances
listed in 21 CFR 182 and 184, if permitted for general use in or on
foods (which includes meat and poultry) in accordance with good
manufacturing practice, unless meat or poultry uses of the substances
are otherwise precluded;
d. GRAS substances found by FSIS to be suitable for specified meat
and poultry uses on the basis of information and data submitted by
petitioners to FSIS. Factors affecting FSIS findings of suitability
include:
(1) Existing FDA GRAS listings, which need not explicitly permit
but may not preclude the specific use in meat or poultry products; and
(2) Concurrence of FSIS with the petitioner and FDA acceptance of
FSIS's determination.
e. FDA food additive, color additive, GRAS, and prior-sanctioned
substance listings promulgated after this proposal becomes final that
provide for meat and poultry uses.
Requests for use of substances not authorized for use in meat and
poultry products must be made to FDA in the form of a petition to amend
FDA food additive, color additive, or GRAS affirmation regulations, as
appropriate. Specifically, this is required when the substance: (1) is
not expressly listed for meat and poultry uses in title 9, CFR, or in
title 21, CFR, Parts 172-180; (2) is not a GRAS substance listed in
Part 182 or 184 of title 21 for general use in foods; and (3) cannot be
demonstrated to FSIS to be GRAS for particular meat or poultry uses.
The working relationship between the two agencies, as set forth in
the memorandum of understanding (MOU) between them, would ensure FDA
and FSIS collaboration on any petition that includes a use in meat or
poultry products.
The Administrator of FSIS would retain legal authority to prohibit
or restrict the use of specific substance(s) in meat or poultry
products by notice-and-comment rulemaking, but is not expected to have
to exercise that authority on a regular basis because FDA's statutory
authority, exercised in
[[Page 67464]]
accord with the MOU, would provide a basis for appropriate limitations
on uses in meat and poultry products.
The Proposed Rule
Under this proposal, FSIS would discontinue duplicative rulemaking
activity regarding food additive and GRAS substance uses in meat and
poultry products. FSIS would amend the Federal meat and poultry
products inspection regulations in 9 CFR, Parts 310, 318, 319, and 381
to include appropriate cross-references to title 21 listings of food
additive and GRAS substances permitted for use in meat and poultry
products.
Substances whose use is GRAS are exempt from the premarket approval
requirements of the FFDCA and need not be listed in title 21 of the
Code of Federal Regulations. For substances that have not been listed
by FDA as GRAS in Parts 182 or 184 of title 21, FSIS will continue to
consider, in consultation with FDA, a manufacturer's basis for claiming
GRAS status and suitability for use in meat, meat food, or poultry
products. Likewise, a manufacturer has the option of seeking advice
from FSIS regarding the suitability for specific uses in meat, meat
food, or poultry products for substances listed in title 21 only for
general use in foods, or for use in meat, meat food, or poultry
products generally. FSIS's responses and related correspondence would
be available to the public, except that the formulation and process
data for proprietary mixtures would be kept confidential. Parties
requesting such evaluations would be advised to petition FDA when the
requested use is not permitted under FDA's regulations.
In keeping with this approach, FSIS proposes that, as a matter of
policy, all substances currently listed by FDA as GRAS in title 21 of
the CFR, Parts 182 and 184, for use in food generally, with no
limitation other than good manufacturing practice, be considered by
USDA to be GRAS for use in meat, meat food product, and poultry
product, unless otherwise restricted for such use by regulation in
title 9 of the CFR. Uses of substances may be restricted by FSIS
standards of identity or composition, or in specific cases where the
inspection program determines that use may adulterate the product.
Existing FSIS regulations in 9 CFR 318.7 and 381.147 listing
substances for various meat and poultry uses would not be immediately
affected. However, FSIS plans to review its title 9 listings within the
next 3 to 5 years, and to eliminate those that duplicate FDA's title 21
listings. FSIS and FDA believe that the public will be better served by
having all permitted uses for food additives and GRAS substances
consolidated in one place--listings in title 21 of the CFR--and intend
to work toward that end. Because of resource constraints, at the
present time FDA regulations in title 21 will be amended to accommodate
meat and poultry uses only in response to a food additive, color
additive, or GRAS affirmation petition.
All petitions for rulemaking to permit new substances or new uses
or use levels of substances in foods--including meat and poultry
products--would be sent to FDA. FDA would evaluate the petitions in
consultation with FSIS if any prospective use of a food additive, color
additive, or GRAS substance includes use in meat, meat food, or poultry
products.
The proposed revisions of 9 CFR 310.20 and 318.1 are intended only
for the purpose of including appropriate references to substance
listings in title 21, CFR. They would not change the substantive
requirements governing the saving of livestock blood or the labeling of
containers. Similarly, the proposed revision of 9 CFR 318.7(d)(2) is
intended only for the purpose of adding a reference to title 21, CFR,
and would not change the prohibitions of and restrictions on the
substance uses provided in that paragraph.
The proposed 9 CFR 318.7(a)(4), 318.7(a)(5) and 381.147(f)(2)(iv)
are intended to provide addresses for inquiries concerning food or
color additive status of substances intended for use in or in contact
with meat or poultry products. The proposed 9 CFR 318.79(a)(5) and
381.147(f)(2)(v) are intended to provide addresses for inquiries on the
suitability for use in meat or poultry products, of substances not
listed in the title 21 regulations. These provisions are not intended
as requirements for a petitioning or petition review process.
Appended to this proposed regulation is a copy of the draft
Memorandum of Understanding between FDA and FSIS, which would provide
for the administration of these provisions.
Executive Order 12866
This proposed rule has been reviewed under Executive Order 12866
and found to be significant, but not economically significant, within
the meaning of the Executive Order (sec. 3(f)). It is significant
because it is a novel, collaborative, inter-Agency approach to
streamlining regulation. It decreases regulatory and paperwork burdens
on society by proposing an alternative to the current Government
process of approving substances for use in foods.
This proposal would replace the current Government processes for
approving substances and their uses in meat and poultry products,
involving consecutive rulemakings by FDA and FSIS, with a ``one-stop''
procedure whereby sponsors of new food additive or other substance uses
in meat and poultry products would have to petition only the FDA. FDA
would conduct any required rulemaking on the matter in consultation
with FSIS. FDA's rule would then specify any uses or use restrictions
unique to meat or poultry products, thereby permitting use of the
substance under the FMIA and PPIA.
This proposal embodies the regulatory philosophy and principles of
Section 1 of the Executive Order and was the result of a review of
existing regulations consistent with the direction in section 5. It
modifies existing FSIS regulations concerning the approval of
substances to be added to meat, meat food, and poultry products that
have been found to result in needless duplication of effort and
expenditures by Government and the regulated industry. These
regulations necessitate sequential rulemakings by FDA and FSIS to
permit a new substance or a new use of a previously approved substance
to be used in meat, meat food, or poultry products. The costs to
industry and Government of these rulemaking procedures includes the
costs to industry arising from a several years' delay in the
introduction of new food additives or new food products. These costs
create a disincentive for technological innovation and new product
development. The existing process, therefore, has a negative effect on
economic growth.
Benefit-Cost Assessment
The public benefits conferred by the rulemaking include,
principally, those associated with the more timely regulatory approval
of substances added to foods and the benefits of the substances
themselves. The benefits of substances added to meat and poultry
products include the technical effects on the characteristics of food
products, the uses of the substances in food processing, and a greater
variety of foods in the marketplace. Public health benefits can include
the greater availability of food through preservation techniques and
improved food safety through, for example, antimicrobial treatment of
raw product and the use of curing solutions in processed products. The
benefits conferred by the availability of substances and their uses
would be marginally increased by this rulemaking.
[[Page 67465]]
The public benefits of regulating food additives generally would
not change. These include, principally, the prevention of adulteration
or misbranding of food products. Consumers are provided assurance that
the products they buy do not contain substances whose use ought, for
various reasons, to be prohibited, or substances that have been
approved have not been used improperly in foods. Such benefits would
not be affected by this proposed rulemaking because FDA would continue
to conduct food safety reviews of substances proposed for use in foods,
including--in consultation with FSIS--meat and poultry products, and
FSIS would continue to exercise its in-plant inspection and other
regulatory authorities to prevent the marketing of adulterated or
misbranded meat and poultry products.
Therefore, elimination of the duplicative FSIS rulemaking process
involved in approving substances for use in meat and poultry products
could save the regulated industry about $600,000 a year over and above
the savings the Government itself would realize in administrative
costs.
Other, albeit less calculable benefits arise through the removal of
a disincentive to innovate. With the potential expansion of uses of
approved food additives and other substances that could result from the
easing of the current regulatory burden, new product development and
marketing could be encouraged.
Executive Order 12778
This proposed rule has been reviewed pursuant to Executive Order
12778, Civil Justice Reform. This proposed rule would provide for the
use in meat and poultry products of substances approved by FDA and
listed in 21 CFR for such uses, and would eliminate the requirement in
the current 9 CFR 318.7(a) and 381.147(a) listing of such uses in 9 CFR
318.7(c)(4) or 381.147(f)(4).
States and local jurisdictions are preempted under the Federal Meat
Inspection Act (FMIA) and the Poultry Products Inspection Act (PPIA)
from imposing any requirements with respect to federally inspected
premises and facilities, and operations of such establishments, that
are in addition to, or different than, those imposed under the FMIA or
PPIA. States and local jurisdictions are also preempted under the FMIA
and PPIA from imposing any marking, labeling, packaging, or ingredient
requirements on federally inspected meat or poultry products that are
in addition to, or different than, those imposed under the FMIA or the
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
or 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. States and
local jurisdictions may also make requirements or take other actions
that are consistent with the FMIA and PPIA, with respect to any other
matters regulated under the FMIA and PPIA.
Under the FMIA and the PPIA, States that maintain meat and poultry
inspection programs must impose requirements on State-inspected
products and establishments that are at least equal to those required
under the FMIA or PPIA. These States may, however, impose more
stringent requirements on such State-inspected products and
establishments.
In the event of its adoption, no retroactive effect would be given
to this proposed rule, and applicable administrative procedures must be
exhausted before any judicial challenge to the application of these
provisions. Those administrative procedures are set forth in 9 CFR
306.5, 318.21(h), 381.35, and 381.153(h).
Effect on Small Entities
The Administrator, FSIS, has determined that the proposed
amendments would not have a significant economic impact on a
substantial number of small entities. Obtaining approval for the use in
meat and poultry products of new substances or for new uses of
previously approved substances would be simpler, faster, and less
costly for both industry and the Federal Government than under the
current system.
FSIS now may approve for use in meat or poultry products only those
substances that have been previously reviewed for safety and approved
for such use by FDA. Under the proposed amendments, separate petitions
to FSIS would no longer have to be submitted. FSIS would permit
substances to be used in products under its jurisdiction on the basis
of FDA's title 21 regulations permitting such uses. Those substances
not authorized for meat and poultry use under existing FDA regulations
would require only one petition for rulemaking--to FDA. (For a
substance that is not affirmed by FDA as GRAS or otherwise listed in 21
CFR part 182 or 184, or a substance listed by FDA for general food use,
manufacturers would have the option of requesting that FSIS evaluate
the manufacturer's assertion of the GRAS status of the substance and
its suitability for a specified use in meat and poultry products.)
FSIS is currently receiving about six petitions per year for the
approval of substances for use in meat and poultry products. Most of
these petitions are from large commercial entities. Although the
reduction in costs from the proposed rule would be significant, but
unknown, for prospective petitioners, the number of such entities is
not substantial. Therefore, the proposed amendments would not have a
significant effect on a substantial number of small entities.
Furthermore, all users of the Federal regulations concerning the
addition of substances to foods should benefit by having fewer, clearer
regulations. Thus, there would be a reduction in the duplication of
effort and attendant costs for all concerned.
Paperwork Reduction Act
FSIS has determined that the proposed rulemaking would entail no
new information collection from the regulated industry or other private
entities. Rather, the effect of the rulemaking would be to
substantially reduce the information collection from private sources
concerning proposed uses of substances in meat or poultry products.
Persons seeking Federal Government approval of substances for use in
meat or poultry foods would only have to petition FDA, rather than both
FDA and FSIS, as they now do. Thus, a current, duplicative information
collection requirement would be eliminated.
List of Subjects
9 CFR Part 310
Animal diseases, Meat inspection.
9 CFR Part 318
Food additives, Meat inspection.
9 CFR Part 319
Food grades and standards, Meat inspection.
9 CFR Part 381
Food grades and standards, Meat inspection, Poultry and poultry
products.
For the reasons set forth in the preamble, FSIS proposes to amend
Parts 310, 318, 319, and 381 of title 9, Code of Federal Regulations,
as follows:
PART 310--POST-MORTEM INSPECTION
1. The authority citation for Part 310 would be revised to read as
follows:
[[Page 67466]]
Authority: 21 U.S.C. 601-695; 7 CFR 2.18, 2.53.
2. Section 310.20 would be revised to read as follows:
Sec. 310.20 Saving of blood from livestock as an edible product.
Blood may be saved for edible purposes at official establishments
provided it is derived from livestock, the carcasses of which are
inspected and passed, and the blood is collected, defibrinated, and
handled in a manner so as not to render it adulterated under the
Federal Meat Inspection Act and regulations issued pursuant thereto.
The defibrination of blood intended for human food purposes shall not
be done with the hands. Anticoagulants specified in title 21 of the
Code of Federal Regulations or in this subchapter may be used in lieu
of defibrination.
PART 318--ENTRY INTO OFFICIAL ESTABLISHMENTS; REINSPECTION AND
PREPARATION OF PRODUCTS
3. The authority citation for Part 318 would be revised to read as
follows:
Authority: 7 U.S.C. 450, 1901-1906; 21 U.S.C. 601-695; 7 CFR
2.18, 2.53.
4. Section 318.1(d) would be revised to read as follows:
Sec. 318.1 Products and other articles entering official
establishments.
* * * * *
(d) Containers of preparations which enter any official
establishment for use in hog scalding water or in denuding of tripe
shall bear labels showing the chemical names of the preparations. In
the case of any preparation containing any of the chemicals which are
specifically limited by title 21 of the Code of Federal Regulations,
Parts 73, 74, 81, 172, 173, 179, 182, or 184, or by a regulation in
this subchapter, as to amount permitted to be used, the labels on the
containers must also show the percentage of each such chemical in the
preparation and must provide dilution directions which prescribe the
maximum allowable use concentration of the preparations.
* * * * *
5. Section 318.7 would be amended by revising the heading,
paragraph (a) and paragraph (d)(2) to read as follows:
Sec. 318.7 Restrictions on the use of substances in meat and meat food
products.
(a) (1) Substances permitted for use in meat and meat food product
in title 21, CFR, shall be permitted for such use under this
subchapter, subject to declaration requirements in Parts 316 and 317 of
this subchapter, unless precluded from such use or further restricted
in Parts 318 or 319 of this subchapter, or by the Administrator in
specific cases.
(2) (i) No substance may be used in the preparation of any product,
for any purpose, unless its use is authorized under title 21, CFR, as a
direct food additive (Part 172), a secondary direct food additive (Part
173), source of radiation (Part 179), an interim-listed direct food
additive (Part 180), a prior-sanctioned substance (Part 181), or listed
as a Generally Recognized As Safe (GRAS) substance or (Part 182 or
184), or by a regulation in this subchapter.
(ii) No substance the intended use of which is to impart color in
any product shall be used unless such use is authorized under title 21,
CFR, as a color additive (Parts 73, 74, and 81), or by a regulation in
this subchapter.
(3) Petitions to amend title 21 regulations to provide for meat or
meat food product uses of substances used in the preparation of
product, or substances used to impart color to product, shall be filed
with the Food and Drug Administration, in accordance with the
provisions of title 21 CFR part 71 or 171, as appropriate.
(4) Inquiries concerning the regulatory status under the Federal
Food, Drug, and Cosmetic Act of any articles intended for use as
components of, or in contact with, meat or meat food product, should be
addressed to the Department of Health and Human Services, Food and Drug
Administration, Center for Food Safety and Applied Nutrition, 200 C
Street, SW., Washington, DC 20204.
(5) Inquiries concerning the suitability for use in specific meat
or meat food products of substances that are not affirmed by FDA as
GRAS or otherwise listed in 21 CFR part 182 or part 184, or of
substances listed in title 21 regulations for general use in foods, or
for use in meat or meat food products generally, including mixtures of
such substances, should be addressed in writing to the Department of
Agriculture, Food Safety and Inspection Service, Product Assessment
Division, USDA, FSIS, RP, West End Court Building, Washington, DC
20250-3700. Copies of such correspondence, except for information on
proprietary mixtures, will be placed in the public record. A list of
proprietary substances and non-food compounds determined suitable for
specified uses also may be obtained from the Product Assessment
Division, at the same address.
* * * * *
(d) * * *
(2) Sorbic acid, calcium sorbate, sodium sorbate, and other salts
of sorbic acid shall not be used in cooked sausage or any other
product; sulfurous acid and salts of sulfurous acid shall not be used
in or on any product, and niacin or nicotinamide shall not be used in
or on fresh product, except that potassium sorbate, propylparaben
(propyl p-hydroxybenzoate), calcium propionate, sodium propionate,
benzoic acid, and sodium benzoate may be used in or on any product only
as provided in 21 CFR or by a regulation in this subchapter.
* * * * *
PART 319--DEFINITIONS AND STANDARDS OF IDENTITY OR COMPOSITION
6. The authority citation for 9 CFR Part 319 would be revised to
read as follows:
Authority: 7 U.S.C. 450, 1901-1906; 21 U.S.C. 601-695; 7 CFR
2.18, 2.53.
Sec. 319.100 [Amended]
7. Section 319.100 would be amended by removing ``Sec. 318.7(c) (1)
and (4) of this subchapter'' in the first sentence and replacing it
with ``a regulation permitting that use in this subchapter or in 21 CFR
Chapter I, Subchapter B.''
