Pages 65017±65234 Vol. 60 12±18±95 No. 242 federal register December 18,1995 Monday announcement ontheinsidecoverofthisissue. For informationonbriefingsinWashington,DC,see Briefings onHowToUsetheFederalRegister 1 II Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995

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2 III

Contents Federal Register Vol. 60, No. 242

Monday, December 18, 1995

Administration on Aging Drug Enforcement Administration See Aging Administration NOTICES Applications, hearings, determinations, etc.: Aging Administration Koenig, Richard M., M.D., 65069–65071 NOTICES Grants and cooperative agreements; availability, etc.: Education Department Indian tribal organizations; supportive and nutritional RULES services for older Indians, 65063–65064 Federal family education loan program eligible borrowers; CFR correction, 65021 Agricultural Marketing Service NOTICES RULES Agency information collection activities under OMB Lime research, promotion, and consumer information order, review: 65019–65020 Proposed agency information collection activities; Oranges and grapefruit grown in Texas, 65017–65018 comment request, 65059–65060 Walnuts grown in California, 65018–65019 PROPOSED RULES Employment and Training Administration Milk marketing orders: NOTICES Carolina et al., 65023–65032 NAFTA transitional adjustment assistance: Iowa Assemblies, Inc., 65072 Agriculture Department See Agricultural Marketing Service Energy Department See Natural Resources Conservation Service See Federal Energy Regulatory Commission

Antitrust Division Environmental Protection Agency NOTICES PROPOSED RULES National cooperative research notifications: Meetings: CommerceNet Consortium, 65068 Analytical methods promulgation streamlining; and trace Diode Laser Welding Consortium, 65069 metals analysis workshop, 65207–65208 HDP User Group International, Inc., 65069 NOTICES Southwest Research Institute; correction, 65069 Meetings: Wilfred Baker Engineering, Inc., 65069 Sanitary sewer overflows dialogue, 65062 X Consortium Inc., 65069 Trace metals analysis; workshop, 65206

Children and Families Administration Executive Office of the President NOTICES See Presidential Documents Grants and cooperative agreements; availability, etc.: Child welfare waiver demonstration projects, 65064 Federal Aviation Administration Coast Guard RULES Class E airspace, 65020–65021 NOTICES PROPOSED RULES East Coast icebreaking program, 65087–65088 Airworthiness directives: Bracket Aircraft Co., Inc., 65038–65041 Commerce Department General Electric Co., 65035–65036 See National Oceanic and Atmospheric Administration Jetstream, 65036–65038 Lockheed, 65032–65035 Committee for the Implementation of Textile Agreements Class D and E airspace, 65041–65042 NOTICES Class E airspace, 65042–65046 Export visa requirements; certification, waivers, etc.: Singapore, 65058–65059 Federal Communications Commission RULES Copyright Office, Library of Congress Radio stations; table of assignments: NOTICES Alabama, 65021–65022 Cable compulsory license specialty stations: Missouri, 65021 Local broadcast signals; examination and reporting, PROPOSED RULES 65072–65074 Radio stations; table of assignments: Virgin Islands et al., 65052 Defense Department Television broadcasting: PROPOSED RULES Closed captioning and video description of video Federal Acquisition Regulation (FAR): programming; availability, cost, and uses, 65052– Withdrawal of proposed rules, 65054–65055 65054 IV Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Contents

NOTICES NOTICES Agency information collection activities under OMB Pollution control; consent judgments: review: American Color & Chemical Corp. et al., 65066–65067 Proposed agency information collection activities; Casings et al., 65067 comment request, 65062–65063 Milwaukee County, WI, 65067 Port of Seattle et al., 65067–65068 Federal Energy Regulatory Commission St. Johnsbury Trucking Co., Inc., 65068 NOTICES Applications, hearings, determinations, etc.: Labor Department CNG Transmission Corp., 65060 See Employment and Training Administration Coral Power, L.L.C., 65060–65061 East Tennessee Natural Gas Co., 65061 Library of Congress Nordic Electric, L.L.C., 65061 See Copyright Office, Library of Congress Powertec International, L.L.P., 65061–65062 U.S. Power & Light, Inc., 65062 National Aeronautics and Space Administration Federal Maritime Commission PROPOSED RULES NOTICES Federal Acquisition Regulation (FAR): Freight forwarder licenses: Withdrawal of proposed rules, 65054–65055 Amerford FMS, Inc., et al., 65063 National Highway Traffic Safety Administration Federal Reserve System NOTICES NOTICES Meetings: Meetings; Sunshine Act, 65092 Motor Vehicle Safety Research Advisory Committee, 65088 Food and Drug Administration Safety performance standards, research, and safety RULES assurance programs, 65088–65089 Hazard Analysis Critical Control Point (HACCP) principles: Fish and fishery products, safe processing and importing; National Oceanic and Atmospheric Administration procedures, 65096–65202 PROPOSED RULES Fishery conservation and management: General Services Administration Bering Sea and Aleutian Islands groundfish PROPOSED RULES 1996 initial harvest specifications, etc.; correction, Federal Acquisition Regulation (FAR): 65093 Withdrawal of proposed rules, 65054–65055 NOTICES Geological Survey National Weather Service; modernization and restructuring: Weather services degradation; areas of concern, 65056– NOTICES 65058 Grants and cooperative agreements; availability, etc.: National spatial data infrastructure competitive cooperative agreements program, 65064–65065 National Park Service NOTICES Health and Human Services Department Environmental statements; availability, etc.: See Aging Administration Lava Beds National Monument, CA, 65065 See Children and Families Administration See Food and Drug Administration Natural Resources Conservation Service NOTICES Indian Affairs Bureau Watershed projects; deauthorization of funds: NOTICES Boulder River Watershed, MT, 65056 Tribal-State Compact approval; Class III (casino) gambling: Winnebago Tribe, 65064 Nuclear Regulatory Commission Tribal-State Compacts approval; Class III casino) gambling: PROPOSED RULES Lummi Nation, WA, 65064 Production and utilization facilities; domestic licensing: RuleNet; pilot computer based program establishment to Interior Department maximize communication between NRC and public See Geological Survey Correction, 65032 See Indian Affairs Bureau See National Park Service Postal Rate Commission See Surface Mining Reclamation and Enforcement Office PROPOSED RULES Interstate Commerce Commission Practice and procedure rules: NOTICES Rate and classification changes; expedition, flexibility, Railroad services abandonment: and innovation, 65051–65052 Burlington Northern Railroad Co., 65066 Presidential Documents Justice Department PROCLAMATIONS See Antitrust Division Imports and exports: See Drug Enforcement Administration Poland, modification of tariff-rate quota on cheese (Proc. See Prisons Bureau 6859), 65233 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Contents V

Prisons Bureau Veterans Affairs Department RULES NOTICES Institutional management: Headstone or marker allowance rate; cost-of-living Correspondence between confined inmates, 65204 adjustments, 65089–65091 Poverty threshold; 1994 weighted average, 65090–65091 Public Health Service See Food and Drug Administration Separate Parts In This Issue Research and Special Programs Administration PROPOSED RULES Part II Hazardous materials: Department of Health and Human Services, Food and Drug Hazardous materials transportation— Administration, 65096–65202 Federal regulatory review; ‘‘direct final rule’’, 65210– 65212 Part III Department of Justice, Bureau of Prisons, 65204 Securities and Exchange Commission PROPOSED RULES Part IV Regulatory Flexibility Act; rules review; list, 65046–65048 Environmental Protection Agency, 65206–65208 NOTICES Self-regulatory organizations; Clearing agency registration applications— Part V Clearing Corp. for Options and Securities, 65076–65087 Department of Transportation, Research and Special Self-regulatory organizations; proposed rule changes: Programs Administration, 65210–65212 Chicago Board Options Exchange, Inc., 65074–65076 Part VI Small Business Administration Department of the Treasury, 65214–65229 NOTICES Agency information collection activities under OMB Part VII review: The President, 65233 Proposed agency information collection activities; comment request, 65087 Reader Aids Social Security Administration Additional information, including a list of public laws, PROPOSED RULES telephone numbers, and finding aids, appears in the Reader Social security benefits: Aids section at the end of this issue. Elementary or secondary school students, full-time; revisions Correction, 65093 New Feature in the Reader Aids! Beginning with the issue of December 4, 1995, a new listing Surface Mining Reclamation and Enforcement Office will appear each day in the Reader Aids section of the PROPOSED RULES Federal Register called ‘‘Reminders’’. The Reminders will Permanent program and abandoned mine land reclamation have two sections: ‘‘Rules Going Into Effect Today’’ and plan submissions: ‘‘Comments Due Next Week’’. Rules Going Into Effect Wyoming, 65048–65051 Today will remind readers about Rules documents NOTICES published in the past which go into effect ‘‘today’’. Agency information collection activities under OMB Comments Due Next Week will remind readers about review: impending closing dates for comments on Proposed Rules Proposed agency information collection activities; documents published in past issues. Only those documents comment request, 65066 published in the Rules and Proposed Rules sections of the Federal Register will be eligible for inclusion in the Textile Agreements Implementation Committee Reminders. See Committee for the Implementation of Textile The Reminders feature is intended as a reader aid only. Agreements Neither inclusion nor exclusion in the listing has any legal significance. Transportation Department The Office of the Federal Register has been compiling data See Coast Guard for the Reminders since the issue of November 1, 1995. No See Federal Aviation Administration documents published prior to November 1, 1995 will be See National Highway Traffic Safety Administration listed in Reminders. See Research and Special Programs Administration

Treasury Department Electronic Bulletin Board PROPOSED RULES Free Electronic Bulletin Board service for Public Law Government Securities Act of 1986; financial responsiblity numbers, Federal Register finding aids, and a list of and reporting and recordkeeping requirements documents on public inspection is available on 202–275– amendments, 65214–65229 1538 or 275–0920. VI Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Contents

CFR PARTS AFFECTED IN THIS ISSUE

A cumulative list of the parts affected this month can be found in the Reader Aids section at the end of this issue.

3 CFR 675...... 65093 676...... 65093 Proclamations: 677...... 65093 6859...... 65233 7 CFR 906...... 65017 984...... 65018 1212...... 65019 Proposed Rules: 1005...... 65023 1011...... 65023 1046...... 65023 10 CFR Proposed Rules: 50...... 65032 14 CFR 71...... 65020 Proposed Rules: 39 (4 (documents) ...... 65032, 65035, 65036, 65038 71 (5 documents) ...... 65041, 65042, 65043, 65044, 65045 17 CFR Proposed Rules: Ch. II ...... 65046 400...... 65214 420...... 65214 20 CFR Proposed Rules: 404...... 65093 21 CFR 123...... 65096 1240...... 65096 28 CFR 540...... 65204 30 CFR Proposed Rules: 950...... 65048 34 CFR 682...... 65021 39 CFR Proposed Rules: 3001...... 65051 40 CFR Proposed Rules: 136...... 65207 141...... 65207 47 CFR 73 (2 documents) ...... 65021 Proposed Rules: 73 (2 documents) ...... 65052 76...... 65052 48 CFR Proposed Rules: 8...... 65054 10...... 65054 15...... 65054 31...... 65054 32...... 65054 42...... 65054 45...... 65054 52...... 65054 53...... 65054 49 CFR Proposed Rules: 106...... 65210 50 CFR Proposed Rules: 611...... 65093 65017

Rules and Regulations Federal Register Vol. 60, No. 242

Monday, December 18, 1995

This section of the FEDERAL REGISTER conformance with Executive Order agricultural producers are defined as contains regulatory documents having general 12866. those whose annual receipts are less applicability and legal effect, most of which This rule has been reviewed under than $500,000. A majority of these are keyed to and codified in the Code of Executive Order 12778, Civil Justice handlers and producers may be Federal Regulations, which is published under Reform. This rule is not intended to classified as small entities. 50 titles pursuant to 44 U.S.C. 1510. have retroactive effect. This final rule This rule finalizes the temporary The Code of Federal Regulations is sold by will not preempt any State or local laws, relaxation of the minimum size the Superintendent of Documents. Prices of regulations, or policies, unless they requirements for grapefruit as new books are listed in the first FEDERAL present an irreconcilable conflict with prescribed under the Texas citrus REGISTER issue of each week. this rule. marketing order. The rule provides that The Act provides that administrative pack size 112 grapefruit may be shipped proceedings must be exhausted before throughout the entire 1995–96 season if DEPARTMENT OF AGRICULTURE parties may file suit in court. Under such grapefruit grade at least U.S. No. 1. section 608c(15)(A) of the Act, any This relaxation is similar to the Agricultural Marketing Service handler subject to an order may file relaxations which were issued for the 7 CFR Part 906 with the Secretary a petition stating that 1993–94 and 1994–95 seasons. This the order, any provision of the order, or relaxation was unanimously [Docket No. FV95±906±3±FIR] any obligation imposed in connection recommended by the Texas Valley with the order is not in accordance with Citrus Committee (TVCC). Oranges and Grapefruit Grown in the law and requesting a modification of the The interim final rule was issued on Lower Rio Grande Valley in Texas; order or to be exempted therefrom. A October 17, 1995, and published in the Final Rule To Temporarily Relax Size handler is afforded the opportunity for October 23, 1995, Federal Register (60 Requirements for Texas Grapefruit a hearing on the petition. After the FR 54291), providing a 30-day comment AGENCY: Agricultural Marketing Service, hearing, the Secretary would rule on the period ending November 22, 1995. No USDA. petition. The Act provides that the comments were received. ACTION: Final rule. district court of the United States in any Minimum grade and size district in which the handler is an requirements for fresh grapefruit grown SUMMARY: The Department of inhabitant, or has his or her principal in Texas are in effect under § 906.365 (7 Agriculture (Department) is adopting as place of business, has jurisdiction in CFR 906.365). This rule amends a final rule, without change, the equity to review the Secretary’s ruling § 906.365 by revising paragraph (a)(4) to provisions of an interim final rule on the petition, provided a bill in equity permit shipment of grapefruit measuring which temporarily relaxed the is filed not later than 20 days after the at least 35⁄16 inches in diameter (pack minimum size requirements for Texas date of the entry of the ruling. size 112) and grading at least U.S. No. grapefruit for the entire 1995–96 season. Pursuant to the requirements set forth 1 for the entire 1995–96 season ending This interim final rule is designed to in the Regulatory Flexibility Act (RFA), June 30, 1996. help the Texas citrus industry the Administrator of the Agricultural Section 906.365 establishes minimum successfully market the 1995–96 season Marketing Service (AMS) has size requirements for Texas grapefruit. grapefruit crop. considered the economic impact of this During the period November 16 through EFFECTIVE DATE: January 17, 1996. action on small entities. January 31 each season, grapefruit must FOR FURTHER INFORMATION CONTACT: The purpose of the RFA is to fit be at least pack size 96, that is the Charles L. Rush, Marketing Order regulatory actions to the scale of minimum diameter for the grapefruit in Administration Branch, Fruit and business subject to such actions in order any lot is 39⁄16 inches. At other times, Vegetable Division, AMS, USDA, P.O. that small businesses will not be unduly grapefruit that is pack size 112, except Box 96456, room 2523–S, Washington, or disproportionately burdened. that the minimum diameter for DC 20090–6456; telephone: 202–690– Marketing orders issued pursuant to the grapefruit in any lot is 35⁄16 inches, may 3670; or Belinda G. Garza, McAllen Act, and rules issued thereunder, are be shipped if it grades at least U.S. No. Marketing Field Office, USDA/AMS, unique in that they are brought about 1. The minimum grade requirement for 1313 East Hackberry, McAllen, Texas through group action of essentially grapefruit is Texas Choice. 78501; telephone: 210–682–2833. small entities acting on their own Permitting shipments of pack size 112 SUPPLEMENTARY INFORMATION: This final behalf. Thus, both statutes have small grapefruit grading at least U.S. No. 1 for rule is issued under Marketing entity orientation and compatibility. the remainder of the 1995–96 season Agreement and Marketing Order No. There are approximately 15 citrus will enable Texas grapefruit handlers to 906 (7 CFR Part 906) regulating the handlers subject to regulation under the meet market needs and compete with handling of oranges and grapefruit order covering oranges and grapefruit similar sized grapefruit expected to be grown in the Lower Rio Grande Valley grown in Texas, and approximately shipped from Florida. in Texas, hereinafter referred to as the 1,500 producers of these citrus fruits in The relaxation is expected to help the order. This order is effective under the Texas. Small agricultural service firms, Texas citrus industry successfully Agricultural Marketing Agreement Act which includes grapefruit handlers, market its 1995–96 season grapefruit of 1937, as amended (7 U.S.C 601–674), have been defined by the Small crop and have a positive effect on hereinafter referred to as the ‘‘Act.’’ Business Administration (13 CFR producer returns. Permitting shipments The Department of Agriculture 121.601) as those having annual receipts of pack size 112 grapefruit grading at (Department) is issuing this rule in of less than $5,000,000, and small least U.S. No. 1 for the entire 1995–96 65018 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations season will enable Texas grapefruit Funds to administer this program are Marketing Service (AMS) has handlers to meet market needs. This derived from assessments on handlers. considered the economic impact of this final rule is based on the current and EFFECTIVE DATE: August 1, 1995, through rule on small entities. prospective crop and market conditions July 31, 1996. The purpose of the RFA is to fit for Texas grapefruit. Fresh Texas FOR FURTHER INFORMATION CONTACT: regulatory actions to the scale of grapefruit shipments began in late Martha Sue Clark, Marketing Order business subject to such actions in order September this season. Administration Branch, Fruit and that small businesses will not be unduly Based on the above, the Administrator Vegetable Division, AMS, USDA, PO. or disproportionately burdened. of the AMS has determined that this Box 96456, room 2523–S, Washington, Marketing orders issued pursuant to the action will not have a significant DC 20090–6456, telephone 202–720– Act, and the rules issued thereunder, are unique in that they are brought about economic impact on a substantial 9918, or Mark A. Hessel, California through group action of essentially number of small entities. Marketing Field Office, Fruit and small entities acting on their own After consideration of all relevant Vegetable Division, AMS, USDA, Suite behalf. Thus, both statutes have small matter presented, including the 102B, 2202 Monterey Street, Fresno, CA entity orientation and compatibility. information and recommendations 93721, telephone 209–487–5901. submitted by the TVCC and other There are approximately 5,000 SUPPLEMENTARY INFORMATION: This rule producers of California walnuts under available information, it is found that is issued under Marketing Agreement finalizing this rule without change, as this marketing order, and approximately and Order No. 984, both as amended (7 65 handlers. Small agricultural published in the Federal Register (60 CFR part 984), regulating the handling FR 54291, October 23, 1995) will tend producers have been defined by the of walnuts grown in California, Small Business Administration (13 CFR to effectuate the declared policy of the hereinafter referred to as the ‘‘order.’’ Act. 121.601) as those having annual receipts The order is effective under the of less than $500,000, and small List of Subjects in 7 CFR Part 906 Agricultural Marketing Agreement Act agricultural service firms are defined as of 1937, as amended (7 U.S.C. 601–674), Grapefruit, Marketing agreements, those whose annual receipts are less hereinafter referred to as the ‘‘Act.’’ Oranges, Reporting and recordkeeping than $5,000,000. The majority of The Department of Agriculture is requirements. California walnut producers and issuing this rule in conformance with handlers may be classified as small For the reasons set forth in the Executive Order 12866. entities. preamble, 7 CFR part 906 is amended as This rule has been reviewed under The budget of expenses for the 1995– follows: Executive Order 12778, Civil Justice 96 marketing year was prepared by the Reform. Under the provisions of the PART 906ÐORANGES AND Walnut Marketing Board, the agency marketing order now in effect, responsible for local administration of GRAPEFRUIT GROWN IN THE LOWER California walnuts are subject to RIO GRANDE VALLEY IN TEXAS the marketing order, and submitted to assessments. It is intended that the the Department for approval. The Accordingly, the interim final rule assessment rate as issued herein will be members of the Board are producers and amending 7 CFR part 906 which was applicable to all assessable walnuts handlers of California walnuts. They are published at 60 FR 54291 on October handled during the 1995–96 marketing familiar with the Board’s needs and 23, 1995, is adopted as a final rule year, which began August 1, 1995, and with the costs of goods and services in without change. ends July 31, 1996. This final rule will their local area and are thus in a not preempt any State or local laws, Dated: December 12, 1995. position to formulate an appropriate regulations, or policies, unless they budget. The budget was formulated and Sharon Bomer Lauritsen, present an irreconcilable conflict with discussed in a public meeting. Thus, all Deputy Director, Fruit and Vegetable Division. this rule. directly affected persons have had an [FR Doc. 95–30672 Filed 12–15–95; 8:45 am] The Act provides that administrative opportunity to participate and provide BILLING CODE 3410±02±P proceedings must be exhausted before input. parties may file suit in court. Under The assessment rate recommended by section 608c(15)(A) of the Act, any the Board was derived by dividing 7 CFR Part 984 handler subject to an order may file anticipated expenses by expected with the Secretary a petition stating that merchantable certifications of California [Docket No. FV95±984±2FIR] the order, any provision of the order, or walnuts. Because that rate will be Walnuts Grown in California; Expenses any obligation imposed in connection applied to the actual quantity of and Assessment Rate with the order is not in accordance with certified merchantable walnuts, it must law and request a modification of the be established at a rate that will provide AGENCY: Agricultural Marketing Service, order or to be exempted therefrom. Such sufficient income to pay the Board’s USDA. handler is afforded the opportunity for expenses. ACTION: Final rule. a hearing on the petition. After the The Board met September 8, 1995, hearing the Secretary would rule on the and unanimously recommended a SUMMARY: The Department of petition. The Act provides that the 1995–96 budget of $2,280,175, $109,403 Agriculture (Department) is adopting as district court of the United States in any more than the previous year. Budget a final rule, without change, the district in which the handler is an items for 1995–96 which have increased provisions of an interim final rule that inhabitant, or has his or her principal compared to those budgeted for 1994–95 authorized expenses and established an place of business, has jurisdiction in (in parentheses) are: Field travel and assessment rate that generated funds to equity to review the Secretary’s ruling relates expenses, $17,000 ($13,000), pay those expenses. Authorization of not later than 20 days after the date of general insurance, $6,800 ($6,400), this budget enables the Walnut the entry of the ruling. social security and hospital insurance Marketing Board (Board) to incur Pursuant to the requirements set forth taxes, $9,286 ($8,129), audit, $8,900, expenses that are reasonable and in the Regulatory Flexibility Act (RFA), ($8,700), group life, retirement, and necessary to administer the program. the Administrator of the Agricultural medical, $45,861 ($44,370), office Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65019 salaries, $41,740 ($40,740), office rent, needs to have sufficient funds to pay its conformance with Executive Order $27,168 ($26,419), office supplies and expenses which are incurred on a 12866. miscellaneous, $20,000 ($15,000), continuous basis. The 1995–96 fiscal This termination order has been postage, $7,000 ($5,000), furniture, period began on August 1, 1995. The reviewed under Executive Order 12778, fixtures, and automobiles, $25,000 marketing order requires that the rate of Civil Justice Reform. It is not intended ($5,000), domestic market research and assessment for the fiscal period apply to to have retroactive effect. This rule will development, $998,000 ($953,000), all assessable walnuts handled during not preempt any State or local laws, walnut production research, $718,420 the fiscal period. In addition, handlers regulations, or policies, unless they ($718,302), crop estimate, $67,000 are aware of this action which was present an irreconcilable conflict with ($60,000), and $30,000 for the reserve unanimously recommended by the this termination order. for contingencies, for which no funding Committee at a public meeting and This action is governed by section was recommended last year. Items published in the Federal Register as an 1960 of the Lime Research, Promotion, which have decreased compared to the interim final rule. and Consumer Information Act of 1990, amount budgeted for 1994–95 (in as amended (Act). Section 1960 of the parentheses) are: Administrative List of Subjects in 7 CFR Part 984 Act provides that the Secretary of salaries, $99,000 ($101,712), and Marketing agreements, Nuts, Agriculture (Secretary) shall conduct a production research director, $34,000 Reporting and recordkeeping referendum not later than 30 months ($40,000). All other items are budgeted requirements, Walnuts. after the date on which the collection of at last year’s amounts. For the reasons set forth in the assessments begins to determine The Board also unanimously preamble, 7 CFR part 984 is amended as whether the issuance of the Order is recommended an assessment rate of follows: favored by a majority of the producers, $0.0116 per kernelweight pound of producer-handlers, and importers voting merchantable walnuts certified, $0.0005 PART 984ÐWALNUTS GROWN IN in the referendum. Paragraph (b) of more than the previous year. This rate, CALIFORNIA section 1960 of the Act requires that the when applied to anticipated shipments Order continue in effect only if favored Accordingly, the interim final rule of 1,980,000 kernelweight pounds of by such majority. amending 7 CFR part 984 which was merchantable walnuts, will yield published at 60 FR 55178 on October Background $2,296,800 in assessment income, 30, 1995, is adopted as a final rule which will be adequate to cover The Lime Research, Promotion, and budgeted expenses. Unexpended funds without change. Consumer Information Act of 1990 may be used temporarily during the first Dated: December 12, 1995. (1990 Act) (Pub. L. 101–624, 7 U.S.C. five months of the subsequent marketing Sharon Bomer Lauritsen, 6201–6212) was enacted on November year, but must be made available to the Deputy Director, Fruit and Vegetable Division. 28, 1990, for the purpose of establishing handlers from whom collected within [FR Doc. 95–30673 Filed 12–15–95; 8:45 am] an orderly procedure for the development and financing of an that period. BILLING CODE 3410±02±P An interim final rule was published effective and coordinated program of in the Federal Register on October 30, research, promotion, and consumer 1995 (60 FR 55178). That interim final 7 CFR Part 1212 information to strengthen the domestic rule added § 989.346 to authorize and foreign markets for limes. The expenses and establish an assessment [FV±95±703] Order required by the 1990 Act became effective on January 27, 1992 (57 FR rate for the Committee. That rule Lime Research, Promotion, and 2985), after notice and comment provided that interested persons could Consumer Information Order file comments through November 29, rulemaking. 1995. No comments were received. AGENCY: Agricultural Marketing Service, In March 1992 the Department While this action will impose some USDA. conducted nomination meetings to additional costs on handlers, the costs ACTION: Final rule; termination order. nominate lime producers and importers are in the form of uniform assessments for appointment to the Lime Board SUMMARY: on handlers. Some of the additional This document removes the (Board). The Board members were costs may be passed on to producers. Lime Research, Promotion, and appointed by the Secretary in However, these costs will be offset by Consumer Information Order (Order) in September 1992 and the Board the benefits derived by the operation of its entirety. A referendum was conducted its first meeting at the the marketing order. Therefore, the conducted in November 1995 to Department in Washington, D.C. in Administrator of the AMS has determine whether continuance of the October 1992. During the course of this determined that this action will not Order was favored by a majority of the meeting, the Board and the Department have a significant economic impact on producers, producer-handlers, and concluded that a technical amendment a substantial number of small entities. importers voting in the referendum. A to the 1990 Act was needed before an After consideration of all relevant majority of the persons voting in the order could be implemented. matter presented, including the referendum did not favor continuance of Consequently, full implementation of information and recommendations the Order. the Order was delayed until the submitted by the Board and other EFFECTIVE DATE: December 18, 1995. enactment of such technical available information, it is hereby found FOR FURTHER INFORMATION CONTACT: amendment. that this rule, as hereinafter set forth, Richard B. Schultz, Research and The Lime Research, Promotion, and will tend to effectuate the declared Promotion Branch, Fruit and Vegetable Consumer Information Improvement policy of the Act. Division, AMS, USDA, Box 96456, Act (1993 Act) (Pub. L. 103–194, Dec. It is further found that good cause Room 2535–S, Washington, D.C. 20090– 14, 1993) contained the necessary exists for not postponing the effective 6456, telephone (202) 720–5976. technical amendment to properly cover date of this action until 30 days after SUPPLEMENTARY INFORMATION: the regulated commodity. The 1993 Act publication in the Federal Register (5 The Department of Agriculture also provided for increasing the U.S.C. 553) because the Committee (Department) is issuing this rule in exemption level from less than 35,000 65020 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations pounds annually to less than 200,000; in the referendum do not favor action is to provide adequate controlled terminating the initial Board; changing continuance of the Order. Accordingly, airspace for Instrument Flight Rules the size and composition of the Board; it is found and determined that the (IFR) operations at Laughlin/Bullhead and delaying the initial referendum Order does not tend to effectuate the International Airport, Bullhead City, date. declared policy of the Act. For these AZ. A proposed rule was published in the reasons, in accordance with the EFFECTIVE DATE: 0901 UTC February 29, April 7, 1994, issue of the Federal provisions of the Act, this action will 1996. Register (58 FR 3446) inviting terminate 7 CFR 1212 in its entirety. FOR FURTHER INFORMATION CONTACT: comments on amending the Order to It is also found and determined that Scott Speer, Airspace Specialist, System reflect the provisions of the 1993 Act. A good cause exists for not postponing the Management Branch, AWP–530, Air final rule was published in the February effective date of this action until 30 days Traffic Division, Western-Pacific 8, 1995, issue of the Federal Register after publication in the Federal Register Region, Federal Aviation (60 FR 7435). because: (1) A continuance referendum Administration, 15000 Aviation In March 1995, as a result of was conducted in November 1995 and Boulevard, Lawndale, California, 90261, terminating the initial Board under the a majority of persons voting in the telephone (310) 725–6533. 1993 Act, the Department conducted referendum did not favor continuance of nomination meetings to nominate lime the Order; (2) it has been determined SUPPLEMENTARY INFORMATION: producers and importers for that the Order does not tend to History appointment to the new Board. The effectuate the declared policy of the Act; On October 20, 1995, the FAA Board members were appointed by the and (3) no useful purpose would be Secretary in June 1995 and the newly proposed to amend part 71 of the served in delaying the effective date of Federal Aviation Regulations (14 CFR constituted Board met at the Department the termination order. in Washington, D.C. in August 1995. At part 71) by amending the Class E this meeting, amid concern over the Termination Order airspace area at Bullhead City, AZ (60 FR 54205). changing character of the lime industry, It is, therefore, ordered, That 7 CFR Interested parties were invited to the Board voted that a referendum be part 1212 is hereby terminated effective participate in this rulemaking conducted before the Order is fully on December 18, 1995. implemented to determine industry proceeding by submitting written support. List of Subjects in 7 CFR Part 1212 comments on the proposal to the FAA. Since the enactment of the 1990 Act, Administrative practice and No comments were received. Class E the character of the lime industry has procedure, Advertising, Limes, airspace designations are published in significantly changed. As a result of the Marketing agreements, Reporting and Paragraph 6005 of FAA Order 7400.9C, extensive damage to lime orchards in recordkeeping requirements. dated August 17, 1995, and effective Florida by Hurricane Andrew in August September 16, 1995, which is 1992, domestic production has PART 1212Ð[REMOVED] incorporated by reference in 14 CFR plummeted and the volume of imports 71.1. The Class E airspace designation has increased dramatically. Domestic For the reasons set forth in the listed in this document will be production is not expected to reach pre- preamble, and under the authority of 7 published subsequently in this Order. U.S.C. 6201–6212, 7 CFR Part 1212 is Hurricane Andrew levels for several The Rule more years because Florida accounted removed. for a majority of domestic production. Dated: December 12, 1995, This amendment to part 71 of the Imports currently represent roughly 94 Lon Hatamiya, Federal Aviation Regulations (14 CFR part 71) amends the Class E airspace percent of lime shipments in the United Acting Assistant Secretary, Marketing and States. Regulatory Programs. area at Bullhead City, AZ. The intended effect of this action is to provide In response to the Board’s vote, an [FR Doc. 95–30671 Filed 12–15–95; 8:45 am] interim final rule with request for adequate Class E Airspace for aircraft BILLING CODE 3410±02±P comments containing a referendum executing the Standard Instrument order and procedures was published in Approach Procedure at Laughlin/ the October 11, 1995, issue of the Bullhead International Airport, DEPARTMENT OF TRANSPORTATION Federal Register (60 FR 52835). No Bullhead City, AZ. comments were received. Federal Aviation Administration The FAA has determined that this A representative period from regulation only involves an established September 1, 1994, through August 31, 14 CFR Part 71 body of technical regulations for which 1995, was established to determine frequent and routine amendments are voter eligibility in the referendum. [Airspace Docket No. 95±AWP±29] necessary to keep them operationally current. Therefore, this regulation—(1) Persons who produced, produced and Amendment of Class E Airspace; is not a ‘‘significant regulatory action’’ handled, or imported 200,000 more Bullhead City, AZ pounds of limes for the fresh market under Executive Order 12866; (2) is not during this period were eligible to vote. AGENCY: Federal Aviation a ‘‘significant rule’’ under DOT A voting period from November 1, 1995, Administration (FAA), DOT. Regulatory Policies and Procedures (44 through November 15, 1995, was ACTION: Final rule. FR 10034; February 26, 1979); and (3) established to allow eligible persons an does not warrant preparation of a opportunity to vote. SUMMARY: This action amends the Class Regulatory Evaluation as the anticipated Continuance of the Order was favored E airspace area at Bullhead City, AZ. impact is so minimal. Since this is a by only 28 percent of the producers, Additional controlled airspace is routine matter that will only affect air producer-handlers, and importers required for aircraft executing traffic procedures and air navigation, it casting valid ballots in the referendum. instrument approach procedures at is certified that this rule will not have Thus, it is found and determined that a Laughlin/Bullhead International a significant economic impact on a majority of persons casting valid ballots Airport. The intended effect of this substantial number of small entities Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65021 under the criteria of the Regulatory DEPARTMENT OF EDUCATION Commission’s Reference Center (Room Flexibility Act. 239), 1919 M Street, NW., Washington, Office of Postsecondary Education DC. The complete text of this decision List of Subjects in 14 CFR Part 71 may also be purchased from the 34 CFR Part 682 Airspace, Incorporation by reference, Commission’s copy contractors, Navigation (air). International Transcription Services, Inc., 2100 M Street, NW., Suite 140, Adoption of the Amendment Federal Family Education Loan Washington, DC. 20037, (202) 857–3800. Program eligible borrowers In consideration of the foregoing, the List of Subjects in 47 CFR Part 73 Federal Aviation Administration CFR Correction Radio broadcasting. amends 14 CFR part 71 as follows: In Title 34 of the Code of Federal Part 73 of title 47 of the Code of Regulations, part 400 to end, revised as Federal Regulations is amended as PART 71Ð[AMENDED] of July 1, 1995, on page 680, second follows: column, the text designated as § 682.201 1. The authority citation for 14 CFR (a)(8) is correctly designated as PART 73Ð[AMENDED] part 71 continues to read as follows: § 682.201 (b)(8) and should appear on 1. The authority citation for part 73 Authority: 49 U.S.C. 106(g), 40103, 40113, page 681, in the second column before continues to read as follows: 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– paragraph (c). 1963 Comp., p. 389; 14 CFR 11.69. Authority: Secs. 303, 48 Stat., as amended, BILLING CODE 1505±01±D 1082; 47 U.S.C. 154, as amended. § 71.1 [Amended] § 73.202 [Amended] 2. The incorporation by reference in FEDERAL COMMUNICATIONS 2. Section 73.202(b), the Table of FM 14 CFR 71.1 of the Federal Aviation COMMISSION Allotments under Missouri, is amended Administration Order 7400.9C, Airspace by removing Channel 237C2 and adding Designations and Reporting Points, 47 CFR Part 73 Channel 237A at Owensville and by dated August 17, 1995, and effective [MM Docket No. 93±174; RM±8263] removing Channel 236A and adding September 16, 1995, is amended as Channel 236C3 at Versailles. follows: Radio Broadcasting Services; Federal Communications Commission. Owensville and Versailles, MO Paragraph 6005 Class E airspace areas John A. Karousos, extending upward from 700 feet or more AGENCY: Federal Communications Chief, Allocations Branch, Policy and Rules above the surface of the earth. Commission. Division, Mass Media Bureau. * * * * * ACTION: Final rule. [FR Docs. 95–30616 Filed 12–15–95; 8:45 am] BILLING CODE 6712±01±F AWP CA E5 Bullhead City, AZ [Revised] SUMMARY: This document substitutes Laughlin/Bullhead International Airport, AZ Channel 236C3 for Channel 236A at (lat. 35°09′27′′ N, long. 114°33′34′′ W) Versailles, Missouri, and modifies the 47 CFR Part 73 Needles VORTAC, CA license for Station KLGS(FM), in [MM Docket No. 94±78; RM±8472; RM±8525] (lat. 34°45′58′′ N, long, 114°28′27′′ W) response to a petition filed by Twin That airspace extending upward from 700 Lakes Communications, Inc. See 58 FR Radio Broadcasting Services; feet above the surface within a 6-mile radius 35421, July 1, 1993. The coordinates for Cloverdale, Montgomery and Warrior, of the Laughlin/Bullhead International Channel 236C3 at Versailles are 38–23– AL Airport and within 3 miles each side of the 27 and 92–38–06. We shall also make an Needle VORTAC 350° radial extending from editorial change in the FM Table of AGENCY: Federal Communications the 6-miles radius to 10 miles south of the Allotments for Owensville, Missouri, Commission. Laughlin/Bullhead International Airport. deleting Channel 237C2 and adding ACTION: Final rule. That airspace extending upward from 1,200 Channel 237A in accordance with the SUMMARY: This document dismisses a feet above the surface within the area Commission’s Rules. See letter dated petition for rule making to Channel bounded by a line beginning a lat. 34°55′00′′ March 17, 1995, from the Chief, Audio 254A to Cloverdale, Alabama, as that N, long. 114°36′00′′ W; to lat. 35°07′00′′ N, Services Division, cancelling the locality’s first local aural transmission long. 115°00′00′′ W; to lat. 35°16′00′′ N, long, construction permit for Station service as requested by Pulaski 115°10′00′′ W; to lat. 35°30′00′′ N, long. KLZE(FM), Channel 237C2. Public Broadcasting, Inc. (RM–8472). The 114°47′00′′ W, thence to the point of notice of this action was given on March beginning. proposal is dismissed based upon the 29, 1995. With this action, this failure of the petitioner or any other * * * * * proceeding is terminated. interested party to demonstrate that Issued in Los Angeles, California, on EFFECTIVE DATE: January 25, 1996. Cloverdale constitutes a bona fide December 1, 1995. FOR FURTHER INFORMATION CONTACT: community for purposes of Section James H. Snow, Kathleen Scheuerle, Mass Media 307(b) of the Communications Act for Acting Manager, Air Traffic Division, Bureau, (202) 418–2180. allotment objectives. See 59 FR 36735, Western-Pacific Region. SUPPLEMENTARY INFORMATION: This is a July 19, 1994. Additionally, in response [FR Doc. 95–30692 Filed 12–15–95; 8:45 am] summary of the Commission’s Report to a mutually exclusive joint BILLING CODE 4910±13±M and Order, MM Docket No. 93–174, counterproposal, this document adopted November 30, 1995, and substitutes Channel 254C1 for Channel released December 11, 1995. The full 254C3 at Warrior, Alabama, and text of this Commission decision is modifies the license of North Jefferson available for inspection and copying Broadcasting Company, Inc. for Station during normal business hours in the WLBI(FM). Further, to accommodate the 65022 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations

Warrior allotment, Channel 255C1 is released December 11, 1995. The full PART 73Ð[AMENDED] substituted for Channel 255C at text of this Commission decision is Montgomery, Alabama, and the license available for inspection and copying 1. The authority citation for part 73 of Deep South Broadcasting Company, during normal business hours in the continues to read as follows: Inc. for Station WBAM-FM is modified FCC’s Reference Center (Room 239), Authority: Secs. 303, 48 Stat., as amended, accordingly (RM–8525). 1919 M Street, NW., Washington, DC. 1082; 47 U.S.C. 154, as amended. Coordinates used for Channel 254C1 The complete text of this decision may at Warrior, Alabama, are 33–44–30 and also be purchased from the § 73.202 [Amended] 86–48–30. Coordinates used for Channel Commission’s copy contractors, 2. Section 73.202(b), the Table of FM 255C1 at Montgomery, Alabama, are 32– International Transcription Service, Allotments under Alabama, is amended 14–45 and 86–07–30. With this action, Inc., (202) 857–3800, located at 1919 M by removing Channel 255C and adding the proceeding is terminated. Street, NW., Room 246, or 2100 M Channel 255C1 at Montgomery; and by EFFECTIVE DATE: January 25, 1996. Street, NW., Suite 140, Washington, DC removing Channel 254C3 and adding 20037. FOR FURTHER INFORMATION CONTACT: Channel 254C1 at Warrior. Nancy Joyner, Mass Media Bureau, (202) List of Subjects in 47 CFR Part 73 Federal Communications Commission. 418–2180. John A. Karousos, Radio broadcasting. SUPPLEMENTARY INFORMATION: This is a Chief, Allocations Branch, Policy and Rules synopsis of the Commission’s Report Part 73 of title 47 of the Code of Division, Mass Media Bureau. and Order, MM Docket No. 94–78, Federal Regulations is amended as [FR Doc. 95–30614 Filed 12–15–95; 8:45 am] adopted November 30, 1995, and follows: BILLING CODE 6712±01±F 65023

Proposed Rules Federal Register Vol. 60, No. 242

Monday, December 18, 1995

This section of the FEDERAL REGISTER examine the impact of a proposed rule U.S.C. 601–674), and the applicable contains notices to the public of the proposed on small entities. Pursuant to 5 U.S.C. rules of practice (7 CFR Part 900), at issuance of rules and regulations. The 605(b), the Administrator of the Charlotte, North Carolina, on January 4, purpose of these notices is to give interested Agricultural Marketing Service has 1995. Notice of such hearing was issued persons an opportunity to participate in the certified that this rule will not have a on November 21, 1994, and published rule making prior to the adoption of the final rules. significant economic impact on a November 25, 1994 (59 FR 60574). substantial number of small entities. Upon the basis of the evidence The amended orders will promote more introduced at the hearing and the record DEPARTMENT OF AGRICULTURE orderly marketing of milk by producers thereof, the Administrator, on August and regulated handlers. 17, 1995, issued a recommended Agricultural Marketing Service These proposed amendments have decision containing notice of the been reviewed under Executive Order opportunity to file written exceptions 7 CFR Parts 1005, 1011, and 1046 12778, Civil Justice Reform. This rule is thereto. Two comments were received [Docket No. AO±388±A8 et al.; DA±94±12] not intended to have a retroactive effect. in response to the notice, both of which If adopted, this proposed rule will not fully support the findings and Milk in the Carolina, Tennessee Valley, preempt any state or local laws, conclusions of the recommended and Louisville-Lexington-Evansville regulations, or policies, unless they decision. Marketing Areas; Decision on present an irreconcilable conflict with The material issues, findings and Proposed Amendments to Marketing this rule. conclusions, rulings, and general Agreements and to Orders The Agricultural Marketing findings of the recommended decision Agreement Act of 1937, as amended (7 are hereby approved and adopted and AGENCY: Agricultural Marketing Service, U.S.C. 601–674), provides that are set forth in full herein, with no USDA. administrative proceedings must be material modifications. ACTION: Proposed rule. exhausted before parties may file suit in The material issues on the record of court. Under section 608c(15)(A) of the the hearing relate to: 7 Act, any handler subject to an order may 1. Marketing area modifications to the CFR Marketing area AO Nos. file with the Secretary a petition stating Tennessee Valley and Louisville- part that the order, any provision of the Lexington-Evansville orders; order, or any obligation imposed in 2. Where to regulate a distributing 1005 Carolina ...... AO±388±A8 connection with the order is not in plant that meets the pooling standards 1011 Tennessee Valley ... AO±251±A39 accordance with the law and requesting 1046 Louisville-Lexington- AO±123±A66 of more than one order; Evansville. a modification of an order or to be 3. Supply plant pooling standards exempted from the order. A handler is under the Tennessee Valley order; SUMMARY: This final decision proposes afforded the opportunity for a hearing 4. Distributing plant pooling to amend the pooling standards of the on the petition. After a hearing, the standards under the Carolina order; Tennessee Valley and Carolina orders; Secretary would rule on the petition. 5. Location adjustments under the modifies the marketing areas of the The Act provides that the district court Carolina order; and Tennessee Valley and Louisville- of the United States in any district in 6. Base-paying months under the Lexington-Evansville orders; changes which the handler is an inhabitant, or Carolina order. the location adjustment under the has its principal place of business, has Findings and Conclusions Carolina order for plants located in the jurisdiction in equity to review the Secretary’s ruling on the petition, The following findings and Middle Atlantic marketing area; and conclusions on the material issues are changes the base-paying months under provided a bill in equity is filed not later than 20 days after the date of the based on evidence presented at the the Carolina order. The decision is hearing and the record thereof: based upon industry proposals entry of the ruling. presented at a public hearing in Prior documents in this proceeding; 1. Marketing Area Modifications to the Notice of Hearing: Issued November Charlotte, North Carolina, on January 4, Tennessee Valley (Order 11) and 21, 1994; published November 25, 1994 1995. Louisville-Lexington-Evansville (Order (59 FR 60574). 46) Orders FOR FURTHER INFORMATION CONTACT: Recommended Decision: Issued Nicholas Memoli, Marketing Specialist, August 17, 1995; published August 24, Six now-unregulated Kentucky USDA/AMS/Dairy Division, Order 1995 (60 FR 43986). counties between the Order 11 and Formulation Branch, Room 2971, South Order 46 marketing areas should be Building, P.O. Box 96456, Washington, Preliminary Statement added to the Order 11 marketing area DC 20090–6456, (202) 690–1932. A public hearing was held upon and one county that is now part of the SUPPLEMENTARY INFORMATION: This proposed amendments to the marketing Order 46 marketing area should be administrative action is governed by the agreements and the orders regulating the removed and added to the Order 11 provisions of Sections 556 and 557 of handling of milk in the Carolina, marketing area. Title 5 of the United States Code and Tennessee Valley, and Louisville- A spokesman for Southern Belle Dairy therefore is excluded from the Lexington-Evansville marketing areas. Company, Inc., testified that the six requirements of Executive Order 12866. The hearing was held pursuant to the unregulated counties—Clay, Jackson, The Regulatory Flexibility Act (5 provisions of the Agricultural Marketing Laurel, McCreary, Owsley, and U.S.C. 601–612) requires the Agency to Agreement Act of 1937, as amended (7 Rockcastle—and the one Order 46 65024 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules county—Pulaski—are in an area that is These amendments will allow a The witness testified that Land-O-Sun closely associated with the Tennessee distributing plant at Kingsport, purchases its raw milk supply from 140 Valley marketing area. He pointed out, Tennessee, that is located within the dairy farmers located in northeast for example, that two Order 11 pool Tennessee Valley marketing area and Tennessee and southwest Virginia plants—the Flav-O-Rich plant at that meets all of the pooling standards within 100 miles of the Kingsport plant. London and the Southern Belle plant at of the Tennessee Valley order to be He noted that this area is also the Somerset—are in Laurel and Pulaski regulated under that order rather than supply area for other Order 11 pool Counties, respectively. under the Carolina order, despite the plants. As a result, he said, any blend The witness indicated that Southern plant’s having greater sales in the price difference to producers in this Belle had sales in each of the counties Carolina marketing area. Similarly, they common supply area leads to market proposed to be added to the marketing will allow a distributing plant located at instability. Because the Order 11 blend area. He also introduced data showing Somerset, Kentucky—which, as price is higher than the Order 5 blend that 79 percent of the fluid milk sales in recommended under Issue No. 1, would price, he stated, Land-O-Sun is forced to the seven-county area came from the be part of the Order 11 marketing area— pay over-order prices to retain its Southern Belle and Flav-O-Rich plants. to be regulated under Order 11 even if producers. He indicated that Land-O- He said that a majority of the sales in the plant should develop greater sales in Sun could not consistently pay these Pulaski County also came from Order 11 the marketing area of Order 46 or some higher prices and remain a viable plants. other order’s marketing area. Finally, business entity. There was no opposition to this the amendments will permit a plant Southern Belle Dairy at Somerset, proposal either at the hearing or in post- located at Greenville, South Carolina (in Kentucky, has been regulated under hearing briefs. the Order 5 marketing area), to be Order 11 since 1989. In recent years, the plant has had nearly equal sales in the The six now-unregulated Kentucky regulated under Order 5 even if the Order 46 and Order 11 marketing areas. counties should be added to the Order plant has more sales in the Southeast If regulation of the plant had shifted to 11 marketing area and Pulaski County marketing area (Order 7). These amendments and the proposals Order 46, the applicable Class I should be removed from the Order 46 which prompted them stem from differential price would be 19 cents marketing area and added to the Order various pricing problems under these lower than under Order 11 (i.e., $2.26 11 marketing area. This seven-county orders that have come about for a compared to $2.45), but the blend price area is closely associated with the variety of reasons, including the fact difference would be even more Tennessee Valley market and its that the marketing areas may not have substantial. For example, in the past 35 addition to the Order 11 marketing area, grown as fast as handlers’ distribution months (January 1992–November 1994), in conjunction with the pooling areas. The pricing problems identified the Order 46 blend price averaged 30 standards adopted in this decision, will on the record of this proceeding relate cents below the Order 11 blend price at add regulatory stability for the plants to Land-O-Sun Dairies, Inc., at Somerset. In some months during this with sales in this area. There are no Kingsport, Tennessee; Southern Belle period, the difference in blend prices plants in this seven-county area other Dairy Company at Somerset, Kentucky; was as much as 67 cents. than the Southern Belle and Flav-O- and Superbrand Dairy Products, Inc., at At the hearing, a Southern Belle Rich plants and none outside of this Greenville, South Carolina. spokesman testified that the handler area that would become regulated as a Land-O-Sun Dairies, Inc., operates a sought the marketing stability that result of the addition of this territory to plant at Kingsport, Tennessee, which is would be provided by regulating the the Tennessee Valley marketing area. in the Tennessee Valley marketing area. plant under Order 11 based upon its A conforming change should be made Because of this plant’s greater route location within the Order 11 marketing in § 1011.52(a)(3) to include the disposition in the Carolina marketing area. The spokesman stated that counties of Jackson, Owsley, and area, it has been regulated under that Southern Belle would experience Rockcastle with the other Kentucky order. During the past three years procurement problems if it could only counties now included in the minus 32- (January 1992–November 1994), the pay its producers the Order 46 blend cent location adjustment zone. Although blend price at Kingsport under Order 5 price in competition with Order 11 there are no plants located in these three has averaged 14 cents below the blend handlers—such as the Flav-O-Rich plant counties, should a plant be built there price at that location under Order 11. In at London, Kentucky, 37 miles east of the appropriate location adjustment some months, the difference has been as Somerset—which also procure milk should be minus 32 cents, the same high as 32 cents. Although the Class I from the same supply area. He also cited location adjustment that is applicable in price at Kingsport is identical under the marketing instability that would the neighboring counties of Laurel, both of these orders, the Tennessee result from the plant shifting back and Pulaski, Clay, and Breathitt. Valley order’s higher Class I forth between the two orders, 2. Where To Regulate a Distributing utilization—e.g., 82.03 percent for Order particularly in view of the differing base Plant That Meets the Pooling Standards 11 compared to 77.96 percent for Order and excess payment plans to producers of More Than One Order 5 during the first 10 months of 1994— in each of these orders. has led to a higher blend price under Superbrand Dairy Products at The pooling standards of the that order at Kingsport during nearly Greenville, South Carolina, has been Tennessee Valley and Carolina orders every month for the past three years. regulated under the Georgia order since should be modified to fully regulate a A spokesman for Land-O-Sun testified May 1992 despite the fact that it is distributing plant that is located within that the Kingsport plant handles located within the marketing area of the their respective marketing areas and that approximately 12 million pounds of Carolina order and meets the pooling meets the pooling standards of milk per month and that about one-third standards of that order. §§ 1011.7(a) or 1005.7(a), respectively, of its Class I sales are distributed on A spokesman for Mid-America even if the plant meets the pooling routes within the Tennessee Valley Dairymen, Inc. (Mid-Am), which has a standards of another order and has more marketing area and the remaining two- full supply contract with the route disposition in such other order’s thirds within the Carolina marketing Superbrand plant, testified that the marketing area. area. Carolina order should be amended to Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65025 provide the same type of pooling Belle plant at Somerset, Kentucky, would yield regulation of the plant to standard that has been proposed for the would be subject to a higher Class I the other order, leaving the plant in a Tennessee Valley order and that was price under Order 11 than would apply state of regulatory limbo. To prevent incorporated in the Department’s at the plant under Order 46; and the this unlikely event from occurring, the recommended [and final] decisions for Superbrand plant at Greenville would paragraph should be modified to read: the new Southeast order.1 Inclusion of be subject to the same Class I price ‘‘The term pool plant shall not apply to this provision in each of these orders whether it was regulated under Order 5 a plant qualified pursuant to paragraph will provide regulatory compatibility or Order 7. (b) of this section if the plant has throughout the Southeast, he said. Consequently, it must be concluded automatic pooling status under another The witness stated that the Mid-Am that the competitive equity that was, Federal order or if the plant meets the proposal would return the Superbrand and continues to be, sought by having pooling requirements of another Federal plant to its former status as a pool plant competing handlers subject to the same order during the month and makes under Order 5. In terms of its sales and rules and Class I prices can be achieved greater qualifying shipments to plants procurement pattern, the plant is more in these marketing areas by pooling regulated under such other order than to closely associated with the Carolina distributing plants under the orders plants regulated under this order.’’ applicable to the marketing areas in market, he added. 3. Supply Plant Pooling Standards The Mid-Am spokesman testified that which the plants are located. Under the Tennessee Valley Order the proposed change in pooling Specifically, the pooling standards of standards is a departure from the the Tennessee Valley and Carolina The supply plant pooling provisions traditional method of determining orders should be amended to fully for the Tennessee Valley order should where a distributing plant should be regulate all distributing plants that meet be amended to provide automatic regulated when it meets the pooling the orders’ pooling standards and that pooling status for a supply plant which standards of more than one order. The are located within their respective met the order’s shipping standards traditional method, he explained, marketing areas. during the preceding months of July regulated a plant wherever it had the Under the provisions adopted here for through February. most sales. He said that the principle the Carolina and Tennessee Valley Armour Food Ingredients Company behind that practice was to insure that orders, a plant that qualifies as a pool (Armour) proposed the change in all handlers having sales in an order distributing plant and which is located supply plant pooling standards. A area were subject to the same regulatory within the marketing area will be spokesman for Armour testified that the provisions as their competition. regulated under the order applicable to company operates a supply plant at However, he added, with the advent of that marketing area even if it meets the Springfield, Kentucky, that has been a large processing plants with sales pooling standards of another order and pool plant under Order 11 since August distribution over wide geographic areas, has greater sales in such other order’s 1992. He said that the facility is a ‘‘dual the traditional method of pooling marketing area. The nearby Southeast Grade A/Grade B plant.’’ The Grade A distributing plants has become obsolete. order, Louisville-Lexington-Evansville part of the plant is used to assemble There was no opposition to this order, and Upper Florida order contain Grade A milk from producers’ farms for proposal either at the hearing or in post- provisions (§§ 1007.7(g)(4), 1046.7(e)(3), transshipment to pool distributing hearing briefs. and 1006.7(d)(3), respectively) that plants, while the Grade B facility is used For the most part, Federal milk orders conform to the proposed provisions by to process surplus milk into Class III have traditionally regulated plants yielding regulation of such plants to the products, he explained. according to where they had the most other order. The witness testified that Order 11 sales. The reasoning behind that policy Orders 5 and 11 also should be now requires Armour to ship milk to has been to ensure that all handlers modified to recognize another order’s distributing plants every month of the having sales in a Federal order primacy to regulate a plant that meets year. However, much less milk is marketing area were subject to the same such other order’s pooling standards needed from Armour during the spring minimum prices (adjusted for plant and that is within the other order’s than during the other months of the location) and other regulatory marketing area. This is accomplished in year, he said. Consequently, he provisions as their competition. When §§ 1005.7(e)(3) and 1011.7(e)(3). concluded, Armour and its distributing A clarifying change should also be these provisions were first incorporated plant customers are incurring receiving made to §§ 1005.7(e)(5) and 1011.7(e)(5). in orders, markets were primarily local and hauling costs for no other purpose At present, these paragraphs, which are in nature. At any given location, it was than to satisfy the order’s shipping designated as §§ 1005.7(d)(4) and common for Class I prices to differ requirements. 1011.7(d)(4), state that ‘‘the term pool among orders, and it was common for The witness introduced an exhibit plant shall not apply to a plant qualified each order to have a unique set of which showed that from August 1992 pursuant to paragraph (b) of this section provisions. through October 1994 Armour shipped which also meets the pooling Most of the provisions in Federal milk a monthly average of 71 percent of its requirements for the month under orders today are standardized. For receipts to pool distributing plants. The another Federal order.’’ A problem example, all orders have uniform exhibit also showed that when could arise with this language because classification and allocation provisions. shipments of surplus milk from these during certain months of the year a Similarly, most Federal order Class I same pool distributing plants to Armour supply plant may qualify as a pool plant prices are properly aligned. As noted were subtracted from the receipts from by shipping less than 50 percent of its above, for example, the Class I price at Armour, the distributing plants, on receipts to distributing plants. For Kingsport, Tennessee, is the same average, kept 34 percent of the milk that example, if a supply plant shipped 40 whether Land-O-Sun’s plant is regulated was sent to them. percent of its receipts to pool under Order 5 or Order 11; the Southern There was no opposition to this distributing plants under Order 5 and 40 proposal either at the hearing or in post- 1 Official notice is taken of the final decision for percent of its receipts to distributing hearing briefs. the Southeast order issued on May 3, 1995 (60 FR plants under Order 11, both orders, The provision proposed by Armour is 25014). pursuant to the language quoted above, included in many Federal milk orders 65026 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules because of the seasonal variation in milk At the present time, §§ 1005.7(b) and Dairy Fresh, Inc., and Pine State production. This variation is also 1011.7(b) of the Carolina and Tennessee Creamery testified that the original evident in the Tennessee Valley market. Valley orders, respectively, authorize proposal had been modified to include In 1993, the average daily production the Director of the Dairy Division to language similar to that contained in the per producer in this market was 2,220 adjust supply plant shipping standards recommended decision of the proposed pounds. However, this daily average to obtain needed shipments of milk or Southeast Federal order. reached a low of 1,941 pounds during to prevent uneconomic shipments. This The witness testified that the reason the month of July and peaked at 2,481 provision was not an issue at the for proposing a change in the in-area pounds during May. As a group, the hearing. However, in conjunction with route disposition requirement was that months of March through June had a the other changes in pooling provisions partially regulated handlers were daily average of 2,375 pounds, that were adopted, the recommended constantly increasing their Class I compared to 2,149 pounds during the decision stated that authority to adjust distribution into the Order 5 marketing months of July through February. supply plant shipping standards should area. He estimated that the average There is no merit in requiring supply be given to the market administrator of distribution for 1994 was between 25 plants to receive, reload, and ship milk Orders 5 and 11. Although interested million and 35 million pounds. He to distributing plants if the milk is not parties were invited to comment on this, claimed that this distribution is needed or if closer milk is available as on other recommendations, no attributed to sales from partially directly from producers’ farms. In comments were received in opposition regulated plants located in Virginia. addition to the statistics suggesting that to this suggestion. The witness explained that the supply plant shipments during the With all of the marketing information Virginia State Milk Commission prices months of March through June are immediately available to him or her, the Class I sales made outside the State of unnecessary, the lack of any market administrator is in an ideal Virginia at the Federal order Class II contradictory testimony from Order 11 position to sense the changing needs of price. He said that this creates a distributing plant operators must be the market and to obtain industry views problem of accountability for those interpreted as concurrence with the concerning the desirability of adjusting Class I sales moving from Virginia to view that supply plant shipments are supply plant shipping requirements. As another state. He claimed that the simply not needed during the months of a result, the market administrator will possibility exists that, in some March through June. In view of this be able to attend to the need for such instances, not all of those sales may be evidence, the proposal should be temporary revisions in a timely fashion accounted for and paid for at the adopted. and will be able to better serve the appropriate price. Section 1011.7(b)(3) of the Tennessee changing needs of handlers and The witness stated that the proposed Valley order, as proposed to be producers under the Carolina and amended here, also should be modified amendment would provide uniformity Tennessee Valley orders. between Order 5 and surrounding to clarify what would happen if a A similar conforming change also orders. He also claimed that the shipping requirement were instituted should be made in § 1011.13(e)(3) of the proposed change would not be during the months of March through Tennessee Valley order for the same burdensome to handlers located in June pursuant to § 1011.7(b)(4). First, it reasons. This change will allow the Virginia if these handlers are already should be understood that a new supply market administrator to increase or paying prices equivalent to, or greater plant or one that did not meet the decrease, by 10 percentage points, the than, the Order 5 Class I price. order’s shipping requirements during diversion limitations applicable to a The general manager for Carolina the months of July through February proprietary bulk tank handler. would be subject to the 40 percent Virginia Milk Producers Association supply plant shipping requirement now 4. Distributing Plant Pooling Standards (CVMPA) also testified in support of the in the order. Under the Carolina Order revised proposal. He stated that the If the market is short of milk during Proposals to amend the Order 5 in- proposal would provide uniformity the ‘‘free-ride’’ months of March area route disposition requirement for between Order 5 and neighboring orders through June and the market pool distributing plants should not be and that it would eliminate potential administrator determines that additional adopted. inequities between Order 5 handlers milk is needed from pool supply plants At the present time, a distributing and handlers regulated by the Virginia pursuant to § 1011.7(b)(4), any increase plant must dispose of at least 60 percent Milk Commission. in shipping percentage would be added of its fluid milk product receipts in The CVMPA representative asserted to the percentage that is then applicable Class I during the months of August that the proposal would regulate some to the plant. For instance, if the market through November, January, and partially regulated plants that may be administrator determines that a 10- February and at least 40 percent in each subject to a lower price for milk used in percentage point increase in shipments of the other months to qualify as a pool fluid milk products than fully regulated is needed, a plant that would have had plant under Order 5. In addition, at least plants under Order 5. He explained that to ship 40 percent of its receipts would 15 percent of the plant’s route handlers regulated under Order 5 must be required to ship 50 percent. disposition must be in the marketing pay at least the minimum Federal order However, a plant in ‘‘free-ride’’ status, area. class prices for their milk. He claimed which normally would not have had to Milkco, Inc., testified in support of its that plants located in Virginia and make any shipments, would have to proposal to change the in-area route regulated by the Virginia Milk ship 10 percent. The market disposition standard of Order 5 from 15 Commission have a competitive administrator’s ability to require percent to 10 percent. At the hearing, advantage on raw milk costs compared additional milk from supply plants, Milkco modified its proposal to the to handlers fully regulated under Order even during the free-ride period of lesser of 1500 pounds daily or 10 5. The witness indicated that the Class March through June, will help to ensure percent of a plant’s fluid milk receipts I price established and regulated by the that the market has adequate supplies of sold as Class I. Virginia Milk Commission has milk for fluid use during all months of A witness representing Milkco, historically been higher than the Order the year. Carolina Dairies, Hunter Farms, Inc., 5 price but that the Commission Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65027 requires that only the Class II price be Richfood at Richmond, Virginia; Land- order marketing area would be paid for sales out of the State. O-Sun Dairies, Inc., at Portsmouth, disruptive to the Commission’s ability The CVMPA witness testified that Virginia; and Marva Maid Dairy at to price and pool milk in the Virginia sales from partially regulated handlers Newport News, Virginia. He said that marketing areas. He argued that there located in Virginia into the Carolina these Virginia plants are the only are less intrusive ways to accomplish marketing area have a significant impact partially regulated distributing plants class price integrity for pooling on the market. Since January 1992, he subject to Order 5 other than the several producer milk. pointed out, sales from these plants plants which distribute long-shelf-life The witness stated that the have ranged from one to three million fluid milk products in a broad Commission was willing to assist the pounds of Class I sales or between .84 geographic area over most of the United Department to ensure proper reporting and 2.26 percent of total route States. Consequently, he concluded, the and pricing within Federal milk disposition in Order 5. He said that MVMPCA proposal would not have a marketing areas to alleviate the concerns while these Class I sales from Virginia substantial impact upon any other of those who have doubts that Virginia’s partially regulated plants are confined plants. out-of-area prices are being enforced. to a small portion of the marketing area, A witness representing Richfood The witness explained that the they have had a disruptive effect on the Dairy, Inc. (Richfood), Richmond, Commission has the ability to report market in eastern North Carolina. Virginia, testified in opposition to sales by Virginia plants into Federal The CVMPA representative testified Milkco’s proposal to reduce the Order 5 orders in a timely and accurate manner, that Federal orders contiguous to the in-area route disposition requirement and is willing to provide such Carolina marketing area have more and in support of Richfood’s proposal to information to the appropriate Federal restrictive pool plant requirements than increase the requirement from 15 order market administrator to help the Carolina order. He noted that the percent to 20 percent. enforce proper pricing. Tennessee Valley order’s in-area route The witness stated that Richfood has Neither Milkco’s proposal, which disposition requirement was 10 percent about 83 percent of its fluid milk would make it easier to fully regulate an and that the recommended Southeast product sales in that part of Virginia out-of-area plant, nor MVMPCA’s or order would fully regulate handlers if a that is outside the Middle Atlantic Richfood’s proposal, which would make plant distributed either 10 percent of its (Order 4) marketing area. The plant has it harder to fully regulate an out-of-area total fluid milk receipts or at least 1500 approximately 12 percent of its sales in plant, should be adopted. pounds of Class I sales per day in the the Carolina marketing area, 4 percent Proponents of Milkco’s proposal marketing area. Such requirements are in the Order 4 marketing area, and the argued that the amount of sales into the appropriate for orders with relatively remaining 1 or 2 percent in the Ohio Carolina marketing area from partially high Class I utilization, he said. Valley marketing area. Richfood’s sales regulated plants located in Virginia is Maryland & Virginia Milk Producers into the Carolina marketing area account constantly increasing due to the Cooperative Association, Inc. for about 1 percent of the market’s total presence of these plants. Record (MVMPCA), proposed a change to the in-area sales, according to the witness. evidence does not support this Order 5 in-area route disposition The Richfood witness stated that argument. For instance, route requirement that would have exactly the Richfood primarily has fluid milk sales disposition in Order 5 by partially opposite effect of Milkco’s proposal. in the eastern Virginia market with regulated plants during the months of The MVMPCA proposal would base the some in the western Virginia market. July through October 1994 was lower in-area requirement on 15 percent of During October 1994, the witness noted, than for the same period of 1993. In ‘‘dairy farmer receipts’’ rather than 15 the eastern and western markets’ Class addition, statistics show that in-area percent of ‘‘total route disposition.’’ I prices were $16.29 and $16.02, route disposition into Order 5 from Because dairy farmer receipts would be respectively. He said that these Virginia partially regulated plants located in larger than total route disposition, the prices, based on the way in which Virginia have been at a relatively proposal would have the effect of Federal order Class I prices are set, constant level over the past two years. making it more difficult to qualify for would represent October Class I For example, in 1993 and 1994, the full regulation under Order 5. differentials of $4.56 for the eastern average share of total Order 5 Class I A spokesman for MVMPCA testified market and $4.29 for the western route disposition from these plants was that the proposed change would amend market. Federal order Class I 2.05 and 1.95 percent, respectively. the Order 5 provision to conform more differentials of this magnitude, he No evidence presented at the hearing closely with the provisions of the emphasized, are not even found in supported the arguments advanced by Middle Atlantic order (Order 4). He said Miami, the highest priced location Milkco and CVMPA concerning the that these definitions should be more under the Federal order system. These alleged competitive advantage that closely aligned to allow distributing facts, he claimed, show that purchasers partially regulated plants in Virginia plants in the Commonwealth of of raw milk in Virginia do not have an have in the Carolina marketing area. The Virginia, which are partially regulated unfair competitive advantage over record is devoid of any data to support under both Orders 4 and 5, to be subject handlers regulated under a Federal this claim. to the same in-area route distribution order. He concluded that a plant with 10 With respect to proponents’ standard under either Federal order. percent of its sales in the Carolina arguments that changes in Order 5 Without alignment of these marketing area and 80 percent in would bring this order into conformance provisions, he said, there could be Virginia should not be forced to be fully with the Middle Atlantic order or the results which are neither intended nor regulated under Order 5. Southeast order, marketing conditions orderly. For instance, he stated, a plant The administrator of the Virginia in the Carolina order do not warrant any could have more route sales in Order 4 State Milk Commission (the change to the in-area route disposition but become fully regulated under Order Commission) testified in opposition to requirement for this reason. Moreover, it 5. Milkco’s original proposal. The is not clear why differences in the in- The witness stated that there are administrator stated that pooling area route disposition requirements of currently three dairies partially Virginia plants that have less than 15 these orders would matter in most regulated in both Orders 4 and 5: percent of their total sales in a Federal circumstances. The only area where this 65028 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules issue seems to be particularly acute is in a location adjustment of minus 5 cents. and to minimize procurement problems Virginia. Even in Virginia, however, The witness stated that ‘‘our only caveat for plants that are located in one Federal there is an insufficient basis to conclude to this pricing formula is that the Order order marketing area but regulated that any competitive advantage exists 5 language should be amended so that under a different order. that would warrant undermining of the the price at Strasburg, Virginia, is The evidence introduced by Virginia State Milk Commission established on the same basis as the MVMPCA shows that its producers regulation. price at Laurel, Maryland.’’ supplying the Order 5 market are The in-area route disposition The cooperative’s spokesman testified located as far south as the Virginia/ requirement is a locally tailored that MVMPCA supplies the Kroger North Carolina border and as far north standard that indicates when a plant is Westover Dairy Order 5 pool as Cumberland County, Maryland. The sufficiently associated with a market to distributing plant at Lynchburg, exhibit, for example, shows that warrant full regulation under the order Virginia, on a year-round basis. In MVMPCA has producers in Halifax regulating that marketing area. Whether addition, he said that since 1992 the County, Virginia, just north of the Order the standard should be 10 percent or 15 cooperative has supplied supplemental 5 base zone. When producer milk from percent depends upon particular milk to nine other Order 5 distributing Halifax is delivered to a distributing circumstances in that area and the plants on a seasonal basis. plant at Lynchburg or to a North demonstrated need for one standard or The witness said that MVMPCA has Carolina handler in the base zone, the the other. Based on the testimony and served as a seasonal balancing agent in milk is priced at the base zone price. data in this hearing record, the present supplying Order 5 plants. He introduced Yet, under present order provisions, if 15 percent in-area route disposition an exhibit showing that MVMPCA’s the milk is not needed for fluid use by requirement under Order 5 should monthly sales to Order 5 plants reach a an Order 5 distributing plant and must remain unchanged. peak during the short production be diverted to MVMPCA’s butter- MVMPCA submitted comments in months of July through October. powder plant at Laurel, 247 miles away, support of the findings and conclusions The witness stated that when it receives 75 cents less than the base of the recommended decision regarding producers’ milk is not needed by Order zone price. Consequently, not only does the Order 5 in-area route disposition 5 plants, it is diverted to MVMPCA’s MVMPCA receive a much lower price requirement. butter-powder plant at Laurel, which for this milk, it also absorbs the hauling serves as a major balancing plant for the 5. Location Adjustments Under the cost to get the milk to Laurel. Middle Atlantic region. The witness A location adjustment of minus 5 Carolina Order also noted that there is another cents at Laurel will narrow the The location adjustment under the balancing facility for Order 5 surplus difference to 5 cents between the Laurel Carolina order for a location within the milk—the Valley Milk butter/powder and Strasburg plants. This adjustment Middle Atlantic Federal order marketing plant located at Strasburg, Virginia— should alleviate the inequity that now area should be determined by which is approximately 80 miles west of exists in pricing between the two plants. subtracting the Order 4 Class I price at Laurel and outside of any Federal order To further reduce the difference in price that location from the base zone Class I marketing area. He said that Order 5 by imposing a minus 5-cent location price specified in Order 5. now prices milk in an inequitable adjustment at Strasburg, as suggested by At the present time, the Order 5 manner by providing a base zone MVMPCA, would entail changing location adjustment for a plant located uniform price for milk that is diverted location adjustments throughout the in the State of Maryland is based upon to Strasburg, but a minus 75-cent State of Virginia, which goes beyond the the shortest hard-surfaced highway location adjustment for milk that is scope of the hearing proposals. distance, as determined by the market diverted to Laurel. MVMPCA filed comments supporting administrator, that such plant is from There was no opposition to this the Order 5 proposed location Greensboro, North Carolina. Once that proposal either at the hearing or in the adjustment change. distance is determined, it is broken post-hearing briefs that were filed. down into 10-mile increments (except MVMPCA’s argument and alternative 6. Base-Paying Months Under the for the last increment, which may be proposal for pricing milk at Laurel is Carolina Order smaller than 10 miles), which are then persuasive and should be adopted. The Maryland & Virginia Milk Producers multiplied by 2.5 cents to determine the location adjustment at Laurel clearly Cooperative Association, Inc., originally location adjustment. Thus, for example, should not be minus 75 cents. It should submitted a proposal to delete the the location adjustment for a plant that be minus 5 cents, the difference month of June from the base-paying is located 295 miles from Greensboro between the Order 5 base zone Class I period of the Order 5 base and excess would be 75 cents (i.e., 30 × 2.5 = .75). price and the Order 4 Class I price at payment plan. At the hearing, however, Maryland and Virginia Milk Laurel. the cooperative modified its proposal to Producers Cooperative Association The appropriate Federal order Class I add the month of February as well as proposed a change in the location price at Laurel, Maryland, is the price delete the month of June. As modified, adjustment applicable to its butter/ established for that location under the the base-paying months would be powder plant at Laurel, Maryland. Middle Atlantic Federal order, which February through May. Initially, the cooperative proposed encompasses Laurel. Thus, if a The MVMPCA witness stated that the treating the Laurel plant as if it were distributing plant located at Laurel were purpose of the base-excess plan is to within the State of Virginia; this would to become regulated under Order 5, its provide producers with an incentive to result in a zero location adjustment at Class I price would be the same as the level their production on a seasonal Laurel. However, at the hearing a price that would apply under Order 4. basis. He indicated that the plan spokesman for the cooperative stated This would ensure competitive pricing encourages production during the that it would support an alternative among competing handlers. months when milk is needed for fluid proposal that would subtract the Order Determining location adjustments for use and discourages production during 4 Class I differential price at Laurel (i.e., plants in this manner helps to assure the flush production months. Under current $3.03) from the Order 5 Class I price at proper alignment of Class I prices marketing conditions, he contended, Greensboro (i.e., $3.08), which results in throughout the Federal order system June is not a surplus month but a month Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65029 when supplemental supplies are On the basis of the statistical data and Kentucky of misaligned uniform prices frequently needed by Order 5 the testimony presented at the hearing, causing Purity and Fleming to be at a distributing plants. Likewise, he the month of February should be competitive disadvantage for milk asserted that February is a month of included in the base-paying period and supplies has been corrected by the substantial surplus production and June deleted to change the base-paying association of additional milk with should be added to the base-paying period to February through May. These Order 11, which has lowered that period rather than remain a base neutral changes should result in a base and order’s Class I utilization. There is no month. excess plan that better serves the needs point in considering a merger of orders During 1992 and 1993, the MVMPCA of the market and that will avoid the in this area until such time as producers witness noted, daily average production unnecessary and inefficient movements and handlers propose such a merger. per Order 5 producer from May to June of needed supplemental milk described For all of these reasons, the motion to declined about 8 percent, from 4,259 by MVMPCA. hold a new hearing is denied. pounds per day to 3,978, and from 4,424 Several conforming changes in order language have been made in response to Rulings on Proposed Findings and to 4,076, respectively. However, he Conclusions indicated that daily average production the addition of February and the in Order 5 in February 1993 of 4,684 removal of June as a base-paying month. Briefs and proposed findings and pounds was the highest production In § 1005.32(a), dealing with ‘‘other conclusions were filed on behalf of month of the year, and production in reports,’’ the words ‘‘March through certain interested parties. These briefs, February 1992 was the third highest June’’ should be changed to ‘‘February proposed findings and conclusions and month. through May’’. In the introductory text the evidence in the record were The witness also testified that a of § 1005.61(a) and in § 1005.61(a)(5), considered in making the findings and collateral consequence of including June the words ‘‘July through February’’ must conclusions set forth above. To the as a base-paying month is that when be changed to ‘‘June through January’’, extent that the suggested findings and supplemental supplies are needed and in § 1005.61(b) the words ‘‘March conclusions filed by interested parties under Order 5, unnecessary and through June’’ must be changed to are inconsistent with the findings and inefficient movements of milk are ‘‘February through May’’. In §§ 1005.90, conclusions set forth herein, the required to avoid the penalty of 1005.91, and 1005.93(b) the words requests to make such findings or reach absorbing the excess price for supplies ‘‘March through June’’ must be changed such conclusions are denied for the of milk that are required for the market’s to ‘‘February through May’’, and the reasons previously stated in this Class I needs. The witness explained words ‘‘February 1’’ in § 1005.93(b) and decision. § 1005.94 should be changed to that when supplemental milk is needed General Findings ‘‘January 1’’ to maintain the existing during the month of June, MVMPCA The findings and determinations avoids the penalty of receiving only the relationship between the start of the base-paying period and the time when hereinafter set forth supplement those excess price for milk delivered directly that were made when the aforesaid from producers’ farms by instead transfers must be completed without the imposition of conditions concerning the orders were first issued and when they delivering plant milk from its Laurel were amended. The previous findings plant. To do this, however, the receipt or transfer of additional base. Finally, ‘‘March 1’’ should be changed and determinations are hereby ratified cooperative must receive the milk at and confirmed, except where they may Laurel, reload it onto a tank truck, and to ‘‘February 1’’ in § 1005.93(e). MVMPCA submitted comments in conflict with those set forth herein. ship it to an Order 5 distributing plant. support of the proposed modifications (a) The tentative marketing He said that the modified proposal to the Order 5 base-excess plan. agreements and the orders, as hereby would eliminate unnecessary and proposed to be amended, and all of the inefficient movements of milk for the Motion for a New Hearing terms and conditions thereof, will tend sole purpose of avoiding the order’s Purity Dairy and Fleming Dairy, both to effectuate the declared policy of the excess price. of Nashville, Tennessee, argued that the Act; There was no opposition to this remedies proposed at this hearing were (b) The parity prices of milk as proposal either at the hearing or in post- not sufficient to address some major determined pursuant to section 2 of the hearing briefs. problems. They maintain that while the Act are not reasonable in view of the The modified proposal to change the proposed amendments would price of feeds, available supplies of base-paying period from March through temporarily correct some problems, in feeds, and other economic conditions June to February through May should be the long run these remedies would only which affect market supply and demand adopted. The removal of June and the make the problems worse. They urged for milk in the marketing area, and the addition of February to the base-paying the Secretary to hold a new hearing to minimum prices specified in the period will bring the base-paying consider a merger of Orders 5, 11, and tentative marketing agreements and the months into closer conformity with the 46 or the merger of Orders 5 and 11 with orders, as hereby proposed to be Class I needs of the market. the proposed Southeast marketing area. amended, are such prices as will reflect For the past three years, the average A major study of Orders 5, 11, and 46 the aforesaid factors, insure a sufficient Class I utilization in January has been and other marketing areas is currently quantity of pure and wholesome milk, 77.8 percent while the June Class I underway at Cornell University. One of and be in the public interest; utilization has averaged 79.8 percent for the purposes of this study is to develop (c) The tentative marketing this same time period. By comparison, recommendations for a merged order in agreements and the orders, as hereby the average Class I utilization for the this area. proposed to be amended, will regulate months of February through May has There have been several major the handling of milk in the same been 75.6, 75.7, 73.9, and 75.1 percent, changes in cooperative representation, manner as, and will be applicable only respectively. The record also shows that supply arrangements, and plant to persons in the respective classes of June is a month in which supplemental ownership in these markets. Milk has industrial and commercial activity supplies of milk are needed to meet the been shifting among the markets. The specified in, marketing agreements upon Class I needs of the market. alleged problem in south central which a hearing has been held; and 65030 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules

(d) All milk and milk products Findings and Determinations issued by the Administrator, handled by handlers, as defined in the The findings and determinations Agricultural Marketing Service, on tentative marketing agreements and the hereinafter set forth supplement those August 17, 1995, and published in the orders as hereby proposed to be that were made when the orders were Federal Register on August 24, 1995 (60 amended, are in the current of interstate first issued and when they were FR 43986), shall be and are the terms commerce or directly burden, obstruct, amended. The previous findings and and provisions of this order, amending or affect interstate commerce in milk or determinations are hereby ratified and the orders, and are set forth in full its products. confirmed, except where they may herein. Rulings on Exceptions conflict with those set forth herein. PART 1005ÐMILK IN THE CAROLINA (a) Findings. A public hearing was MARKETING AREA No exceptions were received in held upon certain proposed opposition to the proposed amendments amendments to the tentative marketing 1. The authority citation for 7 CFR set forth in the recommended decision. agreements and to the orders regulating parts 1005, 1011, and 1046 continues to the handling of milk in the aforesaid Marketing Agreement and Order read as follows: marketing areas. The hearing was held Authority: 7 U.S.C. 601–674. Annexed hereto and made a part pursuant to the provisions of the hereof are two documents, a Marketing Agricultural Marketing Agreement Act 2. In § 1005.7, the reference ‘‘(d)’’ in Agreement regulating the handling of of 1937, as amended (7 U.S.C. 601–674), the introductory text is revised to read milk, and an Order amending the orders and the applicable rules of practice and ‘‘(e)’’, in paragraph (b) the words regulating the handling of milk in the procedure (7 CFR Part 900). ‘‘Director of the Dairy Division’’ and Carolina, Tennessee Valley, and Upon the basis of the evidence ‘‘Director’’ are revised to read ‘‘market Louisville-Lexington-Evansville introduced at such hearing and the administrator’’ wherever they appear, marketing areas, which have been record thereof, it is found that: paragraph (d) is redesignated as decided upon as the detailed and (1) The said orders as hereby paragraph (e) and revised, and a new appropriate means of effectuating the amended, and all of the terms and paragraph (d) is added to read as foregoing conclusions. conditions thereof, will tend to follows: effectuate the declared policy of the Act; It is hereby ordered that this entire (2) The parity prices of milk, as § 1005.7 Pool plant. decision and the two documents determined pursuant to section 2 of the annexed hereto be published in the * * * * * Act, are not reasonable in view of the Federal Register. (d) A plant located within the price of feeds, available supplies of marketing area (other than a producer- Determination of Producer Approval feeds, and other economic conditions handler plant or a governmental agency and Representative Period which affect market supply and demand plant) that meets the qualifications for milk in the aforesaid marketing August 1995 is hereby determined to described in paragraph (a) of this areas. The minimum prices specified in section regardless of its quantity of route be the representative period for the the orders as hereby amended are such purpose of ascertaining whether the disposition in any other Federal order prices as will reflect the aforesaid marketing area. issuance of the orders, as amended and factors, insure a sufficient quantity of as hereby proposed to be amended, pure and wholesome milk, and be in the (e) The term ‘‘pool plant’’ shall not regulating the handling of milk in the public interest; apply to the following plants: aforesaid marketing areas is approved or (3) The said orders as hereby (1) A producer-handler plant; favored by producers, as defined under amended regulate the handling of milk (2) A governmental agency plant; the terms of the individual orders (as in the same manner as, and is applicable (3) A plant with route disposition in amended and as hereby proposed to be only to persons in the respective classes amended), who during such this marketing area that is located of industrial or commercial activity within the marketing area of another representative period were engaged in specified in, marketing agreements upon the production of milk for sale within Federal order and that is fully regulated which a hearing has been held; and under such order; the aforesaid marketing areas. (4) All milk and milk products handled by handlers, as defined in the (4) A plant qualified pursuant to List of Subjects in 7 CFR Parts 1005, paragraph (a) of this section which is 1011, and 1046 order as hereby amended, are in the current of interstate commerce or not located within any Federal order Milk marketing orders. directly burden, obstruct, or affect marketing area but which also meets the interstate commerce in milk or its pooling requirements of another Federal Dated: December 4, 1995. products. order and from which there is a greater Shirley R. Watkins, quantity of route disposition, except Acting Assistant Secretary, Marketing and Order Relative to Handling filled milk, during the month in such Regulatory Programs. It is therefore ordered, that on and other Federal order marketing area than in this marketing area; and Order Amending the Orders Regulating after the effective date hereof, the the Handling of Milk in the Carolina, handling of milk in each of the specified (5) A plant qualified pursuant to Tennessee Valley, and Louisville- orders’ marketing areas shall be in paragraph (b) of this section if the plant Lexington-Evansville Marketing Areas conformity to and in compliance with has automatic pooling status under the terms and conditions of each of the another Federal order or if the plant This order shall not become effective orders, as amended, and as hereby meets the pooling requirements of unless and until the requirements of amended, as follows: another Federal order during the month § 900.14 of the rules of practice and The provisions of the proposed and makes greater qualifying shipments procedure governing proceedings to marketing agreements and orders to plants regulated under such other formulate marketing agreements and amending each of the specified orders order than to plants regulated under this marketing orders have been met. contained in the recommended decision order. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65031

§ 1005.32 [Amended] (b) In Kentucky, the counties of Bell, finds that revision is necessary to obtain 3. In § 1005.32(a), the words ‘‘March Breathitt, Clay, Harlan, Jackson, Knott, needed shipments or to prevent through June’’ are revised to read Knox, Laurel, Leslie, Letcher, McCreary, uneconomic shipments. Before making ‘‘February through May’’ wherever they Owsley, Perry, Pulaski, Rockcastle, and such a finding, the market administrator appear. Whitley. shall investigate the need for revision 4. In § 1005.53, paragraph (a)(6) is * * * * * either at his or her own initiative or at redesignated as paragraph (a)(7) and 10. In § 1011.7, the reference ‘‘(d)’’ in the request of interested persons. If the revised, and a new paragraph (a)(6) is the introductory text is revised to read investigation shows that a revision may added to read as follows: ‘‘(e)’’, paragraph (b) is revised, be appropriate, the market administrator paragraph (d) is redesignated as shall issue a notice stating that the § 1005.53 Plant location adjustments for paragraph (e) and revised, and a new revision is being considered and invite handlers. paragraph (d) is added to read as data, views, and arguments. (a) * * * follows: * * * * * (6) For a plant located within the § 1011.7 Pool plant. (d) A plant located within the Middle Atlantic Federal Order marketing area (other than a producer- Marketing Area (part 1004), the * * * * * handler plant or a governmental agency (b) A plant, other than a plant adjustment shall be computed by plant) that meets the qualifications described in paragraph (a) of this subtracting the base zone Class I price described in paragraph (a) of this section, from which fluid milk products, specified in § 1005.50(a) from the Class section regardless of its quantity of route except filled milk, are shipped to plants I price applicable at such plant under disposition in any other Federal order described in paragraph (a) of this the Middle Atlantic Federal Order; and marketing area. section subject to the following (7) For a plant located outside the (e) The term ‘‘pool plant’’ shall not areas specified in paragraphs (a)(1) additional conditions: (1) During the months of August apply to the following plants: through (a)(6) of this section, the (1) A producer-handler plant; through November, January and adjustment shall be a minus 2.5 cents (2) A governmental agency plant; for each 10 miles or fraction thereof (by February, such shipments must equal (3) A plant with route disposition in the shortest hard-surfaced highway not less than 60 percent (40 percent this marketing area that is located distance as determined by the market during the months of December and within the marketing area of another March through July) of the total quantity administrator) that such plant is from Federal order and that is fully regulated of milk approved by a duly constituted the nearer of the city halls in Greenville, under such order; South Carolina, or Charlotte or regulatory agency for fluid consumption (4) A plant qualified pursuant to Greensboro, North Carolina. that is received during the month at paragraph (a) of this section which is such plant from handlers described in not located within any Federal order § 1005.61 [Amended] § 1011.9 (c) and (d) and from dairy marketing area but which also meets the farmers, including milk that is diverted 5. In § 1005.61 paragraphs (a) pooling requirements of another Federal from the plant pursuant to § 1011.13 but introductory text and (a)(5), the words order and from which there is a greater excluding milk diverted to the plant; ‘‘July through February’’ are revised to quantity of route disposition, except (2) The operator of a plant described read ‘‘June through January’’ and in filled milk, during the month in such in this paragraph may include milk paragraph (b) introductory text the other Federal order marketing area than diverted from the plant to plants words ‘‘March through June’’ are revised in this marketing area; and described in paragraph (a) of this to read ‘‘February through May’’. (5) A plant qualified pursuant to section for up to one-half of the paragraph (b) of this section if the plant §§ 1005.90 and 1005.91 [Amended] shipments required pursuant to this has automatic pooling status under 6. In §§ 1005.90 and 1005.91, the paragraph; another Federal order or if the plant words ‘‘March through June’’ are revised (3) A plant which meets the shipping meets the pooling requirements of to read ‘‘February through May’’ requirements specified in this paragraph another Federal order during the month wherever they appear. during the months of July through February shall be a pool plant during and makes greater qualifying shipments § 1005.93 [Amended] the following months of March through to plants regulated under such other 7. In § 1005.93 paragraph (b), the June unless the milk received at the order than to plants regulated under this words ‘‘March through June’’ are revised plant does not continue to meet the order. to read ‘‘February through May’’ requirements of a duly constituted § 1011.13 [Amended] wherever they appear, the words regulatory agency, the plant fails to meet 11. In § 1011.13 paragraph (e)(3), the ‘‘February 1’’ are revised to read a shipping requirement instituted words ‘‘Director of the Dairy Division’’ ‘‘January 1’’, and in paragraph (e) the pursuant to paragraph (b)(4) of this and ‘‘Director’’ are revised to read words ‘‘March 1’’ are revised to read section, or a written application is filed ‘‘market administrator’’ wherever they ‘‘February 1’’. by the plant operator with the market appear. administrator on or before the first day § 1005.94 [Amended] 12. Section 1011.52(a)(3) is revised to of any such month requesting that the read as follows: 8. In § 1005.94, the words ‘‘February plant be designated a nonpool plant for 1’’ are revised to read ‘‘January 1’’. such month and for each subsequent § 1011.52 Plant location adjustments for month through June during which it handlers. PART 1011ÐMILK IN THE TENNESSEE would not otherwise qualify as a pool (a) * * * VALLEY MARKETING AREA plant; and (3) For such milk which is physically 9. Section 1011.2 is amended by (4) The shipping requirements received at a plant located within the revising paragraph (b) to read as follows: described in paragraph (b)(1) and (b)(3) Kentucky counties of Bell, Breathitt, of this section may be increased or Clay, Harlan, Jackson, Knott, Knox, § 1011.2 Tennessee Valley marketing area decreased up to 10 percentage points by Laurel, Leslie, Letcher, McCreary, * * * * * the market administrator if he or she Owsley, Perry, Pulaski, Rockcastle, and 65032 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules

Whitley, the Class I price shall be Attest modification, if necessary. That AD was decreased by 32 cents; and [FR Doc. 95–30670 Filed 12–15–95; 8:45 am] prompted by reports of fatigue cracks in the caps of the wing rear spar inboard * * * * * BILLING CODE 3410±02±P of inner wing station 346. The actions PART 1046ÐMILK IN THE specified by that AD are intended to LOUISVILLE-LEXINGTON-EVANSVILLE prevent rupture of the rear spar, which NUCLEAR REGULATORY MARKETING AREA could result in extensive damage to the COMMISSION wing and fuel spillage. This action § 1046.2 [Amended] 10 CFR Part 50 would add various improved 13. In § 1046.2, in the list of Kentucky inspections and follow-on actions, and counties, the word ‘‘Pulaski’’ is RuleNet Communication Program; Fire would require that the initial removed. Protection RegulationsÐCorrection inspections be accomplished at reduced [Note: The following appendix will not be thresholds. published in the Code of Federal AGENCY: Nuclear Regulatory Commission. DATES: Comments must be received by Regulations.] February 13, 1996. ACTION: RuleNet announcement; Appendix—Marketing Agreement Correction. ADDRESSES: Submit comments in Regulating the Handling of Milk in Certain triplicate to the Federal Aviation Specified Marketing Areas SUMMARY: This document corrects a Administration (FAA), Transport The parties hereto, in order to effectuate notice of availability appearing in the Airplane Directorate, ANM–103, the declared policy of the Act, and in Federal Register on November 15, 1995 Attention: Rules Docket No. 95–NM– accordance with the rules of practice and (60 FR 57370), that listed the electronic 88–AD, 1601 Lind Avenue, SW., procedure effective thereunder (7 CFR Part address for accessing the RuleNet 900), desire to enter into this marketing Renton, Washington 98055–4056. agreement and do hereby agree that the program. This action is necessary to Comments may be inspected at this provisions referred to in paragraph I hereof correct a printing error in the RuleNet location between 9:00 a.m. and 3:00 as augmented by the provisions specified in address. p.m., Monday through Friday, except paragraph II hereof, shall be and are the FOR FURTHER INFORMATION CONTACT: Federal holidays. provisions of this marketing agreement as if Francis Cameron, U.S. Nuclear The service information referenced in set out in full herein. Regulatory Commission, Washington, the proposed rule may be obtained from I. The findings and determinations, order DC 20555–0001, telephone (301) 415– Lockheed Aeronautical Systems relative to handling, and the provisions of 1642. Support Company, Field Support §§ llllll1 to llllll, all inclusive, of the order regulating the On page 57370, under the ADDRESSES Department, Dept. 693, Zone 0755, 2251 handling of milk in the said marketing areas heading, in the fifth line, the electronic Lake Park Drive, Smyrna, Georgia (7 CFR part llll2) which is annexed address that reads ‘‘http:/nssc.llnl.gov/ 30080. This information may be hereto; and RuleNet’’ should read ‘‘http:// examined at the FAA, Transport II. The following provisions: nssc.llnl.gov/RuleNet.’’ Airplane Directorate, 1601 Lind § llllll3 Record of milk handled and Dated at Rockville, Maryland, this 13th day Avenue, SW., Renton, Washington; or at authorization to correct typographical errors. of December, 1995. the FAA, Small Airplane Directorate, (a) Record of milk handled. The For the Nuclear Regulatory Commission. Atlanta Aircraft Certification Office, undersigned certifies that he/she handled Campus Building, 1701 Columbia during the month of llllll4, Michael T. Lesar, llllll hundredweight of milk covered Chief, Rules Review Section, Rules Review Avenue, Suite 2–160, College Park, by this marketing agreement. and Directives Branch. Georgia. (b) Authorization to correct typographical [FR Doc. 95–30666 Filed 12–15–95; 8:45 am] FOR FURTHER INFORMATION CONTACT: errors. The undersigned hereby authorizes BILLING CODE 7590±01±P Thomas Peters, Aerospace Engineer, the Director, or Acting Director, Dairy Flight Test Branch, ACE–116A, FAA, Division, Agricultural Marketing Service, to Small Airplane Directorate, Atlanta correct any typographical errors which may have been made in this marketing agreement. DEPARTMENT OF TRANSPORTATION Aircraft Certification Office, Campus § llllll3 Effective date. This Building, 1701 Columbia Avenue, Suite marketing agreement shall become effective Federal Aviation Administration 2–160, College Park, Georgia 30337– upon the execution of a counterpart hereof by 2748; telephone (404) 305–7367; fax the Secretary in accordance with Section 14 CFR Part 39 (404) 305–7348. 900.14(a) of the aforesaid rules of practice [Docket No. 95±NM±88±AD] and procedure. SUPPLEMENTARY INFORMATION: In Witness Whereof, The contracting Airworthiness Directives; Lockheed Comments Invited handlers, acting under the provisions of the Model L±1011±385 Series Airplanes Act, for the purposes and subject to the Interested persons are invited to limitations herein contained and not AGENCY: Federal Aviation participate in the making of the otherwise, have hereunto set their respective Administration, DOT. proposed rule by submitting such hands and seals. ACTION: Notice of proposed rulemaking written data, views, or arguments as Signature (NPRM). they may desire. Communications shall By (Name) lllllllllllllll identify the Rules Docket number and (Title) lllllllllllllllll SUMMARY: This document proposes the be submitted in triplicate to the address (Address) llllllllllllllll supersedure of an existing airworthiness specified above. All communications (Seal) directive (AD), applicable to all received on or before the closing date Lockheed Model L–1011–385 series for comments, specified above, will be 1 First and last sections of order. airplanes, that currently requires considered before taking action on the 2 Appropriate Part number. inspections to detect cracking of certain proposed rule. The proposals contained 3 Next consecutive section number. areas of the rear spar caps, web, skin, in this notice may be changed in light 4 Appropriate representative period for the order. and certain fastener holes; and repair or of the comments received. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65033

Comments are specifically invited on thresholds than those specified 1. Lockheed L–1011 Service Bulletin the overall regulatory, economic, previously. The service bulletin revision 093–57–196, Revision 6, dated environmental, and energy aspects of describes the following various December 6, 1994, and Lockheed L– the proposed rule. All comments improved inspection procedures and 1011 Service Bulletin Change submitted will be available, both before follow-on actions: Notification 093–57–196, R6–CN1, and after the closing date for comments, 1. Repetitive X-ray (radiographic) dated August 22, 1995. in the Rules Docket for examination by inspections to detect cracking of the 2. Lockheed L–1011 Service Bulletin interested persons. A report upper and lower caps of the rear spar 093–57–184, Revision 7, dated summarizing each FAA-public contact and of the associated web and skin areas December 6, 1994, and Lockheed L– concerned with the substance of this between IWS 231 and IWS 343. The 1011 Service Bulletin Change proposal will be filed in the Rules inspection procedure specified in the Notification 093–57–196, R7–CN1, Docket. revised service bulletin has been dated August 22, 1995. Commenters wishing the FAA to changed from that described in Revision These service bulletins describe acknowledge receipt of their comments 3 to clarify the location for the X-ray procedures for modification of the rear submitted in response to this notice tube head for certain exposures. spar upper and lower caps between IWS must submit a self-addressed, stamped 2. Repetitive eddy current surface 228 and 346. Among other things, these postcard on which the following scan inspections to detect cracking of service bulletin revisions were issued to statement is made: ‘‘Comments to the upper spar cap-to-skin and the standardize the rework of fastener holes, Docket Number 95–NM–88–AD.’’ The upper spar cap-to-web attachment areas add new instructions to refer to postcard will be date stamped and around the fasteners from IWS 310 to drawings to accomplish the returned to the commenter. the main landing gear (MLG) trunnion modification, clarify miscellaneous information, and to reference certain Availability of NPRMs fitting at approximately IWS 343. 3. A bolt hole eddy current inspection service information for web damage Any person may obtain a copy of this extending beyond IWS 327. to detect cracking in the 11⁄8-inch NPRM by submitting a request to the diameter fastener hole located inboard Discussion of the Proposed Action FAA, Transport Airplane Directorate, of IWS 343. The service bulletin Since an unsafe condition has been ANM–103, Attention: Rules Docket No. specifies that this inspection is identified that is likely to exist or 95–NM–88–AD, 1601 Lind Avenue, accomplished at an initial inspection develop on other products of this same SW., Renton, Washington 98055–4056. threshold only. (However, the service type design, the proposed AD would bulletin also specifies that this Discussion supersede AD 93–17–10 to continue to inspection must be accomplished on On August 26, 1993, the FAA issued require inspections to detect cracking of any fastener hole where the fastener is AD 93–17–10, amendment 39–8681 (58 certain areas of the rear spar caps, web, removed for repair or replacement.) FR 54947, October 25, 1993), which is skin, and certain fastener holes; and applicable to all Lockheed Model L– 4. For airplanes on which cracking is repair or modification, if necessary. The 1011–385 series airplanes. That AD found during the bolt hole eddy current 1 proposed AD would add various requires inspections to detect cracking inspection of the 1 ⁄8-inch diameter improved inspections and follow-on of certain areas of the rear spar caps, fastener hole located inboard of IWS actions, and would require that the web, skin, and certain fastener holes; 343, the service bulletin describes initial inspections be accomplished at and repair or modification, if necessary. procedures for a bolt hole eddy current reduced thresholds. The inspections, That action was prompted by reports of inspection to detect cracking at the four 5 follow-on actions, and modification fatigue cracks in the caps of the wing ⁄8-inch fastener locations directly below 1 would be required to be accomplished rear spar inboard of inner wing station the 1 ⁄8-inch fastener. in accordance with the service bulletin (IWS) 346. The requirements of that AD 5. For airplanes on which Option iv described previously. The repair would are intended to prevent rupture of the or v of Lockheed Repair Procedure LCC– be required to be accomplished in rear spar, which could result in 7622–368 has not been accomplished, accordance with a method approved by extensive damage to the wing and fuel the service bulletin describes the FAA or in accordance with the spillage. procedures for subsequent repetitive Lockheed Model L–1011 Structural Since the issuance of that AD, the ultrasonic inspections to detect cracking Repair Manual. FAA has received additional reports of in the fastener hole. These inspections Operators should note that only the fatigue cracking in the subject areas on are performed in conjunction with eddy inspection procedures (and follow-on these airplanes. The airplanes on which current surface scan inspections to actions) described in Lockheed L–1011 the cracking occurred had accumulated detect cracking of the upper horizontal Service Bulletin 093–57–203 would be 1 fewer landings than the number of edge of the rear spar web, ⁄2-inch each required by this proposal. In a separate landings specified as the inspection side of the inboard edge of the MLG AD action [AD 94–05–01, amendment thresholds in AD 93–17–10. trunnion fitting. 39–8839 (59 FR 10275, March 4, 1994)], 6. Repetitive low frequency eddy the FAA previously addressed the Discussion of Relevant Service current ring probe inspections to detect Information portion of that service bulletin that cracking of the upper cap/skin of the deals with the modification Subsequent to the finding of this new rear spar between IWS 310 to IWS 326 cracking, the manufacturer issued, and and the cap/web fasteners. Cost Impact the FAA reviewed and approved, Since the issuance of AD 93–17–10, There are approximately 236 Model Lockheed L–1011 Service Bulletin 093– the FAA has also reviewed and L–1011–385 series airplanes of the 57–203, Revision 4, dated March 27, approved later revisions of certain affected design in the worldwide fleet. 1995. The revised service bulletin service information specified in The FAA estimates that 118 airplanes of describes procedures for inspections to paragraph (d) of that AD as an U.S. registry would be affected by this detect cracking in certain areas of the alternative method of repairing proposed AD. rear spar caps, web, skin, and certain confirmed findings of cracking, as The actions that are currently fastener holes at earlier inspection follows: required by AD 93–17–10 take 65034 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules approximately 21 work hours per The Proposed Amendment Lockheed service documents listed below. After the effective date of this AD, the airplane to accomplish, at an average Accordingly, pursuant to the labor rate of $60 per work hour. Based inspections and follow-on actions shall be authority delegated to me by the performed only at the times specified in and on these figures, the cost impact on U.S. Administrator, the Federal Aviation in accordance with Revision 4 of Lockheed operators of the actions currently Administration proposes to amend part L–1011 Service Bulletin 093–57–203. [The required is estimated to be $148,680, or 39 of the Federal Aviation Regulations inspections and follow-on actions include: $1,260 per airplane. (14 CFR part 39) as follows: repetitive X-ray (radiographic) inspections; The new actions that are proposed in repetitive eddy current surface scan this AD action would take PART 39ÐAIRWORTHINESS inspections; bolt hole eddy current approximately 64 work hours per inspections at various locations; repetitive DIRECTIVES ultrasonic inspections in conjunction with airplane to accomplish, at an average 1. The authority citation for part 39 eddy current surface scan inspections (for labor rate of $60 per work hour. [This certain airplanes); and repetitive low work hour estimate assumes that X-ray continues to read as follows: frequency eddy current ring probe inspections are done of both upper and Authority: 49 U.S.C. 106(g), 40101, 40113, inspections.] lower caps, and that the ultrasonic 44701. • Lockheed L–1011 Service Bulletin 093– inspection indicates cracking in each of 57–203, Revision 3, dated October 28, 1991; § 39.13 [Amended] five bolt holes (per wing), thus requiring or 2. Section 39.13 is amended by • Lockheed L–1011 Service Bulletin subsequent bolt hole eddy current Service Bulletin 093–57–203, Revision 3, inspections to confirm crack findings. removing amendment 39–8681 (58 FR 54947, October 25, 1993), and by adding dated October 28, 1991, as amended by The estimate includes inspections of Lockheed L–1011 Service Bulletin Change both wings.] Based on these figures, the a new airworthiness directive (AD), to Notification 093–57–203, R3–CN1, dated cost impact on U.S. operators of the read as follows: June 22, 1992; or proposed requirements of this AD is Lockhead Aeronautical Systems Company: • Lockheed L–1011 Service Bulletin 093– estimated to be $453,120, or $3,840 per Docket 95–NM–88–AD. Supersedes AD 57–203, Revision 4, dated March 27, 1995. airplane. 93–17–10, Amendment 39–8681. (1) For airplanes on which the inspections required by AD 93–17–10, amendment 39– Applicability: All Model L–1011–385–1, L– The cost impact figures discussed 8681, have been initiated prior to the above are based on assumptions that no 1011–385–1–14, L–1011–385–1–15, and L– effective date of this AD: Perform the operator has yet accomplished any of 1011–385–3 series airplanes, certificated in inspections and follow-on actions at the the current or proposed requirements of any category. times specified in Table I of Lockheed L– this AD action, and that no operator Note 1: This AD applies to each airplane 1011 Service Bulletin Change Notification would accomplish those actions in the identified in the preceding applicability 093–57–203, R3–CN1, dated June 22, 1992, or provision, regardless of whether it has been within 6 months after November 24, 1993 future if this AD were not adopted. otherwise modified, altered, or repaired in (the effective date of AD 93–17–10, Regulatory Impact the area subject to the requirements of this amendment 39–8681), whichever occurs AD. For airplanes that have been modified, later. The regulations proposed herein altered, or repaired so that the performance Note 3: As allowed by the phrase, ‘‘unless would not have substantial direct effects of the requirements of this AD is affected, the accomplished previously,’’ if the inspections on the States, on the relationship owner/operator must use the authority and follow-on actions required by this between the national government and provided in paragraph (d) of this AD to paragraph were conducted prior to November the States, or on the distribution of request approval from the FAA. This 24, 1993, in accordance with Lockheed L– power and responsibilities among the approval may address either no action, if the 1011 Service Bulletin 093–57–203, Revision current configuration eliminates the unsafe various levels of government. Therefore, 2, dated January 25, 1991, those inspections condition; or different actions necessary to need not be repeated. in accordance with Executive Order address the unsafe condition described in (2) For airplanes on which the inspections 12612, it is determined that this this AD. Such a request should include an required by AD 93–17–10, amendment 39– proposal would not have sufficient assessment of the effect of the changed 8681, have not been initiated prior to the federalism implications to warrant the configuration on the unsafe condition effective date of this AD: Perform the preparation of a Federalism Assessment. addressed by this AD. In no case does the inspections and follow-on actions at the For the reasons discussed above, I presence of any modification, alteration, or times specified in Table I of Lockheed L– certify that this proposed regulation (1) repair remove any airplane from the 1011 Service Bulletin 093–57–203, Revision applicability of this AD. is not a ‘‘significant regulatory action’’ 4, dated March 27, 1995, or within 6 months after the effective date of this AD, whichever under Executive Order 12866; (2) is not Compliance: Required as indicated, unless accomplished previously. occurs later. a ‘‘significant rule’’ under the DOT (b) If no cracking is found, perform the Regulatory Policies and Procedures (44 Note 2: Paragraphs (a)(1) and (b) of this AD restate the requirement for repetitive repetitive inspections and follow-on actions FR 11034, February 26, 1979); and (3) if inspections and follow-on actions contained specified in the Accomplishment Instructions of the Lockheed service promulgated, will not have a significant in paragraphs (a) and (b) of AD 93–17–10. documents listed below thereafter at intervals economic impact, positive or negative, Therefore, for operators who have previously not to exceed 2,000 flight cycles. After the on a substantial number of small entities accomplished at least the initial inspection in effective date of this AD, the inspections and accordance with AD 93–17–10, paragraphs under the criteria of the Regulatory follow-on actions shall be performed only in Flexibility Act. A copy of the draft (a)(1) and (b) of this AD require that the next accordance with Revision 4 of Lockheed L– regulatory evaluation prepared for this scheduled inspection be performed within 1011 Service Bulletin 093–57–203. action is contained in the Rules Docket. 2,000 flight cycles after the last inspection • Lockheed L–1011 Service Bulletin 093– A copy of it may be obtained by performed in accordance with paragraphs (a) 57–203, Revision 3, dated October 28, 1991; and (b) of AD 93–17–10. contacting the Rules Docket at the or • location provided under the caption To prevent rupture of the rear spar, which Lockheed L–1011 Service Bulletin 093– could result in extensive damage to the wing 57–203, Revision 3, dated October 28, 1991, ADDRESSES. and fuel spillage, accomplish the following: as amended by Lockheed L–1011 Service List of Subjects in 14 CFR Part 39 (a) Perform inspections and various follow- Bulletin Change Notification 093–57–203, on actions to detect cracking in the areas R3–CN1, dated June 22, 1992; or Air transportation, Aircraft, Aviation specified in and in accordance with Part II • Lockheed L–1011 Service Bulletin 093– safety, Safety. of the Accomplishment Instructions of the 57–203, Revision 4, dated March 27, 1995; Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65035

