issue-1996-05-02•Federal Register proposed rules — 1996-05-02
Federal Register proposed rules — 1996-05-02
issue-1996-05-02Federal Register proposed rules — 1996-05-02Proposed Regulation
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FR Doc. 96-11010 Weather Service Modernization Criteria
[Federal Register Volume 61, Number 86 (Thursday, May 2, 1996)]
[Proposed Rules]
[Pages 19594-19600]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11010]
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DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
15 CFR Part 946
[Docket No. 960418114-6114-01]
RIN 0648-AF72
Weather Service Modernization Criteria
AGENCY: National Weather Service, National Oceanic and Atmospheric
Administration, Department of Commerce.
ACTION: Proposed amendment; request for comments.
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SUMMARY: In accordance with the Weather Service Modernization Act, (the
Act), the National Weather Service (NWS) is publishing a proposed
amendment to its criteria for modernization actions requiring
certification. This amendment adds criteria unique to automating a
field office to ensure that automation actions will not result in any
degradation of service. Automating a field office occurs after
automated surface observing system (ASOS) equipment is installed and
commissioned at a field office and the NWS employees that were
performing surface observations at that office are removed or
reassigned. At sites where NWS will remain, such as Weather Forecast
Offices, NWS will perform the necessary augmentation and back-up,
therefore no automation certification is required.
DATES: Comments are requested by June 1, 1996.
ADDRESSES: Requests for copies of documents stated in the preamble as
being available upon request and comments should be sent to Julie
Scanlon, NOAA/NWS, SSMC2, Room
[[Page 19595]]
9332, 1325 East--West Highway, Silver Spring, Maryland 20910.
FOR FURTHER INFORMATION CONTACT: Nicholas Scheller, 301-713-0454.
SUPPLEMENTARY INFORMATION: Section 704(a) of the Act requires the NWS
to contract with the National Research Council (NRC) for a review of
the scientific and technical criteria for specified modernization
actions. The NRC conducted this review and submitted the required
report assessing the criteria to the Secretary of Commerce on July 28,
1993. Readers may obtain a copy of this Report from the contact and at
the address provided above.
Section 704(b) of the Act requires the NWS to publish the criteria
in the Federal Register, based on the NRC Report, after providing an
opportunity for public comment and after consulting with the NRC and
the Modernization Transition Committee (the Committee) established by
section 707 of the Act. On March 2, 1994 the NWS published many of the
required criteria as Appendix A to the general modernization
regulations at 15 CFR 946 (see 59 FR 9921). These criteria were
published in four categories as follows:
(1) those for modernization actions that do not require prior
certification of no degradation of service, i.e., commissioning new
weather observation systems and decommissioning outdated NWS radars
(Appendix A, Section I.);
(2) those for modernization actions that require certification and
that are common to all such actions, e.g., providing appropriate
notification in the National Implementation Plan, describing local
weather characteristics and related weather concerns; comparing
services before and after the action (Appendix A, Section II.A.);
(3) those for modernization actions that require certification and
that are unique to consolidating field offices (Appendix A, Section
II.B.); and
(4) those for modernization actions that require certification and
that are unique to relocating field offices (Appendix A, Section
II.C.).
Besides the proposed new criteria, the criteria for commissioning
an ASOS and the criteria common to all modernization actions requiring
certification are applicable to automation actions. These sections of
the previously published criteria are attached for reference (see
Attachment 1).
At the time these criteria were published, the remaining criteria
unique to automating field offices and the criteria for losing these
offices required further development. Since no actions to automate or
close field offices were imminent, the publication of these additional
criteria was deferred.
Developing the automation criteria required further coordination
with the Federal Aviation Administration (FAA) and the aviation
industry to ensure that they would adequately promote aviation
requirements. Developing these criteria also required further
refinement of the NWS' Supplementary Data Program. There now appears to
be general agreement between the FAA and the industry on aviation
service levels suitable for incorporation into the criteria. In
addition, the NWS has published a Notice setting forth its
Supplementary Data Program (60 FR 64020, Dec. 13, 1995. Consequently
the NWS is now proposing the remaining criteria unique to automation
actions at NWS field offices. These criteria would be added to Section
II of Appendix A to 15 CFR Part 946 as a new subsection D. The NWS will
continue to defer publication of the criteria for closing field
offices.
As set forth in the NWS's general modernization regulations,
automation consists of removing or reassigning the NWS employees
responsible for taking surface observations after an ASOS has been
commissioned. This process generally occurs in two stages.
During the first state, an ASOS is installed and commissioned and
begins to provide the official observations for the relevant office.
Thee primary criterion at this stage is successful commissioning of the
ASOS in accordance with the previously published criteria (see Appendix
A. Section I.A.1). In addition, where the ASOS is located on an
airport, the Secretary of Commerce, in consultation with the Secretary
of Transportation, must determine that the weather services provided
after commissioning will continue to be in full compliance with
applicable flight aviation rules promulgated by the FAA. Providing this
determination is an additional criterion at these sites. This
determination was completed on a programmatic basis per a series of
letters between Dr. Elbert W. Friday, Jr., Assistant Administrator for
Weather Services and Mr. Anthony J. Broderick, Associate Administrator
for Regulation and Certification, FAA, dated, November 18, 1992,
December 20, 1992, and January 15, 1993. These letters will be included
with each automation certification in compliance with 15 CFR 946.5(b).
At this first stage, the ASOS observation alone often does not
provide a replacement for the manual observations sufficient to
maintain equivalent-services. NWS employees and/or contract personnel
have continued to augment the ASOS observation pending a determination
of what weather observations, in addition to those provided by ASOS,
may be needed and certification that the needed observations can be
provided by other sources without degrading service.
During the second state of automation, the NWS employees are
relieved of their remaining surface observing responsibilities. The
proposed criteria are intended to provide the basis for certifying that
this action will not result in any degradation of service, i.e., that
the data from the ASOS, together with the data available from other
sources are adequate to support equivalent services. Automation of NWS
field offices will only occur at those sites where there will no longer
be an NWS presence. At sites where NWS will remain, such as Weather
Forecast Offices, NWS will perform the necessary augmentation and back-
up, therefore no automation certification is required.
For aviation services, an important source of additional data at
many airports is that provided by on-site augmentation appended to the
ASOS observation. The extent of what level of augmentation is necessary
has been the subject of extensive consultations between the FAA and the
aviation industry. Beginning in June of 1994, the FAA, the NWS, and the
aviation industry held a series of workshops to define such
requirements in a manner acceptable to the broad range of aviation
users. The participants in these workshops established the objectives
and framework for a joint demonstration project which was conducted
over a six month period at 25 sites with bi-monthly reviews by
industry.
During this process, the FAA and the aviation industry refined the
FAA's historical practice of tailoring services to the specific
requirements of individual airports, ranking all airports, including
the 143 airports served by NWS field offices that are subject to
certification. This ranking was done according to a composite score
that reflected three separate scores: one for Bad Weather Operations,
which factored in both the percentage of time that the airport is
subject to specified adverse weather conditions and total operations at
the airport; a second for distance to the nearest suitable alternate
airport; and the third for certain airport characteristics, such as
categories of Instrument Flight Rules (IFR) approach capabilities, and
operational designations.
[[Page 19596]]
Based on this composite score, the FAA and the aviation industry
identified four categories of airports and the optimum level of
augmentation for each. The levels agreed to are set forth in the
Aviation Service Standards Summary chart in Criterion II.D.4 and those
NWS airports in each category are listed in Appendix B to the
regulations.
The first category encompasses approximately 300 nontowered
airports (involving 27 NWS field offices) referred to as ``D'' Level
Service airports, at which the parties agreed that the ASOS observation
should constitute the entire observation, i.e., no additional
parameters would be augmented, and there would be no manual back-up.
Those 27 airports with NWS field offices for which this level of
service is proposed are listed as ``D'' Level Service airports in
Appendix B.
The parties then agreed on the basic level of augmentation that was
needed for purposes of aviation safety at all commercial airports. This
level, referred to as ``C'' Level Service, would include augmentation
of the following parameters: thunderstorms, tornados, hail, virga,
volcanic ash, and tower visibility. In addition, there would be on-site
backup for the ASOS. This ``C'' Level Service of augmentation would be
provided at all towered airports. ``C'' Level Service was determined to
be the optimum level of augmentation at approximately 300 towered
airports, including 51 airports with NWS field offices. Those 51
airports with NWS field offices are listed as ``C'' Level Service
airports in Appendix B.
At 135 airports, augmentation beyond that required for aviation
safety was considered optimum. These airports were divided into two
categories: (1) those 78 airports (involving 40 NWS field offices)
which received the highest score, i.e., major aviation hubs and high
traffic volume airports with average or worse weather, referred to as
``A'' Level Service airports; and (2) the remaining group of 57
airports (involving 25 NWS field offices) that are smaller hubs or
special airports in other ways, that have worse than average bad
weather operations for thunderstorms and/or freezing/frozen
precipitation, and/or that are remote airports, referred to as ``B''
Level Service airports. The NWS airports designated for these two
levels of service are listed in Appendix B under ``A'' Level Service
and ``B'' Level Service respectively.
The maximum level of service, ``A'' Level Service, would involve
augmenting an ASOS observation by a comprehensive suite of manual
observations including either long-line Runway Visual Range (RVR)
readings at airports equipped with remote RVR capability or, at other
airports, observed visibility increments down to an eighth of a mile,
sixteenth of a mile and zero. The ``B'' Level Service would add
parameters such as ice pellets and snow depth to the ``C'' Level
Service, but would not include certain parameters, e.g., cloud types
and cloud layers above 12,000 feet which are part of the ``A'' Level
Service, but which were found unnecessary because of less crowded
traffic patterns and/or the less diverse and/or severe weather
conditions at these airports. Both ``A'' and ``B'' Level Service
airports (as well as ``C'' Level Service airports, mentioned
previously) would have on-site backup for the ASOS.
Criterion II.D.4a incorporates the above augmentation levels into
the certification process for the NWS field offices involved.
It should be noted that FAA funds, not NWS funds, would be used to
provide the required level of augmentation at airports transitioning to
the FAA. At the present time, funds are available to provide
augmentation beyond the ``C'' Level only at those 22 airports with the
maximum level of aviation activity, commonly referred to as FAA level 5
airports. The 10 NWS field offices subject to automation certification
among these 22 airports are denoted in Appendix B with a ``+''.
Consequently, for those ``A'' and ``B'' Level airports at which funding
is not available, the criterion would be that augmentation would
continue to be provided at the existing, level (``C'' Level Service),
but would be upgraded to the optimum level if funds became available.
The delay in achieving the desired level of service at these
airports should not be confused with a degradation of service related
to any automation action. To the extent that there may be any perceived
reduction in the level of service, it would be the result of funding
limitations and would occur (or already has occurred) independently of
the automation.
As stated above, the FAA will be responsible for ensuring the
required level of augmentation, by their own employees, by Limited
Aviation Weather Reporting Station (LAWRS), or by contract, at all NWS
sites being transitioned to the FAA and subject to automation
certification. The NWS has developed a checklist to ensure the smooth
transition of augmentation/back-up responsibility from the NWS to the
FAA for those sites being transitioned. The checklist specifically
takes into consideration the FAA service level standards and documents
that the needed steps have been completed, e.g., ASOS equipment is
properly configured. After site transition to the FAA, the NWS will
retain responsibility for ASOS maintenance, observer certification and
site inspection. Completion of this checklist is specifically included
as an element of proposed Criterion II.D.4.
Some weather parameters observed manually today will not be
observed by ASOS or appended to those augmented observations supporting
aviation services, at least initially. To ensure equivalent services,
the NWS has introduced two new classes of observations: Supplementary
Data Observations (SDOs), which are event driven, i.e., taken only when
a phenomenon is observed and not at any scheduled time; and
Supplementary Climate Data (SCDs), which are routinely scheduled
observations useful for climatological applications and
hydrometeorological operations. Both types of observations will
originate at the 118 NWS Weather Forecast Offices (WFOs) and be
disseminated through normal NWS communications systems, the Family of
Services, the NOAA Weather Wire, and various commercial vendor
services. The full suite of elements which could be reported as
Supplementary Data are described in the December 13, 1995 Federal
Register notice. Of course, each WFO will report only those elements
that it observes, i.e., those phenomena that occur in its area.
Additional surface observational data in the ASOS era will also
continue to be available from over 20,000 automatic and manual
hydrometeorological sites, including cooperative and hydrological
networks.
Proposed Criterion II.D.5 requires that the certification include a
determination that these data reported from adjacent WFO(s) together
with the ASOS observation as augmented and any complementary data such
as satellite and lightning detection data are adequate to ensure no
degradation of service for all users.
A. Classification Under Executive Order 12866
These proposed regulations establish procedures and criteria for
certifying that certain actions to modernize NWS will not result in any
degradation of weather services to the affected service area. They will
not result in any direct or indirect economic impacts, and have been
determined not to be significant for purposes of E.O. 12866.
B. Regulatory Flexibility Act Analysis
These regulations set forth the criteria for certifying that
certain modernization
[[Page 19597]]
actions will not result in a degradation of service to the affected
area. These criteria will be appended to the Weather Service
Modernization regulations. The Assistant General Counsel for
Legislation and Regulation of the Department of Commerce has certified
to the Chief Counsel for Advocacy of the Small Business Administration
that these criteria, if adopted as proposed, will not have a
significant economic impact on a substantial number of small entities.
These proposed criteria are intended for internal agency use, and the
impact on small business entities will be negligible. The proposed
criteria do not directly affect ``small government jurisdictions'' as
defined by Pub. L. 96-354, the Regulatory Flexibility Act. Accordingly,
no initial regulatory flexibility analysis has been prepared.
C. Paperwork Reduction Act of 1980
These regulations will impose no information collection
requirements of the type covered by Pub. L. 96-511, the Paperwork
Reduction Act of 1980.
D. E.O. 12612
This rule does not contain policies with sufficient Federalism
implications to warrant preparation of a Federalism assessment under
Executive Order 12612.
E. National Environmental Policy Act
NOAA has concluded that publication of this proposed rule does not
constitute a major Federal action significantly affecting the quality
of the human environment. Therefore, an environmental impact statement
is not required. A programmatic Environmental Impact Statement (EIS)
regarding NEXRAD was prepared in November 1984, and an Environmental
Assessment to update the portion of the EIS dealing with the bioeffects
of NEXRAD non-ionizing radiation was issued in 1993.
List of Subjects in 15 CFR Part 946
Administrative practice and procedure, certification,
Commissioning, Decommissioning, National Weather Service, Weather
service modernization.
Dated: April 29, 1996.
Elbert W. Friday, Jr.,
Assistant Administrator for Weather Services.
For the reasons set out in the preamble, 15 CFR part 946 is
proposed to be amended as follows:
PART 946--[AMENDED]
1. The authority citation for part 946 continues to read as
follows:
Authority: Title VII of Pub. L. 102-567, 106 Stat 4303 (15
U.S.C. 313n.)
2. Appendix A is amended by adding a new subsection (D) under
section II. Criteria for modernization actions requiring certification,
to read as set forth below. Subsections I. (A)(1) and II. (A) are
republished without change for the convenience of the reader.
Appendix A to Part 946--National Weather Service Modernization Criteria
I. Modernization Criteria for Actions Not Requiring Certification
(A) Commissioning of New Weather Observation Systems
(1) Automated Surface Observation Systems (ASOS)
Purpose: Successful commissioning for full operational use
requires a demonstration, by tests and other means, that the ASOS
equipment, as installed in the field office, meets its technical
requirements; that the prescribed operating, maintenance, and
logistic support elements are in place; that operations have been
properly staffed with trained personnel and that the equipment can
be operated with all other installed mating elements of the
modernized NWS system.
Note: It may be necessary to incorporate work-arounds to
complete some of the items listed below in a timely and cost-
effective manner. A work-around provides for an alternative method
of meeting a commissioning criteria through the application of a
pre-approved operational procedure implemented on a temporary basis,
for example, by human augmentation of the observation for the
occurrence of freezing rain, until such time as a freezing rain
sensor has been accepted for operational use with ASOS. The ASOS
Plan referenced below includes a process for recommending,
approving, and documenting work arounds and requires that they be
tracked as open items until they can be eliminated by implementation
of the originally intended capability.
References: The criteria and evaluation elements for
commissioning are set forth and further detailed in the NWS-
Sponsored Automated Surface Observing System (ASOS) Site Component
Commissioning Plan (the ASOS Plan), more specifically in Addendum I,
Appendix D of the ASOS Site Component Commissioning Evaluation
Package (the ASOS Package).
Criteria: a. ASOS Acceptance Test: The site component acceptance
test, which includes objective tests to demonstrate that the ASOS,
as installed at the given site, meets its technical specifications,
has been successfully completed in accordance with item 1a, p. D-2
of Appendix D of the ASOS Package.
b. Sensor Siting: Sensor sitings provide representative
observations in accordance with Appendix C of the ASOS Package,
Guidance for Evaluating Representativeness of ASOS Observations and
item 1b, p. D-2 of Appendix D of the ASOS Package.
c. Initialization Parameters: Initialization parameters are in
agreement with source information provided by the ASOS Program
Office, in accordance with item 1c, pp. D-2 & D-3 of Appendix D of
the ASOS Package.
d. Sensor Performance Verification: Sensor performance has been
verified in accordance with the requirements stated in the ASOS Site
Technical Manual and item 1d, p. D-3 of the ASOS Package.
e. Field Modification Kits/Firmware Installed: All critical
field modification kits and firmware for the site as required by
attachments 3a & b (pp. D-45 & D-46) or memorandum issued to the
regions, have been installed on the ASOS in accordance with item 1e,
p. D-4 of Appendix of the ASOS Package.
f. Operations and Maintenance Documentation: A full set of
operations and maintenance documentation is available in accordance
with items 2a-h, pp. D-5 & D-6 of Appendix D of the ASOS Package.
g. Notification of and Technical Coordination with Users: All
affected users have been notified of the initial date for ASOS
operations and have received a technical coordination package in
accordance with item 2i, pp. D-6 & D-7 of Appendix D of the ASOS
Package.
h. Availability of Trained Operations Personnel: Adequate
operations staff are available, training materials are available,
and required training has been completed, per section 3.2.3.1 of the
ASOS Plan, in accordance with items 3a-c, p. D-8 of Appendix D of
the ASOS package.
i. Maintenance Capability: Proper maintenance personnel and
support systems and arrangements are available in accordance with
items 4a-e, pp. D-9 & D-10 of Appendix D of the ASOS Package.
j. Performance of Site Interfaces: The equipment can be operated
in all of its required modes and in conjunction with all of its
interfacing equipment per the detailed checklists of items 5a-b, pp.
D-11 & D-19 of Appendix D of the ASOS Package.
k. Support of Associated NWS Forecasting and Warning Services:
The equipment provides proper support of NWS forecasting and warning
services and archiving, including operation of all specified
automatic and manually augmented modes per the checklist, items 6a-
e, pp. D-20 to D-29, of Appendix D of the ASOS Package.
l. Service Backup Capabilities: Personnel, equipment, and
supporting services are available and capable of providing required
backup readings and services in support of operations when primary
equipment is inoperable in accordance with items 7a-g, pp. D-30 to
D-32, to Appendix D of the ASOS Package.
m. Augmentation Capabilities: Personnel are available and
trained to provide augmentation of ASOS observations in accordance
with augmentation procedures, items 8a-c, p. D-33 of Appendix D of
the ASOS Package.
n. Representativeness of Observations: Observations are
representative of the hydrometeorological conditions of the
observing location as determined by a period of observation of at
least 60 days prior to commissioning in accordance with Appendix
[[Page 19598]]
C and item 6e, pp. D-27 to D-29 of Appendix D of the ASOS Package.
* * * * *
II. Criteria for Modernization Actions Requiring Certification
(A) Criteria Common to all Types of Certifications (Except as
Noted)
1. Notification: Advanced notification and the expected date of
the proposed certification have been provided in the National
Implementation Plan.
2. Local Weather Characteristics and Weather Related Concerns: A
description of local weather characteristics and weather related
concerns which affect the weather services provided to the affected
service area is provided.
3. Comparison of Services: A comparison of services before and
after the proposed action demonstrates that all services currently
provided to the affected service area will continue to be provided.
4. Recent or Expected Modernization of NWS Operations in the
Affected Service Area: A description of recent or expected
modernization of NWS operations in the affected service area is
provided.
5. NEXRAD Network Coverage: NEXRAD network coverage or gaps in
coverage at 10,000 feet over the affected service area are
identified.
6. Air Safety Appraisal (applies only to relocation and closure
of field offices at an airport): Verification that there will be no
degradation of service that affects aircraft safety has been made by
conducting an air safety appraisal in consultation with the Federal
Aviation Administration.
7. Evaluation of Services to In-State Users (applies only to
relocation and closure of the only field office in a State):
Verification that there will be no degradation of weather services
provided to the State has been made by evaluating the effect on
weather services provided to In-State Users.
8. Liaison Officer: Arrangements have been made to retain a
Liaison Officer in the affected service area for at least two years
to provide timely information regarding the activities of the NWS
which may affect service to the community, including modernization
and restructuring; and to work with area weather service users,
including persons associated with general aviation, civil defense,
emergency preparedness, and the news media, with respect to the
provision of timely weather warnings and forecasts.
9. Meteorologist-In-Charge's (MIC) Recommendation to Certify:
The MIC of the future WFO that will have responsibility for the
affected service area has recommended certification in accordance
with 15 CFR 946.7(a).
10. Regional Director's Certification: The cognizant Regional
Director has approved the MIC's recommended certification of no
degradation of service to the affected service area in accordance
with 15 CFR 946.8.
* * * * *
(D) Proposed Modernization Criteria Unique to Automation
Certifications
1. Compliance with flight aviation rules (applies on airports
only): Consultation with the Federal Aviation Administration (FAA)
has verified that the weather services provided after the
commissioning of the relevant ASOS unit(s) will be in full
compliance with applicable Federal Aviation Regulations promulgated
by the FAA.
2. ASOS Commissioning: The relevant ASOS unit(s) have been
successfully commissioned in accordance with the criteria set forth
in section I.A.1 of this Appendix.
3. User Confirmation of Services: Any valid user complaints
related to actual system performance received since commissioning of
the ASOS have been satisfactorily resolved and the issues addressed
in the MIC's recommendation for certification.
4. Aviation Observation Requirement: At sites subject to
automation certification, all surface observations and reports
required for aviation services can be generated by an ASOS augmented
as necessary by non-NWS personnel.
a. The ASOS observation will be augmented/backed-up to the level
specified in Appendix B as described in the Aviation Service
Standards Summary chart, except that, if funds needed for such level
of service are not available at those airports listed as ``A'' or
``B'' Level Service airports in Appendix B, the ASOS will be
augmented/backed-up at the ``C'' Level Service until funds become
available.
b. The transition checklist has been signed by the appropriate
Region Systems Operations Division Chief.
5. General Surface Observation Requirement: The total
observations available are adequate to support the required
inventory of services to users in the affected area. All necessary
hydrometeorological data and information are available through ASOS
as augmented in accordance with this section, through those elements
reported as supplementary data by the relevant Weather Forecast
Office(s), or through other complementary sources. The adequacy of
the total surface observation is addressed in the MIC's
recommendation for certification.
BILLING CODE 3510-12-M
[[Page 19599]]
[GRAPHIC] [TIFF OMITTED] TP02MY96.015
[[Page 19600]]
3. Appendix B is added to Part 946 to read as follows:
Appendix B to Part 946--Airport Tables
------------------------------------------------------------------------
------------------------------------------------------------------------
``A'' Level Service Airports
------------------------------------------------------------------------
Akron, OH*................................... CAK.
Albany, NY*.................................. ALB.
Atlanta, GA* +............................... ATL.
Baltimore, MD*............................... BWI.
Boston, MA+ *................................ BOS.
Charlotte, NC+............................... CLT.
Chicago-O'Hare (AV), IL+ *................... ORD.
Cincinnati, OH+.............................. CVG.
Columbus, OH................................. CMH.
Dayton, OH*.................................. DAY.
Des Moines, IA*.............................. DSM.
Detroit, MI+ *............................... DTW.
Fairbanks, AK*............................... FAI.
Fresno, CA*.................................. FAT.
Greensboro, NC*.............................. GSO.
Hartford, CT*................................ BDL.
Indianapolis, IN*............................ IND.
Kansas City, MO*............................. MCI.
Lansing, MI*................................. LAN.
Las Vegas, NV................................ LAS.
Los Angeles (AV), CA+........................ LAX.
Louisville, KY*.............................. SDF.
Milwaukee, WI*............................... MKE.
Minneapolis, MN*............................. MSP.
Newark, NJ+ *................................ EWR.
Oklahoma City, OK*........................... OKC.
Phoenix, AZ+................................. PHX.
Portland, OR*................................ PDX.
Providence, RI*.............................. PVD.
Raleigh, NC*................................. RDU.
Richmond, VA*................................ RIC.
Rochester, NY*............................... ROC.
Rockford, IL*................................ RFD.
San Antonio, TX*............................. SAT.
San Diego, CA................................ SAN.
San Francisco, CA+ *......................... SFO.
Spokane, WA*................................. GEG.
Syracuse, NY*................................ SYR.
Tallahassee, FL.............................. TLH.
Tulsa, OK.................................... TUL.
------------------------------------------------------------------------
``B'' Level Service Airports
------------------------------------------------------------------------
Baton Rouge, LA*............................. BTR.
Billings, MT*................................ BIL.
Charleston, WV*.............................. CRW.
Chattanooga, TN*............................. CHA.
Colorado Springs, CO......................... COS.
Daytona Beach, FL............................ DAB.
El Paso, TX.................................. ELP.
Flint, MI.................................... FNT.
Fort Wayne, IN............................... FWA.
Honolulu, HI................................. HNL.
Huntsville, AL*.............................. HSV.
Knoxville, TN*............................... TYS.
Lincoln, NE*................................. LNK.
Lubbock, TX.................................. LBB.
Madison, WI*................................. MSN.
Moline, IL*.................................. MLI.
Montgomery, AL*.............................. MGM.
Muskegon, MI*................................ MKG.
Norfolk, VA*................................. ORF.
Peoria, IL................................... PIA.
Savannah, GA*................................ SAV.
South Bend, IN*.............................. SBN.
Tucson, AZ................................... TUS.
West Palm Beach, FL*......................... PBI.
Youngstown, OH*.............................. YNG.
------------------------------------------------------------------------
``C'' Level Service Airports
------------------------------------------------------------------------
Abilene, TX.................................. ABI.
Alltentown, PA............................... ABE.
Asheville, NC................................ AVL.
Athens, GA................................... AHN.
Atlantic City, NJ............................ ACY.
Augusta, GA.................................. AGS.
Austin, TX................................... AUS.
Bakerfield, CA............................... BFL.
Bridgeport, CT............................... BDR.
Bristol, TN.................................. TRI.
Casper, WY................................... CPR.
Columbia, MO................................. COU.
Columbus, GA................................. CSG.
Dubuque, IA.................................. DBQ.
Erie, PA..................................... ERI.
Eugene, OR................................... EUG.
Evansville, IN............................... EVV.
Fargo, ND.................................... FAR.
Fort Smith, AR............................... FSM.
Grand Island, NE............................. GRI.
Helena, MT................................... HLN.
Huntington, WV............................... HTS.
Kahului, HI.................................. OGG.
Key West, FL................................. EYW.
Lewiston, ID................................. LWS.
Lexington, KY................................ LEX.
Lynchburg, VA................................ LYH.
Macon, GA.................................... MCN.
Mansfield, OH................................ MFD.
Meridian, MS................................. MEI.
Olympia, WA.................................. OLM.
Port Arthur, TX.............................. BPT.
Portland, ME................................. PWM.
Rapid City, SD............................... RAP.
Redding, CA.................................. RDD.
Reno, NV..................................... RNO.
Roanoke, VA.................................. ROA.
Rochester, MN................................ RST.
Salem, OR.................................... SLE.
Santa Maria, CA.............................. SMX.
Sioux City, IA............................... SUX.
Springfield, IL.............................. SPI.
Stockton, CA................................. SCK.
Toledo, OH................................... TOL.
Waco, TX..................................... ACT.
Waterloo, IA................................. ALO.
Wilkes-Barre, PA............................. AVP.
Williamsport, PA............................. IPT.
Wilmington, DE............................... ILG.
Worcester, MA................................ ORH.
Yakima, WA................................... YKM.
------------------------------------------------------------------------
``D'' Level Service Airports
------------------------------------------------------------------------
Alamosa, CO.................................. ALS.
Alpena, MI................................... APN.
Astoria, OR.................................. AST.
Beckley, WV.................................. BKW.
Caribou, ME.................................. CAR.
Concordia, KS................................ CNK.
Concord, NH.................................. CON.
Elkins, WV................................... EKN.
Ely, NV...................................... ELY.
Havre, MT.................................... HVR.
Homer, AK.................................... HOM.
Houghton Lake, MI............................ HTL.
Huron, SD.................................... HON.
International Falls, MN...................... INL.
Kalispell, MT................................ FCA.
Lander, WY................................... LND.
Norfolk, NE.................................. OFK.
Sault Ste. Marie, MI......................... SSM.
Scottsbluff, NE.............................. BFF.
Sheridan, WY................................. SHR.
St. Cloud, MN................................ STC.
Tupelo, MS................................... TUP.
Valentine, NE................................ VTN.
Victoria, TX................................. VCT.
Wichita Falls, TX............................ SPS.
Williston, ND................................ ISN.
Winnemucca, NV............................... WMC.
------------------------------------------------------------------------
+--Maximum activity (level 5) airport.
*--Long-line RVR designated site.
[FR Doc. 96-11010 Filed 5-1-96; 8:45 am]
BILLING CODE 3510-12-M
Complete official Federal Register PDF
FR Doc. 96-10968 Proposed Amendment of Class E Airspace; La Grande, OR
[Federal Register Volume 61, Number 86 (Thursday, May 2, 1996)]
[Proposed Rules]
[Pages 19593-19594]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10968]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
14 CFR Part 71
[Airspace Docket No. 96-ANM-008]
Proposed Amendment of Class E Airspace; La Grande, OR
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Notice of Proposed Rulemaking (NPRM).
-----------------------------------------------------------------------
SUMMARY: This proposed rule would amend the La Grande, Oregon, Class E
airspace to accommodate a new Global Positioning System (GPS) Standard
Instrument Approach Procedure (SIAP) to the La Grande/Union County
Airport. The area would be depicted on aeronautical charts for pilot
reference.
DATES: Comments must be received on or before June 14, 1996.
ADDRESSES: Send comments on the proposal in triplicate to: Manager,
Operations Branch, ANM-530, Federal Aviation Administration, Docket No.
96-ANM-008, 1601 Lind Avenue SW., Renton, Washington 98055-4056.
The official docket may be examined at the same address.
An informal docket may also be examined during normal business
hours at the address listed above.
FOR FURTHER INFORMATION CONTACT:
James C. Frala, ANM-532.4, Federal Aviation Administration, Docket No.
96-ANM-008, 1601 Lind Avenue SW., Renton, Washington 98055-4056;
telephone number: (206) 227-2535.
SUPPLEMENTARY INFORMATION:
Comments Invited
Interested parties are invited to participate in this proposed
rulemaking 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 on the proposal. Comments are
specifically invited on the overall regulatory, aeronautical, economic,
environmental, and energy related aspects of the proposal.
Communications should identify the airspace docket number and be
[[Page 19594]]
submitted in triplicate to the address listed above. Commenters wishing
the FAA to acknowledge receipt of their comments on this notice must
submit with those comments a self-addressed, stamped postcard on which
the following statement is made: ``Comments to Airspace Docket No. 96-
ANM-008.'' The postcard will be date/time stamped and returned to the
commenter. All communications received on or before the specified
closing date for comments will be considered before taking action on
the proposed rule. The proposal contained in this notice may be changed
in the light of comments received. All comments submitted will be
available for examination at the address listed above both before and
after the closing date for comments. A report summarizing each
substantive public contact with FAA personnel concerned with this
rulemaking will be filed in the docket.
Availability of NPRM's
Any person may obtain a copy of this NPRM by submitting a request
to the Federal Aviation Administration, Operations Branch, ANM-530,
1601 Lind Avenue SW., Renton, Washington 98055-4056. Communications
must identify the notice number of this NPRM. Persons interested in
being placed on a mailing list for future NPRM's should also request a
copy of Advisory Circular No. 11-2A, which describes the application
procedure.
The Proposal
The FAA is considering an amendment to part 71 of the Federal
Aviation Regulations (14 CFR part 71) to amend Class E airspace at La
Grande, Oregon, to accommodate a new GPS SIAP to the La Grande/Union
County Airport. The area would be depicted on aeronautical charts for
pilot reference. The coordinates for this airspace docket are based on
North American Datum 83. Class E airspace areas extending upward from
700 feet or more above the surface of the earth are published in
Paragraph 6005 of FAA Order 7400.9C dated August 17, 1995, and
effective September 16, 1995, which is incorporated by reference in 14
CFR 71.1. The Class E airspace designation listed in this document
would be published subsequently in the Order.
The FAA has determined that this proposed regulation only involves
an established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
It, therefore, (1) is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under DOT
Regulatory Policies and Procedures (44 FR 11034; February 26, 1979);
and (3) does not warrant preparation of a regulatory evaluation as the
anticipated impact is so minimal. Since this is a routine matter that
will only affect air traffic procedures and air navigation, it is
certified that this rule, when promulgated, will not have a significant
economic impact on a substantial number of small entities under the
criteria of the Regulatory Flexibility Act.
List of Subjects in 14 CFR Part 71
Airspace, Incorporation by reference, Navigation (air).
The Proposed Amendment
In consideration of the foregoing, the Federal Aviation
Administration proposes to amend 14 CFR part 71 as follows:
PART 71--[AMENDED]
1. The authority citation for 14 CFR part 71 continues to read as
follows:
Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24
FR 9565, 3 CFR, 1959-1963 Comp., p. 389; 14 CFR 11.69.
Sec. 71.1 [Amended]
2. The incorporation by reference in 14 CFR 71.1 of the Federal
Aviation Administration Order 7400.9C, Airspace Designations and
Reporting Points, dated August 17, 1995, and effective September 16,
1995, is amended as follows:
Paragraph 6005 Class E airspace areas extending upward from 700
feet or more above the surface of the earth.
* * * * * *
ANM OR E5 La Grande, OR
La Grande/Union County Airport, OR
(Lat 45 deg.17'25'' N, long. 118 deg.00'26'' W)
Walla Walla VOR/DME
(Lat 46 deg.05'13'' N, long. 118 deg.17'33'' W)
That airspace extending upward from 700 feet above the surface
bounded on the north by a line beginning at lat. 45 deg.38'59'' N,
long. 118 deg.02'04'' W, extending eastwardly to lat. 45 deg.37'00''
N, long. 117 deg.44'34'' W, on the east by a line extending to lat.
45 deg.15'29'' N, long. 117 deg.49'04'' W, on the south by a line
extending to lat. 45 deg.17'29'' N, long. 118 deg.07'04'' W, on the
west by a line extending to the point of beginning, and within a
4.3-mile radius of the La Grande/Union County Airport, that airspace
extending upward from 1,200 feet above the surface bounded by a line
beginning at lat. 45 deg.38'59'' N, long. 118 deg.02'04'' W,
extending northwest along V-357 to the Walla Walla VOR/DME 16.6-mile
radius, thence north along the Walla Walla VOR/DME 16.6-mile radius
until intercepting lat. 46 deg.00'00'' N, thence eastward along lat.
46 deg.00'00'' N, to long. 117 deg.02'00'' W, thence south along
long. 117 deg.02'00'' W until intercepting V-298, thence westward
along V-298 to lat. 45 deg.23'30'' N, long. 117 deg.47'10'' W, to
lat. 45 deg.37'00'' N, long. 117 deg.44'34'' W, thence to the point
of beginning, and that airspace bounded on the north by the
southwest edge of V-298, on the east by the Boise, ID Enroute
Domestic Airspace Area, on the south by the north edge of V-121, on
the west by the east edge of V-182-397, excluding that airspace
within Federal airways and the Baker, OR, Class E airspace area.
* * * * *
Issued in Seattle, Washington, on April 19, 1996.
Richard E. Prang,
Acting Assistant Manager, Air Traffic Division, Northwest Mountain
Region.
[FR Doc. 96-10968 Filed 5-1-96; 8:45 am]
BILLING CODE 4910-13-M
Complete official Federal Register PDF
FR Doc. 96-10967 Establishment of Class E Airspace; Menomonie, WI
[Federal Register Volume 61, Number 86 (Thursday, May 2, 1996)]
[Proposed Rules]
[Pages 19592-19593]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10967]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
14 CFR Part 71
[Airspace Docket No. 96-AGL-4]
Establishment of Class E Airspace; Menomonie, WI
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This notice proposes to establish Class E airspace at Score
Field, Menomonie, WI, to accommodate a Very High Frequency
Omnidirectional Range/Distance Measuring Equipment (VOR/DME) instrument
??? procedure for Runway 27. Controlled airspace extending upward from
700 to 1200 feet above ground level (AGL) is needed for aircraft
executing the approach.
DATES: Comments must be received on or before June 6, 1996.
ADDRESSES: Send comments on the proposal in triplicate to: Federal
Aviation Administration, Office of the Assistant Chief Counsel, AGL-7,
Rules Docket No. 96-AGL-4, 2300 East Devon Avenue, Des Plaines,
Illinois 60018.
The official docket may be examined in the Office of the Assistant
Chief Counsel, Federal Aviation Administration, 2300 East Devon Avenue,
Des Plaines, Illinois. An informal docket may also be examined during
normal business hours at the Air Traffic Division, Operations Branch,
Federal Aviation Administration, 2300 East Devon Avenue, Des Plaines,
Illinois.
FOR FURTHER INFORMATION CONTACT:
John A. Clayborn, Air Traffic Division, Operations Branch, AGL-530,
Federal Aviation Administration, 2300 East Devon Avenue, Des Plaines,
Illinois 60018, telephone (847) 294-7568.
SUPPLEMENTARY INFORMATION:
Comments Invited
Interested parties are invited to participate in this proposed
rulemaking
[[Page 19593]]
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 on the proposal. Comments are
specifically invited on the overall regulatory, aeronautical, economic,
environmental, and energy-related aspects of the proposal.
Communications should identify the airspace docket number and be
submitted in triplicate to the address listed above. Commenters wishing
the FAA to acknowledge receipt of their comments on this notice must
submit with those comments a self-addressed, stamped postcard on which
the following statement is made: ``Comments to Airspace Docket No. 96-
AGL-4.'' The postcard will be date/time stamped and returned to the
commenter. All communications received on or before the specified
closing date for comments will be considered before taking action on
the proposed rule. The proposal contained in this notice may be changed
in light of comments received. All comments submitted will be available
for examination in the Rules Docket, FAA, Great Lakes Region, Office of
the Assistant Chief Counsel, 2300 East Devon Avenue, Des Plaines,
Illinois, both before and after the closing date for comments. A report
summarizing each substantive public contact with FAA personnel
concerned with this rulemaking will be filed in the docket.
Availability of NPRM's
Any person may obtain a copy of the Notice of Proposed Rulemaking
(NPRM) by submitting a request to the Federal Aviation Administration,
Air Traffic Division, Operations Branch, 2300 East Devon Avenue, Des
Plaines, Illinois 60018, or by calling (847) 294-7568. Communications
must identify the notice number of this NPRM. Persons interested in
being placed on a mailing list for future NPRM's should also request a
copy of Advisory Circular No. 11-2A, which describes the application
procedure.
The Proposal
The FAA is considering an amendment to part 71 of the Federal
Aviation Regulations (14 CFR part 71) to establish Class E airspace at
Score Field, Menomonie, WI, to accommodate a Very High Frequency
Omnidirectional Range/Distance Measuring Equipment (VOR/DME) Instrument
Approach Procedure for Runway 27. Controlled airspace extending upward
from 700 to 1200 feet AGL is needed for aircraft executing the
approach. The area would be depicted on appropriate aeronautical
charts. Class E airspace designations for areas extending upward from
700 feet or more above the surface of the earth are published in
paragraph 6005 of FAA Order 7400.9C dated August 17, 1995, and
effective September 16, 1995, which is incorporated by reference in 14
CFR 71.1. The Class E airspace designation listed in this document
would be published subsequently in the Order.
The FAA has determined that this proposed regulation only involves
an established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
Therefore, this proposed regulation--(1) Is not a ``significant
regulatory action'' under Executive Order 12866; (2) is not a
``significant rule'' under DOT Regulatory Policies and Procedures (44
FR 11034; February 26, 1979); and (3) does not warrant preparation of a
Regulatory Evaluation as the anticipated impact is so minimal. Since
this is a routine matter that will only affect air traffic procedures
and air navigation, it is certified that this proposed rule would not
have a significant economic impact on a substantial number of small
entities under the criteria of the Regulatory Flexibility Act.
List of Subjects in 14 CFR Part 71
Airspace, Incorporation by reference, Navigation (air).
The Proposed Amendment
Accordingly, pursuant to the authority delegated to me, the Federal
Aviation Administration proposes to amend part 71 of the Federal
Aviation Regulations (14 CFR part 71) as follows:
PART 71--[AMENDED]
1. The authority citation for part 71 continues to read as follows:
Authority: 49 U.S.C. 206(g), 40103, 40113, 40120; E.O. 10854, 24
FR 9565, 3 CFR, 1959-1963 Comp., p. 389; 14 CFR 11.69.
Sec. 71.1 [Amended]
2. The incorporation by reference in 14 CFR 71.1 of the Federal
Aviation Administration Order 7400.9C, Airspace Designations and
Reporting Points, dated August 17, 1995, and effective September 16,
1995, is amended as follows:
Paragraph 6005 The Class E airspace areas extending upward from
700 feet or more above the surface of the earth.
* * * * *
AGL WI E5 Menomonie, WI [New]
Menomonie, Score Field, WI
(Lat. 44 deg.53'29'' N, long. 91 deg.52'00'' W)
That airspace extending upward from 700 feet above the surface
within a 6.4 mile radius of Score Field.
* * * * *
Issued in Des Plaines, Illinois on April 17, 1996.
Maureen Woods,
Acting Manager, Air Traffic Division.
[FR Doc. 96-10967 Filed 5-1-96; 8:45 am]
BILLING CODE 4910-13-M
Complete official Federal Register PDF
FR Doc. 96-10966 Revision of Class E Airspace; LA Porte, IN
[Federal Register Volume 61, Number 86 (Thursday, May 2, 1996)]
[Proposed Rules]
[Pages 19591-19592]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10966]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
14 CFR Part 71
[Airspace Docket No. 96-AGL-6]
Revision of Class E Airspace; LA Porte, IN
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This notice proposes to revise Class E airspace at La Porte
Municipal Airport, La Porte, IN, to accommodate a localizer (LOC)
Instrument Approach Procedure to Runway 2. Controlled airspace
extending upward from 700 to 1200 feet above ground level (AGL) is
needed to for aircraft executing the approach.
DATES: Comments must be received on or before June 6, 1996.
ADDRESSES: Send comments on the proposal in triplicate to: Federal
Aviation Administration, Office of the Assistant Chief Counsel, AGL-7,
Rules Docket No. 96-AGL-6, 2300 East Devon Avenue, Des Plaines,
Illinois 60018
The official docket may be examined in the Office of the Assistant
Chief Counsel, Federal Aviation Administration, 2300 East Devon Avenue,
Des Plaines, Illinois. An informal docket may also be examined during
normal business hours at the Air Traffic Division, Operations Branch,
Federal Aviation Administration, 2300 East Devon Avenue, Des Plaines,
Illinois.