Sec. 319.106 [Amended]
8. Section 319.106 would be amended by removing ``in accordance
with 318.7(c)(4) of this subchapter'' in paragraph (d)(2) and replacing
it with ``a regulation permitting that use in this subchapter or in 21
CFR Chapter I, Subchapter B.''
Sec. 319.140 [Amended]
9. Section 319.140 would be amended by removing ``Sec. 318.7(c)(4)
of this subchapter'' in the second and third sentences and replacing it
with ``a regulation permitting that use in this subchapter or in 21 CFR
Chapter I, Subchapter B.''
Sec. 319.145 [Amended]
10. Section 319.145 would be amended by removing ``in the chart
following Sec. 318.7(c)(4),'' in paragraph (a)(4) and replacing it with
``in a regulation permitting that use in this subchapter or in 21 CFR
Chapter I, Subchapter B'' and in paragraph (b)(6) by removing ``the
chart of substances in Sec. 318.7(c)(4) of this subchapter.'' and
replacing it with ``a regulation permitting that use in this subchapter
or in 21 CFR Chapter I, Subchapter B.''
Sec. 319.180 [Amended]
11. Section 319.180 would be amended by removing ``Sec. 318.7(c)(4)
of
[[Page 67467]]
this chapter,'' in the first sentence of paragraph (a) and the first
sentence of paragraph (b) and replacing it with ``a regulation
permitting that use in this subchapter or in 21 CFR Chapter I,
Subchapter B.'' and by removing ``Sec. 318.7(c)(4) of this
subchapter.'' in the first sentence of paragraph (e) and replacing it
with ``a regulation permitting that use in this subchapter or in 21 CFR
Chapter I, Subchapter B.''
Sec. 319.303 [Amended]
12. Section 319.303 would be amended by removing ``Sec. 318.7(c)(4)
of this subchapter'' from the second sentence of paragraph (a)(3) and
replacing it with ``a regulation permitting that use in this subchapter
or in 21 CFR Chapter I, Subchapter B.''
Sec. 319.700 [Amended]
13. Section 319.700 would be amended by removing ``Sec. 318.7(c)(4)
of this chapter'' in paragraph (a)(4), paragraph (a)(5), and paragraph
(a)(6), and replacing it with ``a regulation permitting that use in
this subchapter or in 21 CFR Chapter I, Subchapter B''; by removing
``Sec. 318.7(c)(4) of this chapter,'' from the first sentence of
paragraph (a)(7) and replacing it with ``21 CFR Parts 73, 74, or 82,'';
and removing ``Sec. 318.7(c)(4) of this chapter,'' from the first
sentence of paragraph (a)(9) and the first sentence of paragraph
(a)(10) and replacing it with ``a regulation permitting that use in 21
CFR Chapter I, Subchapter B.''
PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS
14. The authority citation for 9 CFR Part 381 would be revised to
read as follows:
Authority: 21 U.S.C. 450, 21 U.S.C. 451-470, 7 CFR 2.18, 2.53.
15. Section 381.147 would be amended by revising paragraph (f) to
read as follows:
Sec. 381.147 Restrictions on the use of substances in poultry
products.
* * * * *
(f)(1) Substances permitted for use in poultry product in 21 CFR
chapter I shall be permitted for such use under this subchapter,
subject to declaration requirements in Subparts M and N of this
subchapter, unless precluded from such use or further restricted in
Subparts O and P of this subchapter, or by the Administrator in
specific cases.
(2)(i) No substance may be used in the preparation of any product,
for any purpose, unless its use is permitted under 21 CFR chapter I as
a direct food additive (Part 172), a secondary direct food additive
(Part 173), a source of radiation (Part 179), an interim-listed direct
food additive (Part 180), or is a prior-sanctioned substance (Part
181), or is a GRAS substance listed in Part 182 or Part 184, or is
otherwise permitted by a regulation in this subchapter.
(ii) No substance the intended use of which is to impart color in
any product shall be used unless such use is authorized under 21 CFR
chapter I as a color additive (Parts 73, 74, and 82), or by a
regulation in this subchapter.
(iii) Petitions to amend title 21 regulations to provide for
poultry product uses of substances used in the preparation of product,
or substances used to impart color to product, should be sent to FDA,
in accordance with the provisions of 21 CFR part 71 or 171, as
appropriate.
(iv) Inquiries concerning the food or color additive status under
the Federal Food, Drug, and Cosmetic Act of any articles intended for
use as components of, or in contact with, poultry product, should be
addressed to the Department of Health and Human Services, Food and Drug
Administration, Center for Food Safety and Applied Nutrition, 200 C
St., SW, Washington, DC 20204.
(v) Inquiries concerning the suitability for use in specific
poultry products of substances that are not affirmed by FDA as GRAS or
otherwise listed in 21 CFR part 182 or part 184, or of substances
listed in title 21 regulations for general use in foods, or for use in
poultry products generally, including mixtures of such substances,
should be addressed in writing to the Department of Agriculture, Food
Safety and Inspection Service, Product Assessment Division, USDA, FSIS,
RP, West End Court Building, Washington DC 20250. Copies of such
correspondence will be placed in the public record, except for
correspondence concerning proprietary mixtures. A list of proprietary
substances and non-food compounds determined suitable for specified
uses may be obtained from the Product Assessment Division, at the same
address.
* * * * *
Sec. 381.120 [Amended]
16. Section 381.120 would be amended by removing ``Sec. 381.147''
from the fourth sentence and from the sixth sentence and replacing it
with ``a regulation permitting that use in this subchapter or in 21 CFR
Chapter I, Subchapter B.''
Sec. 381.132 [Amended]
17. Section 381.132 would be amended by removing ``Sec. 381.147''
from paragraph (c)(3)(iii)(D) and replacing it with ``a regulation
permitting that use in this subchapter or in 21 CFR Chapter I,
Subchapter B.''
Sec. 381.171 [Amended]
18. Section 381.171 would be amended by removing ``Sec. 381.147 of
this part'' from the first and second sentences of paragraph (b) and
replacing it with ``a regulation permitting that use in this subchapter
or in 21 CFR Chapter I, Subchapter B.''
Done, at Washington, DC, on: December 21, 1995.
Michael R. Taylor,
Acting Under Secretary for Food Safety.
Appendix
Note: This appendix will not appear in the Code of Federal
Regulations.
Memorandum of Understanding (MOU) Between the Food Safety and
Inspection Service (FSIS), U.S. Department of Agriculture (USDA) and
the U.S. Food And Drug Administration (FDA), U.S. Department of Health
and Human Services (USDHHS)
Regarding the Approval of Food Additives, Color Additives, and
other Substances Used in Meat and Poultry Products
I. Purpose
This agreement establishes the working relationship and
procedures to be followed by FSIS and FDA in responding to requests
for the approval of the use of substances subject to regulation by
the FDA and intended for use in meat and meat food products
(hereinafter known collectively as meat products) and poultry
products regulated by FSIS.
II. Background
The Federal Meat Inspection Act (FMIA) and the Poultry Products
Inspection Act (PPIA), and the Federal Food, Drug, and Cosmetic Act
(FFDCA) provide FSIS and FDA, respectively, with the authority to
determine the safety, wholesomeness, and accurate labeling of foods.
The Food Additives Amendment of 1958 to the FFDCA (21 U.S.C. 348)
gives FDA the authority to determine the safety of food additives
prior to their marketing. The Color Additives Amendment of 1960 (21
U.S.C. 379e) grants FDA premarket review authority comparable with
these amendments to the FFDCA for color additives intended for use
in foods, drugs, cosmetics, and medical devices. FDA has assumed
primary authority over the approval of the use of food additives and
color additives used in foods. FSIS has retained authority under the
FMIA and PPIA to further regulate uses of such FDA-approved
substances in meat and poultry products, respectively, as needed, to
ensure inspected products are not adulterated or misbranded.
The process for documenting approved uses of substances intended
for use in meat and poultry products has required that such
ingredients first be reviewed and approved by FDA (in the form of an
FDA regulation), and then subsequently be reviewed and incorporated
into FSIS regulations. FDA's
[[Page 67468]]
approval of food additives and color additives is based on reviews of
data and other information establishing the safety of the substance
for its intended use in food. To approve a food additive, the Agency
must also determine that the food additive achieves its intended
technical effect; to approve a color additive, the Agency must also
determine that the color additive is suitable for its indended use.
However, these criteria are not sufficient to establish the
suitability of such additives for use in meat or poultry products.
Subsequent FSIS approval is based primarily on review of data
regarding the efficacy and suitability of the substance for its
intended use in meat and poultry products that FSIS regulates under
the FMIA and PPIA. FSIS requires data that support the lowest level
of the subject substance(s) needed to achieve the intended effect.
FSIS is charged with ensuring the safety of inspected products.
However, with respect to the safety of food and color additives that
may be used in those products, FSIS defers to FDA determinations
under the FFDCA.
In light of the foregoing regulatory context, FDA and USDA/FSIS
have concluded:
A. The duplicative, sequential approval process for substances
intended for use in meat and poultry products is unnecessarily
cumbersome, time-consuming, and costly to all parties involved, and
has fostered confusion over the relationship between FDA and FSIS
regulations.
B. Consolidation and harmonization of the Agencies' approvals in
this regard will result in fewer and more consistent Federal
approval regulations for substances used in food, and will provide
simpler and less expensive procedures for petitioners seeking
approval of substances under the FMIA and PPIA.
C. This Memorandum of Understanding should clarify the Agencies'
working relationship and, in particular, provide procedures whereby:
1. In situations where FSIS's Title 9 and FDA's Title 21
regulations do not specifically address the intended use of a
particular substance for meat or poultry products, any interested
party may request that FSIS evaluate the status of such use. FSIS
will conduct a review and determine whether the use is acceptable in
meat or poultry products, including whether the use is approved
under the FFDCA. Under the terms of this MOU, FSIS would seek FDA's
concurrence with FSIS's review and conclusions. If FDA does not
concur that the use is approved under the FFDCA, the petitioner
would be required to submit a food additive or color additive
petition to FDA requesting that FDA's regulations be amended to
accommodate the requested use.
2. In situations in which FDA receives a petition for the use of
a substances or a use of a substance that is not approved under the
FFDCA, a petitioner shall prepare and submit a food additive
petition or a color additive petition only to FDA. FDA will consult
with FSIS regarding petitions for meat and poultry use and, under
the terms of this MOU, FSIS concurrence would be required for the
approval of the use of substances intended for use in meat and
poultry and that are codified in Title 21 of the Code of Federal
Regulations.
D. This agreement and these procedures are not intended to erode
the existing authority of FDA or of FSIS to provide guidance on the
status and conditions of use of substances intended for use in meat
and poultry.
III. Scope
This agreement between FSIS and FDA concerns procedures for
Federal approval of food additives, color additives, and other food
ingredients that are regulated by FDA under the FFDCA and may be
used in meat and poultry products that are subject to the FMIA and
the PPIA. This agreement further provides for the review and
classification, as needed, of substances asserted to be exempt from
regulation under the FFDCA because they are generally recognized as
safe, or are covered by a prior sanction.
IV. Collaborative FSIS--FDA Approvals of Substances Intended for Use in
Meat and Poultry Products
A. Petitions for FDA approval of Substances Intended for Use in
Meat and Poultry Products.
Relevant portions of petitions submitted to FDA for the use of
new substances or new uses of approved substances will be shared
with FSIS by FDA when the proposed use specifically includes use in
meat and poultry products. FSIS will provide advice to FDA, in
writing, on any criteria, restrictions, conditions of use, or
prohibitions FSIS believes necessary concerning use of the substance
in products subject to the FMIA and the PPIA.
B. Requests for FSIS Determination on Acceptability of Substance
Uses in Meat and Poultry Products.
FSIS routinely provides advice and counsel to individuals and
issues guidance on the status and conditions of use of substances in
products under its regulatory purview. Requests for a determination
of the acceptability of substances may result in the need for
rulemaking when: (1) FSIS standards of identity and composition
preclude the use of a substance; or (2) there is concern about the
suitability of a substance for the intended use because the
substance has never been used in meat or poultry before, or the
applications of the substance are new, e.g., a new meat, meat food,
or poultry product category.
Requests for a determination of acceptability of new substances
and new uses of substances in meat and poultry products are
currently submitted by the requester (e.g., an ingredient
manufacturer, meat or poultry processor, or trade group) to FSIS.
FSIS will continue to require that a request for an acceptability
determination for the use of a new substance in meat or poultry or
for the new use of an approved substance be supported by information
and technical data that establish that: (1) the use of the substance
will not render the product in which it is used adulterated or
misbranded and (2) the proposed use of the substance is at the
lowest level necessary to accomplish the intended technical
effect(s) in each category of the product in which the substance
will be used.
Under the terms of this memorandum, when FSIS receives a request
for a determination on whether the use of a substance in meat or
poultry will be permitted, FSIS will evaluate the request and render
a determination of acceptability (i.e., safety and suitability). In
instances where the use of the requested substance is not explicitly
authorized by FDA regulations, FSIS will consult with FDA concerning
FSIS's evaluation of the regulatory status of the food ingredient.
If FDA has no objection to FSIS's determination, FSIS, through its
Product Assessment Division (PAD), will amend Agency directives and
other guidance materials to reflect the approved use. If FDA objects
to FSIS's determination, the request will be denied and the
requester will be advised to petition FDA to amend FDA's regulations
to permit the use of the substance at issue.
V. The Agreement
A. FSIS will:
1. Receive requests for evaluation of the acceptability of new
substances and new uses of approved substances for use in meat and
poultry products subject to the FMIA and PPIA.
2. Through the activities of the PAD, review all data submitted
in support of requests for ingredient use and, in consultation with
FDA, make acceptability determinations on use in meat and poultry
products. FSIS's Regulatory Programs will seek written concurrence
from FDA's Center for Food Safety and Applied Nutrition on FSIS
acceptability determinations before use is granted and the substance
is listed in FSIS directives or other guidance material. If use of a
substance is not found to be acceptable, the requester will be
advised to submit a petition to FDA to approve the use of substance
in meat or poultry products.
3. Forward to FDA all food and color additive petitions and
petitions for affirmation of GRAS status for use of such substances
in meat or poultry products.
4. Respond in a timely manner to inquiries from FDA regarding
petitions or requests for approval of the use of food additives,
color additives, or GRAS substances or new uses of such substances
in meat and poultry products regulated under the FMIA and PPIA.
5. Continue to provide advice and counsel on, and clarification
of, the acceptability and uses permitted under the FMIA and PPIA of
substances used in meat and poultry products.
B. FDA will:
1. Receive petitions for approval of substances intended for use
in foods, including meat or poultry products regulated under the
FMIA and PPIA.
2. Advise interested persons if a petition is needed to amend
FDA regulations to accommodate the requested uses.
3. Advise FSIS of any new substance listings in Title 21
concerning use restrictions or conditions of use, and common or
usual names of substances intended for use, in meat or poultry
products.
4. Provide FSIS, PAD, with copies of relevant information from
petitions and accompanying data submitted by petitioners
[[Page 67469]]
requesting approval of the use of substances in meat or poultry
products.
5. When petitioned, conduct rulemaking that would permit under
the FFDCA use of a substance in meat or poultry, including those
restrictions or conditions of use in meat or poultry products that
are recommended in writing by FSIS, and for which there are data or
other information establishing that the use of the substance is safe
and not deceptive. FDA will also consult with FSIS on any comments
received on petitions regarding meat or poultry uses.
C. FSIS and FDA jointly agree:
1. That the officials of the two Agencies responsible for
implementing the Agreement are:
At FSIS: the Administrator and Deputy Administrators (as may be
designated); Director, Product Assessment Division; Branch Chief,
Food Standards and Ingredients Branch.
At FDA: Director, Center for Food Safety and Applied Nutrition;
Director, Office of Pre-Market Approval.
2. That the responsible officials will concur on rulemaking
documents that, when published by FDA, will list or amend listings
of substances permitted for use in meat and poultry products.
3. That the Administrator of FSIS and the Director, CFSAN, FDA,
shall resolve problems and make decisions by consensus in areas of
disagreement.
VI. Conflict Resolution
Each Agency reserves the authority to review, independently of
the other, matters of concern to their respective authorities.
However, written notice will be provided to the Commissioner of Food
and Drugs and to the Under Secretary for Food Safety, USDA, of any
rulemaking initiative not in keeping with the provisions of this MOU
or about which there is an interagency disagreement, prior to public
announcement of the rulemaking.
VII. Other Agreements
A. The provisions of this MOU are not intended to add to or
detract from any of the authorities provided to either FDA or FSIS
by the FFDCA, FMIA, or the PPIA, or the regulations by which these
laws are implemented.
B. FSIS and FDA may enter into additional, separate agreements
with each other as they deem appropriate to achieve the objectives
of this MOU.
VIII. Duration of MOU
This Agreement becomes effective upon acceptance by both
Agencies and will continue indefinitely. It may be modified by
mutual written consent or terminated by either agency with a 30-day
written notice to the other agency.
Signed:
----------------------------------------------------------------------
Director, CFSAN, FDA
----------------------------------------------------------------------
Date
----------------------------------------------------------------------
Administrator, FSIS
Guidelines for Acceptability Determinations for New Substances and New
Uses of Substances in Meat and Poultry Products
The evaluation by FSIS of the acceptable use of a new substance
or new use of a substance in meat and poultry products subject to
this MOU will be based on the following conditions that must be
addressed by the requester. The conditions set forth are in
accordance with the provisions for use of substances in 9 CFR and 21
CFR.
1. The substance has a documented history of use in foods.
2. The substance is derived from food or a food ingredient and
is not considered to be a chemical or synthesized additive.
3. The process for manufacturing the substance does not result
in a severe alteration of the molecular structure resulting in the
formation of a chemical residue whose safety has not been shown.
4. The safety of the substance has been evaluated by an
independent authority and adequate safety data have been presented.
5. The suitability and efficacy of the substance have been shown
through adequate data submission. The lowest level of the substance
necessary to achieve the intended functional effect must be shown
and the use cannot render the products to which the substance is
intended for use adulterated or misbranded.