(c) If any finding of cracking is confirmed, Issued in Renton, Washington, on above, will be considered before taking prior to further flight, accomplish paragraph December 11, 1995. action on the proposed rule. The (c)(1), (c)(2), or (c)(3) of this AD. Darrell M. Pederson, proposals contained in this notice may (1) Repair the cracked area in accordance Acting Manager, Transport Airplane be changed in light of the comments with a method approved by the Manager, Directorate, Aircraft Certification Service. received. Atlanta Aircraft Certification Office (ACO), [FR Doc. 95–30646 Filed 12–15–95; 8:45 am] Comments are specifically invited on FAA, Small Airplane Directorate. Thereafter, BILLING CODE 4910±13±U the overall regulatory, economic, perform the repetitive inspections and environmental, and energy aspects of follow-on actions required by paragraph (b) the proposed rule. All comments of this AD. Or submitted will be available, both before (2) Repair the rear spar upper and lower 14 CFR Part 39 and after the closing date for comments, caps between IWS 228 and 346 in accordance [Docket No. 95±ANE±41] with the Lockheed Model L–1011 Structural in the Rules Docket for examination by Repair Manual. Thereafter, perform the Airworthiness Directives; General interested persons. A report repetitive inspections and follow-on actions Electric Company CF34 Series summarizing each FAA-public contact required by paragraph (b) of this AD. Or Turbofan Engines concerned with the substance of this (3) Modify the rear spar upper and lower proposal will be filed in the Rules caps between IWS 228 and 346 in accordance AGENCY: Federal Aviation Docket. with the Lockheed service bulletins listed Administration, DOT. Commenters wishing the FAA to below, as applicable. Accomplishment of the ACTION: Notice of proposed rulemaking acknowledge receipt of their comments modification constitutes terminating action (NPRM). submitted in response to this notice for the requirements of this AD. must submit a self-addressed, stamped • Lockheed L–1011 Service Bulletin 093– SUMMARY: This document proposes the postcard on which the following 57–184, Revision 7, dated December 6, 1994, adoption of a new airworthiness statement is made: ‘‘Comments to as amended by Change Notification 093–57– directive (AD) that is applicable to Docket Number 95–ANE–41.’’ The 184, R7–CN1, dated August 22, 1995; or General Electric Company (GE) CF34 • postcard will be date stamped and Lockheed L–1011 Service Bulletin 093– series turbofan engines. This proposal returned to the commenter. 57–196, Revision 6, dated December 6, 1994, would reduce the allowable operating as amended by Change Notification 093–57– cyclic life limit for affected high Availability of NPRMs 196, R6–CN1, dated August 22, 1995; or • pressure compressor (HPC) stage 1 rotor Any person may obtain a copy of this Lockheed L–1011 Service Bulletin 093– disks. This proposal is prompted by an NPRM by submitting a request to the 57–203, Revision 4, dated March 27, 1995. updated stress and life analysis. The FAA, New England Region, Office of the Note 4: Accomplishment of the actions specified by the proposed AD Assistant Chief Counsel, Attention: modification specified in paragraph (c)(3) of are intended to prevent HPC stage 1 Rules Docket No. 95–ANE–41, 12 New this AD prior to the effective date of this AD rotor disk rupture, engine failure, and England Executive Park, Burlington, MA in accordance with the following Lockheed service bulletins, as applicable, is considered damage to the aircraft. 01803–5299. to be in compliance with this paragraph: DATES: Comments must be received by Discussion • February 16, 1996. Lockheed L–1011 Service Bulletin 093– The Federal Aviation Administration 57–184, Revision 6, dated October 28, 1991; ADDRESSES: Submit comments in • triplicate to the Federal Aviation (FAA) has reviewed and approved an Lockheed L–1011 Service Bulletin 093– updated stress and life analysis for high 57–184, Revision 7, dated December 6, 1994; Administration (FAA), New England pressure compressor (HPC) stage 1 rotor • Lockheed L–1011 Service Bulletin 093– Region, Office of the Assistant Chief 57–196, Revision 5, dated October 28, 1991; Counsel, Attention: Rules Docket No. disks installed in General Electric • Lockheed L–1011 Service Bulletin 093– 95–ANE–41, 12 New England Executive Company (GE) CF34 series turbofan 57–196, Revision 6, dated December 6, 1994; Park, Burlington, MA 01803–5299. engines. Although the FAA has not • Lockheed L–1011 Service Bulletin 093– Comments may be inspected at this received any reports of cracked or failed 57–203, Revision 3, dated October 28, 1991; location between 8:00 a.m. and 4:30 HPC stage 1 rotor disks, the stress and or life analysis was performed using new, • p.m., Monday through Friday, except Lockheed L–1011 Service Bulletin 093– Federal holidays. improved methodology. This analysis 57–203, Revision 3, dated October 28, 1991, revealed that the published cyclic life as amended by Change Notification 093–57– FOR FURTHER INFORMATION CONTACT: limits were higher than updated 203, R3–CN1, dated June 22, 1992. Eugene Triozzi, Aerospace Engineer, calculated lives, which could result in (d) An alternative method of compliance or Engine Certification Office, FAA, Engine the operation of an HPC stage 1 rotor adjustment of the compliance time that and Propeller Directorate, 12 New disk beyond its cyclic life. This provides an acceptable level of safety may be England Executive Park, Burlington, MA condition, if not corrected, could result used if approved by the Manager, Atlanta 01803–5299; telephone (617) 238–7148, in HPC stage 1 rotor disk rupture, ACO. Operators shall submit their requests fax (617) 238–7199. through an appropriate FAA Principal engine failure, and damage to the Maintenance Inspector, who may add SUPPLEMENTARY INFORMATION: aircraft. Since an unsafe condition has been comments and then send it to the Manager, Comments Invited Atlanta ACO. identified that is likely to exist or Interested persons are invited to Note 5: Information concerning the develop on other products of this same existence of approved alternative methods of participate in the making of the type design, the proposed AD would compliance with this AD, if any, may be proposed rule by submitting such reduce the allowable operating cyclic obtained from the Atlanta ACO. written data, views, or arguments as life limit for affected HPC stage 1 rotor (e) Special flight permits may be issued in they may desire. Communications disks. accordance with sections 21.197 and 21.199 should identify the Rules Docket There are approximately 440 engines of the Federal Aviation Regulations (14 CFR number and be submitted in triplicate to of the affected design in the worldwide 21.197 and 21.199) to operate the airplane to the address specified above. All fleet. The FAA estimates that 150 a location where the requirements of this AD communications received on or before engines installed on aircraft of U.S. can be accomplished. the closing date for comments, specified registry would be affected by this 65036 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules proposed AD, that it would take zero § 39.13 [Amended] 14 CFR Part 39 additional work hours per engine to 2. Section 39.13 is amended by [Docket No. 95±NM±128±AD] accomplish the proposed actions, and adding the following new airworthiness that the average labor rate is $60 per directive: Airworthiness Directives; Jetstream work hour. Required parts would cost Model 4101 Airplanes approximately $7,667 per engine, based General Electric Company: Docket No. 95– on the estimated current part cost, ANE–41. AGENCY: Federal Aviation prorated downward by a factor equal to Applicability: General Electric Company Administration, DOT. the quotient of the difference between (GE) Models CF34–1A, –3A, and –3A2 ACTION: Notice of proposed rulemaking the original cyclic life limit (9000 turbofan engines, with high pressure (NPRM). cycles) and the revised cyclic life limit compressor (HPC) stage 1 rotor disks, part SUMMARY: This document proposes the (6000 cycles) divided by the original number 6040T79G01, installed. These engines are installed on but not limited to adoption of a new airworthiness cyclic life limit. Based on these figures, directive (AD) that is applicable to the total cost impact of the proposed AD Canadair Limited Model CL–600–2A12 and CL–600–2B16 aircraft. certain Jetstream Model 4101 airplanes. on U.S. operators is estimated to be This proposal would require an $1,150,000. Note: This airworthiness directive (AD) applies to each engine identified in the inspection to verify the proper position The regulations proposed herein preceding applicability provision, regardless of ‘‘door open’’ placards on the inside would not have substantial direct effects of whether it has been modified, altered, or of the main entrance door, and on the States, on the relationship repaired in the area subject to the replacement with new placards between the national government and requirements of this AD. For engines that appropriately positioned, if necessary. the States, or on the distribution of have been modified, altered, or repaired so This proposal is prompted by a report power and responsibilities among the that the performance of the requirements of that the ‘‘door open’’ placards on the various levels of government. Therefore, this AD is affected, the owner/operator must inside of the main entrance door, as in accordance with Executive Order use the authority provided in paragraph (b) currently installed, may not be visible to 12612, it is determined that this to request approval from the Federal Aviation passengers or flightcrew when the door proposal would not have sufficient Administration (FAA). This approval may handle is in the open position. The federalism implications to warrant the address either no action, if the current actions specified by the proposed AD preparation of a Federalism Assessment. configuration eliminates the unsafe are intended to ensure that certain placards on the inside of the main For the reasons discussed above, I condition, or different actions necessary to address the unsafe condition described in entrance door are clearly visible and certify that this proposed regulation (1) this AD. Such a request should include an perform their intended function in the is not a ‘‘significant regulatory action’’ assessment of the effect of the changed event of an emergency evacuation. under Executive Order 12866; (2) is not configuration on the unsafe condition DATES: a ‘‘significant rule’’ under the DOT Comments must be received by addressed by this AD. In no case does the January 23, 1996. Regulatory Policies and Procedures (44 presence of any modification, alteration, or FR 11034, February 26, 1979); and (3) if ADDRESSES: Submit comments in repair remove any engine from the triplicate to the Federal Aviation promulgated, will not have a significant applicability of this AD. economic impact, positive or negative, Administration (FAA), Transport Compliance: Required as indicated, unless Airplane Directorate, ANM–103, on a substantial number of small entities accomplished previously. under the criteria of the Regulatory Attention: Rules Docket No. 95–NM– To prevent HPC stage 1 rotor disk rupture, 128–AD, 1601 Lind Avenue, SW., Flexibility Act. A copy of the draft engine failure, and damage to the aircraft, regulatory evaluation prepared for this Renton, Washington 98055–4056. accomplish the following: Comments may be inspected at this action is contained in the Rules Docket. (a) Remove from service HPC stage 1 rotor A copy of it may be obtained by location between 9 a.m. and 3 p.m., disks prior to accumulating 6,000 cycles in Monday through Friday, except Federal contacting the Rules Docket at the service since new, and replace with a location provided under the caption holidays. serviceable part. The service information referenced in ADDRESSES. (b) An alternative method of compliance or the proposed rule may be obtained from List of Subjects in 14 CFR Part 39 adjustment of the compliance time that Jetstream Aircraft, Inc., P.O. Box 16029, provides an acceptable level of safety may be Dulles International Airport, Air transportation, Aircraft, Aviation used if approved by the Manager, Engine Washington, DC 20041–6029. This safety, Safety. Certification Office. The request should be information may be examined at the forwarded through an appropriate FAA The Proposed Amendment FAA, Transport Airplane Directorate, Principal Maintenance Inspector, who may 1601 Lind Avenue, SW., Renton, add comments and then send it to the Washington. Accordingly, pursuant to the Manager, Engine Certification Office. authority delegated to me by the FOR FURTHER INFORMATION CONTACT: Administrator, the Federal Aviation Note: Information concerning the existence William Schroeder, Aerospace Engineer, Administration proposes to amend part of approved alternative methods of Standardization Branch, ANM–113, compliance with this airworthiness directive, 39 of the Federal Aviation Regulations FAA, Transport Airplane Directorate, if any, may be obtained from the Engine (14 CFR part 39) as follows: 1601 Lind Avenue, SW., Renton, Certification Office. Washington 98055–4056; telephone PART 39ÐAIRWORTHINESS Issued in Burlington, Massachusetts, on (206) 227–2148; fax (206) 227–1149. DIRECTIVES December 8, 1995. Jay J. Pardee, SUPPLEMENTARY INFORMATION: 1. The authority citation for part 39 Manager, Engine and Propeller Directorate, Comments Invited continues to read as follows: Aircraft Certification Service. Interested persons are invited to Authority: 49 U.S.C. 106(g), 40101, 40113, [FR Doc. 95–30645 Filed 12–15–95; 8:45 am] participate in the making of the 44701. BILLING CODE 4910±13±U proposed rule by submitting such Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65037 written data, views, or arguments as the evacuation of passengers during an in accordance with Executive Order they may desire. Communications shall emergency. 12612, it is determined that this identify the Rules Docket number and Jetstream has issued Service Bulletin proposal would not have sufficient be submitted in triplicate to the address J41–11–007, dated May 10, 1995, which federalism implications to warrant the specified above. All communications describes procedures for a one-time preparation of a Federalism Assessment. received on or before the closing date visual inspection to verify the proper For the reasons discussed above, I for comments, specified above, will be position of certain placards on the certify that this proposed regulation (1) considered before taking action on the inside of the main entrance door, and is not a ‘‘significant regulatory action’’ proposed rule. The proposals contained removal of the placard and installation under Executive Order 12866; (2) is not in this notice may be changed in light of a new placard, if necessary. The CAA a ‘‘significant rule’’ under the DOT of the comments received. classified this service bulletin as Regulatory Policies and Procedures (44 Comments are specifically invited on mandatory in order to assure the FR 11034, February 26, 1979); and (3) if the overall regulatory, economic, continued airworthiness of these promulgated, will not have a significant environmental, and energy aspects of airplanes in the United Kingdom. economic impact, positive or negative, the proposed rule. All comments This airplane model is manufactured on a substantial number of small entities submitted will be available, both before in the United Kingdom and is type under the criteria of the Regulatory and after the closing date for comments, certificated for operation in the United Flexibility Act. A copy of the draft in the Rules Docket for examination by States under the provisions of section regulatory evaluation prepared for this interested persons. A report 21.29 of the Federal Aviation action is contained in the Rules Docket. summarizing each FAA-public contact Regulations (14 CFR 21.29) and the A copy of it may be obtained by concerned with the substance of this applicable bilateral airworthiness contacting the Rules Docket at the proposal will be filed in the Rules agreement. Pursuant to this bilateral location provided under the caption Docket. airworthiness agreement, the CAA has ADDRESSES. Commenters wishing the FAA to kept the FAA informed of the situation acknowledge receipt of their comments described above. The FAA has List of Subjects in 14 CFR Part 39 submitted in response to this notice examined the findings of the CAA, Air transportation, Aircraft, Aviation must submit a self-addressed, stamped reviewed all available information, and safety, Safety. postcard on which the following determined that AD action is necessary statement is made: ‘‘Comments to for products of this type design that are The Proposed Amendment Docket Number 95–NM–128–AD.’’ The certificated for operation in the United Accordingly, pursuant to the postcard will be date stamped and States. authority delegated to me by the returned to the commenter. Since an unsafe condition has been Administrator, the Federal Aviation identified that is likely to exist on other Administration proposes to amend part Availability of NPRMs airplanes of the same type design, the 39 of the Federal Aviation Regulations Any person may obtain a copy of this proposed AD would require a one-time (14 CFR part 39) as follows: NPRM by submitting a request to the visual inspection to verify the proper FAA, Transport Airplane Directorate, position of certain placards on the PART 39ÐAIRWORTHINESS ANM–103, Attention: Rules Docket No. inside of the main entrance door, and DIRECTIVES 95–NM–128–AD, 1601 Lind Avenue, removal of the placard and installation 1. The authority citation for part 39 SW., Renton, Washington 98055–4056. of a new placard, if necessary. The continues to read as follows: Discussion actions would be required to be accomplished in accordance with the Authority: 49 U.S.C. 106(g), 40101, 40113, The Civil Aviation Authority (CAA), service bulletin described previously. 44701. which is the airworthiness authority for The FAA estimates that 25 airplanes 39.13 [Amended] the United Kingdom, recently notified of U.S. registry would be affected by this 2. Section 39.13 is amended by the FAA that an unsafe condition may proposed AD, that it would take adding the following new airworthiness exist on certain Jetstream Model 4101 approximately 1 work hour per airplane directive: airplanes. The CAA advises that the to accomplish the proposed actions, and ‘‘door open’’ placards on the inside of that the average labor rate is $60 per Jetstream Aircraft Limited: Docket 95–NM– the main entrance door may not be work hour. Required parts would be 128–AD. properly installed (that is, aligned with supplied by the manufacturer at no cost Applicability: Model 4101 airplanes, the door handle when it is in the to the operators. Based on these figures, constructors numbers 41004 through 41046 inclusive; certificated in any category. ‘‘open’’ position), as required by section the cost impact of the proposed AD on 25.811 (e) of the Federal Aviation U.S. operators is estimated to be $1,500, Note 1: This AD applies to each airplane Regulations (14 CFR 25.811), identified in the preceding applicability or $60 per airplane. provision, regardless of whether it has been ‘‘Emergency exit marking.’’ The The cost impact figure discussed modified, altered, or repaired in the area placards are currently installed at above is based on assumptions that no subject to the requirements of this AD. For imprecise locations, since the type operator has yet accomplished any of airplanes that have been modified, altered, or design data was not explicit in defining the proposed requirements of this AD repaired so that the performance of the the installation locations. Therefore, action, and that no operator would requirements of this AD is affected, the these placards may not be visible to the accomplish those actions in the future if owner/operator must use the authority passengers or flightcrew during an this AD were not adopted. provided in paragraph (b) of this AD to emergency evacuation, and The regulations proposed herein request approval from the FAA. This consequently, do not fulfill the intent of would not have substantial direct effects approval may address either no action, if the current configuration eliminates the unsafe the regulations, which is to ensure that on the States, on the relationship condition; or different actions necessary to these placards are visible and properly between the national government and address the unsafe condition described in aligned with the door handle when it is the States, or on the distribution of this AD. Such a request should include an in the ‘‘open’’ position. This condition, power and responsibilities among the assessment of the effect of the changed if not corrected, could delay or impede various levels of government. Therefore, configuration on the unsafe condition 65038 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules addressed by this AD. In no case does the and possible replacement requirements and after the closing date for comments, presence of any modification, alteration, or as contained in AD 95–03–02, and in the Rules Docket for examination by repair remove any airplane from the would incorporate additional Brackett interested persons. A report that applicability of this AD. air filter assemblies to the applicability summarizes each FAA-public contact Compliance: Required as indicated, unless of that AD. Additionally, it would concerned with the substance of this accomplished previously. provide a terminating action for the proposal will be filed in the Rules To ensure that certain placards on the repetitive inspection. The Federal Docket. inside of the main entrance door are clearly Commenters wishing the FAA to visible and properly aligned, accomplish the Aviation Administration’s following: determination that these additional acknowledge receipt of their comments (a) Within 4 months after the effective date Brackett air filter assemblies should be submitted in response to this notice of this AD, perform a one-time visual inspected and replaced prompted this must submit a self-addressed, stamped inspection to verify the proper position of the AD action. The actions specified by the postcard on which the following door open placards on the inside of the main proposed AD are intended to prevent statement is made: ‘‘Comments to entrance door, in accordance with Jetstream gasket particles from entering the Docket No. 95–CE–61–AD.’’ The Service Bulletin J41–11–007, dated May 10, carburetor because of air filter gasket postcard will be date stamped and 1995. If any placard is found to be failure, which, if not detected and returned to the commenter. improperly positioned, prior to further flight, corrected, could result in partial or remove the placard and install a new placard Availability of NPRMs complete loss of engine power and loss in the specified position, in accordance with Any person may obtain a copy of this the service bulletin. of control of the airplane. (b) An alternative method of compliance or DATES: Comments must be received on NPRM by submitting a request to the adjustment of the compliance time that or before February 20, 1996. FAA, Central Region, Office of the Assistant Chief Counsel, Attention: provides an acceptable level of safety may be ADDRESSES: Submit comments in used if approved by the Manager, triplicate to the Federal Aviation Rules Docket No. 95–CE–61–AD, Room Standardization Branch, ANM–113, FAA, Administration (FAA), Central Region, 1558, 601 E. 12th Street, Kansas City, Transport Airplane Directorate. Operators Missouri 64106. shall submit their requests through an Office of the Assistant Chief Counsel, appropriate FAA Principal Maintenance Attention: Rules Docket No. 95–CE–61– Discussion Inspector, who may add comments and then AD, Room 1558, 601 E. 12th Street, AD 95–03–02 was published in the send it to the Manager, Standardization Kansas City, Missouri 64106. Comments Federal Register on August 25, 1994 (59 Branch, ANM–113. may be inspected at this location FR 43784) and applies to airplanes that Note 2: Information concerning the between 8 a.m. and 4 p.m., Monday have a certain Brackett air filter existence of approved alternative methods of through Friday, holidays excepted. neoprene gasket installed in accordance compliance with this AD, if any, may be Service information that applies to the with Supplemental Type Certificate obtained from the Standardization Branch, proposed AD may be obtained from (STC) SA71GL. The action requires ANM–113. Brackett Aircraft Company, Inc., 7045 repetitively inspecting (visually) the air (c) Special flight permits may be issued in Flightline Drive, Kingman, Arizona filter frame for a loose or deteriorated accordance with sections 21.197 and 21.199 86401. This information also may be gasket, and replacing any gasket found of the Federal Aviation Regulations (14 CFR examined at the Rules Docket at the 21.197 and 21.199) to operate the airplane to loose or deteriorated. a location where the requirements of this AD address above. The FAA’s continuing investigation of can be accomplished. FOR FURTHER INFORMATION CONTACT: these Brackett neoprene gasket air Issued in Renton, Washington, on Elizabeth Bumann, Aerospace Engineer, filter’s failure and the continuing unsafe December 11, 1995. Los Angeles Aircraft Certification condition described in AD 95–03–02 Darrell M. Pederson, Office, FAA, 3960 Paramount suggests that a superseding action be Acting Manager, Transport Airplane Boulevard, Lakewood, California 90712; proposed. The FAA has discovered that Directorate, Aircraft Certification Service. telephone (310) 627–5265; facsimile additional Brackett air filters with the [FR Doc. 95–30644 Filed 12–15–95; 8:45 am] (310) 627–5210. same neoprene gasket design are BILLING CODE 4910±13±U SUPPLEMENTARY INFORMATION: installed as original equipment and in accordance with STC SA693CE on Comments Invited certain additional airplanes. These 14 CFR Part 39 Interested persons are invited to airplanes would also be subject to air participate in the making of the filter assembly failure. [Docket No. 95±CE±61±AD] proposed rule by submitting such After examining the circumstances Airworthiness Directives; Brackett written data, views, or arguments as and reviewing all available information Aircraft Company, Inc. Air Filter they may desire. Communications related to the information described Assemblies Installed on Airplanes should identify the Rules Docket above, the FAA has determined that AD number and be submitted in triplicate to action should be taken to prevent gasket AGENCY: Federal Aviation the address specified above. All particles from entering the carburetor Administration, DOT. communications received on or before because of air filter gasket failure, which ACTION: Notice of proposed rulemaking the closing date for comments, specified could result in partial or complete loss (NPRM). above, will be considered before taking of engine power. action on the proposed rule. The Since an unsafe condition has been SUMMARY: This document proposes to proposals contained in this notice may identified that is likely to exist or supersede AD 95–03–02, which be changed in light of the comments develop in other Brackett air filter frame currently requires repetitively received. assemblies of the same type design, the inspecting (visually) the air filter frame Comments are specifically invited on proposed AD would supersede AD 95– for a loose or deteriorating gasket on the overall regulatory, economic, 03–02 with a new AD that would airplanes incorporating certain Brackett environmental, and energy aspects of require incorporating additional air filter assemblies. The proposed the proposed rule. All comments Brackett air filter assemblies to the action retains the repetitive inspection submitted will be available, both before applicability paragraph of AD 95–03–02, Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65039 retain the repetitive inspection at replacement is estimated to be $40 per Docket. A copy of it may be obtained by intervals not to exceed 100 hours time- airplane. The total estimated cost for the contacting the Rules Docket at the in-service (TIS) with replacement of the proposed modification required at 500 location provided under the caption air filter if damaged, and mandatory hours TIS would be $100 per airplane ADDRESSES. replacement of the air filter assembly at and the total cost impact of the List of Subjects in 14 CFR Part 39 500 hours TIS, terminating the modification is estimated to be repetitive inspection requirement $5,000,000 thereby reducing the total Air transportation, Aircraft, Aviation contained in AD 95–03–02. cost of the proposed AD by $7,600,000 safety, Safety. The FAA estimates that 50,000 from $12,600,000 to $5,000,000. The The Proposed Amendment airplanes in the U.S. registry would be FAA has no way to determine how affected by the proposed AD. To many owners/operators have completed Accordingly, pursuant to the accomplish the proposed repetitive the repetitive inspections and authority delegated to me by the inspection and possible replacement of replacements or the terminating action Administrator, the Federal Aviation a damaged air filter would take modification and must calculate the cost Administration proposes to amend 14 approximately 1 hour per airplane, and impact based on the entire U.S. fleet. CFR part 39 of the Federal Aviation that the average labor rate is The regulations proposed herein Regulations as follows: approximately $60 an hour. To install a would not have substantial direct effects new gasket cost approximately $3 per on the States, on the relationship PART 39ÐAIRWORTHINESS airplane. Based on these figures, the between the national government and DIRECTIVES total cost impact of the proposed the States, or on the distribution of 1. The authority citation for part 39 repetitive inspection and replacement power and responsibilities among the continues to read as follows: on U.S. operators is estimated to be $63 various levels of government. Therefore, per airplane. The FAA knows that each in accordance with Executive Order Authority: 49 USC 106(g), 40101, 40113, owner/operator would have to 12612, it is determined that this 44701. repetitively inspect four times before the proposal would not have sufficient § 39.13 [Amended] mandatory replacement of the air filter federalism implications to warrant the 2. Section 39.13 is amended by assembly, and based on the assumption preparation of a Federalism Assessment. removing Airworthiness Directive (AD) that no operator would incorporate the For the reasons discussed above, I 95–03–02, Amendment 39–9139, and by modification prior to the 500 hours TIS, certify that this action (1) is not a adding a new AD to read as follows: the total cost of four repetitive ‘‘significant regulatory action’’ under inspections with possible replacement Executive Order 12866; (2) is not a Brackett Aircraft Company: Docket No. 95– of the air filter gasket would be $252 per ‘‘significant rule’’ under DOT CE–61–AD; Supersedes AD 95–03–02, Amendment 39–9139. airplane plus the cost of the proposed Regulatory Policies and Procedures (44 terminating action. Based on these FR 11034, February 26, 1979); and (3) if Applicability: Air filter assemblies presented in the following chart that utilize figures the total cost impact of the promulgated, will not have a significant a neoprene gasket installed on, but not proposed AD on U.S. operators is economic impact, positive or negative, limited to the following airplanes, estimated to be $12,600,000. on a substantial number of small entities certificated in any category: In comparison, the cost to incorporate under the criteria of the Regulatory Note 1: These air filters could be installed the modification is about 1 workhour Flexibility Act. A copy of the draft as original equipment or in accordance with per airplane at approximately $60 per regulatory evaluation prepared for this Supplemental Type Certificate (STC) workhour. The air filter assembly action has been placed in the Rules SA71GL or STC SA693CE.

Air filter assembly Airplanes installed on

BA±2010 ...... Beechcraft Model 77 Airplanes. BA±4106 ...... Cessna Models 120, 140, 140A, 150, 150A, 150B, 150C, 150D, 150E, 150F, 150G, 150H, 150J, 150K, 150L, 150M, A150M, 152, and A152; American Champion Models Bellanca (Champion) (Aeronca) 7ACA, 7ECA, and 7FC; Aviat, Inc. Models A±1; Luscombe Models 8, 8A, 8B, 8C, 8D, 8E, 8F, and T±8F; Piper Models PA±22, PA±22±135, PA±22±150, PA±22±160, PA± 22±108, PA±20±115, PA±20±135, PA±38±112, J±3, J3C±65, J3C±65S, PA±11, PA±11S, J4A, J4A±S, J4E, J5A, J5A±80, PA±12, PA±12S, PA±16, PA±17, PA±18, PA±18A, PA±18S, PA±18±``125'' (Army L±21A), PA±18AS±``125'', PA±18S±``125'', PA18AS±``135'', PA±18S±``135'', PA±18±``135'', PA±18±``150'', PA±18A±``150'' (SN 18±1 through 18±6963), PA±18S±``150'', PA±19, PA±18A (Restricted), PA±18A±``135'' (Restricted), and PA±18A±``150'' (Restricted) (SN 18±1 through 18±18±6963); Taylorcraft Models BC65, BCS±65, BC12±65, BCS12±65, BC12±D, BCS12±D1, BC12D85, BCS12D85, BC12D±4±85, BCS12D±4±85, 19, F19, F21, DC±65, DCO±65, F22, F22A, F22B, and F22C; Univair Models (Alon) A±2, A2±A, (Forney) F± 1, F±1A, and (Mooney) M10; Swift Museum Models (Globe) GC±1A and GC±1B; Augustair Model Varga (Morrisey) 2150A; Aeronca Model 65±CA; American Champion 7ECA (with Cont. O±200±A engine) and 7ACA; Reims Aviation (Cessna) F150G, F150H, F150J, F150K, F150L, F150M, FA150K, FA150L, F152, AND FA152; Socata-Groupe Aerospatiale Models Rallye Series MS880B, MS885, and 100S. BA±4106±1 ... Aviat, Inc. Model (Christian) A±1. BA±4210 ...... Gulfstream Models AA±1, AA±1A, AA±1B, AA±1C, and AA±5. BA±5110 ...... Cessna Models 170, 170A, 170B, 172, 172A, 172B, 172C, 172D, 172E, 172F, 172G, 172H, 172I, 172K, 172L, and 172M; Mooney Mite Model M±18C; Reims Aviation Models (Cessna) F172D, F172E, F172F, F172G, F172H, F172K, F172L, and F172M; Socata-Groupe Aerospatiale Models TB9, TB10, Rallye Series MS892A±150, MS892E±150, MS892E±150T, and MS892E±150ST; Panstwowe Zakolady Kotnicze Model PZL±Koliber 150A; Augustair, Inc. Model Varga (Morrisey) 2180. BA±5110A ..... Cessna Models 172N and 172P; Reims Aviation Models (Cessna) F172N and F172P. BA±6110 ...... Maule Models M±4, M±4C, M±4S, M±4T, M±4±220, M±4±220C, M±4±220S, M±4±220T, M±4±180C, M±4±180S, M±4±180T, M±5±220C, M±5±235C, M±5±180C, M±5±210TC, M±6±180, M±6±235, M±7±235, MX±7±180, MXT±7±160, MXT±7±180, MX±7±160, MX±7±235, and MX±8±235; Mooney Models M20, M20A, M20B, M20C, M20D, and M20G. BA±8910 ...... Dynac Models (Aero Commander) 100 and 100A. 65040 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules

Air filter assembly Airplanes installed on

AAF±117 ...... Cessna Models 120, 140, 140A, 150, 150A, 150B, 150C, 150D, 150E, 150F, 150G, 150H, 150J, 150K, 150L, 150M, A150M, 152, and A152; American Champion Models Bellanca (Champion) (Aeronca) 7ACA, 7ECA, and 7FC; Aviat, Inc. Models A±1; Luscombe Models 8, 8A, 8B, 8C, 8D, 8E, 8F, and T±8F; Piper Models PA±22, PA±22±135, PA±22±150, PA±22±160, PA± 22±108, PA±20±115, PA±20±135, PA±38±112, J±3, J3C±65, J3C±65S, PA±11, PA±11S, J4A, J4A±S, J4E, J5A, J5A±80, PA±12, PA±12S, PA±16, PA±17, PA±18, PA±18A, PA±185, PA±18±``125'' (Army L±21A), PA±18AS±``125'', PA±185±``125'', PA±18AS±``135'', PA±18S±``135'', PA±18±``135'', PA±18±``150'', PA±18A±``150'' (SN 18±1 through 18±6963), PA±18S±``150'', PA±19, PA±18A (Restricted), PA±18A±``135'' (Restricted), and PA±18A-``150'' (Restricted) (SN 18±1 through 18±18±6963); Taylorcraft Models BC65, BCS±65, BC12±65, BCS12±65, BC12±D, BCS12±D1, BC12D85, BCS12D85, BC12D±4±85, BCS12D±4±85, 19, F19, F21, DC±65, DCO±65, F22, F22A, F22B, and F22C; Univair Models (Alon) A±2, A2±A, (Forney) F±1, F±1A, and (Mooney) M10; Swift Museum Models (Globe) GC1A and GC±1B; Augustair Model Varga (Morrisey) 2150A; Aeronca Model 65±CA; American Champion 7ECA (with Cont. O±200±A engine) and 7ACA; Reims Aviation (Cessna) F150G, F150H, F150J, F150K, F150L, F150M, FA150K, FA150L, F152, AND FA152; Socata-Groupe Aerospatiale Models Rallye Series MS880B, MS885, and 100S, F22B, and F22C; Univair Models (Alon) A±2, A2±A, (Forney) F±1, F±1A, and (Mooney) M10; Swift Museum Models (Globe) GC±1A and GC±1B; Augustair Model Varga (Morrisey) 2150A; Aeronca Model 65±CA; American Champion 7ECA (with Cont. O±200±A engine) and 7ACA; Reims Aviation (Cessna) F150G, F150H, F150J, F150K, F150L, F150M, FA150K, FA150L, F152, AND FA152; Socata-Groupe Aerospatiale Models Rallye Series MS880B, MS885, and 100S. AAF±118 ...... Cessna Models 170, 170A, 170B, 172, 172A, 172B, 172C, 172D, 172E, 172F, 172G, 172H, 172I, 172K, 172L, and 172M; Mooney Mite Model M±18C; Reims Aviation Models (Cessna) F172D, F172E, F172F, F172G, F172H, F172K, F172L, and F172M; Socata-Groupe Aerospatiale Models TB9, TB10, Rallye Series MS892A±150, MS892E±150, MS892E±150T, and MS892E±150ST; Panstwowe Zakolady Kotnicze Model PZL±Koliber 150A; Augustair, Inc. Model Varga (Morrisey) 2180.

Note 2: This AD applies to each airplane eliminated, the request should include (a) Inspect (visually) the inside and outside identified in the preceding applicability specific proposed actions to address it. of the air filter frame for gasket looseness, provision, regardless of whether it has been Compliance: Required within the next 100 movement, or deterioration in accordance modified, altered, or repaired in the area hours time-in-service (TIS) after the effective with Brackett Document I–194, dated March subject to the requirements of this AD. For date of this AD, or within the next 100 hours 16, 1994. Continue this repetitive inspection airplanes that have been modified, altered, or (TIS) after the last inspection accomplished at intervals not to exceed 100 hours TIS, until repaired so that the performance of the in accordance with AD 95–03–02, whichever accomplishment of the terminating action required in paragraph (c) of this AD. requirements of this AD is affected, the occurs first, and thereafter as indicated in the body of this AD, unless already (b) If the gasket is found to be damaged, owner/operator must request approval for an accomplished in accordance with paragraph prior to further flight, replace the air filter alternative method of compliance in (c) of this AD. assembly with one having a retaining lip in accordance with paragraph (f) of this AD. The To prevent gasket particles from entering accordance with the Brackett request should include an assessment of the the carburetor because of air filter gasket INSTALLATION INSTRUCTION SHEET effect of the modification, alteration, or repair failure, which could result in partial or corresponding to the new air filter assembly on the unsafe condition addressed by this complete loss of engine power, accomplish part number that is applicable to the owner/ AD; and, if the unsafe condition has not been the following: operator’s particular model of airplane:

Air filter assembly Replace with assembly Instruction sheet

BA±2010 ...... BA±2010 Revision A ...... BA±2004, dated 6/6/95. BA±4106 ...... BA±4106 Revision D ...... BA±4105, dated 6/15/95. BA±4106±1 ...... BA±4106±1 Revision A ...... RM±1, dated 7/6/95. BA±4210 ...... BA±4210 Revision B ...... BA±4205, dated 6/14/95. BA±5110 ...... BA±5110 Revision H ...... BA±5105, dated 5/8/95. BA±5110A ...... BA±5110A Revision D ...... BA±5111, dated 5/8/95. BA±6110 ...... BA±6110 Revision C ...... BA±6105, dated 6/5/95. BA±8910 ...... BA±8910 Revision B ...... BA±8910±3, dated 6/6/95. AAF±117 ...... BA±4106 Revision D ...... BA±4105, dated 6/15/95. AAF±118 ...... BA±5110 Revision H ...... BA±5105, dated 5/8/95.

(c) Within the next 500 hours TIS after the (f) An alternative method of compliance or (g) All persons affected by this directive effective date of this AD, replace the air filter adjustment of the repetitive compliance may obtain copies of the documents referred assembly as a terminating action to this AD times that provides an equivalent level of to herein upon request to Brackett Aircraft in accordance with the Brackett safety may be approved by the Manager, Los Company, Inc., 7045 Flightline Drive, INSTALLATION INSTRUCTION SHEET Angeles Aircraft Certification Office, FAA, Kingman, Arizona 86401; or may examine corresponding to the new air filter assembly 3960 Paramount Boulevard, Lakewood, these documents at the FAA, Central Region, part number that is applicable to the owner/ California 90712. The request shall be Office of the Assistant Chief Counsel, Room operator’s particular model of airplane as forwarded through an appropriate FAA 1558, 601 E. 12th Street, Kansas City, specified in paragraph (b) of this AD. Maintenance Inspector, who may add Missouri 64106. (d) The replacement in paragraphs (b) and comments and then send it to the Manager, (h) This amendment supersedes AD 95– (c) are considered terminating action for the Los Angeles Aircraft Certification Office. 03–02, Amendment 39–9139. repetitive inspection required by this AD. (e) Special flight permits may be issued in Note 3: Information concerning the accordance with 14 CFR 21.197 and 21.199 existence of approved alternative methods of to operate the airplane to a location where compliance with this AD, if any, may be the requirements of this AD can be obtained from the Los Angeles Aircraft accomplished. Certification Office. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65041

Issued in Kansas City, Missouri, on by submitting such written data, views, surrounding terrain at airports in the December 11, 1995. or arguments as they may desire. New England region with Class D Henry A. Armstrong, Comments that provide the factual basis airspace areas. That review came in Acting Manager, Small Airplane Directorate, supporting the views and suggestions response to concerns expressed by Aircraft Certification Service. presented are particularly helpful in operators and other interested parties [FR Doc. 95–30675 Filed 12–15–95; 8:45 am] developing reasoned regulatory over recent changes to the lateral limits BILLING CODE 4910±13±U decisions on the proposal. Comments of Class D airspace areas in the New are specifically invited on the overall England Region. By using more detailed regulatory, economic, environmental, topographical charts and more precise 14 CFR Part 71 and energy-related aspects of the calculations, the FAA has determined [Airspace Docket No. 95±ANE±60] proposal. Communications should that reductions in the lateral limits of identify the airspace docket number and the Class D airspace areas at BVY, BED, Proposed Amendment to Class D and be submitted in triplicate to the address DXR, OWD, LEB, and ASH are Class E Airspace; New England Region listed first under ADDRESSES above. appropriate and will not affect aviation Commenters wishing the FAA to safety. As a result of the reductions to AGENCY: Federal Aviation acknowledge receipt of their comments the Class D airspace areas at BVY, LEB, Administration (FAA), DOT. on this notice must submit with those and ASH, the FAA must also make ACTION: Notice of proposed rulemaking. comments a self-addressed, stamped minor adjustments to the associated postcard on which the following SUMMARY: This notice proposes to Class E areas at those airports. Class D statement is made: ‘‘Comments to amend the Class D airspace areas at airspace designations, and Class E Docket No. 95–ANE–60.’’ The postcard Beverly, MA (BVY); Bedford, MA (BED); airspace designations for airspace areas will be date/time stamped and returned Danbury, CT (DXR); Norwood, MA extending upward from the surface of to the commenter. All communications (OWD); Lebanon, NH (LEB); and the earth defined as extensions to Class received on or before the closing date Nashua, NH (ASH); and to amend the D airspace areas, are published in for comments will be considered before associated Class E airspace areas at paragraphs 5000 and 6004, respectively, taking action on the proposed rule. The Beverly (BVY), Lebanon (LEB), and of FAA Order 7400.9C, dated August 17, proposal contained in this notice may Nashua (ASH). The FAA has 1995, and effective September 16, 1995, be changed in light of comments determined after a review of the which is incorporated by reference in 14 received. All comments submitted will elevation of the surrounding terrain in CFR 71.1. The Class D and Class E be available for examination in the the vicinity of these airports that the airspace designations listed in this Rules Docket both before and after the lateral limits of the Class D areas at document would be published closing date for comments. A report these airports may be reduced and the subsequently in this Order. summarizing each substantive public appropriate changes made to the Class The FAA has determined that these contact with FAA personnel concerned E airspace areas. proposed regulations only involve an with this rulemaking will be filed in the established body of technical DATES: Comments must be received on docket. or before January 17, 1996. regulations for which frequent and ADDRESSES: Send comments on the Availability of NPRMs routine amendments are necessary to keep them operationally current. proposal in triplicate to: Manager, Any person may obtain a copy of this System Management Branch, ANE–530, Notice of Proposed Rulemaking (NPRM) Therefore, these proposed regulations— Federal Aviation Administration, by submitting a request to the Federal (1) are not ‘‘significant regulatory Docket No. 95–ANE–60, 12 New Aviation Administration, Office of actions’’ under Executive Order 12866; England Executive Park, Burlington, MA Public Affairs, Attention: Public Inquiry (2) are not ‘‘significant rules’’ under 01803–5299; telephone (617) 238–7530; Center, APA–230, 800 Independence DOT Regulatory Policies and Procedures fax (617) 238–7596. Avenue, SW., Washington, DC 20591, or (44 FR 11034; February 26, 1979); and The official docket file may be by calling (202) 267–3484. (3) do not warrant preparation of a examined in the Office of the Assistant Communications must identify the Regulatory Evaluation as these routine Chief Counsel, New England Region, notice number of this NPRM. Persons matters will only affect air traffic ANE–7, Room 401, 12 New England interested in being placed on a mailing procedures and air navigation, it is Executive Park, Burlington, MA 01803– list for future NPRM’s should also certified that these proposed rules will 5299; telephone (617) 238–7050; fax request a copy of Advisory Circular No. not have significant economic impact on (617) 238–7055. 11–2A, which describes the application a substantial number of small entities An informal docket may also be procedures. under the criteria of the Regulatory examined during normal business hours Flexibility Act. The Proposal in the Air Traffic Division, Room 408, List of Subjects in 14 CFR Part 71 by contacting the Manager, System The FAA is considering an Management Branch at the first address amendment to part 71 of the Federal Airspace, Incorporation by reference, listed above. Aviation Regulations (14 CFR part 71) to Navigation (air). FOR FURTHER INFORMATION CONTACT: reduce the lateral limits of the Class D The Proposed Amendment Raymond Duda, System Management airspace areas at Beverly, MA (BVY); Branch, ANE–533, 12 New England Bedford, MA (BED); Danbury, CT (DXR); Accordingly, pursuant to the Executive Park, Burlington, MA 01803– Norwood, MA (OWD); Lebanon, NH authority delegated to me, the Federal 5299; telephone (617) 238–7533; fax (LEB); and Nashua, NH (ASH); and, as Aviation Administration proposes to (617) 238–7596. a consequence to those changes, to make amend part 71 of the Federal Aviation Regulations (14 CFR part 71) as follows: SUPPLEMENTARY INFORMATION: the necessary changes to the associated Class E airspace areas at Beverly (BVY), PART 71Ð[AMENDED] Comments Invited Lebanon (LEB), and Nashua (ASH). This Interested parties are invited to action is the result of an extensive 1. The authority citation for part 71 participate in this proposed rulemaking review of the elevation of the continues to read as follows: 65042 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules

Authority 49 U.S.C. 106(g), 40103, 40113, Boston, MA, Class B airspace area. This Class (Lat. 43°43′57′′ N, long. 72°20′00′′ W) 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– D airspace area is effective during the Hanover NDB 1963 Comp., p. 389; 14 CFR 11.69. specific dates and times established in (Lat. 43°42′08′′ N, long. 72°10′39′′ W) advance by a Notice of Airmen. The effective That airspace extending upward from the § 71.1 [Amended] dates and times will thereafter be surface within 3.3 miles each side of the 2. The incorporation by reference in continuously published in the Airport/ BURGR OM 352° bearing from a 4.8-mile 14 CFR 71.1 of Federal Aviation Facility Directory. radius of Lebanon Municipal Airport to 8 Administration Order 7400.9C, Airspace * * * * * miles north of the BURGR OM, and within 2.4 miles each side of the Hanover NDB 051° Designations and Reporting Points, ANE NH D Lebanon, NH [Revised] dated August 17, 1995, and effective bearing extending from the 4.8-mile radius to Lebanon Municipal Airport, NH 7 miles northeast of the Hanover NBD. This September 16, 1995, is amended as (Lat. 43°37′35′′ N, long. 72°18′15′′ W) Class E airspace area is effective during follows: That airspace extending upward from the specific dates and times established in Paragraph 5000 Class D Airspace surface to and including 3,100 feet MSL advance by a Notice to Airmen. The effective dates and times will thereafter be * * * * * within a 4.8-mile radius of Lebanon Municipal Airport, and within 1.8 miles each continuously published in the Airport/ MANE MA D Beverly, MA [Revised] side of the extended centerline of Runway Facility Directory. Beverly municipal Airport, MA 36, extending from the 4.8-mile radius to 6 * * * * * (Lat. 42°35′03′′ N, long. 70°55′01′′ W) miles north of the end of Runway 36. This Class D airspace area is effective during the ANE NE E4 Nashua, NH [Revised] That airspace extending upward from the specific dates and times established in Nashua, Boire Field, NH surface to and including 2,600 feet MSL advance by a Notice to Airmen. The effective (Lat. 42°46′54′′ N, long. 71°30′53′′ W) within a 4.1-mile radius of Beverly dates and times will thereafter be CHERN NDB Municipal Airport, excluding that airspace continuously published in the Airport/ (Lat. 42°49′54′′ N, long. 71°30′53′′ W) within the Boston, MA, Class B airspace area. Facility Directory. Manchester VORTAC This Class D airspace area is effective during (Lat. 42°52′06′′ N, long. 71°22′10′′ W) the specific dates and times established in * * * * * That airspace extending upward from the advance by a Notice to Airmen. The effective ANE NH D Nashua, NH [Revised] dates and times will thereafter be surface within 2.6 miles on each side of the Nashua Boire Field, NH CHERN NDB 303° bearing extending from a continuously published in the Airport/ ° ′ ′′ ° ′ ′′ Facility Directory. (Lat. 42 46 54 N, long. 71 30 53 W) 5-mile radius of Boire Field to 7 miles Sports Center Airport, Pepperell northwest of the CHERN NDB, and that * * * * * (Lat. 42°41′45′′ N, long. 71°33′03′′ W) airspace extending upward from the surface That airspace extending upward from the within 1.1 miles on each side of the ANE MA D Bedford MA [Revised] ° surface to and including 2,700 feet MSL Manchester VORTAC 231 radial extending Bedford, Lawrence G. Hanscom Field, MA within a 5-mile radius of Boire Field; from the 5-mile radius to 8.4 miles northeast (Lat. 42°28′12′′ N, long. 71°17′20′′ W) excluding that airspace within a 2-mile of Boire Field. This Class E airspace area is That airspace extending upward from the radius of Sports Center Airport, Pepperell, effective during specific dates and times surface to and including 2,600 feet MSL and that airspace within the Manchester established in advance by a Notice to within a 4.7-mile radius of Lawrence G. Airport, NH, Class C airspace area. This Class Airmen. The effective dates and times will Hanscom Field, excluding that airspace D airspace area is effective during the threafter be continuously published in the within the Boston, MA, Class B airspace area. specific dates and times established in Airport/Facility Directory. This Class D airspace area is effective during advance by a Notice to Airmen. The effective * * * * * the specific dates and times established in date and time will thereafter be continuously Issued in Burlington, MA, on December 7, advance by a Notice to Airmen. The effective published in the Airport/Facility Directory. 1995. dates and times will thereafter be * * * * * John J. Boyce, continuously published in the Airport/ Facility Directory. Acting Manager, Air Traffic Division, New Subpart EÐClass E Airspace England Region. * * * * * * * * * * [FR Doc. 95–30689 Filed 12–15–95; 8:45 am] ANE CT D Danbury, CT [Revised] BILLING CODE 4910±13±M Paragraph 6004 Class E airspace areas Danbury Municipal Airport, CT extending from the surface of the earth (Lat. 41°22′17′′ N, long. 73°28′56′′ W) defined as extensions to Class D airspace 14 CFR Part 71 Carmel VORTAC areas. (Lat. 41°16′48′′ N, long. 73°34′53′′ W) [Airspace Docket No. 95±AWP±28] That airspace extending upward from the * * * * * surface to and including 3,000 feet MSL ANE MA E4 Beverly MA [Revised] Proposed Establishment of Class E within a 6-mile radius of Danbury Municipal Beverly Municipal Airport, MA Airspace; Willcox, AZ Airport, and within 1.2 miles on each side of (Lat. 42°35′03′′ N, long. 70°55′01′′ W) the Carmel VORTAC 039° radial, extending AGENCY: Federal Aviation That airspace extending upward from the from the 6-mile radius to the Carmel surface within 3.2 miles on each side of the Administration (FAA), DOT. VORTAC. This Class D airspace area is Topsfield NDB 317° bearing extending from ACTION: Notice of proposed rulemaking. effective during the specific dates and times a 4.1-mile radius of Beverly Municipal established in advance by a Notice to Airport to 7 miles northwest of the Topsfield SUMMARY: This notice proposes to Airmen. The effective dates and times will NDB. This Class E airspace area is effective establish a Class E airspace area at thereafter be continuously published in the during the specific dates and times Wilcox, AZ. The development of a Airport/Facility Directory. established in advance by a Notice to Global Positioning System (GPS) * * * * * Airmen. The effective dates and times will Standard Instrument Approach thereafter be continuously published in the Procedure (SIAP) to Runway (RWY) 21 ANE MA D Norwood, MA [Revised] Airport/Facility Directory. and RWY 3 has made this proposal Norwood Memorial Airport, MA * * * * * (Lat. 42°11′27′′ N, long. 71°10′23′′ W) necessary. The intended effect of this That airspace extending upward from the ANE NH E4 Lebanon, NH [Revised] proposal is to provide adequate surface to and including 2,600 MSL within Lebanon Municipal Airport, NH controlled airspace for Instrument Flight a 4.5-mile radius of the Norwood Memorial (Lat. 43°3735′′ N, long. 72°18′15′′ W) Rules (IFR) operations at Cochise Airport, excluding that airspace within the BURGR OM County Airport, Willcox, AZ. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65043