FOR FURTHER INFORMATION CONTACT: John A. Clayborn, Air Traffic
Division, Operations Branch, AGL-530, Federal Aviation Administration,
2300 East Devon Avenue, Des Plaines, Illinois 60018, telephone (847)
294-7568.
SUPPLEMENTARY INFORMATION:
Comments Invited
Interested parties are invited to participate in this proposed
rulemaking
[[Page 19592]]
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 on the proposal. Comments are
specifically invited on the overall regulatory, aeronautical, economic,
environmental, and energy-related aspects of the proposal.
Communications should identify the airspace docket number and be
submitted in triplicate to the address listed above. Commenters wishing
the FAA to acknowledge receipt of their comments on this notice must
submit with those comments a self-addressed, stamped postcard on which
the following statement is made: ``Comments to Airspace Docket No. 96-
AGL-6.'' The postcard will be date/time stamped and returned to the
commenter. All communications received on or before the specified
closing date for comments will be considered before taking action on
the proposed rule. The proposal contained in this notice may be changed
in light of comments received. All comments submitted will be available
for examination in the Rules Docket, FAA, Great Lakes Region, Office of
the Assistant Chief Counsel, 2300 East Devon Avenue, Des Plaines,
Illinois, both before and after the closing date for comments. A report
summarizing each substantive public contact with FAA personnel
concerned with this rulemaking will be filed in the docket.
Availability of NPRM's
Any person may obtain a copy of the Notice of Proposed Rulemaking
(NPRM) by submitting a request to the Federal Aviation Administration,
Air Traffic Division, Operations Branch, 2300 East Devon Avenue, Des
Plaines, Illinois 60018, or by calling (847) 294-7568. Communications
must identify the notice number of this NPRM. Persons interested in
being placed on a mailing list for future NPRM's should also request a
copy of Advisory Circular No. 11-2A, which describes the application
procedure.
The Proposal
The FAA is considering an amendment to part 71 of the Federal
Aviation Regulations (14 CFR part 71) to revise Class E airspace at La
Porte Municipal Airport, La Porte, IN, to accommodate a localizer (LOC)
Instrument Approach Procedure to Runway 2. Controlled airspace
extending upward from 700 to 1200 feet AGL is needed for aircraft
executing the approach. The area would be depicted on appropriate
aeronautical charts. Class E airspace designations for areas extending
upward from 700 feet or more above the surface of the earth are
published in paragraph 6005 of FAA Order 7400.9C dated August 17, 1995,
and effective September 16, 1995, which is incorporated by reference in
14 CFR 71.1. The Class E airspace designation listed in this document
would be published subsequently in the Order.
The FAA has determined that this proposed regulation only involves
an established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
Therefore, this proposed regulation--(1) is not ``a significant
regulatory action'' under Executive Order 12866; (2) is not a
``significant rule'' under DOT Regulatory Policies and Procedures (44
FR 11034; February 26, 1979); and (3) does not warrant preparation of a
Regulatory Evaluation as the anticipated impact is so minimal. Since
this is a routine matter that will only affect air traffic procedures
and air navigation, it is certified that this proposed rule would not
have a significant economic impact on a substantial number of small
entities under the criteria of the Regulatory Flexibility Act.
List of Subjects in 14 CFR Part 71
Airspace, Incorporation by reference, Navigation (air).
The Proposed Amendment
Accordingly, pursuant to the authority delegated to me, the Federal
Aviation Administration proposes to amend part 71 of the Federal
Aviation Regulations (14 CFR part 71) as follows:
PART 71--[AMENDED]
1. The authority citation for part 71 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24
FR 9565, 3 CFR, 1959-1963 Comp., p. 389; 14 CFR 11.69.
Sec. 71.1 [Amended]
2. The incorporation by reference in 14 CFR 71.1 of the Federal
Aviation Administration Order 7400.9C, Airspace Designations and
Reporting Points, dated August 17, 1995, and effective September 16,
1995, is amended as follows:
Paragraph 6005 The Class E airspace areas extending upward from
700 feet or more above the surface of the earth.
* * * * *
AGL IN E5 La Porte, IN [Revised]
La Porte Municipal Airport, IN
(Lat. 41 deg.34'22'' N., long. 86 deg.44'03'' W.)
La Porte NDB
(Lat. 41 deg.29'56'' N., long. 86 deg.44'17'' W.)
That airspace extending upward from 700 feet above the surface
within a 7.3-mile radius of the La Porte Municipal Airport and
within 2.5 miles each side of the 201 deg. bearing from the La Porte
NDB extending from the 7.3-mile radius to 11.4 miles south of the
airport, excluding that airspace within the Michigan City, IN and
Knox, IN Class E airspace area.
* * * * *
Issued in Des Plaines, Illinois on April 17, 1996.
Maureen Woods,
Acting Manager, Air Traffic Division.
[FR Doc. 96-10966 Filed 5-1-96; 8:45 am]
BILLING CODE 4910-13-M
Complete official Federal Register PDF
FR Doc. 96-10965 Establishment of Class E Airspace; Sturgis, SD
[Federal Register Volume 61, Number 86 (Thursday, May 2, 1996)]
[Proposed Rules]
[Pages 19590-19591]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10965]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 71
[Airspace Docket No. 96-AGL-5]
Establishment of Class E Airspace; Sturgis, SD
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This notice proposes to establish Class E airspace at Sturgis,
SD. A Global Positioning System (GPS) standard instrument approach
procedure (SIAP) to Runway 29 has been developed for the Sturgis
Municipal Airport. Controlled airspace extending upward from 700 feet
above ground level (AGL) is needed for aircraft executing the approach.
DATES: Comments must be received on or before June 6, 1996.
ADDRESSES: Send comments on the proposal in triplicate to: Federal
Aviation Administration, Office of the Assistant Chief Counsel, AGL-7,
Rules Docket No. 96-AGL-5, 2300 East Devon Avenue, Des Plaines,
Illinois 60018.
The official docket may be examined in the Office of the Assistant
Chief Counsel, Federal Aviation Administration, 2300 East Devon Avenue,
Des Plaines, Illinois. An informal docket may also be examined during
normal business hours at the Air Traffic Division, Operations Branch,
Federal Aviation Administration, 2300 East Devon Avenue, Des Plaines,
Illinois.
FOR FURTHER INFORMATION CONTACT:
John A. Clayborn, Air Traffic Division, Operations Branch, AGL-530,
Federal Aviation Administration, 2300 East Devon Avenue, Des Plaines,
Illinois 60018, telephone (847) 294-7459.
[[Page 19591]]
SUPPLEMENTARY INFORMATION:
Comments Invited
Interested parties are invited to participate in this proposed
rulemaking 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 on the proposal. Comments are
specifically invited on the overall regulatory, aeronautical, economic,
environmental, and energy-related aspects of the proposal.
Communications should identify the airspace docket number and be
submitted in triplicate to the address listed above. Commenters wishing
the FAA to acknowledge receipt of their comments on this notice must
submit with those comments a self-addressed, stamped postcard on which
the following statement is made: ``Comments to Airspace Docket No. 96-
AGL-5.'' The postcard will be date/time stamped and returned to the
commenter. All communications received on or before the specified
closing date for comments will be considered before taking action on
the proposed rule. The proposal contained in this notice may be changed
in light of comments received. All comments submitted will be available
for examination in the Rules Docket, FAA, Great Lakes Region, Office of
the Assistant Chief Counsel, 2300 East Devon Avenue, Des Plaines,
Illinois, both before and after the closing date for comments. A report
summarizing each substantive public contact with FAA personnel
concerned with this rulemaking will be filed in the docket.
Availability of NPRM's
Any person may obtain a copy of the Notice of Proposed Rulemaking
(NPRM) by submitting a request to the Federal Aviation Administration,
Air Traffic Division, Operations Branch, 2300 East Devon Avenue, Des
Plaines, Illinois 60018, or by calling (847) 294-7568. Communications
must identify the notice number of this NPRM. Persons interested in
being placed on a mailing list for future NPRM's should also request a
copy of Advisory Circular No. 11-2A, which describes the application
procedure.
The Proposal
The FAA is considering an amendment to part 71 of the Federal
Aviation Regulations (14 CFR part 71) to establish Class E airspace at
Sturgis, SD. This proposal would provide adequate Class E airspace for
operators executing the GPS Runway 29 SIAP at Sturgis Municipal
Airport. Controlled airspace extending upward from 700 feet AGL is
needed for aircraft executing the approach. The area would be depicted
on appropriate aeronautical charts. Class E airspace designations for
airspace areas extending upward from 700 feet or more above the surface
of the earth are published in paragraph 6005 of FAA Order 7400.9C dated
August 17, 1995, and effective September 16, 1995, which is
incorporated by reference in 14 CFR 71.1. The Class E airspace
designation listed in this document would be published subsequently in
the Order.
The FAA has determined that this proposed regulation only involves
an established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
Therefore, this proposed regulation--(1) is not a ``significant
regulatory action'' under Executive Order 12866; (2) is not a
``significant rule'' under DOT Regulatory Policies and Procedures (44
FR 11034; February 26, 1979); and (3) does not warrant preparation of a
Regulatory Evaluation as the anticipated impact is so minimal. Since
this is a routine matter that will only affect air traffic procedures
and air navigation, it is certified that this proposed rule would not
have a significant economic impact on a substantial number of small
entities under the criteria of the Regulatory Flexibility Act.
List of Subjects in 14 CFR Part 71
Airspace, Incorporation by reference, Navigation (air).
The Proposed Amendment
Accordingly, purusant to the authority delegated to me, the Federal
Aviation Administration proposes to amend part 71 of the Federal
Aviation Regulations (14 CFR part 71) as follows:
PART 71--[AMENDED]
1. The authority citation for part 71 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24
FR 9565, 3 CFR, 1959-1963 Comp., p. 389; 14 CFR 11.69.
Sec. 71.1 [Amended]
2. The incorporation by reference in 14 CFR 71.1 of the Federal
Aviation Administration Order 7400.9C, Airspace Designations and
Reporting Points, dated August 17, 1995, and effective September 16,
1995, is amended as follows:
Paragraph 6005 Class E airspace areas extending upward from 700
feet or more above the surface of the earth.
* * * * *
AGL SD E5 Sturgis, SD [New]
(Lat. 44 deg.25'06''N, long. 103 deg.22'38''W)
That airspace extending upward from 700 feet above the surface
within a 7-mile radius of the Sturgis Municipal Airport.
* * * * *
Issued in Des Plaines, Illinois on April 17, 1996.
Maureen Woods,
Acting Manager, Air Traffic Division.
[FR Doc. 96-10965 Filed 5-1-96; 8:45 am]
BILLING CODE 4910-13-M
Complete official Federal Register PDF
FR Doc. 96-10852 Television Broadcasting Services; Kearney, NE
[Federal Register Volume 61, Number 86 (Thursday, May 2, 1996)]
[Proposed Rules]
[Pages 19601-19602]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10852]
=======================================================================
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 73
[MM Docket No. 96-79; RM-8779]
Television Broadcasting Services; Kearney, NE
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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[[Page 19602]]
SUMMARY: The Commission requests comments on a petition filed by
Citadel Communications, L.L.C. seeking the allotment of UHF Channel 20-
to Kearney, NE, as the community's second local television service.
Channel 20- can be allotted to Kearney in compliance with the
Commission's minimum distance separation requirements without the
imposition of a site restriction, at coordinates 40-41-54 North
Latitude and 99-05-00 West Longitude. The proposed allotment at Kearney
is not affected by the Commission's temporary freeze on new television
allotments in certain metropolitan areas.
DATES: Comments must be filed on or before June 17, 1996, and reply
comments on or before July 2, 1996.
ADDRESSES: Federal Communications Commission, Washington, DC 20554. In
addition to filing comments with the FCC, interested parties should
serve the petitioner, or its counsel or consultant, as follows: Eric L.
Bernthal, Esq., Kevin C. Boyle, Esq., Steven H. Schulman, Esq., Latham
& Watkins, 1001 Pennsylvania Avenue, NW., Suite 1300, Washington, DC
20004 (Counsel to petitioner).
FOR FURTHER INFORMATION CONTACT: Leslie K. Shapiro, Mass Media Bureau,
(202) 418-2180.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Notice of Proposed Rule Making, MM Docket No. 96-79, adopted March 25,
1996, and released April 24, 1996. The full text of this Commission
decision is available for inspection and copying during normal business
hours in the FCC Reference Center (Room 239), 1919 M Street, NW.,
Washington, DC. The complete text of this decision may also be
purchased from the Commission's copy contractor, International
Transcription Services, Inc., (202) 857-3800, 2100 M Street, NW., Suite
140, Washington, DC 20037.
Provisions of the Regulatory Flexibility Act of 1980 do not apply
to this proceeding.
Members of the public should note that from the time a Notice of
Proposed Rule Making is issued until the matter is no longer subject to
Commission consideration or court review, all ex parte contacts are
prohibited in Commission proceedings, such as this one, which involve
channel allotments. See 47 CFR 1.1204(b) for rules governing
permissible ex parte contacts.
For information regarding proper filing procedures for comments,
see 47 CFR 1.415 and 1.420.
List of Subjects in 47 CFR Part 73
Television broadcasting.
Federal Communications Commission.
John A. Karousos,
Chief, Allocations Branch, Policy and Rules Division, Mass Media
Bureau.
[FR Doc. 96-10852 Filed 5-1-96; 8:45 am]
BILLING CODE 6712-10-F
Complete official Federal Register PDF
FR Doc. 96-10841 Mid-Atlantic Fishery Management Council; Public Hearing
[Federal Register Volume 61, Number 86 (Thursday, May 2, 1996)]
[Proposed Rules]
[Pages 19604-19605]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10841]
=======================================================================
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DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
50 CFR Part 652
[I.D. 041996D]
Mid-Atlantic Fishery Management Council; Public Hearing
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Public hearing; request for comments.
-----------------------------------------------------------------------
SUMMARY: The Mid-Atlantic Fishery Management Council (Council) will
hold a public hearing to allow for input on Amendment 9 to the Fishery
Management Plan for the Atlantic Surf Clam and Ocean Quahog Fishery
(FMP).
DATES: Written comments will be accepted until May 10, 1996. The
hearing will be held on Tuesday, May 14, 1996, at 6 p.m.
ADDRESSES: Send comments to David R. Keifer, Executive Director, Mid-
Atlantic Fishery Management Council, Room 2115, Federal Building, 300
South New Street, Dover, DE 19904-6790. The public hearing will be held
at the Doubletree Inn, 4101 Island Avenue, Philadelphia, PA (1-800-222-
TREE).
FOR FURTHER INFORMATION CONTACT: David R. Keifer, (302) 674-2331; fax
(302) 674-5399.
SUPPLEMENTARY INFORMATION: The Council proposes to revise the
overfishing definitions for surf clams and ocean quahogs under
Amendment 9. The amendment is intended to bring the FMP into compliance
with the guidelines in 50 CFR 602 that mandate a quantifiable
definition of overfishing in all FMPs. Overfishing is currently defined
as the catch of surf clams or ocean quahogs exceeding the annual quota
for each species. The provisions of the FMP contain annual quotas,
vessel allocations, and other provisions for cage identification,
minimum size limits, closed areas, and reporting. Overfishing of surf
clams and ocean quahogs has not occurred, given the existing stock
conditions during the past two decades of management. However, NMFS has
concluded that a stronger biological basis is needed for the
overfishing definitions for these species, in part due to the lack of
strong recruitment in recent years.
The preferred alternative overfishing definition for surf clams is
a fishing mortality rate of F20% (20 percent of the maximum
spawning potential (MSP), which equates to an annual exploitation rate
of 15.3 percent. The preferred alternative overfishing definition for
ocean quahogs is a fishing mortality rate of F25% (25 percent of
the MSP), which equates to an annual exploitation rate of 4.3 percent.
Alternative overfishing definitions for surf clams are:
1. A fishing mortality rate of Fmax, which corresponds to an
annual exploitation rate of 16.5 percent.
2. The Council's current optimum yield (OY) for surf clam ranges
from 1,850,000 to 3,400,000 bushels. The Council policy is to set the
quota within an OY range that will allow fishing to continue at that
level for at least 10 years. Within the above constraint, the quota is
set at a level that will meet estimated annual demand.
Alternative overfishing definitions for ocean quahogs are:
1. A fishing mortality rate of F20%, which corresponds to an
annual exploitation rate of 5.8 percent.
2. A fishing mortality rate of F30%, which corresponds to an
annual exploitation rate of 3.5 percent.
3. A fishing mortality rate of Fmax, which corresponds to an
annual exploitation rate of 6.8 percent.
4. The Council's current OY for ocean quahog ranges from 4,000,000
to 6,000,000 bushels. The Council policy is to set the quota within an
OY range that will allow fishing to continue at that level for at least
30 years. Within the above constraint, the quota is set at a level that
will meet estimated annual demand.
This hearing is physically accessible to people with disabilities.
Requests for sign language interpretation or other auxiliary aids
should be directed to David R. Keifer (see ADDRESSES) at least 5 days
prior to the meeting date.
The hearing will be tape recorded with the tapes filed as the
official transcript of the hearing.
Authority: 16 U.S.C. 1801 et seq.
[[Page 19605]]
Dated: April 25, 1996.
Richard W. Surdi,
Acting Director, Office of Conservation and Management, National Marine
Fisheries Service
[FR Doc. 96-10841 Filed 5-1-96; 8:45 am]
BILLING CODE 3510-22-F
Complete official Federal Register PDF
FR Doc. 96-10838 Indian FishingHoopa Valley Indian Reservation
[Federal Register Volume 61, Number 86 (Thursday, May 2, 1996)]
[Proposed Rules]
[Pages 19600-19601]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10838]
=======================================================================
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DEPARTMENT OF THE INTERIOR
Bureau of Indian Affairs
25 CFR Part 250
RIN 1076-AD68
Indian Fishing--Hoopa Valley Indian Reservation
AGENCY: Bureau of Indian Affairs, Interior.
ACTION: Proposed rule.
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SUMMARY: The Bureau of Indian Affairs (BIA) proposes to eliminate 25
CFR Part 250 as mandated by Executive Order 12866 to streamline the
regulatory process and enhance the planning and coordination of new and
existing regulations. The necessity for this rule no longer exists.
Dates: Comments must be received on or before July 1, 1996.
ADDRESSES: Mail comments to Gary Rankel, Chief, Branch of Fish,
Wildlife and Recreation, Office of Trust Responsibilities, Bureau of
Indian Affairs, Department of the Interior, 1849 C St. NW, Mail Stop
4513-MIB, Washington, DC 20240; OR, hand deliver them to Room 4513 at
the above address. Comments will be available for inspection at this
address from 9:00 a.m. to 4:00 p.m., Monday through Friday beginning
approximately 2 weeks after publication of this document in the Federal
Register.
FOR FURTHER INFORMATION CONTACT: Gary Rankel, (202) 208-4088.
SUPPLEMENTARY INFORMATION:
Background
The purpose for which this rule was promulgated has been fulfilled
and the rule is no longer required. The Hoopa
[[Page 19601]]
Valley Tribe has established regulations to protect the fishery
resources and fishing rights of Indians of the Hoopa Valley Indian
Reservation. The Yurok Tribe, which is also covered under these
regulations, is in the final stages of drafting regulations covering
fishing by their members. This proposed rule will eliminate 25 CFR Part
250, Indian Fishing--Hoopa Valley Indian Reservation.
Public Participation Statement
Publication of the proposed rule by the Department of the Interior
(Department) provides the public an opportunity to participate in the
rulemaking process. Interested persons may submit written comments
regarding the proposed rule to the location identified in the addresses
section of this document.
Evaluation and Certification
The Department has certified to the Office of Management and Budget
(OMB) that the elimination of this rule meets the applicable standards
provided in sections 2(a) and 2(b)(2) of Executive Order 12778.
The Office of Management and Budget has determined the elimination
of this rule is not a significant regulatory action under Executive
Order 12866.
There will be no economic effect on each tribal government and
tribal organization under the Regulatory Flexibility Act (5 U.S.C. 601
et seq.) and no additional outlays will be required of tribal
governments, tribal organizations, and the Federal Government.
In accordance with Executive Order 12630, the Department has
determined that the elimination of this rule will not have
``significant'' takings implications. The elimination of this rule does
not pertain to ``taking'' of private property interests, nor does it
impact private property.
The Department has determined that the elimination of this rule
will not have significant federalism effects under Executive Order
12612 and will not interfere with the roles, rights and
responsibilities of states.
The Department has determined that the elimination of this rule
will not constitute a major Federal action significantly affecting the
quality of the human environment and that no detailed statement is
required pursuant to the National Environmental Policy Act of 1969.
No information collection is required in the elimination of this
rule that would require approval by the Office of Management and Budget
under 44 U.S.C. 3501 et seq.
Drafting Information
The primary author of this document is Bettie Rushing, Bureau of
Indian Affairs.
List of Subjects in 25 CFR Part 250
Indians, Indian--fishing rights.
Under the authority of Executive Order 12866, and for the reasons
stated above, it is proposed to remove 25 CFR part 250.
Dated: April 11, 1996.
Ada E. Deer,
Assistant Secretary--Indian Affairs.
[FR Doc. 96-10838 Filed 5-01-96; 8:45 am]
BILLING CODE 4310-02-P
Complete official Federal Register PDF
FR Doc. 96-10797 Service Contract Act; Labor Standards for Federal Service Contracts
[Federal Register Volume 61, Number 86 (Thursday, May 2, 1996)]
[Proposed Rules]
[Pages 19770-19781]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10797]
[[Page 19769]]
_______________________________________________________________________
Part VI
Department of Labor
_______________________________________________________________________
Wage and Hour Division
_______________________________________________________________________
29 CFR Part 4
Service Contract Act; Labor Standards for Federal Service Contracts;
Proposed Rule
Federal Register / Vol. 61, No. 86 / Thursday, May 2, 1996 / Proposed
Rules
[[Page 19770]]
DEPARTMENT OF LABOR
Employment Standards Administration
Wage and Hour Division
29 CFR Part 4
RIN 1215-AA78
Service Contract Act; Labor Standards for Federal Service
Contracts
AGENCY: Wage and Hour Division, Employment Standards Administration,
Labor.
ACTION: Notice of proposed rulemaking; request for comments.
-----------------------------------------------------------------------
SUMMARY: The Department of Labor (DOL or the Department) is proposing
alternative approaches for procedures to establish minimum health and
welfare benefits requirements in the regulations issued under the
McNamara-O'Hara Service Contract Act (SCA). Pursuant to Sec. 4(b) of
the SCA, a variance from the SCA's locality and occupational
requirements for determining prevailing health and welfare fringe
benefits is also proposed to reflect the limitations of available
fringe benefit data. Comments are also requested on revisions to
timeframes for section 4(c) substantial variance proceedings.
The United States District Court for the District of Columbia has
set a deadline for the Department of July 31, 1996, to complete this
rulemaking process. SEIU v. Reich, CA No. 91-0605 (D.D.C. January 29,
1996). To aid in the selection of the most appropriate methodology, the
Department is in the process of developing data on the occupational mix
of service contract employees. This data will help provide a basis for
the regulatory impact analysis. Due to the time constraints imposed by
the district court, however, it is not feasible to publish the impact
analysis for comment with the proposed rule. Instead, the analysis will
be published as soon as possible for comment. Comments on the analysis
will be reviewed prior to promulgation of a final rule.
DATES: Comments are due on or before July 1, 1996.
ADDRESSES: Submit written comments to Maria Echaveste, Administrator,
Wage and Hour Division, Employment Standards Administration, U.S.
Department of Labor, Room S-3502, 200 Constitution Avenue NW.,
Washington, DC 20210. Commenters who wish to receive notification of
receipt of comments are requested to include a self-addressed, stamped
postcard, or to submit them by certified mail, return receipt
requested. As a convenience to commenters, comments may be transmitted
by facsimile (``FAX'') machine to (202) 219-5122 (this is not a toll-
free number). If transmitted by facsimile and a hard copy is also
submitted by mail, please indicate on the hard copy that it is a
duplicate copy of the facsimile transmission.
FOR FURTHER INFORMATION CONTACT: William Gross, Director, Division of
Wage Determinations, Wage and Hour Division, Employment Standards
Administration, U.S. Department of Labor, Room S-3506, 200 Constitution
Avenue NW., Washington, DC 20210; telephone (202) 219-8353. This is not
a toll-free number.
SUPPLEMENTARY INFORMATION:
I. Paperwork Reduction Act
The Department is proposing alternative procedures for determining
prevailing health and welfare fringe benefits under SCA and seeks
comments on each alternative. The Department does not intend, with this
notice, to introduce new or added reporting or recordkeeping
requirements subject to the Paperwork Reduction Act of 1980 (Pub. L.
96-511). The existing information collection requirements contained in
Regulations, 29 CFR Part 4 were previously approved by the Office of
Management and Budget under OMB control number 1215-0150. The general
Fair Labor Standards Act (FLSA) recordkeeping requirements which are
restated in Part 4 were approved by the Office of Management and Budget
under OMB control number 1215-0017.
II. Background
The McNamara-O'Hara Service Contract Act of 1965 (SCA) (41 U.S.C.
351, et seq.) applies to Federal contracts with the principal purpose
of furnishing services through the use of service employees. For
service contracts in excess of $2,500, the Department of Labor is
required to make determinations of prevailing wage rates and fringe
benefits that must be paid as a minimum by contractors and
subcontractors to employees employed on covered contacts ``* * * in
accordance with prevailing rates for such employees in the locality, *
* *'' (see sections 2 (a)(1) and 2(a)(2) of the Act).1
---------------------------------------------------------------------------
\1\ The prevailing wage and fringe benefit determination scheme
provided by sections 2 (a)(1) and 2(a)(2) of the Act was modified by
amendments to the Act in 1972. As a result of a new Sec. 2(a)(5),
the Department, in making prevailing determinations, is also
required to give due consideration to the rates that would be paid
to the various classes of service employees if directly hired by the
Federal agency. In addition, prevailing determinations are not
applicable where the employees of a predecessor contractor are
covered by a collective bargaining agreement. In such cases,
collectively bargained wages and fringe benefits are specified in
determinations pursuant to section 4(c) of the Act.
---------------------------------------------------------------------------
Section 4(b) of the Act as amended in 1972 authorizes the Secretary
of Labor to ``provide such reasonable limitations'' and to ``make such
rules and regulations allowing reasonable variations, tolerances, and
exemptions to and from any or all provisions of this Act (other than
Sec. 10), but only in special circumstances where * * * necessary and
proper in the public interest or to avoid the serious impairment of
Government business, and is in accord with the remedial purposes of
this Act to protect prevailing labor standards.''
Federal agencies award contracts for a large variety of services
which are performed for a specific period, typically one year with
options for additional years.2 Upon the expiration of such
contracts, through new solicitations for bids or requests for
proposals, follow-on contracts are commonly awarded to continue the
services at the same locality or localities. When new contracts are
awarded, the employees of predecessor contractors often routinely go to
work for the new contractors.3 Continuity of services and,
generally, employees from year to year makes consistency in wage and
fringe benefit determinations a key concern of contracting agencies,
contractors, and service employees. Although the statutory requirements
for issuing both prevailing wage rate and fringe benefit determinations
are the same, different procedures have been used since the Act's
enactment in 1965 to implement them. These procedures have been shaped
by the availability of wage and fringe benefit data, the need for
consistency and continuity over time, and the common practice of
employers in the service contracting industry to provide uniform fringe
benefit packages to all workers.
---------------------------------------------------------------------------
\ 2\ Option periods are deemed wholly new contracts for wage
determination purposes and must include new or updated wage
determinations (see 29 CFR 4.145).
\ 3\ Experience with this general practice underlies Executive
Order 12933, signed by President Clinton on October 20, 1994. While
successor contractors on service contracts for the maintenance of
public buildings typically hire the majority of the predecessor's
employees, the executive order seeks to minimize the disruption in
services that otherwise would occur if a successor contractor hires
a totally new work force. The executive order, among other things,
requires solicitations for building service contracts for public
buildings to include a clause that requires the successor contractor
to offer certain employees of the predecessor a right of first
refusal to employment on the new, follow-on contract.
---------------------------------------------------------------------------
Prevailing wage rates are based primarily on cross-industry surveys
[[Page 19771]]
conducted by the Bureau of Labor Statistics (BLS), either under its own
Area Wage Survey program (currently under review) or under contract
with the Department's Employment Standards Administration. These
surveys are designed to provide earnings data for selected occupations
common to many manufacturing and nonmanufacturing industries, using a
standard set of job descriptions, within a particular local labor
market usually described in terms of a metropolitan area. Since 1965,
the Department has routinely issued locality-based, occupation-specific
prevailing wage rate determinations.
Since 1965, the fringe benefit levels specified in prevailing
determinations have been applicable to all of the listed occupational
classes in a particular determination. The locality surveys conducted
by BLS, in addition to data on the wages paid to workers in selected
occupations, provide information on the overall prevalence of certain
fringe benefits, such as life insurance, sickness and accident
insurance plans, hospitalization, surgical and medical insurance plans,
accidental death and dismemberment insurance, long-term disability
insurance, sick leave, retirement plans, civic and personal leave, and
other benefits. These surveys also provide information on the numbers
of holidays and vacation days provided by the surveyed employers.
Unlike wage data, the fringe benefit information from these surveys is
not currently collected on an occupation-by-occupation basis; nor is
data on the cost of such benefits collected. In the past, the
Department has found that reliable data by locality or by occupation
could not be obtained due to prohibitive costs.
It has been the Department's general practice to include locality-
based holiday and vacation benefits in determinations, based on
information obtained from the locality surveys. However, due to the
absence of locality-based data up to this time, health and welfare
fringe benefits 4 have always been specified in a determination as
a monetary amount based on survey data collected on a nationwide
basis.5 Until 1976, the Department routinely issued a single,
national ``insurance'' benefit level for all occupations of service
employees throughout the country,6 based primarily on data from
the BLS' Biennial Survey of Employee Compensation in the Private
Nonfarm Economy.7 This ``insurance'' benefit level was limited to
the average cost per hour of providing life, accident, and health
insurance in all industries, based on available information which
indicated that this fringe benefit package was the most prevalent of
the various benefits provided by employers, particularly small
employers, and was stated in determinations as a fixed hourly payment
amount due for each hour paid (up to a maximum of 40 hours per week and
2,080 per year) on behalf of each service employee.
---------------------------------------------------------------------------
\4\ The term ``health and welfare'' fringe benefits refers to
all benefits provided to workers not required by law except vacation
and holiday benefits.
\5\ BLS is currently in the process of redesigning its system
for collecting fringe benefit data to potentially allow for the
collection and publication of health and welfare benefit information
for several of the country's largest metropolitan areas. The number
of localities for which such data will be published is uncertain at
this point and clearly would not include all localities for which
the Department issues wage determinations under the SCA. Such data
is currently not available and may be several years from
publication.
\6\ This did not include pension or other benefits because BLS
locality surveys indicated that such benefits did not ordinarily
prevail.
\7\ When information available for a geographic area indicated
that collectively bargained wage rates and fringe benefits were
furnished to a majority of the employees in a particular occupation,
such wage rates and fringe benefits were adopted as prevailing.
Studies of employee compensation practices in particular industries,
in contrast to those conducted as cross-industry area wage studies,
were also sometimes used in the past for determinations issued for
service contracts in that industry, e.g., mail hauling.
---------------------------------------------------------------------------
In the early 1970s, several large Federal service contractors and
some contracting agencies asked the Department to consider an
alternative methodology because the contractors were having difficulty
hiring and retaining highly skilled workers, and remaining competitive,
at the ``insurance'' only benefit level. In response, a second health
and welfare benefit level was developed that took into account not only
insurance, but all types of benefits not legally required, since these
were commonly provided to employees by larger employers. This ``total
benefits'' level has since been applied primarily to solicitations for
large base support service contracts, solicitations (for OMB Circular
A-76 actions) with potential for displacement of federal civilian
workers, and solicitations that require bidders to be large, national
corporations, or providers of highly technical services. The ``total
benefits'' level includes the all-industry average hourly cost of not
only life, accident, and health insurance, but also sick leave, pension
plans, civic and personal leave, other leave, severance pay, and
savings and thrift plans. Rather than a fixed payment for each hour
worked, the ``total benefit'' level is expressed in terms of average
cost--which allows variable contributions to employees (e.g.,
contributions to a health insurance plan typically vary depending upon
the individual employee's marital or employment status)--so long as
total contributions for all service employees average at least the
specified amount per hour for each service employee. (See 29 CFR
4.175(b).)
From 1966 to 1979, the BLS Biennial Survey of Employee Compensation
in the Private Nonfarm Economy was the primary source for the
nationwide cost data on the health and welfare benefit level, for both
the ``insurance'' and the ``total benefit'' levels. However, in 1979,
BLS discontinued this survey. Absent a new survey data base, benefit
levels were not adjusted between 1980 and 1986. In 1986, updated fringe
benefit levels were based on BLS Employment Cost Index (ECI) data
showing the percentage increase in benefit costs between 1980 and 1986,
which was applied to the 1980 base rates. At that time, the
``insurance'' benefit level was increased from $0.32 to $0.59 per hour,
and the ``total benefit'' level from $1.08 to $1.84 per hour.
When BLS published ECI survey data on fringe benefit levels for the
first time in 1987,8 the average employer's cost of the various
fringe benefit components did not correspond with the SCA health and
welfare fringe benefit levels then being issued (i.e., the ECI data
would have significantly increased the ``insurance'' benefit level and
comparably decreased the ``total benefit'' level). It was decided to
evaluate alternative methodologies which might better reflect the
practices of the type of employers who perform contracts subject to
SCA. As a consequence, health and welfare fringe benefits levels again
were not adjusted until 1991 (see below).
---------------------------------------------------------------------------
\8\ Employer costs for employee compensation are developed from
data collected for the Bureau of Labor Statistics Employment Cost
Index (ECI) during a March sample. The report, ``Employer Costs for
Employee Compensation,'' is published once a year, and covers all
occupations in private industry (excluding farms and households) and
state and local governments. It is a measure of the average cost to
employers per employee hour worked for wages and salaries and
employee benefits. See BLS Handbook of Methods, Bulletin 2414, for a
full background discussion concerning the ECI. The ECI has been
designated as a principal Federal economic indicator by the Office
of Management and Budget and ``is the only measure of labor costs
that treats wages and salaries and total compensation consistently,
and provides consistent subseries by occupation and industry.'' Id.,
p. 63.
---------------------------------------------------------------------------
On March 21, 1991, the Service Employees International Union (SEIU)
filed a lawsuit against the Department in the U.S. District Court for
the District of Columbia, seeking to compel the Secretary of Labor to
immediately raise
[[Page 19772]]
the fringe benefit amounts specified in prevailing wage determinations.
At the time, the Department was completing the development of a new
methodology for setting health and welfare fringe benefit levels
utilizing newly published ECI size-of-establishment breakouts. In
evaluating the new BLS ECI fringe benefit cost data, the Department
concluded that cost distributions by size-of-firm best approximated
fringe benefit levels and practices among the types of establishments
that performed SCA-covered contracts, and would preserve continuity and
consistency for Federal agencies, service contractors, and service
employees. Accordingly, the health and wealth fringe benefit level
issued for most service contracts, which was based only on the
``insurance'' component, was raised from $0.59 to $0.74 per hour in
September 1991, based on 1990 data for employers with less-than-100
employees. The new BLS ECI data on total benefits for firms with 100-
or-more employees was used to increase the ``total benefits'' level
from $1.84 to $2.07 per hour.
Actual BLS ECI fringe benefit cost data by size-of-firm was also
used as a basis for updating the health and welfare levels in 1992,
1993, and 1994. Applying the same principles adopted for the 1991
updates, the ``insurance'' level was raised to $0.83 per hour in July
1992, to $0.89 in August 1993, and to $0.90 in August 1994.
Correspondingly, the ``total benefit'' package was raised to $2.23 per
hour in July 1992, to $2.39 in August 1993, and to $2.56 in August
1994.9
---------------------------------------------------------------------------
\9\ The following year (1995), Wage and Hour decided to keep the
health and welfare benefits levels the same as were issued in August
1994, even though the BLS ECI fringe benefit cost data, published in
March 1995, showed decreases in both the ``insurance'' and ``total
benefits'' levels (to $0.82 and $2.32, respectively). The rationale
behind this decision was three-fold. First was the concern that
issuance of decreased health and welfare benefit rates would be
disruptive to the federal services procurement community. Second, it
was perceived to be inappropriate to decrease health and welfare
benefit rates based on a methodology which was uncertain to continue
in light of the Board's remand order (see below) and the pending
litigation which challenged the methodology. Third, Wage-Hour was
aware that BLS was considering significant revisions to its survey
methodology.
---------------------------------------------------------------------------
After the issuance of updated health and welfare fringe benefit
levels in September 1991, SEIU amended its complaint to seek review of
the Department's fringe benefit methodology, in particular the use of
BLS ECI fringe benefit data for employers with less-than-100 employees
for the ``insurance'' level. In addition to challenging the size-of-
establishment methodology, SEIU also challenged a number of other
aspects of the existing methodology, including the issuance of
nationwide rather than locality-based health and welfare fringe benefit
determinations, the use of private industry data only (the ECI covers
private industry and also state and local governments), and the lack of
consideration of fringe benefit costs in the Federal sector. Because no
administrative review within the Department was sought by SEIU relating
to the size-of-establishment methodology adopted for the September 1991
updates, the District Court dismissed the case without prejudice,
directing SEIU to exhaust its administrative remedies before the
Department of Labor. See SEIU v. Martin, CA No. 91-0605 (JFP) (D.D.C.
April 1, 1992).
The size-of-establishment procedures were subsequently reaffirmed
by the Acting Administrator of the Wage and Hour Division on July 8,
1992, and SEIU appealed the decision to the Department's Board of
Service Contract Appeals (BSCA). In a decision dated August 28, 1992,
the BSCA generally affirmed fringe benefit practices, including the
issuance of fringe benefits on a nationwide basis, but remanded the
issue of using size-of-establishment data as a basis for fringe benefit
rates.10 The BSCA directed Wage and Hour to either better support
the use of the size-of-establishment data or develop an alternative
methodology for setting fringe benefit rates. On remand, Wage and Hour
conducted a study of service contracts subject to the SCA and examined
other available data. This research indicated that the great
preponderance of service establishments employs fewer than 100 workers,
and the Acting Administrator, by letter to SEIU dated May 28, 1993,
reaffirmed the use of BLS ECI size-of-establishment data in the
development of prevailing fringe benefits under the Act.11
---------------------------------------------------------------------------
\10\ SEIU re Nationwide Fringe Benefit Determinations, BSCA Case
No. 92-01 (August 23, 1992).
\11\ Wage and Hour reasoned that cost data for firms with fewer
than 100 employees approximated the cost of providing health and
welfare benefits to employees furnishing services of the kind
required under the vast majority of SCA-covered contracts, and that
data for firms with 100 or more employees best approximated the cost
experience of employers with SCA-covered contracts involving large
base support contracts and other contracts involving competition
among major corporations or for highly technical tasks.
---------------------------------------------------------------------------
In response to SEIU's review petition, the BSCA decided on
September 23, 1993, that Wage and Hour had not provided sufficient
justification for its departure from the practice of basing the
``insurance'' and ``total benefit'' components on all industry data
(prior to 1991) without regard to size-of-establishments. While the
BSCA acknowledged that the size-of-establishment methodology addressed
certain concerns such as consistency, ease of administration, and the
ability to update on a regular basis, it was not convinced that these
attributes and objectives were ``characteristic only of a system that
utilizes size-of-establishment data or whether those same objectives
can be also achieved by using other data to set the SCA rates.'' While
the BSCA upheld the use of BLS ECI data in general and concluded that
the lack of reliable locality data was reasonable justification for
issuing nationwide benefit rates, it again remanded the matter to Wage
and Hour for reconsideration; the Board was not satisfied that the
size-of-establishment data justified departure from the previous
practice of basing the fringe benefit rates on all-industry data, or
that other data might not achieve the desired objectives.12
---------------------------------------------------------------------------
\12\ See SEIU re Nationwide Fringe Benefit Determinations, BSCA
Case No. 93-08 (September 23, 1993).
---------------------------------------------------------------------------
Because of the variety of alternatives that could be used to
determine prevailing fringe benefits, and the potential effects of each
of these alternatives, the Department concluded that resolution of the
issues in the pending litigation would be best accomplished through
rulemaking.
In the meantime, SEIU moved in district court to reopen its case
against the Department. SEIU asked the court to enjoin the use of the
1991 methodology and direct DOL to immediately begin setting minimum
fringe benefit rates in accordance with the methodology used prior to
1991. The district court, by Order dated January 29, 1996, dismissed
the case without prejudice to SEIU's right to reopen for
reconsideration upon a showing that DOL has not adopted a final rule in
this matter by July 31, 1996. The court declined to order reinstatement
of the Department's pre-1991 methodology, stating that it would not
``impose a disruptive interim rule that will itself be displaced by the
full participation exercise of rulemaking.'' SEIU v. Reich, CA No. 91-
0605 (CRR) (D.D.C. January 19, 1996)
The Department has given careful consideration to a number of
alternative methodologies involving the use of BLS ECI fringe benefit
cost data (as the best currently available data source) and,
accordingly, is proposing to use one of the approaches described below
in determining prevailing health and welfare benefits under the SCA in
the
[[Page 19773]]
future. In order to assist the Department in establishing the most
appropriate method, the Department requests commenters to consider the
optional fringe benefit methodologies discussed below and seeks
information on ease or difficulty of compliance; administrative and/or
recordkeeping burdens; economic and budgetary impact from the point of
view of service contractors, service employees and Federal procurement
agencies; transitional difficulties in departing from the current
methodology, including the appropriateness of a phase-in alternative
for such methodologies; the nature of SCA-covered contracts and the
fringe benefit practices typical of service contractors; the effects on
contracting activity and employment; and any other areas of concern
that the Department should take into consideration in deciding this
matter.
If commenters favor continued use of the current methodology based
on size-of-establishment data, comments should include data or other
evidence that the methodology in fact is consistent with industry
practices. Commenters are also invited to comment on any alternative
approach for which reliable fringe benefit cost data are available
through the ECI or otherwise, including a discussion of how the
approach would result in fringe benefits which would better indicate
prevailing fringes on SCA contracts, as well as the other issues raised
below.
Commenters are also requested to comment on whether they would
favor utilization of locality-based fringe benefit data for certain
selected metropolitan areas, should such data become available in the
future (see note 5, supra), within the framework of any of the
following proposed methodologies favored by the commenter.
III. Alternative Proposed Methodologies
Alternative I: Issue a Single Benefit Level Based Upon ECI Data for
Workers in Private Industry
This methodology would utilize employer costs per hour worked for
all benefits (excluding holidays, vacations, and benefits otherwise
required by law, such as social security, unemployment insurance, and
workers' compensation payments) as reported annually by the BLS ECI
study of employer costs for employee compensation in the private sector
(all workers, all industries, all establishment sizes, and all
occupations). Under this ``total benefits'' approach, the Department
would issue a single nationwide health and welfare fringe benefit level
applicable to all employees engaged in the performance of SCA-covered
contracts, based on the average cost 13 for the following
compensation components:
---------------------------------------------------------------------------
\13\ The cost of the benefit components in the BLS ECI study are
an average based on data of all employers in the survey, including
employers that do not provide the particular benefit. Because
averaging in the ``zeros'' is another way of showing prevalence, the
proposal is not limited to only those benefits that prevail. Data is
not currently available that computes the cost of benefits provided
by only employers with benefit plans. The Department is currently
exploring the possibility of obtaining such data, and if it can be
obtained, will consider its use under the various alternatives for
those benefits that prevail.