6. The FDA has determined the common or usual name of the
substance(s).
7. FDA must concur with FSIS's determination of acceptability in
order to allow use.
[FR Doc. 95-31390 Filed 12-26-95; 3:36 pm]
BILLING CODE 3410-DM-P
Complete official Federal Register PDF
FR Doc. 95-31376 Conformance of Uniform State Waterways Marking System and Western Rivers Marking System with the United States Aids to Navigation System and the Maritime Buoyage System of the International Association of Lighthouse Authorities
[Federal Register Volume 60, Number 250 (Friday, December 29, 1995)]
[Proposed Rules]
[Pages 67345-67346]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31376]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Coast Guard
33 CFR Parts 62 and 66
[CGD 94-091]
RIN 2115-AF14
Conformance of Uniform State Waterways Marking System and Western
Rivers Marking System with the United States Aids to Navigation System
and the Maritime Buoyage System of the International Association of
Lighthouse Authorities
AGENCY: Coast Guard, DOT.
ACTION: Advance notice of proposed rulemaking and request for comments.
-----------------------------------------------------------------------
SUMMARY: The Coast Guard is considering changes that would bring the
Uniform State Waterways Marking System (USWMS) and the Western Rivers
Marking System (WRMS) more into conformance with the U.S. Aids to
Navigation System (USATONS) and the
[[Page 67346]]
Maritime Buoyage System (MBS) of the International Association of
Lighthouse Authorities (IALA). These changes would help mariners avoid
misinterpreting signals they might see when transiting different bodies
of water now subject to different marking systems.
DATES: Please submit comments on or before February 12, 1996.
ADDRESSES: Comments may be mailed to the Executive Secretary, Marine
Safety Council (G-LRA, Room 3406) [CGD 94-091], U.S. Coast Guard
Headquarters, 2100 Second Street SW., Washington, DC 20593-0001, or may
be delivered to room 3406 at the same address between 8 a.m. to 3 p.m.,
Monday through Friday, except Federal holidays. the telephone number is
(202) 267-1477.
The Executive Secretary maintains the public docket for this notice
and request for comments. Comments will become part of this docket and
will be available for inspection or copying at room 3406, U.S. Coast
Guard Headquarters, between 8 a.m. to 3 p.m., Monday through Friday,
except Federal holidays.
FOR FURTHER INFORMATION CONTACT:
LTJG Chad Asplund, Division of Short Range Aids to Navigation,
Telephone: (202) 267-1386.
SUPPLEMENTARY INFORMATION:
Request for Comments
The Coast Guard encourages interested persons to participate in
this notice and request for comments by submitting written data, views,
or arguments. Persons submitting comments should include their names
and addresses, identify this rulemaking [CG 94-091] and the specific
section of this notice to which each comment applies, and give the
reason for each comment. Please submit two copies of all comments and
attachments in an unbound format, no larger than 8+ by 11 inches,
suitable for copying and electronic filing. Persons wanting
acknowledgement of receipt of comments should enclose stamped, self-
addressed postcards or envelopes.
Background and Purpose
In 1966 the USWMS was created to provide a system that would
adequately mark State waters. At its inception it was meant in part to
supplement the USATONS. It offered two types of aids to navigation, a
system of regulatory markers as well as a system to supplement the
USATONS. It features red and black buoys to mark lateral hazards.
The WRMS was introduced to establish a system that would adequately
mark the dynamic waterways of the Mississippi River and its Western
counterparts. Some deviations from the USATONS were necessary to
adequately mark these waterways. The WRMS allowed for only a few light
characteristics to mark the waterways. As the number of users
increased, and as the number of aids increased, a need arose to
differentiate among the aids in the WRMS.
In 1982, the United States, along with most of the world's other
maritime Nations, became a party to the agreement that established the
MBS of the IALA. In 1985 the United States began converting the USATONS
to harmonize with the MBS; if finished in 1991. Yet the systems that
mark the Uniform State Waterways and the Western Rivers are not fully
in conformance with the single system comprising MBS and USATONS.
The purpose of this proposed change is to develop an approach to
adequately mark the Uniform State Waterways and Western Rivers while
minimizing the number of systems of aids to navigation.
The Coast Guard is considering the following changes:
1. Allowing the five existing flash characteristics authorized in
the USATONS to be used in the WRMS.
2. Using non-lateral daymarks as crossing daymarks in the WRMS.
3. Replacing the black buoys in the USWMS with green buoys.
4. Removing cardinal marks from the USWMS.
5. Marking hazards in the USWMS with the appropriate lateral marks
as in the USATONS.
Early Participation
The Coast Guard is consulting with the National Association of
State Boating-Law Administrators and with users in the Second Coast
Guard District, as well as with State maritime authorities, to gather
information required for this proposed change.
Solicitation of Views
The Coast Guard solicits comments from all segments of the marine
community and other interested persons on economic and other impacts
and [suggested alternatives related to aids to navigation system] to
adequately mark the Uniform State Waterways and the Western Rivers.
Persons submitting comments should include their names and addresses,
identify this docket [CG 94-091], identify their concern or concerns,
state what impacts may result from one or more of the alternatives
identified, suggest other alternatives, and provide reasons to support
the suggested alternatives. The Coast Guard is particularly interested
in receiving information, views, data, and reasons on the following
questions and areas of concern:
1. WHAT WOULD BE THE ECONOMIC IMPACTS OF A PROPOSED CHANGE IN
LIGHTING CHARACTERISTICS ON THE WESTERN RIVERS?
Would users be adversely affected by having additional lighting
characteristics within the WRMS?
What financial impact would this have?
Who are the persons most affected?
2. WHAT OTHER FACTORS AFFECT A PROPOSED CHANGE IN LIGHTING?
Is there any other information that you feel may be helpful in
implementing this change with less impact on the affected persons?
3. SHOULD CROSSING DAYBOARDS USED IN THE WRMS BE REPLACED BY THE
NON-LATERAL DAYBOARDS USED IN THE USATONS?
Should the currently used single-color crossing dayboards be
replaced by the red-and-white or green-and-white non-lateral marks for
better visibility?
4. WHAT IS THE BEST WAY TO MARK OBSTRUCTIONS IN THE USWMS?
Should cardinal marks be retained, or should the States adopt a
system similar to that of the USATONS?
5. SHOULD THE MEANING OF THE RED-AND-WHITE STRIPED BUOYS IN THE
USWMS BE CHANGED SO SUCH BUOYS MARK SAFE WATER AS IN THE USATONS?
Dated: December 20, 1995.
Rudy K. Peschel,
Rear Admiral, U.S. Coast Guard, Chief, Office of Navigation Safety and
Waterway Services.
[FR Doc. 95-31376 Filed 12-28-95; 8:45 am]
BILLING CODE 4910-14-M
Complete official Federal Register PDF
FR Doc. 95-30972 Management Official Interlocks
[Federal Register Volume 60, Number 250 (Friday, December 29, 1995)]
[Proposed Rules]
[Pages 67424-67441]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30972]
[[Page 67423]]
_______________________________________________________________________
Part III
Department of the Treasury
Office of the Comptroller of the Currency
12 CFR Part 26
Federal Reserve System
12 CFR Part 212
Federal Deposit Insurance Corporation
12 CFR Part 348
Department of the Treasury
Office of Thrift Supervision
12 CFR Part 563f
_______________________________________________________________________
Management Official Interlocks; Proposed Rule
Federal Register / Vol. 60, No. 250 / Friday, December 29, 1995 /
Proposed Rules
[[Page 67424]]
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 26
[Docket No. 95-31]
RIN 1557-AB39
FEDERAL RESERVE BOARD
12 CFR Part 212
[Docket No. R-0907]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 348
RIN 3064-AB71
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Part 563f
[Docket No. 95-204]
RIN 1150-AA95
Management Official Interlocks
AGENCIES: Office of the Comptroller of the Currency, Treasury; Board of
Governors of the Federal Reserve System; Federal Deposit Insurance
Corporation; Office of Thrift Supervision, Treasury.
ACTION: Joint notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Office of the Comptroller of the Currency (OCC), Board of
Governors of the Federal Reserve System (Board), Federal Deposit
Insurance Corporation (FDIC), and Office of Thrift Supervision (OTS)
(collectively, the agencies) propose to revise their rules regarding
management interlocks. The proposal conforms the interlocks rules to
recent statutory changes, modernizes and clarifies the rules, and
reduces unnecessary regulatory burdens where feasible, consistent with
statutory requirements.
DATES: Comments must be received by February 27, 1996.
ADDRESSES: Comments should be directed to:
OCC: Office of the Comptroller of the Currency, Communications
Division, 250 E Street, SW, Washington, DC 20219, Attention: Docket No.
95-31. Comments will be available for public inspection and
photocopying at the same location. In addition, comments may be sent by
facsimile transmission to FAX number (202) 874-5274 or by internet mail
to [email protected]
Board: William W. Wiles, Secretary, Board of Governors of the
Federal Reserve System, Docket No. R-0907, 20th Street and Constitution
Avenue, NW, Washington, DC 20551. Comments addressed to Mr. Wiles may
also be delivered to the Board's mail room between 8:45 a.m. and 5:15
p.m., and to the security control room outside of those hours. Both the
mail room and control room are accessible from the courtyard entrance
on 20th Street between Constitution Avenue and C Street, NW. Comments
may be inspected in room MP-500 between 9:00 a.m. and 5:00 p.m., except
as provided in Sec. 261.8 of the Board's Rules Regarding Availability
of Information, 12 CFR 261.8.
FDIC: Jerry L. Langley, Executive Secretary, Attention: Room F-402,
Federal Deposit Insurance Corporation, 550 17th Street, NW, Washington,
DC 20429. Comments may be delivered to room F-400, 1776 F Street, NW,
Washington, DC 20429, on business days between 8:30 a.m. and 5:00 p.m.
or sent by facsimile transmission to FAX number 202/898-3838. Internet:
[email protected] Comments will be available for inspection and
photocopying in room 7118, 550 17th Street, NW, Washington, DC 20429,
between 8:30 a.m. and 5:00 p.m. on business days.
OTS: Chief, Dissemination Branch, Records Management and
Information Policy, Office of Thrift Supervision, 1700 G Street, NW,
Washington, DC 20552, Attention Docket No. 95-204. These submissions
may be hand delivered to 1700 G Street, NW, from 9:00 A.M. to 5:00 P.M.
on business days; they may be sent by facsimile transmission to FAX
number (202) 906-7755. Comments over 25 pages in length should be sent
to FAX number (202) 906-6956. Comments will be available for inspection
at 1700 G Street, NW, from 9:00 A.M. until 4:00 P.M. on business days.
FOR FURTHER INFORMATION CONTACT:
OCC: Sue E. Auerbach, Senior Attorney, Bank Activities and
Structure Division (202) 874-5300; Emily R. McNaughton, National Bank
Examiner, Credit & Management Policy (202) 874-5170; Jackie Durham,
Senior Licensing Policy Analyst (202) 874-5060; or Mark J. Tenhundfeld,
Senior Attorney, Legislative and Regulatory Activities (202) 874-5090.
Board: Thomas M. Corsi, Senior Attorney (202/452-3275), or Tina
Woo, Attorney (202/452-3890), Legal Division, Board of Governors of the
Federal Reserve System. For the hearing impaired only,
Telecommunication Device for Deaf (TTD), Dorothea Thompson (202/452-
3544), Board of Governors of the Federal Reserve System, 20th and C
Streets, NW, Washington DC 20551.
FDIC: Curtis Vaughn, Examination Specialist, Division of
Supervision, (202) 898-6759; or Mark Mellon, Counsel, Regulation and
Legislation Section, Legal Division, (202) 898-3854, Federal Deposit
Insurance Corporation, 550 17th Street, NW., Washington, DC 20429.
OTS: David Bristol, Senior Attorney, Business Transactions
Division, (202) 906-6461; or Donna Miller, Program Manager, Supervision
Policy, (202) 906-7488.
SUPPLEMENTARY INFORMATION:
Background
Section 303 of the Riegle Community Development and Regulatory
Improvement Act of 1994 (CDRI Act)
Section 303(a) of the CDRI Act (12 U.S.C. 4803(a)) requires the
OCC, OTS, Board, and FDIC to review their regulations in order to
streamline and modify the regulations to improve efficiency, reduce
unnecessary costs, and eliminate unwarranted constraints on credit
availability. Section 303(a) also requires the agencies to work jointly
to make uniform all regulations and guidelines implementing common
statutory or supervisory policies. The agencies have reviewed their
respective management interlocks regulation with these purposes in mind
and, as is explained in greater detail in the text that follows,
propose to amend the regulations in ways designed to meet the goals of
section 303(a).\1\
\1\ The National Credit Union Administration has participated in
the interagency effort to revise the management interlocks
regulations and intends to publish a separate Notice of Proposed
Rulemaking revising 12 CFR part 711 in the near future.
---------------------------------------------------------------------------
Summary of Statutory Changes
The CDRI Act amended the Depository Institution Management
Interlocks Act (12 U.S.C. 3201-3208) (Interlocks Act) by removing the
agencies' broad authority to exempt otherwise impermissible interlocks
and replacing it with the authority to exempt interlocks under more
narrow circumstances. The CDRI Act also required a depository
organization with a ``grandfathered'' interlock to apply for an
extension of the grandfather period if the organization wanted to keep
the interlock in place.\2\
\2\ The agencies completed their review of requests for
extensions by March 23, 1995, as directed by the statute. Therefore,
the provision regarding extending the grandfather period is moot for
purposes of this regulation.
[[Page 67425]]
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After the changes made by the CDRI Act, a person subject to the
Interlocks Act's restrictions seeking an exemption from those
restrictions must qualify either for a ``regulatory standards''
exemption (the Regulatory Standards exemption) or an exemption under a
``management official consignment program'' (the Management Consignment
exemption). An applicant seeking a Regulatory Standards exemption must
submit a board resolution certifying that no other candidate from the
relevant community has the necessary expertise to serve as a management
official, is willing to serve, and is not otherwise prohibited by the
Interlocks Act from serving. Before granting the exemption request, the
appropriate agency must find that the individual is critical to the
institution's safe and sound operations, that the interlock will not
produce an anticompetitive effect, and that the management official
meets any additional requirements imposed by the agency. Under the
Management Consignment exemption, the appropriate agency may permit an
interlock that otherwise would be prohibited by the Interlocks Act if
the agency determines that the interlock would improve the provision of
credit to low- and moderate-income areas, increase the competitive
position of a minority- or woman-owned institution, or strengthen the
management of a newly chartered institution or an institution that is
in an unsafe or unsound condition. (See text following ``Management
Consignment exemption'' in this Preamble for a discussion regarding
interlocks involving newly chartered institutions or institutions that
are in an unsafe or unsound condition.)
The proposal reflects these statutory changes, and streamlines and
clarifies the interlocks regulations in various respects. These changes
are discussed in the text that follows. The agencies invite comments on
all aspects of this proposal.
Discussion
The following is a section-by-section discussion of the proposed
revisions.
Authority, Purpose, and Scope
This section in the agencies' current regulations identifies the
Interlocks Act as the statutory authority for the management interlocks
regulation. It also states that the purpose of the rules governing
management interlocks is to foster competition between unaffiliated
institutions. Finally, this section currently identifies the types of
institutions to which each agency's regulation applies.
The proposed rule restates these provisions and, in the OCC
proposed rule, uses the term ``District bank'' to describe banks
operating under the Code of Laws of the District of Columbia. (See
definition of ``District bank'' at proposed Sec. 26.2(k).)
Definitions
Each of the agencies' current regulations sets forth definitions of
key terms used in the regulation.
The proposed regulations change some of the current definitions. A
discussion of the substantive differences between the current rules and
proposals follows.
Anticompetitive Effect
The current regulations neither use nor define the term
``anticompetitive effect.''
The proposed regulations define the term to mean ``a monopoly or
substantial lessening of competition.'' This term is used in the
Regulatory Standards exemption. Under that exemption, the appropriate
agency may approve a request for an exemption to the Interlocks Act if,
among other things, the agency finds that continuation of service by
the management official does not produce an anticompetitive effect with
respect to the affected institution. The statute does not define the
term ``anticompetitive effect,'' nor does the legislative history to
the CDRI Act point to a particular definition.
The context of the Regulatory Standards exemption suggests,
however, that the agencies should apply the term ``anticompetitive
effect'' in a manner that permits interlocks that present no
substantial lessening of competition. By prohibiting an interlock that
would result in a monopoly or substantial lessening of competition, the
proposed definition preserves the free flow of credit and other banking
services that the Interlocks Act is designed to protect. Another
benefit of the proposed definition is that it is familiar to the
banking industry, given that it is derived from the Bank Merger Act (12
U.S.C. 1828(c)). This enables the agencies to accomplish the
legislative purpose of the Interlocks Act without imposing unnecessary
regulatory burdens.
Area Median Income
The current regulations do not use the term ``area median income,''
and, therefore, do not define this term.
The proposed regulations define ``area median income'' as the
median family income for the metropolitan statistical area (MSA) in
which an institution is located or the statewide nonmetropolitan median
family income if an institution is located outside an MSA. This term is
used in the definition of ``low- and moderate-income areas,'' which in
turn is used in the implementation of the Management Consignment
exemption.
Contiguous or Adjacent Cities, Towns, or Villages
The current regulations define ``adjacent cities, towns, or
villages'' as cities, towns, or villages whose borders are within 10
road miles from each other. They also define ``contiguous cities,
towns, or villages'' as cities, towns, or villages whose borders touch.
The statute and regulations apply these terms to prohibit interlocks
involving small institutions that are located in contiguous or adjacent
cities, towns, or villages.
The proposed regulations combine these two definitions, given that
contiguous cities, towns, or villages necessarily are within 10 miles
of each other.
Critical
The current regulations neither use nor define ``critical.''
The proposed regulations define the term in connection with the
Regulatory Standards exemption. Under that exemption, the appropriate
agency must find that a proposed management official is critical to the
safe and sound operations of the affected institution. 12 U.S.C.
3207(b)(2)(A). Neither the statute nor its legislative history define
``critical.''
The agencies are concerned that a narrow interpretation of this
term would nullify the Regulatory Standards exemption. If someone were
``critical'' to the safe and sound operations of an institution only if
the institution would fail but for the service of the person in
question, the exemption would have little relevance because the
standard would be practically impossible to meet. Given that Congress
clearly intended for the Regulatory Standards exemption to permit
interlocks under some circumstances, the question thus becomes how to
define those circumstances.
This proposal addresses the issue by stating that the agencies will
consider a person to be critical to a depository organization if the
person will play an important role in helping the institution either
address current problems or maintain safe and sound operations going
forward. The agencies believe that this approach is consistent with the
[[Page 67426]]
legislative intent by insuring that only persons of demonstrated
expertise and importance to the institution will be allowed to serve
pursuant to a Regulatory Standards exemption.
Low- and Moderate-Income Areas
The current regulations permit interlocks under certain
circumstances involving a depository organization located ``in a low
income or other economically depressed area.'' However, the current
rules do not define ``low income'' or ``economically depressed.''
Section 209(c)(1)(A) of the Interlocks Act (12 U.S.C.
3207(c)(1)(A)) authorizes the appropriate agency to permit interlocks
pursuant to the Management Consignment exemption if the agency
determines that the proposed service would ``improve the provision of
credit to low- and moderate-income areas.'' The proposed regulations
define ``low- and moderate-income areas'' as areas where the median
family income is less than 100 percent of the area median income. This
definition is consistent with Title I, Subtitle A of the CDRI Act (the
Community Development Banking and Financial Institutions Act of 1994)
(12 U.S.C. 4701-4718), which, like the Management Consignment exemption
affecting institutions in low- and moderate-income areas, is intended
to assist the flow of credit into economically depressed areas. Section
103(17) of the CDRI Act (12 U.S.C. 4702(17)) defines ``low income'' to
mean not more than 80 percent of the area median income. The agencies
believe that Congress, by using the term ``low- and moderate-income''
in the Management Consignment exemption, intended for that term to
apply to an area where the median family income exceeds 80 percent of
the median income for the area. The agencies have selected 100 percent
of the area median income as the cutoff for defining ``low- and
moderate-income areas'' because they believe that a higher threshold
would permit interlocks that would not improve the provision of credit
to low- and moderate-income areas.
Management Official
The current regulations define ``management official'' to include
an employee or officer ``with management functions'' (including a
branch manager), a director, a trustee of an organization under the
control of trustees, or any person who has a representative or nominee
serving in such capacity. The definition excludes (1) a person whose
management functions relate either exclusively to the business of
retail merchandising or manufacturing or principally to business
outside the United States of a foreign commercial bank and (2) a person
excluded by section 202(4) of the Interlocks Act (12 U.S.C. 3201(4)).
The proposed regulations adopt the definition of ``management
official'' set forth in the current rules, except that the phrase ``an
employee or officer with management functions'' is removed. It is
replaced by the term ``senior executive officer'' as defined by each of
the agencies in their regulations pertaining to the prior notice of
changes in senior executive officers, which implement section 32 of the
Federal Deposit Insurance Act (FDI Act) (12 U.S.C. 1831i) as added by
section 914 of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (FIRREA).
The agencies are proposing this change to eliminate the uncertainty
and attendant compliance burden created by the ambiguous term
``management functions.'' The proposals incorporate specific
illustrative examples of positions at depository organizations that
will be treated as senior executive officers. See 12 CFR 5.51(c)(3)
(OCC); 12 CFR 225.71(a) (Board); 12 CFR 303.14(a)(3) (FDIC); and 12 CFR
574.9(a)(2) (OTS). The agencies believe that these definitions will
allow depository organizations to identify impermissible interlocks
with greater certainty and thus will enhance compliance. The agencies
request comment on the advisability of defining ``management official''
by using ``senior executive officer'' rather than ``employee or officer
with management functions.''
The current definition of ``management official'' exempts those
individuals whose management functions relate to retail merchandising
or manufacturing. Stated another way, the current exemption applies to
a category of persons whose responsibilities are unrelated to the
business of a deposit-taking institution.
The agencies specifically ask commenters to address whether the
agencies should exempt a broader category of management officials whose
duties are unrelated to the provision of financial services by a
depository institution or depository holding company, and if so, how
the agencies should define that category of excluded officials.
Relevant Metropolitan Statistical Area (RMSA)
The current regulations define ``relevant metropolitan statistical
area'' as an MSA, a primary MSA, or a consolidated MSA that is not
comprised of designated primary MSAs as defined by the Office of
Management and Budget (OMB). This definition is derived from section
203(1) of the Interlocks Act (12 U.S.C. 3202(1)).
The proposed regulations define ``relevant metropolitan statistical
area (RMSA)'' as an MSA, a primary MSA, or a consolidated MSA that is
not comprised of designated primary MSAs, to the extent that the OMB
defines and applies these terms. This change reflects the fact that the
OMB defines ``consolidated MSA'' to include two or more primary MSAs.
Given that consolidated MSAs, by the OMB's definition, are comprised of
primary MSAs, the reference to consolidated MSAs in the Interlocks Act
and the agencies' regulations is inappropriate. The proposed change
enables the agencies to implement the statute in a way that complies
with both the spirit and the letter of the Interlocks Act.
Representative or Nominee
The current regulations define ``representative or nominee'' as a
person who serves as a management official and has an express or
implied obligation to act on behalf of another person with respect to
management responsibilities. The current definition goes on to state
that the determination of whether someone is a representative or
nominee depends on the facts of a particular case and that certain
relationships (such as family, employment, and so on) may evidence an
express or implied obligation to act.
The proposed regulations also define ``representative or nominee''
as someone who serves as a management official and has an obligation to
act on behalf of someone else. The proposed definition deletes the rest
of the current definition, however, and inserts in lieu thereof a
statement that the appropriate agency will find that someone has an
obligation to act on behalf of someone else only if there is an
agreement (express or implied) to act on behalf of another. The
agencies propose this change to clarify that the determination that a
representative or nominee situation exists will depend on whether there
is a basis to conclude that an agreement exists to act on someone's
behalf. The agencies note that the current definition provides specific
guidance for determining when a representative or nominee relationship
might be found to exist, and request comment on whether the current
definition, the proposed definition, or another definition is
preferable.
Prohibitions
The current regulations prohibit interlocks in the following three
[[Page 67427]]
instances. First, no two unaffiliated depository organizations may have
an interlock if they (or their depository institution affiliates) have
depository institution offices in the same community. Second, a
depository organization may not have an interlock with any unaffiliated
depository organization if either depository organization has assets
exceeding $20 million and the depository organizations (or depository
institution affiliates of either) have depository institution offices
in the same RMSA.3 Third, if a depository organization has total
assets exceeding $1 billion, it (and its affiliates) may not have an
interlock with any depository organization with total assets exceeding
$500 million (or affiliate thereof), regardless of location.
3 A community as that term is defined in the proposals is
smaller than an RMSA. There may be several communities in one RMSA.
---------------------------------------------------------------------------
The proposed regulations amend the rules as they apply to
institutions with assets of less than $20 million to better conform to
the purposes of the Interlocks Act. Whereas the current rules prohibit
interlocks in an RMSA if one of the organizations has total assets of
$20 million or more, the proposed rules would apply the RMSA-wide
prohibition only if both organizations have total assets of $20 million
or more. Interlocks within a community involving unaffiliated
depository organizations would continue to be prohibited.
The agencies believe that this proposed change is consistent with
both the language and the intent of the Interlocks Act. While the
statute uses the plural ``depository institutions'' in section 203(1)
of the Interlocks Act (12 U.S.C. 3202(1)), in context, neither the
statute nor its legislative history compels the conclusion that the
interlock must involve two institutions with less than $20 million in
assets before the less restrictive prohibition applies.
The Interlocks Act seeks to prohibit interlocks that could enable
two institutions to engage in anticompetitive behavior. However, an
institution with total assets of less than $20 million is likely to
derive most of its business from the community in which it is located
and is unlikely to compete with institutions that do not have offices
in that community. Therefore, interlocks involving one institution with
assets under $20 million and another institution with assets of at
least $20 million not in the same community are not likely to lead to
the anticompetitive conduct that the Interlocks Act is designed to
prohibit.
The agencies believe, moreover, that the proposed change will
promote rather than inhibit competition. Expanding the pool of
managerial talent for institutions with assets under $20 million could
enhance the ability of smaller institutions to compete by improving the
management of these institutions.
The proposed regulations reflect the change affecting depository
organizations with less than $20 million in total assets. They also set
forth the prohibition against interlocks involving large depository
organizations but do not change the substance of that prohibition. The
proposed regulations change the style of all three prohibitions in
order to make them easier to understand.
The agencies invite comment on any aspect of this proposed section.
The agencies specifically seek comment on whether the proposed
reinterpretation of 12 U.S.C. 3202(1) might result in anticompetitive
effects and thus run counter to the legislative intent of the
Interlocks Act. For example, could the proposed change enable a large
bank to engage in anticompetitive conduct by creating interlocks with
one or more smaller depository institutions located in the same RMSA
but not in the same community (a ``hub and spokes'' interlock)? The
agencies also seek comment on whether the final rule should
specifically address such situations.
Interlocking Relationships Expressly Permitted by Statute
The current regulations restate most of the exemptions that are
expressly permitted by the Interlocks Act and list those exemptions
that the agencies have permitted by regulation pursuant to the broad
exemptive authority that applied before the enactment of the CDRI Act.
The current regulations also address interlocks involving diversified
savings and loan holding companies.
The proposed regulations state the exemptions found in 12 U.S.C.
3204(1)-(8).4 The proposals reorder the exemptions set forth in
the current regulations in order to conform the list of exemptions to
the list set forth in the Interlocks Act.
4 The Interlocks Act contains an additional exemption for
savings associations and savings and loan holding companies that
have issued stock in connection with a qualified stock issuance
pursuant to section 10(q) of the Home Owners' Loan Act (12 U.S.C.
1467a(q)). See 12 U.S.C. 3204(9). The OTS therefore proposes to
continue to list an additional exemption in its interlocks
regulation which the other agencies do not list. Another exemption
provides for interlocks as a result of an emergency acquisition of a
savings association authorized in accordance with section 13(k) of
the Federal Deposit Insurance Act (12 U.S.C. 1823(k)) if the FDIC
has given its approval to the interlock. The FDIC therefore proposes
to continue to list an additional exemption in its management
interlocks regulation which the other agencies do not list.
---------------------------------------------------------------------------
Regulatory Standards Exemption
The current regulations contain no Regulatory Standards exemption.
The proposed regulations set forth the standards that a depository
organization must satisfy in order to obtain a Regulatory Standards
exemption. The proposal implements the requirement regarding
certification by allowing a depository organization's board of
directors (or the organizers of a depository organization that is being
formed) to certify to the appropriate agency that no other qualified
candidates have been found after undertaking reasonable efforts to
locate other qualified candidates who are not prohibited from service
under the Interlocks Act. If read narrowly, the Interlocks Act could
require a depository organization to evaluate every person in a given
locale that might be qualified and interested. This would create a
requirement that, in practice, would be impossible to satisfy. Given
that Congress would not have included an exemption that would have no
practical application, the agencies believe that the proposed
``reasonableness'' standard is consistent with the legislative intent.
The proposed regulations also set forth presumptions that the
agencies will apply when reviewing an application for a Regulatory
Standards exemption. First, each agency will presume that an interlock
will not have an anticompetitive effect if it involves institutions
that, if merged, would not trigger a challenge from the agencies on
competitive grounds. This presumption is unavailable, however, for
interlocks subject to the Major Assets prohibition.
Generally, the agencies will not object to a merger on competitive
grounds if the post-merger Herfindahl-Hirschman Index (HHI) for the
market is less than 1800 and the merger increases the HHI by 200 points
or less. This presumption will enable applicants to avoid the
unnecessary burden of submitting a competitive analysis in several
instances. The agencies have found this HHI benchmark to be a useful
guide to evaluating anticompetitive effects of interlocks.5
However, simply analyzing the HHI for the two organizations in a
potential interlock does not take into
[[Page 67428]]
account any anticompetitive effects that might stem from a previously
existing interlock. Accordingly, the agencies are requesting comments
as to how other interlocks involving depository organizations should be
viewed in applying this presumption.
\5\ See, e.g., the OCC's Bank Merger Competitive Analysis Screen
(OCC Advisory Letter 95-4, July 18, 1995); Department of Justice
Merger Guidelines (49 FR 26823, June 29, 1984) (applied by the
Board); FDIC Statement of Policy: Bank Merger Transactions (54 FR
39045, Sept. 22, 1989).
---------------------------------------------------------------------------
The second presumption to be applied by the agencies is that a
person is critical to an institution's safe and sound operations if the
agencies also approved that individual under section 914 of FIRREA and
the institution in question either was a newly chartered institution,
failed to meet minimum capital requirements, or otherwise was in a
``troubled condition'' as defined in the reviewing agency's section 914
regulation at the time the section 914 filing was approved.6
\6\ This presumption also applies to individuals whose service
as a senior executive officer is approved by the OCC pursuant to the
standard conditions imposed on newly chartered national banks and to
individuals whose service as a management official is approved by
the FDIC as a condition of a grant of deposit insurance prior to the
opening of the depository institution.
---------------------------------------------------------------------------
The agencies invite comment on the utility of the proposed
presumptions and on whether other presumptions also should apply.
The proposed regulations also address the duration of an interlock
permitted under the Regulatory Standards exemption. The statute does
not require that these interlocks terminate. In light of this open-
ended grant of authority, the agencies are not proposing a specific
term for a permitted exemption. Instead, the agencies may require an
institution to terminate the interlock if an agency determines that the
management official in question either no longer is critical to the
safe and sound operations of the affected organization or that
continued service will produce an anticompetitive effect. The agencies
will provide affected organizations an opportunity to submit
information before they make a final determination to require
termination of an interlock.
Grandfathered Interlocking Relationships--Removed
The current regulations restate the grandfather provisions set
forth in section 206 of the Interlocks Act (12 U.S.C. 3205). Section
338(a) of the CDRI Act authorizes the agencies to extend a
grandfathered interlock for an additional five years if the management
official in question satisfied the statutory criteria for obtaining an
extension.
The proposed regulations remove the sections addressing the
grandfather exemption because they are unnecessary and redundant in
light of the statute. Individuals who wished to extend their exemption
already have applied for and received an exemption if they met the
statutory criteria. The grandfathered exemptions will expire on
November 10, 1998, unless Congress amends the Interlocks Act again to
provide another opportunity for an extension.
Management Consignment Exemption
The current regulations set forth a number of instances in which
the agencies may permit an exemption to the Interlocks Act. However,
the statutory provisions authorizing the agencies to grant exemptions
have been amended, thereby requiring that the current regulations be
amended as well. The Management Consignment exemption set forth in
section 209(c) of the Interlocks Act (12 U.S.C. 3207(c)) is modelled
after certain exemptions that appear in the agencies' current
regulations.
The proposed regulations implement the Management Consignment
exemption, and restate the statutory criteria, with three
clarifications. First, the proposed rules state that the agencies
consider a ``newly chartered institution'' to be an institution that
has been chartered for less than two years at the time it files an
application for exemption. This standard is consistent with certain
other banking agency thresholds for determining when an institution is
considered newly chartered (see, e.g., 12 CFR 5.51(d), 225.72(a)(1);
303.14(b)).
Second, the proposal clarifies that the exemption available for
``minority- and women-owned institutions'' is available for an
institution that is owned either by minorities or women. In noting the
types of exemptions that the Federal banking agencies have approved,
the House Conference Report to the CDRI Act (H.R. Conf. Rep. No. 652,
103d Cong., 2d Sess. 181 (1994)) (Conference Report) states that the
types of institutions that have received exemptions include those that
are ``owned by women or minorities.'' These exemptions ultimately were
codified in the Interlocks Act. Accordingly, the agencies have
concluded that Congress intended the Management Consignment exemption
to assist institutions owned by women and/or by minorities, but did not
intend to require the institution to be owned by both.
Third, the proposal permits an interlock if the interlock would
strengthen the management of either a newly chartered institution or an
institution that is in an unsafe or unsound condition. Section
209(c)(1)(C) of the Interlocks Act (12 U.S.C. 3207(c)(1)(C)) permits an
exemption if the interlock would ``strengthen the management of newly
chartered institutions that are in an unsafe or unsound condition.''
However, this provision contains what appears on its face to be an
error, given that an exemption limited to situations involving newly
chartered institutions that also are in an unsafe and unsound condition
would have no practical utility. The chartering agencies do not approve
an application for a bank or thrift charter unless the applicant
seeking a charter can demonstrate that the proposed new financial
institution will operate in a safe and sound manner for the foreseeable
future. While there may be an extraordinary instance where a newly
chartered institution immediately experiences unforeseen problems so
severe that they threaten the safety and soundness of that institution,
there is nothing in the legislative history to suggest that Congress
intended to limit the Management Consignment exemption to such rare
instances.
Moreover, the legislative history of the CDRI Act suggests that the
agencies are to apply the Management Consignment exemption in cases
involving either newly chartered institutions or institutions that are
in an unsafe or unsound condition. The Conference Report notes that the
agencies have used their exemptive authority to grant exemptions in
limited cases where institutions ``are particularly in need of
management guidance and expertise to operate in a safe and sound
manner.'' Id. The Conference Report goes on to state that ``Examples of
exceptions permissible under an agency management official consignment
program include improving the provision of credit to low- and moderate-
income areas, increasing the competitive position of minority- and
women-owned institutions, and strengthening he [sic] management of
newly chartered institutions or institutions that are in an unsafe or
unsound condition.'' Id. at 182 (emphasis added).
Finally, Congress used the exemptions in the agencies' current
rules as the model for the Management Consignment exemption. See id. at
181-182. These exemptions distinguish newly chartered institutions from
institutions that are in an unsafe or unsound condition. The reference
in the CDRI Act's legislative history to the current regulatory
exemptions suggests that Congress intended to codify these exemptions.