---------------------------------------------------------------------------
(1) Sick and other leave (excluding vacation and holiday leave);
(2) Insurance, consisting of life, health, and sickness and
accident insurance plans;
(3) Retirement and savings, consisting of pension and savings and
thrift plans; and
(4) Other benefits not otherwise required by law.
Based on March 1995 BLS ECI data, this alternative would result in
a single fringe benefit rate of $1.89 per hour. This alternative would
increase the current benefit level (from $0.90 to $1.89 per hour) for
those SCA-covered contracts now subject to prevailing determinations
containing the ``insurance'' fringe benefit level, and would result in
a benefit level reduction (from $2.56 to $1.89 per hour) for SCA-
covered contracts currently subject to the ``total benefit'' fringe
benefit level.
In basing the fringe benefit level on the average compensation
level for all employees, this alternative is consistent with the
approach generally used in determining prevailing wages in that it does
not differentiate by size of firm, and in determining prevailing fringe
benefits in the past. It would eliminate the two-tier benefit levels
that have been difficult to defend in the legal proceedings before the
BSCA described above. This approach would apply the same minimum hourly
benefit level for all service employees and would not require any
subjective judgments as to which benefit level to apply based on the
type of contract or employee. This determination method would be simple
to understand and to comply with, and relatively simple to administer
and enforce by the Department. It would allow all service contractors
to offer health benefits for their employees, whereas at present some
employers cannot purchase health benefits at the current ``insurance''
benefit level.
Service employees currently employed on contracts subject to the
``total benefit'' level could experience a reduction in fringe benefits
and not return to the current level for several years. Further, this
approach does not recognize the real differences in types of SCA-
covered contracts that are apparent from the occupational data. As
demonstrated by the data by occupational groupings, discussed below,
privately-employed service employees in relatively low-skilled, low-
wage service occupations do not generally receive this level of fringe
benefits. On the other hand, privately-employed high-skilled service
workers, such as aircraft mechanics, generally receive fringe benefits
above this level.
In addressing this alternative, comments are specifically sought on
the appropriateness of mitigating any disruption (and the short-term
costs) caused by the increase in the current ``insurance'' level by
phasing in the changes during a transition period; whether or not the
current ``total benefit'' level should be grandfathered at its present
level until it is overtaken by the all-industry, all-occupation average
rate; and, whether such actions would be consistent with statutory
requirements.
Alternative II-A: Issue a Single Benefit Level for Each of Six Major
Occupational Groupings Based on ECI Data for All Workers in Each
Grouping in Private Industry
The BLS ECI reports employer fringe benefit costs for employees in
broad occupational groups compatible with the ``Standard Occupational
Classification Manual.'' Of these occupational groupings, six account
for most of the classifications used in the performance of SCA-covered
contracts: (1) Professional, specialty and technical; (2)
Administrative support, including clerical; (3) Precision production,
craft and repair; (4) Transportation and material moving; (5) Handlers,
cleaners, helpers, laborers; and (6) Service workers.
Under this alternative, the ``total benefit'' level for each of
these six occupational groupings would be specified in prevailing
determinations. Thus, a benefit amount would be specified for each
occupation listed on an SCA-determination with the amount applicable to
a particular occupation determined by the occupational grouping of that
occupation. Based on the data reported by the March 1995 BLS ECI study,
the hourly ``total benefit'' amounts for the six basic
[[Page 19774]]
occupational groupings would be as follows: \14\
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\14\ The listed amounts represent close approximations based on
Wage-Hour's reading of 1995 BLS ECI cost data and may not be exact.
1. Professional, specialty and technical (nurses, computer
systems analysts, etc.)....................................... $3.15
2. Administrative support including clerical (computer
operators, secretaries, typists, clerks, etc.)................ 1.96
3. Precision production, craft and repair (vehicle mechanics,
heavy equipment operators, automotive mechanics, aircraft
mechanics, machinery repairers, electrical and electronic
equipment repairers, heating/air-conditioning/refrigeration
mechanics, etc.).............................................. 2.73
4. Transportation and material moving (motor vehicle operators,
truck drivers, material moving equipment operators, operating
engineers, etc.).............................................. 2.22
5. Handlers, equipment cleaners, helpers and laborers (helpers,
handlers, equipment cleaners, laborers, etc.)................. 1.24
6. Service occupations (guards, food/beverage preparation and
service occupations, health service occupations, janitors and
cleaners, barbers, hairdressers, amusement/recreation facility
attendants, etc.)............................................. 0.62
Utilizing this approach would permit the Department to issue
prevailing health and welfare fringe benefit determinations for various
``classes of service employees'' as contemplated by the Act, thereby
permitting health and welfare benefits to correspond more closely to
the benefits such classes of employees actually receive in the private
sector. Because many service contracts do not involve a broad mix of
different occupations, the administrative difficulty with multiple
fringe benefit determinations for those contracts would be minimized.
Further, it would not result in large differences for highly skilled
employees on many technical service contracts that currently receive
the ``total benefit'' level.
Certain administrative concerns arise under this alternative,
however, especially regarding those SCA-covered contracts that do
involve a mix of employees from different occupational groups. This
alternative envisions that employers would provide different fringe
benefit plans to employees in each occupational group, and thus would
be contrary to what we understand to be the common employer practice of
providing the same benefits to all employees. Not only might it be
difficult for a carrier to provide, and for the employer or the carrier
to administer, up to six different benefit plans, but labor-management
problems would be likely where employees realize that their co-workers
are entitled to different benefits than they are receiving.
Furthermore, an employer administering self-funded plans may be
restricted in providing different benefit plans because of non-
discrimination rules of the Internal Revenue Code which prevent
providing higher-paid employees with better health benefits. See 26
U.S.C. 105(h); 26 CFR Sec. 1.105-11. An employer's alternative, if it
did not want to, or could not, provide different plans, would be to (1)
provide all employees benefits at the lowest level and pay the
difference to other classes of employees in cash; (2) provide all
employees higher benefits and absorb the difference from the employer's
profit margin; or (3) provide employees the same health benefits at the
lowest level, but provide other benefits, such as pension benefits, to
employees in the other classifications.
Therefore, some mechanism such as the use of an average cost
concept, discussed below, with which most small service contractors and
employees are not familiar, or providing benefits to all employees in
accordance with the predominant class, may be advisable. On the other
hand, such a mechanism would entail significant administrative
difficulties for contractors and for the Department in determining
compliance. Further, it would result in a substantial decrease in
benefits for large numbers of service employees in ``service''
occupations, e.g., janitors, guards, food service workers.
Therefore, in particular, comments are sought regarding whether in
fact employers normally provide the same level of fringe benefits to
all classes of employees; on the administrative feasibility of this
alternative; whether or not the current ``insurance'' level should be
grandfathered at its present level until it is overtaken by the
``service'' occupation average rate; and on the practicality of
assigning a single rate to a particular service contract based on the
benefit rate applicable to the predominant occupational group
performing the contract services.
Alternative II-B: Issue a Single Benefit Rate Adjusted To Reflect the
Difference Between the BLS ECI Occupational Universe and the Actual Mix
of Comparable Occupations on SCA-Covered Contracts
As noted above, the BLS ECI data provide a breakout of fringe
benefit costs by broad occupational groupings. The fringe benefit costs
for employees in each of these occupational categories is a component
factor of the all-industry, all-occupation ``total benefit'' costs
calculated for the universe of employees. The distribution of employees
within the six occupational categories in the BLS ECI data (above) may
not correspond proportionately to the actual mix of employees
performing work on SCA-covered contracts in the same occupational
categories, i.e., it is likely that the number of SCA-covered employees
within the BLS ECI service occupation category is proportionately
larger than the number of such employees in the overall BLS ECI
occupational universe. Under this proposed alternative approach, the
distribution of benefit levels in the six BLS ECI occupational
categories would be weighted by the corresponding distribution of SCA-
covered employees in the same occupational categories to arrive at an
adjusted ``total benefit'' level that may better reflect actual
employment experience on SCA-covered service contracts, rather than the
overall employment mix among these occupational groups in the general
economy.
While the benefit level under this approach would be expected to be
somewhat less than the March 1995 BLS ECI ``total benefit'' level of
$1.89, data to compute an actual rate for this level is not yet
available. The Department is in the process of developing information
on the occupational mix of service contract employees utilizing
procurement data in the Federal Procurement Data System (FPDS), and a
survey of SCA-covered contracts is being conducted.
Because the actual mix of occupations on SCA-covered contracts
generally would be a factor in the determination, the benefit
determination would be more reflective of the prevailing benefit level
on SCA-type contracts than the all-industry, all-employee average.
Moreover, the single benefit level that would be established avoids
many of the administrative and compliance complexities associated with
separate levels for each of the occupational groupings, is a simple
determination for contractors to understand and comply with, and,
because the same benefit level would be applied to all employees, does
not require subjective judgment as to which benefit level to use.
On the other hand, this alternative would not be consistent with
past practice of using all-industry, all-employee data for wages and,
until 1991, benefits. Furthermore, this alternative would apply a lower
fringe benefit level to those service employees currently receiving the
``total benefit''
[[Page 19775]]
level, and, thus, requires consideration of what, if any, transition
procedure would be appropriate.
Because the alternative, unlike the others, does not directly apply
BLS ECI data to SCA-covered contracts, the Department is particularly
interested in receiving public comments on its appropriateness. In
commenting on this alternative, comments are also sought on the
appropriateness of mitigating any disruption caused by any increase in
the current ``insurance'' level by phasing in the changes during a
transition period; whether or not the current ``total benefit'' level
should be grandfathered at its present level until it is overtaken by
the new fringe benefit rate; and whether such actions would be
consistent with statutory requirements.
Alternative II-C: Issue Two Benefit Levels Based on a Combination of
the Occupational Groupings
This alternative combines some aspects of both Alternatives II-A
and II-B. Rather than using six occupational groupings as proposed in
Alternative II-A, occupational groups would be combined to result in
only two groupings (or some other number). For example, the ECI
``professional, specialty and technical'' occupational group could be
combined with the ``administrative support, including clerical'' group
to develop a single rate for ``white-collar'' occupations. Similarly,
the ``precision production, craft and repair;'' ``transportation and
material moving;'' ``handlers, cleaners, helpers, laborers;'' and
``service worker'' groupings could be combined to develop a single rate
for production occupations, both skilled and unskilled.
Like the approach proposed under Alternative II-B, Alternative II-C
might weight the ECI data based on the corresponding distribution of
SCA-covered employees in the same occupational categories to arrive at
an adjusted ``total benefit'' level for each of the two occupational
groupings. In the alternative, the ECI data could be weighted in
accordance with the national incidence of the various occupational
groups.
Although this alternative would reduce the potential number of
different benefit levels that might be required on a single contract
from six to two, Alternative II-C still has the potential for applying
different benefit levels to employees working on the same contract.
Therefore, many of the questions and issues identified under
Alternative II-A are also applicable to this alternative. By reducing
the number of occupational groupings, however, the probability of
having all workers employed on the contract fall within the same
occupational grouping increases greatly. Thus, for many contracts the
problem of multiple benefit levels would be unlikely because the
employees performing the contract will be clustered within a single,
broad occupational grouping.
In commenting on the feasibility and desirability of this
alternative, commenters are asked to comment on the appropriate number
of occupational groupings, how the occupational groups should be
combined, and the weighting methodology which should be used.
Commenters are asked to give particular attention to whether this
smaller number of groups would significantly decrease any
administrative and compliance difficulties which might be entailed in
using the six groups.
Alternative III: Issue a Single Benefit Rate for Each of Four
Geographic Regions Based on ECI Data for All Workers in Private
Industry
The BLS ECI data includes average costs for benefit categories in
four broad regions: Northeast, South, Midwest, and West.\15\ This
alternative would result in four benefit levels that would be reflected
in SCA-determinations issued for contracts within each of these
geographic regions. Based on the March 1995 BLS ECI data, the benefit
amount for each area would be as follows:
\15\ These four regions correspond to the four Census regions.
The State composition of the regions is as follows: Northeast--
Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New
York, Pennsylvania, Rhode Island, and Vermont; South--Alabama,
Arkansas, Delaware, District of Columbia, Florida, Georgia,
Kentucky, Louisiana, Maryland, Mississippi, North Carolina,
Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West
Virginia; Midwest--Illinois, Indiana, Iowa, Kansas, Michigan,
Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and
Wisconsin; and West--Alaska, Arizona, California, Colorado, Hawaii,
Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and
Wyoming.
1. Northeast--$2.30
2. South--$1.57
3. Midwest--$1.99
4. West--$1.90
4The BLS ECI data base does not cross-correlate fringe benefit
costs by occupational groupings within the four geographic areas, and
this limitation precludes any options that would combine this
alternative with the above occupational approaches, absent a large
increase in sample size and thus survey costs. Utilizing this
alternative would permit the Department to issue prevailing fringe
benefit determinations on a ``locality'' basis, as contemplated by the
Act. The single benefit level for each geographic region would be
simple to administer, and is relatively easy for contractors to
understand and comply with.
This option fails to reflect variations within a region, which we
believe may be more significant than variations among regions.
Furthermore, like the occupational approach, this option is in
potential conflict with our understanding of the common practice that
employers, including service contractors, provide similar fringe
benefits to all employees without regard to either occupation or
geographic location. This alternative also raises unique administrative
questions because some service contracts require performance in a
number of different locations and some service contractors bid on
contracts for similar services at various facilities and installations
throughout the country. Finally, while the option permits all service
contractors to offer meaningful health benefits, it could result in
reduced benefits for those service employees currently employed on
contracts subject to the ``total benefit'' level.
Commenters are asked to address whether service contractors
typically provide similar fringe benefits to all employees without
regard to geographic location, and the administrative feasibility of
this alternative. In particular, comments are sought on what
adjustments, if any, would be appropriate in the case of a service
contract that requires performance in more than one of the four
regions, or in those cases where service contractors customarily bid on
contracts for similar services at various facilities and installations
throughout the country.
Alternative IV: Issue a Single Fringe Benefit Rate (as a Percent of
Wages) Based on the Relationship Between the ECI All-Private Industry
``Total Benefit'' Rate and the ECI All-Private Industry Average Wage
Rate
The BLS ECI data correlates employer fringe benefit expenditures as
a percent of overall compensation. Under this alternative, a single,
nationwide fringe benefit percentage level, determined as the percent
that all industry ``total benefit'' costs represent of total average
wages, would be established. The March 1995 BLS ECI data reports
average straight-time wages and salaries for all workers in private
industry at $12.25 per hour. Based on a ``total benefit'' level of
$1.89, the ratio of the fringe benefit amount to the wage rate under
this methodology would be 15.4 percent, which would be specified in all
SCA-determinations. If the prevailing wage for an occupation were $8.00
per hour, for example, the applicable fringe benefit amount under this
alternative
[[Page 19776]]
would be 15.4 percent of that amount, or $1.23 an hour; a prevailing
wage of $11.00 an hour would require a fringe benefit obligation of
$1.69 an hour; and a prevailing wage of $15.00 an hour would compute to
a fringe benefit obligation of $2.31 an hour.
Because fringe benefits are directly related to locality-based wage
rates, this alternative results in fringe benefit levels that vary by
occupation and location (wages listed in a prevailing determination for
particular occupations are survey-based by locality) and, therefore,
has the advantage of being more consistent with the statutory provision
that contemplates determining prevailing fringe benefits for classes of
service workers in localities than are the other alternatives under
consideration. The ratio of benefits to wages is easy to determine from
BLS ECI data, and should remain relatively consistent over time; many
employers, particularly Federal service contractors, have familiarity
with the concept in connection with contract costing practices.
The alternative is a significant departure from current practices,
and many contractors, particularly smaller ones, may have difficulty
with its administrative requirements, which will be similar to the
problems with separate benefit levels for occupational groupings. It
will also require a more extensive revision of the current regulations
to explain the compliance requirements. Moreover, the methodology
assumes a straight line relationship between wages and benefits.
Finally, the option could be problematic under IRS rules discussed
above and would be inconsistent with the common practice of offering
the same health benefits to all employees without variation based on
individual employees' wage rates.
Because the wage rates paid and the number of workers used to
perform SCA-covered contracts can fluctuate considerably, comments are
requested on the administrative and recordkeeping burdens associated
with this alternative, and how compliance would be determined. Comments
are also sought on whether this alternative should be applied on an
individual employee basis (applying the ratio to the individual's rate
of pay to determine the fringe amount that must be furnished) or on a
payroll basis (for example, by applying the percentage to the total
payroll and dividing by total employment to determine the fringe
benefit amount that must be furnished to each service employee).
Alternative V: Issue Two Fringe Benefit Levels Based on BLS ECI Size-
of-Establishment Data for All Workers in Private Industry
This alternative is essentially the same as the current methodology
that has been used since 1991. In addition, the Department seeks public
comments on the appropriateness and feasibility of a variation of the
current methodology, which also is under consideration:
A. Currently, the ``insurance'' benefit level is issued based on
employers' average cost for providing insurance benefits in
establishments with fewer than 100 employees. The ``total benefit''
level is based on the average cost for providing all benefits in
establishments with 100 employees or more. Although size-of-
establishment data are used to determine the different benefit levels,
in practice the two levels are applied based primarily upon the nature
rather than the size of the contract.16 Based on the March 1994
BLS ECI data, the ``insurance'' benefit level, as established in August
1994, is $.90 per hour, and the ``total benefit'' level is currently
$2.56 per hour.17
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\16\ Currently, the ``total benefit'' level is applied to large
base support contracts, solicitations based on OMB Circular A-76
solicitations, solicitations for highly technical services typically
provided by large corporations, and other selected solicitations
without regard to size of contract. Such contracts are frequently
awarded to large contractors, but not always. In practice, small
contractors are most likely awarded contracts that contain the
``insurance'' level.
\17\ As noted previously, these rates continue to remain in
effect, even though 1995 BLS ECI data for size-of-establishment
would have resulted in somewhat lower rates.
---------------------------------------------------------------------------
B. A variation of this methodology would continue the issuance of
two levels but, instead, use the BLS ECI all industry ``total benefit''
data for (1) firms with fewer than 100 employees and (2) firms with 100
or more employees--perhaps to be applied, respectively, to SCA-covered
contracts performed by fewer than 100 employees and those performed by
100 or more employees. On the basis of the March 1995 BLS ECI data, the
``fewer than 100'' level would be established at $1.28 per hour, and
the ``100 or more'' level would be $2.32 per hour. This alternative,
thus, differs from the methodology applied from 1991 through 1994 in
that an amount comprising ``total benefits'' is used instead of an
amount limited to the cost disclosed for ``insurance,'' and the
applicable rate would possibly be applied by the size (rather than the
nature) of the contract.
Both versions of this alternative are consistent with the
longstanding procedure of generally applying a lower fringe benefit
level to small contractors and a total benefit level to large
contractors. Under Alternative A, in accordance with current practice,
the lower fringe benefit rate would be based only on the ``insurance''
component, derived from data from employers with fewer than 100
employees. Under Alternative B, the lower fringe benefit rate would be
based on the ``total benefit'' level, also derived from data from
employers with fewer than 100 employees. In both cases, in accordance
with current practice, the ``total benefit'' level is derived from data
from employers with 100 or more employees. These are the only
alternatives which would not appear to be greatly disruptive to
contractors and employees in that current practices would generally be
continued. Neither would result in any significant reduction of
benefits for employees currently working on SCA-covered contracts--or
significant increase in costs to contractors and to the Government--and
there would be continuity with the benefit levels that have been issued
for the last twenty years.
The major disadvantage of both versions of this alternative is that
there is little evidence to support the rationale for two fringe
benefit levels: i.e., assumptions that the average benefit level for
small firms corresponds best to benefits paid by private employers on
contracts similar to most SCA contracts, and that the level paid by
large firms corresponds to employers which perform contracts to which
the ``total benefit'' package is applied. Although most SCA-covered
contracts involve performance by fewer than 100 employees, there is not
a direct relationship in all cases between the size of an SCA-covered
contract and the fringe benefit package (``less than 100'' and ``100 or
more'' size-of-establishment data divisions) which has been applied.
The second variation ameliorates this problem, but instead would put
small and large contractors on an unequal footing in bidding on
contracts, unless estimated size of contract (instead of size of firm)
is used. Also, both options require a sometimes subjective
determination regarding which contracts are subject to the high level
benefit and which the low level benefit.
In addition to the practical aspects of a two-level fringe benefit
approach, commenters who favor this methodology are also requested to
provide data to support its continued use, including any suggestions on
how the available ECI data, or new data in the long term, could be used
to provide a basis for its continued use consistent with the
requirements of the SCA.
[[Page 19777]]
IV. Average Cost Approach
As noted above, the lower ``insurance'' level has traditionally
been stated in determinations as a fixed payment due for all hours paid
for (up to a maximum of 40 hours per week and 2,080 per year) on behalf
of each service employee. The ``total benefits'' level, on the other
hand, has traditionally been stated in terms of average cost which
allows variable contributions among employees so long as total
contributions for all service employees on a particular contract
average at least the specified amount per hour per service employee.
Explanation of the average cost concept is set forth in 29 CFR
4.175(b).
The average cost concept was intended to provide flexibility to
accommodate variable employee benefit practices. It takes into account
variable contributions based, for example, on an employee's election of
single or family coverage under health insurance plans, or an
employee's election not to participate in health insurance plans or
other supplemental plans that may be offered like those for dental and
eyeglass coverage. It also accommodates variable contributions to
pension or other plans like life insurance that are commonly related to
an employee's wages.18 It is also recognized that certain
employees may receive lesser or even no fringe benefits when the
average cost approach is used by a service contractor, for example,
because they are part-time and not eligible for certain benefits, are
subject to a waiting period before becoming eligible, have elected not
to participate, or for other reasons. Therefore this approach may be
perceived as inequitable. The Department is seeking specific comments
on the use of the average cost concept in conjunction with any of the
above alternative methodologies, or other alternatives suggested by
commenters, and what changes, if any, would be appropriate to
facilitate compliance, reduce administrative burdens, and create
fairness for service employees, consistent with the requirements of the
SCA. In considering the average cost approach in connection with the
above alternatives, or other alternatives suggested by commenters,
comments are also sought on any recordkeeping requirements which would
be necessary to document the average cost, and whether this would
result in a greater burden on conractors, particularly smaller
contractors.
---------------------------------------------------------------------------
\ 18\ Under current regulations, service contractors who elect
to pay the specified benefit level as a cash equivalent to each
employee for each hour worked, rather than administer particular
health and welfare plans, are required to pay the amount specified
in the wage determination to each employee. The regulations do not
permit variable cash contributions.
---------------------------------------------------------------------------
V. Variance Under Section 4(b) of the Act
In connection with any fringe benefit methodology that may be
adopted as a result of this rulemaking, the Department is further
proposing to provide a corresponding variance pursuant to Sec. 4(b)
from the Act's provisions for making prevailing fringe benefit
determinations for various classes of workers on a locality
basis.19 Under the Department's longstanding procedure, the
vacation and holiday components of the fringe benefit determination
vary based on the locality where the contract services are to be
performed because locality data are available for these components. The
health and welfare component has been issued only on a national basis
due to the current absence of locality-based data (except the large
regional groupings discussed above), and none of the available data
sources on fringe benefits provides any occupational-based information
(except the broad occupational groupings discussed above).
---------------------------------------------------------------------------
\19\ A variance from both provisions may not be necessary under
some of the alternatives on which comments are solicited.
---------------------------------------------------------------------------
Moreover, the Department has researched all available data sources
over the years to ascertain the existence of any reliable information
that would permit the making of prevailing fringe benefit
determinations on a locality and occupation basis. The Department has
also initiated special pilot studies to test the feasibility of
collecting fringe benefit cost data in specific geographic localities.
Based on the results of these pilot studies by BLS, it has been the
Department's conclusion that significant technical problems would have
to be overcome before such data could be collected and utilized on a
routine basis, and at probably very high cost.20 At this time, the
available BLS ECI fringe benefit cost data is the most comprehensive,
and best information available that shows what employers spend for
different types of fringe benefits furnished to their employees. While
the annual ECI study provides some locality (four geographic regions)
and occupational information (broad occupational groupings), it does
not currently produce cost data by occupation within each of the
geographic regions.
---------------------------------------------------------------------------
\ 20\ A September 1987 BLS test survey of fringe benefit costs
in the Madison, Wisconsin, locality, for example, used newly
developed ECI concepts, manuals, and methods. The pilot did not
produce publishable data, and the cost to upgrade the data
collection effort to produce publishable data were viewed at the
time as prohibitive.
---------------------------------------------------------------------------
Under these circumstances, the variance discussed above is believed
by the Department to be reasonable, necessary and proper in the public
interest or to avoid the serious impairment of Government business.
Furthermore, because it is our understanding that many employers
normally provide the same fringe benefit package to employees in all
locations and occupations, this variance is believed to be in accord
with the remedial purposes of this Act to protect prevailing labor
standards.
As discussed in footnote 5 above, BLS is currently redesigning its
system for collecting fringe benefit data to potentially allow for
collection and publication of health and welfare benefit information
for several large metropolitan areas. Commenters are therefore
specifically requested to comment on whether they would favor
utilization of locality-based fringe benefit data for selected
metropolitan areas, should such data become available in the future.
Public commenters are requested to specifically include in their
comments particular views on any alternative ways to balance the Act's
``locality'' and ``class of service worker'' requirements with the
practical problems of data availability; and the feasibility, expense,
and burden of collecting fringe benefit cost data in occupational and
locality-based surveys in relation to the benefits derived therefrom.
Commenters are also requested to provide information regarding whether
it is their practice to provide different benefit packages in different
localities or to different classes of workers, and to address the
burden on employers of providing different benefit packages.
VI. General
In considering the various alternatives discussed above, the
Department also seeks comments on the requirement to give ``due
consideration'' to the wage and fringe benefit rates being paid Federal
employees in making wage determinations applicable to SCA-covered
contracts, and what administrative procedure, if any, would be
appropriate in factoring this information into fringe benefit
determinations (see 29 CFR 4.51(d)). Also, see AFGE v. Donovan, 25 WH
Cases (D.D.C. 1982), aff'd 694 F.2d 280 (D.C. Cir. 1982), which
interpreted the SCA's ``due consideration'' clause.
The Department also seeks comments concerning whether state and
local employee data should be included in data compiled in determining
health
[[Page 19778]]
and welfare benefits in the future. The BLS ECI data currently reports
fringe benefit cost information for the civilian workforce which
includes private industry and State and local governments. Under the
current methodology, the ``insurance'' and the ``total benefit'' levels
are based on private industry data. However, the Department has
recently changed its methodology to include both private and public
employee data in determining prevailing wage rates where the data is
available. The insurance component (life, health, and sickness and
accident insurance plans) for all workers in private industry, as
reported by March 1995 BLS ECI data, is $1.15 an hour, whereas the
comparable cost in the State and local government sector is $2.03; the
combined insurance cost for private and governmental civilian workers
is $1.29 an hour. The effect of including State and local governments
cost data is similar in the other fringe benefit components.
Also, the Department requests comments on whether the Department
should explore the cost and feasibility of expanding the ECI survey so
that more refined data could be obtained, or in the alternative,
developing other data bases. For example, should the Department
consider expanding the survey to permit determination of prevailing
fringe benefit levels by occupation within geographic regions; or to
permit determination of whether the individual fringe benefit
components prevail in each occupation? In commenting on whether
expanding the survey should be pursued, commenters are specifically
asked to comment on the value of the more refined data which might be
obtained relative to the potential costs and burden of conducting such
surveys, as well as to consider whether there would be a net benefit to
the Government or to the contractors and service employees subject to
the SCA from obtaining more refined data, thereby presumably permitting
more accurate prevailing fringe benefit determinations.21
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\21\ Of course any expansion of the surveys or development of
more refined data bases would have to be funded and could not be
accomplished immediately. Therefore, if pursued, a fringe benefit
methodology for the short-term would continue to be required.
---------------------------------------------------------------------------
Finally, the Department seeks comment on whether it should continue
to recognize different benefit levels for certain industries. Data
limitations and the expense of conducting such surveys make their
widespread use infeasible. Although some special surveys were conducted
in the past, they are rarely used currently except for mail-haul
contracts. The Department notes that these industries would be included
in existing data, and that past practice has been to issue such special
rates for low-benefit industries (and not vice-versa).
VII. Other Proposals
The Department is also seeking comments on the current procedures
for the conduct of substantial variance hearings under Section 4(c) of
the Act. Under existing regulations, the Administrator is required to
respond to the party requesting a hearing within 30 days after receipt
of a request for a hearing (29 CFR 4.10(b)(2)). Upon submission of an
Order of Reference to the Chief Administrative Law Judge, interested
parties must submit a written response to the Chief Administrative Law
Judge within 20 days of the date on which the Order of Reference was
mailed (29 CFR 6.51(b)), and the hearing is to take place within 60
days of the Order of Reference (29 CFR 6.52). The regulations further
provide that an expedited transcript shall be made of the hearing (29
CFR 6.54(f)), and that the Administrative Law Judge's (ALJ) decision
shall be issued within 15 days of receipt of the transcript. Any
aggrieved party within 60 days of the ALJ's decision may appeal to the
Board of Service Contract Appeals (the Board) (29 CFR 8.7(b)). No time
frames are established for issuance of a decision by the Board.
The National Performance Review (NPR) has recommended that the
regulations be revised to require that substantial variance hearings be
held and decisions issued within 60 calendar days.22 In view of
the NPR recommendation, comments are requested on the existing time
frames and how these time frames might be reduced to conform with the
NPR recommendation. In particular, comments are sought on a 60-day time
frame for the completion of substantial variance hearings, and whether
or not this period accords interested parties adequate time to prepare
for the proceeding, obtain a transcript, and file necessary briefs, and
for the ALJ to issue a considered opinion on the merits.
---------------------------------------------------------------------------
\ 22\ Creating a Government That Works Better and Costs Less,
Reinventing Federal Procurement (Accompanying Report of the National
Performance Review), Office of the Vice President, September 1993,
page 37.
---------------------------------------------------------------------------
Finally, it is proposed that the final rule will include certain
minor, technical modifications necessitated by the 1989 Amendments to
the Fair Labor Standards Act (FLSA), a 1985 court decision, a 1983
treaty, and a 1986 intergovernmental compact. Specifically, Section 4.2
would be revised to delete the reference to dated minimum wage rates,
and the tip credit example in Section 4.6(q) would be modified to
delete the example that is based on the minimum wage rates required by
the 1978 Amendments to the FLSA. Furthermore, the text of Section
4.112, which was invalidated by a 1985 court decision in AFL-CIO v.
Donovan, 757 F.2d 330 (D.C. Cir. 1985), would be modified to reinstate
the previous regulations as they appeared in the July 1, 1983, edition
of the CFR. In addition, necessary changes to address more recent
enactments pertaining to the geographic scope of SCA would be included
in the restored regulatory language.23 Also, the reference ``See
Section 4.6(m)(8)'' in the previously existing Section 4.112(b) would
be deleted since this section was deleted from the regulations issued
October 27, 1983. If commenters have any questions about these planned
changes, information can be obtained as indicated above.
---------------------------------------------------------------------------
\ 23\ SCA covers contract services furnished ``in the United
States.'' The geographical area included in this term, as defined in
Sec. 8(d), requires changes to conform to the Treaty of Friendship
Between the United States and the Republic of Kiribati, T.I.A.S. No.
10777, ratified June 21, 19183, and the Compact of Free Association
between the United States and the Governments of Marshall Islands
and the Federated States of Micronesia which was placed into effect
by the President on November 3, 1986, pursuant to Pub. L. 99-239.
---------------------------------------------------------------------------
VIII. Executive Order 12866/Section 202 of the Unfunded Mandates Reform
Act of 1995
The Department is seeking public comment on various optional fringe
benefit methodologies and is not proposing any specific methodology.
The anticipated cost of some alternatives to the existing methodology
for updating SCA health and welfare fringe benefit rates may exceed the
costs associated with the existing methodology. Therefore, adoption of
an alternative methodology may result in increased procurement costs to
Federal agencies who award SCA-covered service contracts, as well as
higher fringe benefits for many of the affected service employees. To
cover that possibility, the Department has reached the preliminary
conclusion that this notice may likely result in a rule deemed an
economically significant regulatory action within the meaning of
Executive Order 12866. However, the rule will not include any Federal
mandate requiring expenditures by State, local or tribal governments of
$100 million or more in any one year. Preparation of the required
analyses under the executive order and
[[Page 19779]]
Unfunded Mandates Reform Act must necessarily await the compilation of
related economic data.
As noted in the discussion under Alternative II-B, the Department
is in the process of developing data to establish more reliable
information on the occupational mix of service employees engaged in the
performance of SCA-covered contracts. Based on data collected by the
Federal Procurement Data System for Fiscal Year 1994, a statistical
survey will provide specific information on service contract employment
by occupation within SIC industry classifications. The information
collected should also provide a basis for more reliable estimates of
the economic impact of the various proposed alternatives.
Due to the time constraints imposed by the district court,
discussed above, it is not feasible to publish the impact analysis for
comment with the proposed rule. Instead, the analysis will be published
as soon as possible for comment. Comments will be reviewed prior to
promulgation of a final rule. In the meantime, if commenters have
empirical evidence which would assist in developing the analysis or
evaluating the data, it would be welcome at this time.
IX. Regulatory Flexibility Act
Under the Regulatory Flexibility Act, Public Law 96-354 (94 Stat.
1164; 5 U.S.C. 601 et seq.), Federal agencies are required to prepare
and make available for public comment an initial regulatory flexibility
analysis that describes the anticipated impact of proposed rules on
small entities. The Department has prepared the following Regulatory
Flexibility Analysis regarding this rule.
(1) Reasons Why Action Is Being Considered
The McNamara-O'Hara Service Contract Act of 1965 (SCA) requires
that the Department of Labor (DOL) determine locally-prevailing wages
and fringe benefits for the various classes of service employees
performing contract work subject to the SCA. Contracts over $2,500 (if
the predecessor contract was not subject to a collective bargaining
agreement) are required to contain wage determinations issued by DOL
that specify the minimum monetary wages and fringe benefits that must
be paid to the various classes of workers who perform work on the
service contract, based upon rates determined by DOL to be prevailing
in the locality where the work is to be performed. As discussed
previously, fringe benefit data are not generally available on an
occupation-specific or on a locality basis, which prompted DOL to issue
fringe benefit determinations for health and welfare based on
nationwide data ever since SCA was enacted.
The Service Employees International Union (SEIU) sued DOL in March
1991 in the United States District Court for the District of Columbia
over the longstanding administrative practice, since 1976, of issuing
two nationwide rates for health and welfare fringe benefits, and for
failure to periodically update SCA H&W fringe benefit levels which, at
that time, had not been updated since 1986 (SEIU v. Martin, CA No. 91-
0605 (JFP) (D.D.C. April 1, 1992)). In this court challenge, the
district court remanded the case to DOL for exhaustion of
administrative remedies and final agency action, which led to the
decision of DOL's Board of Service Contract Appeals that remanded the
matter to the Wage and Hour Division to consider alternative
methodologies for implementing the statutory objectives (BSCA Case No.
92-01 (August 28, 1992) and Case No. 93-08 (September 23, 1993)). The
proposed rulemaking alternatives are being considered in order to
develop a methodology for establishing prevailing SCA fringe benefits
consistent with statutory requirements. In the meantime, SEIU moved the
district court to reopen its case against the Department. The district
court dismissed the case without prejudice to SEIU's right to reopen
for reconsideration upon a showing that DOL has not adopted a final
rule in this matter by July 31, 1996 (SEIU v. Reich, CA No. 91-0605
(CRR) (D.D.C. January 19, 1996)).
(2) Objectives of and Legal Basis for Rule
These regulations are issued under the authority of the McNamara-
O'Hara Service Contract Act of 1965 (SCA) (41 U.S.C. 351 et seq.),
Public Law 89-286, 79 Stat. 1034, as amended by Public Law 92-473, 86
Stat. 789; by Public Law 93-57, 87 Stat. 140; and by Public Law 94-489,
90 Stat. 2358. The objective of these regulations is to provide
effective procedures for implementing SCA's statutory requirement that
DOL determine prevailing health and welfare fringe benefits that are to
be specified in wage determinations included in SCA-covered service
contracts, which benefits are required to be furnished to the various
classes of service employees performing work on SCA-covered contracts.
(3) Number of Small Entities Covered Under the Rule
The definition of small business varies considerably depending upon
the policy issues and circumstances under review, the industry being
studied, and the measures used. The Small Business Administration's
Office of Advocacy generally uses employment data as a basis for size
comparisons, with firms having fewer than 100 employees or fewer than
500 employees defined as small.24
---------------------------------------------------------------------------
24 The State of Small Business: A Report of the President
Transmitted to the Congress (1991), Together with The Annual Report
on Small Business and Competition of the U.S. Small Business
Administration (United States Government Printing Office,
Washington, D.C., 1991), p. 19. A more detailed breakdown also used
is: under 20 employees, very small; 20-99, small; 100-499, medium-
sized; and over 500, large. In general, a business bidding on a
government contract is regarded as small if it has fewer than 500
employees (see p. 221).
---------------------------------------------------------------------------
Statistics published by the Internal Revenue Service indicate that
in 1990, an estimated 20.4 million business tax returns were filed for
4.4 million corporations, 1.8 million partnerships, and 14.2 million
sole proprietorships, most of which are ``small''--fewer than 7,000
would qualify as large businesses if an employment measure of 500
employees or less is used to define small and medium-sized
businesses.25
---------------------------------------------------------------------------
\25\ U.S. Department of the Treasury, Internal Revenue Service,
SOI Bulletin (Spring 1990) Table 19; reprinted by SBA in The State
of Small Business (1991), Id., p. 21.
---------------------------------------------------------------------------
Federal procurement data are compiled and reported by the Federal
Procurement Data Center (FPDC) in the Federal Procurement Data System
Federal Procurement Report (Washington, D.C.: U.S. Government Printing
Office). The value of Federal contracts and volume of contract
``actions'' are currently reported individually to the FPDC for
contract actions exceeding $25,000; actions of less than $25,000 are
reported only in the aggregate. A contract ``action'' differs from an
initial contract ``award'' because a single contract may involve more
than one action--for example, a modification to an initial contract
award is reported to the FPDC as a separate action and may involve the
obligation or de-obligation of funds.
Small businesses were awarded $58.8 billion of the $184.2 billion
spent by the Federal government on goods and services in Fiscal Year
(FY) 1989, including $31.6 billion awarded directly to small firms and
$27.2 billion awarded to small subcontractors by Federal prime
contractors.26 Small firms accounted for more than one-half (51.3
[[Page 19780]]
percent) of the value of contracts under $25,000, but only 14.1 percent
of those over $25,000 in FY 1989.27 Since FY 1979 when the FPDC
first began reporting procurement data regularly, the share of Federal
procurement dollars awarded to small firms has fluctuated between 14
and 16 percent over the entire period--for FY 1989 it was 14.1 percent
overall.
---------------------------------------------------------------------------
\26\ Id., p. 220.
\27\ Ibid.
---------------------------------------------------------------------------
Of the major product/service categories under which contract
actions are reported to the FPDC, the ``other services'' category
(which includes a variety of non-construction activities ranging from
technical, sociological, administrative, and other professional
services, to installation, maintenance, and repair of equipment)
amounted to 28.9 percent of the total Federal prime contract actions
reported individually in FY 1989. Small businesses were awarded $6.8
billion or 14.7 percent of the contract dollars awarded for services in
FY 1989.28
---------------------------------------------------------------------------
\28\ Id., pp. 223, 226 & 235-237.
---------------------------------------------------------------------------
This FPDC data on small business awards does not correlate
precisely with the number of contract actions or contract dollars
awarded that are subject to the SCA. However, the ``services'' category
can be considered a reliable proxy for analyzing the universe of SCA-
covered contracts reported to the FPDC that may be awarded to small
businesses. Of a total 502,138 contract actions valued at $177.8
billion that were individually reported to the FPDC in FY 1992 (i.e.,
actions over $25,000 each), 82,957 contract actions, valued at $18.1
billion, were classified as subject to the SCA.29 Of these awards,
we estimate that $2.66 billion (14.7 percent) went to small businesses.
These figures, however, do not include any portion of the contract
actions not individually reported but reported in summary to the FPDC,
which totaled 19.6 million contract actions valued at $22.02
billion.30 Based upon the percentage of contract actions and
contract dollars in the services category that were reported
individually to FPDC as being subject to SCA, we estimate that an
additional 2,905,696 actions, valued at $2.2 billion, of the actions
reported in summary to the FPDC were subject to SCA. Of these awards,
we estimate that $1.1 billion (50 percent) went to small businesses.
---------------------------------------------------------------------------
\29\ Federal Procurement Data System Standard Report, Fiscal
Year 1992, Fourth Quarter, pp. 74-75.
\30\ Id., p. 74.
---------------------------------------------------------------------------
No current employment data are available by size of business that
would relate to Federal contracts awarded subject to SCA. (The SBA
measures employment change on a current basis for each small-or large-
business-dominated industry using Bureau of Labor Statistics payroll
data.31)
---------------------------------------------------------------------------
\31\ Id., p. 34.
---------------------------------------------------------------------------
(4) Reporting, Recordkeeping and Other Compliance Requirements of the
Rule
This proposed rule, which relates to the procedures to be followed
by DOL for determining prevailing health and welfare fringe benefits to
be paid to service employees working on Federal service contracts
covered by SCA, contains no reporting, recordkeeping, or other
compliance requirements applicable to small businesses. However, some
of the proposed alternatives may involve additional recordkeeping. All
SCA-covered contractors (including small businesses) are required to
maintain records specified under 29 CFR Part 4 that demonstrate
compliance with the statutory requirements to furnish equivalent fringe
benefits or cash equivalents at not less than prevailing rates.
(5) Relevant Federal Rules Duplicating, Overlapping or Conflicting With
the Rule
There are currently no Federal rules that duplicate, overlap or
conflict with this proposed rule.
(6) Differing Compliance or Reporting Requirements for Small Entities
This proposed rule, as noted, relates to DOL procedures for
determining prevailing health and welfare fringe benefits for service
employees on SCA-covered service contracts. At this time, the rule
contains no reporting, recordkeeping, or other compliance requirements
applicable to small businesses. Moreover, the requirement to provide
prevailing fringe benefits applies to all contracts in excess of
$2,500, and establishing different requirements for small entities is
not a valid alternative under the terms of the statute. However, under
the express terms of the statute, all SCA-covered contractors may
discharge their obligations to furnish prevailing fringe benefits under
SCA ``* * * by furnishing any equivalent combinations of fringe
benefits or by making equivalent or differential payments in cash under
rules and regulations established by the Secretary * * *,'' which are
set forth at 29 CFR Sec. 4.177.
(7) Clarification, Consolidation and Simplification of Compliance and
Reporting Requirements
As noted, this proposed rule pertaining to DOL procedures for
determining prevailing fringe benefits under SCA contains no new
compliance or reporting requirements for small entities.
(8) Use of Other Standards
Given the stated objectives of the statute, compliance by
contractors can only be achieved through performance rather than design
standards--i.e., the Secretary is required by the Act to determine the
prevailing wages and fringe benefits to be paid by service contractors.
The available alternative methodologies that are being considered and
put forth in this proposed rule are discussed in the preamble above and
are not repeated here.
(9) Exemption From Coverage for Small Entities
Exemption from coverage under this rule for small entities would
not be appropriate given the statutory mandate of SCA that all
contractors (large and small) performing on SCA-covered contracts
furnish prevailing fringe benefits to service employees performing on
Federal service contracts. Further exclusion of such small businesses
from data collected to determine prevailing fringe benefits would also
be impractical, and would distort determinations of prevailing fringe
benefits, possibly to the detriment of small businesses.
Summary
Based upon the foregoing analysis, the revised procedures contained
in this proposed rule are expected to have a ``significant economic
impact on a substantial number of small entities'' within the meaning
of the Regulatory Flexibility Act. This impact is mitigated in some
respects by the statutory authority for SCA-covered contractors to
discharge their obligations to furnish prevailing fringe benefits by
furnishing any equivalent combinations of fringe benefits or by making
equivalent or differential payments in cash.
Document Preparation
This document was prepared under the direction and control of Maria
Echaveste, Administrator, Wage and Hour Division, Employment Standards
Administration, U.S. Department of Labor.
List of Subjects in 29 CFR Part 4
Administrative practice and procedures, Employee benefit plans,
[[Page 19781]]
Government contracts, Investigations, Labor, Law enforcement, Minimum
wages, Penalties, Recordkeeping requirements, Reporting requirements,
Wages.
Signed at Washington, DC, on this 26th day of April, 1996.
Maria Echaveste,
Administrator, Wage and Hour Division.
[FR Doc. 96-10797 Filed 5-1-96; 8:45 am]
BILLING CODE 4510-27-P
Complete official Federal Register PDF
FR Doc. 96-10796 Performance Standards for the Production of Certain Meat and Poultry Products
[Federal Register Volume 61, Number 86 (Thursday, May 2, 1996)]
[Proposed Rules]
[Pages 19564-19578]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10796]
========================================================================
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. 61, No. 86 / Thursday, May 2, 1996 / Proposed
Rules
[[Page 19564]]
DEPARTMENT OF AGRICULTURE
Food Safety and Inspection Service
9 CFR Parts 301, 317, 318, 320, and 381
[Docket No. 95-033P]
Performance Standards for the Production of Certain Meat and
Poultry Products
AGENCY: Food Safety and Inspection Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Food Safety and Inspection Service (FSIS) is proposing to
amend the Federal meat and poultry inspection regulations by converting
the current regulations governing the production of cooked beef
products, uncured meat patties, and certain poultry products into
performance standards. The proposed performance standards spell out the
objective level of performance establishments must meet during their
operations in order to produce safe products, but allow the use of
plant-specific processing procedures other than the procedures
prescribed in the current regulations.
Performance standards set forth requirements in terms of what is to
be achieved by a given regulatory requirement. They represent a shift
in focus from ``command-and-control'' regulations in that they specify
the ends to be achieved (producing safe meat and poultry products), but
not the means to achieve those ends. The command-and-control provisions
in the current regulations prescribe the means for producing safe meat
and poultry products, specifying step-by-step procedures to be followed
by establishments.
All of the command-and-control provisions in the current
regulations meet the proposed performance standards. FSIS proposes to
maintain the current provisions in the regulations as examples of how
an establishment might comply with the proposed performance standards
(``safe harbors''). Therefore, establishments would not be required to
change any current practices in response to this proposed rule.
The specific categories of products affected follow: cooked beef,
roast beef, and cooked corned beef; fully cooked, partially cooked, and
char-marked uncured meat patties; and certain fully and partially
cooked poultry products. Any establishment producing these products and
choosing to develop and use procedures different from those provided in
the safe-harbor example would be required to maintain on file a
documented process schedule that has been approved by a process
authority for safety and efficacy, as required by the performance
standard. The process schedule would include control, monitoring,
validation, and corrective action activities to be performed by the
establishment.
DATES: Comments must be received on or before July 1, 1996.
ADDRESSES: Submit one original and two copies of written comments to
Docket Clerk, U.S. Department of Agriculture, Food Safety and
Inspection Service, Room 4352-S, Washington, DC 20250-3700. Please
refer to docket number 95-033P in your comments. Any person desiring an
opportunity for oral presentation of views as provided under the
Poultry Products Inspection Act should contact Dr. Paula M. Cohen at
(202) 720-7164 so that arrangements can be made. All comments submitted
in response to this proposal will be available for public inspection in
the Docket Clerk's Office between 8:30 a.m. and 1:00 p.m., and 2:00
p.m. and 4:30 p.m., Monday through Friday. To review the research and
other background information used by FSIS in developing this document,
persons may visit the Docket Clerk's office during the times listed
above.
FOR FURTHER INFORMATION CONTACT: Patricia F. Stolfa, Acting Deputy
Administrator, Science and Technology, Food Safety and Inspection
Service, U.S. Department of Agriculture, Washington, DC 20250-3700;
(202) 205-0699.
SUPPLEMENTARY INFORMATION:
Background
Under 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.),
FSIS issues regulations governing the production of meat and poultry
products prepared for distribution in interstate and foreign commerce.
Many of these regulations employ the command-and-control approach,
prescribing a precise sequence of steps to be followed to produce food
that is safe and not adulterated.
Since 1972, FSIS has promulgated several regulations ensuring the
safety of various cooked and partially cooked meat and poultry
products. These regulations (9 CFR 318.17, 318.23, and 381.150)
prescribe specific steps establishments must follow to ensure harmful
bacteria are killed, growth of spore-forming bacteria is controlled,
and recontamination of the product is prevented. By describing detailed
safety procedures, this approach to rulemaking has provided clear
direction and ensured that all establishments are subject to the same
rules.
However, command-and-control regulations often do not account for
the uniqueness of individual processing procedures and needs within
different establishments. FSIS command-and-control regulations require
all establishments to produce meat and poultry products in the same
manner. Such prescriptive regulations are burdensome in many settings.
Further, command-and-control regulations can have disparate
economic effects on establishments producing different volumes of the
same product. By mandating the use of specific processes or
technologies, FSIS often inadvertently imposes economic burdens on
small businesses. Small establishments producing meat and poultry
products at low volumes often must pay a high cost per product unit
when required to employ a specific process or technology, while large
establishments are able to spread the cost over their higher production
volumes.
FSIS is now proposing to convert these regulations to performance
standards. Performance standards spell out the objective level of
performance establishments must meet during their operations in order
to produce safe and nonadulterated products, but allow the use of
plant-specific processing procedures, other than those prescribed in
the current regulations. Accordingly, establishments could employ
innovative or unique processing procedures customized to the nature and
volume of their production.
[[Page 19565]]
The conversion of command-and-control regulations to performance
standards is also an important element of the Agency's HACCP (Hazard
Analysis and Critical Control Points) initiative.
Performance Standards and HACCP
In the Federal Register of February 3, 1995 (60 FR 6774), FSIS
described a new food safety strategy based on clearly defining the
responsibility of meat and poultry establishments to produce products
that meet FSIS-established food safety performance standards. As a
central element of this new food safety strategy, FSIS has proposed
that all establishments adopt the science-based system of preventive
controls to ensure food safety, known as HACCP. Under HACCP,
establishments will be responsible for developing and implementing
HACCP plans incorporating the controls determined by the establishment
to be necessary and appropriate to produce safe products. HACCP is a
flexible system that enables establishments to tailor their control
systems to the needs of particular plants and processes.
Clearly defined food safety performance standards and HACCP are
both powerful tools for improving food safety. Under FSIS proposals to
implement performance standards and HACCP, establishments would have
the incentive and flexibility to adopt innovative, science-based food
safety processing procedures and controls. Furthermore, by focusing on
inspectional oversight of the manner in which establishments are
implementing HACCP plans and achieving performance standards, FSIS will
have a more effective means of ensuring that establishments are meeting
their food safety responsibilities.
Moreover, for HACCP to be successful, FSIS must reconsider its
current reliance on command-and-control regulations. As a general
matter, such regulations are incompatible with HACCP and the new food
safety strategy because they deprive plants of the flexibility to
innovate, one of the advantages of HACCP, and undercut the clear
delineation of responsibility for food safety on which the FSIS
strategy is based. Therefore, to prepare for the implementation of
HACCP, FSIS is conducting a thorough review of its current regulations
and, to the maximum extent possible, converting its command-and-control
regulations to performance standards. This proposal to convert the
current regulations governing the production of certain cooked beef
products, uncured meat patties, and certain poultry products into
performance standards is an important part of this effort.
The Integration of Performance Standards Into Establishment HACCP Plans
Establishments would have the option of developing customized
processing procedures designed to meet performance standards prior to
their implementation of the HACCP requirements. These establishments
would incorporate elements of their customized processing procedures
into their HACCP plans and, in fact, probably would develop these
processing procedures with HACCP in mind. Specifically, establishments
would incorporate the means they use to meet the performance standards
into their HACCP plans as critical limits.
When developing a HACCP plan, an establishment must first carry out
a hazard analysis to identify and list the physical, biological, or
chemical food safety hazards reasonably likely to occur in the
production process for a particular product and the preventive measures
necessary to control the hazards. The establishment then must identify
the critical control points (CCPs) in each of its processes. A CCP is
a point, step, or procedure at which control can be applied and a food
safety hazard can be prevented, eliminated, or reduced to an acceptable
level.
Next, the critical limits for preventive measures associated with
each identified CCP must be established. A critical limit is the
maximum or minimum value to which a process control measure must be
controlled at a CCP to prevent, eliminate, or reduce to an acceptable
level the identified food safety hazard. Critical limits are most often
based on process parameters such as temperature, time, water activity,
or humidity. Critical limits must be designed to satisfy relevant FSIS
regulations (including performance standards), FDA tolerances, and
action levels where appropriate.
The proposed performance standards set out quantifiable
microbiological pathogen reduction requirements for cooked beef
products, uncured meat patties, and certain fully and partially cooked
poultry products. Therefore, establishments would develop critical
limits based upon these performance standards. Of course, during hazard
analysis, establishments probably would identify other hazards not
addressed by these performance standards and would be required to
develop CCP's and critical limits accordingly. An example of how an
establishment might use performance standards to develop critical
limits follows.
Establishment X produces ready-to-eat poultry products and, as a
result of this proposal, would be required to meet three performance
standards: lethality, stabilization, and handling. To meet the
lethality standard, the establishment must achieve a 7-D reduction in
the microbiological pathogen Salmonella (explained below) in their
poultry products. As would most, if not all establishments,
Establishment X achieves this reduction in Salmonella through cooking.
Establishment X cooks its poultry at 155 deg.F for 16 seconds to
achieve a 7-D lethality.
As part of its HACCP plan, Establishment X must develop critical
limits for the preventive measures addressing the hazards associated
with producing ready-to-eat poultry products. Salmonella is identified
as one of those hazards by the lethality performance standard.
Therefore, Establishment X would incorporate the time/temperature
combination used to meet the lethality performance standard into its
HACCP plan as critical limits.
To meet the second performance standard, stabilization,
Establishment X must prevent the germination and multiplication of
toxigenic microorganisms such as C. botulinum and allow no more than a
1-decimal log multiplication of C. perfringens within its ready-to-eat
poultry products (further explained below). To meet this performance
standard, Establishment X decides to chill its poultry products
following cooking, to 80 deg.F within 1.5 hours and to 40 deg.F
within 5 hours. C. botulinum and C. perfringens are identified by the
stabilization performance standard as hazards that must be addressed
during the production of ready-to-eat poultry products. Therefore,
Establishment X would incorporate the time/temperature combination used
to meet the stabilization performance standard into its HACCP plan as
critical limits.
To meet the third performance standard for ready-to-eat poultry,
handling, Establishment X must ensure that no infectious pathogens are
introduced into the product following processes ensuring lethality and
stabilization and after final packaging. To meet the handling standard,
Establishment X cooks the packaged, raw poultry product in a room
physically separated from other rooms in which raw poultry and
ingredients are handled and packaged. Further, Establishment X assures
that raw materials entering the room for processing are stored
separately from the finished, ready-to-eat product. Finally,
Establishment X monitors the integrity of the packaged, ready-to-eat
[[Page 19566]]
product to ensure that there are no punctures or incomplete seals that
may cause contamination.
The Proposed Performance Standards and Commercial Sterility
As stated above, the performance standards proposed set out
quantifiable pathogen reduction requirements for cooked beef products,
uncured meat patties, and certain fully and partially cooked poultry
products. In the interest of further simplifying the food safety
regulations governing these products, FSIS might have proposed a single
performance standard: commercial sterility, or the elimination of all
microorganisms from these products.
However, achieving commercial sterility within cooked beef
products, uncured meat patties, and certain fully and partially cooked
poultry products would not be feasible. It would be technically
impossible for establishments to produce versions of these products
that are both commercially sterile and marketable. For example, using
current technology, it would be impossible to produce a ready-to-eat,
rare roast beef product that is commercially sterile.
The quantifiable pathogen reduction performance standards proposed
for these products would both ensure the production of safe food, with
an ample margin of safety, and be readily achievable by industry.
Further, as explained in the following section, these proposed
performance standards are intrinsic to the current regulations.
Safe Harbors
Products produced in accordance with the command-and-control
provisions in the current regulations governing cooked beef products,
uncured meat patties, and certain fully and partially cooked poultry
products would meet the proposed performance standards. Establishments
producing these products therefore would not be required to change any
current practices in response to this proposed rule. By proposing
performance standards that may be met through adherence to the current
regulations, FSIS creates a regulatory ``safe harbor'' for
establishments that wish to continue operating as is currently
required.
FSIS proposes to retain these regulatory safe harbors in the Code
of Federal Regulations (CFR), as examples of how establishments can
produce cooked beef products, uncured meat patties, and certain fully
and partially cooked poultry products that meet the performance
standards. Such examples would assist small or new establishments that
do not have the resources to develop customized process schedules for
these products. Though these regulatory safe harbors contain many
prescriptive and possibly obsolete requirements, the Agency wants to
provide options that allow establishments to continue operating as they
do under the current regulations. Therefore, in this proposal, the
regulatory safe harbors are presented with few changes from the current
regulations.
FSIS has announced a comprehensive review of regulatory procedures
and requirements to determine which are still needed and which ought to
be reconsidered, streamlined, or eliminated. As well as identifying
regulatory candidates for reform and repeal in general, this review
will establish priorities for revising regulations for compatibility
with HACCP and the new FSIS food safety strategy. As explained above,
under the new food safety strategy and HACCP, establishments will be
responsible for developing and implementing HACCP plans incorporating
the controls determined by the establishment to be necessary and
appropriate to produce safe products.
Many of the command-and-control provisions, inherent in the current
regulations and thus in the proposed safe harbors, must therefore be
eliminated, revised, or converted to performance standards. Command-
and-control regulations are generally incompatible with HACCP and the
new food safety strategy because they deprive establishments of the
flexibility to innovate and undercut the clear delineation of
responsibility for food safety on which the FSIS strategy is based.
FSIS will focus its review of the proposed regulatory safe harbors on
the most prescriptive provisions, especially those concerning prior
approval of customized processes or product disposition by FSIS program
officials. These prior approval requirements would be incompatible with
FSIS inspection under HACCP and would need to be eliminated before
HACCP implementation. Further, FSIS proposes to retain the safe harbors
only as examples of processes establishments can use to produce product
meeting the performance standard.
The safe harbors included in this proposal still contain provisions
requiring prior approval by FSIS program officials of customized
processes or product disposition. As stated above, FSIS must remove
these provisions prior to the implementation of HACCP. FSIS invites
comment on precisely how safe harbors should be revised in light of
HACCP and the new FSIS food safety strategy. FSIS also invites comment
on whether the Agency should provide regulatory safe harbors at all,
and if so, whether their retention in the Code of Federal Regulations
is necessary.
Process Schedule Approval and Validation
Prior to its development and implementation of a HACCP plan, an
establishment choosing to develop and use processing procedures
different from those provided in the safe-harbor examples would be
required to have on file, available to FSIS, a written process schedule
describing the specific operations employed by the establishment to
accomplish the objectives of the performance standards (FSIS would
amend the relevant information requirements in 9 CFR part 320). This
process schedule also would be required to contain the related control,
monitoring, validation, and corrective action activities associated
with the establishment's procedures. These activities are the good
sanitation and basic good manufacturing practices generally regarded as
essential prerequisites for the production of safe food. Further, these
activities would be similar, if not identical, to the control,
monitoring, validation, and corrective action activities developed by
the establishment as part of its HACCP plan. Accordingly, so not to
place duplicative requirements on establishments, FSIS would sunset
these process schedule requirements as HACCP is implemented.
The process schedule would have to be evaluated and approved for
safety and efficacy by a process authority. FSIS does not propose to
preapprove the procedures deemed acceptable by the establishment's
process authority. The proposed regulations define a process authority
as a person or organization with expert knowledge in meat and poultry
process control and relevant regulations.
The process authority would evaluate the establishment's
prospective processing procedures and, after using such devices as
laboratory challenge studies or comparison to peer-reviewed and -
accepted procedures, approve, in writing, the safety and efficacy of
the establishment's prospective procedures. The process authority must
have access to the establishment in order to evaluate the safety of
that establishment's planned production processes.
As stated above, FSIS proposes to sunset these proposed process
schedule requirements as establishments develop and implement HACCP
plans. These requirements would be duplicative of
[[Page 19567]]
what is required by HACCP, that is, an establishment would not need
both an approved process schedule and a validated HACCP plan for the
same process. FSIS anticipates that if an establishment developed a
process schedule for producing one of the aforementioned meat or
poultry products prior to implementing HACCP, it would incorporate
elements of that process schedule into its HACCP plan.
Also, FSIS proposes to require that prior to the implementation of
HACCP, establishments validate the process schedule by testing product
to determine that it meets the applicable performance standards.
Testing would have to be conducted in accordance with a sampling
program designed by the process authority to assure, with at least 95
percent statistical confidence, that an establishment's process
schedule will produce product that meets applicable performance
standards. Establishments could not release product for commercial use
until testing confirmed that the process schedule was producing product
meeting applicable performance standards. FSIS would require that
results of the product testing, as well as the sampling regimen, be
made available as the validation activities contained in the process
schedule.
It is an industry convention to confirm that new production
processes are safe and effective by holding and testing product prior
to its commercial release. Therefore, FSIS believes that this proposed
testing requirement for customized and essentially new process
schedules would not be burdensome for meat and poultry establishments.
Validation of process schedules through sampling prior to the
implementation of HACCP is a necessary step establishments must take to
ensure that their processes are producing safe food for commercial
distribution. FSIS realizes, however, that this particular form of
validation may not be appropriate in every circumstance. Therefore,
FSIS invites comment on the validation requirement proposed in this
document, specifically as to whether FSIS should prescribe this
specific method of validation for these process schedules, and, whether
the proposed testing requirement is in fact appropriate for ensuring
that an establishment's products meet food safety performance
standards.
Like the proposed requirements concerning the development,
approval, and maintenance of the process schedule, the process schedule
validation requirement would be sunsetted as HACCP is implemented. FSIS
would not require an establishment with a validated HACCP plan
producing meat and poultry products that meet performance standards
also to have on file a validated process schedule.
FSIS Inspection
After a process authority has approved an establishment's planned
procedures and before the production of lots to be held and tested, an
establishment would be required to notify FSIS that it is implementing
procedures different than those contained in the safe harbor provisions
of the regulations. This notification would facilitate FSIS inspection
in regard to these procedures. FSIS personnel would continue to perform
inspection tasks as scheduled by the Performance Based Inspection
System, as they do under the current regulations, in order to verify
that the product is processed according to the procedures on file and
meets the performance standards. FSIS in-plant inspection personnel
would not be evaluating the process authority-approved procedures for
efficacy, except through these in-plant verification tasks. FSIS
inspection of an establishment employing process authority-approved
procedures would be as rigorous as inspection of an establishment
employing safe-harbor procedures.
At all establishments, FSIS personnel would retain the authority to
sample product for verification or to take action on the process in
cases where noncompliance with Agency regulations is suspected or when
the process is not properly controlled. FSIS personnel would sample
products made with process authority-approved procedures at the same
frequency they sample products made with safe-harbor procedures.
Should an establishment wish to alter its approved procedures, the
process authority must evaluate and approve, in writing, the proposed
alterations prior to their implementation. The process authority would
approve only alterations that result in the continued production of
product meeting performance standards. Prior to the commercial release
of any product produced by process authority-approved, altered
procedures, testing requirements would again apply.
It is possible that the same process authority may service several
establishments owned by a single company. The process authority could
approve the same procedures for use at all of the establishments. FSIS
would allow such an arrangement, as long as the process authority-
approved procedure is on file at each establishment and each
establishment complies with the applicable testing provisions for the
product in question.
Any establishment operating under a Total Quality Control (TQC)
system (Sec. 318.4) and desiring to employ a processing procedure
approved by a process authority would be required to submit the
approved procedure through normal channels for incorporation into its
TQC system. FSIS would evaluate only the format of the approved
procedure, to allow its incorporation into the official FSIS-held
copies of the TQC system procedures.
Performance Standards for Cooked/Roast Beef Products, Cooked Uncured
Meat Patties, and Certain Cooked Poultry Products
To meet the proposed performance standards for cooked/roast beef
products, fully cooked, uncured meat patties, and certain fully cooked
poultry products, establishments would need to continue to eliminate
pathogenic microorganisms from these products. FSIS is proposing three
performance standards reflecting this goal: lethality, stabilization,
and handling. An establishment meeting these three standards would
produce ready-to-eat, cooked products containing no viable pathogenic
microorganisms.
Lethality
To meet the first standard, lethality, establishments must treat
ready-to-eat product so as to ensure a specific, significant reduction
in the number of pathogenic microorganisms in the product, effectively
eliminating the pathogenic microorganisms from the product. FSIS is not
proposing to require that any particular means be used to meet the
lethality standard. For these cooked products, FSIS would continue to
require a heat treatment. However, FSIS is not proposing to require
that cooking be the sole means by which lethality is to be achieved.
Other applicable treatments, such as curing, might be used in
combination with cooking to achieve the required lethality.
For the purpose of the lethality standard, reduction of pathogenic
microorganisms would be measured in D-values. A D-value indicates the
time required to reduce the viable microbial population by one
log10 unit at a given temperature:
D=t/log a-log b
where ``t'' is the time of heating, ``a'' the number of viable
organisms at ``t''=0 minutes, and ``b'' the number of surviving
organisms. A ``7-D'' process for Salmonella, for example, would
[[Page 19568]]
reduce Salmonella contamination by a factor of 10 million and would
ensure the effective elimination of Salmonella in a product
contaminated with as many as 10 million (107) organisms per gram.
For cooked beef, roast beef, and cooked corned beef products, FSIS
is proposing that the lethality performance standard be a 7-D reduction
in Salmonella. Traditionally, the pathogenic microorganism of concern
in cooked beef products has been Salmonella. Although E. coli 0157:H7
has emerged as a significant pathogen of concern in meat products,
Salmonella is generally slightly more resistant to heat than E. coli
0157:H7. Furthermore, while Salmonella is not as heat resistant as
Listeria monocytogenes, the presence of L. monocytogenes in finished
product is primarily a result of recontamination and the expected
levels of L. monocytogenes are much lower than those expected of
Salmonella. Therefore, the thermal destruction of Salmonella in cooked
beef products would indicate the destruction of the other two
pathogens. (To review the research and other background information
used by FSIS in developing this document, see ADDRESSES above.)
When the current regulations for cooked beef products were
promulgated, available research indicated that due to the
microbiological profile of beef and other factors, a 7-D reduction in
Salmonella was necessary to produce a safe cooked beef product, free of
pathogens. A 7-D reduction in Salmonella does effectively eliminate all
pathogenic microorganisms from cooked beef products and provides a
significant margin of safety. However, the Agency recognizes that the
required 7-D reduction in Salmonella may be overly conservative in
certain processing environments. For example, if an establishment with
an effective system of process controls were processing high quality
raw product into roast beef, it might not need to achieve a 7-D
reduction in Salmonella in order to produce safe product. Given the
variety of establishments producing cooked beef products, however,
requiring a 7-D reduction of Salmonella in these products provides for
a significant margin of safety throughout the industry.
FSIS also recognizes that developments in processing technology now
may indicate that a safe, ready-to-eat cooked beef product could be
produced with a different level of lethality. Raw beef is rarely
contaminated with Salmonella at levels in excess of three or four logs
(1,000-10,000 organisms) per gram of product. It is thus probable that
a 3-D or 4-D reduction in Salmonella would effectively eliminate all
pathogens from a cooked beef product.
The Agency invites submissions on this lethality standard. FSIS
would consider revising the lethality performance standard and safe
harbor example for cooked beef products in general if presented with
compelling data. FSIS also might consider revising the lethality
performance standard for cooked beef products produced under certain
combinations of conditions, such as those presented in the example
above. Such revisions would grant further flexibility to cooked beef
processors and encourage innovation, while ensuring the safety of the
food produced.
The current regulations in Sec. 318.17, governing the production of
cooked beef, roast beef, and cooked corned beef products, require,
among other things, that these products be cooked at certain
temperatures for certain periods of time (the table in paragraph (a) of
Sec. 318.17 lists the approved time/temperature combinations). When
applied, all of these time/temperature combinations produce a 7-D
lethality. Therefore, as a result of this proposal, establishments
continuing to follow the current regulations (the proposed safe
harbors) would produce cooked beef products that meet the 7-D lethality
standard presented in this document. And, notably, establishments that
choose to produce cooked beef products using procedures other than
those retained in the safe harbor regulations would be required to meet
the same rigorous measure of lethality.
For fully cooked, uncured meat patties, FSIS is proposing that the
lethality performance standard be a 5-D reduction in Salmonella. FSIS
has identified Salmonella as the target pathogenic microorganism in
fully cooked uncured meat patties, as in fully cooked beef products,
because its elimination indicates the elimination of other pathogenic
microorganisms. A 5-D reduction in Salmonella in cooked, uncured meat
patties effectively eliminates all pathogenic microorganisms, provides
a significant margin of safety, and allows for the production of a
marketable product (achieving a 7-D reduction of Salmonella in fully
cooked meat patties, as is mandated for cooked beef or poultry
products, would require a degree of processing that would render the
patties burnt, dry, and unacceptable to consumers).
As in the cooked beef product regulations, the regulations in
Sec. 318.23 governing the production of cooked, uncured meat patties
require that these products be cooked at certain temperatures for
certain periods of time (Table A, in paragraph (b)(1)(i) of Sec. 318.23
lists the approved time/temperature combinations). When applied, all of
these time/temperature combinations produce a 5-D lethality. Therefore,
as a result of this proposal, establishments continuing to follow the
current regulations (the proposed safe harbors) would produce cooked
meat patties that meet the 5-D lethality standard proposed in this
document. And, establishments that choose to produce cooked meat
patties using procedures other than those retained in the safe harbor
regulations would be required to meet the same rigorous measure of
lethality.
For the cooked poultry products described in Sec. 381.150, FSIS is
proposing that the lethality performance standard be a 7-D reduction in
Salmonella. FSIS has identified Salmonella as the target pathogenic
microorganism in cooked poultry products, as in fully cooked beef and
uncured meat patties, because its elimination indicates the elimination
of other pathogenic microorganisms. When the current regulations for
cooked poultry products were promulgated, available research indicated
that due to the microbiological profile of poultry and other factors, a
7-D reduction in Salmonella was necessary to produce a safe cooked
poultry product, free of pathogens. (To review the research and other
background information used by FSIS in developing this document, see
ADDRESSES above.) A 7-D reduction in Salmonella does effectively
eliminate all pathogenic microorganisms from cooked poultry products
and provides a significant margin of safety.
The Agency recognizes that the required 7-D reduction in Salmonella
may be overly conservative in certain processing environments. For
example, if an establishment with an effective system of process
controls were processing high quality raw product into ready-to-eat
cooked poultry, it might not need to achieve a 7-D reduction in
Salmonella in order to produce safe product. Given the variety of
establishments producing cooked poultry products, however, requiring a
70D reduction of Salmonella in these products provides for a
significant margin of safety throughout the industry.
Further, FSIS recognizes that developments in processing technology
now may indicate that in general, safe, ready-to-eat cooked poultry
products could be produced with a different level of lethality. It is
possible, for example, that a 3-D or 4-D reduction in
[[Page 19569]]
Salmonella would effectively eliminate all pathogens from cooked
poultry products.
The Agency invites submissions on the lethality standard for cooked
poultry products. FSIS would consider revising the lethality
performance standard and safe harbor example for cooked poultry
products in general if presented with compelling data. FSIS also might
consider revising the lethality performance standard for cooked poultry
products produced under certain combinations of conditions, such as
those presented in the example above.
The regulations in Sec. 381.150(b) governing the production of
cooked poultry products require that these products reach certain
internal temperatures prior to being removed from the cooking medium.
Meeting these internal temperature requirements ensures a 7-D reduction
of Salmonella. Therefore, as a result of this proposal, establishments
continuing to follow the current regulations (the proposed safe
harbors) would produce cooked poultry products that meet the 7-D
lethality standard proposed in this document. And, establishments that
choose to produce cooked poultry products using procedures other than
those retained in the safe harbor regulations would be required to meet
the same rigorous measure of lethality.
Stabilization
In order to meet the second performance standard, stabilization,
establishments must prevent vegetative spore-forming bacteria from
growing within product and producing toxin. If allowed to grow in
number, these bacteria can produce high concentrations of toxin, which
cause foodborne illness.
Means applied to products to bring about the lethality of certain
pathogenic microorganisms, such as Salmonella, can create a model
environment for the multiplication of spore-forming bacteria. For
example, cooking or heat processing is likely to be applied to a
product in order to eliminate Salmonella and other pathogenic
microorganisms. Clostridium botulinum spores, Clostridium perfringens
spores, and spores from other vegetative and spore-forming bacteria can
survive cooking and, in fact, thrive in the warm product following
cooking when competitive microorganisms, such as Salmonella, have been
eliminated.
Therefore, it is important that the stabilization conditions are
implemented so that vegetative, spore-forming bacteria do not have an
opportunity to grow within the product. Accordingly, FSIS is proposing
that stabilization, likely to be rapid cooling following cooking, must
prevent the germination and multiplication of toxigenic microorganisms
such as C. botulinum, and allow no more than a 1-decimal log
multiplication of C. perfringens. Limiting the allowable growth of C.
perfringens to a 1-decimal log multiplication would effectively limit
the multiplication of other, slower growing spore-forming bacteria,
such as Bacillus cereus and Staphylococcus aureus.
The current regulations for cooked beef products and cooked meat
patties require, among other things, that these cooked products be
quickly cooled following cooking, in order to inhibit the growth of
vegetative, spore-forming bacteria. Section 318.17(h)(10) requires that
establishments begin chilling cooked beef products within 90 minutes of
heat processing. The products must be chilled from 120 deg.F to 55
deg.F in no more than 6 hours, chilling must continue until shipment,
and the product cannot be packed for shipment until it has reached 40
deg.F. Section 318.23(b) requires that cooked meat patties be cooled to
an internal temperature of 40 deg.F or below within 2 hours of heat
processing. When applied, the chilling requirements for both cooked
beef products and cooked meat patties prevent the germination and
multiplication of toxigenic microorganisms such as C. botulinum and
allow no more than a 1-decimal log multiplication of C. perfringens,
that is, they produce cooked products that meet the stabilization
performance standard presented in this document.
The chilling requirements for the cooked poultry products concerned
in this proposal are not set out in the regulations for these products,
Sec. 381.150, but instead in FSIS Directive 7110.3, ``TIME/TEMPERATURE
GUIDELINES FOR COOLING HEATED PRODUCTS.'' This directive states that
following heat treatment, cooked poultry products should be chilled to
80 deg.F within 1.5 hours, and to 40 deg.F within 5 hours. When
applied, this chilling prevents the germination and multiplication of
toxigenic microorganisms such as C. botulinum and allows no more than a
1-decimal log multiplication of C. perfringens, that is, it produces
cooked poultry products that meet the stabilization performance
standard presented in this document.
Therefore, as a result of this proposal, establishments continuing
to follow the current regulations regarding the chilling of cooked beef
and meat patty products or the directive regarding the chilling of
cooked poultry products (the proposed safe harbors) would produce
cooked products that meet the stabilization standard for cooked
products presented in this document. And, establishments that choose to
produce cooked products using procedures other than those retained in
the proposed safe harbors would be required to meet the same rigorous
measure of stabilization.
FSIS is proposing to amend the current regulations in Sec. 381.150
(the proposed safe harbor for certain cooked poultry products) by
adding the chilling requirements for cooked poultry currently contained
in FSIS Directive 7110.3. This proposed amendment would help to clarify
and complete in a single section of the Poultry Products Inspection
Regulations the proposed safe harbor regulations for certain cooked
poultry products.
Handling
To meet the third performance standard for cooked products,
establishments would need to handle product to preclude its
recontamination by infectious pathogenic microorganisms. This standard
requires that no infectious pathogens are introduced into the product
following processes ensuring lethality, stabilization, or final
packaging.
The current regulations for cooked beef products and cooked meat
patties require, among other things, that these cooked products be
handled, throughout processing, in a manner precluding their
recontamination by infectious pathogenic microorganisms. Section
318.17, paragraphs (i), (j), and (k) require that establishments take
various measures to ensure that cooked beef products are not
recontaminated by contact with raw product, unsanitary work surfaces or
machines, employee gloves or garments, and other sources of
contamination. Section 318.23, paragraph (b)(4) requires establishments
to take similar measures to ensure that cooked meat patties are not
recontaminated.
Therefore, as a result of this proposal, establishments continuing
to follow the current regulations regarding handling of cooked beef and
meat patty products (the proposed safe harbors) would produce cooked
beef products and cooked meat patties that meet the handling standard
for cooked products proposed in this document. And, establishments that
choose to produce cooked beef products and cooked meat patties using
procedures other than those retained in the proposed safe harbors would
be required to meet the same rigorous measure of handling.
[[Page 19570]]
Section 381.150 of the regulations contains no specific handling
requirements for cooked poultry products. FSIS is proposing to amend
the regulations contained in Sec. 381.150 by adding specific handling
requirements for cooked poultry products. These proposed handling
requirements are modeled after those currently in place for cooked beef
products and cooked meat patties. Consequently, adherence to these
proposed handling requirements for cooked poultry products would assure
establishment compliance with the proposed handling performance
standard. The addition of these handling requirements to the proposed
regulatory safe harbor would clarify existing sanitation requirements
and assist establishments that do not have the resources to develop
customized process schedules for these products.
FSIS experience with establishments producing the cooked poultry
products defined under Sec. 381.150 indicates that the proposed
handling requirements represent current good manufacturing practices
(GMPs) accepted by industry. These handling GMPs, including the
separation of raw and cooked product, sanitation of work surfaces, and
appropriate packaging, are generally regarded as essential for
preventing the direct and indirect contamination of cooked product.
Poultry establishments already following the proposed handling safe
harbor requirements would not have to change their handling procedures
in order to meet the proposed handling performance standards. These
establishments may wish to take advantage of the flexibility afforded
by the proposed performance standards, however, and develop handling
procedures that more closely match their unique production practices.
Establishments that do not have handling procedures in place that meet
the proposed safe harbor requirements, would be required to either
adhere to the proposed safe harbor handling requirements or develop
procedures that meet the proposed handling performance standard. FSIS
is requesting comment on the possible economic impact of these proposed
handling requirements (see ``Executive Order 12866 and Regulatory
Flexibility Act,'' below).
Performance Standards for Partially Cooked and Char-Marked Meat Patties
and Partially Cooked Poultry Breakfast Strips
Unlike the fully cooked, ready-to-eat products described above,
partially cooked and char-marked uncured meat patties and partially
cooked poultry breakfast strips are essentially raw, and require
adequate cooking prior to consumption. A lethality performance standard
therefore would not apply to partially cooked and char-marked products,
since FSIS does not require that these products be ready-to-eat.
Neither would a handling performance standard apply, since these raw
products may contain infectious pathogenic microorganisms after
processing and prior to cooking. FSIS is proposing, however, that
establishments producing these products meet a stabilization
performance standard identical to the stabilization standard proposed
above for fully cooked products.
During processing, these products are partially cooked and then
cooled, which creates a model environment for the growth of C.
perfringens, C. botulinum, and other spore-forming, toxigenic bacteria.
Cooking by the consumer, retailer, or other end-user may not eliminate
these bacteria from these products. Therefore, it is important that
bacterial growth be controlled in these products to the extent possible
while they remain at the producing establishment. Accordingly, FSIS is
proposing that in partially cooked and char-marked uncured meat patties
and partially cooked poultry breakfast strips, establishments prevent
the germination and multiplication of toxigenic microorganisms such as
C. botulinum, and allow no more than a 1-decimal log multiplication of
C. perfringens.
The current regulations for partially cooked and char-marked
uncured meat patties and partially cooked poultry breakfast strips
require, among other things, that these products be quickly chilled
following partial cooking or char-marking, in order to inhibit the
growth of vegetative, spore-forming bacteria. Section 318.23, paragraph
(b)(1)(ii) requires that partially cooked meat patties be cooled to a
maximum internal temperature of 40 deg.F within 2 hours following
partial cooking. Section 318.23, paragraph (b)(1)(iii) requires that
char-marked meat patties be char-marked and then cooled to a maximum
internal temperature of 40 deg.F within 2 hours. Section 381.150,
paragraph (a) requires that following partial cooking, partially cooked
poultry breakfast strips be cooled to 80 deg.F within 1.5 hours and to
40 deg.F within 5 hours. When applied, these chilling requirements
prevent the germination and multiplication of toxigenic microorganisms
such as C. botulinum and allow no more than a 1-decimal log
multiplication of C. perfringens, that is, they produce partially
cooked and char-marked products that meet the stabilization performance
standard presented in this document.
Therefore, as a result of this proposal, establishments continuing
to follow the current regulations regarding the chilling of partially
cooked and char-marked uncured meat patties and partially cooked
poultry breakfast strips (the proposed safe harbors) would produce
cooked products that meet the stabilization standard for partially
cooked products proposed in this document. And, establishments that
choose to produce these products using procedures other than those
retained in the proposed safe harbors would be required to meet the
same rigorous measure of stabilization.
FSIS requires that partially cooked and char-marked meat patties,
as well as partially cooked poultry breakfast strips, be labeled with
cooking directions. It is imperative that consumers fully cook these
products, as they are essentially raw, and may contain viable
pathogenic microorganisms. Therefore, FSIS is proposing that these
labeling requirements remain in the regulations governing partially
cooked and char-marked meat patties and partially cooked poultry
breakfast strips.
Miscellaneous
Section 317.2, paragraph (l) and Sec. 381.125, paragraph (b) of the
regulations require that safe handling instructions be provided for
beef products, meat patties, and poultry products not heat processed in
a manner that conforms to the time and temperature combinations listed
in Secs. 318.17, 318.23, and 381.150, respectively. This proposal,
however, would allow ready-to-eat products to be processed by means
other than the time and temperature requirements currently prescribed
in these sections, as long as they met the performance standards
proposed. Therefore, as a result of this proposal, safe handling label
requirements would not be applicable to all ready-to-eat products
processed by means other than the currently prescribed time and
temperature combinations. FSIS proposes to amend 317.2, paragraph (l)
and Sec. 381.125, paragraph (b), to reflect this change.
Executive Order 12866 and Regulatory Flexibility Act
This proposed rule has been reviewed under Executive Order 12866.
The 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.
[[Page 19571]]
In accordance with 5 U.S.C. 603, we have performed an Initial
Regulatory Flexibility Analysis, which is set out below, regarding the
impact of this rule on small entities. However, we do not currently
have all the data necessary for a comprehensive analysis of the effects
of this rule on small entities. Therefore, we are inviting comments
concerning potential effects. In particular, we are interested in
determining the number and kind of small entities that may incur
benefits or costs from implementation of this proposed rule.
This rule would allow individual establishments to employ
processing methods other than those currently mandated, as long as
those methods yield products that meet the performance standards set
out in this rule. Since the currently mandated methods meet the
performance standards and would be retained as ``safe harbors,''
establishments could choose to continue using their current methods and
probably incur no new expenses (or savings or income) as a result of
this rule. Therefore, we anticipate that the rule would have a
favorable economic impact on all establishments, regardless of size.
As stated above, FSIS is proposing to amend the current regulations
in Sec. 381.150 (the proposed safe harbor for certain cooked poultry
products) by adding the chilling requirements for cooked poultry
currently contained in FSIS Directive 7110.3. This proposed amendment
would help to clarify and complete in a single section of the Poultry
Products Inspection Regulations the proposed safe harbor regulations
for certain cooked poultry products. Because establishments producing
cooked poultry products already must meet the chilling requirements set
forth in FSIS Directive 7110.3, FSIS anticipates that codifying these
requirements in the regulations would have no economic impact.
Also, because currently there are no explicit handling regulations
for cooked poultry products, some establishments may be required to
develop new procedures in order to meet the proposed handling
performance standard for cooked products. Establishments already
following the proposed handling safe harbor requirements would not have
to change their handling procedures in order to meet the proposed
handling performance standards. These establishments may wish to take
advantage of the flexibility afforded by the proposed performance
standards, however, and develop handling procedures that more closely
match their unique production practices. Establishments that do not
have handling procedures in place that meet the proposed safe harbor
requirements, would be required to either adhere to the proposed safe
harbor handling requirements or develop procedures that meet the
proposed handling performance standard.
FSIS anticipates that any impact on these firms would be minimal,
because the proposed handling requirements for cooked poultry products
represent current GMPs accepted and in general use by industry. Data
necessary for a comprehensive analysis of the effects of these proposed
handling safe harbors on poultry establishments is not currently
available to FSIS. Therefore, FSIS invites public comment concerning
potential economic effects of these proposed requirements.
When an establishment wants to use a processing method other than
those contained in the safe harbors, either because it will be more
efficient or improve its product, we can assume by its decision to
incur the expense of using that method (only a small part of which
would be to meet the requirements of the proposed rule) that it expects
to receive increased revenues in the future from the investment in the
method. In that sense, the rule could have favorable economic
consequences for firms that choose to innovate. Also, the increased
flexibility to innovate allowed by the rule could encourage competition
and benefit consumers with lower prices or higher quality products.
It is difficult to quantify the potential benefits of this proposal
since it is not possible to predict exactly how many establishments
would develop innovative processes and how these innovations would
generate revenues or benefits to consumers. There are approximately
1,000 establishments currently producing the cooked beef products,
uncured meat patties, and poultry products addressed by this proposal.
FSIS expects that only about five to ten percent of these
establishments would choose to develop customized process schedules
prior to the implementation of HACCP. FSIS anticipates that most, if
not all, of these establishments would develop alternative process
schedules for the production of ready-to-eat poultry products.
Under the current regulations, FSIS requires that ready-to-eat
poultry products reach specific, minimum internal temperatures before
being removed from a cooking medium. The products lose water during
cooking at these temperatures and consequently, establishments must add
water and other ingredients both to make the products palatable and to
restore lost yield.