For these reasons, the agencies propose to permit exemptions
pursuant
[[Page 67429]]
to the Management Consignment exemption if the management official will
strengthen either a newly chartered institution or an institution that
is in an unsafe or unsound condition. Commenters are requested to
address this approach.
The proposals set forth two presumptions that the agencies will
apply in connection with an application for an exemption under the
Management Consignment exemption. First, the agencies will presume that
an individual is capable of strengthening the management of an
institution that has been chartered for less than two years if the
reviewing agency approved the individual to serve as a management
official of that institution pursuant to section 914 of FIRREA.7
Second, the agencies will presume that an individual is capable of
strengthening the management of an institution that is in an unsafe or
unsound condition if the reviewing agency approved the individual to
serve under section 914 as a management official of that institution at
a time when the institution was not in compliance with minimum capital
requirements or otherwise was in a ``troubled condition.''
\7\ This presumption also applies to an individual whose service
as a senior executive officer of a national bank is approved
pursuant to the standard conditions imposed by the OCC on newly
chartered national banks and to individuals whose service as a
management official is approved by the FDIC as a condition of a
grant of deposit insurance prior to the opening of the depository
institution.
---------------------------------------------------------------------------
The agencies believe that presumptions of suitability are less
valid when applied to the other Management Consignment exemptions
because there is no reason to conclude that a management official
approved under section 914 necessarily will improve the flow of credit
to low- and moderate-income areas or increase the competitive position
of minority- or woman-owned institutions. No presumption regarding
effects on competition is proposed, given that this is not a factor to
be considered by the agencies when reviewing an application for a
Management Consignment exemption.
The agencies seek comment on the utility of the proposed
presumptions and on whether additional presumptions should apply as
well.
The proposed regulations set forth the limits on the duration of a
Management Consignment exemption. The Interlocks Act limits a
Management Consignment exemption to two years, with a possible
extension for up to an additional two years if the applicant satisfies
at least one of the criteria for obtaining a Management Consignment
exemption. The proposed regulations implement this limitation by
requiring interested parties to submit an application for an extension
at least 30 days before the expiration of the initial term of the
exemption and by clarifying that the presumptions that apply to initial
applications also apply to extension applications.
Change in Circumstances
The current regulations provide a 15-month grace period for
nongrandfathered interlocks that become impermissible due to a change
in circumstances. This period may be shortened by the agencies under
appropriate circumstances.
The proposed regulations revise the style of this section in the
current regulations but not its substance.
The agencies seek comment on the proposed continued availability of
a grace period.
Enforcement
The current regulations set forth the jurisdiction of the agencies
that enforce the Interlocks Act.
The proposed regulations simplify the style of this section in the
current regulations but not its substance.
Small Market Share Exemption
In 1994, the OCC, Board, and FDIC published separate notices of
proposed rulemaking seeking comment on a proposed exemption for
interlocks involving institutions that, on a combined basis, would
control less than 20 percent of the deposits in a community or relevant
MSA. These agencies published small market share exemption proposals
pursuant to the broad exemptive authority vested in the agencies prior
to the enactment of the CDRI Act. However, as previously noted, the
CDRI Act amended the agencies' broad rulemaking authority by
authorizing the agencies to grant exemptions only in more narrow
circumstances. In light of this statutory change, the three agencies
believe that it would be inappropriate to adopt the proposed small
market share exemption. The FDIC already has withdrawn its proposal
regarding the small market share exemption (see 60 FR 7139 (February 7,
1995)). The OCC and Board hereby withdraw their respective proposals.
Paperwork Reduction Act
The OCC, FDIC, and OTS invite comment on:
(1) Whether the proposed collection of information contained in
this notice of proposed rulemaking is necessary for the proper
performance of each agency's functions, including whether the
information has practical utility;
(2) The accuracy of each agency's estimate of the burden of the
proposed information collection;
(3) Ways to enhance the quality, utility, and clarity of the
information to be collected; and
(4) Ways to minimize the burden of the information collection on
respondents, including through the use of automated collection
techniques or other forms of information technology.
Respondents are not required to respond to this collection of
information unless it displays a currently valid OMB control number.
OCC: The collection of information requirements contained in this
notice of proposed rulemaking have been submitted to the Office of
Management and Budget for review in accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. 3507(d)). Comments on the collections
of information should be sent to the Office of Management and Budget,
Paperwork Reduction Project (1557-0196), Washington, DC 20503, with
copies to the Legislative and Regulatory Activities Division (1557-
0196), Office of the Comptroller of the Currency, 250 E Street, SW,
Washington, DC 20219.
The collection of information requirements in this proposed rule
are found in 12 CFR 26.4(h)(1)(i), 26.5(a)(1), 26.5(a)(2), 26.6(a), and
26.6(c). This information is required to evidence compliance with the
requirements of the Interlocks Act by national banks and District
banks. The likely respondents are national banks and District banks.
Estimated average annual burden hours per respondent: 3 hours.
Estimated number of respondents: 100.
Start-up costs to respondents: None.
Board: In accordance with section 3506 of the Paperwork Reduction
Act of 1995 (44 U.S.C. Ch. 35; 5 CFR 1320 Appendix A.1), the Board
reviewed the proposed rule under the authority delegated to the Board
by the Office of Management and Budget. Comments on the collections of
information should be sent to the Office of Management and Budget,
Paperwork Reduction Project (7100-0046, 7100-0134, 7100-0171, 7100-
0266), Washington, DC 20503, with copies of such comments to be sent to
Mary M. McLaughlin, Federal Reserve Board Clearance Officer, Division
of Research and Statistics, Mail Stop 97, Board of Governors of the
Federal Reserve System, Washington, DC 20551.
The collection of information requirements in this proposed
rulemaking are found in 12 CFR
[[Page 67430]]
212.4(h)(1)(i), 212.5(a)(1), 212.5(a)(2), 212.6(a), and 212.6(c). This
information is required to evidence compliance with the requirements of
the Interlocks Act as amended by section 338 of the CDRI Act. The
respondents are state member banks and subsidiary depository
institutions of bank holding companies.
Currently, information on management official interlocks is
gathered as a part of the following applications: membership in the
Federal Reserve System (OMB No. 7100-0046); state member bank mergers
(OMB No. 7100-0266); changes in bank control (OMB No. 7100-0134); and
bank holding company acquisitions of depository institutions (OMB No.
7100-0171). The estimated portion of burden for each application that
is attributable to management interlocks averages 4 hours, and the
burden ranges from as much as 6 hours to as little as 0.5 hours. It is
estimated that 822 applications are filed annually, with an estimate of
3,288 hours of annual burden. Based on an hourly cost of $20, the
annual cost to the public is estimated to be $65,760. The Federal
Reserve believes that the proposed rule will have a minimal effect on
respondent burden.
The Federal Reserve may not conduct or sponsor, and an organization
is not required to respond to, these information collections unless
they display currently valid OMB control numbers.
No issues of confidentiality under the provisions of the Freedom of
Information Act normally arise for the applications.
Comments are invited on: (1) Whether the proposed revised
collections of information are necessary for the proper performance of
the Federal Reserve's functions, including whether the information has
practical utility; (2) the accuracy of the Federal Reserve's estimate
of the burden of the proposed information collections, including the
cost of compliance; (3) ways to enhance the quality, utility, and
clarity of the information to be collected; and (4) ways to minimize
the burden of information collection on respondents, including through
the use of automated collection techniques or other forms of
information technology.
FDIC: The collections of information contained in this notice of
proposed rulemaking have been submitted to the Office of Management and
Budget for review in accordance with the Paperwork Reduction Act of
1995 (44 U.S.C. 3507(d)). Comments on the collections of information
should be sent to the Office of Management and Budget, Paperwork
Reduction Project (3604-0092), Washington, DC 20503, with copies of
such comments to be sent to Steven F. Hanft, Office of the Executive
Secretary, Room F-453, Federal Deposit Insurance Corporation, 550 17th
Street, NW., Washington, DC 20429.
The collection of information requirements in this proposed
regulation are found in 12 CFR 348.4(i)(1)(i), 348.5(a)(1),
348.5(a)(2), 348.6(a), and 348.6(c). This information is required to
evidence compliance with the requirements of the Interlocks Act as
amended by section 338 of the CDRI Act. The likely respondents are
insured nonmember banks.
Estimated number of respondents: 6 applicants per year.
Estimated average annual burden per respondent: 4 hours.
Estimated annual frequency of recordkeeping: Not applicable (one-
time application).
Estimated total annual recordkeeping burden: 24 hours.
OTS: The collection of information requirements contained in this
notice of proposed rulemaking have been submitted to the Office of
Management and Budget for review in accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. 3507(d)). Comments on the collection
of information should be sent to the Office of Management and Budget,
Paperwork Reduction Project (1550), Washington, DC 20503, with copies
to the Business Transactions Division (1550), Office of Thrift
Supervision, 1700 G Street, NW, Washington, DC.
The collection of information requirements in this proposed rule
are found in 12 CFR 563f.4(h)(1)(i), 563f.5(a)(1), 563f.5(a)(2),
563f.6(a), and 563f.6(c). This information is required to evidence
compliance with the requirements of the Interlocks Act by savings
associations. The likely respondents are national savings associations.
Estimated average annual burden hours per respondent: 4 hours.
Estimated number of respondents: 8.
Start-up costs to respondents: None.
Regulatory Flexibility Act
Pursuant to section 605(b) of the Regulatory Flexibility Act (RFA)
(5 U.S.C. 605(b)), the initial regulatory flexibility analysis
otherwise required under section 603 of the RFA (5 U.S.C. 603) is not
required if the head of the agency certifies that the rule will not
have a significant economic impact on a substantial number of small
entities and the agency publishes such certification and a succinct
statement explaining the reasons for such certification in the Federal
Register along with its general notice of proposed rulemaking.
Pursuant to section 605(b) of the RFA, the agencies hereby certify
that this proposed rule will not have a significant economic impact on
a substantial number of small entities. The agencies expect that this
proposal will not (1) have significant secondary or incidental effects
on a substantial number of small entities or (2) create any additional
burden on small entities. Moreover, the changes to the exemptions
available are required by the Interlocks Act. Accordingly, a regulatory
flexibility analysis is not required.
Executive Order 12866
OCC and OTS: The OCC and OTS have determined that this proposal is
not a significant regulatory action under Executive Order 12866.
Unfunded Mandates Act of 1995
OCC and OTS: Section 202 of the Unfunded Mandates Act of 1995
(Unfunded Mandates Act) requires that an agency prepare a budgetary
impact statement before promulgating a proposed rule likely to result
in a Federal mandate that may result in the annual expenditure of $100
million or more in any one year by State, local, and tribal
governments, in the aggregate, or by the private sector. If a budgetary
impact statement is required, section 205 of the Unfunded Mandates Act
requires an agency to identify and consider a reasonable number of
alternatives before promulgating a proposal.
The OCC and OTS have determined that the proposed rule will not
result in expenditures by State, local, and tribal governments, or by
the private sector, of more than $100 million in any one year.
Accordingly, neither the OCC nor the OTS has prepared a budgetary
impact statement or specifically addressed the regulatory alternatives
considered.
List of Subjects
12 CFR Part 26
Antitrust, Banks, banking, Holding companies, Management official
interlocks, National banks.
12 CFR Part 212
Antitrust, Banks, banking, Holding companies, Management official
interlocks.
12 CFR Part 348
Antitrust, Banks, banking, Holding companies.
[[Page 67431]]
12 CFR Part 563f
Antitrust, Holding companies, Management official interlocks,
Savings associations.
Office of the Comptroller of the Currency
12 CFR CHAPTER I
Authority and Issuance
For the reasons set out in the joint preamble, the OCC proposes to
revise part 26 of chapter I of title 12 of the Code of Federal
Regulations to read as follows:
PART 26--MANAGEMENT OFFICIAL INTERLOCKS
Sec.
26.1 Authority, purpose, and scope.
26.2 Definitions.
26.3 Prohibitions.
26.4 Interlocking relationships permitted by statute.
26.5 Regulatory Standards exemption.
26.6 Management Consignment exemption.
26.7 Change in circumstances.
26.8 Enforcement.
Authority: 12 U.S.C. 93a and 3201-3208.
Sec. 26.1 Authority, purpose, and scope.
(a) Authority. This part is issued under the provisions of the
Depository Institution Management Interlocks Act (Interlocks Act) (12
U.S.C. 3201 et seq.), as amended, and the OCC's general rulemaking
authority in 12 U.S.C. 93a.
(b) Purpose. The purpose of the Interlocks Act and this part is to
foster competition by generally prohibiting a management official from
serving two nonaffiliated depository organizations in situations where
the management interlock likely would have an anticompetitive effect.
(c) Scope. This part applies to management officials of national
banks, District banks, and affiliates of either.
Sec. 26.2 Definitions.
For purposes of this part, the following definitions apply:
(a) Affiliate. (1) The term affiliate has the meaning given in
section 202 of the Interlocks Act (12 U.S.C. 3201). For purposes of
that section, shares held by an individual include shares held by
members of his or her immediate family. ``Immediate family'' includes
spouse, mother, father, child, grandchild, sister, brother, or any of
their spouses, whether or not any of their shares are held in trust.
(2) For purposes of section 202(3)(B) of the Interlocks Act (12
U.S.C. 3201(3)(B)), an affiliate relationship involving a national bank
based on common ownership does not exist if the OCC determines, after
giving the affected persons the opportunity to respond, that the
asserted affiliation was established in order to avoid the prohibitions
of the Interlocks Act and does not represent a true commonality of
interest between the depository organizations. In making this
determination, the OCC considers, among other things, whether a person,
including members of his or her immediate family, whose shares are
necessary to constitute the group owns a nominal percentage of the
shares of one of the organizations and the percentage is substantially
disproportionate with that person's ownership of shares in the other
organization.
(b) Anticompetitive effect means a monopoly or substantial
lessening of competition.
(c) Area median income means:
(1) The median family income for the metropolitan statistical area
(MSA), if a depository organization is located in an MSA; or
(2) The statewide nonmetropolitan median family income, if a
depository organization is located outside an MSA.
(d) Community means city, town, or village, and contiguous or
adjacent cities, towns, or villages.
(e) Contiguous or adjacent cities, towns, or villages means cities,
towns, or villages whose borders touch each other or whose borders are
within 10 road miles of each other at their closest points. The
property line of an office located in an unincorporated city, town, or
village is the boundary line of that city, town, or village for the
purpose of this definition.
(f) Critical means important to restoring or maintaining a
depository organization's safe and sound operations.
(g) Depository holding company means a bank holding company or a
savings and loan holding company (as more fully defined in section 202
of the Interlocks Act (12 U.S.C. 3201)) having its principal office
located in the United States.
(h) Depository institution means a commercial bank (including a
private bank), a savings bank, a trust company, a savings and loan
association, a building and loan association, a homestead association,
a cooperative bank, an industrial bank, or a credit union, chartered
under the laws of the United States and having a principal office
located in the United States. Additionally, a United States office,
including a branch or agency, of a foreign commercial bank is a
depository institution.
(i) Depository institution affiliate means a depository institution
that is an affiliate of a depository organization.
(j) Depository organization means a depository institution or a
depository holding company.
(k) District bank means any State bank operating under the Code of
Law of the District of Columbia.
(l) Low- and moderate-income areas means areas where the median
family income is less than 100 percent of the area median income.
(m) Management official. (1) The term management official includes:
(i) A director;
(ii) An advisory or honorary director of a depository institution
with total assets of $100 million or more;
(iii) A senior executive officer as that term is defined in 12 CFR
5.51(c)(3);
(iv) A branch manager;
(v) A trustee of a depository organization under the control of
trustees; and
(vi) Any person who has a representative or nominee serving in any
of the capacities in this paragraph (m)(1).
(2) The term management official does not include:
(i) A person whose management functions relate exclusively to the
business of retail merchandising or manufacturing;
(ii) A person whose management functions relate principally to the
business outside the United States of a foreign commercial bank; or
(iii) A person described in the provisos of section 202(4) of the
Interlocks Act (12 U.S.C. 3201(4)) (referring to an officer of a State-
chartered savings bank, cooperative bank, or trust company that neither
makes real estate mortgage loans nor accepts savings).
(n) Office means a principal or branch office of a depository
institution located in the United States. Office does not include a
representative office of a foreign commercial bank, an electronic
terminal, or a loan production office.
(o) Person means a natural person, corporation, or other business
entity.
(p) Relevant metropolitan statistical area (RMSA) means an MSA, a
primary MSA, or a consolidated MSA that is not comprised of designated
primary MSAs to the extent that these terms are defined and applied by
the Office of Management and Budget.
(q) Representative or nominee means a natural person who serves as
a management official and has an obligation to act on behalf of another
person with respect to management responsibilities. The OCC will find
that a person has an obligation to act on
[[Page 67432]]
behalf of another person only if the first person has an agreement,
express or implied, to act on behalf of the second person with respect
to management responsibilities. The OCC will determine, after giving
the affected persons an opportunity to respond, whether a person is a
representative or nominee.
(r) Total assets. (1) The term total assets means assets measured
on a consolidated basis and reported in the most recent fiscal year-end
Consolidated Report of Condition and Income.
(2) The term total assets does not include:
(i) Assets of a diversified savings and loan holding company as
defined by section 10(a)(1)(F) of the Home Owners' Loan Act (12 U.S.C.
1467a(a)(1)(F)) other than the assets of its depository institution
affiliate;
(ii) Assets of a bank holding company that is exempt from the
prohibitions of section 4 of the Bank Holding Company Act of 1956
pursuant to an order issued under section 4(d) of that Act (12 U.S.C.
1843(d)) other than the assets of its depository institution affiliate;
or
(iii) Assets of offices of a foreign commercial bank other than the
assets of its United States branch or agency.