Therefore, FSIS anticipates that most establishments initially
taking advantage of the proposed performance standards would develop
customized process schedules for ready-to-eat poultry products and
would benefit from some cost savings. FSIS expects that most
establishments producing roast beef and meat patty products would not
develop customized process schedules prior to implementing HACCP, as it
would be less duplicative and more cost-effective to use the proposed
performance standards to develop critical limits within HACCP plans.
Finally, there is the potential for an increase in the efficiency
of the nation's economy in general because the proposed rule encourages
businesses to consider a more efficient use of resources. Also, the
possibility of reduced prices of meat or poultry products are economic
factors that could produce a more efficient use of resources in the
economy as a whole. These effects would be small for individual firms
and consumers, but could be substantial in the aggregate.
Executive Order 12778
This proposed rule has been reviewed under Executive Order 12778,
Civil Justice Reform. States and local jurisdictions are preempted by
the Federal Meat Inspection Act and the Poultry Products Inspection Act
(PPIA) from imposing any marking or packaging requirements on federally
inspected meat and poultry products that are in addition to, or
different than, those imposed under the FMIA or 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 and poultry products
that are misbranded or adulterated under the FMIA or PPIA, or, in the
case of imported articles, which are not at such an establishment,
after their entry into the United States.
This proposed rule is not intended to have retroactive effect.
There are no applicable administrative procedures that must be
exhausted prior to any judicial challenge to the provisions of this
proposed rule. However, the administrative procedures specified in 9
CFR Secs. 306.5 and 381.35 must be exhausted prior to any judicial
challenge of the application of the provisions of this proposed rule,
if the challenge involves any decision of an FSIS employee relating to
inspection
[[Page 19572]]
services provided under the FMIA or the PPIA.
Paperwork Requirements
Title: Performance Standards for Certain Meat and Poultry Products.
Type of Collection: New.
Abstract: FSIS has reviewed the paperwork and recordkeeping
requirements in this proposed rule in accordance with the Paperwork
Reduction Act. Under this proposed rule, establishments choosing to
meet performance standards for certain cooked beef products, uncured
meat patties, and certain fully and partially cooked poultry products
either by means other than those described in the current regulations
or under the HACCP requirements, would be required to develop a written
process schedule and maintain a copy of the process schedule on file.
The process schedule would detail all the specific, sequential
operations that compose the process used by each establishment to
produce its specific products. The process schedule would also contain
the related control, monitoring, validation, and corrective action
activities associated with the procedure. Further, this process
schedule must have been evaluated and approved for safety, efficacy,
and equivalency by a process authority.
FSIS inspectors would initially, and periodically as required,
review the process schedule and any other relevant records to ensure
that the product is processed according to the procedures on file. FSIS
personnel would not evaluate the process authority-approved procedures
for efficacy.
Again, developing and implementing processing procedures different
from those in the current regulations would be optional. FSIS assumes
that an establishment would develop and implement such processing
procedures only if the resulting economic advantages outweighed the
accompanying costs, including the paperwork burden.
FSIS is proposing to amend the current regulations in Sec. 381.150
(the proposed safe harbor for certain cooked poultry products) by
adding the chilling requirements for cooked poultry currently contained
in FSIS Directive 7110.3. The paperwork burden hours for FSIS Directive
7110.3 are approved under OMB control number 0583-0089.
Finally, because currently there are no explicit handling
regulations for cooked poultry products, some establishments may be
required to develop new procedures in order to meet the proposed
handling performance standard for cooked products. FSIS has accounted
for the paperwork and recordkeeping burden hours resulting from the
proposed handling requirements in the estimate of burden for process
schedules below.
Estimate of Burden: FSIS estimates that the process schedule would
take an average of 2 days (16 hours) to develop and 5 minutes to file.
The written description of the establishment validation procedures,
whether conducted for new or altered process schedules, would take no
more than 1 day (8 hours) to complete and 5 minutes to file.
Respondents: Meat and poultry product establishments.
Estimated Number of Respondents: 1,000 (this number represents the
total number of establishments that could change their operations).
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 24,166 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 are invited on: (a) whether the proposed collection of
information is necessary for the proper performance of the functions of
the Agency, including whether the information will have practical
utility; (b) the accuracy of the Agency's estimate of the burden of the
proposed collection of information including the validity of the
methodology and assumptions used; (c) ways to enhance the quality,
utility, and clarity of the information to be collected; and (d) ways
to minimize the burden of the collection of information on those who
are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology. Comments may be sent to Lee
Puricelli, Paperwork Specialist, see address above, and Desk Officer
for Agriculture, Office of Information and Regulatory Affairs, Office
of Management and Budget, Washington, DC 20253.
Comments are requested by July 1, 1996. To be most effective,
comments should be sent to OMB within 30 days of the publication date
of this proposed rule.
List of Subjects
9 CFR Part 301
Meat inspection.
9 CFR Part 317
Food labeling.
9 CFR Part 318
Meat inspection, Reporting and recordkeeping requirements.
9 CFR Part 320
Meat inspection, Reporting and recordkeeping requirements.
9 CFR Part 381
Poultry and poultry products inspection, Reporting and
recordkeeping requirements.
Accordingly, title 9, chapter III, of the Code of Federal
Regulations would be amended as follows:
PART 301--DEFINITIONS
1. The authority citation for part 301 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.
2. Section 301.2 would be amended by removing the paragraph
designations (a) through (yyy) and adding, in alphabetical order, new
definitions for ``Process Schedule'' and ``Process authority'' to read
as follows:
Sec. 301.2 Definitions.
* * * * *
Process authority. A person or organization with expert knowledge
in meat production process control and relevant regulations. This
definition does not apply to subpart G of this part.
Process schedule. A process schedule is a written description of
processing procedures, consisting of any number of specific, sequential
operations directly under control of the establishment employed in the
manufacture of a specific product, including the control, monitoring,
validation, and corrective action activities associated with
production. This definition does not apply to subpart G of this part.
* * * * *
PART 317--LABELING, MARKING DEVICES, AND CONTAINERS
3. The authority citation for part 317 would continue to read as
follows:
Authority: 21 U.S.C. 601-695; 7 CFR 2.18, 2.53.
4. In Sec. 317.2, paragraph (l) would be revised to read as
follows:
Sec. 317.2 Labels: definition; required features.
* * * * *
(l) Safe handling instructions shall be provided for: All meat and
meat products of cattle, swine, sheep, goat, horse, or other equine not
heat processed in a manner that conforms to the time and temperature
combinations in the Table for Time/Temperature
[[Page 19573]]
Combination For Cooked Beef, Roast Beef, and Cooked Corned Beef in
Sec. 318.17 of this chapter, or that have not undergone other
processing that would render them ready-to-eat; and all comminuted meat
patties not processed in accordance with the standard for fully cooked
patties in Sec. 318.23 of this chapter; except as exempted under
paragraph (l)(4) of this section.
* * * * *
PART 318--ENTRY INTO OFFICIAL ESTABLISHMENTS; REINSPECTION AND
PREPARATION OF PRODUCTS
5. The authority citation for part 318 would be revised to read as
follows:
Authority: 7 U.S.C. 138f, 450, 1901-1906; 21 U.S.C. 601-695; 7
CFR 2.18, 2.53.
6. Section 318.17 would be revised to read as follows:
Sec. 318.17 Requirements for the production of cooked beef, roast
beef, and cooked corned beef products.
(a) Cooked beef, roast beef, and cooked corned beef products must
be produced using processes ensuring that the products meet the
following performance standards:
(1) Lethality. A 7-decimal log reduction of Salmonella must be
achieved within the product. The lethality process must include a
cooking step.
(2) Stabilization. There can be no germination and multiplication
of toxigenic microorganisms such as Clostridium botulinum, and no more
than a 1-decimal log multiplication of Clostridium perfringens within
the product.
(3) Handling. There can be no recontamination of product by
infectious pathogens at any time from processing through the final
packaging.
(b) For each product produced using a process other than the
process provided as an example in paragraph (e) of this section or a
process conducted in accordance with the Hazard Analysis and Critical
Control Point (HACCP) system requirements set, an establishment must
develop and have on file, available to FSIS, a process schedule, as
defined in Sec. 301.2 of this chapter. Each process schedule must be
approved, in writing, by a process authority for safety and efficacy in
meeting the performance standards established for the product in
question. A process authority must have access to an establishment in
order to evaluate and approve the safety and efficacy of each process
schedule.
(c) Establishments must validate the process schedule by producing
and testing product against applicable performance standards, in
accordance with a statistically valid sampling program designed by the
process authority. No product can released for commercial use until
samples are tested and found to meet the applicable performance
standards. After a process authority has approved an establishment's
process schedule and before the production of lots to be held and
tested, the establishment must notify FSIS that it is implementing a
process other than that described in paragraph (e) of this section.
(d) Should an establishment wish to alter any procedures contained
in an approved process schedule, a process authority must evaluate and
approve, in writing, the proposed alterations prior to their
implementation. The process authority can approve only alterations that
result in the continued production of product meeting applicable
performance standards. Prior to the commercial release of any product
produced by approved, altered procedures, the establishment must
validate the altered process schedule by sampling and testing product
in accordance with a statistically valid sampling program designed by
the process authority; the tested product must meet applicable
performance standards.
(e) Example. An establishment may produce cooked beef, roast beef,
and cooked corned beef products using the processes described in the
following example, which meets the performance standards listed in
paragraph (a) of this section:
(1) Cooked beef and roast beef, including sectioned and formed
roasts and chunked and formed roasts, and cooked corned beef shall be
prepared by one of the time and temperature combinations in the
following table. The stated temperature is the minimum which shall be
produced and maintained in all parts of each piece of meat for at least
the stated time:
Table for Time/Temperature Combination for Cooked Beef, Roast Beef, and
Cooked Corned Beef
------------------------------------------------------------------------
Minimum internal temperature Minimum
------------------------------------------------------------ processing
time in
minutes
Degrees after
Degrees Fahrenheit Centigrade minimum
temperature
is reached
------------------------------------------------------------------------
130............................................ 54.4 121
131............................................ 55.0 97
132............................................ 55.6 77
133............................................ 56.1 62
134............................................ 56.7 47
135............................................ 57.2 37
136............................................ 57.8 32
137............................................ 58.4 24
138............................................ 58.9 19
139............................................ 59.5 15
140............................................ 60.0 12
141............................................ 60.6 10
142............................................ 61.1 8
143............................................ 61.7 6
144............................................ 62.2 5
145............................................ 62.8 (\1\)
------------------------------------------------------------------------
\1\ Instantly.
(2) Cooked beef, including sectioned and formed roasts and chunked
and formed roasts, and cooked corned beef shall be moist cooked
throughout the process or, in the case of roast beef or corned beef to
be roasted, cooked as provided in paragraph (e)(3) of this section. The
moist cooking may be accomplished by placing the meat in a sealed,
moisture impermeable bag, removing the excess air, and cooking,
completely immersing the meat, unbagged, in water throughout the entire
cooking process, or using a sealed oven or steam injection to raise the
relative humidity above 90 percent throughout the cooking process.
(3) Roast beef or corned beef to be roasted shall be cooked by one
of the following methods:
(i) Heating roasts of 10 pounds or more in an oven maintained at
250 degrees F. (121 degrees C.) or higher throughout the process;
(ii) Heating roasts of any size to a minimum internal temperature
of 145 degrees F. (62.8 degrees C.) in an oven maintained at any
temperature if the relative humidity of the oven is maintained either
by continuously introducing steam for 50 percent of the cooking time or
by use of a sealed oven for over 50 percent of the cooking time, or if
the relative humidity of the oven is maintained at 90 percent or above
for at least 25 percent of the total cooking time, but in no case less
than 1 hour; or
(iii) Heating roasts of any size in an oven maintained at any
temperature that will satisfy the internal temperature and time
requirements of paragraph (e)(1) of this section if the relative
humidity of
[[Page 19574]]
the oven is maintained at 90 percent or above for at least 25 percent
of the total cooking time, but in no case less than 1 hour.
(iv) The relative humidity may be achieved by use of steam
injection or by sealed ovens capable of producing and maintaining the
required relative humidity.
(4)(i) Except as provided in paragraph (e)(4)(ii) of this section,
establishments producing cooked beef, roast beef, or cooked corned beef
shall have sufficient monitoring equipment, including recording
devices, to assure that the time (within 1 minute), the temperature
(within 1 degree F.), and relative humidity (within 5 percent) limits
of these processes are being met. Data from the recording devices shall
be made available to a program employee upon request.
(ii) In lieu of recording devices, establishments may propose in
the written procedures prescribed in paragraph (e)(6) of this section,
an alternative means of providing inspection personnel with evidence
that finished product has been prepared in compliance with the humidity
requirements of paragraphs (e)(2) and (e)(3) of this section, and the
145 degrees F. (62.8 degrees C.) temperature requirements of paragraph
(e)(1) of this section.
(5) Each package of finished product shall be plainly and
permanently marked
FR Doc. 96-10796 Performance Standards for the Production of Certain Meat and Poultry Products
on the immediate container with the date of
production either in code or with the calendar date.
(6) In order to assure that cooked beef, roast beef, and cooked
corned beef are handled, processed, and stored under sanitary
conditions, the establishment shall submit a set of written procedures
through the inspector-in-charge for approval by the Regional Director.
The written procedures shall include the following information:
(i) The temperature to which raw frozen product is thawed and the
time required.
(ii) The lot identification procedure for lots of product during
processing.
(iii) The storage time and temperature combinations which the
establishment intends to use before cooking, the cooking time and
temperature the establishment intends to use, and the time, if any, the
establishment intends to wait after cooking and before cooling.
(iv) If a code, instead of the calendar date, is used on the
immediate container of the finished product, its meaning shall also be
included.
(v) Any other critical control points in the procedures which could
affect the safety of the product.
(vi) In lieu of recording devices, the alternate means permitted by
paragraph (e)(4)(ii) of this section for providing evidence to
inspection personnel that the finished product will be prepared in
compliance with temperature or humidity requirements.
(vii) Any other alternate procedure used that is permitted in this
section.
(7) The establishment shall maintain records and reports which
document the time, temperature, and humidity at which any cooked beef,
roast beef, or cooked corned beef is cooked and cooled at the
establishment. Such records shall be kept by the establishment for 6
months or for such further period as the Administrator may require for
purposes of any investigation or litigation under the Act, by written
notice to the person required to keep such records. Such records shall
be made available to the inspector or any duly authorized
representative of the Secretary upon request.
(8) The handling and processing of cooked beef, roast beef, and
cooked corned beef before, during, and after cooking shall be such as
to prevent the finished product from being adulterated. As a minimum,
they shall be controlled as follows:
(i) The establishment shall notify the inspector-in-charge which
processing procedure will be used on each lot, including time and
temperature.
(ii) In order to assure uniform heat penetration and consequent
adequate cooking of each piece of beef, individual pieces of raw
product in any one lot shall either not vary in weight by more than 2
pounds or not vary in thickness by more than 2 inches at the thickest
part. Alternate methods of assuring uniform heat penetration may be
submitted in writing for approval to the Regional Director.
(iii) A water-based solution that is used for injecting or
immersing the meat shall be refrigerated to 50 degrees F. (10 degrees
C.) or lower from the time it contacts the meat, and shall be filtered
each time it is recirculated or reused.
(iv) A nonmeat ingredient, including the water-based solution in
paragraph (e)(8)(iii) of this section, which has contacted meat shall
be discarded at the end of that day's production unless it is in
continuous contact with one batch of product.
(v) Product prepared for cooking shall be entered into the cooking
cycle within 2 hours of completion of precooking preparation, or be
placed immediately in a cooler at a temperature of 40 degrees F. (4.4
degrees C.) or lower.
(vi) The time and temperature requirements shall be met before any
product in the lot is removed from the cooking units. Unless otherwise
specified in the written procedures approved in accordance with
paragraph (e)(6) of this section, the heat source shall not be shut off
until these requirements are met.
(vii) Other than incidental contact caused by water currents during
immersion cooking or cooling, product shall be placed so that it does
not touch or overlap other products. This provision does not apply to
product that is stirred or agitated to assure uniform heat transfer.
(viii) Temperature sensing devices shall be so placed that they
monitor product in the coldest part of the cooking unit; and when an
oven temperature is required by paragraph (e)(3) of this section, the
oven temperature shall also be monitored in the coldest part of the
cooking unit.
(ix) If a humidity sensing device is required in an oven, it shall
be placed so that it measures humidity in either the oven chamber or at
the exit vent.
(x) Chilling shall begin within 90 minutes after the cooking cycle
is completed.
(A) All product shall be chilled from 120 degrees F. (48.8 degrees
C.) to 55 degrees F. (12.7 degrees C.) in no more than 6 hours.
(B) Chilling shall continue and the product shall not be packed for
shipment until it has reached 40 degrees F. (4.4 degrees C.).
(xi) Any establishment that has experienced a cooking process
deviation during preparation of product may either reprocess the
product completely, continue the heating to 145 degrees F. (62.8
degrees C.), or contact the Regional Director for a review of the
process schedule for adequacy and, if needed, for a cooking schedule to
finish that one batch of product.
(xii) An establishment that has experienced a cooling deviation
after the product has been cooked shall contact the Regional Director
to determine the disposition of that retained product.
(9) Cooked beef, roast beef, and cooked corned beef shall be so
handled as to assure that the product is not recontaminated by direct
contact with raw product. To prevent direct contamination of the cooked
product, establishments shall:
(i) Physically separate areas where raw product is handled from
areas where exposed cooked product is handled, using a solid impervious
floor to ceiling wall;
(ii) Handle raw and exposed cooked product at different times, with
a cleaning of the entire area after the raw material handling is
completed and
[[Page 19575]]
prior to the handling of cooked product in that area; or
(iii) Submit a written procedure for approval through the
inspector-in-charge to the Circuit Supervisor detailing the steps to be
taken which would avoid recontamination of cooked product by raw
product during processing.
(10) To prevent indirect contamination of cooked product:
(i) Any work surface, machine, or tool which contacts raw product
shall be thoroughly cleaned and sanitized with a solution germicidally
equivalent to 50 ppm chlorine before it contacts cooked product;
(ii) Employees shall wash their hands and sanitize them with a
solution germicidally equivalent to 50 ppm chlorine whenever they enter
the heat processed product area or before preparing to handle cooked
product, and as frequently as necessary during operations to avoid
product contamination; and
(iii) Outer garments, including aprons, smocks, and gloves, shall
be especially identified as restricted for use in cooked product areas
only, changed at least daily, and hung in a designated location when
the employee leaves the area.
(11) Cooked product shall not be stored in the same room as raw
product unless it is first packaged in a sealed, water-tight container
or is otherwise protected by a covering that has been approved, upon
written request, by the Circuit Supervisor.
7. Section 318.23 would be revised to read as follows:
Sec. 318.23 Requirements for the production of uncured meat patties.
(a) Fully cooked, uncured meat patties must be produced using
processes ensuring that the products meet the following performance
standards:
(1) Lethality. A 5-decimal log reduction of Salmonella must be
achieved within the product. The lethality process must include a
cooking step.
(2) Stabilization. There can be no germination and multiplication
of toxigenic microorganisms such as Clostridium botulinum, and no more
than a 1-decimal log multiplication of Clostridium perfringens within
the product.
(3) Handling. There can be no recontamination of product by
infectious pathogens at any time from processing through the final
packaging.
(b) Partially cooked and char-marked meat patties must be produced
using processes ensuring that the products meet the performance
standard listed in paragraph (a)(2) of this section.
(1) Partially cooked patties must bear the labeling statement
``Partially cooked: For Safety Cook Until Well Done (Internal Meat
Temperature 160 degrees F.)''. The labeling statement must be adjacent
to the product name, at least one-half the size of the largest letter
in the product name, and prominently placed with such conspicuousness
(as compared with other words, statements, designs or devices in the
labeling) as to render it likely to be read and understood by the
ordinary individual under customary conditions of purchase and use.
(2) Char-marked patties must bear the labeling statement
``Uncooked, Char-marked: For Safety, Cook Until Well Done (Internal
Meat Temperature 160 degrees F.)''. The labeling statement shall be
adjacent to the product name, at least one-half the size of the largest
letter in the product name, and prominently placed with such
conspicuousness (as compared with other words, statements, designs or
devices in the labeling) as to render it likely to be read and
understood by the ordinary individual under customary conditions of
purchase and use.
(c) For each product produced using a process other than the
process described in paragraph (f) of this section or a process
conducted in accordance with the Hazard Analysis and Critical Control
Point (HACCP) system requirements, an establishment must develop and
have on file, available to FSIS, a process schedule, as defined in
Sec. 301.2 of this chapter. Each process schedule must be approved, in
writing, by a process authority for safety and efficacy in meeting the
performance standards established for the product in question. A
process authority must have access to an establishment in order to
evaluate and approve the safety and efficacy of each process schedule.
(d) Establishments must validate the process schedule by producing
and testing product against applicable performance standards, in
accordance with a statistically valid sampling program designed by the
process authority. No product can released for commercial use until
samples are tested and found to meet the applicable performance
standards. After a process authority has approved an establishment's
process schedule and before the production of lots to be held and
tested, the establishment must notify FSIS that it is implementing a
process other than that described in paragraph (f) of this section.
(e) Should an establishment wish to alter any procedures contained
in an approved process schedule, a process authority must evaluate and
approve, in writing, the proposed alterations prior to their
implementation. The process authority can approve only alterations that
result in the continued production of product meeting applicable
performance standards. Prior to the commercial release of any product
produced by approved, altered procedures, the establishment must
validate the altered process schedule by sampling and testing product
in accordance with a statistically valid sampling program designed by
the process authority; the tested product must meet applicable
performance standards.
(f) Example. An establishment may produce uncured meat patties
using the processes described in this example, which meet the
applicable performance standards listed in paragraph (a) of this
section.
(1) Definitions. For purposes of Sec. 318.23, the following
definitions shall apply:
(i) Comminuted. A processing term describing the reduction in size
of pieces of meat, including chopping, flaking, grinding, or mincing,
but not including chunking or sectioning.
(ii) Heat-processed. Treatment by a heat source, including, but not
limited to, frying, broiling, baking, or roasting, which results in a
fully-cooked, partially-cooked, or char-marked product.
(iii) Patty. A shaped and formed, comminuted, flattened cake of
meat food product.
(2) Processing procedures for heat-processed patties. Fully-cooked,
partially-cooked, or char-marked patties shall be processed as follows:
(i) Heat processing. (A) Official establishments which manufacture
fully-cooked patties shall utilize the following heat-processing
procedures:
Permitted Heat-Processing Temperature/Time Combinations for Fully-Cooked
Patties
------------------------------------------------------------------------
Minimum internal temperature at the center of each Minimum holding
patty time after
------------------------------------------------------ maximum
temperature is
reached
Degrees Fahrenheit Degrees Centigrade ------------------
Minutes Seconds
------------------------------------------------------------------------
151.............................. 66.1.............. 0.68 41
152.............................. 66.7.............. .54 32
153.............................. 67.2.............. .43 26
154.............................. 67.8.............. .34 20
155.............................. 68.3.............. .27 16
156.............................. 68.9.............. .22 13
157 (and up)..................... 69.4 (and up)..... .17 10
------------------------------------------------------------------------
(B) Official establishments which manufacture partially-cooked
patties
[[Page 19576]]
shall raise the internal temperature at the center of each patty to a
minimum internal temperature of 140 degrees F. and then cool it to a
maximum internal temperature of 40 degrees F. within 2 hours.
(C) Official establishments which manufacture char-marked patties
(if marked by a heat source) may raise the temperature at the center of
each patty, but not above 70 degrees F., when the char-marks are
applied to the patty. The process of char-marking the patty and cooling
the patty to a maximum internal temperature of 40 degrees F. shall be
completed within 2 hours or less.
(D) The official establishment shall measure the holding time and
temperature of at least one heat-processed patty from each production
line each hour of production to assure control of the heat process. The
temperature measuring device shall be accurate within 1 degrees F.
(ii) Cooling. (A) Fully-cooked patties shall be cooled to an
internal temperature of 40 degrees F. or below within 2 hours after
heat-processing.
(B) Cooling requirements for partially-cooked and char-marked
patties are combined with those for heat-processing and are contained
in paragraph (f)(2)(i) (B) and (C) of this section.
(C) The internal temperature measuring device shall be accurate
within 1 degrees F.
(iii) Cooking instruction label requirement. (A) Partially-cooked
patties shall bear the labeling statement ``Partially-cooked: For
Safety Cook Until Well Done (Internal Meat Temperature 160 degrees
F.)''. The labeling statement shall be adjacent to the product name, at
least one-half the size of the largest letter in the product name, and
prominently placed with such conspicuousness (as compared with other
words, statements, designs or devices in the labeling) as to render it
likely to be read and understood by the ordinary individual under
customary conditions of purchase and use.
(B) Char-marked patties shall bear the labeling statement
``Uncooked, Char-marked: For Safety, Cook Until Well Done (Internal
Meat Temperature 160 degrees F.)''. The labeling statement shall be
adjacent to the product name, at least one-half the size of the largest
letter in the product name, and prominently placed with such
conspicuousness (as compared with other words, statements, designs or
devices in the labeling) as to render it likely to be read and
understood by the ordinary individual under customary conditions of
purchase and use.
(iv) Sanitary handling and storage practices. Fully-cooked patties
shall be handled in accordance with the following provisions so as to
assure that the patties are not recontaminated.
(A) To prevent direct contamination of fully-cooked patties,
official establishments shall:
(1) Physically separate areas where unpackaged, fully-cooked
patties are handled from areas where less-than-fully-cooked products
are handled using a solid impervious floor to ceiling wall;
(2) Handle unpackaged, fully-cooked patties and less-than-fully-
cooked product at different times, and cleaning the entire area after
handling other products before handling unpackaged, fully-cooked
patties; or
(3) Submit a written procedure through the inspector-in-charge to
the Regional Director detailing the steps to be taken which would avoid
recontamination of fully-cooked patties by less-than-fully-cooked
product during processing.
(B) To prevent indirect contamination of fully-cooked patties:
(1) Any work surface, machine, or tool which contacts other product
shall be cleaned and sanitized before it contacts unpackaged fully-
cooked patties. The sanitizer shall be germicidally equivalent to 50
ppm chlorine.
(2) Employees shall wash their hands with soap and water and
sanitize their hands whenever they enter the fully-cooked patty area or
before handling unpackaged, fully-cooked patties. They must also wash
and sanitize their hands whenever they become contaminated during
operations to avoid contamination of fully-cooked patties. The
sanitizer shall be germicidally equivalent to 50 ppm chlorine.
(3) All employee outer garments, including aprons, smocks, and
gloves shall be identified as restricted for use in the fully-cooked
area only. The employee shall change garments at least daily. The
garments shall be hung in a designated location before the employee
leaves the area.
(C) Fully-cooked patties stored in the same room with other
product, shall first be packaged or covered to prevent microbial
contamination.
(D) Fully-cooked, partially-cooked, and char-marked patties shall
be stored at a chamber temperature of 40 degrees F. or below.
(3) Requirements for Handling Heating or Cooling Deviations.
(i) If for any reason a heating or cooling deviation has occurred,
the official establishment shall investigate and identify the cause;
take steps to assure that the deviation will not recur; and place on
file in the official establishment, available to any duly authorized
representative of the Secretary, a report of the investigation, the
cause of the deviation, and the steps taken to prevent recurrence; and
(ii) In addition, in the case of a heating deviation, the official
establishment may reprocess the affected product, by a method in
paragraph (f)(2)(i)(A) in this section; use the affected product as an
ingredient in another product processed to one of the temperature and
time combinations in paragraph (f)(2)(i)(A) in this section, provided
this does not violate the final product's standard of composition,
upset the order of predominance of ingredients, or perceptibly affect
the normal product characteristics; or relabel the affected product as
a partially-cooked patty product, if it meets the partially-cooked
requirements in paragraph (f)(2)(i)(B) of this section.
(iii) In addition, in the case of a cooling deviation, contact the
Regional Director to determine the disposition of the product.
PART 320--RECORDS, REGISTRATION, AND REPORTS
8. The authority citation for part 320 would be revised to read as
follows:
Authority: 21 U.S.C. 601-695; 7 CFR 2.18, 2.53.
Sec. 320.1 [Amended]
9. In Sec. 320.1, paragraph (b)(4), the phrase ``Sec. 318.17(d)''
would be removed and the phrase ``Sec. 318.17(e)(4)'' would be added in
its place.
Sec. 320.4 [Amended]
10. In Sec. 320.4, the first sentence would be amended by adding
the phrase ``process schedules,'' immediately before the phrase
``facilities and inventory''
PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS
11. The authority citation for part 381 would be revised to read as
follows:
Authority: 7 U.S.C. 138f, 450; 21 U.S.C. 451-470; 7 CFR 2.18,
2.53.
12. Section 381.1 would be amended by adding new paragraphs (b)(63)
and (b)(64) to read as follows:
Sec. 381.1 Definitions.
* * * * *
(b) * * *
(63) Process schedule. A process schedule is a written description
of processing procedures, consisting of any number of specific,
distinct, and ordered operations directly under control of the
establishment employed in the manufacture of a specific product,
including the control, monitoring,
[[Page 19577]]
validation, and corrective action activities associated with
production.
(64) Process authority. A person or organization with expert
knowledge in poultry production process control and relevant
regulations.
* * * * *
Sec. 381.125 [Amended]
13. In Sec. 381.125, the introductory text of paragraph (b) would
be amended by removing the phrase ``Sec. 381.150(b)'' and by adding the
phrase ``Sec. 381.150(f)(2)(i)'' in its place; and by removing the word
``further''.
14. Section 381.150 would be revised to read as follows:
Sec. 381.150 Requirements for the production of cooked poultry
products and partially cooked poultry breakfast strips.
(a) Cooked poultry products must be produced using processes
ensuring that the products meet the following performance standards:
(1) Lethality. A 7-decimal log reduction of Salmonella must be
achieved within the product. The lethality process must include a
cooking step.
(2) Stabilization. There can be no germination and multiplication
of toxigenic microorganisms such as Clostridium botulinum, and no more
than a 1-decimal log multiplication of Clostridium perfringens within
the product.
(3) Handling. There can be no recontamination of product by
infectious pathogens at any time from processing through the final
packaging.
(b) Partially cooked poultry breakfast strips must be produced
using processes ensuring that the products meet the performance
standard listed in paragraph (a)(2) of this section. Labeling for these
products must comply with section 381.125. In addition, the statement
``Partially Cooked: For Safety, Cook Until Well Done'' must appear on
the principal display panel in letters no smaller than \1/2\ the size
of the largest letter in the product name. Detailed cooking
instructions shall be provided on the immediate container of the
products.
(c) For each product produced using a process other than the
process described in paragraph (f) of this section or a process
conducted in accordance with the Hazard Analysis and Critical Control
Point (HACCP) system requirements, an establishment must develop and
have on file, available to FSIS, a process schedule, as defined in
Sec. 381.1. Each process schedule must be approved, in writing, by a
process authority for safety and efficacy in meeting the performance
standards established for the product in question. A process authority
must have access to an establishment in order to evaluate and approve
the safety and efficacy of each process schedule.
(d) Establishments must validate the process schedule by producing
and testing product against applicable performance standards, in
accordance with a statistically valid sampling program designed by the
process authority. No product can be released for commercial use until
samples are tested and found to meet the applicable performance
standards. After a process authority has approved an establishment's
process schedule and before the production of lots to be held and
tested, the establishment must notify FSIS that it is implementing a
process other than that described in paragraph (f) of this section.
(e) Should an establishment wish to alter any procedures contained
in an approved process schedule, a process authority must evaluate and
approve, in writing, the proposed alterations prior to their
implementation. The process authority can approve only alterations that
result in the continued production of product meeting applicable
performance standards. Prior to the commercial release of any product
produced by approved, altered procedures, the establishment must
validate the altered process schedule by sampling and testing product
in accordance with a statistically valid sampling program designed by
the process authority; the tested product must meet applicable
performance standards.
(f) Example. An establishment may produce partially cooked poultry
breakfast strips and cooked poultry products using the processes
described in the following example, which meet the applicable
performance standards listed in paragraph (a) of this section.
(1) Poultry breakfast strips are cured and smoked products which
require special handling during distribution and additional cooking
before consumption. These products shall be heated to an internal
temperature of 140 degrees F. After heating in the establishment, these
products must be cooled to 80 degrees F. within 1.5 hours and to 40
degrees F. with 5 hours. Labeling for these products shall comply with
Sec. 381.125. In addition, the statement ``Partially Cooked: For
Safety, Cook Until Well Done'' shall appear on the principal display
panel in letters no smaller than \1/2\ the size of the largest letter
in the product name. Detailed cooking instructions shall be provided on
the immediate container of the products.
(2) Except for product produced in accordance with paragraph (f)(1)
of this section, poultry rolls and other poultry products produced in
accordance with this example shall meet the following requirements:
(i) Heat processing. Poultry rolls and other poultry products that
are heat processed in any manner shall reach an internal temperature of
at least 160 degrees F. prior to being removed from the cooking medium,
except that cured and smoked poultry rolls and other cured and smoked
poultry products shall reach an internal temperature of at least 155
degrees F. prior to being removed from the cooking medium.
Notwithstanding the other provisions of this section, product to which
heat will be applied incidental to a subsequent processing procedure
may be removed from the media for such processing provided it is
immediately fully cooked to the required 160 degrees F. internal
temperature.
(ii) Cooling. After heating in the establishment, these products
must be cooled to 80 degrees F. within 1.5 hours and to 40 degrees F.
with 5 hours.
(iii) Handling. The product must be so handled as to assure that
the cooked product is not recontaminated. To prevent direct
contamination of the cooked product, establishments shall:
(A) Physically separate areas where raw product is handled from
areas where exposed cooked product is handled, using a solid impervious
floor to ceiling wall.
(1) Handle raw and exposed cooked product at different times, with
a cleaning of the entire area after the raw material handling is
completed and prior to the handling of cooked product in that area; or
(2) Submit a written procedure for approval through the inspector-
in-charge to the Circuit Supervisor detailing the steps to be taken
which would avoid recontamination of cooked product by raw product
during processing.
(B) To prevent indirect contamination of cooked product:
(1) Any work surface, machine, or tool which contacts raw product
shall be thoroughly cleaned and sanitized with a solution germicidally
equivalent to 50 ppm chlorine before it contacts cooked product;
(2) Employees shall wash their hands and sanitize them with a
solution germicidally equivalent to 50 ppm chlorine whenever they enter
the heat processed product area or before preparing to handle cooked
product, and as frequently as necessary during operations to avoid
product contamination; and
[[Page 19578]]
(3) Outer garments, including aprons, smocks, and gloves, shall be
especially identified as restricted for use in cooked product areas
only, changed at least daily, and hung in a designated location when
the employee leaves the area.
(C) Cooked product shall not be stored in the same room as raw
product unless it is first packaged in a sealed, water-tight container
or is otherwise protected by a covering that has been approved, upon
written request, by the Circuit Supervisor.
Done in Washington, DC: April 29, 1996.
Michael R. Taylor,
Acting Under Secretary for Food Safety.
[FR Doc. 96-10796 Filed 5-01-96; 8:45 am]
BILLING CODE 3410-DM-P
Complete official Federal Register PDF
FR Doc. 96-10795 Elimination of Prior Approval Requirements for Establishment Drawings and Specifications, Equipment, and Certain Partial Quality Control Programs
[Federal Register Volume 61, Number 86 (Thursday, May 2, 1996)]
[Proposed Rules]
[Pages 19578-19590]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10795]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
9 CFR Parts 304, 308, 317, 318, 319, and 381
[Docket No. 95-032P]
RIN 0583-AB93
Elimination of Prior Approval Requirements for Establishment
Drawings and Specifications, Equipment, and Certain Partial Quality
Control Programs
AGENCY: Food Safety and Inspection Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Food Safety and Inspection Service (FSIS) is proposing to
amend the Federal meat and poultry products inspection regulations by
removing current requirements for prior approval by FSIS of
establishment drawings, specifications, and equipment prior to their
use in official establishments. Requirements involving the comparison
of blueprints and specifications with actual facilities and equipment
would end. These amendments would provide the regulated industry with
the flexibility to design facilities and equipment in the manner they
deem best to maintain a sanitary environment for food production. FSIS
would continue to verify through inspection that good sanitation is
being achieved. Similarly, FSIS is proposing to end its prior approval
of most establishment-operated partial quality control programs, which
are used by establishments to control certain kinds of food processing
and product characteristics. This change would make it possible for
establishments to develop and implement quality control programs
without first having to receive permission from FSIS to do so. This
action is being taken to streamline and modernize the meat and poultry
food safety regulations, to separate the roles of Government and the
regulated industry, to encourage innovations that will improve food
safety, and to remove unnecessary regulatory burdens on inspected meat
and poultry establishments. In addition, the proposal represents an
important shift away from FSIS's ``command-and-control'' regulatory
approach and toward a less bureaucratic approach consistent with the
Agency's food safety mission.
DATES: Comments must be received on or before: July 1, 1996.
ADDRESSES: Please send an original and two copies of comments on this
proposed rule to FSIS Docket Clerk, DOCKET #93-032P, Room 4352 South
Agriculture Building, Washington, DC 20250-3700. Oral comments, as
provided under the Poultry Products Inspection Act, should be directed
to the person listed under FOR FURTHER INFORMATION CONTACT. Copies of
FSIS reference materials cited in this proposal are available for
review in the FSIS docket room.
FOR FURTHER INFORMATION CONTACT: Ms. Patricia F. Stolfa, Acting Deputy
Administrator, Science and Technology, FSIS, Room 402 Annex Building,
Washington, DC 20250-3700; (202) 205-0699.
SUPPLEMENTARY INFORMATION:
Background
The Federal Meat Inspection Act (FMIA) (21 U.S.C. 601 et seq.), and
the Poultry Products Inspection Act (PPIA) (21 U.S.C. 451 et seq.)
direct the Secretary of Agriculture to maintain inspection programs
designed to assure the public that meat and meat food products (meat
products) and poultry and poultry products (poultry products) are safe,
wholesome, not adulterated, and properly marked, labeled, and packaged.
FSIS carries out the mandates of these statutes by administering a
continuous in-establishment inspection program for meat and poultry
products that are shipped in interstate and foreign commerce or in
``designated'' States. A number of the States operate meat and poultry
inspection programs for product shipped intrastate. Under the FMIA and
PPIA, such programs must impose requirements ``at least equal'' to the
Federal requirements.
The FMIA and PPIA require the Secretary to provide, among other
things, for the inspection of establishments to assure that the
conditions under which meat and poultry products are produced are
sanitary. The Acts also require the Secretary to prescribe rules and
regulations governing the sanitary conditions of official
establishments (21 U.S.C. 608 and 456). Pursuant to these provisions,
the meat and poultry inspection regulations currently prescribe ``prior
approval'' or approval-before-use by FSIS of facility drawings and
specifications and of equipment used in official establishments. The
regulations also provide for the prior approval of certain quality
control programs, known as partial quality control (PQC) programs,
before their use by official establishments.
Current Prior Approval Procedures
Currently, applicants seeking Federal inspection must submit to
FSIS blueprints and drawings with specifications that exactly
illustrate the applicant's establishment as it exists or is proposed to
exist (9 CFR 304.2(a), 308.2, and 381.19). Before inspection is
granted, FSIS officials in the field and in Washington, D.C., review
the blueprints and drawings and the facility they represent to
determine whether the facility meets the requirements of the meat and
poultry inspection regulations, which are intended to ensure that
products can be produced in a sanitary environment. Owners or operators
of establishments intending to add structures or remodel their existing
facility must also submit blueprints and drawings with specifications
to FSIS for review before beginning any new construction (9 CFR 404.2,
308.2, and 381.19). During FY 1994, FSIS technical personnel reviewed
about 2,900 sets of blueprints for new or modified facilities.
Federally inspected establishments or equipment manufacturers must
go through a similar process of prior submission for review and
approval of most equipment used in preparing or handling edible meat
and poultry products or ingredients (9 CFR 308.5 and 381.53). FSIS
requires that establishment owners or operators wishing to use new
equipment submit any information FSIS needs to review new equipment,
including assembly-type drawings and a list showing the materials of
which parts are made. The primary objectives of the FSIS review are to
determine whether the equipment can be readily cleaned and inspected
for its sanitary condition. In some instances, FSIS also requires that
the equipment be used on a trial basis before approval is granted (9
CFR 308.5(d) and 381.53(a)(4)). FSIS technical personnel review more
than 2,500 submissions of equipment specifications each year, and
approximately 650 pieces of new equipment require a trial installation
before being accepted for use.
[[Page 19579]]
Also, prior-approval procedures exist for numerous establishment-
operated partial quality control programs. This means that companies
must come to FSIS for permission before they can initiate or modify
processes or controls intended to ensure that products have desired
characteristics and that processes are stable.
The prior-approval process is a feature of FSIS's traditional
``command-and-control'' regulatory approach. While prior approval
provides assurance that equipment, facilities, or processes, as
designed, meet certain requirements that are intended to assure food
safety or quality, they reflect the emphasis of the current system on
closely observing the means by which establishments maintain sanitation
and produce safe food. This feature of the current system is an
inappropriate allocation of responsibility between the Agency and
establishments. It is an obstacle and too often a deterrent to
innovation by establishments seeking to improve operations, and
contributes to unproductive use of FSIS resources both in managing the
approval system and policing establishment compliance with approved
facility and equipment specifications.
In addition, elimination of prior-approval requirements is
consistent with the principles articulated in FSIS's February 3, 1995,
Pathogen Reduction/Hazard Analysis and Critical Control Points (HACCP)
proposal (60 FR 6774). HACCP and the FSIS food safety strategy are
based on the principle that sanitary measures and science-based
preventive process controls should be built into the food production
system to reduce or eliminate food safety hazards. Establishment
management should be responsible for designing and implementing such
process controls, as well as for developing and maintaining standard
operating procedures (SOP's) for its sanitation programs. However, the
current system imposed by FSIS inappropriately allocates responsibility
between the Agency and the industry and impedes the ability of
establishment management to implement innovative food safety
strategies. Establishments conducting their own hazard analyses and
developing the HACCP plans to meet FSIS's food safety objectives will
determine whether facility layouts, equipment operating
characteristics, and other technical components of the manufacturing
process will result in products that meet required standards.
FSIS's reliance on prior approvals also contrasts with both the
practices of the remainder of the food industry as regulated by the
U.S. Food and Drug Administration and the practices of a significant
number of countries that have meat and poultry inspection systems that
provide a level of food safety assurance equivalent to that of the
United States. With the single exception of Canada, whose meat and
poultry regulatory system is intertwined with that of the United
States, none of these other countries relies on prior-approval systems
to ensure that equipment does not adulterate product.
Anticipated Changes in Inspection
The elimination of the prior approval systems proposed here would
change the manner in which FSIS conducts certain aspects of its
inspection. Under the current prior approval system, FSIS focuses
substantial attention on identifying specific design-related conditions
affecting food safety, which should be the responsibility of the
establishment. For example, FSIS not only performs prior approval of
facility blueprints and equipment, but also inspection tasks to verify
that the facility as constructed conforms to the blueprint and that
equipment meets approved design specifications. This reflects the fact
that the FSIS regulatory system has, in effect, taken responsibility
for these matters. Similarly, many establishments currently lack a
written sanitation plan and do not systematically ensure daily
maintenance of good sanitation. In order to compensate for this lack,
FSIS inspectors focus considerable attention on sanitation conditions
and practices that are more appropriately the establishment's
responsibility.