(s) United States means the United States of America, any State or
territory of the United States of America, the District of Columbia,
Puerto Rico, Guam, American Samoa, and the Virgin Islands.
Sec. 26.3 Prohibitions.
(a) Community. A management official of a depository organization
may not serve at the same time as a management official of an
unaffiliated depository organization if the depository organizations in
question (or a depository institution affiliate thereof) have offices
in the same community.
(b) RMSA. A management official of a depository organization may
not serve at the same time as a management official of an unaffiliated
depository organization if the depository organizations in question (or
a depository institution affiliate thereof) have offices in the same
RMSA and each depository organization has total assets of $20 million
or more.
(c) Major assets. A management official of a depository
organization with total assets exceeding $1 billion (or any affiliate
thereof) may not serve at the same time as a management official of an
unaffiliated depository organization with total assets exceeding $500
million (or any affiliate thereof), regardless of the location of the
two depository organizations.
Sec. 26.4 Interlocking relationships permitted by statute.
The prohibitions of Sec. 26.3 do not apply in the case of any one
or more of the following organizations or to a subsidiary thereof:
(a) A depository organization that has been placed formally in
liquidation, or which is in the hands of a receiver, conservator, or
other official exercising a similar function;
(b) A corporation operating under section 25 or section 25A of the
Federal Reserve Act (12 U.S.C. 601 et seq. and 12 U.S.C. 611 et seq.,
respectively) (Edge Corporations and Agreement Corporations);
(c) A credit union being served by a management official of another
credit union;
(d) A depository organization that does not do business within the
United States except as an incident to its activities outside the
United States;
(e) A State-chartered savings and loan guaranty corporation;
(f) A Federal Home Loan Bank or any other bank organized solely to
serve depository institutions (a bankers' bank) or solely for the
purpose of providing securities clearing services and services related
thereto for depository institutions and securities companies;
(g) A depository organization that is closed or is in danger of
closing as determined by the appropriate Federal depository
institutions regulatory agency and is acquired by another depository
organization. This exemption lasts for five years, beginning on the
date the depository organization is acquired; and
(h)(1) A diversified savings and loan holding company (as defined
in section 10(a)(1)(F) of the Home Owners' Loan Act (12 U.S.C.
1467a(a)(1)(F)) with respect to the service of a director of such
company who also is a director of an unaffiliated depository
organization if:
(i) Both the diversified savings and loan holding company and the
unaffiliated depository organization notify their appropriate Federal
depository institutions regulatory agency at least 60 days before the
dual service is proposed to begin; and
(ii) The appropriate regulatory agency does not disapprove the dual
service before the end of the 60-day period.
(2) The OCC may disapprove a notice of proposed service if it finds
that:
(i) The service cannot be structured or limited so as to preclude
an anticompetitive effect in financial services in any part of the
United States;
(ii) The service would lead to substantial conflicts of interest or
unsafe or unsound practices; or
(iii) The notificant failed to furnish all the information required
by the OCC.
(3) The OCC may require that any interlock permitted under this
paragraph (h) be terminated if a change in circumstances occurs with
respect to one of the interlocked depository organizations that would
have provided a basis for disapproval of the interlock during the
notice period.
Sec. 26.5 Regulatory Standards exemption.
(a) Criteria. The OCC may permit an interlock that otherwise would
be prohibited by the Interlocks Act and Sec. 26.3 if:
(1) The board of directors of the depository organization (or the
organizers of a depository organization being formed) that seeks the
exemption provides a resolution to the OCC certifying that the
organization, after the exercise of reasonable efforts, is unable to
locate any other candidate from the community or RMSA, as appropriate,
who:
(i) Possesses the level of expertise required by the depository
organization and who is not prohibited from service by the Interlocks
Act; and
(ii) Is willing to serve as a management official; and
(2) The OCC, after reviewing an application submitted by the
depository organization seeking the exemption, determines that:
(i) The management official is critical to the safe and sound
operations of the affected depository organization; and
(ii) Service by the management official will not produce an
anticompetitive effect with respect to the depository organization.
(b) Presumptions. The OCC applies the following presumptions when
reviewing any application for a Regulatory Standards exemption:
(1) An interlock has no anticompetitive effect if it involves
depository institutions that, if merged, would not cause the post-
merger Herfindahl-Hirschman Index (HHI) to exceed 1800 and would not
cause the HHI to increase by more than 200 points. This presumption
does not apply to institutions subject to the major assets prohibition
of Sec. 26.3(c).
(2) A proposed management official is critical to the safe and
sound operations of a depository institution if that official is
approved by the OCC to serve as a director or senior executive officer
of that institution pursuant to 12 CFR 5.51 or pursuant to conditions
imposed on a newly chartered national bank and the institution had
operated for less than two years, was not in compliance with minimum
capital requirements, or otherwise was in a ``troubled condition''
[[Page 67433]]
as defined in 12 CFR 5.51 at the time the service under that section
was approved.
(c) Duration of interlock. An interlock permitted under this
section may continue until the OCC notifies the affected organizations
otherwise. The OCC may require a national bank to terminate any
interlock permitted under this section if the OCC concludes, after
giving the affected persons the opportunity to respond, that the
determinations under paragraph (a)(2) of this section no longer may be
made.
Sec. 26.6 Management Consignment exemption.
(a) Criteria. The OCC may permit an interlock that otherwise would
be prohibited by the Interlocks Act and Sec. 26.3 if the OCC, after
reviewing an application submitted by the depository organization
seeking an exemption, determines that the interlock would:
(1) Improve the provision of credit to low- and moderate-income
areas;
(2) Increase the competitive position of a minority- or woman-owned
depository organization;
(3) Strengthen the management of a depository institution that has
been chartered for less than two years at the time an application is
filed under this part; or
(4) Strengthen the management of a depository institution that is
in an unsafe or unsound condition as determined by the OCC on a case-
by-case basis.
(b) Presumptions. The OCC applies the following presumptions when
reviewing any application for a Management Consignment exemption:
(1) A proposed management official is capable of strengthening the
management of a depository institution described in paragraph (a)(3) of
this section if that official is approved by the OCC to serve as a
director or senior executive officer of that institution pursuant to 12
CFR 5.51 or pursuant to conditions imposed on a newly chartered
national bank and the institution had operated for less than two years
at the time the service under 12 CFR 5.51 was approved; and
(2) A proposed management official is capable of strengthening the
management of a depository institution described in paragraph (a)(4) of
this section if that official is approved by the OCC to serve as a
director or senior executive officer of that institution pursuant to 12
CFR 5.51 and the institution was not in compliance with minimum capital
requirements or otherwise was in a ``troubled condition'' as defined
under 12 CFR 5.51 at the time service under that section was approved.
(c) Duration of interlock. An interlock granted under this section
may continue for a period of two years from the date of approval. The
OCC may extend this period for one additional two-year period if the
depository organization applies for an extension at least 30 days
before the current exemption expires and satisfies one of the criteria
specified in paragraph 26.6(a) of this section. The provisions set
forth in paragraph (b) of this section also apply to applications for
extensions.
Sec. 26.7 Change in circumstances.
(a) Termination. A management official shall terminate his or her
service or apply for an exemption to the Interlocks Act if a change in
circumstances causes the service to become prohibited under that Act. A
change in circumstances may include, but is not limited to, an increase
in asset size of an organization, a change in the delineation of the
RMSA or community, the establishment of an office, an acquisition, a
merger, a consolidation, or any reorganization of the ownership
structure of a depository organization that causes a previously
permissible interlock to become prohibited.
(b) Transition period. A management official described in paragraph
(a) of this section may continue to serve the depository institution
involved in the interlock for 15 months following the date of the
change in circumstances. The OCC may shorten this period under
appropriate circumstances.
Sec. 26.8 Enforcement.
Except as noted in this section, the OCC administers and enforces
the Interlocks Act with respect to national banks, District banks, and
affiliates of either, and may refer any case of a prohibited
interlocking relationship involving these institutions to the Attorney
General of the United States to enforce compliance with the Interlocks
Act and this part. If an affiliate of a national bank or a District
bank is subject to the primary regulation of another Federal depository
organization supervisory agency, then the OCC does not administer and
enforce the Interlocks Act with respect to that affiliate.
Dated: November 27, 1998.
Eugene A. Ludwig,
Comptroller of the Currency.
Federal Reserve System
12 CFR CHAPTER II
Authority and Issuance
For the reasons set forth in the joint preamble, the Board proposes
to revise part 212 of chapter II of title 12 of the Code of Federal
Regulations to read as follows:
PART 212--MANAGEMENT OFFICIAL INTERLOCKS
Sec.
212.1 Authority, purpose, and scope.
212.2 Definitions.
212.3 Prohibitions.
212.4 Interlocking relationships permitted by statute.
212.5 Regulatory Standards exemption.
212.6 Management Consignment exemption.
212.7 Change in circumstances.
212.8 Enforcement.
212.9 Effect of Interlocks Act on Clayton Act.
Authority: 12 U.S.C. 3201-3208; 15 U.S.C. 19.
Sec. 212.1 Authority, purpose, and scope.
(a) Authority. This part is issued under the provisions of the
Depository Institution Management Interlocks Act (Interlocks Act) (12
U.S.C. 3201 et seq.), as amended.
(b) Purpose. The purpose of the Interlocks Act and this part is to
foster competition by generally prohibiting a management official from
serving two nonaffiliated depository organizations in situations where
the management interlock likely would have an anticompetitive effect.
(c) Scope. This part applies to management officials of state
member banks, bank holding companies, and their affiliates.
Sec. 212.2 Definitions.
For purposes of this part, the following definitions apply:
(a) Affiliate. (1) The term affiliate has the meaning given in
section 202 of the Interlocks Act (12 U.S.C. 3201). For purposes of
that section, shares held by an individual include shares held by
members of his or her immediate family. ``Immediate family'' includes
spouse, mother, father, child, grandchild, sister, brother, or any of
their spouses, whether or not any of their shares are held in trust.
(2) For purposes of section 202(3)(B) of the Interlocks Act (12
U.S.C. 3201(3)(B)), an affiliate relationship based on common ownership
does not exist if the Board determines, after
[[Page 67434]]
giving the affected persons the opportunity to respond, that the
asserted affiliation was established in order to avoid the prohibitions
of the Interlocks Act and does not represent a true commonality of
interest between the depository organizations. In making this
determination, the Board considers, among other things, whether a
person, including members of his or her immediate family, whose shares
are necessary to constitute the group owns a nominal percentage of the
shares of one of the organizations and the percentage is substantially
disproportionate with that person's ownership of shares in the other
organization.
(b) Anticompetitive effect means a monopoly or substantial
lessening of competition.
(c) Area median income means:
(1) The median family income for the metropolitan statistical area
(MSA), if a depository organization is located in an MSA; or
(2) The statewide nonmetropolitan median family income, if a
depository organization is located outside an MSA.
(d) Community means city, town, or village, or contiguous and
adjacent cities, towns, or villages.
(e) Contiguous or adjacent cities, towns, or villages means cities,
towns, or villages whose borders touch each other or whose borders are
within 10 road miles of each other at their closest points. The
property line of an office located in an unincorporated city, town, or
village is the boundary line of that city, town, or village for the
purpose of this definition.
(f) Critical, as used in Sec. 212.5, means important to restoring
or maintaining a depository organization's safe and sound operations.
(g) Depository holding company means a bank holding company or a
savings and loan holding company (as more fully defined in section 202
of the Interlocks Act (12 U.S.C. 3201)) having its principal office
located in the United States.
(h) Depository institution means a commercial bank (including a
private bank), a savings bank, a
FR Doc. 95-30972 Management Official Interlocks
trust company, a savings and loan
association, a building and loan association, a homestead association,
a cooperative bank, an industrial bank, or a credit union, chartered
under the laws of the United States and having a principal office
located in the United States. Additionally, a United States office,
including a branch or agency, of a foreign commercial bank is a
depository institution.
(i) Depository institution affiliate means a depository institution
that is an affiliate of a depository organization.
(j) Depository organization means a depository institution or a
depository holding company.
(k) Low- and moderate-income areas means areas where the median
family income is less than 100 percent of the area median income.
(l) Management official. (1) The term management official includes:
(i) A director;
(ii) An advisory or honorary director of a depository institution
with total assets of $100 million or more;
(iii) A senior executive officer as that term is defined in 12 CFR
225.71(a);
(iv) A branch manager;
(v) A trustee of a depository organization under the control of
trustees; and
(vi) Any person who has a representative or nominee, as defined in
paragraph (p) of this section, serving in any of the capacities in this
paragraph (l) (1).
(2) The term management official does not include:
(i) A person whose management functions relate exclusively to the
business of retail merchandising or manufacturing;
(ii) A person whose management functions relate principally to a
foreign commercial bank's business outside the United States; or
(iii) A person described in the provisos of section 202(4) of the
Interlocks Act (referring to an officer of a State-chartered savings
bank, cooperative bank, or trust company that neither makes real estate
mortgage loans nor accepts savings).
(m) Office means a principal or branch office of a depository
institution located in the United States. Office does not include a
representative office of a foreign commercial bank, an electronic
terminal, a loan production office.
(n) Person means a natural person, corporation, or other business
entity.
(o) Relevant metropolitan statistical area (RMSA) means an MSA, a
primary MSA, or a consolidated MSA that is not comprised of designated
Primary MSAs to the extent that these terms are defined and applied by
the Office of Management and Budget.
(p) Representative or nominee means a natural person who serves as
a management official and has an obligation to act on behalf of another
person with respect to management responsibilities. The Board will find
that a person has an obligation to act on behalf of another person only
if the first person has an agreement, express or implied, to act on
behalf of the second person with respect to management
responsibilities. The Board will determine, after giving the affected
persons an opportunity to respond, whether a person is a representative
or nominee.
(q) Total assets. (1) The term total assets means assets measured
on a consolidated basis and reported in the most recent fiscal year-end
Consolidated Report of Condition and Income.
(2) The term total assets does not include:
(i) Assets of a diversified savings and loan holding company as
defined by section 10(a)(1)(F) of the Home Owners' Loan Act (12 U.S.C.
1467a(a)(1)(F)) other than the assets of its depository institution
affiliate;
(ii) Assets of a bank holding company that is exempt from the
prohibitions of section 4 of the Bank Holding Company Act of 1956
pursuant to an order issued under section 4(d) of that Act (12 U.S.C.
1843(d)) other than the assets of its depository institution affiliate;
or
(iii) Assets of offices of a foreign commercial bank other than the
assets of its United States branch or agency.
(r) United States means the United States of America, any State or
territory of the United States of America, the District of Columbia,
Puerto Rico, Guam, American Samoa, and the Virgin Islands.
Sec. 212.3 Prohibitions.
(a) Community. A management official of a depository organization
may not serve at the same time as a management official of an
unaffiliated depository organization if the depository organizations in
question (or a depository institution affiliate thereof) have offices
in the same community.
(b) RMSA. A management official of a depository organization may
not serve at the same time as a management official of an unaffiliated
depository organization if the depository organizations in question (or
a depository institution affiliate thereof) have offices in the same
RMSA and each depository organization has total assets of $20 million
or more.
(c) Major assets. A management official of a depository
organization with total assets exceeding $1 billion (or any affiliate
thereof) may not serve at the same time as a management official of an
unaffiliated depository organization with total assets exceeding $500
million (or any affiliate thereof), regardless of the location of the
two depository organizations.
Sec. 212.4 Interlocking relationships permitted by statute.
The prohibitions of Sec. 212.3 do not apply in the case of any one
or more of
[[Page 67435]]
the following organizations or to a subsidiary thereof:
(a) A depository organization that has been placed formally in
liquidation, or which is in the hands of a receiver, conservator, or
other official exercising a similar function;
(b) A corporation operating under section 25 or section 25A of the
Federal Reserve Act (12 U.S.C. 601 et seq. and 12 U.S.C. 611 et seq.,
respectively) (Edge Corporations and Agreement Corporations);
(c) A credit union being served by a management official of another
credit union;
(d) A depository organization that does not do business within the
United States except as an incident to its activities outside the
United States;
(e) A State-chartered savings and loan guaranty corporation;
(f) A Federal Home Loan Bank or any other bank organized solely to
serve depository institutions (a bankers' bank) or solely for the
purpose of providing securities clearing services and services related
thereto for depository institutions and securities companies;
(g) A depository organization that is closed or is in danger of
closing as determined by the appropriate Federal depository
institutions regulatory agency and is acquired by another depository
organization. This exemption lasts for five years, beginning on the
date the depository organization is acquired; and
(h)(1) A diversified savings and loan holding company (as defined
in section 10(a)(1)(F) of the Home Owners' Loan Act (12 U.S.C.
1467a(a)(1)(F)) with respect to the service of a director of such
company who also is a director of an unaffiliated depository
organization if:
(i) Both the diversified savings and loan holding company and the
unaffiliated depository organization notify their appropriate Federal
depository institutions regulatory agency at least 60 days before the
dual service is proposed to begin; and
(ii) The appropriate regulatory agency does not disapprove the dual
service before the end of the 60-day period.
(2) The Board may disapprove a notice of proposed service if it
finds that:
(i) The service cannot be structured or limited so as to preclude
an anticompetitive effect in financial services in any part of the
United States;
(ii) The service would lead to substantial conflicts of interest or
unsafe or unsound practices; or
(iii) The notificant failed to furnish all the information required
by the Board.
(3) The Board may require that any interlock permitted under this
paragraph (h) be terminated if a change in circumstances occurs with
respect to one of the interlocked depository organizations that would
have provided a basis for disapproval of the interlock during the
notice period.
Sec. 212.5 Regulatory Standards exemption.
(a) Criteria. The Board may permit an interlock that otherwise
would be prohibited by the Interlocks Act and Sec. 212.3 if:
(1) The board of directors of the depository organization (or the
organizers of a depository organization being formed) that seeks the
exemption provides a resolution to the Board certifying that the
organization, after the exercise of reasonable efforts, is unable to
locate any other candidate from the community or RMSA, as appropriate,
who:
(i) Possesses the level of expertise required by the depository
organization and who is not prohibited from service by the Interlocks
Act; and
(ii) Is willing to serve as a management official; and
(2) The Board, after reviewing an application submitted by the
depository organization seeking the exemption, determines that:
(i) The management official is critical to the safe and sound
operations of the affected depository organization; and
(ii) Service by the management official will not produce an
anticompetitive effect with respect to the depository organization.
(b) Presumptions. The Board applies the following presumptions when
reviewing any application for a Regulatory Standards exemption:
(1) An interlock has no anticompetitive effect if it involves
depository institutions that, if merged, would not cause the post-
merger Herfindahl-Hirschman Index (HHI) to exceed 1800 and would not
cause the HHI to increase by more than 200 points. This presumption
does not apply to institutions subject to the major assets prohibition
of Sec. 212.3(c).
(2) A proposed management official is critical to the safe and
sound operations of a depository institution if the official is
approved by the Board to serve as a director or senior executive
officer of the institution pursuant to 12 CFR 225.71 and the
institution had operated for less than two years, was not in compliance
with minimum capital requirements, or otherwise was in a ``troubled
condition'' as defined in 12 CFR 225.71 at the time the service under
that section was approved.
(c) Duration of interlock. An interlock permitted under this
section may continue until the Board notifies the affected
organizations otherwise. The Board may require termination of any
interlock permitted under this section if the Board concludes, after
giving the affected persons the opportunity to respond, that the
determinations under paragraph (a)(2) of this section no longer may be
made.
Sec. 212.6 Management Consignment exemption.
(a) Criteria. The Board may permit an interlock that otherwise
would be prohibited by the Interlocks Act and Sec. 212.3 if the Board,
after reviewing an application submitted by the depository organization
seeking an exemption, determines that the interlock would:
(1) Improve the provision of credit to low- and moderate-income
areas;
(2) Increase the competitive position of a minority- or woman-owned
depository organization;
(3) Strengthen the management of a depository institution that has
been chartered for less than two years at the time an application is
filed under this part; or
(4) Strengthen the management of a depository institution that is
in an unsafe or unsound condition as determined by the Board on a case-
by-case basis.
(b) Presumptions. The Board applies the following presumptions in
reviewing any application for a Management Consignment exemption:
(1) A proposed management official is capable of strengthening the
management of a depository institution described in paragraph (a)(3) of
this section if that official is approved by the Board to serve as a
director or senior executive officer of that institution pursuant to 12
CFR 225.71 and the institution had operated for less than two years at
the time the service was approved; and
(2) A proposed management official is capable of strengthening the
management of a depository institution described in paragraph (a)(4) of
this section if the official is approved by the Board to serve as a
director or senior executive officer of the institution pursuant to 12
CFR 225.71 and the institution was not in compliance with minimum
capital requirements or otherwise was in a ``troubled condition'' as
defined under 12 CFR 225.71 at the time service was approved.
(c) Duration of interlock. An interlock granted under this section
may continue for a period of two years from the date of approval. The
Board may extend this period for one additional two-year
[[Page 67436]]
period if the depository organization applies for an extension at least
30 days before the current exemption expires and satisfies one of the
criteria specified in paragraph (a) of this section. The provisions set
forth in paragraph (b) of this section also apply to applications for
extensions.
Sec. 212.7 Change in circumstances.
(a) Termination. A management official shall terminate his or her
service or apply for an exemption to the Interlocks Act if a change in
circumstances causes the service to become prohibited under that Act. A
change in circumstances may include, but is not limited to, an increase
in asset size of an organization, a change in the delineation of the
RMSA or community, the establishment of an office, an acquisition, a
merger, a consolidation, or any reorganization of the ownership
structure of a depository organization that causes a previously
permissible interlock to become prohibited.
(b) Transition period. A management official described in paragraph
(a) of this section may continue to serve the state member bank or bank
holding company involved in the interlock for 15 months following the
date of the change in circumstances. The Board may shorten this period
under appropriate circumstances.
Sec. 212.8 Enforcement.
Except as noted in this section, the Board administers and enforces
the Interlocks Act with respect to state member banks, bank holding
companies, and affiliates of either, and may refer any case of a
prohibited interlocking relationship involving these institutions to
the Attorney General of the United States to enforce compliance with
the Interlocks Act and this part. If an affiliate of a state member
bank or a bank holding company is subject to the primary regulation of
another Federal depository organization supervisory agency, then the
Board does not administer and enforce the Interlocks Act with respect
to that affiliate.
Sec. 212.9 Effect of Interlocks Act on Clayton Act.
The Board regards the provisions of the first three paragraphs of
section 8 of the Clayton Act (15 U.S.C. 19) to have been supplanted by
the revised and more comprehensive prohibitions on management official
interlocks between depository organizations in the Interlocks Act.
Dated: December 14, 1995.
William W. Wiles,
Secretary of the Board.
Federal Deposit Insurance Corporation
12 CFR CHAPTER III
Authority and Issuance
For the reasons set forth in the joint preamble, pursuant to its
authority under section 209 of the Depository Institution Management
Interlocks Act (12 U.S.C. 3207), the Board of Directors of the FDIC
proposes to revise part 348 of chapter III of title 12 of the Code of
Federal Regulations to read as follows:
PART 348--MANAGEMENT OFFICIAL INTERLOCKS
Sec.
348.1 Authority, purpose, and scope.
348.2 Definitions.
348.3 Prohibitions.
348.4 Interlocking relationships permitted by statute.
348.5 Regulatory Standards exemption.
348.6 Management Consignment exemption.
348.7 Change in circumstances.
348.8 Enforcement.
Authority: 12 U.S.C. 3207, 12 U.S.C. 1823(k).
Sec. 348.1 Authority, purpose, and scope.
(a) Authority. This part is issued under the provisions of the
Depository Institution Management Interlocks Act (Interlocks Act) (12
U.S.C. 3201 et seq.), as amended.
(b) Purpose. The purpose of the Interlocks Act and this part is to
foster competition by generally prohibiting a management official from
serving two nonaffiliated depository organizations in situations where
the management interlock likely would have an anticompetitive effect.
(c) Scope. This part applies to management officials of insured
nonmember banks and their affiliates.
Sec. 348.2 Definitions.
For purposes of this part, the following definitions apply:
(a) Affiliate. (1) The term affiliate has the meaning given in
section 202 of the Interlocks Act (12 U.S.C. 3201). For purposes of
that section, shares held by an individual include shares held by
members of his or her immediate family. ``Immediate family'' includes
spouse, mother, father, child, grandchild, sister, brother or any of
their spouses, whether or not any of their shares are held in trust.
(2) For purposes of section 202(3)(B) of the Interlocks Act (12
U.S.C. 3201(3)(B)), an affiliate relationship involving an insured
nonmember bank based on common ownership does not exist if the FDIC
determines, after giving the affected persons the opportunity to
respond, that the asserted affiliation was established in order to
avoid the prohibitions of the Interlocks Act and does not represent a
true commonality of interest between the depository organizations. In
making this determination, the FDIC considers, among other things,
whether a person, including members of his or her immediate family
whose shares are necessary to constitute the group, owns a nominal
percentage of the shares of one of the organizations and the percentage
is substantially disproportionate with that person's ownership of
shares in the other organization.
(b) Anticompetitive effect means a monopoly or substantial
lessening of competition.
(c) Area median income means:
(1) The median family income for the metropolitan statistical area
(MSA), if a depository organization is located in an MSA; or
(2) The statewide nonmetropolitan median family income, if a
depository organization is located outside an MSA.
(d) Community means city, town, or village, and contiguous or
adjacent cities, towns, or villages.
(e) Contiguous or adjacent cities, towns, or villages means cities,
towns, or villages whose borders touch each other or whose borders are
within 10 road miles of each other at their closest points. The
property line of an office located in an unincorporated city, town, or
village is the boundary line of that city, town, or village for the
purpose of this definition.
(f) Critical means important to restoring or maintaining a
depository organization's safe and sound operations.
(g) Depository holding company means a bank holding company or a
savings and loan holding company (as more fully defined in section 202
of the Interlocks Act (12 U.S.C. 3201)) having its principal office
located in the United States.
(h) Depository institution means a commercial bank (including a
private bank), a savings bank, a trust company, a savings and loan
association, a building and loan association, a homestead association,
a cooperative bank, an industrial bank, or a credit union, chartered
under the laws of the United States and having a principal office
located in the United States. Additionally, a United States office,
including a branch or agency, of a foreign commercial bank is a
depository institution.
[[Page 67437]]
(i) Depository institution affiliate means a depository institution
that is an affiliate of a depository organization.
(j) Depository organization means a depository institution or a
depository holding company.
(k) Low- and moderate-income areas means areas where the median
family income is less than 100 percent of the area median income.
(l) Management official. (1) The term management official includes:
(i) A director;
(ii) An advisory or honorary director of a depository institution
with total assets of $100 million or more;
(iii) A senior executive officer as that term is defined in 12 CFR
303.14(a)(3);
(iv) A branch manager;
(v) A trustee of a depository organization under the control of
trustees; and
(vi) Any person who has a representative or nominee serving in any
of the capacities in this paragraph (l)(1).
(2) The term management official does not include:
(i) A person whose management functions relate exclusively to the
business of retail merchandising or manufacturing;
(ii) A person whose management functions relate principally to the
business outside the United States of a foreign commercial bank; or
(iii) A person described in the provisos of section 202(4) of the
Interlocks Act (12 U.S.C. 3201(4)) (referring to an officer of a State-
chartered savings bank, cooperative bank, or trust company that neither
makes real estate mortgage loans nor accepts savings).
(m) Office means a principal or branch office of a depository
institution located in the United States. Office does not include a
representative office of a foreign commercial bank, an electronic
terminal, or a loan production office.
(n) Person means a natural person, corporation, or other business
entity.
(o) Relevant metropolitan statistical area (RMSA) means an MSA, a
primary MSA, or a consolidated MSA that is not comprised of designated
Primary MSAs to the extent that these terms are defined and applied by
the Office of Management and Budget.
(p) Representative or nominee means a natural person who serves as
a management official and has an obligation to act on behalf of another
person with respect to management responsibilities. The FDIC will find
that a person has an obligation to act on behalf of another person only
if the first person has an agreement, express or implied, to act on
behalf of the second person with respect to management
responsibilities. The FDIC will determine, after giving the affected
persons an opportunity to respond, whether a person is a representative
or nominee.
(q) Total assets. (1) The term total assets includes assets
measured on a consolidated basis and reported in the most recent fiscal
year-end Consolidated Report of Condition and Income.
(2) The term total assets does not include:
(i) Assets of a diversified savings and loan holding company as
defined by section 10(a)(1)(F) of the Home Owners' Loan Act (12 U.S.C.
1467a(a)(1)(F)) other than the assets of its depository institution
affiliate;
(ii) Assets of a bank holding company that is exempt from the
prohibitions of section 4 of the Bank Holding Company Act of 1956
pursuant to an order issued under section 4(d) of that Act (12 U.S.C.
1843(d)) other than the assets of its depository institution affiliate;
or
(iii) Assets of offices of a foreign commercial bank other than the
assets of its United States branch or agency.
(r) United States means the United States of America, any State or
territory of the United States of America, the District of Columbia,
Puerto Rico, Guam, American Samoa, and the Virgin Islands.
Sec. 348.3 Prohibitions.
(a) Community. A management official of a depository organization
may not serve at the same time as a management official of an
unaffiliated depository organization if the depository organizations in
question (or a depository institution affiliate thereof) have offices
in the same community.
(b) RMSA. A management official of a depository organization may
not serve at the same time as a management official of an unaffiliated
depository organization if the depository organizations in question (or
a depository institution affiliate thereof) have offices in the same
RMSA and each depository organization has total assets of $20 million
or more.
(c) Major assets. A management official of a depository
organization with total assets exceeding $1 billion (or any affiliate
thereof) may not serve at the same time as a management official of an
unaffiliated depository organization with total assets exceeding $500
million (or any affiliate thereof), regardless of the location of the
two depository organizations.
Sec. 348.4 Interlocking relationships permitted by statute.
The prohibitions of Sec. 348.3 do not apply in the case of any one
or more of the following organizations or to a subsidiary thereof:
(a) A depository organization that has been placed formally in
liquidation, or which is in the hands of a receiver, conservator, or
other official exercising a similar function;
(b) A corporation operating under section 25 or section 25A of the
Federal Reserve Act (12 U.S.C. 601 et seq. and 12 U.S.C. 611 et seq.,
respectively) (Edge Corporations and Agreement Corporations);
(c) A credit union being served by a management official of another
credit union;
(d) A depository organization that does not do business within the
United States except as an incident to its activities outside the
United States;
(e) A State-chartered savings and loan guaranty corporation;
(f) A Federal Home Loan bank or any other bank organized solely to
serve depository institutions (a bankers' bank) or solely for the
purpose of providing securities clearing services and services related
thereto for depository institutions and securities companies;
(g) A depository organization that is closed or is in danger of
closing as determined by the appropriate Federal depository
institutions regulatory agency and is acquired by another depository
organization. This exemption lasts for five years, beginning on the
date the depository organization is acquired;
(h) A savings association whose acquisition has been authorized on
an emergency basis in accordance with section 13(k) of the Federal
Deposit Insurance Act (12 U.S.C. 1823(k)) with resulting dual service
by a management official that would otherwise be prohibited under the
Interlocks Act which may continue for up to 10 years from the date of
the acquisition provided that the FDIC has given its approval for the
continuation of such service; and
(i)(1) A diversified savings and loan holding company (as defined
in section 10(a)(1)(F) of the Home Owners' Loan Act (12 U.S.C.
1467a(a)(1)(F)) with respect to the service of a director of such
company who is also a director of an unaffiliated depository
organization if:
(i) Both the diversified savings and loan holding company and the
unaffiliated depository organization notify their appropriate Federal
depository institutions regulatory agency at least 60 days before the
dual service is proposed to begin; and
(ii) The appropriate regulatory agency does not disapprove the dual
service before the end of the 60-day period.
[[Page 67438]]
(2) The FDIC may disapprove a notice of proposed service if it
finds that:
(i) The service cannot be structured or limited so as to preclude
an anticompetitive effect in financial services in any part of the
United States;
(ii) The service would lead to substantial conflicts of interest or
unsafe or unsound practices; or
(iii) The notificant failed to furnish all the information required
by the FDIC.
(3) The FDIC may require that any interlock permitted under this
paragraph (h) be terminated if a change in circumstances occurs with
respect to one of the interlocked depository organizations that would
have provided a basis for disapproval of the interlock during the
notice period.
Sec. 348.5 Regulatory Standards exemption.
(a) Criteria. The FDIC may permit an interlock that otherwise would
be prohibited by the Interlocks Act and Sec. 348.3 if:
(1) The board of directors of the depository organization (or the
organizers of a depository organization being formed) that seeks the
exemption provides a resolution to the FDIC certifying that the
organization, after the exercise of reasonable efforts, is unable to
locate any other candidate from the community or RMSA, as appropriate,
who:
(i) Possesses the level of expertise required by the depository
organization and who is not prohibited from service by the Interlocks
Act; and
(ii) Is willing to serve as a management official; and
(2) The FDIC, after reviewing an application submitted by the
depository organization seeking the exemption, determines that:
(i) The management official is critical to the safe and sound
operations of the affected depository organization; and
(ii) Service by the management official will not produce an
anticompetitive effect with respect to the depository organization.
(b) Presumptions. The FDIC applies the following presumptions when
reviewing any application for a Regulatory Standards exemption:
(1) An interlock has no anticompetitive effect if it involves
depository institutions that, if merged, would not cause the post-
merger Herfindahl-Hirschman Index (HHI) to exceed 1800 and would not
cause the HHI to increase by more than 200 points. This presumption
shall not apply to institutions subject to the major assets prohibition
of Sec. 348.3(c).
(2) A proposed management official is critical to the safe and
sound operations of a depository institution if that official is
approved by the FDIC to serve as a director or a senior executive
officer of that institution pursuant to 12 CFR 303.14 and the
institution had operated for less than two years, was not in compliance
with minimum capital requirements, or otherwise was in a ``troubled
condition'' as defined by 12 CFR 303.14(a)(4) at the time the service
under that section was approved.
(c) Duration of interlock. An interlock permitted under this
section may continue until the FDIC notifies the affected organizations
otherwise. The FDIC may require termination of any interlock permitted
under this section if the FDIC concludes, after giving the affected
persons the opportunity to respond, that the determinations under
paragraph (a)(2) of this section no longer may be made.
Sec. 348.6 Management Consignment exemption.
(a) Criteria. The FDIC may permit an interlock that otherwise would
be prohibited by the Interlocks Act and Sec. 348.3 if the FDIC, after
reviewing an application submitted by the depository organization
seeking an exemption, determines that the interlock would:
(1) Improve the provision of credit to low- and moderate-income
areas;
(2) Increase the competitive position of a minority- or woman-owned
depository organization;
(3) Strengthen the management of a depository institution that has
been chartered for less than two years at the time an application is
filed under this part; or
(4) Strengthen the management of a depository institution that is
in an unsafe or unsound condition as determined by the FDIC on a case-
by-case basis.
(b) Presumptions. The FDIC applies the following presumptions when
reviewing any application for a Management Consignment exemption:
(1) A proposed management official is capable of strengthening the
management of a depository institution described in paragraph (a)(3) of
this section if that official is approved by the FDIC to serve as a
director or a senior executive officer of that institution pursuant to
12 CFR 303.14 and the institution had operated for less than two years
at the time the service under 12 CFR 303.14 was approved; and
(2) A proposed management official is capable of strengthening the
management of a depository institution described in paragraph (a)(4) of
this section if that official is approved by the FDIC to serve as a
director or a senior executive officer of that institution pursuant to
12 CFR 303.14 and the institution was not in compliance with minimum
capital requirements or otherwise was in a ``troubled condition'' as
defined under 12 CFR 303.14 at the time service under that section was
approved.