Under this proposal, FSIS would no longer control through prior
approval the design specifications for buildings and equipment.
Instead, FSIS would focus its regulatory and inspectional attention on
determining whether an establishment is successfully meeting sanitation
standards. Establishments would ensure that the design of buildings and
equipment is appropriate for sanitary food production and for
maintaining good sanitary conditions in accordance with broad
sanitation principles. In addition, the FSIS proposal to require
establishments to adopt sanitation SOP's of their own design, requires
establishments to identify the elements of good sanitation required to
prevent direct product contamination, carry out the SOP's on a daily
basis, and achieve acceptable sanitation results. Concurrent with this
action, FSIS inspection activities under SOP's and HACCP would be
restructured to focus not on the building or equipment design, or on
FSIS approval status, but on whether good sanitation is, in fact, being
maintained.
In concert with this proposal, FSIS would review and revise its
existing regulations and guidelines to avoid real or de facto
prescriptions that are inconsistent with the approach outlined here.
This review is underway and public comments on this process were
invited in an advance notice of proposed rulemaking, the ``FSIS Agenda
for Change,'' published in the December 29, 1995, issue of the Federal
Register (60 FR 67469).
Prior-Approval Requirements To Be Eliminated
A. Establishment Facilities
The demand for Federal inspection of sanitary conditions of
slaughterhouses was one of the principal concerns leading to enactment
of the 1906 Meat Inspection Act. Leading experts of the day in the
field of meat inspection advocated the approval of slaughterhouse plans
by qualified veterinary inspectors. Facilities for slaughtering,
dressing, and meat preparation that were properly designed and built
with sound materials that could be effectively cleaned and not
contaminate product were considered essential to help prevent the
spread of disease and protect the health and safety of the animal and
human populations. While the Meat Inspection Act itself did not mandate
prior approval of drawings as a condition of inspection, early
regulations issued under that law required the submission to the Agency
of plans for new and remodeled establishments for review and approval
before inspection could be granted.
The FMIA, the current law governing meat inspection, continues with
slight modification the provision in the original meat act assigning to
USDA the responsibility for regulating the sanitary conditions of
inspected establishments (see 21 U.S.C. 608). The PPIA contains similar
provisions, but neither of the Acts mandates prior approval of
establishment blueprints.
As a means of assuring sanitary conditions in inspected
establishments, the meat and poultry inspection regulations require
that applicants for inspection submit to FSIS the drawings and
specifications of establishments where inspected operations are to be
conducted for review and approval (9 CFR 304.2, 381.19). The
regulations also require that drawings reflecting any remodeling be
submitted in advance of construction (Secs. 308.2 and 381.18), and
prescribe specifications for facilities of inspected establishments (at
Secs. 307, 308, and 381, subparts G and H). This procedure was required
to help avoid costly changes in construction in the
[[Page 19580]]
event that FSIS determined facilities could create insanitary
conditions that could lead to food adulteration.
To comply with the prior-approval regulations, the applicant
completes a request form and provides a blueprint with specifications
to the FSIS inspector-in-charge. The blueprint and specifications are
then reviewed by the inspection circuit supervisor, the first level of
supervision outside inspected establishments, and sent directly to FSIS
headquarters in Washington, D.C. FSIS's area office--the second level
of supervision in the field organizational structure, which stands
between the circuit supervisors and the five Regional Offices--may also
review plans referred to it by the circuit supervisor before sending
them on to FSIS headquarters. In Washington, FSIS's facilities branch
reviews the information and decides whether to approve or reject the
drawings and specifications, seek further information, or return the
materials to the applicant. When changes are made in the facilities of
an establishment, the changes must be reflected in revised blueprints
for the establishment. The remodeled facilities are then reviewed by
the FSIS inspector-in-charge and the circuit supervisor to assure
compliance with the approved blueprints and that there will be no
product adulteration.
Currently, about 2,900 blueprints (both from new applicants and
from establishments remodeling their facilities) are reviewed each
fiscal year. About 38% of the submissions, or about 1,100 sets, are
rejected due to various deficiencies. Most rejections result from
errors in paperwork rather than design flaws that will compromise food
safety. The Agency works with the submitting establishments to see that
the deficiencies are corrected. Under prior approval, establishments
are urged to delay construction until drawings and specifications have
been approved, in order to avoid costly changes in construction or
remodeling.
Experience has shown that FSIS prior approvals are of limited value
in assuring good sanitation, because they are limited in both scope--
dealing only with establishment facilities as presented in drawings--
and time--they are given once, on the condition that establishments
will maintain a sanitary operating environment after their facilities
are approved. Ultimately, the establishments' implementation of good
sanitation operating procedures on a continuing basis is more critical
than the actual design of a facility. Also, with the elimination of
prior approval requirements, production time that previously was lost
in obtaining FSIS approval of blueprints and specifications would
become available to the industry.
Under the proposal, establishments would continue to be expected to
establish and maintain a sanitary environment for slaughtering and
processing by adhering to the general principles and requirements for
lighting, ventilation, drainage, plumbing, toilets, and condensation
found in Secs. 308.3(a)-(c), 308.4, 308.7, 308.8 (a) and (b), 381.46,
and 381.47 of the meat and poultry inspection regulations.
All official establishments (about 6,200 establishments), would be
affected by the proposal, except food irradiation facilities. There is
no requirement for prior approval of blueprints for food irradiation
facilities, because only prepackaged product is permitted to be
irradiated under current regulations.
Although FSIS's prior-approval procedures for drawings and
specifications would change under the proposal, its sanitation
standards would not. Establishments would be responsible for ensuring
that the design of facilities creates a sanitary environment and that
such an environment can be and is maintained. If field inspectors
carrying out their routine inspection tasks found product to be
adulterated or prepared, packed, or held under insanitary conditions
whereby it may have been contaminated with filth or may have been
rendered injurious to health because of deficient facilities, all
product subject to such conditions would be either retained and
reworked or condemned, and the establishment would be required to take
corrective action or cease operations. As under current regulations,
such corrective action, which might involve repair or reconstruction of
facilities, would be triggered only by an actual finding of product
adulteration or insanitary conditions. Such a finding would constitute
evidence of deviation from regulatory standards. Therefore, FSIS is
proposing to remove the current requirements for prior approval of
facility drawings and specifications. Requirements at 9 CFR 304.2(a),
308.2, and 381.19(a)-(f) for submission of blueprints and drawings
before inspection can be granted or changes made in facilities at
official establishments would be eliminated. Establishments would
initiate and complete construction without prior approval by FSIS.
Although there would no longer be a requirement for an
establishment to submit facility drawings and specifications in
applying for a grant of Federal inspection, FSIS would continue to have
a specific process through which the decision on granting inspection
would be made. This process would still include an on-site review, or
``walk-through,'' of the establishment's facilities by the FSIS circuit
supervisor as part of the predecisional review of the establishment's
capability to produce ``complying'' product. However, the
decisionmaking process would no longer include the review and prior
approval of establishment facility blueprints and specifications by the
Agency. The on-site review would not involve matching items on the
blueprints with the actual facilities represented. Instead, the focus
of the review would be on the extent to which the establishment is able
to maintain a sanitary environment for food production. This change
would be intended to parallel other changes in establishment-inspector
relationships that FSIS is contemplating in its reinvention of meat and
poultry inspection.
If this proposal is adopted, FSIS would plan to:
(1) maintain a small number of personnel who would assist
inspectors in performing in their in-plant roles. These roles would
eventually include the monitoring of establishment-operated sanitation
SOP's and HACCP systems;
(2) provide general guidance regarding establishment layout and
design to assist establishments in meeting food safety standards; and,
(3) publish one final edition of Agriculture Handbook 570, ``U.S.
Inspected Meat and Poultry Packing Establishments: A Guide to
Construction and Layout'', 1 and make it available to industry as
a guidebook to construction of facilities. Handbook 570, an FSIS
reference guide (not a set of regulatory requirements per se), is
provided to assist industry, architects, and inspectors.
---------------------------------------------------------------------------
\1\ A copy of Agriculture Handbook 570 is on file for review in
the FSIS Docket Clerk's office, 4352 South Agriculture Building,
Washington DC, 20250.
---------------------------------------------------------------------------
A small staff in Washington would maintain FSIS's technical
expertise and capability in this important aspect of food science and
technology. This staff would be responsible for keeping abreast of
developments in the field and updating FSIS's new, HACCP-oriented
guidelines and communicating technical information to Agency personnel.
The Agency will not approve industry decisions in these areas.
In addition, implementation of the proposed Pathogen Reduction/
HACCP rule's sanitation standard operating procedures, would render
prior-approval procedures unnecessary.
[[Page 19581]]
Establishment-operated sanitation procedures and HACCP systems would
accomplish, without prior approval, the same objectives as the FSIS
prior approvals. Thus, under HACCP-based inspection, the FSIS prior
approvals could no longer be considered an efficient and cost-effective
way to achieve sanitation objectives.
B. Equipment Approval
As in the case of the facilities regulations, the regulations
governing equipment (9 CFR 308.5, 381.53) were promulgated with a view
to having the Agency assure sanitation in slaughtering, dressing, and
processing operations. Requirements for sanitary equipment and utensils
have been in force since the 1906 Meat Inspection Act. However, unlike
prior approval of facility blueprints and drawings, the approval of
types of equipment prior to use has not always been a requirement.
Under regulations that have been in force since 1975 (9 CFR 308.5,
and 381.53), the FSIS Equipment Branch formally evaluates equipment and
utensils proposed by manufacturers or suppliers before they can be used
in official establishments to assure they can be maintained in a
sanitary condition. The program focuses on identifying and correcting
problems during the initial development of equipment, instead of
resolving problems after equipment is put into widespread use.
FSIS's acceptance of new, modified, or reconditioned equipment for
use in federally inspected meat and poultry establishments is a two-
step process. First, FSIS Equipment Branch personnel evaluate the
design and construction of equipment by reviewing assembly-type
drawings and corresponding parts and material lists submitted to the
Branch by the equipment manufacturer. Then, if necessary, FSIS
inspectors review the in-establishment operation of the equipment and
report their findings to the Equipment Branch. Commercially available
equipment is accepted and listed in an FSIS reference guide, ``Accepted
Meat and Poultry Equipment,'' \1\ known as the FSIS Equipment Book.
Once equipment is listed in this reference as acceptable, no further
approval is needed on an establishment-by-establishment basis. Certain
categories of equipment, such as simple tools and cleaning equipment,
are exempt from prior approval. Among the types of equipment that are
evaluated through FSIS's prior-approval procedure are clean-in-place
systems, piping used with establishment machinery, automatic
eviscerators, heat exchangers, smokehouses and ovens, air compressors,
and water recycling equipment.
FSIS processes about 2,500 equipment applications, rejections, and
acceptances each year. About 200 equipment applications are rejected on
first review for lack of sufficient information. About 650 acceptance
decisions are based on the results of in-plant trials. About 18
equipment applications are rejected after in-plant trials reveal
deficiencies.
The principal cost of the prior-approval process to the private
sector is considered to be that resulting from lost or delayed
equipment sales caused by delay in obtaining approval. This cost falls
mainly on equipment sellers and manufacturers and can be considerable
if the introduction of promising new technology is delayed. The
productivity of meat and poultry establishments could also be adversely
affected by delays in approving efficient new equipment.
Furthermore, FSIS's one-time approval does not address daily
operational issues such as proper maintenance and adjustment of
equipment to prevent product contamination. Such issues are covered by
the requirement that equipment and utensils be of such material and
construction that they can be easily cleaned to prevent product
adulteration (9 CFR 308.5, 381 subpart H), as well as by other general
requirements, independently of any prior approval.
The prior-approval review for equipment may sometimes involve the
evaluation of machinery, including scientific instrumentation, that
will not itself have contact with a food product or have other direct
effects on health or safety, but that may be part of an innovative
approach to food processing or product safety. The Agency's review may
delay testing or introduction of the innovation by weeks or months. The
delay can be costly to a company in a highly competitive environment.
FSIS is therefore proposing to eliminate the requirement at 9 CFR
308.5 and 381.53 for prior evaluation and approval of equipment and
utensils used in official meat and poultry establishments. The general
principles and requirements for such equipment and utensils provided at
9 CFR 308.5(a) and 381.53(a) would be preserved.
Under this proposal, equipment and utensils would still have to be
constructed so as to facilitate thorough cleaning and operational
cleanliness and not adulterate edible product. Also, they would still
have to be constructed, maintained, and used in a manner that does not
interfere with inspection.
However, FSIS would no longer conduct its acceptance program before
equipment could be used in an official establishment. Establishments
would be able to use equipment based on their own evaluation of their
ability to utilize the equipment in a sanitary way. The general
requirements for equipment already in the regulations (9 CFR 308.5 and
381.53) would not change. In its inspection activities, FSIS would
continue to judge establishment equipment by those same general
standards. Equipment must be cleanable, it must be capable of being
disassembled and inspected, and it must not interfere with inspection
or adulterate product. FSIS inspectors would continue to reject
equipment they find posing a sanitary hazard.
For calendar year 1996, the Agency will separate the general
guidance material from its list of approved equipment and publish the
guidance material separately. The final edition of the equipment list,
which FSIS published in 1995, is available to current subscribers and
to anyone who requests a copy before the effective date of the final
rule.
Operational procedures and appropriate sanitation process controls
would be developed by the inspected establishment. In this area, as in
facilities, official establishments would be required to meet the
general requirements prescribed in the regulations, but would be
allowed the flexibility to determine the specific steps to be taken to
comply with those requirements. The sanitation SOP's proposed for
official establishments in FSIS's Pathogen Reduction/HACCP proposal
would provide plans for applying the general principles for maintaining
sanitary conditions to specific establishment situations. The
establishment would also be required to maintain any controls
appropriate to the HACCP plans for the establishment's products (e.g.,
raw beef), such as making sure the facilities and equipment (structures
and machinery for evisceration) are designed, built, and operated so
that any necessary action (sanitary dressing procedures) can be taken
at critical control points in the HACCP plan.
The equipment prior-approval process proposed here for elimination
is to be distinguished from the program, announced by FSIS last year,
for reviewing experimentation with new technologies (``Guidelines for
Preparing and Submitting Experimental Protocols for In-Plant Trials of
New Technologies and Procedures; 60 FR 27714; May 25, 1995) under
commercial conditions. The purpose of the new program is to
[[Page 19582]]
encourage the adoption by industry of innovative technologies that will
help reduce the risk of foodborne disease. The Agency has established
procedures (see FSIS Directive 10,700.1) for reviewing protocols for
experimentation with new technologies in official establishments if
there is a possibility the experimentation could adversely affect
product, environmental, or worker safety, or interfere with inspection.
For example, in experiments involving the artificial contamination
of carcasses with fecal matter to test the effectiveness of a carcass
cleaning process, any products from these carcasses must be removed
from commercial channels or reconditioned to be wholesome or fit for
sale. Protocols for experiments involving the use of materials that
could pollute the environment or affect worker safety must include
appropriate regulatory citations or be accompanied by written approval
of the Environmental Protection Agency or the Occupational Safety and
Health Administration. Although new technologies can be expected to
include the use of equipment, the FSIS review program is primarily
intended to enable the experimentation to proceed rather than to
approve the equipment used.
Further Regulatory Reform
As stated in FSIS Docket #95-008A, ``FSIS Agenda for Change;
Regulatory Review'' (60 FR 67469; December 29, 1995), FSIS is reviewing
all of its regulations, policies, and inspection procedures, including
those concerning establishment sanitation (as presented in handbooks,
notices, directives, etc.). Although implementation of FSIS's proposal
for sanitation SOP's would not depend on revisions to the Agency's
sanitation regulations, because this is an area where inspectors have
traditionally exercised discretion and provided direct oversight and
direction to establishments, the Agency recognizes the need to more
clearly state its performance standards in this area. The Agency
believes that the regulations can be made much clearer in describing
the establishments' responsibilities, that doing so will relieve
inspectors of much of the routine work they do that should be done by
establishment employees, and that inspection resources can then be
freed up and reapplied in performing new, HACCP-related food safety
functions.
C. Partial Quality Control Programs
Quality control, in general, is a planned, documented system of
activities intended to assure the stability of processes and uniformity
of products. Quality control programs are based on the assumption that
there is normal variation in any process and that the process is under
control if that variation is not exceeded. Quality control is used in
manufacturing to assure that components and products from ball bearings
to microcomputer circuits, which are made in huge quantities, will all
have the same desired characteristics. In the food industry, quality
control systems are used in processing operations to make sure that
each product produced, from TV dinners to hotdogs, will be exactly the
same--will have the same content, flavor, color, texture, and so forth,
no matter how many thousands are made in a production run.
In applications relevant to food safety, quality control programs
can be used to maintain normal process variation around a standard,
such as a time-temperature standard for cooked beef or a moisture-
protein ratio for dry sausage. If the expected variation is exceeded,
corrective action must be taken to restore process stability and ensure
food safety.
Under current FSIS regulations, a company may choose to place all
of the processes and products in an establishment under a comprehensive
quality control system. Such a system, known as total quality control
(TQC), integrates an establishment's quality development, maintenance,
and improvement efforts to enable engineering, production, marketing,
and service to take place at the most efficient levels that meet
consumer expectations. A quality control system for only one process or
product in an establishment is known as a partial quality control
system (PQC). The quality control systems are, in a sense, precursors
of the HACCP system FSIS envisions in that they are establishment-
operated process control systems.
In 1980, FSIS promulgated regulations establishing procedures for
meat and poultry establishments to follow in obtaining Agency approval
of their voluntary TQC and PQC systems. FSIS approved several thousand
PQC programs during the 1980's. Since 1990, FSIS has approved an
additional 4,000 PQC programs and more than 3,000 amendments to those
programs. There are now more than 8,200 approved PQC programs.
An approved quality control program is typically a voluntary
activity in which an establishment is allowed to establish its own
control procedures (provided these conform with the regulations).
Approved PQC programs have provided FSIS with a tool or method for
maintaining assurances that label claims, composition declarations, and
many other standards are met, and that food products are safe. They
also allow FSIS to regulate processes for which specific criteria have
not been prescribed by the regulations. Verification inspection of the
PQC programs enables FSIS to determine whether or not the programs are
functioning. If they are shown to be malfunctioning, the establishment
takes corrective action.
There are several types of FSIS-approved PQC programs; most are
voluntary, some are mandatory. Voluntary PQC's generally fit into two
broad categories. The first type includes those that need not be used
to produce a product. For example, an approved PQC program for
controlling the percentage of fat and water in a product is not
necessary for an establishment to be allowed to make hotdogs. The
establishment could produce the product without the PQC program.
However, the PQC program helps assure that the establishment produces
the hotdog and other products in accordance with the regulatory
standards. Without a PQC program, an establishment runs a higher risk
of producing noncompliant product subject to retention by the FSIS
inspector.
The second type of voluntary PQC includes product labeling-related
programs intended to ensure production of a product that is in
compliance with a compositional requirement. For example, some PQC's
are designed to meet the requirements of vignette labeling (labeling
that shows an image of the food product either as it is in the
container or as served, such as labeling that shows a specific number
of meatballs in or pepperoni slices on a product); other PQC's are
designed to comply with product composition requirements that must be
met if certain labeling is used (such as the protein-fat-free
requirement for a product labeled ``ham, water added'').
There are also mandatory PQC programs. Some are compulsory for
certain types of food processing or are required to produce certain
products; others are required for an establishment to operate under a
certain inspection system. For example, the PQC for on-line carcass
quality control is a mandatory component of the New Line Speeds (NELS)
poultry inspection system. FSIS also requires approved PQC programs for
the testing of new or not-previously-approved antimicrobial treatments
in slaughtering establishments (to monitor equipment and process
controls for experimental design and safety reasons); for product
[[Page 19583]]
identification and control during slaughter, dressing, and processing
to support labeling statements; and for monitoring chlorine
concentrations in product intended for export to Canada.
There are also PQC programs to control products for so-called
economic factors. These programs are intended to prevent the marketing
of products that are misbranded or that lack the quality or value that
the product standard imposes. These economic PQC's are intended to
serve two main purposes: (1) to take the place of lot inspection of
product (the sampling and testing of a shift's production for certain
characteristics) by the FSIS inspector; and (2) to assure that products
meet requirements associated with their labeling.
Establishments operating the first type of economic PQC generate
data that are subject to random verification by the FSIS inspector.
Examples of these include programs for net weight, fat and water in
frankfurters, and boneless meat (mainly for aesthetic defects). An
establishment operating under a PQC for net weight keeps records of its
checks and corrective actions to avoid lot inspection. Under PQC's for
fat and water in frankfurters, establishments keep ingredient records
by lot and results of laboratory tests for random verification by FSIS
inspectors. An establishment operating a PQC for boneless meat
inspections does its own on-line inspections and keeps records. The
FSIS inspector randomly selects samples of product the establishment
has already inspected to assure that the establishment's records are
accurate.
Examples of the second kind of economic PQC include those for
controlling the amount of added ingredients in corned beef, the amount
of basting or marinating solutions in certain poultry products, and the
truthfulness or accuracy of certain label claims. The PQC programs for
basting or marinating solutions in certain poultry products assure that
the amount of added solution in such products does not exceed the
standards set forth in 9 CFR 381.169. The establishment accomplishes
the objective of these programs by controlling the pumping procedure at
the time of product formulation.
The PQC program for an establishment making a product bearing a
label claim that only sirloin cuts have been used in the meat portion
of the product must include an approved procedure with records for
assuring the veracity of the claim. The PQC's for vignette labeling
assure that product characteristics conform with the graphic display on
the product label, in accordance with 9 CFR 317.8(a) and 381.121. If a
product label shows four meat balls, the PQC for the product would have
to document that each package contains four meat balls. The programs
are carried out through in-plant sampling and visual inspection, with
verification checks by FSIS inspectors.
Although about 70 percent of PQC's are intended to support labeling
claims, not all have this purpose. Some support alternative processing
procedures that have become so routine that very specific guidelines
are followed in preparing the PQC program. FSIS has developed 64
guidelines detailing the essential elements of the most commonly used
PQC programs. Many of these are procedures that substitute for more
direct controls on economic or quality features of products such as
declared count, vignette labeling, or the ``popping'' of pork rinds.
These are not connected with food safety.
Under the current system, no matter how routine the preparation,
review, and subsequent approval of the PQC program, each must be
submitted to either the Washington office or a Regional Office and be
stamped ``approved.'' FSIS has assigned 11 staff-years to the review
and approval of establishment PQC programs. Approximately 1,800 quality
control programs and amendments are handled each year by the Regional
Offices; approximately 50 programs for complex processes or requiring
specialized knowledge (such as programs for thermal processing) are
approved each year by the Washington office. The purpose of the review
is to assure that the programs contain all the necessary elements of a
quality control program and are appropriate for their intended purpose.
The programs must describe the product and process for which they are
intended, and the materials to be used. They must identify any hazards,
define process deviations, indicate the control points to be monitored,
and procedures for checking processes. They must also state the methods
for gathering data and determining results, and the corrective actions
to be taken if process deviations are found. Finally, the programs must
bear the names and locations of responsible establishment quality
control officials and authorized USDA employees must have access to
records generated by the programs. The time for a PQC prior approval to
be obtained is typically 2 weeks.
FSIS considers this administrative burden on the industry and the
Agency to be unnecessary to achieve food safety or nonadulteration
objectives. Under HACCP-based inspection, establishments would assume
responsibility for developing process control procedures in advance
without having to depend on Agency approval for every step in their
procedures. FSIS would evaluate or verify the effectiveness of the
procedures through normal inspection operations and take action when
necessary to prevent product adulteration.
By relying on general requirements for the design of all PQC
programs, but not requiring prior approval of such programs, FSIS could
use its resources (staff-years) more efficiently and effectively than
it does now in its PQC prior-approval activities. This approach would
also provide establishments with ample flexibility to develop their own
process control techniques.
For these reasons, FSIS is proposing to eliminate the requirements
at 9 CFR 318.4(d) and 381.145(d) for prior approval of PQC programs.
Prior approval of most voluntary or ``economic'' PQC programs would be
discontinued and an unnecessary regulatory burden would thus be lifted.
However, the current requirements governing the content of PQC programs
would remain (Secs. 318.4(d)(2)(i) and 381.145(d)(2)(i)), as would
existing mandatory-PQC requirements. Prior approval of PQC programs
would be eliminated for all but a few of the mandatory PQC programs,
such as those required for certain slaughter inspection systems, or
those requiring special expertise, such as PQC's for thermal processing
or other complex processing. The Agency, however, is planning to change
these areas of its regulations to eliminate prior reviews and make them
compatible with HACCP. This proposal would eliminate at least 90
percent of the approximately 1,900 PQC submissions made to FSIS each
year. Cross-references to the existing prior-approval requirement would
also be eliminated (in 9 CFR 318.7(b)(3), 318.7(c)(4), 317.21, 318.19,
318.309, 319.5, 319.104, 381.121d, and 381.309).
In addition, the regulations would be revised to provide (in 9 CFR
318.4(d)(2)(ii) and 381.145(d)(2)(ii)) for the design of PQC programs
to assure, with at least 85 percent statistical confidence, that the
lot or process means do not exceed the product or label limits to which
the PQC programs apply. This requirement, which is already observed in
the design of FSIS-approved PQC programs now in use, would also provide
for control of individual sublot samples to within plus-or-minus 3
standard errors (standard deviations of the sampling distribution) of
the process mean. At least 3 sublot samples representing a
[[Page 19584]]
production lot would have to be drawn for each lot of product subject
to the PQC program. Further, each sublot sample would have to contain
at least 5 samples representing the sublot. No individual sample mean
or sublot-sample mean could be more than 3 standard errors above or
below the process mean. (A lot is ordinarily a shift's production, but
may be defined differently by different establishments. A sublot is a
fraction of a lot, and may represent an hour's production, or a
quarter-hour's production, or other portion of a production lot from
which quality control samples may be drawn.)
For example, a PQC program prepared according to the FSIS guideline
for the injection of corned beef labeled as having 30-percent added
solution would be designed to assure with greater than 85 percent
confidence that the 30-percent limit is not exceeded. In other words,
the lot average must not be above this limit. A batch, a portion of the
lot, must not be more than 1.2 percent above the declared value on the
label. Samples drawn from individual batches of the production lot
would have to show that the 3-standard-errors limit (in this example,
1.2 percent, or 31.2 percent added solution) is not exceeded.
PQC programs thus designed would provide process control, and hence
a degree of food safety or food nonadulteration assurance, that is
comparable to that provided currently by PQC programs individually
approved by FSIS. Official establishments would have a less
prescriptive set of conditions to meet in designing and implementing
their PQC programs, and more latitude for innovation. Because the
unnecessary regulatory burden of prior approval would no longer exist,
establishments would be able to implement their programs sooner than
the current prior-approval process allows.
Establishments would be required to comply with the requirements in
proposed 9 CFR 318.4(d)(2)(ii) and 381.145(d)(2)(ii) in designing their
PQC programs. Prior approval would still be required for quality
control programs and systems referred to elsewhere in the regulations
(e.g., 9 CFR 318.4 (c), (e), (f), and (h); and 381.145 (c), (e), (f),
and (h)), including those associated with, and required for, such
slaughter inspection systems as the NELS and the NTIS (9 CFR
381.76(c)). Proposals addressing these programs and systems will be
published in the near future. This proposed rule would amend paragraphs
9 CFR 318.4(e) and 381.145(e) to delete references to prior approval
requirements for PQC programs.
Proposed 9 CFR 318.4(d)(1) and 381.145(d)(1) would retain the
current requirement for official establishments with PQC's to make the
programs and data and information generated by them available to FSIS
inspectors. Formal notification would not be required because
establishment operators typically notify FSIS personnel of the products
and processes operated under establishment-operated PQC programs during
their regular interactions with FSIS personnel. Establishment operators
recognize the advantage of making their quality control programs and
data available to FSIS. FSIS personnel who have not been advised that a
product is being produced under a PQC program would perform traditional
lot inspection procedures, rather than quality control evaluation and
verification tasks. The results of lot inspection may differ
technically from those obtained under a PQC inspection. A product lot
could be subject to retention even though the process for the product
is under control, requiring no corrective action to restore controls.
FSIS, therefore, is not proposing to terminate the use of PQC's as
a mechanism for organizing the collection and review of data which
document outcomes. FSIS is, however, proposing to end its role as the
approver of paperwork describing data collection to support alternative
processing procedures.
Establishments operating under approved PQC programs would continue
to keep the programs on file and available for use by FSIS employees.
FSIS would adjust verification inspection tasks to reflect an approach
that is appropriate to the process control procedure being used by the
establishment.
It is likely that establishments will find the continued use of PQC
programs to be advantageous under the inspection system envisioned by
the Agency in its ``Pathogen Reduction/HACCP'' proposal. Although most
PQC programs currently used by inspected establishments control
products and processes for economic factors, e.g., fat and moisture
content or the amount of marinating solution a product can absorb,
there are some that have public health implications. Such PQC programs
would be compatible with establishment-operated HACCP plans and
establishments would continue to use them under HACCP-oriented
inspection. Moreover, because establishments operating HACCP plans
would be concerned about maintaining stability in all their processes,
they would be likely to continue many of their economic PQC's or
develop new ones. But they would no longer need prior approval from
FSIS before implementing them.
FSIS considers relief from the prior-approval aspect of these PQC's
to be the first in a series of steps to realign inspection and company
responsibilities in the area of process control systems. As FSIS
progresses in its review and adjustment of its inspection regulations,
it will take more steps in this area. Regulations will be rewritten as
performance standards, facilitating innovation. Establishments will be
free to develop establishment-specific approaches as long as the
regulatory objectives are met. Therefore, as FSIS reinvents its
regulations in accordance with its stated plans (see docket #95-008A,
``FSIS Agenda for Change; Regulatory Review''), the need for Agency-
developed guidelines should decrease. Companies will be able to call on
a full range of technical resources to develop alternatives and design
systems to demonstrate their efficacy.
Other Prior Approvals
This proposal addresses the removal of the requirements for prior
approval of facility blueprints, equipment, and PQC programs for
inspected meat and poultry establishments. In addition to the prior
approvals discussed in this proposal, FSIS plans to eliminate its
remaining centralized prior approval procedures. These include the
procedures for: PQC's for water reuse, on-line PQC's used in the NELS
and NTIS poultry inspection systems, nonfood compounds and proprietary
additives, and possibly labeling. FSIS intends to publish proposals on
these topics in the near future.
Like the regulations governing meat and poultry inspection, the egg
products inspection regulations, promulgated under the Egg Products
Inspection Act (21 U.S.C. 1031, et seq.) (EPIA), also contain prior-
approval procedures for facilities and blueprints (7 CFR 59.146,
59.500, 59.506, 59.520, 59.538, 59.540, and 59.550), labels (7 CFR
59.411), equipment and utensils (7 CFR 59.502, 59.506, 59.515, 59.520,
59.522, 59.540, 59.540, 59.547, and 59.552), nonfood compounds (7 CFR
59.504 and 59.552), and various processing procedures for egg products.
FSIS is not prepared to propose to remove these requirements because
FSIS has only recently acquired responsibility for administering the
EPIA and the egg products inspection regulations promulgated under that
Act. FSIS has just begun reviewing the prior-approval requirements in
the egg products regulations to see which, if any, are still necessary
and should be maintained, and which are obsolete or burdensome and
should be amended or
[[Page 19585]]
rescinded. As appropriate, FSIS will propose changes in the egg
products inspection regulations.
Executive Order 12778
This proposed rule has been reviewed under Executive Order 12778,
Civil Justice Reform. States and local jurisdictions are preempted
under the Federal Meat Inspection Act (FMIA) and the Poultry Products
Inspection Act (PPIA) from imposing any marking or packaging
requirements on federally inspected meat and poultry products that are
in addition to, or different than, those imposed under the FMIA or
PPIA. States and local jurisdictions may, however, exercise concurrent
jurisdiction over meat and poultry products that are outside official
establishments for the purpose of preventing the distribution of meat
and poultry products that are misbranded or adulterated under the FMIA
or PPIA or, in the case of imported articles, which are not at such an
establishment after their entry into the United States.
This proposed rule is not intended to have retroactive effect.
If this proposed rule is adopted, administrative proceedings will
not be required before parties may file suit in court challenging this
rule. However, the administrative procedures specified in 9 CFR
Secs. 306.5 and 381.35 must be exhausted prior to any judicial
challenge of the application of the provisions of this rule, if the
challenge involves any decision of an FSIS employee relating to
inspection services provided under the FMIA or PPIA.
Executive Order 12866 and Effect on Small Entities
This proposed rule has been determined to be significant and was
reviewed by OMB under Executive Order 12866.
FSIS is proposing to eliminate prior approval requirements for
establishment drawings and specifications, equipment, and certain
partial quality control programs. Concurrent with this proposal, FSIS
would restructure inspection activities to focus more attention on the
ability of establishments to maintain a sanitary environment. These
actions, in addition to implementation of the sanitary standard
operating procedures, which were proposed by the Agency as part of the
Pathogen Reduction/HACCP proposal, would provide the industry the
flexibility for creating and maintaining a sanitary working environment
without prescriptive command-and-control requirements.
Removing these requirements would affect establishments subject to
official inspection, firms producing and selling equipment currently
subject to prior approval, firms providing expediting services to
businesses seeking prior approval, and consumers. The proposal would
reduce demands on FSIS resources which could be redirected to functions
more critical to improving food safety.
Alternatives to this rulemaking that FSIS considered for facilities
and equipment prior approvals included development by FSIS of detailed
standards to be published in booklets with periodic updates,
recognizing industry organizations as prior approval authorities, and
establishing general performance standards similar to FDA-recognized
good manufacturing practices. Another alternative which would have
provided these services on a voluntary, user-fee basis, was considered
but not adopted. FSIS has chosen the option of eliminating prior
approval requirements while maintaining the general food safety
standards in the existing regulations.
For PQC prior approvals, the alternatives to no rulemaking were
market sampling of finished products, mandating additional in-plant
controls, sampling of finished products for chemical analysis, and
maintaining general requirements and a standard for the design of PQC
programs. The last option was chosen because it would provide official
establishments with the most flexibility in implementing PQC programs.
Benefits of the Rule
Approximately 6,200 federally inspected meat and poultry
establishments would no longer be required to submit blueprints,
drawings, and specifications to FSIS for review and approval. FSIS
reviewed about 2,900 submissions in FY 1994. The cost of receiving FSIS
approval for drawings and specifications and changes they represent
includes the administrative, mailing, and labor costs associated with
preparing the required Agency forms. The labor cost is estimated at 30
minutes for each submission. Assuming an hourly wage or per-hour salary
of $20-$25 for each person submitting blueprints and specifications and
the FSIS form, the annual cost to the industry for making these
submissions is in the range of $30,000 to $40,000. This, then, is an
estimate of the savings accruing to industry from removing the
requirement for prior approval that FSIS is proposing.
As many as 1,500 establishments per year submit for approval PQC
programs or amendments to PQC programs. FSIS receives a total of 1,900
submissions each year. A typical PQC program, prepared according to
FSIS guidelines, can be written up in about 4 hours by an individual
earning $20 to $25 per hour. Thus, removing the requirement for prior
approval of PQC plans is estimated to save the industry $150,000 to
$190,000 per year.
FSIS receives approximately 2,500 submissions for approval of
equipment each year. The costs of these applications generally fall on
equipment manufacturers rather than the meat and poultry firms subject
to inspection, although a few meat and poultry establishments make some
of their own equipment or equipment modifications. FSIS has no estimate
that specifically pertains to the costs to manufacturers of applying
for equipment approval, but these costs are assumed to be comparable to
the costs to official establishments of submitting blueprint and
establishment specification approvals. FSIS recognizes that actual
costs to firms seeking equipment approval may differ and welcomes
comments on this. Based on 30 minutes per submission, a labor cost of
$20-$25 per hour, and 2,500 submissions annually, the annual cost
savings from removing the prior approval requirement for equipment
would be in the range of $25,000 to $32,500. In addition, approximately
650 applications for approval are contingent on in-plant trials. These
trials involve some added costs to manufacturers and meat and poultry
establishments, but the Agency has no estimates of these costs to
include in this analysis. FSIS invites commenters to present
information indicating what these costs are.
The proposal to eliminate blueprint prior approvals would remove a
source of income for approximately 20 small firms that represent
official establishments for the purpose of labeling and blueprint
approval. These firms are known as ``expediters.'' It is estimated that
approximately 20 percent of the annual blueprint submissions (about
600) are made to the Agency using the services of expediters. The
estimated annual total value of blueprint expediting is about $240,000
for the companies involved. While this would be lost income to the
expediters, it would be a transfer to meat and poultry firms, which is
not a social cost of the proposed rule.
The social benefits directly resulting from the elimination of
prior approval requirements as proposed in this rulemaking are
indicated in Table 1. There would be additional but unquantifiable
social benefits from the proposals to eliminate prior approvals.
[[Page 19586]]
These benefits derive from efficiencies arising from fewer demands on
management, greater incentives to adopt innovative practices, and the
enhanced ability to make changes quickly which the prior approval
system and its inherent delays inhibit. Also, the delays inherent in
the prior approval process, which can be translated into lost
production time, would be eliminated.
However, it is unlikely that an inspection finding of adulterated
product or insanitary conditions under the amended regulations would
result in increased costs to the industry for rebuilding or remodeling
facilities. Establishments planning substantial investments in new
construction typically consult with local authorities and experts with
up-to-date knowledge of food establishment construction before
beginning major projects.
In addition to the benefits to firms from elimination of these
prior approval requirements, FSIS could be expected to benefit by
reallocating about $2.3 million to high priority food safety needs.
Currently, the Agency allocates about 15 staff-years ($750,000) to
reviews of equipment, 20 staff-years (about $1 million) to reviews of
drawings and specifications, and 11 staff-years ($550,000) to review
and approval of PQC programs. The true social benefits to be expected
are the improvements in food safety that would logically flow from
reallocating these resources to more important food safety-related
tasks.
Costs of the Proposed Rule
As is currently the practice, inspectors would continue to require
establishments to take corrective action or cease operations if any
product has been adulterated or prepared, packed or held under
insanitary conditions whereby it may have been contaminated with filth
or may have been rendered injurious to health, because of deficient
facilities and equipment. Corrective action, which might include
reconstruction, remodeling, and redesign would only be triggered by an
actual finding of product adulteration or insanitary conditions.
However, it is unlikely that this proposal will increase the level of
inspection findings that result in reconstruction, remodeling, and
redesign of facilities and equipment.
Currently, facility and equipment plans submitted to FSIS for prior
approval are rejected due either to errors in paperwork or to deviation
from specific design criteria developed by FSIS. Under the proposal,
establishments would not have to submit applications for approval.
Instead, establishments would be permitted to initiate and complete
construction or introduce new equipment without submitting any
paperwork to FSIS. In addition, FSIS would eliminate design-related
criteria currently utilized to evaluate the acceptability of facilities
and equipment. Inspectors would no longer require establishments to
incur costs for reconstruction, remodeling, and redesign, because the
actual facility or piece of equipment does not match a specified design
criterion, blueprint, or equipment specification.
In the absence of prior approval, FSIS would focus inspection on
whether establishments are maintaining a sanitary environment. Under
this proposal and the proposed rule on sanitation standard operating
procedures, establishments would assume greater control over their
production practices to ensure that a sanitary environment is
maintained. Currently, many establishments utilize the services of
knowledgeable architects, engineers, and other experts to design
facilities and equipment for use in meat and poultry establishments.
Under prior approval, these experts ensure, among other things, that
FSIS design specifications are met. Without prior approval,
establishments may require these experts to provide more information on
the procedures necessary for maintaining facilities and equipment in a
sanitary condition, which could increase the costs for these services.
However, this is consistent with the need for the industry to assume
greater responsibility for its operations. Any cost increases for these
services would be commensurate with the transfer of responsibility from
FSIS to the industry, and would not be a social cost attributable to
the rule.
Table 1.--Benefits to Firms From Eliminating Prior Approval Requirements
----------------------------------------------------------------------------------------------------------------
Firms with more than Firms with fewer
Action 500 employees than 500 employees All firms
----------------------------------------------------------------------------------------------------------------
Remove blueprint and specification approval... $1,800-$2,400 $28,200-$37,600 $30,000-$40,000
Remove equipment approval..................... $2,500-$3,250 $22,500-$29,250 $25,000-$32,500
Remove PQC approval........................... $9,000-$11,400 $141,000-$178,600 $150,000-$190,000
-----------------------------------------------------------------
Total................................... $13,300-17,050 $191,700-$245,450 $205,000-262,500
----------------------------------------------------------------------------------------------------------------
Regulatory Flexibility Assessment
The Administrator has determined that, for the purposes of the
Regulatory Flexibility Act (5 U.S.C. 601-12), this proposed rule would
not have a significant economic impact on a substantial number of small
entities. The entities that would be affected by this proposal are
inspected meat and poultry establishments, equipment suppliers, and
companies representing official establishments to the Agency for the
purpose of obtaining blueprint approvals. Most of these are small
entities.
The proposed rule is expected to have a beneficial effect on small
and large entities, on both those regulated under the FMIA and PPIA and
some that are not regulated under the inspection laws but which are
affected by the Agency's review of their products, e.g., suppliers of
equipment used in inspected meat and poultry establishments.
There are about 5,800 federally inspected small establishments. In
this analysis, FSIS is using the Small Business Administration (SBA)
business size standards (at 13 CFR 121.601) for meat packing
establishments, establishments that produce sausages and other prepared
meats, and poultry slaughtering and processing establishments. A small
establishment in any of these categories is considered to be one with
500 or fewer employees. Under current regulations, all official
establishments are required, as a condition of receiving inspection
services, to submit blueprints, drawings, and specifications of new or
remodeled facilities to FSIS for review and approval. Under this
proposal, the establishments would, of course, not be spared the cost
of preparing for themselves blueprints and specifications for
construction and major installations. However, they would no longer
bear the cost of submitting these drawings and specifications to the
Agency for review
[[Page 19587]]
because the requirement to do so would be eliminated.
The savings to be obtained by eliminating FSIS approval for
drawings and specifications and the changes they represent includes the
administrative and mailing costs and the time (resources) required to
fill out the required Agency form (``Submission and Approval of Plans
and Specifications,'' FSIS -5200-S), which is estimated at 30 minutes
each submission. As mentioned above, the annual savings to the meat and
poultry products industry from eliminating the requirement of making
the submissions would be in the neighborhood of $30,000-40,000. FSIS
does not consider this savings to be significant. But in addition to
such direct savings, the largest potential savings to the industry
resulting from the prior approval process for blueprints and
specifications would be those associated with the elimination of
delays--of up to several weeks per submission--in obtaining approval.
This estimated delay includes the time needed to resolve disagreements
over plans and specifications, should such disagreements arise between
the Agency and the establishment. This savings could be significant for
some small entities, but there is no information to indicate that it
would be so for a substantial number of them.
The savings would not be significant for at least two reasons.
First, establishments engaged in construction projects plan for the
eventuality of an FSIS review, or at least are advised by knowledgeable
food establishment architects and engineers to build FSIS review time
into their project timelines. Costs are minimized because delays that
do occur are anticipated. Second, under the current prior review and
approval system, the Agency is able to exercise discretion expediting
reviews of blueprints and facilities in specific cases to prevent
economic hardship from occurring. The proposal is intended to eliminate
the costs attributable to the delays associated with prior review and
approval.