(c) Duration of interlock. An interlock granted under this section
may continue for a period of two years from the date of approval. The
FDIC may extend this period for one additional two-year period if the
depository organization applies for an extension at least 30 days
before the current exemption expires and satisfies one of the criteria
specified in paragraph (a) of this section. The provisions set forth in
paragraph (b) of this section also apply to applications for
extensions.
Sec. 348.7 Change in circumstances.
(a) Termination. A management official shall terminate his or her
service or apply for an exemption to the Interlocks Act if a change in
circumstances causes the service to become prohibited under that Act. A
change in circumstances may include, but is not limited to, an increase
in asset size of an organization, a change in the delineation of the
RMSA or community, the establishment of an office, an acquisition, a
merger, a consolidation, or any reorganization of the ownership
structure of a depository organization that causes a previously
permissible interlock to become prohibited.
(b) Transition period. A management official described in paragraph
(a) of this section may continue to serve the insured nonmember bank
involved in the interlock for 15 months following the date of the
change in circumstances. The FDIC may shorten this period under
appropriate circumstances.
Sec. 348.8 Enforcement.
Except as noted in this section, the FDIC administers and enforces
the Interlocks Act with respect to insured nonmember banks and their
affiliates and may refer any case of a prohibited interlocking
relationship involving these institutions to the Attorney General of
the United States to enforce compliance with the Interlocks Act and
this part. If an affiliate of an insured nonmember bank is subject to
the primary regulation of another federal depository organization
supervisory agency, then the FDIC does not administer and enforce the
Interlocks Act with respect to that affiliate.
By order of the Board of Directors.
Dated at Washington, DC, this 12th day of December, 1995.
[[Page 67439]]
Federal Deposit Insurance Corporation.
Jerry L. Langley,
Executive Secretary.
Office of Thrift Supervision
12 CFR CHAPTER V
Authority and Issuance
For the reasons set out in the joint preamble, the OTS proposes to
revise part 563f of chapter V of title 12 of the Code of Federal
Regulations to read as follows:
PART 563f--MANAGEMENT OFFICIAL INTERLOCKS
Sec.
563f.1 Authority, purpose, and scope.
563f.2 Definitions.
563f.3 Prohibitions.
563f.4 Interlocking relationships permitted by statute.
563f.5 Regulatory Standards exemption.
563f.6 Management Consignment exemption.
563f.7 Change in circumstances.
563f.8 Enforcement.
563f.9 Interlocking relationships permitted pursuant to Federal
Deposit Insurance Act.
Authority: 12 U.S.C. 3201-3208.
Sec. 563f.1 Authority, purpose, and scope.
(a) Authority. This part is issued under the provisions of the
Depository Institution Management Interlocks Act (Interlocks Act) (12
U.S.C. 3201 et seq.), as amended.
(b) Purpose. The purpose of the Interlocks Act and this part is to
foster competition by generally prohibiting a management official from
serving two nonaffiliated depository organizations in situations where
the management interlock likely would have an anticompetitive effect.
(c) Scope. This part applies to management officials of savings
associations, savings and loan holding companies, and affiliates of
either.
Sec. 563f.2 Definitions.
For purposes of this part, the following definitions apply:
(a) Affiliate. (1) The term affiliate has the meaning given in
section 202 of the Interlocks Act (12 U.S.C. 3201). For purposes of
that section, shares held by an individual include shares held by
members of his or her immediate family. ``Immediate family'' includes
spouse, mother, father, child, grandchild, sister, brother, or any of
their spouses, whether or not any of their shares are held in trust.
(2) For purposes of section 202(3)(B) of the Interlocks Act (12
U.S.C. 3201(3)(B)), an affiliate relationship involving a savings
association or savings and loan holding company based on common
ownership does not exist if the OTS determines, after giving the
affected persons the opportunity to respond, that the asserted
affiliation was established in order to avoid the prohibitions of the
Interlocks Act and does not represent a true commonality of interest
between the depository organizations. In making this determination, the
OTS considers, among other things, whether a person, including members
of his or her immediate family, whose shares are necessary to
constitute the group owns a nominal percentage of the shares of one of
the organizations and the percentage is substantially disproportionate
with that person's ownership of shares in the other organization.
(b) Anticompetitive effect means a monopoly or substantial
lessening of competition.
(c) Area median income means:
(1) The median family income for the metropolitan statistical area
(MSA), if a depository organization is located in an MSA; or
(2) The statewide nonmetropolitan median family income, if a
depository organization is located outside an MSA.
(d) Community means city, town, or village, and contiguous or
adjacent cities, towns, or villages.
(e) Contiguous or adjacent cities, towns, or villages means cities,
towns, or villages whose borders touch each other or whose borders are
within 10 road miles of each other at their closest points. The
property line of an office located in an unincorporated city, town, or
village is the boundary line of that city, town, or village for the
purpose of this definition.
(f) Critical means important to restoring or maintaining a
depository organization's safe and sound operations.
(g) Depository holding company means a bank holding company or a
savings and loan holding company (as more fully defined in section 202
of the Interlocks Act (12 U.S.C. 3201)) having its principal office
located in the United States.
(h) Depository institution means a commercial bank (including a
private bank), a savings bank, a trust company, a savings and loan
association, a building and loan association, a homestead association,
a cooperative bank, an industrial bank, or a credit union, chartered
under the laws of the United States and having a principal office
located in the United States. Additionally, a United States office,
including a branch or agency, of a foreign commercial bank is a
depository institution.
(i) Depository institution affiliate means a depository institution
that is an affiliate of a depository organization.
(j) Depository organization means a depository institution or a
depository holding company.
(k) Low- and moderate-income areas means areas where the median
family income is less than 100 percent of the area median income.
(l) Management official. (1) The term management official includes:
(i) A director;
(ii) An advisory or honorary director of a depository institution
with total assets of $100 million or more;
(iii) A senior executive officer as that term is defined in 12 CFR
574.9(a)(2);
(iv) A branch manager;
(v) A trustee of a depository organization under the control of
trustees; and
(vi) Any person who has a representative or nominee serving in any
of the capacities in this paragraph (l)(1).
(2) The term management official does not include:
(i) A person whose management functions relate exclusively to the
business of retail merchandising or manufacturing;
(ii) A person whose management functions relate principally to the
business outside the United States of a foreign commercial bank; or
(iii) A person described in the provisos of section 202(4) of the
Interlocks Act (12 U.S.C. 3201(4)) (referring to an officer of a State-
chartered savings bank, cooperative bank, or trust company that neither
makes real estate mortgage loans nor accepts savings).
(m) Office means a principal or branch office of a depository
institution located in the United States. Office does not include a
representative office of a foreign commercial bank, an electronic
terminal, or a loan production office.
(n) Person means a natural person, corporation, or other business
entity.
(o) Relevant metropolitan statistical area (RMSA) means an MSA, a
primary MSA, or a consolidated MSA that is not comprised of designated
Primary MSAs to the extent that these terms are defined and applied by
the Office of Management and Budget.
(p) Representative or nominee means a natural person who serves as
a management official and has an obligation to act on behalf of another
person with respect to management responsibilities. The OTS will find
that a person has an obligation to act on behalf of another person only
if the first person has an agreement, express or implied, to act on
behalf of the second
[[Page 67440]]
person with respect to management responsibilities. The OTS will
determine, after giving the affected persons an opportunity to respond,
whether a person is a representative or nominee.
(q) Savings association means:
(i) Any Federal savings association (as defined in section 3(b)(2)
of the Federal Deposit Insurance Act (12 U.S.C. 1813(b)(2));
(ii) Any state savings association (as defined in section 3(b)(3)
of the Federal Deposit Insurance Act (12 U.S.C. 1813(b)(3)) the
deposits of which are insured by the Federal Deposit Insurance
Corporation; and
(iii) Any corporation (other than a bank as defined in section
3(a)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813(a)(1)) the
deposits of which are insured by the Federal Deposit Insurance
Corporation, that the Board of Directors of the Federal Deposit
Insurance Corporation and the Director of the Office of Thrift
Supervision jointly determine to be operating in substantially the same
manner as a savings association.
(r) Total assets. (1) The term total assets means assets measured
on a consolidated basis and reported in the most recent fiscal year-end
Consolidated Report of Condition and Income.
(2) The term total assets does not include:
(i) Assets of a diversified savings and loan holding company as
defined by section 10(a)(1)(F) of the Home Owners' Loan Act (12 U.S.C.
1467a(a)(1)(F)) other than the assets of its depository institution
affiliate;
(ii) Assets of a bank holding company that is exempt from the
prohibitions of section 4 of the Bank Holding Company Act of 1956
pursuant to an order issued under section 4(d) of that Act (12 U.S.C.
1843(d)) other than the assets of its depository institution affiliate;
or
(iii) Assets of offices of a foreign commercial bank other than the
assets of its United States branch or agency.
(s) United States means the United States of America, any State or
territory of the United States of America, the District of Columbia,
Puerto Rico, Guam, American Samoa, and the Virgin Islands.
Sec. 563f.3 Prohibitions.
(a) Community. A management official of a depository organization
may not serve at the same time as a management official of an
unaffiliated depository organization if the depository organizations in
question (or a depository institution affiliate thereof) have offices
in the same community.
(b) RMSA. A management official of a depository organization may
not serve at the same time as a management official of an unaffiliated
depository organization if the depository organizations in question (or
a depository institution affiliate thereof) have offices in the same
RMSA and each depository organization has total assets of $20 million
or more.
(c) Major assets. A management official of a depository
organization with total assets exceeding $1 billion (or any affiliate
thereof) may not serve at the same time as a management official of an
unaffiliated depository organization with total assets exceeding $500
million (or any affiliate thereof), regardless of the location of the
two depository organizations.
Sec. 563f.4 Interlocking relationships permitted by statute.
The prohibitions of Sec. 563f.3 do not apply in the case of any one
or more of the following organizations or to a subsidiary thereof:
(a) A depository organization that has been placed formally in
liquidation, or which is in the hands of a receiver, conservator, or
other official exercising a similar function;
(b) A corporation operating under section 25 or section 25A of the
Federal Reserve Act (12 U.S.C. 601 et seq. and 12 U.S.C. 611 et seq.,
respectively) (Edge Corporations and Agreement Corporations);
(c) A credit union being served by a management official of another
credit union;
(d) A depository organization that does not do business within the
United States except as an incident to its activities outside the
United States;
(e) A State-chartered savings and loan guaranty corporation;
(f) A Federal Home Loan Bank or any other bank organized solely to
serve depository institutions (a bankers' bank) or solely for the
purpose of providing securities clearing services and services related
thereto for depository institutions and securities companies;
(g) A depository organization that is closed or is in danger of
closing as determined by the appropriate Federal depository
institutions regulatory agency and is acquired by another depository
organization. This exemption lasts for five years, beginning on the
date the depository organization is acquired;
(h)(1) A diversified savings and loan holding company (as defined
in section 10(a)(1)(F) of the Home Owners' Loan Act (12 U.S.C.
1467a(a)(1)(F)) with respect to the service of a director of such
company who also is a director of an unaffiliated depository
organization if:
(i) Both the diversified savings and loan holding company and the
unaffiliated depository organization notify their appropriate Federal
depository institutions regulatory agency at least 60 days before the
dual service is proposed to begin; and
(ii) The appropriate regulatory agency does not disapprove the dual
service before the end of the 60-day period.
(2) The OTS may disapprove a notice of proposed service if it finds
that:
(i) The service cannot be structured or limited so as to preclude
an anticompetitive effect in financial services in any part of the
United States;
(ii) The service would lead to substantial conflicts of interest or
unsafe or unsound practices; or
(iii) The notificant failed to furnish all the information required
by the OTS.
(3) The OTS may require that any interlock permitted under this
paragraph be terminated if a change in circumstances occurs with
respect to one of the interlocked depository organizations that would
have provided a basis for disapproval of the interlock during the
notice period; and
(i) Any savings association or any savings and loan holding company
(as defined in section 10(a)(1)(D) of the Home Owners' Loan Act) which
has issued stock in connection with a qualified stock issuance pursuant
to section 10(q) of such Act, except that this paragraph (i) shall
apply only with regard to service by a single management official of
such savings association or holding company, or any subsidiary of such
savings association or holding company, by a single management official
of the savings and loan holding company which purchased the stock
issued in connection with such qualified stock issuance, and shall
apply only when the OTS has determined that such service is consistent
with the purposes of the Interlocks Act and the Home Owners' Loan Act.
Sec. 563f.5 Regulatory Standards exemption.
(a) Criteria. The OTS may permit an interlock that otherwise would
be prohibited by the Interlocks Act and Sec. 563f.3 if:
(1) The board of directors of the depository organization (or the
organizers of a depository organization being formed) that seeks the
exemption provides a resolution to the OTS certifying that the
organization, after the exercise of reasonable efforts, is unable to
locate any other candidate from the community or RMSA, as appropriate,
who:
[[Page 67441]]
(i) Possesses the level of expertise required by the depository
organization and who is not prohibited from service by the Interlocks
Act; and
(ii) Is willing to serve as a management official; and
(2) The OTS, after reviewing an application submitted by the
depository organization seeking the exemption, determines that:
(i) The management official is critical to the safe and sound
operations of the affected depository organization; and
(ii) Service by the management official will not produce an
anticompetitive effect with respect to the depository organization.
(b) Presumptions. The OTS applies the following presumptions when
reviewing any application for a Regulatory Standards exemption:
(1) An interlock has no anticompetitive effect if it involves
depository institutions that, if merged, would not cause the post-
merger Herfindahl-Hirschman Index (HHI) to exceed 1800 and would not
cause the HHI to increase by more than 200 points. This presumption
shall not apply to institutions subject to the major assets prohibition
of Sec. 563f.3(c).
(2) A proposed management official is critical to the safe and
sound operations of a depository institution if that official is
approved by the OTS to serve as a director or senior executive officer
of that institution pursuant to 12 CFR 574.9 and the institution had
operated for less than two years, was not in compliance with minimum
capital requirements, or otherwise was in a ``troubled condition'' as
defined in 12 CFR 574.9 at the time the service under that section was
approved.
(c) Duration of interlock. An interlock permitted under this
section may continue until the OTS notifies the affected organizations
otherwise. The OTS may require termination of any interlock permitted
under this section if the OTS concludes, after giving the affected
persons the opportunity to respond, that the determinations under
paragraph (a)(2) of this section no longer may be made.
Sec. 563f.6 Management Consignment exemption.
(a) Criteria. The OTS may permit an interlock that otherwise would
be prohibited by the Interlocks Act and Sec. 563f.3 if the OTS, after
reviewing an application submitted by the depository organization
seeking an exemption, determines that the interlock would:
(1) Improve the provision of credit to low- and moderate-income
areas;
(2) Increase the competitive position of a minority- or woman-owned
depository organization;
(3) Strengthen the management of a depository institution that has
been chartered for less than three years at the time an application is
filed under this part; or
(4) Strengthen the management of a depository institution that is
in an unsafe or unsound condition as determined by the OTS on a case-
by-case basis.
(b) Presumptions. The OTS applies the following presumptions when
reviewing any application for a Management Consignment exemption:
(1) A proposed management official is capable of strengthening the
management of a depository institution described in paragraph (a)(3) of
this section if that official is approved by the OTS to serve as a
director or senior executive officer of that institution pursuant to 12
CFR 574.9 and the institution had operated for less than two years at
the time the service under 12 CFR 574.9 was approved; and
(2) A proposed management official is capable of strengthening the
management of a depository institution described in paragraph (a)(4) of
this section if that official is approved by the OTS to serve as a
director or senior executive officer of that institution pursuant to 12
CFR 574.9 and the institution was not in compliance with minimum
capital requirements or otherwise was in a ``troubled condition'' as
defined under 12 CFR 574.9 at the time service under that section was
approved.
(c) Duration of interlock. An interlock granted under this section
may continue for a period of two years from the date of approval. The
OTS may extend this period for one additional two-year period if the
depository organization applies for an extension at least 30 days
before the current exemption expires and satisfies one of the criteria
specified in paragraph (a) of this section. The provisions set forth in
paragraph (b) of this section also apply to applications for
extensions.
Sec. 563f.7 Change in circumstances.
(a) Termination. A management official shall terminate his or her
service or apply for an exemption to the Interlocks Act if a change in
circumstances causes the service to become prohibited under that Act. A
change in circumstances may include, but is not limited to, an increase
in asset size of an organization, a change in the delineation of the
RMSA or community, the establishment of an office, an acquisition, a
merger, a consolidation, or any reorganization of the ownership
structure of a depository organization that causes a previously
permissible interlock to become prohibited.
(b) Transition period. A management official described in paragraph
(a) of this section may continue to serve the depository institution
involved in the interlock for 15 months following the date of the
change in circumstances. The OTS may shorten this period under
appropriate circumstances.
Sec. 563f.8 Enforcement.
Except as noted in this section, the OTS administers and enforces
the Interlocks Act with respect to savings associations, savings and
loan holding companies, and affiliates of either, and may refer any
case of a prohibited interlocking relationship involving these
institutions to the Attorney General of the United States to enforce
compliance with the Interlocks Act and this part. If an affiliate of a
savings association or savings and loan holding company is subject to
the primary regulation of another Federal depository organization
supervisory agency, then the OTS does not administer and enforce the
Interlocks Act with respect to that affiliate.
Sec. 563f.9 Interlocking relationships permitted pursuant to Federal
Deposit Insurance Act.
A management official or prospective management official of a
depository organization may enter into an otherwise prohibited
interlocking relationship with another depository organization for a
period of up to 10 years if such relationship is approved by the
Federal Deposit Insurance Corporation pursuant to section
13(k)(1)(A)(v) of the Federal Deposit Insurance Act, as amended (12
U.S.C. 1823(k)(1)(A)(v)).
Dated: December 13, 1995.
Jonathan L. Fiechter,
Acting Director.
[FR Doc. 95-30972 Filed 12-28-95; 8:45 am]
BILLING CODES 4810-33-P, 6210-01-P, 6714-01-P, 6720-01-P
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