While eliminating the cost of blueprint prior approvals to small
establishments producing meat and poultry products, the proposal would
at the same time remove a source of income for about 20 small
expediting firms that represent official establishments for the purpose
of labeling and blueprint approvals. These expediters are frequently
able to shorten the time for these approvals and reduce the rejection
rate on submissions because of their knowledge of Agency requirements
and proximity to Agency offices. As mentioned above, the estimated
annual total value of blueprint expediting is about $240,000 for the
companies involved. This is a small part of the expediters' total
business, which is mainly that of expediting label approvals and
consulting work. These 20 entities, in any event, do not constitute a
substantial number of small entities unfavorably affected by this rule.
By the same reasoning that the Agency used to determine that these
prior approvals do not serve to increase the safety of meat and poultry
products, the expediting activities of these firms that will be reduced
by the rule would no longer be a productive use of resources. These
firms may, however, experience an increased demand for their consulting
services from inspected establishments who depended upon the
Government's prior approval to assure they were in compliance with the
regulations, who now need help from a third party to assure they are in
compliance with the regulations.
The equipment acceptance procedure principally affects
manufacturers or other vendors of equipment. The equipment
manufacturers range in size from small to large concerns and, under the
current regulations, depend on FSIS prior approval to be able to sell
their products to inspected establishments. It is estimated that up to
90 percent of the equipment manufacturers and other applicants for FSIS
equipment acceptance are small entities. According to the SBA business
size standards (13 CFR 121.601), a small food products machinery
manufacturer is one that employs 500 or fewer people.
Also favorably affected by the approval process are inspected
establishments that may require machinery or other equipment to improve
or continue their operations. As is the case in the blueprint review
process for inspected facilities, the savings from avoiding a delay
before installation and operation of a newly developed piece of
equipment, although it could be significant for a few entities, large
or small, but will not be significant for most establishments.
Finally, FSIS has determined that the proposal to eliminate prior
approval of most voluntary PQC programs would not have a significant
economic impact on a substantial number of small entities. Both large
and small establishments subject to FSIS inspection would be permitted
to continue to develop and implement PQC programs for their products
and processes but would no longer be required to submit the PQC's to
FSIS for review and approval in advance of use. Accordingly, the
administrative delay for review that occurs under the present system
would be eliminated.
It takes a minimum of 2 weeks for the Agency to review a typical
PQC program, and as many as 1,500 establishments per year submit such
programs or amendments to programs--a total of nearly 1,900 submissions
per year--and about 90 percent of these establishments could be
regarded as small entities. Therefore, roughly 1,100 establishments
would avoid the costs associated with having to wait a minimum of 2
weeks for PQC approval, but it is not possible to identify what costs
would be saved under these circumstances.
For these reasons, the Administrator has determined that this
proposal would not result in a significant economic impact on a
substantial number of small entities. The economic impact on such
entities would in most cases involve the elimination of certain costs--
some quantifiable, some not quantifiable--associated with doing
business subject to Federal regulation and hence would be beneficial to
those entities. Though non-quantifiable, increasing the benefits that
come from reducing an establishment's dependence on Government
decisions is an important objective of the proposed rule.
Paperwork Requirements
FSIS has reviewed the paperwork and recordkeeping requirements in
this proposed rule in accordance with the Paperwork Reduction Act. This
proposed rule would substantially reduce ``reporting'' requirements for
official establishments and other entities. FSIS estimates the total
reduction in reporting to be 4,291 burden hours. The reductions would
occur in the following information collection reports:
0583-0082, ``Meat and Poultry Inspection; Application for
Inspection, Sanitation, and Equipment Requirements and Exemptions'':
Establishments subject to inspection would no longer have to submit
blueprints and specifications along with Form FSIS-5200-5. The response
time is estimated to be 30 minutes, and there are 701 total burden
hours approved by the Office of Management and Budget (OMB) for this
activity. Therefore, FSIS would request OMB to remove the 701 approved
burden hours.
0583-0082, ``Meat and Poultry Inspection; Application for
Inspection, Sanitation, and Equipment Requirements and Exemptions'':
FSIS prior approval would no longer be required for the products of
these companies that are used in official establishments. The response
time is
[[Page 19588]]
estimated to be 30 minutes for the prior approval of equipment. There
are 2,990 total burden hours approved by OMB for this activity.
Therefore, FSIS would request OMB to remove the 2,990 approved burden
hours.
0583-0089, ``Processing Procedures and Qual
FR Doc. 96-10795 Elimination of Prior Approval Requirements for Establishment Drawings and Specifications, Equipment, and Certain Partial Quality Control Programs
ity Control
Systems'': Establishments could continue to develop and implement PQC
programs according to Agency guidelines. These establishments, with the
exception of poultry irradiation facilities, would no longer be
required to submit a letter requesting approval of a proposed PQC
program and a copy of the program to the Agency for approval prior to
implementation. The response time is estimated to be 30 minutes for
writing the request letter and sending the PQC program to FSIS. There
are 600 total burden hours approved by OMB for this activity. In
consideration of poultry irradiation facilities 60 hours of burden
would remain. FSIS does not foresee more than two irradiation
facilities requesting FSIS approval of PQC programs. Therefore, FSIS
would request OMB to remove 540 approved burden hours. The burden hours
for PQC program development and reporting would remain the same.
Copies of this information collection assessment can be obtained
from Lee Puricelli, Paperwork Specialist, Food Safety and Inspection
Service, USDA, South Agriculture Building, Room 3812, Washington, DC
20250.
Comments are invited on: (a) whether the proposed collection of
information is necessary for the proper performance of the functions of
the Agency, including whether the information will have practical
utility; (b) the accuracy of the Agency's estimate of the burden of the
proposed collection of information including the validity of the
methodology and assumptions used; (c) ways to enhance the quality,
utility, and clarity of the information to be collected; and (d) ways
to minimize the burden of the collection of information on those who
are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology. Comments may be sent to Lee
Puricelli, Paperwork Specialist (see address above), and to the Desk
Officer for Agriculture, Office of Information and Regulatory Affairs,
Office of Management and Budget, Washington, DC 20253.
Comments are requested by July 1, 1996. To be most effective,
comments should be sent to OMB within 30 days of the publication date
of this proposed rule.
List of Subjects
9 CFR 304
Drawings, Information to be furnished, Grant or refusal of
inspection, Meat inspection.
9 CFR 308
Meat inspection, Sanitation.
9 CFR 317
Meat inspection, Reporting and recordkeeping requirements.
9 CFR 318
Meat inspection, Establishment-operated quality control.
9 CFR 319
Food grades and standards, food labeling.
9 CFR 381
Poultry and poultry products.
For the reasons set forth in the preamble, FSIS is proposing to
amend 9 CFR Chapter III, the Federal meat and poultry inspection
regulations, as follows:
PART 304--APPLICATION FOR INSPECTION; GRANT OR REFUSAL OF
INSPECTION
1. The authority citation for Part 304 would be revised to read as
follows:
Authority: 21 U.S.C. 601-695; 7 CFR 2.18, 2.53.
2. The heading of section 304.2 would be revised to read as
follows:
Sec. 304.2 Information to be furnished; grant or refusal of
inspection.
* * * * *
3. Section 304.2 would be amended by removing paragraph (a) and
redesignating paragraphs (b) through (f) as paragraphs (a) through (e),
respectively.
PART 308--SANITATION
4. The authority citation for Part 308 would be revised to read as
follows:
Authority: 21 U.S.C. 601-695; 7 CFR 2.18, 2.53.
Sec. 308.2 [Removed]
5. Section 308.2 would be removed and reserved.
6. Section 308.5 would be amended by removing ``, in the judgment
of the Administrator,'' from the first and third sentences of paragraph
(a); removing paragraphs (b) through (f); redesignating paragraph (g)
as (b); and revising the section heading to read as follows:
Sec. 308.5 Equipment and utensils to be easily cleaned; those for
inedible products to be so marked; PCB-containing equipment.
* * * * *
PART 317--LABELING, MARKING DEVICES, AND CONTAINERS
7. The authority citation for part 317 would continue to read as
follows:
Authority: 21 U.S.C. 601-695; 7 CFR 2.18, 2.53.
8. Section 317.21 would be amended by removing the words ``or
Partial Quality Control Program'' from paragraph (b).
PART 318--ENTRY INTO OFFICIAL ESTABLISHMENTS; REINSPECTION AND
PREPARATION OF PRODUCTS
9. The authority citation for part 318 would be revised to read as
follows:
Authority: 7 U.S.C. 138f, 450, 1901-1906; 21 U.S.C. 601-695; 7
CFR 2.18, 2.53.
10. Paragraph (d) of Sec. 318.4 would be revised to read as
follows:
Sec. 318.4 Preparation of products to be officially supervised;
responsibilities of official establishments; plant operated quality
control.
* * * * *
(d) Partial Quality Control Programs. (1) Any owner or operator of
an official establishment preparing meat food products who is using a
quality control program for a product, operation, or part of an
operation shall make the written program and data and information
generated by the program available to Program employees.
(2) (i) Such quality control program shall include, as appropriate
for the product, operation, or part of an operation which the program
concerns, detailed information on: raw material control, the critical
check or control points, the nature and frequency of tests to be made,
the charts and records that will be used, the length of time such
charts and records will be maintained in the custody of the official
establishment, the limits which will be used and the points at which
corrective action will be taken to prevent recurrence of a loss of
control, and the nature of the corrective action--ranging from the
least to the most severe.
(ii) Such quality control program shall be designed so as to
provide, with at least 85 percent statistical confidence, that the lot
mean (process mean) is within the product or label limit used and that,
of a minimum of 3 sublot samples representing the lot, with each sublot
sample containing at least 5 samples representing the sublot, no
[[Page 19589]]
individual sample mean or sublot-sample mean shall be greater than
three standard errors above, nor less than three standard errors below,
the process mean.
* * * * *
11. Paragraph (e) of Sec. 318.4 would be amended by removing the
words ``or Partial Quality Control'' from the paragraph heading, the
words ``or (d)'' from the first sentence of paragraph (e)(1) and both
occurrences of the words ``or partial quality control program'' from
the second sentence of the same paragraph (e)(1); by removing the words
``or program'' from the first and second sentences of paragraph (e)(2);
by removing the words ``or partial quality control program'' from
paragraph (e)(3); and by revising the heading of paragraph (g) and
removing the words ``or partial quality control program'' from
paragraphs (g)(1) and the introductory text of (g)(2) and revising
paragraph (g)(3) to read as follows:
Sec. 318.4 Preparation of products to be officially supervised;
responsibilities of official establishments; establishment operated
quality control.
* * * * *
(g) Termination of Total Establishment Quality Control.
* * * * *
(3) If approval of the total establishment quality control system
has been terminated in accordance with the provisions of this section,
an application and request for approval of the same or a modified total
establishment quality control system will not be evaluated by the
Administrator for at least 6 months from the termination date.
* * * * *
12. Paragraphs (b)(3)(i) and (b)(3)(ii) of Sec. 318.7 would be
revised to read as follows:
Sec. 318.7 Approval of substances for use in the preparation of
products.
* * * * *
(b) * * *
(3) * * *
(i) 100 ppm ingoing (potassium nitrite at 123 ppm ingoing); and 500
ppm sodium ascorbate or sodium erythorbate (isoascorbate) shall be
used; provided that the establishment has a partial quality control
program as provided in Sec. 318.4(d) such as to result in compliance
with this provision, or
(ii) A predetermined level between 40 and 80 ppm (potassium nitrite
at a level between 49 and 99 ppm); 550 ppm sodium ascorbate or sodium
erythorbate (isoascorbate); and additional sucrose or other similar
fermentable carbohydrate at a minimum of 0.7 percent and an inoculum of
lactic acid producing bacteria such as Pediococcus acetolactii or other
bacteria demonstrated to be equally effective in preventing the growth
of botulinum toxin at a level sufficient for the purpose of preventing
the growth of botulinum toxin; provided that the establishment has a
partial quality control program as provided in Sec. 318.4(d) such as to
result in compliance with this provision.
* * * * *
13. In the table in Sec. 318.7(c)(4) under the Class of substance
``Miscellaneous,'' the entry under the Substance ``Ascorbic Acid,
erythorbic acid, citric acid, sodium ascorbate, and sodium citrate''
would be revised to read as follows:
Sec. 318.7 Approval of substances for use in the preparation of
products.
* * * * *
(c) * * *
(4) * * *
----------------------------------------------------------------------------------------------------------------
Class of substance Substance Purpose Product Amount
----------------------------------------------------------------------------------------------------------------
* * * * * *
Miscellaneous................ Ascorbic acid, To delay Fresh beef Not to exceed, singly or in
erythorbic discoloration. cuts, fresh combination, 500 ppm or 1.8
acid, citric lamb cuts, and mg/sq inch of product surface
acid, sodium fresh pork of ascorbic acid (in
ascorbate and cuts. accordance with 21 CFR
sodium 182.3013), erythorbic acid
citrate, (in accordance with 21 CFR
singly or in 182.3041), or sodium
combination ascorbate (in accordance with
under quality 21 CFR 182.3731); and/or not
control. to exceed, singly or in
combination, 250 ppm or 0.9
mg/sq inch of product surface
of citric acid (in accordance
with 21 CFR 182.6033), or
sodium citrate (in accordance
with 21 CFR 182.6751).
* * * * * *
*
----------------------------------------------------------------------------------------------------------------
14. Section 318.19 would be amended by removing the words ``or
partial quality control program'' from paragraph (e).
15. Paragraph (a) of Sec. 318.309 would be amended by removing the
words ``an approved'' and ``program'' and paragraphs (b) and (c) of
Sec. 318.309 would be amended by removing ``and submitted to the
Administrator for approval''.
PART 319--DEFINITIONS AND STANDARDS OF IDENTITY OR COMPOSITION
16. The authority citation for Part 319 would continue to read as
follows:
Authority: 7 U.S.C. 450, 1901-1906; 21 U.S.C. 601-695; 7 CFR
2.18, 2.53.
17. Section 319.5 would be amended by removing the second sentence
of paragraph (e)(2) and revising the first sentence to read as follows:
Sec. 319.5 Mechanically Separated (Species).
* * * * *
(e) * * *
(2) A prerequisite for label approval for products consisting of or
containing ``Mechanically Separated (Species)'' is that such
``Mechanically Separated (Species)'' shall have been produced by an
establishment under a establishment quality control system. * * *
18. The last sentence in footnote 3 to the chart in Sec. 319.104
would be amended by removing the words ``approved by the Administrator
under Sec. 318.4 of this subchapter.''
PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS
19. The authority citation for Part 381 would be revised to read as
follows:
Authority: 7 U.S.C. 138f, 450; 21 U.S.C. 451-470; 7 CFR 2.18,
2.53.
20. Section 381.19 would be revised to read as follows:
Sec. 381.19 Application for inspection; irradiation facilities.
All applicants for inspection whose operations include irradiation
and other processing would submit, to the Administrator, a proposed
quality control system as specified in Sec. 381.149.
Sec. 381.20 [Amended]
21. Section 381.20 would be amended by removing ``the approved
drawings,
[[Page 19590]]
specifications, and'' from the first sentence.
22. Section 381.53 would be amended by removing paragraph (b);
redesignating paragraphs (c) through (m) as paragraphs (b) through (l),
respectively; and revising paragraph (a) to read as follows:
Sec. 381.53 Equipment and utensils.
(a) Equipment and utensils used for processing or otherwise
handling any edible poultry product or ingredient thereof, in any
official establishment, shall comply with any applicable provisions of
paragraphs (b) through (l) of this section and otherwise shall be of
such material and construction as will facilitate their thorough
cleaning, insure cleanliness in the preparation and handling of all
edible poultry products, and avoid adulteration and misbranding of such
products. In addition to these requirements, equipment and utensils
shall not in any way interfere with or impede inspection procedures.
Receptacles used for handling inedible products shall be of such
material and construction that their use will not result in
adulteration of any edible product or in unsanitary conditions at the
establishment, and they shall bear conspicuous and distinctive marking
to identify them as only for such use and shall not be used for
handling any edible poultry products.
* * * * *
Sec. 381.121d [Amended]
23. Section 381.121d would be amended by removing the words ``or
Partial Quality Control Program'' from paragraph (b).
24. The section heading and paragraph (d) of Sec. 381.145 would be
revised to read as follows:
Sec. 381.145 Preparation of products to be officially supervised;
responsibilities of official establishments; establishment operated
quality control.
* * * * *
(d) Partial Quality Control Programs. (1) Any owner or operator of
an official establishment preparing meat food products who is using a
quality control program for a product, operation, or part of an
operation shall make the written program and data and information
generated by the program available to Program employees.
(2) (i) Such quality control program shall include, as appropriate
for the product, operation, or part of an operation which the program
concerns, detailed information on: raw material control, the critical
check or control points, the nature and frequency of tests to be made,
the charts and records that will be used, the length of time such
charts and records will be maintained in the custody of the official
establishment, the limits which will be used and the points at which
corrective action will be taken to prevent recurrence of a loss of
control, and the nature of the corrective action--ranging from the
least to the most severe.
(ii) Such quality control program shall be designed so as to
provide, with at least 85 percent statistical confidence, that the lot
mean (process mean) is within the product or label limit used and that,
of a minimum of 3 sublot samples representing the lot, with each sublot
sample containing at least 5 samples representing the sublot, no
individual sample mean or sublot-sample mean shall be greater than
three standard errors above, nor less than three standard errors below,
the process mean.
* * * * *
25. Paragraph (e) of Sec. 381.145 would be amended by removing the
words ``Programs or'' from the paragraph heading, the words ``or (d)''
from the first sentence of paragraph (e)(1) and both occurrences of ``,
partial quality control program,'' from the second sentence of the same
paragraph (e)(1); by removing the words ``or program'' from the first
and second sentences of paragraph (e)(2); by removing ``, partial
quality control program,'' from paragraph (e)(3); by revising the
heading of paragraph (g) and removing the words ``or a partial quality
control program'' from paragraph (g)(1); by removing ``, partial
quality control program,'' from paragraph (g)(2) introductory text and
the words ``or program'' from the first sentence of paragraph
(g)(2)(ii); and by revising paragraph (g)(3) to read as follows:
Sec. 381.145 Preparation of products to be officially supervised;
responsibilities of official establishments; establishment operated
quality control.
* * * * *
(g) Termination of Total Establishment Quality Control.
* * * * *
(3) If approval of the total establishment quality control system
has been terminated in accordance with the provisions of this section,
an application and request for approval of the same or a modified total
establishment quality control system will not be evaluated by the
Administrator for at least 6 months from the termination date.
* * * * *
Sec. 381.309 [Amended]
26. Paragraph (a) of Sec. 381.309 would be amended by removing the
words ``an approved'' and ``program'' and paragraphs (b) and (c) of
Sec. 381.309 would be amended by removing ``and submitted to the
Administrator for approval''.
Done, at Washington, DC April 25, 1996.
Michael R. Taylor,
Acting Under Secretary for Food Safety.
[FR Doc. 96-10795 Filed 5-1-96; 8:45 am]
BILLING CODE 3410-DM-P
Complete official Federal Register PDF
FR Doc. 96-10793 Federal Motor Vehicle Safety Standards; Hydraulic Brake Systems; Light Vehicle Brake Systems
[Federal Register Volume 61, Number 86 (Thursday, May 2, 1996)]
[Proposed Rules]
[Pages 19602-19604]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10793]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 571
[Docket No. 85-06; Notice 11]
RIN [2127-AG35]
Federal Motor Vehicle Safety Standards; Hydraulic Brake Systems;
Light Vehicle Brake Systems
AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation.
ACTION: Notice of proposed rulemaking (NPRM).
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SUMMARY: This document proposes to extend the requirements of Federal
motor vehicle safety standard (FMVSS) No. 135, Passenger Car Brake
Systems, to trucks, buses, and multipurpose passenger vehicles with a
gross vehicle weight rating (GVWR) of 10,000 pounds (4,536 kilograms)
or less. As a result, manufacturers of such vehicles have the option of
complying with either FMVSS No. 105 or FMVSS No. 135 for an interim
five year period, after which all light vehicles would have to comply
with FMVSS No. 135. The agency believes that such an amendment would be
consistent with the agency's policy of achieving international
harmonization whenever possible, consistent with the statutory mandate
to ensure motor vehicle safety.
DATES: Comment Period: Comments on this notice must be received by
NHTSA no later than July 1, 1996.
ADDRESSES: Comments should refer to the docket and notice numbers above
and be submitted to: Docket Section, National Highway Traffic Safety
Administration, 400 Seventh Street SW, Washington, D.C. 20590. Docket
hours are 9:30 a.m. to 4 p.m., Monday through Friday.
FOR FURTHER INFORMATION CONTACT: For non-legal issues: Mr. Robert M.
Clarke, Office of Crash Avoidance, National Highway Traffic Safety
Administration, 400 Seventh Street, SW., Washington, D.C. 20590 (202)
366-5278.
For legal issues: Mr. Marvin L. Shaw, NCC-20, Rulemaking Division,
Office of Chief Counsel, National Highway Traffic Safety
Administration, 400 Seventh Street, SW., Washington, D.C. 20590 (202)
366-2992.
SUPPLEMENTARY INFORMATION:
I. Background
On February 2, 1995, the National Highway Traffic Safety
Administration (NHTSA) published a final rule establishing a new
Federal motor vehicle safety standard (FMVSS) No. 135, Passenger Car
Brake Systems ( 60 FR 6411). This standard resulted from the agency's
efforts to harmonize U.S. brake standards with international brake
standards. FMVSS No. 135 applies only to passenger cars. Between March
6, 1995 and August 31, 2000, manufacturers of passenger cars have the
option of complying with either FMVSS No. 105 or FMVSS No. 135. After
September 1, 2000, all passenger cars must comply with the requirements
of FMVSS No. 135, while all other vehicles with hydraulic brakes,
including light vehicles 1 other than passenger cars, still must
meet the requirements of FMVSS No. 105.
---------------------------------------------------------------------------
\1\ Those vehicles with a gross vehicle weight rating (GVWR) of
10,000 lbs. (4,536 kilograms) or less.
---------------------------------------------------------------------------
NHTSA is considering whether to extend the applicability of FMVSS
No. 135 to all light vehicles. FMVSS No. 105 would continue to apply to
vehicles with a GVWR greater than 10,000 pounds (i.e., medium and heavy
hydraulically-braked vehicles). If this change is adopted, FMVSS No.
135 would be retitled Light Vehicle Brake Systems.
In comments submitted in response to the agency's July 3, 1991
supplemental proposed rulemaking (SNPRM) on this subject (56 FR 30528),
Kelsey-Hayes asked whether the rule would apply to all purpose
vehicles, mini-vans, and light trucks, as well as to passenger cars. In
the final rule, NHTSA decided to apply FMVSS No. 135 only to passenger
cars, but stated it might consider applying FMVSS No. 135 to all light
vehicles at a later date.
In its petition for reconsideration to the final rule, General
Motors (GM) requested, among other things, that the agency consider
applying FMVSS No. 135 to all hydraulically-braked light vehicles. GM
stated that the United Nations Economic Commission for Europe (ECE)
Regulation R13-H was being developed with the intention of applying it
to all light vehicles. That company further stated that ``it would be
desirable to have a single brake
[[Page 19603]]
standard applicable to all hydraulically-braked vehicles, as has
traditionally been the case with FMVSS No. 105.'' GM stated its belief
that FMVSS No. 135 was superior to FMVSS No. 105 and that extending its
applicability ``* * * could lead to genuinely improved brake systems
for MPV and LTV customers.''
II. Agency Proposal
After reviewing GM's petition, NHTSA has decided to propose
applying FMVSS No. 135 to all light vehicles. As a result,
manufacturers of such vehicles have the option of complying with either
FMVSS No. 105 or FMVSS No. 135 for an interim five year period, after
which all light vehicles would have to comply with FMVSS No. 135. The
agency believes that such an amendment would be consistent with the
agency's policy of achieving international harmonization whenever
possible and appropriate, consistent with the statutory mandate to
promote motor vehicle safety. In establishing FMVSS No. 135, NHTSA
stated that the new standard would differ from the existing one (FMVSS
No. 105) primarily in containing a revised test procedure based on
harmonized international procedures developed during discussions held
between NHTSA and the Meeting of Experts on Brakes and Running Gear
(GRRF) of the ECE. NHTSA stated that the new FMVSS would ensure the
same level of safety for the aspects of performance covered by FMVSS
No. 105, while improving safety by addressing some additional safety
issues.
At the agency's June 28, 1995 and September 22, 1995 quarterly
public meetings addressing NHTSA's regulatory activities, agency
personnel requested comments about whether the agency should apply
FMVSS No. 135 to all light vehicles. The agency has received no
comments, either in favor or in opposition to such an action. The
agency further notes that in 1995, domestic light truck manufacturers
were voluntarily equipping 56 percent of their annual production with
4-wheel antilock brake systems (ABS). The agency notes that a light
vehicle equipped with ABS would more easily comply with FMVSS No. 135,
particularly the adhesion utilization requirements. Market trends and
manufacturers' public pronouncements indicate that a significant
majority of light vehicles will be equipped with four-wheel ABS in the
near future. Based on these considerations, NHTSA believes that vehicle
manufacturers are already planning to voluntarily design and equip
their products with brake systems that would comply with FMVSS No.
135's requirements, including those dealing with adhesion utilization
and variable proportioning functional failures.
Accordingly, the agency proposes to amend Section S3. Application,
to apply FMVSS No. 135 to trucks, buses, and multipurpose passenger
vehicles with a GVWR of 10,000 pounds (4,536 kilograms) or less. The
agency notes that FMVSS No. 105 has some requirements that differ
depending on the vehicle's GVWR. Nevertheless, the agency is aware of
no reasons why the requirements of FMVSS No. 135 which relate to
equipment, dynamic road test procedures and required stopping
performance, system failures, and parking brake test procedures and
performance should be different for these vehicles than they are for
passenger cars. Nevertheless, the agency specifically invites comments,
along with supporting data, that might alter that tentative conclusion.
III. Rulemaking Analyses and Notices
A. Executive Order 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures
This notice has not been reviewed under Executive Order 12866.
NHTSA has considered the impacts of this rulemaking action and
determined that it is not ``significant'' within the meaning of the
Department of Transportation's regulatory policies and procedures. The
agency believes that FMVSS No. 135 would ensure an equivalent level of
safety for those aspects of performance covered by FMVSS No. 105 and
that it would also address additional areas of brake performance which
offer added safety benefits. The agency believes that manufacturers are
already planning, prior to the date on which compliance with this
standard would become mandatory, to voluntarily equip their light
vehicles with brake systems that would meet the requirements of FMVSS
No. 135. Thus, the application of this standard to those vehicles would
not impose costs on manufacturers beyond those they otherwise
voluntarily plan to incur. Applying this rule to all light vehicles
would offer the possibility of reducing the production costs for these
vehicles. Further, the agency believes that manufacturers' compliance
verification costs, attributable to the full test procedure in the new
standard, would be approximately the same as those attributable to the
existing procedure under FMVSS No. 105. Based on the above
considerations, NHTSA believes that the impacts are so minimal as not
to warrant preparation of a full regulatory evaluation.
B. Regulatory Flexibility Act
NHTSA has also considered the effects of both this proposal under
the Regulatory Flexibility Act. I hereby certify that it would not have
a significant economic impact on a substantial number of small
entities. Accordingly, the agency has not prepared a preliminary
regulatory flexibility analysis.
NHTSA concluded that the February 1995 final rule had no
significant impact on a substantial number of small entities. That
conclusion is equally valid for this proposal to extend the application
of this rule to include all light vehicles. Accordingly, the cost
savings would be so small that they would not likely affect vehicle
sales.
C. National Environmental Policy Act
NHTSA has analyzed this rulemaking action for the purposes of the
National Environmental Policy Act of 1969. The agency has determined
that implementation of this action would not have any significant
impact on the quality of the human environment. No changes in existing
production or disposal processes result.
D. Executive Order 12612 (Federalism)
NHTSA has analyzed this action under the principles and criteria in
Executive Order 12612. The agency believes that this rulemaking action
would not have sufficient Federalism implications to warrant the
preparation of a Federalism Assessment. No State laws would be
affected.
E. Civil Justice Reform
This rulemaking would not have any retroactive effect. Under 49
U.S.C. 30103, whenever a Federal motor vehicle safety standard is in
effect, a State may not adopt or maintain a safety standard applicable
to the same aspect of performance which is not identical to the Federal
standard, except to the extent that the State requirement imposes a
higher level of performance and applies only to vehicles procured for
the State's use. 49 U.S.C. 30161 sets forth a procedure for judicial
review of rulemakings establishing, amending or revoking Federal motor
vehicle safety standards. That section does not require submission of a
petition for reconsideration or other administrative proceedings before
parties may file suit in court.
[[Page 19604]]
List of Subjects in 49 CFR part 571
Imports, Motor vehicle safety, Motor vehicles, Rubber and rubber
products, Tires.
In consideration of the foregoing, the agency proposes to amend
Title 49 of the Code of Federal Regulations at Part 571 as follows:
PART 571--FEDERAL MOTOR VEHICLE SAFETY STANDARDS
1. The authority citation for Part 571 would continue to read as
follows:
Authority: 49 U.S.C. 322, 30111, 30115, 30117, and 30166;
delegation of authority at 49 CFR 1.50
2. Section 571.105 would be amended by revising S3, to read as
follows:
Sec. 571.105 Standard No. 105; Hydraulic Brake Systems.
* * * * *
S3. Application. This standard applies to hydraulically-braked
vehicles with a GVWR greater than 10,000 pounds. This standard applies
to hydraulically-braked passenger cars manufactured before September 1,
2000, and to hydraulically-braked multipurpose passenger vehicles,
trucks, and buses with a GVWR of 10,000 pounds or less that are
manufactured before September 1, 2002. At the option of the
manufacturer, hydraulically-braked passenger cars manufactured before
September 1, 2000, and hydraulically-braked multipurpose passenger
vehicles, trucks, and buses with a GVWR of 10,000 pounds or less
manufactured before September 1, 2002, may meet the requirements of
Federal Motor Vehicle Safety Standard No. 135, Light Vehicle Brake
Systems instead of this standard.
* * * * *
3. Section 571.135 would amended by revising the heading and
section S3. to read as follows:
Sec. 571.135 Standard No. 135; Light Vehicle Brake Systems
* * * * *
S3. Application. This standard applies to hydraulically-braked
passenger cars manufactured on and after September 1, 2000, and to
hydraulically-braked multipurpose passenger vehicles, trucks and buses
with a gross vehicle weight rating (GVWR) of 10,000 pounds (4,536
kilograms) or less, manufactured on and after September 1, 2002. In
addition, at the option of the manufacturer, passenger cars
manufactured before September 1, 2000, and multipurpose passenger
vehicles, trucks and buses with a GVWR of 10,000 pounds or less. (4,536
kilograms), manufactured before September 1, 2002, may meet the
requirements of this standard instead of Federal Motor Vehicle Safety
Standard No. 105, Hydraulic Brake Systems.
* * * * *
Issued on: April 25, 1996.
Barry Felrice,
Associate Administrator for Safety Performance Standards.
[FR Doc. 96-10793 Filed 5-1-96; 8:45 am]
BILLING CODE 4910-59-P
Complete official Federal Register PDF
FR Doc. 96-10569 Approval and Promulgation of State Implementation Plans; California State Implementation Plan Revision, San Joaquin Valley Unified Air Pollution Control Agency
[Federal Register Volume 61, Number 86 (Thursday, May 2, 1996)]
[Proposed Rules]
[Page 19601]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10569]
=======================================================================
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[CA-070-0001b; FRL-5452-1]
Approval and Promulgation of State Implementation Plans;
California State Implementation Plan Revision, San Joaquin Valley
Unified Air Pollution Control Agency
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: EPA is proposing to approve revisions to the California State
Implementation Plan (SIP) which concern the control of volatile organic
compound (VOC) emissions from the transfer of gasoline in stationary
storage containers, delivery vessels, bulk plants, and vehicle fuel
tanks.
The intended effect of proposing approval of these rules is to
regulate emissions of VOCs in accordance with the requirements of the
Clean Air Act, as amended in 1990 (CAA or the Act). In the Final Rules
Section of this Federal Register, the EPA is approving the state's SIP
revision as a direct final rule without prior proposal because the
Agency views this as a noncontroversial revision amendment and
anticipates no adverse comments. A detailed rationale for this approval
is set forth in the direct final rule. If no adverse comments are
received in response to this proposed rule, no further activity is
contemplated in relation to this rule. If EPA receives adverse
comments, the direct final rule will be withdrawn and all public
comments received will be addressed in a subsequent final rule based on
this proposed rule. The EPA will not institute a second comment period
on this document. Any parties interested in commenting on this action
should do so at this time.
DATES: Comments on this proposed rule must be received in writing by
June 3, 1996.
ADDRESSES: Written comments on this action should be addressed to:
Daniel A. Meer, Rulemaking Section (A-5-3), Air and Toxics Division,
U.S. Environmental Protection Agency, Region 9, 75 Hawthorne Street,
San Francisco, CA 94105-3901.
Copies of the rule revisions and EPA's evaluation report of each
rule are available for public inspection at EPA's Region 9 office
during normal business hours. Copies of the submitted rule revisions
are also available for inspection at the following locations:
California Air Resources Board, Stationary Source Division, Rule
Evaluation Section, 2020 ``L'' Street, Sacramento, CA 95812.
San Joaquin Valley Unified Air Pollution Control District, 1999
Tuolumne Street, Fresno, CA 93721.
FOR FURTHER INFORMATION CONTACT: Christine Vineyard, Rulemaking Section
[A-5-3], Air and Toxics Division, U.S. Environmental Protection Agency,
Region 9, 75 Hawthorne Street, San Francisco, CA 94105-3901, Telephone:
(415) 744-1197.
SUPPLEMENTARY INFORMATION: This document concerns San Joaquin Valley
Unified Air Pollution Control District Rule 4621, Gasoline Transfer
into Stationary Containers, Delivery Vessels, and Bulk Plants, and Rule
4622, Transfer of Gasoline into Vehicle Fuel Tanks, submitted to EPA on
November 18, 1993 and May 24, 1994 by the California Air Resources
Board. For further information, please see the information provided in
the Direct Final action which is located in the Rules Section of this
Federal Register.
Authority: 42 U.S.C. 7401-7671q.
Dated: March 24, 1996.
Felicia Marcus,
Regional Administrator.
[FR Doc. 96-10569 Filed 5-01-96; 8:45 am]
BILLING CODE 6560-50-W
Complete official Federal Register PDF
FR Doc. 96-10181 Electronic Fund Transfers
[Federal Register Volume 61, Number 86 (Thursday, May 2, 1996)]
[Proposed Rules]
[Pages 19696-19705]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10181]
Federal Register / Vol. 61, No. 86 / Thursday, May 2, 1996 / Proposed
Rules
[[Page 19696]]
FEDERAL RESERVE SYSTEM
12 CFR Part 205
[Regulation E; Docket No. R-0919]
Electronic Fund Transfers
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Board is publishing for comment proposed amendments to
Regulation E, which implements the Electronic Fund Transfer Act. The
proposed amendments relate to: the use of electronic communication in
home-banking services for providing disclosures and other
documentation; error resolution requirements for new accounts; and the
treatment of stored-value cards (imposing modified Regulation E
requirements on stored-value products in systems that track individual
transactions, cards, or consumers; providing an exemption for cards on
which a maximum value of $100 can be stored; and providing that other
stored-value cards are not covered by Regulation E).
DATES: Comments must be received on or before August 1, 1996.
ADDRESSES: Comments should refer to Docket No. R-0919 and be mailed to
William W. Wiles, Secretary, Board of Governors of the Federal Reserve
System, Washington, DC 20551. They may also be delivered to the guard
station in the Eccles Building Courtyard on 20th Street, NW (between
Constitution Avenue and C Street) between 8:45 a.m. and 5:15 p.m.
weekdays. Except as provided in the Board's rules regarding the
availability of information (12 CFR 261.8), comments will be available
for inspection and copying by members of the public in the Freedom of
Information Office, Room MP-500 of the Martin Building, between 9:00
a.m. and 5:00 p.m. weekdays.
FOR FURTHER INFORMATION CONTACT: Regarding the proposed amendments on
electronic communication, Michael Hentrel, Staff Attorney, and
regarding the other proposed amendments, Jane Gell, Natalie Taylor, or
Kyung Cho-Miller, Staff Attorneys, Division of Consumer and Community
Affairs, at (202) 452-2412 or (202) 452-3667. For the hearing impaired
only, Telecommunications Device for the Deaf (TDD), Dorothea Thompson,
at (202) 452-3544.
SUPPLEMENTARY INFORMATION:
I. Background
The Electronic Fund Transfer Act (EFTA) (15 U.S.C. 1693), enacted
in 1978, provides a basic framework establishing the rights,
liabilities, and responsibilities of participants in electronic fund
transfer (EFT) systems. The Federal Reserve Board was given rulewriting
authority to issue implementing regulations. Types of transfers covered
by the act and regulation include transfers initiated through an
automated teller machine (ATM), point-of-sale (POS) terminal, automated
clearinghouse, telephone bill-payment system, or home banking program.
The act and Regulation E (12 CFR Part 205) provide rules that govern
these and other EFTs. The rules prescribe restrictions on the
unsolicited issuance of ATM cards and other access devices; disclosure
of terms and conditions of an EFT service; documentation of EFTs by
means of terminal receipts and periodic statements; limitations on
consumer liability for unauthorized transfers; procedures for error
resolution; and certain rights related to preauthorized EFTs.
In 1994 the Board issued for public comment a proposed revision of
Regulation E under the Board's Regulatory Planning and Review program.
(The Board has taken final action on the proposal; a revised regulation
and revised staff commentary are published in today's Federal
Register.) As part of that process, and based in part on the public
comments received, the Board identified areas that offer an opportunity
for further burden reduction without undercutting consumer protection.
One such area involves the use of electronic communication between
consumers and financial institutions--for example, by personal computer
and modem--in place of paper documents. The proposed revision published
in 1994 included a provision that allowed electronic communication in
place of paper for authorization of recurring electronic debits. The
Board now proposes to permit electronic text messages to substitute for
paper under Regulation E generally. The proposed revision also
solicited comment generally on coverage of prepaid cards and other
stored-value products under Regulation E. To resolve issues raised
during and following the public comment period, the Board undertook an
analysis of stored-value products and their treatment under Regulation
E. The Board now proposes amendments under which many stored-value
products would be exempt, and others would be covered under limited
requirements.
II. Proposed Regulatory Revisions
The following discussion covers the proposed amendments to
Regulation E in the order of the sections of the regulation that would
be affected--first addressing electronic communication, then error
resolution for new accounts, and finally stored-value products.
Electronic Communication--Section 205.4(c)
Financial institutions offer a wide variety of ``home banking''
services ranging from account inquiries, verifications, and fund
transfers between accounts, to bill payment and full account
management; and they are using various forms of electronic
communication to deliver these services. Telephones and personal
computers are the most common means of access to home banking services.
Telephones with digital screens (``screen phones''), equipped with bar
code or magnetic stripe readers, allow consumers to enter transactions
off-line, then send the information to the financial institution on-
line. Financial institutions may offer consumers specialized software
that allows the user to access bank information via personal computer;
oftentimes this software is integrated with other on-line services.
These EFT services use electronic communication as a fast, convenient,
and sometimes less costly means of communication with the consumer.
Electronic communication, for purposes of this discussion, means an
electronically transmitted text message between a financial institution
and a consumer's home computer or other electronic device possessed by
the consumer.
Under Regulation E, certain disclosures (such as initial
disclosures and periodic statements) must be provided to consumers (1)
in writing, (2) in a clear and readily understandable form, and (3) in
a form that the consumer may keep. In the context of home banking and
similar services, financial institutions have asked whether they may
satisfy these requirements by providing the information electronically,
for example, through a consumer's personal computer.
Are Electronic Communications ``Writings''
Many Regulation E disclosures must be provided to consumers in
writing. A writing, up to the present, has typically been presumed to
mean a paper document. Information that is produced,
[[Page 19697]]
stored, or communicated by computer too is generally considered to be a
writing, at least where text is involved. Indeed, in many office
environments in the United States today, documents are produced,
edited, revised, and communicated to others within the organization by
the use of computers and electronic mail, and these documents are
considered written documents when kept in electronic form as well as
when printed on paper. Similarly, under other laws that call for
information to be in writing, information in electronic form is
considered to be ``written.''
Communications by telephone (including voicemail systems) are
typically characterized as oral communication as they do not have the
feature generally associated with a writing--visual text. Therefore,
pursuant to its authority under section 904(c) of the EFTA, the Board
proposes to permit financial institutions to use an electronic
communication where the regulation calls for information to be provided
in writing, but to limit the scope of the term ``electronic
communication'' to a communication in a form that can be displayed as
visual text. An example would be an electronic message that the
receiver could display on a screen (including a computer monitor or a
screen phone).
Clear and Readily Understandable Form
Regulation E requires financial institutions to provide required
information in a clear and readily understandable form. Some means of
displaying an electronic communication appear to meet this standard;
for example, a personal computer monitor should allow the consumer to
read the text of a disclosure. Others may not have this capability; a
screen phone, for example, may display only a few lines of text at a
time, making it difficult for a consumer to review initial disclosures
or a periodic statement, where it may be necessary to move back and
forth between various parts of the document. The Board believes that
the requirement for clear and readily understandable disclosures
applies fully to electronic communications. The Board requests specific
comments on the likelihood and extent of compliance problems that could
be caused by this requirement, as well as suggestions for resolving
such problems.
Retainability
The act and regulation establish a retainability requirement. In
general, if information must be provided in writing, Regulation E
requires that the information must be in a form that the consumer may
retain.
Consumers with home banking systems will most likely have the
ability to download information, print it out, and store it on a
computer disk for later retrieval. The responsibility to provide EFTA
information in a retainable form belongs to the financial institution.
Still, the Board recognizes that to satisfy the retainability
requirement for electronic communications, financial institutions will
have to rely on the consumer's having the capability to download data.
The Board believes that where a consumer has agreed to receive
information electronically, the financial institution should be deemed
to satisfy the retention requirement by making information available
for downloading, provided some consumer safeguards are established. In
the event of printer malfunctions and other unforeseen computer
problems, for instance, the consumer may be precluded from effectively
retaining an electronic message received from a financial institution.
The Board proposes to amend Regulation E to provide that if a
financial institution uses electronic communication to send information
that is required to be in writing, the consumer may request a paper
copy of the information within one year after receipt of the electronic
communication. Commenters are asked to address whether this is an
appropriate time period, and if not, to offer suggestions for an
alternative.
The Board also solicits comment on possible alternatives to
providing a paper copy upon request to consumers. One such means might
be for a financial institution to maintain the information in data
storage and re-send the information electronically to a consumer whose
computer facilities were temporarily inoperable.
Some electronic messages from a consumer to an institution trigger
the need for a response from the institution. For example, an oral or
written notice of error from a consumer requires the institution to
investigate and resolve the error within a specified period. Some
financial institutions have indicated that in accepting electronic
communications from consumers, they may want to require paper
verifications, for their own and the consumer's protection. For
example, Regulation E provides that a consumer may stop payment of a
preauthorized electronic fund transfer by notifying the institution
orally or in writing, and that the institution may require written
confirmation of an oral stop-payment order. If an institution accepts
an electronic stop-payment order, the institution might want to require
confirmation of the order in paper form, to make sure that a
preauthorized payment is not dishonored by mistake.
The Board believes that (as in the case of an oral communication)
if the consumer sends an electronic communication to the institution,
the institution could require a confirmation from the consumer in paper
form. Comment is requested, however, on whether and how the regulation
should address this point.
Electronic communication between financial institutions and
consumers could also be used in contexts other than home banking. For
example, a consumer who possesses a modem-equipped personal computer
may wish to send and receive information required by Regulation E about
an EFT service used by the consumer, such as debit card access to the
consumer's account. The proposal covers this situation. The Board
solicits comment on whether the regulation should, as proposed, permit
electronic communication to substitute for paper disclosures and other
required paper messages for EFT services other than home banking, or
should limit electronic communication to home-banking services.
Error Resolution for New Accounts--Section 205.11
Regulation E requires a financial institution to investigate and
resolve a consumer's claim of error within specified time limits. An
institution generally is expected to resolve the alleged error within
ten business days after receiving a notice of error. If the institution
needs more time, it must provisionally credit the consumer's account
and resolve the error no later than 45 calendar days after receiving
the notice.
In the course of commenting on the Board's 1994 proposal to revise
Regulation E, some institutions requested that the Board use its
exception authority under the statute either (1) to exempt new accounts
from the requirement to provisionally credit the account by the tenth
business day or (2) to extend the time period for resolving errors.
Commenters expressed concern about individuals who open a new
account with the intent to defraud. Such individuals may open an
account, immediately withdraw all or a large amount of the funds
through ATMs, and file a claim with the financial institution disputing
the ATM transactions. Often they receive provisional credit because of
the financial institution's inability to
[[Page 19698]]
research the claim (such as by obtaining photographic evidence from ATM
cameras) within ten business days. At that point, the individual
immediately withdraws the funds that were provisionally credited and
abandons the account. Commenters believe that having more time to
investigate errors involving new accounts would enable institutions to
limit their losses and control this type of fraud.
Some commenters pointed to the Board's exception for new accounts
under Regulation CC, which implements the Expedited Funds Availability
Act. There, the regulation extends the time within which an institution
is required to make funds available to a customer for new accounts.
Regulation CC defines a new account as an account during the first 30
calendar days after the first deposit to the account is made.
The Board proposes to amend Regulation E, pursuant to its section
904(c) authority to provide for adjustments and exceptions in the
regulation, to extend the time periods for resolving errors that
involve new accounts. The proposal would allow 20 business days for
resolving an error before an institution is required to provisionally
credit, and an outside limit of 90 calendar days for resolving the
claim. Comment is solicited on the proposed extensions of time, on the
30-day definition for new accounts, and on whether consumer protections
relating to error resolution would be adversely affected.
Stored-Value Systems--Section 205.16
Over the past few years the financial services industry has shown
increasing interest in providing ``stored-value cards'' (also referred
to as prepaid or value-added cards) to consumers. These cards maintain,
typically in a computer chip or magnetic stripe, a ``stored value'' of
funds available to the consumer for access primarily at retail
locations. The balance recorded on the card is debited at a merchant's
POS terminal when the consumer makes a purchase.
Products that could be characterized broadly as ``stored-value''
cover a wide range. In their simplest form, stored-value systems are
targeted at low-value uses (public transit, pay telephones, or
photocopiers, for example); the amount that can be stored on the card
is limited; and the card is disposed of once its value has been used
up. These cards typically have a single type of use, and only one card
issuer and one entity (likely to be the same as the issuer) that
accepts the card as payment for goods or services.
More sophisticated systems can involve large transactions and
permit consumers to store value in the hundreds of dollars on a card.
The cards may have multiple uses, and there may be multiple card
issuers and multiple card-accepting merchants. The cards may allow the
consumer to obtain cash from ATMs instead of, or in addition to, making
purchases. At least one system (now in the pilot stage) would enable
the consumer to transfer stored-value balances to another person's
card. Some systems would provide access to funds in foreign currencies.
Cards tend to be reloadable, allowing the consumer to load value onto
the card, for example, by withdrawing funds from an account at a
depository institution through a teller, via an ATM, or, potentially,
via a specially-equipped telephone. Some systems are designed as stand-
alone products. In other cases, stored-value features may be added to
debit or credit cards. Some of these more sophisticated stored-value
systems are in operation as pilot programs or are under development by
financial institutions or associations of institutions.
Colleges and universities are increasingly adding a stored-value
feature to student identification cards, so that students can make
purchases at campus locations such as cafeterias, bookstores, and
vending machines. In some cases, the educational institution is both
the issuer and the only card-accepting entity; in others, the card is
also accepted by off-campus merchants. In addition to the stored-value
features that some student card systems may have, these systems may
operate with student asset accounts maintained by the university or by
a depository institution on behalf of the university; these accounts
are covered by Regulation E.
There are significant differences among proposed systems in the
manner that they handle balances and transaction data. Some systems
operate off-line, with transaction approval and data retention
occurring only at the merchant level. The balance of available funds
may be stored only on the card itself as transactions occur, and
transactions neither require nor receive authorization from a central
database. The data for a given transaction are kept at the merchant
location, and are not forwarded to the central data facility. Only the
aggregate amount for a batch of transactions is transmitted by the
merchant (usually daily) so that the merchant can receive appropriate
credit from a financial institution. In other off-line systems, the
dollar value remaining on the card is stored both on the card and in a
central data facility. Data for individual transactions are transmitted
to the central data facility, typically at the end of each business
day, and maintained there. Still other systems operate on-line, and
transactions are authorized by communication between a terminal and a
central database.
Status of Stored-Value Cards Under the EFTA
In 1994, the Board issued proposed revisions to Regulation E under
the Board's Regulatory Planning and Review program. At that time, the
Board generally requested comment on whether, and the extent to which,
the regulation should apply to stored-value cards. The Board made clear
that a transaction involving such cards is covered by Regulation E when
the transaction accesses a consumer's account (such as when value is
``loaded'' onto the card from the consumer's deposit account via an
ATM). Among the commenters that addressed this issue, many asked the
Board to provide an exemption from Regulation E for stored-value cards
and other stored-value products so as not to hinder their development
or, alternatively, to modify the requirements applicable to them.
Legislation introduced and still pending in the Congress would
exempt stored-value cards and other stored-value products from the EFTA
and Regulation E. (H.R. 2520, 104th Cong., 1st Sess., Sec. 443; S. 650,
104th Cong., 1st Sess., Sec. 601 (1995).) The Board has suggested in
congressional testimony that, while certain provisions of Regulation E
should not apply, it would be appropriate to first examine basic issues
raised by these new payments systems before legislating a blanket
exemption from the EFTA. The Board mentioned terminal receipts and
periodic statements as examples of requirements that should not apply,
but suggested that consumers might benefit from receiving initial
disclosures (such as disclosure of a consumer's risk for unauthorized
transactions), a requirement that would likely entail minimal added
expense for card issuers.
Coverage Issue
Coverage of stored-value systems under the EFTA and Regulation E
depends on whether a stored-value transaction involves an EFT from a
consumer's asset account. The act defines an ``electronic fund
transfer'' as a transfer of funds initiated through electronic means
(such as an electronic terminal or a computer) that results in a debit
or credit to an account. Stored-value transactions involve a transfer
of funds and are carried out through
[[Page 19699]]
electronic means--namely, terminals in retail locations that read the
magnetic strip or chip embedded in the card.
The act defines ``account'' as a demand deposit, savings, or other
``asset account''--as described in regulations of the Board--that is
established primarily for personal, family, or household purposes.
Asset accounts are not limited to traditional checking and other
deposit accounts. For example, the term includes a consumer's money
market mutual fund or other securities account held by a broker-dealer.
The Board also interprets the term ``account'' to include accounts
established by government agencies under electronic benefit transfer
(EBT) programs (59 FR 10678, March 7, 1994).
The legislative history of the act provides guidance as to the
Board's regulatory authority under the EFTA for determining issues of
coverage. Senate Banking Committee reports noted that the ``definitions
of `financial institution' and `account' are deliberately broad so as
to assure that all persons who offer equivalent EFT services involving
any type of asset account are subject to the same standards and
consumers owning such accounts are assured of uniform protection.'' (S.
Rep. No. 915, 95th Cong., 2d Sess. 9 (1978).) This concept is captured
in section 904(d) of the EFTA, which provides that if EFT services
``are made available to consumers by a person other than a financial
institution holding a consumer's account, the Board shall by regulation
assure that the disclosures, protections, responsibilities, and
remedies created by this title are made applicable to such persons and
services.''
Further, section 904(c) provides that the rules issued by the Board
``may contain such classifications, differentiations, or other
provisions * * * as in the judgment of the Board are necessary or
proper to effectuate the purposes of this title, [or] to prevent
circumvention or evasion thereof. * * *'' Senate Banking Committee
reports on two separate bills, in discussing section 904(c), stated
that ``since no one can foresee EFT developments in the future,
regulations would keep pace with new services and assure that the act's
basic protections continue to apply.'' (S. Rep. No. 915, 95th Cong., 2d
Sess. 10 (1978).)
Types of Stored-Value Systems
In some stored-value systems, the balance of funds available is
recorded on the card, but is also maintained at a central data facility
at a bank or elsewhere. The systems operate off-line; there is no
authorization of transactions by communication with a database at a
financial institution or elsewhere. Transaction data are periodically
transmitted to and maintained by a data facility. As in the case of the
traditional consumer deposit account accessed by a debit card, in these
stored-value card systems a consumer has the right to draw upon funds
held by an institution. The maintenance of a record of value and of
transactions for a given card apart from the card itself--so that
transactions are traceable to the individual card--strongly parallels
the functioning of a deposit account. The Board believes that the facts
support a finding that such systems involve an account for purposes of
the EFTA. These systems are referred to below as ``off-line accountable
stored-value systems.''
In another type of stored-value system that also operates off-line,
the record of value is maintained only on the card itself, and not in a
central database. Transaction data for debits to the card's ``stored
value'' are recorded on the card and captured at merchant terminals
(where they are maintained for a limited period of time). Only the
aggregate amount of transactions for a given period is transmitted by
the merchant to a financial institution or other entity so that the
merchant can receive credit. Given the lack of a centrally maintained,
ongoing record of individual card balances or of transaction data in
these systems, it is more difficult to conclude that an ``account''
exists for purposes of Regulation E. These systems will be referred to
below as ``off-line unaccountable stored-value systems.''
A third type of stored-value system operates in a manner that is
the functional equivalent of using a debit card to access a traditional
deposit account. Notably, this type of system involves on-line access
to a database for purposes of transaction authorization and data
capture. That is, when the card is used at an ATM or a POS terminal,
the transaction is authorized by means of on-line communication with
the data facility, where the transaction data are stored (including
information such as merchant identification, amount, date, and card
number). The balance of funds available to the consumer is not recorded
on the card itself, as in off-line stored-value systems; instead, the
balance information is maintained in the data facility. Two
distinctions between these systems and traditional deposit accounts
accessed by debit card are (1) the value associated with a card is
limited to the amount that the cardholder has chosen to make accessible
through the card (as opposed to a deposit account accessed by debit
card, where the entire account is accessible and funds available may
fluctuate); and (2) the value associated with the card is accessible
only through use of the card itself (in contrast to deposit accounts
accessible by debit card, which typically may be accessed through
various means, including check, withdrawal slip, ACH, or telephone bill
payment).
The Board believes these systems--which are referred to as ``on-
line stored-value systems''--meet the definition of a consumer asset
account, and thus are covered by Regulation E, based on their on-line
operation and extensive data capture and retention. As discussed below,
however, the Board also believes it is appropriate to propose modifying
the rules applicable to these systems.
Modifications and Exceptions for Various Types of Stored-Value Systems
The discussion that follows is organized to address separately each
of the three types of systems described above--off-line accountable
stored-value systems, off-line unaccountable stored-value systems, and
on-line stored-value systems. The Board notes that, in all three types
of systems, a transaction in which a stored-value card is used to
access a consumer's deposit account, such as ``reloading'' the card by
drawing on the consumer's checking account at an ATM, is covered by
Regulation E and subject to all Regulation E requirements. The
discussion below, therefore, relates to transactions in which value
stored on a card is drawn down to obtain cash or purchase goods or
services.
A. Off-line ``Accountable'' Stored-Value Systems
To the extent that off-line accountable stored-value systems are
similar to systems involving debit cards and traditional deposit
accounts, parallel consumer protections under Regulation E may be
appropriate. If these stored-value systems were to be covered by all
requirements of Regulation E, however, their further development could
be seriously slowed or even halted in some cases. The following
discussion presents an analysis of the major provisions of Regulation
E, including the compliance burdens to financial institutions and the
benefits to consumers associated with each.
1. Restrictions on unsolicited issuance of access devices.
Generally Regulation E prohibits issuing a debit card, personal
identification number (PIN), or other ``access device'' to a consumer
(for example, by mail) unless the consumer has requested the device,
orally or in writing. The purpose is to avoid making
[[Page 19700]]
consumers' accounts accessible by a means that consumers may not want
and that may subject them to added risk, and to reduce the likelihood
of unauthorized transactions from interception of cards. There is a
qualified exception, for an access device that is not ``validated''
(meaning usable) at the time of issuance and that the issuer will
validate only upon request by the consumer and verification of the
consumer's identity.
As a practical matter, most providers of stored-value products will
likely issue stored-value cards only to consumers who request them.
Some may choose to promote their product by targeting populations and
sending unsolicited cards with small amounts of ``free money'' on the
card. Such a practice would not appear to harm consumers, since there
would be no access to the consumer's own deposit-account funds.
Application of the unsolicited issuance rules to off-line
accountable stored-value cards (aside from those that could access a
consumer's existing deposit account, where the rules already apply)
appears unnecessary for consumer protection. The Board proposes to
exclude off-line accountable stored-value cards from the Regulation E
rules on unsolicited issuance, but solicits specific comment on whether
there is any practical need for the rules to apply.
2. Initial disclosures. Regulation E requires that at the time a
financial institution and a consumer enter into an agreement for an EFT
service, the institution must disclose certain terms and conditions.
Items to be disclosed include a summary of the consumer's liability for
unauthorized transfers, error-resolution procedures, any limits on the
frequency or dollar amount of transfers, and any fees or charges for
individual transfers or for the service.
Without the disclosure of terms and conditions, consumers might
regard off-line accountable stored-value products as comparable to
debit or credit cards, and thus might expect similar rights and
remedies to apply. This could be particularly likely if the stored-
value feature were made part of the consumer's debit or credit card, or
if a consumer could use the card for transactions in the same locations
where debit or credit card transactions take place.
Financial institutions that provide stored-value products may
disclose certain information voluntarily; however, the disclosures that
they opt to give could vary considerably. Requiring disclosures under
Regulation E would ensure that uniform information is given to
consumers. Such disclosures would be useful in alerting consumers to
important features of these new services, such as transaction charges
and risk of loss for lost or stolen cards.
Providing initial disclosures would probably not impose significant
compliance costs. The disclosures can be given along with the card or
other account-opening material in a preprinted format; they need not be
individually customized for each account. Accordingly, the Board
proposes to amend Regulation E to require initial disclosures for off-
line accountable stored-value systems.
The proposed amendment would not include all the items generally
required to be disclosed under Regulation E, but only those that appear
relevant to off-line accountable stored-value systems. These include
the disclosures of consumer liability for unauthorized transactions;
the types of transfers available; transaction charges, if any; and
error resolution procedures available to the consumer, if any. The
disclosure of consumer liability for unauthorized transactions would
expressly state that the consumer bears the full risk of loss (if such
is the case), or would state any limits on liability that might be
adopted by agreement with the consumer.
3. Change-in-terms notices. Under Regulation E, if terms or
conditions required to be disclosed (such as limits on transfers, or
transaction fees) were to change from those initially in effect, the
institution must generally notify the consumer at least 21 days before
the effective date of the change.
Whether change-in-terms notices are relevant for off-line
accountable stored-value products depends on whether contract terms
applicable to the card are likely to change. If there are increases in
transaction charges, for instance, it is reasonable for consumers to be
informed of the increase before it takes effect. (It appears that,
currently at least, charges are not imposed on stored-value
transactions.) But issuers of some of these products may not expect to
have an ongoing relationship with the consumer, and thus may not
typically obtain an address at the time the consumer purchases the
card. In some cases, stored-value cards are freely transferrable; even
if the card issuer has the address of the original cardholder, the
issuer may not have the address of a subsequent holder. If the value
stored on the card is likely to be used within a short period, it is
also probable that new transaction charges would not be imposed or
charges increased during its lifetime.
The Board believes that the potential costs of having to comply
with the change-in-terms notice requirement outweighs the consumer
protections that would be afforded by such notices and proposes to
exempt off-line accountable stored-value systems from this requirement.
The Board specifically solicits comment on whether there might be
circumstances in which the notice requirement should apply.
4. Transaction receipts and periodic statements. For an EFT
initiated at an ATM or a POS terminal, Regulation E requires that a
transaction receipt be made available to a consumer. The receipt must
show the date, amount, type of transaction and account, card or account
number, terminal location, and name of any third party (such as a
merchant) involved in the transfer. The regulation also requires
periodic account statements, generally monthly, that detail largely the
same information as on terminal receipts and provide other information
such as opening and closing account balances and fees or charges
assessed during the statement period. These receipts and periodic
statements allow consumers to verify account activity and to detect
unauthorized transactions and errors, so that they can be reported and
resolved.
For off-line accountable stored-value products, documentation
requirements could present compliance difficulties and considerable
costs, while providing only limited benefits to consumers. In some
cases, receipts may be given whether or not required by Regulation E. A
retailer that accepts debit cards must provide receipts under
Regulation E for debit card transactions, and therefore might provide
receipts for stored-value card transactions as well. But if the card
can be used at places not equipped with printers (such as vending
machines), to require receipts would necessitate a retrofitting of
terminals and would impose ongoing compliance costs. Moreover, for
small or commonly-made transactions, many consumers may not want or
need a receipt.
The requirement for periodic statements too may present compliance
problems for some off-line accountable stored-value systems. In some of
these systems, transaction data are collected in centralized data
facilities, not by the card-issuing financial institutions. Given that
lack of data, providing periodic statements would be costly and could
impede the development of stored-value products. Moreover, as in the
case of receipts, for small or commonly-made transactions on these
cards, consumers may not need or want documentation on a periodic
statement.
[[Page 19701]]
The Board believes that the consumer benefits of terminal receipts
and periodic statements--in the context of stored-value transactions--
may be somewhat limited and be outweighed by the compliance costs.
Consequently, the Board proposes to exempt off-line accountable stored-
value systems from these requirements.
5. Limitations on consumer liability for unauthorized transfers.
Regulation E generally limits a consumer's losses for unauthorized EFT
debits to a maximum of $50. If the consumer fails to notify the
financial institution of the loss or theft of a debit card or other
``access device'' within two business days of learning of the loss or
theft, the consumer's potential liability rises to $500. If the
consumer fails to notify the institution of unauthorized transfers
appearing on a periodic statement within 60 days after the institution
sent the statement, the consumer's liability for any further
unauthorized transfers is unlimited.
Absent Regulation E's limits on liability, stored-value cardholders
bear the entire risk unless the issuer opts to assume some part of it
(or offers insurance to consumers against losses). If the regulatory
liability limits applied, the risk would be imposed on the issuer,
because these systems operate off-line and will not typically require
PIN-protection or any other means of identifying the consumer. Without
PIN-protection there is an almost certain likelihood that lost or
stolen cards could and would be used.
Some off-line accountable systems could conceivably store negative
files at merchant POS terminals for blocking unauthorized transactions.
Thus, they might be able to prevent unauthorized use, assuming a
consumer promptly reported loss or theft of the card. But many systems
do not have this capability. In addition, even for those that could,
the cost of transmitting negative files to terminals frequently enough
to effectively block unauthorized transactions could be prohibitive.
Arguably, the lack of PIN-protection in these systems may lead
consumers to be more careful in handling the cards. Consumers might act
more prudently if initial disclosures were provided, explaining the
risk. In addition, if loss does occur, the amount stored on the card
may be substantially less than would typically be at risk with the loss
or theft of a traditional debit card, where the deposit account may
serve several purposes (as a repository for savings or for paying
bills, for instance), and thus may tend to have a larger account
balance.
In light of these factors, the Board proposes to exempt off-line
accountable stored-value cards from the liability provisions. Under the
proposal, the initial disclosures given to consumers would summarize
the full extent of their risk.
6. Error resolution procedures. Regulation E requires financial
institutions to investigate and resolve claims of error made by
consumers within specified times--generally, no later than ten business
days after receiving the consumer's notice of error; or 45 days after
the notice if the institution provisionally credits the consumer's
account, in the amount of the claimed error, within ten business days.
A summary of these procedures is given to consumers with the initial
disclosures, and consumers also receive an annual notice as a reminder.
``Error'' includes an unauthorized electronic debit, a transaction in
an incorrect amount, and failure to provide required identification of
transactions.
Prompt resolution of errors is an important consumer protection,
but the detailed procedures prescribed by the act and regulation pose a
potentially difficult compliance problem for off-line accountable
stored-value systems. Investigation and resolution of errors in
accordance with Regulation E would be complicated and costly.
After weighing the potential costs against the consumer's need for
these protections, the Board proposes to exempt off-line accountable
stored-value systems from application of the error resolution
procedures and also from the related requirement to mail an annual
notice describing them. Initial disclosures would inform consumers that
they bear the full risk of loss in case of lost or stolen cards, if
that is the case, and would summarize any error resolution procedures
available.
The Board requests specific comment on whether, alternatively, some
minimal error resolution procedures should be required. For example, an
error within the financial institution's control, such as one resulting
from a malfunctioning card, may not be unduly difficult to correct.
Commenters are also asked to address whether, if no error resolution
requirements are imposed, the initial disclosures should include a
statement that there are no error resolution procedures available to
the consumer.
7. De minimis exclusion. In addition to the modifications presented
above, the Board proposes a de minimis exclusion for off-line
accountable stored-value systems based on the maximum balance that can
be stored on the card or other device. For a stored-value product
limited to a relatively small amount of funds, the amount at risk would
be sufficiently minimal that application of even modified Regulation E
protections appears unnecessary. This provision would apply to off-line
accountable devices that are limited to a maximum of $100 at a given
time; such devices would be completely exempt from Regulation E.
B. Off-line ``Unaccountable'' Stored-Value Systems
As described above, off-line unaccountable stored-value systems are
those in which the card balances and transaction data are maintained
only on the card itself. Transaction data may be maintained for a
limited time at merchant terminals, but are not captured or maintained
by the issuer or a central database. Photocopier cards and farecards
for the mass transit systems in some cities are examples of such cards.
Under the proposed amendments, off-line unaccountable stored-value
systems would not be covered by Regulation E. The proposed amendments
do not provide an explicit exemption; instead, the definitions of
systems that would be covered under the proposal do not capture off-
line unaccountable systems.
Most off-line unaccountable systems currently involve small dollar
amounts and a single use, such as paying transit fares. Other proposed
systems, however, could involve substantially larger transaction
amounts and maximum card values, and could have multiple uses. These
features may make such a system more comparable to traditional debit
cards than the small-value cards, in terms of potential uses by
consumers. This being the case, the Board could consider whether to
exercise its authority under the EFTA (to provide uniform protections
for all equivalent consumer EFT services) by proposing to bring off-
line unaccountable systems within the coverage of the act. If the
requirements applicable to off-line unaccountable stored-value systems
were the same as those that the Board is proposing with regard to off-
line accountable systems--initial disclosures, with an exemption for
card values of $100 or less--compliance would not be particularly
costly or difficult. Since the concern about consumer protection would
exist primarily for systems that store substantial amounts on a card,
any proposal could be framed in terms of covering only those cards with
a maximum value of more than a certain amount.
Although some off-line stored-value systems that permit larger
maximum card values may fall within the
[[Page 19702]]
unaccountable category, it is not clear that such systems would operate
in this manner at all times and with respect to all transactions. As
systems are further developed, they could evolve into systems that
capture and maintain some transactions in a location other than on
cards and at merchant terminals. If so, the Board believes such systems
could be characterized as off-line accountable, rather than off-line
unaccountable, systems, and thus would be subject to the same set of
rules.
There is some risk that the application of Regulation E to off-line
accountable stored-value systems, but not to off-line unaccountable
systems, could act as an incentive for developers of stored-value
systems to structure systems as unaccountable in order to avoid being
covered under the regulation. It is not desirable to have system design
be guided by regulatory rather than economic considerations. However,
the requirements applicable to off-line accountable systems--initial
disclosures--are so minimal when compared to other factors that could
affect system design (for example, the transaction data collected in
accountable systems may be useful for various purposes including fraud
detection and marketing) that it seems unlikely the potential for
coverage by Regulation E would have much impact.
On balance, the Board believes that it is preferable to state that
off-line unaccountable cards are not covered by Regulation E. The Board
solicits specific comment, however, on whether the distinction between
off-line accountable and off-line unaccountable systems (especially
high-value ones) reaches the right result, in light of the
considerations discussed above, and accordingly on whether the Board
should consider coverage of off-line unaccountable systems, under very
limited requirements such as initial disclosures. The Board also
solicits comment on whether, if Regulation E coverage were extended to
off-line unaccountable systems, it would be preferable in defining the
scope of coverage to focus on the value capable of being stored, on
whether the system has multiple uses, or on both of these features.
C. ``On-line'' Stored-Value Systems
The third type of stored-value system in some respects resembles
off-line accountable stored-value systems, and in others resembles
traditional deposit accounts accessed by debit cards. As in off-line
accountable stored-value systems, data about individual card balances
and transactions (including merchant identification, amount, date, and
card number) are collected and maintained at centralized locations; and
the value associated with a card is limited to an amount that the
consumer chooses, not a fluctuating balance in the consumer's checking
or savings account.
As in traditional deposit accounts accessed by debit cards, these
stored-value systems operate on-line. When a card is used at an ATM or
a POS terminal, the transaction is authorized by means of on-line
communication with a financial institution or central data facility.
The balance of funds available to the consumer is not recorded on the
card itself, as in off-line stored-value systems; instead, the balance
information is maintained only at the data facility. In this respect
too, an on-line stored-value system is the functional equivalent of a
deposit account accessed by a debit card, and thus can be viewed as
representing a consumer asset account for Regulation E purposes,
subject to coverage by the regulation.
In general, compliance with Regulation E requirements does not
appear to be a significant problem. For example, because these systems
operate on-line, they are designed to block unauthorized access, and
compliance with the limitations on consumer liability for unauthorized
transactions should not be more burdensome than for a traditional
deposit account accessed by debit card. However, a few exceptions from
particular provisions of Regulation E may be appropriate, as presented
below.
1. Exceptions for periodic statements and annual error resolution
notices. Regulation E requires statements that detail account activity.
In some on-line stored-value systems, cards are not reloadable, but
instead are meant to be discarded after the funds associated with the
card are drawn down to zero. For example, a consumer may purchase a
card for use on a trip of a few weeks, and draw down all value tied to
the card within that time. In such cases, the potentially short-term
nature of the product and the lack of an ongoing account relationship
may make periodic statements unnecessary.
As an alternative to the periodic statement requirement, an issuer
could provide account balances and account histories upon request, for
the preceding one or two months. This treatment would parallel the
exception adopted by the Board under the rules applicable to EBT
systems. (See 59 FR 10678, March 7, 1994, codified at 12 CFR
Sec. 205.15.) This alternative documentation would not appear to be
unduly burdensome, because cardholders who have used up the value
associated with the card will presumably not request an account
history. For similar reasons, the Board believes that it would be
appropriate to propose exempting these systems from the requirement to
send annual notices summarizing error resolution procedures. Again, if
the card is used and discarded within a year, this annual notice would
serve little purpose.
It may also be appropriate to propose an exemption from the
periodic statement requirement for on-line stored-value systems
involving cards that are reloadable. Since the stored value is
accessible only through use of the card itself (not, for example, by
check), then periodic statements may be unnecessary. If a consumer
receives a receipt for each transaction, periodic statements may not be
needed even if the relationship between the consumer and the issuer is
ongoing. If the consumer needed to check on recent account
transactions, the consumer could request the issuer to provide an
account history.
There may be less reason to exempt reloadable on-line cards from
the annual error resolution notice requirement. If a card issuer has an
ongoing relationship with the consumer, sending the annual notice does
not seem burdensome. However, extending the exemption to both
requirements--periodic statements and the annual error notice--
regardless of whether a card is reloadable, would avoid making the
proposed rule overly complex.
Accordingly, the Board proposes to provide that on-line stored-
value systems are not subject to (1) the periodic statement
requirement, but may instead provide the account balance and
transaction history to the cardholder upon request; or (2) the
requirement for an annual reminder of error resolution procedures. The
Board solicits comment on whether the proposed modifications should be
different for on-line stored-value cards that are reloadable.
2. Change-in-terms notices. Under Regulation E, if terms or
conditions required to be disclosed (such as limits on transfers, or
transaction fees) were to change from those initially in effect, the
institution must generally notify the consumer at least 21 days before
the effective date of the change.
For the reasons discussed in connection with off-line accountable
stored-value products, the Board believes that the change-in-terms
notice requirements need not apply to on-line accountable stored-value
products and, accordingly, proposes to exempt them from this
requirement. Specific comment is solicited on whether there
[[Page 19703]]
might be circumstances in which the notice requirement should apply.
3. De minimis exclusion. Some on-line stored-value systems may make
relatively small amounts accessible through use of the card. For
example, a number of prepaid telephone card systems apparently operate
on-line. As in the case of off-line accountable stored-value systems,
if the amount associated with a consumer's card is limited to a
relatively small amount, application of Regulation E protections such
as the limitation on the consumer's liability for unauthorized
transactions seems less important. And if transaction amounts are on
average quite small (as is likely to be true if the maximum amount on a
card is low), the cost impact of Regulation E compliance would be
proportionately greater than for systems involving large transactions.
For these reasons, the Board proposes to exempt on-line stored-value
systems completely from coverage under Regulation E if the maximum
amount that can be associated with a card is limited to $100.
Computer Network Payment Products
Parallel to the development of stored-value card products, there
has been an increasing interest in other products that might adopt
stored-value concepts. Systems are being proposed, for example, for
making payments over computer networks, such as the Internet. In these
cases, a balance of funds could be accessed via a consumer's personal
computer, and transferred or used in purchases via a computer network.
As in the case of card-based products, there is a range of network
payment products in operation or under development.
Some of these network payment products involve on-line access to a
consumer account in a financial institution, and thus are fully subject
to Regulation E. Other products may involve various procedures for
authorizing and carrying out transactions, and may or may not be
subject to the regulation. The Board requests specific comment on the
extent to which the Board should consider proposing that Regulation E
apply to various types of network payment products. In general, the
Board believes that the same principles should apply to network payment
products as to stored-value card products in analyzing coverage under
Regulation E. For example, the Board might consider applying a de
minimis exemption to network payment products in the same way the Board
is proposing for stored-value card products.
Summary of Proposed Amendments for Stored-Value Systems
To summarize, with respect to stored-value systems, the Board
proposes to amend Regulation E to:
(1) Exempt completely from Regulation E off-line unaccountable
stored-value systems;
(2) Exempt completely from Regulation E both off-line accountable
stored-value systems and on-line stored-value systems if the maximum
amount that can be stored on or associated with a card at any given
time is $100 or less;
(3) Establish modified requirements for coverage of off-line
accountable stored-value systems, applying only the requirements
relating to initial disclosures; and
(4) Modify the requirements applicable to on-line stored-value
systems, under which such systems would not be subject to (a) the
periodic statement requirement, if an account balance and a summary of
recent transactions is provided upon request; (b) the annual error
resolution notice requirement; or (c) change-in-terms notices.
III. Form of Comment Letters
Comment letters should refer to Docket No. R-0919. The Board
requests that, when possible, comments be prepared using a standard
courier typeface with a type size of 10 or 12 characters per inch. This
will enable the Board to convert the text into machine-readable form
through electronic scanning, and will facilitate automated retrieval of
comments for review. Comments may also be submitted on computer
diskettes, using either the 3.5'' or 5.25'' size, in any DOS-compatible
format. Comments on computer diskettes must be accompanied by a paper
version.
IV. Regulatory Flexibility Analysis
In accordance with section 603 of the Regulatory Flexibility Act
and section 904(a)(2) of the EFTA, the Board's Division of Research and
Statistics has prepared an economic impact statement on the proposed
regulation. A copy of the analysis may be requested from Publications
Services, Board of Governors of the Federal Reserve System, Washington,
DC 20551, or by telephone at (202) 452-3245.
V. Paperwork Reduction Act
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 collection of
information should be sent to the Office of Management and Budget,
Paperwork Reduction Project (7100-0200), 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
regulation are found in 12 CFR Part 205. This information would be
mandatory (15 USC 1693 et seq.) to ensure adequate disclosure of basic
terms, costs, and rights relating to electronic fund transfer (EFT)
services affecting consumers using certain stored-value cards or home-
banking services and consumers exercising their error resolution rights
under Regulation E. The respondents/recordkeepers are for-profit
financial institutions, including small businesses. Regulation E
applies to all types of financial institutions, not just state member
banks. However, under Paperwork Reduction Act regulations, the Federal
Reserve accounts for the burden of the paperwork associated with the
regulation only for state member banks. Other agencies account for the
Regulation E paperwork burden on their respective constituencies.
The Federal Reserve has no data on which to estimate the burden the
proposed requirements would impose on state member banks. With regard
to stored-value cards, there are as yet no such systems in full
operation in the United States, and only a few stored-value card pilot
projects. It is difficult to predict how many state member banks will
choose to offer these products and how many cards will be issued to
consumers. However, because the proposed amendments include a number of
exemptions for stored-value products from Regulation E requirements,
the proposed amendments could have the effect of reducing paperwork
burden, compared to what the burden would be without the amendments in
place.
The proposed amendments on the use of electronic communication in
home banking would likely reduce the paperwork burden of financial
institutions. Institutions offering home banking programs would be able
to use electronic communication to provide disclosures, periodic
statements, and other information required by Regulation E rather than
having to print and mail the information in paper form.
The proposed amendment relating to error resolution for new
accounts may reduce paperwork burden, because institutions may be able
to complete
[[Page 19704]]
error investigations within the longer time allowed under the proposal
(20 business days), rather than have to provisionally credit consumer's
accounts within ten business days and provide related notices to the
consumer, as is required currently under Regulation E.
The Federal Reserve requests comments from issuers, especially
state member banks, that will help to estimate the number and burden of
the various disclosures that would be made in the first year this
regulation is effective. Comments are invited on: (a) the cost of
compliance; (b) ways to enhance the quality, utility, and clarity of
the information to be disclosed; and (c) ways to minimize the burden of
disclosure on respondents, including through the use of automated
disclosure techniques or other forms of information technology.
List of Subjects in 12 CFR Part 205
Consumer protection, Electronic fund transfers, Federal Reserve
System, Reporting and recordkeeping requirements.
Text of Proposed Revisions
Certain conventions have been used to highlight the proposed
changes to Regulation E. New language is shown inside bold-faced
arrows, while language that would be removed is set off with brackets.
Pursuant to the authority granted in sections 904 (a), (c), and (d)
of the Electronic Fund Transfer Act, 15 U.S.C. 1693b (a), (c), and (d),
and for the reasons set forth in the preamble, the Board proposes to
amend 12 CFR Part 205 as set forth below:
PART 205--ELECTRONIC FUND TRANSFERS (REGULATION E)
1. The authority citation for Part 205 would be revised to read as
follows:
Authority: 15 U.S.C. 1693-1693r.
2. Section 205.4 would be amended by adding paragraph (c) to read
as follows:
Sec. 205.4 General disclosure requirements; jointly offered services.
* * * * *
(c) Electronic communication. (1) Definition. For
purposes of this part, the term electronic communication means an
electronically transmitted text message between a consumer and a
financial institution; in the case of a communication to the consumer,
the message shall allow text to be displayed on equipment in the
consumer's possession such as a modem-equipped personal computer or
screen telephone.
(2) Communication between financial institution and consumer. (i)
By agreement between a financial institution and a consumer, either may
send to the other by electronic communication any information required
by this part to be provided orally or in writing. Information required
by this part to be in writing and sent to a consumer by electronic
communication shall be clear and readily understandable and shall be
provided in a manner that would allow a consumer to retain the
information.
(ii) If this part specifies that information be provided to the
consumer in writing, the consumer may request a paper copy of the
information up to one year after receiving the electronic
communication.
* * * * *
3. Section 205.11 would be amended by revising paragraph (c)(3), to
read as follows:
Sec. 205.11 Procedures for resolving errors.
* * * * *
(c) Time limits and extent of investigation. * * *
* * * * *
(3) Extension of time periods. The applicable time periods in this
paragraph (c)(3) are 20 business days in place of 10 business days, and
90 days in place of 45 days, if a notice of error involves an
electronic fund transfer that:
(i) Was not initiated within a state; [or]
(ii) Resulted from a point-of-sale debit card transaction;
or
(iii) Involves a new account during the first 30 calendar days
after the first deposit to the account is made.
* * * * *
4. A new section 205.16 would be added, to read as follows:
Sec. 205.16 Certain stored-value services.
(a) General. The rules in this section apply to stored-value
accounts as defined in paragraph (b) of this section.
(b) Definitions. For purposes of this section, the following
definitions apply:
(1) Off-line stored-value account means a balance of funds recorded
on a card that a consumer may use at electronic terminals to obtain
cash or purchase goods or services, where the record of such balance is
also maintained on a separate database, apart from the card, and where
on-line authorization of transactions is not required to access the
funds. Off-line stored-value accounts are subject to the requirements
in paragraph (d) of this section.
(2) On-line stored-value account means a balance of funds that may
be accessed only through the use of a card that a consumer may use at
electronic terminals to obtain cash or purchase goods or services,
where the record of such balance is maintained on a separate database,
and not on the card, and where on-line authorization of transactions is
required to access the funds. On-line stored-value accounts are subject
to the requirements in paragraph (e) of this section.
(3) Financial institution includes any person that, directly or
indirectly, holds an on-line or off-line stored-value account, or that
issues a card to a consumer for use in obtaining cash or purchasing
goods or services by accessing such an account.
(c) $100 exemption. A stored-value account, as defined in
paragraphs (b) (1) and (2) of this section, is exempt from the
requirements of this part if the maximum amount that may be in the
account at any given time is $100 or less.
(d) Modified requirements for off-line stored-value accounts;
initial disclosures. Stored-value accounts as defined in paragraph
(b)(1) of this section are subject only to the following initial
disclosure requirements of this part, as applicable:
(1) Liability of consumer. A summary of the consumer's liability,
under state or other applicable law or agreement, for unauthorized
transfers.
(2) Types of transfers; limitations. The type of electronic fund
transfers that the consumer may make and any limitations on the
frequency and the dollar amount of transfers.
(3) Fees. Any fees imposed by the financial institution for
electronic fund transfers or for the right to make transfers.
(4) Error resolution. A summary of the financial institution's
procedures for resolving errors concerning electronic fund transfers,
including the telephone number and address of the person or office to
be notified in the event of an error.
(e) Modified requirements for on-line stored-value accounts.
Stored-value accounts as defined in paragraph (b)(2) of this section
are subject to the requirements of this part, with the following
modifications:
(1) Exceptions; change-in-terms notice; error resolution notice.
The account is exempt from the requirements of Sec. 205.8.
(2) Alternative to periodic statement. A financial institution need
not furnish the periodic statement required by Sec. 205.9(b) if the
financial institution makes available to the consumer:
[[Page 19705]]
(i) The consumer's account balance, through a readily available
telephone line and at a terminal; and
(ii) A written history of the consumer's account transactions that
is provided promptly in response to an oral or written request and that
covers at least 60 days preceding the date of a request by the
consumer.
(3) Additional modifications. A financial institution that does not
furnish periodic statements, in accordance with paragraph (e)(2) of
this section, shall comply with the following special rules:
(i) Initial disclosures. The financial institution shall modify the
disclosures under Sec. 205.7 by disclosing:
(A) Account balance. The means by which the consumer may obtain
information concerning the account balance, including a telephone
number. This disclosure may be made by providing a notice substantially
similar to the notice in paragraph A-6 of Appendix A of this part.
(B) Written account history. A summary of the consumer's right to
receive a written account history upon request, in place of the
periodic-statement disclosure required by section 205.7(b)(6), and the
telephone number to call to request an account history. This disclosure
may be made by providing a notice substantially similar to the notice
in paragraph A-6 of Appendix A of this part.
(C) Error resolution. A notice concerning error resolution that is
substantially similar to the notice contained in paragraph A-6 of
Appendix A of this part.
(ii) Limitations on liability. For purposes of Sec. 205.6(b)(3),
regarding a 60-day period for reporting any unauthorized transfer that
appears on a periodic statement, the 60-day period shall begin with the
transmittal of a written account history provided to the consumer under
paragraph (e)(2) of this section.
(iii) Error resolution. The financial institution shall comply with
the requirements of section 205.11 in response to an oral or written
notice of an error from the consumer that is received no later than 60
days after the consumer obtains the written account history, under
paragraph (e)(2) of this section, in which the error is first
reflected.
5. Appendix A would be amended by adding an entry to the table of
contents at the beginning of the appendix and by adding a new paragraph
A-6, to read as follows:
Appendix A to Part 205--Model Disclosure Clauses and Forms
Table of Contents
* * * * *
A-6--Model Forms for On-Line Stored-Value Card Services
(Sec. 205.16(e)(3))
* * * * *
A-6--Model Forms for On-Line Stored-Value Card Services
(Sec. 205.16(e)(3))
(1) Disclosure of information about obtaining account balances
and account histories in on-line stored-value card service
(Sec. 205.16(e)(3)(i) (A) and (B))
You may find out about the balance remaining on your card by
calling [telephone number]. You can also learn your remaining
balance [by making a balance inquiry at an ATM] [on the receipt you
get when withdrawing cash from an ATM] [on the receipt you get when
making a purchase].
You also have the right to get a written summary of transactions
made with your card for the 60 days preceding your request by
calling [telephone number].
(2) Disclosure of error resolution procedures in on-line stored-
value card service (Sec. 205.16(e)(3)(i)(C))
In Case of Errors of Questions About Your Card Transactions
Telephone us at [telephone number] or Write us at [address] as soon
as you can, if you think an error has occurred involving a
transaction made with your card. We must hear from you no later than
60 days after you receive a written summary of transactions (which
you can request from us), showing the error. You will need to tell
us:
Your name and card number.
Why you believe there is an error, and the dollar
amount involved.
Approximately when the error took place.
If you tell us orally, we may require that you send us your
complaint or question in writing within 10 business days. We will
generally complete our investigation within 10 business days and
correct any error promptly. In some cases, an investigation may take
longer, but you will have the use of the funds in question after the
10 business days. However, if we ask you to put your complaint or
question in writing and we do not receive it within 10 business
days, we may not credit the funds in question back to the card
during the investigation.
If we decide that there was no error, we will send you a written
explanation within three business days after we finish our
investigation. You may ask for copies of the documents that we used
in our investigation.
If you need more information about our error resolution
procedures, call us at [telephone number] [the telephone number
shown above].
By order of the Board of Governors of the Federal Reserve
System, April 19, 1996.
William W. Wiles,
Secretary of the Board.
[FR Doc. 96-10181 Filed 5-1-96; 8:45 a.m.]
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