DATES: Comments must be received on California 90261, both before and after List of Subjects in 14 CFR Part 71 or before January 19, 1996. the closing date for comments. A report Airspace, Incorporation by reference, ADDRESSES: Send comments on the summarizing each substantive public Navigation (air). proposal in triplicate to: Federal contact with FAA personnel concerned Aviation Administration, Attn: with this rulemaking will be filed in the The Proposed Amendment Manager, System Management Branch, docket. In consideration of the foregoing, the AWP–530, Docket No. 95–AWP–28, Air Federal Aviation Administration Availability of NPRM Traffic Division, P.O. Box 92007, proposes to amend 14 CFR part 71 as Worldway Postal Center, Los Angeles, Any person may obtain a copy of this follows: California, 90009. Notice of Proposed Rulemaking (NPRM) PART 71Ð[AMENDED] The official docket may be examined by submitting a request to the Federal in the Office of the Assistant Chief Aviation Administration, System 1. The authority citation for 14 CFR Counsel, Western Pacific Region, Management Branch, P.O. Box 92007, part 71 continues to read as follows: Federal Aviation Administration, Room Worldway Postal Center, Los Angeles, 6007, 15000 Aviation Boulevard, Authority: 49 U.S.C. 106(g), 40103, 40113, California 90009. Communications must 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– Lawndale, California 90261. identify the notice number of this 1963 Comp., p. 389; 14 CFR 11.69. An informal docket may also be NPRM. Persons interested in being examined during normal business at the § 71.1 [Amended] placed on a mailing list for future Office of the Manager, System NPRM’s should also request a copy of 2. The incorporation by reference in Management Branch, Air Traffic Advisory Circular No. 11–2A, which 14 CFR 71.1 of the Federal Aviation Division at the above address. describes the application procedures. Administration Order 7400.9C, Airspace FOR FURTHER INFORMATION CONTACT: Designations and Reporting Points, Scott Speer, Airspace Specialist, System The Proposal dated August 17, 1995, and effective Management Branch, AWP–530, Air September 16, 1995, is amended as Traffic Division, Western-Pacific The FAA is considering an follows: Region, Federal Aviation amendment to Part 71 of the Federal Aviation Regulations (14 CFR part 71) to Paragraph 6005 Class E airspace areas Administration, 15000 Aviation extending upward from 700 feet or more Boulevard, Lawndale, California, 90261, establish a Class E airspace area at above the surface of the earth. telephone (310) 725–6533. Willcox, AZ. The development of GPS SIAPs at Cochise County Airport has * * * * * SUPPLEMENTARY INFORMATION: made this proposal necessary. The AWP AZ E5 Willcox, AZ [New] Comments Invited intended effect of this proposal is to Cochise County Airport, AZ ° ′ ′′ ° ′ ′′ Interested parties are invited to provide adequate Class E airspace for (Lat. 32 14 39 N, long. 109 53 38 W) participate in this proposed rulemaking aircraft executing the GPS RWY 21 and That airspace extending upward from 700 by submitting such written data, views, RWY 3 SIAP at Cochise County Airport, feet above the surface within a 6.5-mile radius of Cochise County Airport. or arguments as they may desire. Willcox, AZ. Class E airspace Comments that provide the factual basis designations for airspace areas * * * * * extending upward from 700 feet or more Issued in Los Angeles, California, on supporting the views and suggestions December 1, 1995. presented are particularly helpful in above the surface of the earth are Harvey R. Riebel, developing reasoned regulatory published in Paragraph 6005 of FAA decisions on the proposal. Comments Order 7400.9C dated August 17, 1995, Acting Manager, Air Traffic Division, Western-Pacific Region. are specifically invited on the overall and effective September 16, 1995, which regulatory, aeronautical, economic, is incorporated by reference in 14 CFR [FR Doc. 95–30690 Filed 12–15–95; 8:45 am] environmental, and energy-related 71.1. The Class E airspace designation BILLING CODE 4910±13±M aspects of the proposal. listed in this document would be published subsequently in this Order. Communications should identify the 14 CFR Part 71 airspace docket number and be The FAA has determined that this submitted in triplicate to the address proposed regulation only involves an [Airspace Docket No. 95±AWP±43] listed above. Commenters wishing the established body of technical FAA to acknowledge receipt of their regulations for which frequent and Proposed Amendment of Class E comments on this notice must submit routine amendments are necessary to Airspace; Vacaville, CA with the comments a self-addressed, keep them operationally current. AGENCY: Federal Aviation stamped postcard on which the Therefore, this proposed regulation—(1) Administration (FAA), DOT. following statement is made: is not a ‘‘significant regulatory action’’ ACTION: Notice of proposed rulemaking. ‘‘Comments to Airspace Docket No. 95– under Executive Order 12866; (2) is not AWP–28.’’ The postcard will be date/ a ‘‘significant rule’’ under DOT SUMMARY: This notice proposes to time stamped and returned to the Regulatory Policies and Procedures (44 amend the Class E airspace area at commenter. All communications FR 10034; February 26, 1979); and (3) Vacaville, CA. The development of a received on or before the specified does not warrant preparation of a Global Positioning System (GPS) closing date for comments will be Regulatory Evaluation as the anticipated Standard Instrument Approach considered before taking action on the impact is so minimal. Since this is a Procedure (SIAP) to Runway (RWY) 20 proposed rule. The proposal contained routine matter that will only affect air has made this proposal necessary. The in this notice may be changed in light traffic procedures and air navigation, it intended effect of this proposal is to of comments received. All comments is certified that this proposed rule provide adequate controlled airspace for submitted will be available for would not have a significant economic Instrument Flight Rules (IFR) operations examination in the System Management impact on a substantial number of small at Nut Tree Airport, Vacaville, CA. Branch, Air Traffic Division, at 15000 entities under the criteria of the DATES: Comments must be received on Aviation Boulevard, Lawndale, Regulatory Flexibility Act. or before January 24, 1996. 65044 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules

ADDRESSES: Send comments on the summarizing each substantive public The Proposed Amendment proposal in triplicate to: Federal contact with FAA personnel concerned In consideration of the foregoing, the Aviation Administration, Attn: with this rulemaking will be filed in the Federal Aviation Administration Manager, System Management Branch, docket. proposes to amend 14 CFR part 71 as AWP–530, Docket No. 95–AWP–43, Air Availability of NPRM follows: Traffic Division, P.O. Box 92007, Worldway Postal Center, Los Angeles, Any person may obtain a copy of this PART 71Ð[AMENDED] California, 90009. Notice of Proposed Rulemaking (NPRM) The official docket may be examined by submitting a request to the Federal 1. The authority citation for 14 CFR in the Office of the Assistant Chief Aviation Administration, System part 71 continues to read as follows: Counsel, Western Pacific Region, Management Branch, P.O. Box 92007, Authority: 49 U.S.C. 106(g), 40103, 40113, Federal Aviation Administration, Room Worldway Postal Center, Los Angeles, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– 6007, 15000 Aviation Boulevard, California 90009. Communications must 1963 Comp., p. 389; 14 CFR 11.69. Lawndale, California 90261. identify the notice number of this § 71.1 [Amended] An informal docket may also be NPRM. Persons interested in being 2. The incorporation by reference in examined during normal business at the placed on a mailing list for future 14 CFR 71.1 of the Federal Aviation Office of the Manager, System NPRM’s should also request a copy of Administration Order 7400.9C, Airspace Management Branch, Air Traffic Advisory Circular No. 11–2A, which Designations and Reporting Points, Division at the above address. describes the application procedures. dated August 17, 1995, and effective FOR FURTHER INFORMATION CONTACT: Scott Speer, Airspace Specialist, System The Proposal September 16, 1995, is amended as follows: Management Branch, AWP–530, Air The FAA is considering an Traffic Division, Western-Pacific amendment to part 71 of the Federal Paragraph 6005 Class E airspace areas Region, Federal Aviation Aviation Regulations (14 CFR part 71) extending upward from 700 feet or more Administration, 15000 Aviation by amending the Class E airspace area above the surface of the earth. Boulevard, Lawndale, California 90261, at Vacaville, CA. The development of a * * * * * telephone (310) 725–6533. GPS SIAP at Nut Tree Airport has made AWP AZ E5 Vacaville, CA [Revised] this proposal necessary. The intended SUPPLEMENTARY INFORMATION: Nut Tree Airport, CA effect of this proposal is to provide ° ′ ′′ ° ′ ′′ Comments Invited (Lat. 38 22 37 N, long. 121 57 45 W) adequate Class E airspace for aircraft Sacramento VORTAC Interested parties are invited to executing the GPS RWY 20 SIAP at Nut (Lat. 38°26′38′′ N, long. 121°33′02′′ W) participate in this proposed rulemaking Tree Airport, Vacaville, CA. Class E That airspace extending upward from 700 by submitting such written data, views, airspace designations for airspace areas feet above the surface within a 5-mile radius or arguments as they may desire. extending upward from 700 feet or more of Nut Tree Airport and within 2.5 miles Comments that provide the factual basis above the surface of the earth are radius of the Nut Tree Airport and within 2.2 supporting the views and suggestions published in Paragraph 6005 of FAA miles each side of the Sacramento VORTAC ° presented are particularly helpful in Order 7400.9C dated August 17, 1995, 259 radial, extending from the 5-mile radius to 11.3 miles west of the VORTAC and 2.5 developing reasoned regulatory and effective September 16, 1995, which ° is incorporated by reference in 14 CFR miles each side of the 034 bearing from the decisions on the proposal. Comments Nut Tree Airport, extending from the 2.6 mile are specifically invited on the overall 71.1. The Class E airspace designation radius to 10.5 miles northwest of the airport. regulatory, aeronautical, economic, listed in this document would be published subsequently in this Order. * * * * * environmental, and energy-related Issued in Los Angeles, California, on aspects of the proposal. The FAA has determined that this December 1, 1995. Communications should identify the proposed regulation only involves an James H. Snow, airspace docket number and be established body of technical Acting Manager, Air Traffic Division, submitted in triplicate to the address regulations for which frequent and Western-Pacific Region. listed above. Commenters wishing the routine amendments are necessary to [FR Doc. 95–30691 Filed 12–15–95; 8:45 am] FAA to acknowledge receipt of their keep them operationally current. comments on this notice must submit Therefore, this proposed regulation—(1) BILLING CODE 4910±13±M with the comments a self-addressed, is not a ‘‘significant regulatory action’’ stamped postcard on which the under Executive Order 12866; (2) is not 14 CFR Part 71 following statement is made: a ‘‘significant rule’’ under DOT ‘‘Comments to Airspace Docket No. 95– Regulatory Policies and Procedures (44 [Airspace Docket No. 95±AEA±06] AWP–43.’’ The postcard will be date/ FR 10034; February 26, 1979); and (3) time stamped and returned to the does not warrant preparation of a Proposed Establishment of Class E commenter. All communications Regulatory Evaluation as the anticipated Airspace; Stevensville, MD received on or before the specified impact is so minimal. Since this is a AGENCY: Federal Aviation closing date for comments will be routine matter that will only affect air Administration (FAA), DOT. considered before taking action on the traffic procedures and air navigation, it ACTION: Notice of proposed rulemaking. proposed rule. The proposal contained is certified that this proposed rule in this notice may be changed in light would not have a significant economic SUMMARY: This proposed rule would of comments received. All comments impact on a substantial number of small establish Class E Airspace at submitted will be available for entities under the criteria of the Stevensville, MD. A standard examination in the System Management Regulatory Flexibility Act. instrument approach procedure (SIAP), Branch, Air Traffic Division, at 15000 based on the Global Positioning System List of Subjects in 14 CFR Part 71 Aviation Boulevard, Lawndale, (GPS), has been developed for Runway California 90261, both before and after Airspace, Incorporation by reference, (RWY) 11 at Bay Bridge Airport, the closing date for comments. A report Navigation (air). Stevensville, MD. The intended effect of Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65045 this proposal is to provide adequate in the light of comments received. All entities under the criteria of the controlled airspace for Instrument Flight comments submitted will be available Regulatory Flexibility Act. Rules (IFR) operations to the airport. for examination in the Rules Docket List of Subjects in 14 CFR Part 71 The area would be depicted on both before and after the closing date for aeronautical charts for pilot reference. comments. A report summarizing each Airspace, Incorporation by reference, DATES: Comments must be received on substantive public contact with the FAA Navigation (air). or before February 29, 1996. personnel concerned with this The Proposed Amendment ADDRESSES: rulemaking will be filed in the docket. Send comments on the In consideration of the foregoing, the proposed rule in triplicate to: Manager, Availability of NPRMs Federal Aviation Administration System Management Branch, AEA–530, Any person may obtain a copy of this proposes to amend 14 CFR part 71 as Docket No. 95–AEA–06 F.A.A. Eastern follows: Region, Federal Building #111, John F. Notice of Proposed Rulemaking (NPRM) Kennedy Int’l Airport, Jamaica, NY by submitting a request to the Office of PART 71Ð[AMENDED] 11430. the Assistant Chief Counsel, AEA–7, The official docket may be examined F.A.A. Eastern Region, Fitzgerald 1. The authority citation for part 71 in the Office of the Assistant Chief Federal Building # 111, John F. Kennedy continues to read as follows: Counsel, AEA–7, F.A.A. Eastern Region, International Airport, Jamaica, NY Authority: 49 U.S.C. 106(g), 40103, 40113, Federal Building #111, John F. Kennedy 11430. Communications must identify 40120; E.O. 10854 24 FR 9565, 3 CFR, 1959– International Airport, Jamaica, New the notice number of this NPRM. 1963 Comp., p. 389; 14 CFR 11.69. York 11430. Persons interested in being placed on a 2. The incorporation by reference in An informal docket may also be mailing list for future NPRM’s should 14 CFR 71.1 of the Federal Aviation examined during normal business hours also request a copy of Advisory Circular Administration Order 7400.9C, dated in the System Management Branch, No. 11–2A, which describes the August 17, 1995, and effective AEA–530, F.A.A. Eastern Region, application procedure. September 16, 1995, is proposed to be Federal Building, #111, John F. Kennedy The Proposal amended as follows: International Airport, Jamaica, New York 11430. The FAA is considering an Paragraph 6005 Class E airspace areas extending upward from 700 feet or more FOR FURTHER INFORMATION CONTACT: amendment to part 71 of the Federal Mr. Francis T. Jordan, Jr., Airspace Aviation Regulations (14 CFR part 71) to above the surface of the earth. Specialist, System Management Branch, establish Class E airspace at * * * * * AEA–530, F.A.A. Eastern Region, Stevensville, MD. A GPS RWY 11 SIAP AEA VA E5 Stevensville, MD # Federal Building, 111, John F. Kennedy has been developed for Bay Bridge Bay Bridge Airport, MD International Airport, Jamaica, New Airport. Additional controlled airspace (Lat. 38°58′35′′ N, long. 76°19′ 47′′W) York 11430; telephone: (718) 553–4521. extending upward from 700 feet above That airspace extending upward from 700 the surface (AGL) is needed to SUPPLEMENTARY INFORMATION: feet above the surface within a 6-mile radius accommodate this SIAP and for IFR of Bay Bridge Airport. Comments Invited operations at the airport. The area * * * * * Interested parties are invited to would be depicted on appropriate Issued in Jamaica, New York, on November participate in this proposed rulemaking aeronautical charts. Class E airspace 30, 1995. by submitting such written data, views designations for airspace extending John S. Walker, or arguments as they may desire. upward from 700 feet above the surface Manager, Air Traffic Division. are published in Paragraph 6005 of FAA Comments that provide the factual basis [FR Doc. 95–30693 Filed 12–15–95; 8:45 am] Order 7400.9C, dated August 17, 1995, supporting the views and suggestions BILLING CODE 4910±13±M presented are particularly helpful in and effective September 16, 1995, which developing reasoned regulatory is incorporated by reference in 14 CFR decisions on the proposal. Comments 71.1. The Class E airspace designation 14 CFR Part 71 are specifically invited on the overall listed in this document would be regulatory, aeronautical, economic, published subsequently in the Order. [Airspace Docket No. 95±AWP±39] The FAA has determined that this environmental, and energy-related Proposed Amendment of Class E proposed regulation only involves an aspects of the proposal. Airspace; Columbia, CA Communications should identify the established body of technical airspace docket number and be regulations for which frequent and AGENCY: Federal Aviation submitted in triplicate to the address routine amendments are necessary to Administration (FAA), DOT. listed above. Commenters wishing the keep them operationally current. ACTION: Notice of proposed rulemaking. FAA to acknowledge receipt of their Therefore, this proposed regulation—(1) comments on this notice must submit is not a ‘‘significant regulatory action’’ SUMMARY: This notice proposes to with those comments a self-addressed, under Executive Order 12866; (2) is not amend the Class E airspace area at stamped postcard on which the a ‘‘significant rule’’ under DOT Columbia, CA. The development of a following statement is made: Regulatory Policies and Procedures (44 Global Positioning System (GPS) ‘‘Comments to Airspace Docket No. 95– FR 11034; February 26, 1979); and (3) Standard Instrument Approach AEA–06.’’ The postcard will be date/ does not warrant preparation of a Procedure (SIAP) to Runway (RWY) 35 time stamped and returned to the regulatory evaluation as the anticipated has made this proposal necessary. The commenter. impact is so minimal. Since this is a intended effect of this proposal is to All communications received before routine matter that would only affect air provide adequate controlled airspace for the specified closing date for comments traffic procedures and air navigation, it Instrument Flight (IFR) operations at will be considered before taking action is certified that this proposed rule Columbia Airport, Columbia, CA. on the proposed rule. The proposal would not have a significant economic DATES: Comments must be received on contained in this notice may be changed impact on a substantial number of small or before January 19, 1996. 65046 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules

ADDRESSES: Send comments on the summarizing each substantive public The Proposed Amendment proposal in triplicate to: Federal contact with FAA personnel concerned In consideration of the foregoing, the Aviation Administration, Attn: with this rulemaking will be filed in the Federal Aviation Administration Manager, System Management Branch, docket. proposes to amend 14 CFR part 71 as AWP–530, Docket No. 95–AWP–39, Air Availability of NPRM follows: Traffic Division, P.O. Box 92007, Worldway Postal Center, Los Angeles, Any person may obtain a copy of this PART 71Ð[AMENDED] California, 90009. Notice of Proposed Rulemaking (NPRM) The official docket may be examined by submitting a request to the Federal 1. The authority citation for 14 CFR in the Office of the Assistant Chief Aviation Administration, System part 71 continues to read as follows: Counsel, Western Pacific Region, Management Branch, P.O. Box 92007, Authority: 49 U.S.C. 106(g), 40103, 40113, Federal Aviation Administration, Room Worldway Postal Center, Los Angeles, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– 6007, 15000 Aviation Boulevard, California 90009. Communications must 1963 Comp., p. 389; 14 CFR 11.69. Lawndale, California 90261. identify the notice number of this § 71.1 [Amended] An informal docket may also be NPRM. Persons interested in being 2. The incorporation by reference in examined during normal business at the placed on a mailing list for future 14 CFR 71.1 of the Federal Aviation Office of the Manager, System NPRM’s should also request a copy of Administration Order 7400.9C, Airspace Management Branch, Air Traffic Advisory Circular No. 11–2A. which Designations and Reporting Points, Division at the above address. describes the application procedures. dated August 17, 1995, and effective FOR FURTHER INFORMATION CONTACT: Scott Speer, Airspace Specialist, System The Proposal September 16, 1995, is amended as follows: Management Branch, AWP–530, Air The FAA is considering an Traffic Division, Western-Pacific amendment to part 71 of the Federal Paragraph 6005 Class E airspace areas Region, Federal Aviation Aviation Regulations (14 CFR part 71) extending upward from 700 feet or more Administration, 15000 Aviation by amending the Class E airspace area above the surface of the earth. Boulevard, Lawndale, California 90261, at Columbia, CA. The development of a * * * * * telephone (310) 725–6533. GPS SIAP at Columbia Airport has made AWP AZ E5 Columbia, CA [Revised] this proposal necessary. The intended SUPPLEMENTARY INFORMATION: Columbia Airport, CA effect of this proposal is to provide ° ′ ′′ ° ′ ′′ Comments Invited (Lat. 38 01 50 N, long. 120 24 53 W ) adequate Class E airspace for aircraft Columbia NDB Interested parties are invited to executing the GPS RWY 35 SIAP at (Lat. 38°01′52′′ N, long. 120°24′46′′ W) participate in this proposed rulemaking Columbia Airport, Columbia, CA. Class That airspace extending upward from 700 by submitting such written data, views, E airspace designations for areas feet above the surface within a 5-mile radius or arguments as they may desire. extending upward from 700 feet or more of Columbia Airport and within 2.6 miles Comments that provide the factual basis above the surface of the earth are radius of each side of the 211° bearing from supporting the views and suggestions published in Paragraph 6005 of FAA the Columbia NDB extending from the 5-mile Order 7400.9C dated August 17, 1995, radius to 10.4 miles south of the NDB and presented are particularly helpful in ° developing reasoned regulatory and effective September 16, 1995, which within 2 miles east of the 189 bearing from is incorporated by reference in 14 CFR the Columbia NDB extending from the 5-mile decisions on the proposal. Comments radius to 7.8 miles south of the NDB. are specifically invited on the overall 71.1. The Class E airspace designation regulatory, aeronautical, economic, listed in this document would be * * * * * published subsequently in this Order. Issued in Los Angeles, California, on environmental, and energy-related December 1, 1995. aspects of the proposal. The FAA has determined that this James H. Snow, Communications should identify the proposed regulation only involves an airspace docket number and be established body of technical Acting Manager, Air Traffic Division, Western-Pacific Region. submitted in triplicate to the address regulations for which frequent and listed above. Commenters wishing the routine amendments are necessary to [FR Doc. 95–30694 Filed 12–15–95; 8:45 am] FAA to acknowledge receipt of their keep them operationally current. BILLING CODE 4910±13±M comments on this notice must submit Therefore, this proposed regulation—(1) with the comments a self-addressed, is not a ‘‘significant regulatory action’’ stamped postcard on which the under Executive Order 12866; (2) is not SECURITIES AND EXCHANGE following statement is made: a ‘‘significant rule’’ under DOT COMMISSION ‘‘Comments to Airspace Docket No. 95– Regulatory Policies and Procedures (44 17 CFR Chapter II AWP–39.’’ The postcard will be date/ FR 10034; February 26, 1979); and (3) time stamped and returned to the does not warrant preparation of a Release Nos. 33±7246, 34±36572, 35±26428, commenter. All communications Regulatory Evaluation as the anticipated 39±2337, IC±21591, IA±1540; File No. S7± received on or before the specified impact is so minimal. Since this is a 33±95 closing date for comments will be routine matter that will only affect air considered before taking action on the traffic procedures and air navigation, it List of Rules To Be Reviewed Pursuant proposed rule. The proposal contained is certified that this proposed rule to the Regulatory Flexibility Act in this notice may be changed in light would not have a significant economic AGENCY: Securities and Exchange of comments received. All comments impact on a substantial number of small Commission. submitted will be available for entities under the criteria of the ACTION: Publication of list of rules examination in the System Management Regulatory Flexibility Act. scheduled for review. Branch, Air Traffic Division, at 15000 List of Subjects in 14 CFR Part 71 Aviation Boulevard, Lawndale, SUMMARY: The Securities and Exchange California 90261, both before and after Airspace, Incorporation by reference, Commission is today publishing a list of the closing date for comments. A report Navigation (air). rules to be reviewed pursuant to Section Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65047

610 of the Regulatory Flexibility Act. Title: Form F–4 (for registration of Citation: 17 CFR 274.11a–1. The list is published to provide the securities of foreign private issuers Authority: 15 USC 77f, 77g, 77h, 77j, public with notice that these rules are issued in certain business 77s, 80a–8, 80a–24, 80a–29, and 80a–37. scheduled for review by the agency and combinations). Title: Form N–14 (for the registration to invite public comment on them. Citation: 17 CFR 239.34. of securities issued in business DATES: Public comments are due by Authority: 15 U.S.C. 77a et seq. combination transactions). January 31, 1996. Title: General rules and regulations Citation: 17 CFR 239.23. ADDRESSES: Persons wishing to submit pursuant to Section 9(a) of the African Authority: 15 USC 77f, 77g, 77h, 77j, written comments should file three Development Bank Act. 77s, 80a–8, 80a–24, 80a–29, and 80a–37. copies with Jonathan G. Katz, Secretary, Citation: 17 CFR Part 288. Title: Rule 203(b)(3)–1 (definition of Securities and Exchange Commission, Authority: 15 U.S.C. 77a et seq.; 22 ‘‘client’’ of an investment adviser for 450 Fifth Street, N.W., Room 6184, Stop U.S.C. 290i–9a. certain purposes relating to limited 6–9, Washington, D.C. 20549. All Title: Regulation 14A; Regulation 14C. partnership). submissions should refer to File No. S7– Citation: 17 CFR 240.14a–1 through Citation: 17 CFR 275.203(b)(3)–1. 33–95, and will be available for public 240.14a–104 (Regulation 14A); 17 CFR Authority: 15 USC 80b–6A. inspection and copying at the 240.14c–1 through 240.14c–101 Title: Rule 205–3 (exemption from the Commission’s Public Reference Room, (Regulation 14C). compensation prohibition of Section Room 1026, at the same address. Authority: 15 U.S.C. 78a et seq. 205(1) for registered investment FOR FURTHER INFORMATION CONTACT: Rules and Forms To Be Reviewed by advisers). Anne H. Sullivan, Office of the General the Division of Investment Management Citation: 17 CFR 275.203(b)(3)–1. Authority: 15 USC 80b–6A. Counsel, Securities and Exchange Title: Rule 2a19–1 (investment Commission 202–942–0954. company limited partners not deemed Title: Rule 6c–3 (exemptions for SUPPLEMENTARY INFORMATION: The affiliated persons). certain registered variable life insurance Regulatory Flexibility Act (‘‘RFA’’) (Pub. Citation: 17 CFR 270.2a19–1. separate accounts). L. 96–354, 94 Stat. 1165 (September 19, Authority: 15 USC 80a–6(c) and 80a– Citation: 17 CFR 270.6c–3. 1980) requires that each agency review 37(a). Authority: 15 USC 80a–6(c) and 80a– 37(a). every ten years each of its rules that has Title: Rule 10b–1 (definition of regular a significant economic impact upon a broker or dealer) Title: Rule 6c–6 (exemption for substantial number of small entities. Citation: 17 CFR 270.10b–1. certain registered separate accounts and The purpose of the review is ‘‘to Authority: 15 USC 80a–37(a). other persons). determine whether such rules should be Title: Rule 22e–2 (pricing of Citation: 17 CFR 270.6c–6. continued without change, or should be redemption requests in accordance with Authority: 15 USC 80a–6(c), 80a– amended or rescinded . . . to minimize Rule 22c–1). 11(a), and 80a–37(a). any significant economic impact of the Citation: 17 CFR 270.22e–2. Title: Rule 6c–7 (exemptions from rules upon a substantial number of such Authority: 15 USC 80a–6(c), 80a– certain provisions of Sections 22(e) and small entities’’ (5 USC 610(a)). 22(e), and 80a–37(a). 27 for registered separate accounts The RFA stipulates the following Title: Rule 20a–1 (solicitations of offering variable annuity contracts to specific considerations that must be proxies, consents and authorizations). participants in the Texas Optional addressed in the review of each rule: (1) Citation: 17 CFR 270.20a–1. Retirement Program). the continued need for the rule; (2) the Authority: 15 USC 80a–20(a). Citation: 17 CFR 270.6c–7. nature of complaints or comments Title: Rule 30a–1 (annual reports). Authority: 15 USC 80a–6(c); 80a– received concerning the rule from the Citation: 17 CFR 270.30a–1. 37(a). public; (3) the complexity of the rule; (4) Authority: 15 USC 80a–29. Title: Rule 6c–8 (exemptions for the extent to which the rule overlaps, Title: Rule 30b1–1 (semi-annual registered separate accounts to impose a duplicates or conflicts with other report). deferred sales load and to deduct certain Federal rules, and, to the extent feasible, Citation: 17 CFR 270.30b1–1. administration charges) with State and local governmental rules; Authority: 15 USC 80a–29. Citation: 17 CFR 270.6c–8. and (5) the length of time since the rule Title: Rule 30b1–2 (semi-annual Authority: 15 USC 80a–6(c) and 80a– has been evaluated or the degree to report for totally-owned registered 37(a). which technology, economic conditions, management investment company Title: Rule 6e–3(T) (temporary or other factors have changed in the area subsidiary of registered management exemptions for flexible premium affected by the rule (5 USC 610(c)). investment company). variable life insurance separate Pursuant to the RFA, the rules and Citation: 17 CFR 270.30b1–2. accounts). forms listed below are scheduled for Authority: 15 USC 80a–29. Citation: 17 CFR 270.6e–3(T). review by staff of the Commission Authority: 15 USC 80a–6(e) and 80a– during the next twelve months. The Title: Rule 30f–1 (applicability of 37(a). rules are grouped according to which Section 16 of the Exchange Act to Division or Office of the Commission Section 30(f)). Title: Rule 11a–2 (offers of exchange has responsibility for, and will review, Citation: 17 CFR 270.30f–1, by certain registered separate accounts Authority: 15 USC 78p. each rule: or others the terms of which do not Title: Rule 34b–1 (sales literature require prior Commission approval). Rules and Forms To Be Reviewed by deemed to be misleading). Citation: 17 CFR 270.11a–2. the Division of Corporation Finance Citation: 17 CFR 270.34b–1. Authority: 15 USC 80a–6(c) and 80a– Title: Form S–4 (for registration of Authority: 15 USC 77j, 77l, 78j(b), and 37(a). securities issued in business 80a–33(b). Title: Rule 22d–2 (exemption from combination transactions). Title: Form N–2 (registration section 22(d) for certain registered Citation: 17 CFR 239.25. statement of closed-end management separate accounts). Authority: 15 U.S.C. 77a et seq. investment companies). Citation: 17 CFR 270.22d–2. 65048 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules

Authority: 15 USC 80a–6(c) and 80a– Title: Rule 41 (exemption of public Title: Depository shipment control list 37(a). utility subsidiaries with respect to transfer instructions; Definition of item. Title: Rule 26a–1 (payment of limited subsidiaries with respect to Citation: 17 CFR 240.17Ad–1. administrative fees to the depositor or limited acquisition of utility assets). Authority: 15 U.S.C. 78b, 781, 78q–1 principal underwriter of a unit Citation: 17 CFR 250.41. and 78w. investment trust; exemptive relief for Authority: 15 U.S.C. 78m. Title: Written inquiries and requests. separate accounts). Title: Rule 52 (exemption of issue and Citation: 17 CFR 240.17Ad–5. Citation: 17 CFR 270.26a–1. sale of certain securities). Authority: 15 U.S.C. 78c, 78q–1 and Authority: 15 USC 80a–6(c), 80a– Citation: 17 CFR 250.52. 78w. 26(a), and 80a–37(a). Authority: 15 U.S.C. 79f and 79h. Title: Rule 26a–2 (exemptions from Title: Rule 53 (certain registered Rule To Be Reviewed by the Office of certain provisions of sections 26 and 27 holding company financings in the Chief Accountant for registered separate accounts and connection with the acquisition of one Title: Article 4 of Regulation S–X others regarding custodianship of and or more exempt wholesale generators). (Rules of General Application). deduction of certain fees and charges Citation: 17 CFR 250.53. Citation: 17 CFR 210.4. from the assets of such accounts). Authority: 15 U.S.C. 79z–5a. Authority: 15 U.S.C. 77f, 77g, 77s(a), Citation: 17 CFR 270.26a–2. Title: Rule 54 (effect of exempt 77aa(25) to (26), 78l, 78m, 78o(d), Authority: 15 USC 80a–6(c) and 80a– wholesale generators on other 78w(a), 79e(b), 79n, 79t(a), 80a–8, and 37(a). transactions). 80a–29. Title: Form N–3 (registration Citation: 17 CFR 250.54. The Commission invites public statement of separate accounts Authority: 15 U.S.C. 79c, 79f(b), and comment on both the list and the rules organized as management investment 79-i(c)(3). to be reviewed. companies). Title: Notices and reports to be filed Dated: December 12, 1995. Citation: 17 CFR 274.11b. under Section 33. Authority: 15 USC 77g, 77j, 77s, 80a– By the Commission. Citation: 17 CFR 250.57. Margaret H. McFarland, 8, 80a–29, and 80a–37. Authority: 15 U.S.C. 79z–5b. Title: Form N–4 (registration Deputy Secretary. Title: Rule 63 (Approval of [FR Doc. 95–30659 Filed 12–15–95; 8:45 am] statement of separate accounts reorganization fees. BILLING CODE 8010±01±P organized as unit investment trusts). Citation: 17 CFR 250.63. Citation: 17 CFR 274.11c. Authority: 11 U.S.C. 608. Authority: 15 USC 77g, 77j, 77s, 80a- 8, 80a-29, and 80a-37. Title: Rule 64 (scope of applications DEPARTMENT OF THE INTERIOR for approval of reorganization plans). Title: Rule 7 (companies deemed not Citation: 17 CFR 250.64. to be electric gas utility companies). Office of Surface Mining Reclamation Authority: 15 U.S.C. 79k. Citation: 17 CFR 250.7. and Enforcement Authority: 15 U.S.C. 79b. Title: Rule 72—Filing of statements 30 CFR Part 950 Title: Rule 14 (exemption of pursuant to Section 17(a). acquisitions of securities of power Citation: 17 CFR 250.72. [SPATS No. WY±022] supply companies from section 9(a)(2) Authority: 15 U.S.C. 79q. Wyoming Regulatory Program of the Act). Rules To Be Reviewed by the Division Citation: 17 CFR 250.14. of Market Regulation AGENCY: Office of Surface Mining Authority: l5 U.S.C. 79i(a)(2). Title: Exemption of certain direct Reclamation and Enforcement (OSM), Title: Rule 15 (exemption of holding Interior. company and subsidiary companies participation program securities from Sections 7(c) and 11(d)(1). ACTION: Proposed rule; public comment under section 3(a)(2) of the Act). period and opportunity for public Citation: 17 CFR 250.15. Citation: 17 CFR 240.3a12–9. hearing on proposed amendment. Authority: 15 U.S.C. 79c(a)(2). Authority: 15 U.S.C. 78c(a)(12), 78g, 78k and 78w. Title: Rule 16 (exemption of non- SUMMARY: OSM is announcing receipt of utility subsidiaries and affiliates). Title: Options disclosure document. a proposed amendment to the Wyoming Citation: 17 CFR 250.16. Citation: 17 CFR 240.9b–1. regulatory program (hereinafter, the Authority: 15 U.S.C. 79b(a)(8) and Authority: 15 U.S.C. 77b, 77g, 77j, ‘‘Wyoming program’’) under the Surface 79b(a)(11). 77s(a), 78i, 78(o) and 78w(a). Mining Control and Reclamation Act of Title: Rule 20 (prescribed forms and Title: Exemptions from Section 12(g). 1977 (SMCRA). The proposed amendments). Citation: 17 CFR 240.12g–1. amendment consists of the addition and Citation: 17 CFR 250.20. Authority: 15 U.S.C. 78l, 78m, 78o revision of statutes and rules pertaining Authority: 15 U.S.C. 79f. and 78w. to shrub density stocking requirements Title: Rule 21 (filing of documents). Title: Tender offers by issuers. and wildlife habitat. The amendment is Citation: 17 CFR 250.21. Citation: 17 CFR 240.13e–4; 17 CFR intended to revise the Wyoming Authority: 15 U.S.C. 77a et. seq., 78a 240.14e-1. program to be consistent with SMCRA et. seq., and 77aaa et.seq. Authority: 15 U.S.C. 78c(b), 78i(a)(6), and the corresponding Federal Title: Rule 22 (applications and 78j(b), 78m(e), 78n(e), 78w(a) and 80a– regulations. declarations). 23(c). DATES: Written comments must be Citation: 17 CFR 250.22. Title: Annual reporting requirements received by 4:00 p.m., m.s.t., January 17, Authority: 15 U.S.C. 77s, 78m, 78o, for registered transfer agents. 1996. If requested, a public hearing on 78w, 79o, 77eee, 77ggg, 77nnn, 77sss, Citation: 17 CFR 240.17Ac2–2. the proposed amendment will be held 80a–37, 80a–38, 79c and 79t, 80b–3, Authority: 15 U.S.C. 78q, 78q–1 and on January 12, 1996. Requests to present 80b–4, and 80b–11. 78w(a). oral testimony at the hearing must be Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65049 received by 4:00 p.m., m.s.t., January 2, definitions; chapter II, section 2, permit proposes to add a definition for 1996. application requirements for surface ‘‘Eligible land’’ at section 2(ac) to be ADDRESSES: Written comments should coal mining operations; chapter IV, All land to be affected by a mining operation be mailed or hand delivered to Guy V. section 2, general environmental after the shrub standard set forth at Chapter Padgett at the address listed below. protection performance standards for IV, Section 2.(d)(x)(E) is approved by the Copies of the Wyoming program, the surface coal mining operations; chapter Office of Surface Mining. Cropland, proposed amendment, and all written X, section 4, coal exploration and pastureland, or treated grazingland approved comments received in response to this reclamation performance standards; by the Administrator which is to be affected document will be available for public chapter XI, section 5, self-bonding; by a mining operation after the shrub review at the addresses listed below chapter XIII, section 3, notice and standard set forth at chapter IV, section opportunity for public hearing on 2.(d)(x)(E) is approved by the Office of during normal business hours, Monday Surface Mining is not ‘eligible land’. through Friday, excluding holidays. surface coal mining permit revisions; Each requester may receive one free chapter XVII, section 1, definitions for Wyoming proposes to revise the copy of the proposed amendment by designation of areas unsuitable for definition for ‘‘Important habitat’’ at contacting OSM’s Casper Field Office. surface coal mining; and appendix A, recodified section 2(ax) to be Guy V. Padgett, Director, Casper Field vegetation sampling methods and That habitat which, in limited availability, Office, Office of Surface Mining reclamation success standards for supports or encourages a maximum diversity Reclamation and Enforcement, surface coal mining operations. of wildlife species or fulfills one or more Federal Building, Room 2128, 100 Specifically, Wyoming proposes to living requirements of a wildlife species. Examples of important habitat include, but East ‘‘B’’ Street, Casper, Wyoming delete the definitions for ‘‘Agricultural lands,’’ ‘‘Critical habitat,’’ and are not limited to, wetlands, riparian areas, 82601–1918 rimrocks, areas offering special shelter or Dennis Hemmer, Director, Department ‘‘Important habitat’’ or ‘‘crucial habitat’’ at W.S. 35–11–103(e) (xxviii), (xxix), protection, reproduction and nursery areas, of Environmental Quality, Herschler and wintering areas. Building—4th Floor West, 125 West and (xxx). Wyoming proposes to revise W.S. 35– It proposes to revise section 2(bc)(iii) to 25th Street, Cheyenne, Wyoming 11–402(b) to indicate that this statutory indicate that ‘‘Grazingland includes 82002, Telephone: (307) 777–7938 provision addresses, to the extent rangelands and forest lands where the FOR FURTHER INFORMATION CONTACT: Guy required by Federal law or regulations, indigenous native vegetation is actively V. Padgett, Telephone: (307) 261–5824. State wildlife agencies’ approval, rather managed for grazing, browsing, and SUPPLEMENTARY INFORMATION: than consultation and approval, of occasionally hay production, and reclamation standards for fish and occasional use by wildlife.’’ Wyoming I. Background on the Wyoming wildlife habitat. It proposes to further proposes to revise section 2(bc)(viii) to Program revise W.S. 35–11–402(b) to require that indicate that ‘‘Fish and wildlife habitat On November 26, 1980, the Secretary the Wyoming Game and Fish means land dedicated wholly or of the Interior conditionally approved Department shall consider ‘‘fish and partially to the production, protection or the Wyoming program. General wildlife habitat’’ to be that defined at management of species of fish or background information on the W.S. 35–11–103(e)(xxvi) and not to wildlife.’’ It proposes to add at section Wyoming program, including the include grazing land as defined in W.S. 2(bc)(xi) a provision to indicate that Secretary’s findings, the disposition of 35–11–103(e) (xxvii) ‘‘unless the ‘‘Treated grazingland’’ means grazingland comments, and the conditions of grazingland has been designated as which has been altered to reduce or eliminate approval of the Wyoming program can critical habitat by the United States Fish shrubs provided such treatment was applied be found in the November 26, 1980, and Wildlife Service’’ or ‘‘crucial habitat at least five years prior to submission of the Federal Register (45 FR 78637). by the Wyoming Game and Fish state program permit application. However, Subsequent actions concerning Department prior to submittal of the grazingland altered more than five years prior Wyoming’s program and program initial permit application or any to submission of the state program permit amendments can be found at 30 CFR subsequent amendments to the permit application on which full shrubs have 950.12, 950.15, 950.16, and 950.20. application.’’ Wyoming proposes to reestablished to a density of at least one per revise W.S. 35–11–402(c) to require that nine square meters does not qualify as treated II. Proposed Amendment grazingland. native shrubs shall be reestablished on By letter dated November 29, 1995, grazing land and that no shrub species Wyoming proposes to recodify the Wyoming submitted a proposed shall be required to be more than one- definitions in chapter 1, section 2, to amendment to is program half of the shrubs in the postmining reflect the additions of new terms as (administrative record No. WY–031–1) standard. discussed above. pursuant to SMCRA (30 U.S.C. 1201 et Wyoming also proposes several In chapter II, Wyoming proposes to seq.). Wyoming submitted the proposed revisions to its rules and regulations. In revise section 2(a)(vi)(G)(II) to require amendment in response to the required chapter I, Wyoming proposes to revise that, if crucial habitat, in addition to program amendments at 30 CFR the definition for ‘‘Critical habitat’’ at critical or important habitat, disruption 950.16(q) and (bb) through (gg). The section 2(v) to be ‘‘those areas essential is likely, the Wyoming Game and Fish provisions of the Wyoming to the survival and recovery of species Department shall be contacted to Environmental Quality Act that listed by the Secretary of the Interior or determine the types and numbers of Wyoming proposes to revise are: Commerce as threatened or endangered; wildlife likely to be disturbed or Wyoming Statue (W.S.) 35–11–103, (50 CFR Parts 17 and 226).’’ It proposes displaced. It also proposes to revise definitions, and W.S. 35–11–402, to add a definition for ‘‘Crucial habitat’’ section 2(b)(iv)(C), regarding establishment of reclamation standards. at section 2(w) to be ‘‘those areas, revegetation plans, to require that (1) the The provisions of the coal rules and designated as such by the Wyoming Wyoming Game and Fish Department regulations of the Department of Game and Fish Department, which shall be consulted, and its approval Environmental Quality, Land Quality determine a population’s ability to received, for minimum stocking and Division, that Wyoming proposes to maintain and reproduce itself at a planting arrangements of trees and revise are: chapter I, section 2, certain level over a long term.’’ It shrubs, including species composition 65050 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules and ground cover for crucial and critical requested under section 4(a)(ii), rather sample adequacy, is conducted, the habitat, (2) the Wyoming Game and Fish than section 3(a)(ii), indicates that the number of shrub density sample points Department shall be consulted for operator no longer qualifies under the should correspond to the number of minimum stocking and planting self-bonding program. cover samples in each community type. arrangements of trees and shrubs, In Chapter XIII, Wyoming proposes to In appendix A, Wyoming proposes to including species composition and revise section 3(a) to require that (1) the revise table 1 to include parameter vegetative ground cover for important operator’s newspaper notice of values to be used for 50 square meter habitat, and (3) the Wyoming application for permit revision shall shrub density plots in assessing sample Department of Agriculture shall be include the information required by adequacy, (2) to revise table 2, consulted on cropland and erosion W.S. 35–11–406(j) and the permit minimum and maximum sample sizes control techniques. number and date approved, and (2) the for various sampling methods, to delete In chapter IV, Wyoming proposes to operator shall mail a copy of the the belt transect sampling method, and revise section 2(d)(x)(E) to include a application mine plan map to the (3) to revise table 2 to require, for 50 requirement that the postmining Wyoming Oil and Gas Commission in square meter shrub density plots, a density, composition, and distribution accordance with W.S. 35–11–406(j). minimum of 15 samples and to indicate of shrubs shall be based upon site- In chapter XVII, Wyoming proposes to that, if sample adequacy cannot be specific evaluation of premining revise its rules concerning designation achieved after sampling 50 shrub vegetation and wildlife use. It proposes of areas unsuitable for surface coal density plots, the operator shall contact to revise section 2(d)(x)(E)(I) to require mining at section 1(a) to define ‘‘Fragile the Land Quality Division for guidance. that (1) except where a lesser density is lands’’ to include crucial habitats for In appendix A, Wyoming proposes to justified from premining condition in fish or wildlife. revise section IV.D to require that, with accordance with appendix A, at least 20 In appendix A, Wyoming proposes to respect to maximum and minimum percent of the eligible land shall be revise section II.C.3, suggested sampling sampling sizes, shrub density be restored to shrub patches supporting an procedures for ‘‘shrub habitat estimated using a 50 square meter plot. average density of one shrub per square characteristics,’’ to indicate that (1) the In appendix A, Wyoming proposes to meter, (2) patches shall be no less than postmining density composition and revise section VII.F, restoration of .05 acres each and shall be arranged in distribution of shrubs shall be based shrubs, subshrubs, and trees, to require a mosaic that will optimize habitat upon site-specific evaluation of the that (1) the postmining density, interspersion and edge effect, (3) criteria premining vegetation and wildlife use, composition, and distribution of shrubs and procedures for establishing the (2) except where a lesser density is shall be based upon site-specific standard are specified in appendix A, justified from premining conditions, at evaluation of the premining vegetation and (4) this standard shall apply upon least 20 percent of the eligible land shall and wildlife use and (2) except where a approval by OSM to all lands affected be restored to shrub patches supporting lesser density is justified from thereafter. It also proposes to revise an average density of one shrub per premining conditions, at least 20 section 2(d)(x)(E)(II) to require that square meter, (3) the baseline vegetation percent of the eligible land shall be approved shrub species and seeding ‘‘shall,’’ instead of ‘‘should,’’ include restored to shrub patches supporting an techniques shall be applied to all premining shrub distribution data, (4) average density of one shrub per square remaining grazingland. Finally, it shrub density and cover data ‘‘shall,’’ meter. In this section, Wyoming also proposes to revise section 2(d)(x)(E)(III) instead of ‘‘should,’’ be components of proposes to delete various shrub density to require that (1) for areas containing the shrub distribution information, (5) criteria. designated critical or crucial habitat, the when shrub density data are estimated, In Appendix A, Wyoming proposes to Wyoming Game and Fish Department they ‘‘shall,’’ instead of ‘‘should,’’ be add in section VIII.E various and shall be consulted about, and its gathered from each community, but not numerous standards and criteria for the approval received for, minimum from control areas, reference areas, or evaluation of shrub density. stocking and planting arrangements of extended reference areas, (6) ‘‘shrubs’’ Lastly, in appendix A, Wyoming shrubs, including species composition, ‘‘shall,’’ instead of ‘‘should,’’ be divided proposes to revise the glossary at and (2) for areas determined to be into woody species (full shrubs) and appendix VII to define ‘‘dominant’’ as important habitat, the Wyoming Game suffrutescent species (subshrubs) for the species with the greatest density and Fish Department shall be consulted sampling purposes, (7) shrub density relative to all other species sampled and for recommended minimum stocking counts shall be performed within a 50 ‘‘primary shrub species’’ as and planting arrangements of shrubs, square meter area using a plot shape appropriate to the community, (8) data All full shrub species which comprise at least including species composition, that may 10 percent of the relative density of full exceed the programmatic standard ‘‘shall,’’ instead of ‘‘should,’’ be shrubs. However, if an operator selects discussed above. recorded by species, (9) data ‘‘shall,’’ option IV, the community-specific full shrub In chapter X, Wyoming proposes to instead of ‘‘should,’’ be reported as and approved subshrub density standard, revise section 4(e) to require that coal number per square meter and per acre, then ‘primary shrub species’ means all full exploration operations that will (10) all shrub density data collected shrub and approved subshrub species which substantially disturb the natural land after the effective date specified in comprise at least 10 percent of the relative surface shall not disturb critical or chapter IV, section 2(d)(x)(E) of the rules density of full shrubs. It is further provided crucial habitats and that they shall and regulations shall be subject to the under option IV that in order to be considered as a ‘‘primary shrub species,’’ consult the Wyoming Game and Fish sample adequacy tests specified in fringed sagewort must comprise at least 20 Department prior to disturbing appendix A, section IV, although all percent of the relative shrub and approved important habitat. shrub density data collected on land subshrub species composition. In chapter XI, Wyoming proposes to affected prior to the effective date shall revise section 5(a) to require that the not be subject to sample adequacy tests III. Public Comment Procedures Administrator of the Division of Land unless that shrub density data is being In accordance with the provisions of Quality shall require the substitution of used to fulfill the 20 percent shrub 30 CFR 732.17(h), OSM is seeking a corporate surety for a self-bond if the density standard, and (11) when comments on whether the proposed financial information submitted or sampling, which is not subject to amendment satisfies the applicable Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65051 program approval criteria of 30 CFR IV. Procedural Determinations existing requirements previously 732.15. If the amendment is deemed promulgated by OSM will be 1. Executive Order 12866 adequate, it will become a part of the implemented by the State. In making the Wyoming program. This rule is exempted from review by determination as to whether this rule the Office of Management and Budget would have a significant economic 1. Written Comments (OMB) under Executive Order 12866 impact, the Department relied upon the Written comments should be specific, (Regulatory Planning and Review). data and assumptions for the pertain only to the issues proposed in counterpart Federal regulations. this rulemaking, and include 2. Executive Order 12778 explanations in support of the The Department of the Interior has List of Subjects in 30 CFR Part 950 commenter’s recommendations. conducted the reviews required by Intergrovernmental relations, Surface Comments received after the time section 2 of Executive Order 12778 mining, Underground mining indicated under ‘‘DATES’’ or at (Civil Justice Reform) and has Dated: December 7, 1995. locations other than the Casper Field determined that this rule meets the Office will not necessarily be applicable standards of subsections (a) Russell F. Price, considered in the final rulemaking or and (b) of that section. However, these Acting Regional Director, Western Regional included in the administrative record. standards are not applicable to the Coordinating Center. actual language of State regulatory [FR Doc. 95–30649 Filed 12–15–95; 8:45 am] 2. Public Hearing programs and program amendments BILLING CODE 4310±05±M Persons wishing to testify at the since each program is drafted and public hearing should contact the promulgated by a specific State, not by person listed under FOR FURTHER OSM. Under sections 503 and 505 of POSTAL RATE COMMISSION INFORMATION CONTACT by 4:00 p.m., SMCRA (30 U.S.C. 1253 and 1255) and m.s.t., January 2, 1996. Any disabled the Federal regulations at 30 CFR [Docket No. RM95±4; Order No. 1094] individual who has need for a special 730.11, 732.15, and 732.17(h)(10), 39 CFR Part 3001 accommodation to attend a public decisions on proposed State regulatory hearing should contact the individual programs and program amendments Rules of Practice and Procedure listed under FOR FURTHER INFORMATION submitted by the States must be based CONTACT. The location and time of the solely on a determination of whether the AGENCY: Postal Rate Commission. hearing will be arranged with those submittal is consistent with SMCRA and ACTION: Proposed rulemaking; extension persons requesting the hearing. If no one its implementing Federal regulations of time. requests an opportunity to testify at the and whether the other requirements of public hearing, the hearing will not be 30 CFR Parts 730, 731, and 732 have SUMMARY: The Commission is extending held. been met. the time for the filing of comments on Filing of a written statement at the draft rules of practice and procedure time of the hearing is requested as it 3. National Environmental Policy Act published at 60 FR 54981–89. will greatly assist the transcriber. No environmental impact statement is DATES: Comments on the draft rules of Submission of written statements in required for this rule since section practice and procedure must be advance of the hearing will allow OSM 702(d) of SMCRA (30 U.S.C. 1292(d)) submitted on or before January 8, 1996. officials to prepare adequate responses provides that agency decisions on ADDRESSES: Comments and and appropriate questions. proposed State regulatory program correspondence should be sent to The public hearing will continue on provisions do not constitute major Margaret P. Crenshaw, Secretary of the the specified date until all persons Federal actions within the meaning of Commission, 1333 H Street, N.W., Suite scheduled to testify have been heard. section 102(2)(C) of the National 300, Washington, D.C. 20268–0001 Persons in the audience who have not Environmental Policy Act of 1969 (42 (telephone 202/789–6840). been scheduled to testify, and who wish U.S.C. 4332(2)(C)). to do so, will be heard following those FOR FURTHER INFORMATION CONTACT: who have been scheduled. The hearing 4. Paperwork Reduction Act Stephen L. Sharfman, Legal Advisor, will end after all persons scheduled to This rule does not contain Postal Rate Commission, 1333 H Street, testify and persons present in the information collection requirements that N.W., Suite 300, Washington, D.C. audience who wish to testify have been require approval by OMB under the 20268–0001 (telephone 202/789–6820). heard. Paperwork Reduction Act (44 U.S.C. SUPPLEMENTARY INFORMATION: On 3507 et seq.). October 27, 1995, Order No. 1084, a 3. Public Meeting Notice of Proposed Rulemaking, was If only one person requests an 5. Regulatory Flexibility Act published at 60 FR 54981–89. This opportunity to testify at a hearing, a The Department of the Interior has Notice presented draft rules that were public meeting, rather than a public determined that this rule will not have founded on rules initially proposed by hearing, may be held. Persons wishing a significant economic impact on a the United States Postal Service in a to meet with OSM representatives to substantial number of small entities Petition filed April 13, 1995. However, discuss the proposed amendment may under the Regulatory Flexibility Act (5 the Commission’s draft rules request a meeting by contacting the U.S.C. 601 et seq.). The State submittal incorporated views expressed and person listed under FOR FURTHER that is the subject of this rule is based suggestions made in comments filed by INFORMATION CONTACT. All such meetings upon counterpart Federal regulations for twenty-one participants. The deadline will be open to the public and, if which an economic analysis was established for comments on the possible, notices of meeting will be prepared and certification made that Commission’s draft rules was December posted at the locations listed under such regulations would not have a 26, 1995. Notice is hereby given that the ADDRESSES. A written summary of each significant economic effect upon a deadline for filing comments on the meeting will be made a part of the substantial number of small entities. draft rules is extended to January 8, administrative record. Accordingly, this rule will ensure that 1996. 65052 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules

The Commission is concerned that the during normal business hours in the Synopsis of Notice of Inquiry initial deadline for filing comments, FCC Reference Center (Room 239), 1919 1. The Notice seeks information on December 26, 1995, falls at an M Street, NW., Washington, DC. The the current availability, cost, and uses of inconvenient time, in the midst of the complete text of this decision may also closed captioning and video holiday season. As a courtesy to those be purchased from the Commission’s description, and also asks comment on planning to file comments on the draft copy contractors, International what further Commission actions may rules and in the interest of obtaining Transcription Service, Inc., (202) 857– be appropriate to promote these comments based on a thorough review 3800, 2100 M Street, NW., Suite 140, services. It also seeks comment on the of the draft rules, the Commission has Washington, DC 20037. appropriate means of promoting their conferred this extension. It is Ordered: wider use in programming delivered by 1. Comments addressing the draft List of Subjects in 47 CFR Part 73 television broadcasters, cable operators, rules published at 60 FR 54981–89 are Radio broadcasting. and other video programming providers. now due on January 8, 1996. Federal Communications Commission. 2. The Secretary shall publish this I. Background John A. Karousos, Notice and Order in the Federal 2. Captioning is similar to subtitles in Register. Chief, Allocations Branch, Policy and Rules Division, Mass Media Bureau. that it displays the audio portion of a Issued by the Commission on December 12, [FR Doc. 95–30615 Filed 12–15–95; 8:45 am] television signal as printed words on the 1995. BILLING CODE 6712±01±F television screen. To assist viewers who Margaret P. Crenshaw, are hearing disabled, captions also Secretary. identify speakers, sound effects, music, [FR Doc. 95–30640 Filed 12–15–95; 8:45 am] 47 CFR Parts 73 and 76 and laughter. Video description BILLING CODE 7710±FW±P provides audio descriptions of a program’s key visual elements that are [MM Docket No. 95±176; FCC 95±484] inserted during the natural pauses in the FEDERAL COMMUNICATIONS In the Matter of Closed Captioning and program’s dialogue. COMMISSION Video Description of Video 3. Both the Senate and the House of Programming Representatives have passed bills (H.R. 47 CFR Part 73 1555 and S. 652), which, if enacted, AGENCY: would require the Commission to adopt [MM Docket No. 95±141; RM±8642] Federal Communications Commission. regulations to ensure that video programming is accessible to persons Radio Broadcasting Services; ACTION: Notice of inquiry. Frederiksted, VI and Culebra and with hearing disabilities through the Carolina, PR SUMMARY: This Notice of Inquiry solicits provision of closed captioning, comment on the current availability, including requiring ‘‘video AGENCY: Federal Communications cost, and uses of closed captioning and programming providers or owners’’ to Commission. video description of television video maximize the accessibility of previously ACTION: Proposed rule; dismissal. programming. This information will published or exhibited programs by adding closed captioning. Both bills SUMMARY: The Commission dismisses provide the Commission a record on these important services, which benefit would allow the Commission to exempt the petition for rule making filed by Jose programs from these requirements in J. Arzuaga, proposing the allotment of individuals with disabilities. It will also enable the Commission to assess what certain circumstances, including Channel 298B1 at Frederiksted, Virgin circumstances where the closed Islands, as its third local FM further actions may be appropriate to promote these services. captioning would impose an transmission service (RM–8642). See 60 unreasonable financial burden. The FR 46563, September 7, 1995. We also DATES: Interested parties may file House bill would require the dismiss petitioner’s counterproposal to comments on or before January 29, Commission to conduct an inquiry into allotment Channel 293B in lieu of 1996, and reply comments on or before the current extent of closed captioning Channel 298B1 at Frederiksted, Virgin February 14, 1996. as well as other issues. In addition, both Islands, and to allot Channel 298B1 at ADDRESSES: Federal Communications bills would require the Commission to Culebra, Puerto Rico. The petitioner has Commission, Washington, D.C. 20554. study the use of video description. The abandoned his interest in a Class B1 House bill further provides that the FOR FURTHER INFORMATION CONTACT: allotment at Frederiksted, Virgin Commission may adopt regulation it Charles Logan, (202) 776–1653. Islands, and there are no other timely deems necessary to promote the expressions of interest for the channel. SUPPLEMENTARY INFORMATION: This is a accessibility of video programming to In addition, petitioner’s counterproposal synopsis of the Commission’s Notice of persons with visual impairments. is not consistent with the Commission’s Inquiry in MM Docket No. 95–176, FCC technical requirements. With this 95–484, adopted December 1, 1995 and II. The Public Interest Benefits of action, this proceeding is terminated. released on December 4, 1995. The Closed Captioning and Video FOR FURTHER INFORMATION CONTACT: complete text of this Notice is available Description Sharon P. McDonald, Mass Media for inspection and copying during 4. The Notice asks parties to elaborate Bureau, (202) 418–2180. normal business hours in the FCC on the importance and nature of the SUPPLEMENTARY INFORMATION: This is a Reference Center (Room 239), 1919 M public interest benefits of closed synopsis of the Commission’s Report Street, N.W., Washington, D.C., and also captioning and video description. It asks and Order, MM Docket No. 95–141, may be purchased from the parties to submit information regarding adopted November 30, 1995, and Commission’s copy contractor, the number of individuals with hearing released December 11, 1995. The full International Transcription Service, and vision disabilities in this country text of this Commission decision is Inc., 2100 M Street, N.W., Suite 140, who can benefit from these innovations, available for inspection and copying Washington, DC 20037, (202) 857–3800. including the basis for such estimates. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65053

Are the number of persons with hearing or producer, by market size, and by sufficient number of decoder-equipped and vision disabilities expected to grow whether an entity is affiliated with a television receivers in the market to in the coming years, particularly due to broadcast network or multiple cable provide the hoped-for incentive for the the aging of the population? What system operator. television industry to provide closed proportion of the persons with such 6. The Commission also seeks captioning? The Commission also disabilities require closed captioning or comment on the current availability of requests comment on the role market- video description to enjoy television video description, including its based incentives can play in fostering programming, and what proportion availability within each of the categories video description. currently utilize these technologies? In described in its discussion of the VI. Inquiry Regarding Mandatory addition, the Commission requests availability of closed captioning. It also Captioning and Video Description comment on the number of children requests comment on the estimated Requirements with hearing and vision disabilities that number of U.S. households that have can benefit from either closed stereo television receivers, a VCR, or 11. As noted, there is legislation captioning or video description, and the television adaptor capable of receiving pending in Congress that generally nature of these benefits. The Notice also video descriptions via the Second would require closed captioning of seeks comments on other public interest Audio Program channel. video programming and which would benefits of closed captioning and video 7. The Commission asks parties to require the Commission to examine the description, such as teaching literacy comment on the impact that means of promoting video description. skills to children and illiterate adults. implementation of Advanced Television Before these mandatory requirements (‘‘ATV’’), and the use of digital become law, the legislation must pass III. Availability of Closed Captioning technology, may have on the provision both Houses of Congress and be signed and Video Description of closed captioning and video by the President. Alternatively, the 5. The Notice asks commenters to description on video programming Commission could assess the possibility provide data regarding the current carried by broadcasters and other of adopting regulatory requirements in availability of closed captioning of program providers. this area under it existing statutory television video programming. Has the authority. The Commission is not amount of closed captioning been IV. The Cost of Closed Captioning and presently proposing such action, but it increasing in recent years, or has it Video Description requests comment on the general form reached a plateau? The Commission is 8. The Notice requests information on any mandatory closed captioning or particularly interested in data on the current costs of providing closed video description requirements should availability and any discernible trends captioning and video description of new take if they are deemed necessary. It regarding the following categories: (1) as well as previously published or particularly seeks comment on the Program Source. What is the current exhibited television programming. What following matters: (1) The application of availability of closed captioning is the cost of the computer hardware mandatory requirements (i.e., which according to the source of the and software, as well encoding and entities (e.g., program producers, video programming—broadcast network, basic other equipment, necessary for these programming distributors) should be cable and premium cable networks, services? What are the current rates for subject to any mandatory requirements); syndicated programming, locally- closed captioning and video description (2) Exemptions to any mandatory produced programming, local and services for both prerecorded and live, requirements due to financial burden or nationally produced public television ‘‘real-time’’ programming? Are these other factors; (3) Technical and quality programming? (2) Other Delivery rates uniform throughout the country? standards; (4) The appropriate Systems. To what extent is programming Do the rates vary by program type, the timetables for implementing any closed carried on wireless cable, satellite type of delivery system, or other factors? captioning or video description master antenna systems, direct-to-home What is the overall cost of providing requirements that may be imposed; (5) satellite services (including direct closed captioning or video description Strategies to improve competition and broadcast satellite), and local exchange of different types of programs? innovation in the provision of these carriers/video dialtone services closed 9. The Commission also requests services. captioned? (3) Program Type. To what comment on the adequacy of the supply 12. The pending Senate and House extent are each of the following types of of closed captioning and video bills, if enacted, would provide express programs closed captioned (on the description services. In addition, it statutory authority for imposing media within the scope of FCC seeks comment on the governmental mandatory closed captioning jurisdiction): entertainment programs, and nongovernmental funding sources requirements. The House bill would local and national news, documentaries, for these services. also permit the Commission to adopt public affairs programming, children’s regulations to promote the accessibility educational programming, other types of V. Market Incentives for Closed of video programming to persons with children’s programming, sports, movies, Captioning and Video Description visual disabilities after conducting an cable public access programming, and 10. The Notice solicits comment on inquiry into video description. live vs. pre-recorded programming? (4) the role free-market forces have played However, the Commission seeks Previously Published Programming. The and can play in promoting the provision comment on the scope of its authority Commission solicits comment on the of closed captioning of video under current law to adopt regulations extent of closed captioning of programming. For example, are imposing either closed captioning or previously published or exhibited advertisers actively seeking to market to video description requirements on programs, such as reruns and movies, individuals with hearing impairments, broadcast television licensees, cable that will be shown to television which could in turn encourage closed operators, wireless cable systems, audiences again. (5) Market Size and captioning of television programming? SMATV operators, direct-to-home Other Factors. The Commission also How does the audience size of a satellite services, and local exchange requests comment on the degree to particular program influence the carrier/video dialtone systems, as well which closed captioning varies by the likelihood that the program will be as on producers/owners and other size of the video programming provider closed captioned? Are there presently a distributors of such programming. 65054 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules

Commenters should address with DEPARTMENT OF DEFENSE FAR Case 91–111, Commercially specificity the basis for their views Available Government-Furnished concerning the Commission’s authority, GENERAL SERVICES Material ADMINISTRATION and also address any other legal Published at 59 FR 46557, September constraints that they believe may apply 2, 1994, to require contractors to in this area. NATIONAL AERONAUTICS AND SPACE ADMINISTRATOIN provide all material for performing Administrative Matters Government contracts, except when 48 CFR Parts 8, 10, 15, 31, 32, 42, 45, Government-furnished material is 13. Pursuant to applicable procedures 52 and 53 necessary to achieve significant set forth in Sections 1.415 and 1.419 of economy, standardization, or expedited the Commission’s Rules, 47 C.F.R. production, or when it is otherwise in [FAR Case 90±017, 90±054, 91±039, 91±057, §§ 1.415, 1.419, interested parties may the Government’s interest. [RIN 9000– 91±093, 91±111, 91±114, 91±117, 92±033, & AF95] file comments on or before January 29, 92±044] 1996, and reply comments on or before FAR Case 91–114, Use of Government February 14, 1996. All relevant and Federal Acquisition Regulation; Facilities on a No-Charge Basis timely comments will be considered by Withdrawal of Proposed Rules the Commission before final action is Published at 59 FR 45657, September 2, 1994, to include two clauses to taken in this proceeding. To file AGENCY: Department of Defense (DOD), provide controls on the use of formally in this proceeding, parties General Services Administration (GSA), Government property by identifying the must file an original and four copies of and National Aeronautics and Space Administration (NASA). items of property furnished under a all comments, reply comments and contract or used on a no-charge basis, supporting comments. If parties want ACTION: Proposed rule withdrawals. and by describing the obligation of both each Commissioner to receive a parties with regard to the property. [RIN personal copy of their comments, an SUMMARY: The Department of Defense, 9000–AF96] original plus nine copies must be filed. General Services Administration, and Comments and reply comments should National Aeronautics and Space FAR Case 91–117, Use and Charges be sent to the Office of the Secretary, Administration have decided to Clause Federal Communications Commission, withdraw ten proposed rules without Published at 60 FR 22442, May 5, 1919 M Street, N.W., Washington, D.C. further action. The actual text of the 1995, to clarify current language 20554. Comments and reply comments Federal Acquisition Regulation is pertaining to rental payments for will be available for public inspection unaffected by this document. Government-owned real property and during regular business hours in the FOR FURTHER INFORMATION CONTACT: Ms. equipment. [RIN 9000–AG23] FCC Reference Center (Room 239) of the Beverly Fayson, FAR Secretariat, Room The councils agreed to withdraw the Federal Communications Commission, 4037, GS Building, Washington, DC following two proposed rules because 1919 M Street, N.W., Washington, D.C. 20405 (202) 501–4755. the Department of Defense decided to retain the guidance in the Defense 20554. SUPPLEMENTARY INFORMATION: Federal Acquisition Regulation 14. There are no ex parte or disclosure Background supplement. requirements applicable to this proceeding pursuant to 47 CFR On July 21, 1995, the Councils agreed FAR Case 91–39, Voluntary Refunds § 1.1204(a)(4). to withdraw the following five proposed Published at 56 FR 40716, August 15, rules because the Director of Defense List of Subjects 1991, to establish guidance on Procurement is conducting an initiative solicitation and acceptable of voluntary 47 CFR Part 73 to rewrite FAR Part 45, Government refunds from contractors. [RIN 9000– Property, to make the Government AE11] Television broadcasting. property regulations easier to understand and less burdensome for FAR Case 90–54, Defective Pricing 47 CFR Part 76 both Government and industry. The Published at 55 FR 50534, December Cable television. issues addressed by these rules will be 6, 1990, to revise policies affecting considered under the Part 45 Rewrite Federal Communications Commission. defective pricing reductions. [RIN 9000– initiative. AE23] William F. Caton, FAR Case 91–057, Disposal of The councils also agreed to withdraw Acting Secretary. Hazardous Government Property the following three proposed rules [FR Doc. 95–30549 Filed 12–15–95; 8:45 am] because the issues addressed in these BILLING CODE 6712±01±P Published at 59 FR 14464, March 28, rules have been superseded by other 1994, to provide guidance relating to the regulations including regulations identification and appropriate implementing the Federal Acquisition disposition of hazardous Government Streamlining Act of 1994. property. [RIN 9000–AF62] FAR Case 90–017, Exemptions from FAR Case 91–093, Special Tooling Cost or Pricing Data Under Fixed-Price Contracts Published at 55 FR 36774, September Published at 59 FR 14462, March 28, 6, 1990, to minimize administrative 1994, to amend the Government’s policy impediments in the procedures for on managing and controlling special claiming and granting exemptions from tooling for which the Government has the requirements for submission of the right to title. [RIN 9000–AF66] certified cost or pricing data, and the Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65055 policies regarding price negotiations. [RIN 9000–AD89] FAR Case 92–033, Price Competition Exemption Published at 59 FR 114458, March 28, 1994, to address unnecessarily requiring the submission of cost or pricing data and to clarify when adequate price competition exists. [RIN 9000–AF81] FAR Case 92–044, Reconditioned Material Published at 59 FR 46019, September 6, 1994, to combine two clause as an acquisition streamlining measure. [RIN 9000–AG08] List of Subjects in 48 CFR Parts 8, 10, 15, 31, 32, 42, 45, 52, and 53 Government procurement. Dated: September 12, 1995. Edward C. Loeb, Acting Director, Office of Federal Acquisition Policy. [FR Doc. 95–30651 Filed 12–15–95; 8:45 am] BILLING CODE 6820±EP±M 65056

Notices Federal Register Vol. 60, No. 242

Monday, December 18, 1995

This section of the FEDERAL REGISTER (Catalog of Federal Domestic Assistance concerns about possible degradation of contains documents other than rules or Program No. 10.904, Watershed Protection weather services under the NWS proposed rules that are applicable to the and Flood Prevention. Office of management modernization plan (published public. Notices of hearings and investigations, and Budget Circular A–95 regarding State November 4, 1994, 59 FR 55254). Over and local clearinghouse review of Federal committee meetings, agency decisions and 67,000 public comments were received rulings, delegations of authority, filing of and federally assisted programs and projects petitions and applications and agency is applicable.) from 32 different geographical areas. These 32 areas were then established as statements of organization and functions are Dated: December 6, 1995. examples of documents appearing in this areas of concern to receive in depth section. Christine Peterson, analysis based on the NRC’s assessment Acting State Conservationist. criteria (published February 23, 1995, [FR Doc. 95–30658 Filed 12–15–95; 8:45 am] 60 FR 10066). DEPARTMENT OF AGRICULTURE BILLING CODE 3410±16±M FOR FURTHER INFORMATION CONTACT: Julie Scanlon at 301–713–1413 or Nick Natural Resources Conservation Scheller at 301–713–0454. Service DEPARTMENT OF COMMERCE SUPPLEMENTARY INFORMATION: Mitigation Boulder River Watershed, Montana Recommendations: The mitigation National Oceanic and Atmospheric recommendations contained in the AGENCY: Natural Resources conservation Administration report and the Secretary’s transmittal Service, USDA. National Weather Service letter are: Additional WSR–88Ds and/or WFO— ACTION: Notice of intent to deauthorize Modernization and Associated The Secretary’s team recommends the Federal funding. Restructuring acquisition and siting of three SUMMARY: Pursuant to the Watershed ACTION: Notice. additional WSR–88Ds and one Weather Protection and Flood Prevention Act, Forecast Office (WFO) to provide Public Law 83–566, and the Natural SUMMARY: On October 27, 1995, the coverage for: Resources Conservation Service Secretary of Commerce released a report ‘‘(1) Northern Indiana and Northwest Guidelines (7 CFR 622), the Natural to Congress entitled, Secretary’s Report Ohio. The Team recommends that the Resources Conservation Service gives to Congress on Adequacy of NEXRAD National Weather Service install a notice of the intent to deauthorize Coverage and Degradation of Weather WSR–88D, along with a fully staffed Federal funding for the Boulder River Services under the National Weather WFO, to provide forecast and warning Watershed project in Jefferson County, Service Modernization for 32 Areas of services to the citizens of northern Montana. Concern. This report was prepared by a Indiana and northwestern Ohio. The Departmental team with expertise in FOR FURTHER INFORMATION CONTACT: Team finds that this combined area radar meteorology, operational weather Richard J. Gooby, State Conservationist, experiences a high frequency of services, employee relations, and Natural Resource Conservation Service, especially severe weather, and that the strategic planning. The Secretary’s 10 East Babcock Street Room 442, present NEXRAD configuration will not report applied the criteria developed in Bozeman, Montana 59715, telephone: provide the low level surveillance the National Research Council’s (NRC) 406–587–6813. necessary for detecting reflectivity and study, Toward a New National Weather velocity signatures associated with Boulder River Watershed, Montana Service—Assessment of NEXRAD tornado formation and other severe Coverage and Associated Weather Notice of Intent to Deauthorize Federal weather phenomena. It is the opinion of Funding Services, which was delivered to the the Team that the frequency of severe Secretary in June, 1995. The weather, areal extent of radar coverage SUPPLEMENTARY INFORMATION: A Modernization Transition Committee degradation, increased work load determination has been made by (MTC), a Federal advisory committee associated with a large spotter network, Richard J. Gooby that the proposed established by the Weather Service argues for the establishment of a full- works of improvement for the Boulder Modernization Act (WSMA), 15 U.S.C. service WFO. In addition, the Team River Watershed project will not be 313 note, P.L. 102–567, was consulted recommends that the NWS re-examine installed. The sponsoring local on the Secretary’s Report on October 30, the distribution of county warning organizations have concurred in this 1995. responsibility throughout northern determination and agree that Federal The Secretary’s report assessed the Indiana and northwestern Ohio funding should be deauthorized for the adequacy of Doppler weather following placement of the WSR–88D. project. Information regarding this surveillance radar (WSR–88D), also The Team further recommends that the determination may be obtained from known as NEXRAD, coverage and Fort Wayne Weather Service Office and Richard J. Gooby, State Conservationist, degradation of weather services under WSR–74C remain in service until the at the above address and telephone the National Weather Service (NWS) new WSR–88D and WFO are number. modernization plan for 32 geographical operational. No administrative action on areas of concern and identified (2) Northern Alabama and Southeast implementation of the proposed mitigation actions for areas where Tennessee. The Team recommends the deauthorization will be taken until 60 degradation was indicated. Late last addition of a WSR–88D optimized for days after the date of this publication in year, comments from the public were coverage of severe weather phenomena the Federal Register. solicited to identify community (particularly mini-supercells and Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices 65057 macrobursts) in the northern Alabama, and community outreach. If solutions to ‘‘However, I remain concerned about southeastern Tennessee, and remote radar (and other equipment) the team’s finding of significant northwestern Georgia region. The communications and maintenance degradation of radar coverage at the climatology of severe weather for this reliability concerns cannot be found, lower levels for the Williston, North area is such that there are a significant and if adequate community Dakota, area. In this location, the team number of tornadoes whose genesis is coordination and outreach cannot be concluded that weather services should observable only from low level radar assured, the Team recommends that a not be degraded, although their information. The recommended WSR– nearby WFO be established. The office assessment included the finding that 88D may be operated as a remote radar should incorporate, at a minimum, low-altitude radar coverage would be due to the accessibility of locations in adequate staffing for maintaining and degraded over portions of all eight the region, and reliability of commercial operating the radar for severe weather counties of the county warning area for communications. The NWS should re- observations and the dissemination of certain weather phenomena. The evaluate the county warning area warnings, and for coordinating outreach geographic area which would distribution for future WFOs Nashville, activities with northern Maine experience some level of degradation of TN, Birmingham, AL, Atlanta, GA, and communities. radar information is far more extensive Morristown, TN in order to determine (2) Key West, Florida. The Team than for any of the other areas which WFOs are best positioned to recommends continued operations at examined. Therefore, I have decided provide primary warning Key West, Florida, until the NWS can that the NWS will maintain the responsibilities for counties assumed validate reliable communications and operations of the Williston Weather from the Chattanooga and Huntsville maintenance between the Key West Service Office and its associated radar areas. The Team further recommends WSR–88D site and WFO Miami. If for a period of two years before that the Chattanooga and Huntsville solutions to remote radar implementing the team’s WSR–74C’s remain in service until the communications and maintenance recommendation to proceed with NWS commissions the new WSR–88D reliability concerns cannot be found, the planned radar decommissioning and and achieves confirmation of services Team recommends a continued NWS weather office closure. During this time, with users. presence at Key West, with, at a the NWS will conduct an operational (3) Northwest Arkansas/Eastern minimum, adequate staffing for evaluation to assess whether mid- and Oklahoma. The Team recommends that maintaining and operating the radar for upper-altitude NEXRAD data and an additional WSR–88D be installed to severe weather observations and the information from composite system the southwest of Fort Smith and dissemination of warnings.’’ sources provide adequate information to operated with dedicated Continuation of Radar Operations— detect, and warn for, all weather communications to both WFO Tulsa and The Secretary’s team recommends phenomena of concern. The team continued radar operations at the WFO Little Rock. The Fort Smith area concurs with my decision.’’ experiences a very high frequency of following sites, in addition to those Funding for Mitigation severe thunderstorms and flash floods. listed above: Recommendations: There are no The southern portion of the Fort Smith ‘‘(1) Erie, Pennsylvania. As a result of resources (dollars or work force county warning area, comprising the the degraded radar coverage for certain positions) in the current NWS budget counties of Le Flore, Scott and Polk, is lake-effect snow events, the Team for additional radars or offices beyond beyond the range of reliable detection of recommends the continued operation of the low, mid and upper altitude radar WSO Erie’s WRS–74C pending the those already identified in the strategic features used to identify the severe results of ‘‘The Lake Effect Snow plan for NWS modernization. thunderstorms and weak to moderate Study.’’ This assessment should Additional radars and offices identified tornadoes associated with squall lines compare the adequacy of existing WSR– in the Secretary’s report will require and intersecting outflow boundaries. 88D information, and other data sources additional funding authority and Many of the storms move into the area (the composite system) with the local appropriations. Recommended from the southwest of these counties— warning radar to determine capabilities mitigation actions, identified in the an area also too far from surrounding for lake effect snow identification. The Secretary’s report, will be reflected in WSR–88Ds for reliable severe weather Team recommends that the NWS remote the normal budget process beginning in identification. The Team further the WSR–74C data to WFO Cleveland in fiscal year 1997. recommends that the Fort Smith WSR– order to facilitate the schedule Release of Remaining Areas of 74C remain in service until the NWS spindown of WSO Erie. Concern: Actions to close, consolidate, commissions the new WSR–88 and (2) South Bend, Indiana. As a result relocate, or automate any field office or achieves confirmation of services with of the degraded radar coverage for decommission any NWS radar in an users.’’ certain lake-effect snow events, the area of concern were prohibited until Continuation of Office Operations— Team recommends continued radar the Secretary had reported to Congress The Secretary’s team recommends the operations at WSO South Bend pending that he believed that such actions would continuation of office operations at the the results of the lake effect snow study. not result in a degradation of service following sites: This assessment should compare the and a 30-day grace period had elapsed. (1) Caribou, Maine. The Team adequacy of existing WSR–88D The Secretary’s report was submitted to recommends continued operations at information, and other data sources (the Congress on October 27, 1995, and the Caribou, Maine, until the NWS can: (a) composite system) with the local 30-day grace period elapsed on Validate reliable communications and warning radar to determine capabilities November 27, 1995. Thus the maintenance for the Hodgdon WSR–88D for lake effect snow identification.’’ prohibition on actions to close, site; and (b) certify that other distance- Continuation of Office and Radar consolidate, relocate, or automate any and time-sensitive service Operations—The Secretary decided to field office or decommission any NWS considerations have been reconciled, continue office and radar operations in radar in an area of concern is removed including maintenance of equipment the Williston, North Dakota, area. The for the following areas of concern where and the coordination of northern Maine following was extracted from the the Secretary’s report found no emergency management requirements Secretary’s transmittal letter: degradation of service: 65058 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices

WSO Asheville, NC Dated: December 7, 1995. Williston Community Library, 1302 Davidson WSO Astoria, OR Louis J. Boezi, Drive, Williston, ND 58801 WSO Athens, GA Deputy Assistant Administrator for Wilmington Institute Library, 10th and WSO Baton Rouge, LA Modernization. Market Street, Wilmington, DE 19801 WSO Cape Hatteras, NC List of Libraries FR Doc. 95–30627 Filed 12–15–95; 8:45 am] WSO Charlotte, NC BILLING CODE 3510±12±M WSO Colorado Springs, CO Pack Memorial Library, 67 Haywood Street, Asheville, NC 28801 WSO Del Rio, TX Astoria Public Library, 459 Tenth Street, WSO Elkins, WV Astoria, OR 97103 WSO Evansville, IN Athens/Clark County Library, 2025 Baxter COMMITTEE FOR THE WSO Grand Island, NE Street, Athens, GA 30606 IMPLEMENTATION OF TEXTILE East Baton Rouge Parish, Main Library, 7711 WSO Greensboro, NC AGREEMENTS WSO Harrisburg, PA Goodwood Boulevard, Baton Rouge, LA 70806 WSO International Falls, MN New Export Visa Stamp for Certain WSO Kalispell, MT Dare County Library Hatteras Branch, Hatteras Community Center, P.O. Box 309, Cotton, Wool and Man-Made Fiber WSO Lexington, KY Hatteras, NC 27943 Textile Products Produced or WSO Montgomery, AL Caribou Public Library, 30 High Street, Manufactured in Singapore WSO Redding, CA Caribou, ME 04736 WSO Toledo, OH Deschutes County Library, 507 NW Wall December 13, 1995. WSO Wichita Falls, TX Street, Bend, OR 97701 AGENCY: WSO Wilmington, DE Yakima Valley Regional Library, 102 North Committee for the WSO Hondo, TX 3rd Street, Yakima, WA 98901 Implementation of Textile Agreements Central Oregon/Central Washington The Public Library of Charlotte and (CITA). Mecklenburg County, 310 North Tryon The Secretary is still required to Street, Charlotte, NC 28202 ACTION: Issuing a directive to the satisfy the requirement of sec. 706(b) of Chattanooga/Hamilton County Bicentennial Commissioner of Customs providing for the WSMA to certify no degradation of Library, 1001 Broad Street, Chattanooga, the use of a new export visa stamp. service when she/he restructures a filed TN 37402 Pikes Peak Library District, 5550 North office. If the field office is located in an EFFECTIVE DATE: January 1, 1996. area of concern, the Secretary is Union Boulevard, Colorado Springs, CO 80901 required to provide all public comments FOR FURTHER INFORMATION CONTACT: Val Verde County Public Library, 300 Spring Janet Heinzen, International Trade relating to that area of concern to the Street, Del Rio, TX 78840 Modernization Transition Committee Elkins-Randolph Public Library, 416 Davis Specialist, Office of Textiles and during the certification process. Avenue, Elkins, WV 26241 Apparel, U.S. Department of Commerce, Obtaining Copies of the Secretary’s Erie County Library, 27 South Park Row, (202) 482–4212. Report: The Secretary’s report consists Erie, PA 16501–1102 SUPPLEMENTARY INFORMATION: of two volumes. Volume 1 provides the Evansville-Vanderburgh County Public overall report and includes the Library, 22 Southeast Fifth Street, Authority: Executive Order 11651 of March Evansville, IN 47708–1604 methodology used by the Secretary’s 3, 1972, as amended; section 204 of the Fort Smith Public Library, 61 South 8th Agricultural Act of 1956, as amended (7 team and a summary of assessment Street, Fort Smith, AR 72901 U.S.C. 1854). results for each of the 32 areas of Allen County Public Library, P.O. Box 2270, concern. Volume 2 consists of an Fort Wayne, IN 46801 Beginning on January 1, 1996, the individual package of information for Edith Abbott Memorial Library, 211 North Government of the Republic of each of the 32 areas of concern. Each Washington, Grand Island, NE 68801–5855 Singapore will begin issuing a new package includes all the detailed Greensboro Public Library, 201 North Greene export visa stamp for shipments of information considered by the team in Street, P.O. Box 3178, Greensboro, NC 27402 textile products, produced or making its assessment of potential Dauphin County Library System, 101 Walnut degradation of service. The report has manufactured in Singapore and Street, Harrisburg, PA 17101, 717–234– exported from Singapore on and after been submitted to the U.S. Government 4961 Printing Office for printing. Copies Hondo Public Library, 1011 19th Street, January 1, 1996. There will be a one- should be available in February 1996. Hondo, TX 78861 month grace period from December 1, Distribution of Volume 1 is planned Huntsville/Madison County Public Library, 1995 through December 31, 1995, throughout NWS and to Congress and 915 Monroe Street, Huntsville, AL 35801 during which goods exported from people who submitted the public International Falls Public Library, 750 Fourth Singapore may be accompanied by comments that established the areas of Street, International Falls, MN 56649 either the old or the new export visa Flathead County Library, 247 1st Avenue stamp. Goods exported from Singapore concern. Volume 2 will be available by East, Kalispell, MT 59901 request only. If you would like a copy Monroe County Library, 700 Fleming Street, on or after January 1, 1996 must be of Volume 1 and/or Volume 2 mailed to Key West, FL 33040–6897 accompanied by the new export visa you, please specify which area(s) of Lexington Public Library, 140 East Main, stamp. concern you want and send your name Lexington, KY 40507–1376 A facsimile of the new visa stamp is Montgomery City/County Library, 245 High and address to: National Weather on file at the U.S. Department of Service, 1325 East-West Highway, Silver Street, Montgomery, AL 36104 Commerce, Office of Textiles and Spring, MD 20910–3283, Attn: Wx21– Shasta County Public Library, 1855 Shasta Apparel, 14th and Constitution Avenue, Patricia Daenecke. Street, Redding, CA 96001 Saint Joseph County Public Library, 304 NW., room 3104, Washington, DC. In the interim, copies of the report are South Main, South Bend, IN 46601–2125 See 47 FR 6683, published on available to the public at centrally Toledo-Lucas County Public Library, 325 located libraries in each of the 32 areas North Michigan Street, Toledo, Ohio 43624 February 16, 1982; 47 FR 53446, of concern. A list of these libraries is Wichita Falls Public Library, 1300 Lamar, published on November 26, 1982; and attached to this notice. Wichita Falls, TX 76301 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices 65059

51 FR 43454, published on December ADDRESSES: Written comments and through the use of information 12, 1986. requests for copies of the proposed technology. Troy H. Cribb, information collection requests should Dated: December 11, 1995. Chairman, Committee for the Implementation be addressed to Patrick J. Sherrill, Gloria Parker, of Textile Agreements. Department of Education, 600 Director, Information Resources Group. Committee for the Implementation of Textile Independence Avenue, S.W., Room Agreements 5624, Regional Office Building 3, Office of Educational Research and Improvement December 13, 1995. Washington, DC 20202–4651, or should be electronic mailed to the internet Type of Review: New Commissioner of Customs, # Title: Baccalaureate and Beyond Department of the Treasury, Washington, DC address [email protected], or should be 20229. faxed to 202–708–9346. Longitudinal Study: Second Follow- up (B&B: 93/97) Dear Commissioner: This directive FOR FURTHER INFORMATION CONTACT: amends, but does not cancel, the directive Patrick J. Sherrill (202) 708–8196. Frequency: On occasion issued to you on February 10, 1982, as Individuals who use a Affected Public: Individuals or amended, by the Chairman, Committee for telecommunications device for the deaf households the Implementation of Textile Agreements. (TDD) may call the Federal Information Reporting Burden and Recordkeeping: That directive establishes export visa Responses: 11,500 requirements for certain cotton, wool and Relay Service (FIRS) at 1–800–877–8339 between 8 a.m. and 8 p.m., Eastern time, Burden Hours: 7,935 man-made fiber textile products, produced or Abstract: This study will collect and manufactured in Singapore. Monday through Friday. report data about student who Effective on January 1, 1996, you are SUPPLEMENTARY INFORMATION: Section completed a bachelor’s degree in directed to amend further the directive dated 3506 of the Paperwork Reduction Act of 1992–93. Specifically, this follow-up February 10, 1982 to provide for the use of 1995 (44 U.S.C. Chapter 35) requires a new export visa stamp issued by the will collect data concerning post- that the Department of Education (ED) Government of the Republic of Singapore to baccalaureate degree attendance, provide interested Federal agencies and accompany shipments of textile products, persistence, and completion; the public an early opportunity to produced or manufactured in Singapore and transition into and experience after exported from Singapore on and after January comment on information collection early entry into the work force; and 1, 1996. requests. The Office of Management and career path of those who entered Goods exported from Singapore during the Budget (OMB) may amend or waive the teaching at the elementary/secondary period December 1, 1995 through December requirement for public consultation to level. 31, 1995 may be accompanied by either the the extent that public participation in old or the new export visa stamp. Goods the approval process would defeat the Office of Special Education and exported from Singapore on or after January Rehabilitative Services 1, 1996 must be accompanied be the new purpose of the information collection, export visa stamp. violate State or Federal law, or Type of Review: Extension A facsimile of the visa stamp is enclosed substantially interfere with any agency’s Title: Programs Authorized by the with this letter. ability to perform its statutory Rehabilitation act Amendments of Shipments entered or withdrawn from obligations. The Director of the 1992 warehouse according to this directive which Information Resources Group, publishes Frequency: Annually are not accompanied by the appropriate this notice containing proposed Affected Public: Not-for-profit export visa stamp shall be denied entry and institutions; State, Local or Tribal a new visa must be obtained. information collection requests at the The Committee for the Implementation of beginning of the Departmental review of Government Textile Agreements has determined that this the information collection. Each Reporting Burden and Recordkeeping: action falls within the foreign affairs proposed information collection, Responses: 1000 exception to the rulemaking provisions of 5 grouped by office, contains the Burden Hours: 40,000 U.S.C. 553(a)(1). following: (1) Type of review requested, Abstract: Discretionary Grant Sincerely, e.g., new, revision, extension, existing application package for the use of Troy H. Cribb, or reinstatement; (2) Title; (3) Summary program authorized by the Chairman, Committee for the Implementation of the collection; (4) Description of the Rehabilitation Act Amendments of of Textile Agreements. need for, and proposed use of, the 1992. [FR Doc. 95–30713 Filed 12–13–95; 4:24 pm] information; (5) Respondents and Office of Postsecondary Education BILLING CODE 3510±DR±F frequency of collection; and (6) Type of Review: Revision Reporting and/or Recordkeeping Title: Confirmation Report for the burden. ED invites public comment at Patricia Robert Harris Fellowship DEPARTMENT OF EDUCATION the address specified above. Copies of Program—Fellowship Rep. the requests are available from Patrick J. Frequency: Annually Notice of Proposed Information Sherrill at the address specified above. Affected Public: Not for Profit Collection Requests The Department of Education is institutions AGENCY: Department of Education. especially interested in public comment Reporting Burden and Recordkeeping: ACTION: Notice of proposed information addressing the following issues: (1) Is Responses: 1 collection requests. this collection necessary to the proper Burden Hours: 1100 functions of the Department, (2) will Abstract: Institutions of Higher SUMMARY: The Director, Information this information be processed and used Education that have received PRH Resources Group, invites comments on in a timely manner, (3) is the estimate grants are required to demonstrate the proposed information collection of burden accurate, (4) how might the their compliance with statutory requests as required by the Paperwork Department enhance the quality, utility, requirements for distribution to Reduction Act of 1995. and clarity of the information to be fellowships information collected will DATES: Interested persons are invited to collected, and (5) how might the be used by institutions of higher submit comments on or before February Department minimize the burden of this education to document the eligibility 16, 1996. collection on the respondents, including characteristics of students who are 65060 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices

scheduled to receive fellowships CNGT states that the Commission and necessity. If a motion for leave to under the program and the amount of originally authorized CNGT to provide intervene is timely filed, or if the each student stipend. this storage capacity to Texas Eastern Commission on its own motion believes Office of Postsecondary Education Transmission Corporation on behalf of that a formal hearing is required, further Type of Review: Revision LILCO, for a three-year term, as part of notice of such hearing will be duly Title: Confirmation Report for the the storage services that were approved given. Patricia Robert Harris Fellowship in Docket No. CP83–386 (25 FERC Under the procedure herein provided Program—Fellowship Rep. ¶ 61,355 (1983)). CNGT further states for, unless otherwise advised, it will be Frequency: Annually that the term of this certificated storage unnecessary for CNGT to appear or be Affected Public: Not for Profit service was subsequently extended by represented at the hearing. institutions Commission order in Docket No. CP84– Lois D. Cashell, Reporting Burden and Recordkeeping: 306 (29 FERC ¶61,032 (1984)). CNGT Responses: 1 Secretary. also states that these Part 157 [FR Doc. 95–30620 Filed 12–15–95; 8:45 am] Burden Hours: 1100 entitlements were transferred to LILCO Abstract: Institutions of Higher as part of CNGT’s Order No. 636 BILLING CODE 6717±01±M Education that have received PRH restructuring proceeding, in Docket No. grants are required to demonstrate RS92–14–005, et al. (64 FERC ¶61,303 [Docket No. ER96±25±000] their compliance with statutory (1993)). requirements for distribution to CNGT additionally states that the Coral Power, L.L.C.; Notice of Issuance fellowships information collected will proposed partial abandonment of this of Order be used by institutions of higher service is consistent with the December 12, 1995. education to document the eligibility Stipulation and Agreement filed June characteristics of students who are 28, 1995, in CNGT Docket No. RP94– On October 3, 1995, as amended scheduled to receive fellowships 96–012, et al., particularly the October 31, 1995, Coral Power, L.L.C. under the program and the amount of settlement mitigation for Phase II Billing (Coral Power) submitted for filing a rate each student stipend. Determinants more fully described in schedule under which Coral Power will engage in wholesale electric power and [FR Doc. 95–30686 Filed 12–15–95; 8:45 am] Appendix ‘‘D’’ of CNGT’s filing, and energy transactions as a marketer. Coral BILLING CODE 4000±01±M will result in an increase in LILCO’s GSS Billing Determinants from 34,137 Power also requested waiver of various Dt/d to 35,814 Dt/d, which will be offset Commission regulations. In particular, Coral Power requested that the DEPARTMENT OF ENERGY by a decrease in LILCO’s FTNN Billing Determinants from 27,689 Dt/d to Commission grant blanket approval Federal Energy Regulatory 26,012 Dt/d. under 18 CFR Part 34 of all future Commission Any person desiring to be heard or to issuances of securities and assumptions make any protest with reference to said of liability by Coral Power. [Docket No. CP96±69±000] application should on or before January On December 6, 1995, pursuant to 2, 1996, file with the Federal Energy delegated authority, the Director, CNG Transmission Corporation; Notice Division of Applications, Office of of Application Regulatory Commission, Washington, D.C. 20426, a motion to intervene or a Electric Power Regulation, granted December 12, 1995. protest in accordance with the requests for blanket approval under Part Take notice that on November 14, requirements of the Commission’s Rules 34, subject to the following: 1995, CNG Transmission Corporation of Practice and Procedure (18 CFR Within thirty days of the date of the (CNGT), 445 West Main Street, 385.214 or 385.211) and the Regulations order, any person desiring to be heard Clarksburg, West Virginia 26301, filed under the Natural Gas Act (18 CFR or to protest the blanket approval of in Docket No. CP96–69–000 an 157.10). All protests filed with the issuances of securities or assumptions of application pursuant to Section 7(b) of Commission will be considered by it in liability by Coral Power should file a the Natural Gas Act for permission and determining the appropriate action to be motion to intervene or protest with the approval to abandon a portion of a taken but will not serve to make the Federal Energy Regulatory Commission, storage service provided to Long Island protestants parties to the proceeding. 888 First Street, N.E., Washington, D.C. Lighting Company (LILCO) under Part Any person wishing to become a party 20426, in accordance with Rules 211 157 of the Commission’s regulations and to a proceeding or to participate as a and 214 of the Commission’s Rules of instead provide additional storage party in any hearing therein must file a Practice and Procedure (18 CFR 385.211 service under Part 284 blanket motion to intervene in accordance with and 385.214). authorization, all as more fully set forth the Commission’s Rules. Absent a request for hearing within in the application on file with the Take further notice that, pursuant to this period, Coral Power is authorized to Commission and open to public the authority contained in and subject to issue securities and assume obligations inspection.1 the jurisdiction conferred upon the or liabilities as a guarantor, indorser, CNGT proposes to abandon 101,342 Federal Energy Regulatory Commission surety, or otherwise in respect of any Dt of the Storage Capacity that has been by Sections 7 and 15 of the Natural Gas security of another person; provided allocated to LILCO under an October 1, Act and the Commission’s Rules of that such issuance or assumption is for 1993, Part 157 Service Agreement, and Practice and Procedure, a hearing will some lawful object within the corporate provided under CNGT’s Rate Schedule be held without further notice before the purposes of the applicant, and GSS, in order that 101,342 Dt of Commission or its designee on this compatible with the public interest, and additional Storage Capacity may be application if no motion to intervene is is reasonably necessary or appropriate provided under CNGT’s Part 284 filed within the time required herein, if for such purposes. blanket authorization. the Commission on its own review of The Commission reserves the right to the matter finds that permission and require a further showing that neither 1 CNGT filed corrected pages 1, 3 and 4 of the approval for the proposed abandonment public nor private interests will be application on December 1, 1995. are required by the public convenience adversely affected by continued Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices 65061 approval of Coral Power’s issuances of NGA (18 CFR 157.205) a protest to the adversely affected by continued securities or assumptions of liability. request. If no protest is filed within the approval of Nordic’s issuances of Notice is hereby given that the allowed time, the proposed activity securities or assumptions of liability. deadline for filing motions to intervene shall be deemed to be authorized Notice is hereby given that the or protests, as set forth above, is January effective the day after the time allowed deadline for filing motions to intervene 5, 1996. for filing a protest. If a protest is filed or protests, as set forth above, is January Copies of the full text of the order are and not withdrawn within 30 days after 2, 1996. available from the Commission’s Public the time allowed for filing a protest, the Copies of the full text of the order are Reference Branch, 888 First Street, NE., instant request shall be treated as an available from the Commission’s Public Washington, DC 20426. application for authorization pursuant Reference Branch, 888 First Street, N.E., Lois D. Cashell, to Section 7 of the NGA. Washington, D.C. 20426. Secretary. Lois D. Cashell, Lois D. Cashell, [FR Doc. 95–30621 Filed 12–15–95; 8:45 am] Secretary. Secretary. BILLING CODE 6717±01±M [FR Doc. 95–30619 Filed 12–15–95; 8:45 am] [FR Doc. 95–30622 Filed 12–15–95; 8:45 am] BILLING CODE 6717±01±M BILLING CODE 6717±01±M [Docket No. CP96±94±000] [Docket No. ER96±127±000] [Docket No. ER96±1±000] East Tennessee Natural Gas Company; Notice of Request Under Blanket Nordic Electric, L.L.C.; Notice of Powertec International, L.L.P.; Notice Authorization Issuance of Order of Issuance of Order

December 12, 1995. December 12, 1995. December 12, 1995. Take notice that on December 4, 1995, On October 20, 1995, as amended On October 2, 1995, as amended East Tennessee Natural Gas Company November 1, 1995, Nordic Electric, October 23, 1995, Powertac (East Tennessee), Post Office Box 2511, L.L.C. (Nordic) submitted for filing a International, L.L.P. (Powertec) Houston, Texas 77252, filed a request rate schedule under which Nordic will submitted for filing a rate schedule with the Commission in Docket No. engage in wholesale electric power and under which Powertec will engage in CP96–94–000 pursuant to Sections energy transactions as a marketer. wholesale electric power and energy 157.205, 157.212 and 157.216(b) of the Nordic also requested waiver of various transactions as a marketer. Powertec Commission’s Regulations under the Commission regulations. In particular, also requested waiver of various Natural Gas Act (NGA) for authorization Nordic requested that the Commission Commission regulations. In particular, to establish a bi-directional point and to grant blanket approval under 18 CFR Powertec requested that the abandon certain facilities, authorized in Part 34 of all future issuances of Commission grant blanket approval blanket certificate issued in CP82–412– securities and assumptions of liability under 18 CFR Part 34 of all future 000, all as more fully set forth in the by Nordic. issuances of securities and assumptions request on file with the Commission and On December 1, 1995, pursuant to of liability by Powertec. open to public inspection. delegated authority, the Director, On December 1, 1995, pursuant to At the request of Citizens Gas Utility Division of Applications, Office of delegated authority, the Director, (Citizens), East Tennessee proposes to Electric Power Regulation, granted Division of Applications, Office of modify an existing receipt meter station requests for blanket approval under Part Electric Power Regulation, granted on its system to establish a bi- 34, subject to the following: requests for blanket approval under Part directional point for both receipts from Within thirty days of the date of the 34, subject to the following: and deliveries to Citizens to order, any person desiring to be heard Within thirty days of the date of the accommodate a gas storage facility or to protest the blanket approval of order, any person desiring to be heard operated by Citizens. To accomplish issuances of securities or assumptions of or to protest the blanket approval of this, East Tennessee proposes to convert liability by Nordic should file a motion issuances of securities or assumptions of their existing station (#75–9123 to intervene or protest with the Federal liability by Powertec should file a ‘‘Citizens Gas’’) by abandoning the Energy Regulatory Commission, 888 motion to intervene or protest with the receipt meter and removing it. East First Street, N.E., Washington, D.C. Federal Energy Regulatory Commission, Tennessee would then install the 20426, in accordance with Rules 211 888 First Street, N.E., Washington, D.C. requested bi-directional meter (#75– and 214 of the Commission’s Rules of 20426, in accordance with Rules 211 9012 ‘‘Morgan County No. 1’’) by Practice and Procedure (18 CFR 385.211 and 214 of the Commission’s Rules of installing two 4-inch meter tubes in and 385.214). Practice and Procedure (18 CFR 385.211 parallel to the existing tube. East Absent a request for hearing within and 385.214). Tennessee states that they would this period, Nordic is authorized to Absent a request for hearing within continue to own, operate, and maintain issue securities and assume obligations this period, Powertec is authorized to the existing side valve measurement. or liabilities as a guarantor, indorser, issue securities and assume obligations The meter station would be located on surety, or otherwise in respect of any or liabilities as a guarantor, indorser, the existing site provided by Citizens security of another person; provided surety, or otherwise in respect of any adjacent to the right-of-way. that such issuance or assumption is for security of another person; provided Any person or the Commission’s staff some lawful object within the corporate that such issuance or assumption is for may, within 45 days after the purposes of the applicant, and some lawful object within the corporate Commission has issued this notice, file compatible with the public interest, and purposes of the applicant, and pursuant to Rule 214 of the is reasonably necessary or appropriate compatible with the public interest, and Commission’s Procedural Rules (18 CFR for such purposes. is reasonably necessary or appropriate 385.214) a motion to intervene or notice The Commission reserves the right to for such purposes. of intervention and pursuant to Section require a further showing that neither The Commission reserves the right to 157.205 of the Regulations under the public nor private interests will be require a further showing that neither 65062 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices public nor private interests will be necessary or appropriate for such FEDERAL COMMUNICATIONS adversely affected by continued purposes. COMMISSION approval of Powertec’s issuances of The Commission reserves the right to securities or assumptions of liability. require a further showing that neither Notice of Public Information Notice is hereby given that the public nor private interests will be Collections Being Reviewed by FCC deadline for filing motions to intervene adversely affected by continued for Extension Under Delegated or protests, as set forth above, is January approval of U.S. Power and Light’s Authority 5 CFR 1320 Authority, 2, 1996. issuances of securities or assumptions of Comments Requested Copies of the full text of the order are liability. December 11, 1995. available from the Commission’s Public Notice is hereby given that the Reference Branch, 888 First Street, N.E. deadline for filing motions to intervene SUMMARY: The Federal Communications Washington, D.C. 20426. or protests, as set forth above, is January Commission, as part of its continuing Lois D. Cashell, 5, 1996. effort to reduce paperwork burden invites the general public and other Secretary. Copies of the full text of the order are Federal agencies to take this [FR Doc. 95–30623 Filed 12–15–95; 8:45 am] available from the Commission’s Public Reference Branch, 888 First Street, N.E., opportunity to comment on the BILLING CODE 6717±01±M Washington, D.C. 20426. following proposed and/or continuing Lois D. Cashell, information collections, as required by Secretary. the Paperwork Reduction Act of 1995, [Docket No. ER96±105±000] Public Law 104–13. Comments are [FR Doc. 95–30624 Filed 12–15–95; 8:45 am] requested concerning (a) whether the U.S. Power & Light, Inc.; Notice of BILLING CODE 6717±01±M proposed collection of information is Issuance of Order necessary for the proper performance of December 12, 1995. the functions of the Commission, ENVIRONMENTAL PROTECTION including whether the information shall On October 17, 1995, U.S. Power & AGENCY have practical utility; (b) the accuracy of Light, Inc. (U.S. Power & Light) the Commissions burden estimates; (c) submitted for filing a rate schedule [FRL±5346±8] ways to enhance the quality, utility, and under which U.S. Power & Light will Public Meeting of the Sanitary Sewer clarity of the information collected and engage in wholesale electric power and Overflows Dialogue (d) ways to minimize the burden of the energy transactions as a marketer. U.S. collection of information on the Power & Light also requested waiver of AGENCY: Environmental Protection respondents, including the use of various Commission regulations. In Agency (EPA). automated collection techniques or particular, U.S. Power & Light requested ACTION: Notice. other forms of information technology. that the Commission grant blanket The FCC is reviewing the following approval under 18 CFR Part 34 of all SUMMARY: Notice is hereby given that information collection requirements for future issuances of securities and the Environmental Protection Agency possible 3-year extension under assumptions of liability by U.S. Power (EPA) is convening a public meeting of delegated authority 5 CFR 1320, & Light. the Sanitary Sewer Overflows (SSOs) authority delegated to the Commission On December 6, 1995, pursuant to Dialogue. The meeting will be held on by the Office of Management and delegated authority, the Director, January 11 and 12, 1996. The purposes Budget (OMB). Division of Applications, Office of of the meeting are to discuss: (1) The Electric Power Regulation, granted draft SSO framework; (2) permit and DATES: Written comments should be requests for blanket approval under Part compliance priorities; and (3) the submitted on or before February 16, 34, subject to the following: overall SSO strategy flowchart. The 1996. If you anticipate that you will be Within thirty days of the date of the meeting is open to the public without submitting comments, but find it order, any person desiring to be heard need for advance registration. difficult to do so within the period of or to protest the blanket approval of DATES: The SSO meeting will be held on time allowed by this notice, you should issuances of securities or assumptions of January 11 and 12, 1996. On January 11, advise the contact listed below as soon liability by U.S. Power & Light should the meeting will run from 8:30 am to as possible. file a motion of intervene or protest with 5:00 pm EST. On January 12, the ADDRESSES: Direct all comments to the Federal Energy Regulatory meeting will run from about 8:30 am Dorothy Conway, Federal Commission, 888 First Street, N.E., until completion. Communications, Room 234, 1919 M Washington, D.C. 20426, in accordance ADDRESSES: The SSO meeting will be St., NW., Washington, DC 20554 or via with Rules 211 and 214 of the held at the Crystal Gateway Marriott internet to [email protected]. Commission’s Rules of Practice and Hotel, 1700 Jefferson Davis Highway, FOR FURTHER INFORMATION CONTACT: For Procedure (18 CFR 385.211 and Arlington, Virginia. The telephone additional information or copies of the 385.214). numbers for the hotel are: 1–800–228– information collections contact Dorothy Absent a request for hearing within 9290, or (703) 920–3230. Conway at 202–418–0217 or via internet at [email protected]. this period, U.S. Power & Light is FOR FURTHER INFORMATION CONTACT: Lam authorized to issue securities and Lim of EPA’s Office of Wastewater SUPPLEMENTARY INFORMATION: assume obligations or liabilities as a Management, at (202) 260–7371. OMB Approval Number: 3060–0171. guarantor, indorser, surety, or otherwise Title: 73.1125 Station main studio Dated: December 8, 1995. in respect of any security of another location. person; provided that such issuance or Michael B. Cook, Form No.: N/A. assumption is for some lawful object Director, Office of Wastewater Management, Type of Review: Extension of a within the corporate purposes of the Designated Federal Official. currently approved collection. applicant, and compatible with the [FR Doc. 95–30557 Filed 12–15–95; 8:45 am] Respondents: Business or other for- public interest, and is reasonably BILLING CODE 6560±50±P profit. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices 65063

Number of Respondents:135. performance standards specified in the Amerford FMS, Inc., 441 N. Oak Street, Estimated Time Per Response:30 rules, may file informal requests for Inglewood, CA 90302, Officers: Michael O minutes. approval of their sampling systems. Elze, President, Samuel Young, Treasurer Total Annual Burden:68 hours. Section 73.68(d) requires that a request Mark Fromm, 882 Fair Acres Avenue, Needs and Uses:Section 73.1125 Westfield, NJ 07090, Sole Proprietor for modification of the station license be All American Worldwide, Inc., 211 West requires AM, FM or TV licensees to submitted to the FCC when the antenna Comstock, Dallas, TX 75208, Officers: locate their main studio at any point sampling system is modified or Judson H. Good, President, Robert A. Nero, within the station’s principal components of the sampling system are Vice President community countours. If the station replaced. The informal request for Pacific Multi-Modal, Inc., 840 W. 12th Street, relocates its main studio from one point approval of sampling systems is used by Long Beach, CA 90813, Officers: Abraham to another within the principal FCC staff to maintain complete R. Walker, CEO, Karen L. Walker, President community contour or from a point technical information regarding licesees Pactrans Marine Inc., 9520 La Cienega Blvd., outside the principal community to insure that the sampling system is in Inglewood, CA 90301, Officers: Jesse contour to one within it, the licensee is Domingo, Director, C.T. Tsui, Vice full compliance with the Commission’s President required to notify the FCC. The data is Rules and will not cause interference to Interpacific Airmarine, Inc., 555 Redondo used by FCC staff to assure that the other facilities, thus reducing the Beach Blvd. #160, Gardena, CA 90248, station main studio is located within the service provided to the public. The Officer: Jae H. Chang, President principal community contour and request for modification of station Robinson Expediters, Inc., 9675 NW 13th serves to notify use of a change in the license is used to issue a new station Street, Miami, FL 33172, Officers: Jorge mailing address. license. Robinson, President, Ebba Robinson, Vice OMB Approval Number:3060–0160. President OMB Approval Number:3060–0387. Distribution Support Management, Inc., 75 Title:73.158 Directional Antenna Title:Field Disturbance Sensors, Northcrest, Newman, GA 30265, Officers: Monitoring Points. Authorization and On-Site Verification Arthur G. Neil, Jr., President, Joan H. Neil, Form No.:N/A. (Section 15.201(d)). Secretary Type of Review:Business or other for- Form No.:N/A. JRM International Forwarding, Inc., 1743 profit. Type of Review:Extension of existing Christie Drive, Marietta, GA 30066, Number of Respondents:80. collection. Officers: Rose-Marie Miller, President, Estimated Time Per Response:4 hours. Respondents:Businesses or other for- James Ivey Miller, Secretary Ace Forwarding, Inc., 510 Plaza Drive, Suite Total Annual Burden:320 hours. profit; Small businesses or # Needs and Uses:Section 73.158 organizations. 2760, Atlanta, GA 30349, Officers: Kim McGurgan, President, Frank Petillon, requires a licensee of an AM station Number of Respondents:200. Director using a directional antenna system to Estimated Time Per Response:18 Dated: December 12, 1995. file an informal application to modify hours. their station license to specify a new Total Annual Burden:3,600 hours. By the Federal Maritime Commission. location for the field monitoring point Needs and Uses: To monitor non- Joseph C. Polking, when circumstances occur which make licensed field disturbance sensors Secretary. the present location no longer accessible operating in the low VHF television [FR Doc. 95–30618 Filed 12–15–95; 8:45 am] or unsuitable. Section 73.158 also bands, equipment testing is required at BILLING CODE 6730±01±M requires the licensee to file a request for each installation. Data is retained by the a corrected station license when the holder of the equipment authorization descriptive routing to reach any of the issued by the Commission, and made monitoring points as shown on the available only at the request of the DEPARTMENT OF HEALTH AND station license is no longer correct due Commission. HUMAN SERVICES to road or building construction or other Federal Communications Commission. Office of the Secretary changes. These filings provide up-to- William F. Caton, date directions for use by the Acting Secretary. Complaints and Investigations Bureau’s [Program Announcement 13655.911] inspectors in accurately locating the [FR Docs. 95–30653 Filed 12–15–95; 8:45 am] BILLING CODE 6712±01±F Grants to Indian Tribal Organizations monitoring points and obtaining field for Supportive and Nutritional Services strength measurements relevant to the for Older Indians Commission’s enforcement program aimed at keeping electromagnetic FEDERAL MARITIME COMMISSION AGENCY: Administrtion on Aging (AoA), interference to a minumum. OS. Ocean Freight Forwarder License OMB Approval Number:3060–0321. Applicants ACTION: Extension of deadline to apply Title:73.68 Sampling Systems for for funds under the Older Americans Antenna Monitoring. Notice is hereby given that the Act, Title VI, Grants for Native Form No.:N/A. following applicants have filed with the Americans, Part A—Indian Program. Type of Review:Extension of a Federal Maritime Commission currently approved collection. applications for licenses as ocean freight SUMMARY: Due to the recent shut down Respondents:Business or other for- forwarders pursuant to section 19 of the of many components of the Federal profit. Shipping Act of 1984 (46 U.S.C. App. government, including the AoA, the Number of Respondents:100. 1718 and 46 CFR 510). Administration is extending the date for Estimated Time Per Response:2 hours. Persons knowing of any reason why which the Title VI grant applications for Total Annual Burden:200 hours. any of the following applicants should the grant period April 1, 1996–March Needs and Uses:Section 73.68(b) not receive a license are requested to 31, 1999 are due. requires that licensees of existing AM contact the Office of Freight Forwarders, DATES: All applications must be broadcast stations with antenna monitor Federal Maritime Commission, received or postmarked on or before sampling systems, meeting the Washington, D.C. 20573. December 20, 1995. 65064 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices

FOR FURTHER INFORMATION CONTACT: Dated: December 11, 1995. which was executed on September 12, Your local AoA Regional Olivia A. Golden, 1995. Administration as listed in the original Commissioner, Administration on Children, EFFECTIVE DATES: December 18, 1995. Federal Register announcement dated Youth and Families. FOR FURTHER INFORMATION CONTACT: September 6, 1995 on pages 46283– [FR Doc. 95–30650 Filed 12–15–95; 8:45 am] George T. Skibine, Director, Indian 46287. BILLING CODE 4184±01±P Gaming Management Staff, Bureau of Fernando M. Torres-Gil, Indian Affairs, Washington, D.C. 20240, Assistant Secretary for Aging. (202) 219–4068. DEPARTMENT OF THE INTERIOR [FR Doc. 95–30667 Filed 12–15–95; 8:45 am] Dated: November 13, 1995. BILLING CODE 4130±01±M Bureau of Indian Affairs Ada E. Deer, Assistant Secretary—Indian Affairs. Indian Gaming; Lummi Nation, WA [FR Doc. 95–30655 Filed 12–15–95; 8:45 am] Administration for Children and BILLING CODE 4310±02±P AGENCY: Bureau of Indian Affairs, Families Interior. Child Welfare Waiver Demonstrations ACTION: Notice of approved Tribal/State Geological Survey Pursuant to Section 1130 of the Social Compact. Federal Geographic Data Committee Security Act (the Act); Titles IV±E and SUMMARY: Pursuant to 25 U.S.C. 2710, of IV±B of the Act; Public Law 103±432 (FGDC); Application Notice the Indian Gaming Regulatory Act of Establishing the Closing Date for 1988 (Pub. L. 100–497), the Secretary of Transmittal of Applications Under the AGENCY: Administration on Children, the Interior shall publish, in the Federal FGDC National Spatial Data Youth and Families (ACYF), ACF, Register, notice of approved Tribal/State Infrastructure (NSDI) Competitive DHHS. Compacts for the purpose of engaging in Cooperative Agreements Program for Class III (casino) gambling on Indian ACTION: Public notice. Fiscal Year (FY) 1996 reservations. The Assistant Secretary— Indian Affairs, Department of the AGENCY: U.S. Geological Survey. SUMMARY: This notice amends the Public Interior, through her delegated Interior. Notice published in the Federal authority, has approved the Tribal-State ACTION: Notice inviting applications for Register on September 7, 1995 (60 FR Compact for Class III Gaming between competitive cooperative agreement 46616), by extending the December 31, the Lummi Nation and the State of awards for fiscal year 1996. 1995 due date for accepting new child Washington, which was executed on SUMMARY: The purpose of the FGDC welfare waiver demonstration proposals September 21, 1995. for any Second Round of proposals. A National Spatial Data Infrastructure DATES: December 18, 1995. (NSDI) Competitive Cooperative new Federal Register announcement FOR FURTHER INFORMATION CONTACT: will be published in January, 1996, to Agreements Program is to facilitate and George T. Skibine, Director, Indian foster partnerships and alliances within provide a new deadline for submission Gaming Management Staff, Bureau of and among various public and private of additional child welfare waiver Indian Affairs, Washington, D.C. 20240, entities to assist in building the NSDI. demonstration proposals if it is (202) 219–4068. The NSDI consists of policies, determined that additional proposals Dated: November 13, 1995. standards, agreements, and partnerships will be considered. Ada E. Deer, among a variety of sectors and FOR FURTHER INFORMATION CONTACT; Assistant Secretary—Indian Affairs. disciplines that will promote more cost- effective production, ready availability, Michael W. Ambrose at (202) 205–8618. [FR Doc. 95–30339 Filed 12–15–95; 8:45 am] and greater use of high quality SUPPLEMENTARY INFORMATION: On BILLING CODE 4310±02±P geospatial data. The NSDI Competitive September 7, 1995, the Administration Cooperative Agreements Program is on Children, Youth and Families Indian Gaming intended to encourage resource-sharing published a Public Notice in the Federal projects, between and among the public Register that summarized the child AGENCY: Bureau of Indian Affairs, and private sector through the use of welfare waiver demonstration proposals Interior. technology, networking, and enhanced submitted to date and established ACTION: Notice of approved Second interagency coordination efforts. December 31, 1994 as a due date for the Amendment to Tribal-State Compact. Proposals must involve two or more submission of proposals for Round Two. organizations and participants are This amendment cancels the December SUMMARY: Pursuant to 25 U.S.C. 2710, of expected to cost share in the project. 31, 1995 due date. Any new Federal the Indian Gaming Regulatory Act of Activities initiated under this program 1988 (Pub. L. 100–497), the Secretary of Register announcement providing a new will promote development and the Interior shall publish, in the Federal deadline for child welfare waiver maintenance of and access to data sets Register, notice of approved Tribal-State that are needed for national, regional, demonstration proposals will be Compacts for the purpose of engaging in state, and local analyses. Authority for published in January, 1996. Class III (casino) gambling on Indian this program is contained in the (Catalog of Federal Domestic Assistance reservations. The Assistant Secretary— Department of the Interior and Related Program Numbers 93.645, Child Services- Indian Affairs, Department of the Agencies Appropriations Act of 1996. State Grants; 93.658, Foster Care Interior, through her delegated Applications may be submitted by Maintenance; 93.659, Adoption Assistance) authority, has approved the Second State and local government agencies, Amendment to the Winnebago Tribe of educational institutions, private firms, Nebraska and the State of Iowa Gaming private foundations, and Federally Compact between the Winnebago Tribe acknowledged or state-recognized of Nebraska and the State of Iowa, Native American tribes or groups. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices 65065

DATES: The program announcement and integrate information accurately. existing visitor center, and minor application forms are expected to be Applicable efforts include conducting increases in administrative support available on or about January 15, 1996. feasibility projects for implementing facilities. Applications must be received on or technical and institutional aspects of the Alternative A: No Action, would framework; and, expanding programs or before March 29, 1996. continue the current situation at Lava projects to incorporate data content, ADDRESSES: Copies of Program Beds. Lands at Petroglyph Point would Announcement 08187 may be obtained technical, operational, and business characteristics of the framework. not be acquired, resources would not be by writing to Kathleen Craig, U.S. adequately protected, and no additional Geological Survey, Office of The fourth component addresses steps would be taken to accommodate Procurement and Contracts, Mail Stop developing and implementing visitor interest and use. Resource 205A, 12201 Sunrise Valley Drive, educational outreach programs to Reston, Virginia 22092. (703) 648–7357. increase awareness and understanding quality and visitor use experience of the major NSDI components among quality would decline. FOR FURTHER INFORMATION CONTACT: Jennifer Snyder, FGDC, U.S. Geological members of the broader community. Alternative C: Enhanced Visitor Survey, 590 National Center, 12201 Applicable efforts involve providing Experience, would be similar to Sunrise Valley Drive, Reston, Virginia programs and services to educate and Alternative B in terms of resource 22092; telephone number (703) 648– train constituents on the purpose, management and protection, but would 5514; facsimile (703) 648–5755. Internet benefits, and application of NSDI provide a broader range of visitor initiatives, networks, and standards. ‘‘[email protected]’’. service. Increased interpretive and law SUPPLEMENTARY INFORMATION: Under this Dated: December 11, 1995. enforcement staffing would allow a FY 1996 program announcement, William Gossman, wider range of interpretive programs proposals are to be directed towards Acting Chief, Office of Program Support. and faster response to emergency four components of the NSDI. The first [FR Doc. 95–30630 Filed 12–15–95; 8:45 am] situations. A visitor center at the north component deals with creation of a BILLING CODE 4310±31±M end of the monument and a new and distributed clearinghouse for finding larger visitor facility at the Indian Well and accessing geospatial data. Efforts area would increase the range of considered applicable include the National Park Service exhibits and visitor services. Additional creation (inventory, evaluate, catalog General Management Plan; Lava Beds administrative facilities would be data, and establish Internet access) and needed to support the greater staffing. management of a node within the National Monument; Notice of National Geospatial Data Clearinghouse Availability of Draft Environmental The environmental consequences of that provides users with a means for Impact Statement the proposed action and the alternatives are fully documented, and mitigation finding, accessing, and sharing SUMMARY: Pursuant to Section 102 (2) geospatial data; establish, develop, or (C) of the National Environmental provided as appropriate to minimize expand programs or projects, through Policy Act of 1969 (Pub. L. 91–190 as impacts. No significant impacts are development of training programs, amended), the National Park Service, anticipated as a result of implementing information guides and other Department of the Interior, has prepared the proposed action. explanatory materials, that increase the a Draft Environmental Impact Statement SUPPLEMENTARY INFORMATION: Written contributions of local, regional, or (DEIS) assessing the potential impacts of comments on the DGMP/EIS should be national data sets to the National the proposed Draft General Management directed to the Superintendent, Lava Geospatial Data Clearinghouse; and, Plan (DGMP) for Lava Beds National Beds National Monument, P.O. Box 867, design, develop, or implement tools to Monument, Modoc and Siskiyou Tulelake, California 96134. Comments assist in the inventory, evaluation, Counties, California. Once approved, documentation, cataloging, serving, the DGMP/EIS will guide the on the DGMP/EIS must be received by maintenance, and sharing of geospatial management of the monument over the March 1, 1996. data or metadata. next fifteen (15) years. A public meeting will be held January The second component involves This DGMP/EIS presents a proposal 10 at the home economics building at development and promulgation of the and two alternatives for the the Tulelake-Butte Valley Fairgrounds use of FGDC-endorsed standards in data management, use, and development of from 7:00–10:00 p.m. National Park collection, documentation, transfer, and Lava Beds National Monument. The Service personnel will be available to search and query. Applicable efforts proposed alternative, Alternative B: explain the planning alternatives, include conducting programs to Minimum Requirements, provides for answer questions, and receive public increase user comprehension and staffing, facilities, and boundary comments. adoption of the FGDC Content changes to provide for long-term Standards for Digital Geospatial resource protection, and facilities and Inquiries on the DGMP/EIS and Metadata and the Spatial Data Transfer programs sufficient to provide for requests for copies of the DGMP/EIS Standard; developing software tools or essential visitor services. Physical should be directed to Lava Beds techniques to aid the collection, features of the plan include boundary National Monument, address as above, comparison, evaluation, and additions at Petroglyph Point, or by telephone at (916) 667–2282. maintenance of metadata; and improvements at that area to reduce Copies of the DGMP/EIS will be stimulating the development of damage to the petroglyphs from wind available for public inspection at the applicable geospatial data standards in erosion and vandalism, a small-scale Monument and at area libraries. partnership with the FGDC research facility to facilitate the Dated: December 6, 1995. Subcommittees and Working Groups. recruitment of volunteers for cost- Stephen Crabtree, The third component focuses on the effective research and resource- initial implementation of creating a management projects, a visitor contact Field Director, Pacific West Area. geospatial data framework that provides station at the north end of the [FR Doc. 95–30613 Filed 12–15–95; 8:45 am] a base on which to collect, register, or monument, improvements at the BILLING CODE 4310±70±P 65066 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices

Office of Surface Mining Reclamation SUMMARY: The Commission, pursuant to DEPARTMENT OF JUSTICE and Enforcement 49 U.S.C. 10505, exempts from the prior approval requirements of 49 U.S.C. Notice of Lodging of Consent Decree Information Collection Submitted to 10903–04 the abandonment by Pursuant to the Comphrensive the Office of Management and Budget Burlington Northern Railroad Company Environmental Response, for Review Under the Paperwork of 5.04 miles of railroad in Clatsop Compensation and Liability Act Reduction Act County, OR, subject to standard labor Notice is hereby given that a proposed The proposal for the collection of protective conditions, an environmental consent decree in United States v. information listed below has been condition, and a trail use condition. American Color & Chemical submitted to the Office of Management DATES: Provided no formal expression of Corporation et al., Civil Action No. 4: and Budget for approval under the intent to file a financial assistance offer CV–92–1352, was lodged on November provisions of the Paperwork Reduction has been received, this exemption will 30, 1995 in the United States District Act (44 U.S.C. Chapter 35). Copies of the be effective on January 17, 1996. Formal Court for the Middle District of proposed collection of information and expressions of intent to file financial Pennsylvania. The consent decree related form may be obtained by assistance offers 1 under 49 CFR settles an action brought under the contacting the Bureau clearance officer 1152.27(c)(2) and requests for a notice of Comprehensive Environmental at the phone number listed below. interim trail use/rail banking must be Response, Compensation and Liability Comments and suggestions on the filed by December 28, 1995. Petitions to Act (‘‘CERCLA’’), 42 U.S.C. 9606 et seq., requirements should be made directly to stay must be filed by January 2, 1996. against American Color & Chemical the Bureau’s clearance officer and to the Requests for a public use condition Corporation (‘‘AC&C’’) and Beazer East, Office of Management and Budget, must be filed by January 8, 1996. Inc. (‘‘Beazer’’) for reimbursement of Paperwork Reduction Project 1029– Petitions to reopen must be filed by response costs incurred in connection 0083, Washington, DC 20503, telephone January 12, 1996. with clean-up of the Drake Chemical 202–395–7340. Superfund Site located in Lock Haven, ADDRESSES: Title: Application for Blaster Send pleadings referring to Pennsylvania. Certification in Federal Program States Docket No. AB–6 (Sub-No. 368X) to: (1) Under the proposed settlement, AC&C and on Indian Lands, 30 CFR 955. Office of the Secretary, Case Control and Beazer agree to finance and perform Branch, Interstate Commerce the groundwater cleanup for Drake Site. Abstract: This information is being 2 collected to ensure that the qualification Commission, 1201 Constitution In addition, the settling defendants will of applicants for blaster certification is Avenue, N.W., Washington, DC 20423; reimburse the United States and the adequate. This information will be used and (2) Petitioner’s representative: Sarah Commonwealth of Pennsylvania for past to determine the eligibility of the J. Whitley, 3800 Continental Plaza, 777 costs in the amounts of $3.6 million and applicant. The affected public will be Main Street, Fort Worth, TX 76102– $400,000, respectively. Additionally, blasters who want to be certified by the 5384. the settling defendants will co-ordinate Office of Surface Mining Reclamation FOR FURTHER INFORMATION CONTACT: the Drake Site groundwater cleanup and Enforcement. Joseph H. Dettmar, (202) 927–5660. with a corrective action ongoing at the Bureau Form Number: OSM–74. [TDD for the hearing impaired: (202) neighboring AC&C facility pursuant to Frequency: Every three years. 927–5721.] the Resource Conservation and Description of Respondents: Recovery Act (‘‘RCRA’’), 42 U.S.C. 6901 SUPPLEMENTARY INFORMATION: Individuals seeking certification as et seq. Additional information is contained in Blasters. In consideration of settling the Commission’s decision. To obtain a Estimated Completion Time: 50 defendants’ groundwater remediation copy of the full decision, write to, call, minutes. and their reimbursement of $4 million or pick up in person from: DC NEWS & Annual Responses: 35. in past costs incurred by the United DATA, INC., Interstate Commerce Annual Burden Hours: 30. States and the Commonwealth, AC&C Commission Building, 1201 Bureau Clearance Officer: John A. and Beazer will receive a covenant not Constitution Avenue, N.W., Trelease (202) 208–2617. to sue under Sections 106 and 107(a) of Washington, DC 20423. Telephone: CERCLA for the Drake Site and for Dated: October 25, 1995. (202) 289–4357. [Assistance for the CERCLA Section 107 costs associated Gene E. Krueger, hearing impaired is available through with RCRA management at the AC&C Acting Chief, Office of Technology TDD services (202) 927–5721.] facility. With respect to future liability Development and Transfer. Decided: December 5, 1995. for the remedial action to be performed, [FR Doc. 95–30648 Filed 12–15–95; 8:45 am] By the Commission, Chairman Morgan, the covenant not to sue for Section 106 BILLING CODE 4310±05±M Vice Chairman Owen, and Commissioner of CERCLA becomes effective upon Simmons. certification of completion of the remedial action by EPA. In addition, the Vernon A. Williams, INTERSTATE COMMERCE covenants not to sue are conditioned COMMISSION Secretary. upon the complete and satisfactory [FR Doc. 95–30656 Filed 12–15–95; 8:45 am] performance by each settling defendant [Docket NO. AB±6 (Sub-No. 368X)] BILLING CODE 7035±01±P of its obligations under the Consent Decree. Burlington Northern Railroad 1 See Exempt. of Rail Abandonment—Offers of The Department of Justice will CompanyÐAbandonment ExemptionÐ Finan. Assist., 4 I.C.C.2d 164 (1987). receive, for a period of thirty (30) days in Clatsop County, OR 2 Legislation to sunset the Commission on from the date of this publication, December 31, 1995, and transfer remaining comments relating to the proposed AGENCY: Interstate Commerce functions is now under consideration in Congress. Commission. Until further notice, parties submitting pleadings consent decree. Comments should be addressed to the Assistant Attorney ACTION: Notice of exemption. should continue to use the current name and address. General for the Environment and Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices 65067

Natural Resources Division, Department The proposed consent decree may be pay $1 million of the United States’ past of Justice, Washington, D.C. 20530, and examined at the office of the United costs of $1.8 million (as of January 31, should refer to United States v. States Attorney for the Northern District 1991); and (4) grant the United States American Color & Chemical of New York, 100 South Clinton Street, and its assigns irrevocable access to the Corporation et al., DOJ Ref. Syracuse, New York 13261; the Region Moss-American Superfund Site. # 90±11±2±7Α. II Office of the Environmental The Department of Justice will receive The proposed consent decree may be Protection Agency, 290 Broadway, New for a period of thirty (30) days from the examined at the Office of the United York, New York, 10007–1866 (contact date of this publication comments States Attorney, Middle District of Assistant Regional Counsel Beverly relating to the proposed Consent Decree. Pennsylvania, 1162 Federal Building, Kolenberg); and at the Consent Decree Comments should be addressed to the 228 Walnut Street Harrisburg, PA Library, 1120 G Street, N.W., 4th Floor, Assistant Attorney General, 17108; the Region III Office of the Washington, D.C. 20005, (202) 624– Environment and Natural Resources Environmental Protection Agency, 841 0892. A copy of the proposed consent Division, U.S. Department of Justice, Chestnut Building, Philadelphia, decree may be obtained in person or by Washington, D.C. 20530, and should Pennsylvania, 19107; and at the Consent mail from the Consent Decree Library, refer to United States v. County of Decree Library, 1120 G Street, N.W., 4th 1120 G Street, N.W., 4th Floor, Milwaukee, Wisconsin, D.J. Ref. 90–11– Floor, Washington, D.C. 20005, (202) Washington, D.C. 20005. In requesting a 2–590A. 624–0892. A copy of the proposed copy please refer to the referenced case The proposed Consent Decree may be consent decree may be obtained in and enclose a check in the amount of examined at: (1) The Mill Road Library, person or by mail from the Consent $5.00 (25 cents per page reproduction 6431 N. 76th St., Milwaukee, Decree Library, 1120 G Street, N.W., 4th costs) for the Consent Decree, payable to Wisconsin; (2) U.S. Environmental Floor, Washington, D.C. 20005. In the Consent Decree Library. Protection Agency, Region 5, 77 W. requesting a copy of the body of the Joel Gross, Jackson Blvd, Chicago, Illinois 60604 proposed decree, please refer to the Chief, Environmental Enforcement Section, (contact Mr. Russell D. Hart (312–886– referenced case and enclose a check in Environment and Natural Resources Division. 4844)); and (3) the U.S. Department of the amount of $52.75 (25 cents per page [FR Doc. 95–30633 Filed 12–15–95; 8:45 am] Justice’s Consent Decree Library, 1120 G reproduction costs), for each copy. The BILLING CODE 4410±01±M Street, N.W., 4th Floor, Washington, check should be made payable to the D.C. 20010, (202) 624–0892. A copy of Consent Decree Library. the consent decree may be obtained in Notice of Lodging of Consent Decree person or by mail from the Consent Joel M. Gross, Pursuant to the Comprehensive Decree Library, 1120 G Street, N.W., 4th Chief, Environmental Enforcement Section, Environmental Response, Floor, Washington, D.C. 20010. In Environment and Natural Resources Division. Compensation and Liability Act requesting a copy, please enclose a [FR Doc. 95–30629 Filed 12–15–95; 8:45 am] check in the amount of $8.25 (consent In accordance with Section 122(d)(2) BILLING CODE 4410±01±M decree only) or $46.75 (consent decree of the Comprehensive Environmental and appendices) (25 cents per page Response, Compensation and Liability reproduction cost) payable to the Notice of Lodging of Consent Decree Act (‘‘CERCLA’’), 42 U.S.C. 9622(d)(2), Consent Decree Library. Pursuant to the Comprehensive and Departmental policy, 28 CFR 50.7, Environmental Response notice is hereby given that on November Joel M. Gross, Compensation and Liability Act 28, 1995, a proposed consent decree in Chief, Environment Enforcement Section, (``CERCLA'') United States v. County of Milwaukee, Environmental and Natural Resources Division. Wisconsin, Civil Action No. 95–C–1210, Notice is hereby given that a proposed was lodged with the United States FR Doc. 95–30631 Filed 12–15–95; 8:45 am] consent decree in United States v. District Court of the Eastern District of BILLING CODE 4410±01±M Casings, et al., Civil Action No. 92–0284 Wisconsin. This consent decree (NPM), was lodged on November 27, represents a settlement of claims 1995, with the United States District Notice of Lodging of Consent Decree brought against Milwaukee County Pursuant to the Comprehensive Court for the Northern District of New under CERCLA Sections 106 and 107, York. The Consent Decree requires Environmental Response, 42 U.S.C. 9606 and 9607, for the Compensation and Liability Act defendants to pay to the United States recovery of costs incurred and to be $120,000 within thirty days of entry of incurred by the United States in In accordance with Departmental the Consent Decree to reimburse responding to the release and threatened policy, 28 C.F.R. § 50.7, notice is hereby Environmental Protection Agency release of hazardous substances at and given that on September 29, 1995, a response costs incurred at the Catskill from the Moss-American Superfund Site proposed Consent Decree in United Tire Fire Superfund Site. Total Site in Milwaukee, Wisconsin. States of America v. The Port of Seattle, costs incurred by EPA were Under the proposed settlement, et al., Civil Action No. C95–1495–Z, approximately $375,000. Milwaukee County will be required to: was lodged with the United States The Department of Justice will (1) Relinquish a potential takings claim; District Court for the Western District of receive, for a period of thirty (30) days (2) withdraw a motion to intervene that Washington. from the date of this publication, is pending before the Court; (3) The Complaint in this action was comments relating to the proposed withdraw its opposition to entry of a brought pursuant to Section 107 of the consent decree. Comments should be proposed consent decree between the Comprehensive Environmental addressed to the Assistant Attorney United States and Kerr-McGee Chemical Response, Compensation and Liability General for the Environment and Co. (‘‘Kerr-McGee’’) that was lodged in Act, 42 U.S.C. 9607, to require the Natural Resources Division, Department 1991 (‘‘Remedial Action Decree’’), under defendants to implement EPA’s selected of Justice, Washington, D.C. 20530, and which Kerr-McGee would be obligated cleanup for the Site, and to recover costs should refer to United States v. Casings, to perform the final remedial action for incurred by the United States in et al., DOJ Ref. #90–11–3–872. the Site, at a cost of $26 million, and response to releases of hazardous 65068 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices substances at the Harbor Island pursuant to the Comprehensive filed written notifications Superfund Site in Seattle, Washington. Environmental Response, Compensation simultaneously with the Attorney The proposed Consent Decree that is and Liability Act, as amended. General and the Federal Trade the subject of this Notice requires the Under the terms of the Stipulation of Commission disclosing certain changes defendants to complete the cleanup Settlement, the United States in its membership. The notifications selected by EPA for the Soil and Environmental Protection Agency will were filed for the purpose of extending Groundwater Operable Units of the Site. be reimbursed $35,000 for the Act’s provisions limiting the The United States estimates that the administrative expenses incurred in recovery of antitrust plaintiffs to actual cleanup expense will be approximately connection with property formerly damages under specified circumstances. $40 million. The Consent Decree also owned by St. Johnsbury. St. Johnsbury Specifically, the identities of the requires the defendants to reimburse the also agrees to an allowed unsecured additional members at the sponsor level United States for all costs it shall incur claim in the amount of $3,000,000 for are: Justsystem, Inc., Menlo Park, CA; in overseeing the completion of the costs incurred and to be incurred by the Defense Logistics Agency, U.S. cleanup. United States in connection with The Department of Justice will response actions at the Site and in the Government, Alexandria, VA; and receive, for a period of thirty (30) days amount of $150,000 for natural resource NASA, Federal Government, Moffett from the date of this publication, damages for resources under the Field, CA. comments relating to the proposed trusteeship of the Department of The following organizations have Consent Decree. Comments should be Interior. joined the Consortium as associate addressed to the Assistant Attorney The Department of Justice will receive members: Concurrent Technologies General of the Environmental and for a period of thirty (30) days from the Corporation, Oakland, CA; DigiCash, Natural Resources Division, Department date of this publication comments New York, NY; Hamilton Hallmark, of Justice, P.O. Box 7611, Ben Franklin relating to the proposed Stipulation of Culver City, CA; Online Computer Station, Washington, D.C. 20044. Settlement. Comments should be Market, Southboro, MA; Hummingbird Comments should refer to United States addressed to the Assistant Attorney Software Corporation, Incline Village, of America v. the Port of Seattle, et al., General of the Environment and Natural NV; Golf Web, Saratoga, CA; The Civil Action No. C95–1495–Z, DOJ Ref. Resources Division, Department of No. 90–11–2–970A. Document Center, Belmont, CA; Media Justice, Ben Franklin Station, Circus, New York, NY; InterCom- The proposed Consent Decree may be Washington, D.C. 20044, and should University of Virginia, Computer examined at the Office of Regional refer to In re St. Johnsbury Trucking Science Department, Charlottesville, Counsel, Environmental Protection Company, Inc., D.J. Ref. 90–11–2–978. Agency, 1200 Sixth Avenue, Seattle, The proposed Stipulation may be VA; Sholink Corporation, Mt. View, CA; Washington (206) 553–1504; and at the examined at the Region 1 Office of the and Tradewinds Technologies Consent Decree Library, 1120 G Street, Environmental Protection Agency, One Incorporated, Winston-Salem, NC. N.W., 4th Floor, Washington, DC 20005, Congress Street, Boston, Massachusetts. The following organizations have (202) 624–0892. A copy of the proposed Copies of the Consent Decree may be joined as international associate Consent Decree may be obtained in examined at the Environmental members: Justsystem Corporation, person or by mail from the Consent Enforcement Section Document Center, Tokushima, JAPAN; British Decree Library. In requesting a copy 1120 G Street, N.W., 4th Floor, Telecommunications, London, UNITED please refer to the referenced case and Washington, D.C. 20005, (202) 624– KINGDOM; Toshiba Corporation, enclose a check in the amount of $18.00 0892. A copy of the proposed Consent Tokyo, JAPAN; and Kokusai Denshin (25 cents per page reproduction cost) Decree may be obtained in person or by Denwa Company, Ltd., Tokyo, JAPAN. payable to the Consent Decree Library. mail from the Document Center. In Joel Gross, requesting a copy, please refer to the No other changes have been made in Chief, Environmental Enforcement Section, referenced case and enclose a check in either the membership or planned Environment and Natural Resources Division. the amount of $4.25 (25 cents per page activities of the Consortium. [FR Doc. 95–30632 Filed 12–15–95; 8:45 am] reproduction cost) made payable to Membership remains open, and the BILLING CODE 4410±01±M Consent Decree Library. Consortium intends to file additional Joel M. Gross, written notifications disclosing all Acting Chief, Environmental Enforcement changes in membership. Notice of Lodging of Stipulation of Section, Environment and Natural Resources On June 13, 1994, the Consortium Settlement Pursuant to the Division. filed its original notification pursuant to Comprehensive Environmental [FR Doc. 95–30628 Filed 12–15–95; 8:45 am] Section 6(a) of the Act. The Department Response, Compensation and Liability BILLING CODE 4410±01±M of Justice published a notice in the Act Rederal Register pursuant to Section In accordance with Departmental 6(b) of the Act on August 31, 1994 (59 policy, 28 CFR 50.7, notice is hereby Antitrust Division FR 45012). given that on November 24, 1995, a Notice Pursuant to the National The last notification was filed with proposed Stipulation of Settlement in In Cooperative Research and Production the Department on June 9, 1995. A re St. Johnsbury Trucking Company, Act of 1993ÐCommercenet notice was published in the Federal Inc., Civil Action No. 93–43136, was Consortium Register pursuant to Section 6(b) of the lodged with the United States Act on December 5, 1995 (60 FR 62259). Bankruptcy Court for the Southern Notice is hereby given that, on August District of New York. The proposed 17, 1995, pursuant to Section 6(a) of the Constance K. Robinson, Stipulation of Settlement concerns the National Cooperative Research and Director of Operations, Antitrust Division. response to the existence of hazardous Production Act of 1993, 15 U.S.C. FR Doc. 95–30636 Filed 12–15–95; 8:45 am] substances at the Pine Street Canal Site § 4301 et seq. (‘‘the Act’’), CommerceNet BILLING CODE 4410±01±M located in Burlington, Vermont Consortium, (the ‘‘Consortium’’) has Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices 65069

Notice Pursuant to the National No other changes have been in either Register pursuant to Section 6(b) of the Cooperative Research and Production the membership or the planned activity Act on May 11, 1995 (60 FR 25252). Act of 1993ÐDiode Laser Welding of the joint venture. Constance K. Robinson, Consortium On September 14, 1994, the HDP User Director of Operations Antitrust Division. Group filed its original notification [FR Doc. 95–30639 Filed 12–15–95; 8:45 am] Notice is hereby given that, on pursuant to Section 6(a) of the Act. The BILLING CODE 4410±01±M November 1, 1995, pursuant to Section Department of Justice published a notice 6(a) of the National Cooperative in the Federal Register pursuant to Research and Production Act of 1993, Section 6(a) of the Act of March 23, Notice Pursuant to the National 15 U.S.C. § 4301 et seq. (‘‘the Act’’), 1995 (60 FR 15306–07). The last Cooperative Research and Production parties to a joint venture collectively notification was filed on February 27, Act of 1993ÐX Consortium, Inc. referred to as the ‘‘Diode Laser Welding 1995. A notice was published in the Consortium’’ filed notifications Federal Register on May 11, 1995 (60 Notice is hereby given that, on simultaneously with the Attorney FR 25251). September 1, 1995, pursuant to Section 6(a) of the National Cooperative General and the Federal Trade Constance K. Robinson, Commission disclosing (1) the identities Research and Production Act of 1993, Director of Operations, Antitrust Division. 15 U.S.C. § 4301 et seq. (‘‘the Act’’), X of the parties to the joint venture and (2) [FR Doc. 95–30638 Filed 12–15–95; 8:45 am] the nature and objectives of the joint Consortium, Inc. (the ‘‘Corporation’’) BILLING CODE 4410±01±M venture. The notifications were filed for has filed written notifications the purpose of invoking the Act’s simultaneously with the Attorney General and the Federal Trade provisions limiting the recovery of Notice Pursuant to the National Commission disclosing changes in its antitrust plaintiffs to actual damages Cooperative Research and Production membership. The notifications were under specified circumstances. Pursuant Act of 1993ÐSouthwest Research filed for the purpose of extending the to Section 6(b) of the Act, the identities Institute Act’s provisions limiting the recovery of of the parties are: SDL, Inc., San Jose, antitrust plaintiffs to actual damages CA; Teledyne Brown Engineering, Correction under specified circumstances. Huntsville, AL; and Utilase Systems, In notice document 95–15787 Specifically, the new member of the Detroit, MI. The objective of the joint appearing on page 33432 in the issue of Corporation is: Georgia Institute of venture is the development of a fiber- Wednesday, June 28, 1995, in the first Technology, Atlanta, GA. coupled direct diode laser system for column, in the third paragraph, in the No other changes have been made in the cutting and welding of steel and eleventh (11th) line, ‘‘65 FR 15307’’ either the membership or planned aluminum parts in the automotive should read ‘‘60 FR 15307’’. activity of the group research project. industry. Constance K. Robinson, Membership in this group research Constance K. Robinson, Director of Operations, Antitrust Division. project remains open, and the Director of Operations, Antitrust Division. [FR Doc. 95–30634 Filed 12–15–95; 8:45 am] Corporation intends to file written [FR Doc. 95–30635 Filed 12–15–95; 8:45 am] BILLING CODE 4410±01±M notifications disclosing all changes in BILLING CODE 4410±01±M membership. On September 15, 1993, the Notice Pursuant to the National Corporation filed its original Notice Pursuant to the National Cooperative Research and Production notification pursuant to Section 6(a) of Cooperative Research and Production Act of 1993ÐWilfred Baker the Act. The Department of Justice Act of 1993ÐHDP User Group Engineering, Inc. Petroleum/Chemical published a notice in the Federal International, Inc. Processing Joint Agreement Register pursuant to Section 6(b) of the Act on November 10, 1993 (58 FR Notice is hereby given that, on Notice is hereby given that, on June 59737). The last notification was filed October 30, 1995, pursuant to Section 22, 1995, pursuant to Section 6(a) of the with the Department on June 6, 1995. A 6(a) of the National Cooperative National Cooperative Research and notice was published in the Federal Research and Production Act of 1993, Production Act of 1993, 15 U.S.C. Register pursuant to Section 6(b) of the 15 U.S.C. § 4301 et seq. (‘‘the Act’’), § 4301 et seq. (‘‘the Act’’), Wilfred Baker Act on June 29, 1995 (60 FR 33849). HDP User Group International, Inc., an Engineering, Inc., has filed written Constance K. Robinson, Arizona non-profit corporation, filed notifications simultaneously with the Director of Operations, Antitrust Division. notification simultaneously with the Attorney General and the Federal Trade [FR Doc. 95–30637 Filed 12–15–95; 8:45 am] Attorney General and the Federal Trade Commission disclosing a change in its BILLING CODE 4410±01±M Commission disclosing changes in membership. The notifications were membership. The notifications were filed for the purpose of extending the filed for the purpose of extending the Act’s provisions limiting the recovery of Drug Enforcement Administration Act’s provisions limiting the recovery of antitrust plaintiffs to actual damages antitrust plaintiffs to actual damages under specified circumstances. [Docket No. 94±32] Specifically, Hoechst Celanese Chemical under specified circumstances. Richard M. Koenig, M.D., Revocation of Group, Dallas, TX has joined the joint Specifically, Amkor Electronics, Registration Chandler, AZ; MCC, Austin, TX; venture. No other changes have been Motorola, Schaumberg, IL; and Texas made in either the membership or On March 2, 1994, the Deputy Instruments, Villeneuve, FRANCE have planned activities of the venture. Assistant Administrator, Office of become members of HDP User Group On March 14, 1995, Wilfred Baker Diversion Control, Drug Enforcement International, Inc. Combitech, Engineering, Inc. filed its original Administration (DEA), issued an Order Jonkoping, SWEDEN; Digital Equipment notification pursuant to Section 6(a) of to Show Cause to Richard M. Koenig, Corporation, Maynard, MA; and ESEC, the Act. The Department of Justice M.D., (Respondent) of Riverhead, New Phoenix, AZ are no longer members. published a notice in the Federal York, notifying him of an opportunity to 65070 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices show cause as to why DEA should not manner diminished by any recitation of performed on another day. He also revoke his DEA Certificate of facts, issues and conclusions herein, or stated that ‘‘I can’t tell you how much Registration, AK6455237, under 21 of any failure to mention a matter of fact I regret them,’’ but that ‘‘(i)t was an error U.S.C. 824(a), and deny any pending or law. in thinking. It was a reflection that applications for renewal of such The Deputy Administrator finds that people would understand and it’s not a registration as a practitioner under 21 the Respondent is a Board-certified system that understands and that was at U.S.C. 823(f), as being inconsistent with psychiatrist in private practice in the worst, pathological naivete on my the public interest. Specifically, the Riverhead, New York, and is also a part- part.’’ He further testified that he Order to Show Cause alleged that the time consultant for North Fork needed a DEA registration in order to Respondent had been excluded from Counseling, a mental health clinic in prescribe benzodiazapines as participation in a program pursuant to Mattituck, New York. On June 28, 1991, tranquilizers, and Dexedrine and Cylert 42 U.S.C. 1320a–7(a), as evidenced by, the Respondent was sentenced in a New for attention deficit disorder. but not limited to the following: York state court to six months Benzodiazepines and Cylert (trade name imprisonment, fines totalling $25,000, (a) Between March 1986 and January 1990, for pemoline) are Schedule IV (the Respondent) submitted false or and probation for five years as a result controlled substances, and Dexedrine fraudulent medical services claims to the of a jury verdict of guilty to 20 counts (trade name for dextroamphetamine), is New York State Medical Assistance Program, of offering a false instrument for filing. a Schedule II controlled substance. The commonly known as Medicaid, and as a Specifically, the Respondent was Respondent further testified that result of such submissions (he) obtained convicted of filing, with the intent to without a DEA registration, he would approximately $150,000.00 in funds to which defraud the State of New York, written feel obliged to leave North Fork because (he) was not entitled. instruments containing false statements of his inability to render appropriate (b) On or about April 19, 1991, (the and false information that he had treatment. Respondent) was convicted in the County of provided services to certain Medicaid Karen Malcolmsen, Ph.D., the Clinical Rockland, State of New York, of twenty recipients, and that he had not been Director of Family Service League, counts of offering a false instrument for filing, in violation of New York Penal Code, paid for such services, when in fact he North Fork Counseling (North Fork), Section 175.35. On or about June 28, 1991, was paid a salary to render such testified that North Fork is the only (the Respondent) was sentenced to five years services. On January 24, 1994, the licensed mental health clinic within a probation with the conditions that, inter alia, Respondent was discharged from forty-mile radius and is located in a very (he) serve six months in jail and pay a probation. rural community. Further, North Fork $25,000.00 fine. On February 13, 1992, the Director of provides counseling and psychiatric (c) Effective on or about March 5, 1992, the the U.S. Department of Health and services primarily to the poor and Office of the Inspector General, United States Human Services Health Care working poor in the local community, Department of Health and Human Services, Administrative Sanctions Office of many of whom are migrant farm excluded (the Respondent) from participating Investigations advised the Respondent workers who cannot afford to pay in the Medicare program and any State health that, pursuant to 42 U.S.C. 1320a–7(a), care program for a period of five years. substantial sums for mental health care. he was mandatorily excluded from Dr. Malcolmsen testified that she had On April 11, 1994, the Respondent, Medicare and state health care programs known the Respondent for six years, for through counsel, filed a timely request because of his conviction for a criminal he had performed his community for a hearing, and following prehearing offense related to the delivery of an item service at North Fork, plus an additional procedures, a hearing was held in or service under the Medicaid Program. hundred hours of service, and she had Arlington, Virginia, on October 4, 1994, The letter also advised the Respondent supervised him, worked with him on before Administrative Law Judge Mary that the exclusion would be in effect for the treatment team, and referred clients Ellen Bittner. At the hearing, both five years. The Respondent did not to him when they needed medication or parties called witnesses to testify and appeal this revocation. if therapists sought a second opinion. introduced documentary evidence, and Pursuant to a Notice of Hearing and Dr. Malcolmsen stated that the after the hearing, counsel for both sides Statement of Charges dated December 9, Respondent is still a consulting submitted proposed findings of fact, 1992, a hearing was held before a psychiatrist for North Fork, that he is conclusions of law and argument. On Hearing Committee of the New York paid a ‘‘very small salary’’ by the clinic February 2, 1995, Judge Bittner issued State Board For Professional Medical based on his working seven hours per her Opinion and Recommended Ruling, Conduct (Medical Board) on January 20, week, when in fact he actually provided recommending that the Respondent’s 1993. By order dated February 5, 1993, ten to thirteen hours per week of DEA registration be revoked and that the Medical Board found that the services to the clinic. Dr. Malcolmsen any pending applications be denied. Respondent had knowingly submitted opined that the Respondent’s work was Neither party filed exceptions to her invoices to Medicaid representing that excellent, that clients always reported decision, and on March 6, 1995, Judge he had provided certain services that, in positively about him, and that she found Bittner transmitted the record of these fact, he had not rendered as represented him very caring and honest. Dr. proceedings to the Deputy on the invoice. The Medical Board Malcolmsen also testified that the Administrator. suspended the Respondent’s medical Respondent had told her about the The Deputy Administrator has license for four months and ordered him charges against him before the considered the record in its entirety and to perform one hundred hours of indictment was handed down, that he the filings of the parties, and pursuant community service. had told her that he had never to 21 CFR 1316.67, hereby issues his At the hearing before Judge Bittner, intentionally done anything illegal but final order based upon findings of fact the Respondent testified that the had made some errors, and that several and conclusions of law as hereinafter set conviction he received concerning times in meetings with her he had forth. The Deputy Administrator adopts, ‘‘false instruments’’ or Medicaid expressed remorse for his actions and in full, the Opinion and Recommended billings, resulted from ‘‘errors in had taken responsibility for them. Ruling, Findings of Fact, Conclusions of judgment on (his) part,’’ based upon his Finally, Dr. Malcolmsen testified that Law and Decision of the Administrative performing a service on one day and the Respondent had never abused his Law Judge, and his adoption is in no billing for that service as if it had been authority to handle controlled Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices 65071 substances. She explained that if the grounds to revoke Respondent’s DEA substances needed by many of North Respondent’s DEA registration were registration pursuant to 42 U.S.C. 824(a)(5). Fork’s patients. revoked or suspended, the clinic would Next, as to the public interest issue, The Respondent also testified about not be able to function in emergency factors one and five are relevant in his remorse for his misconduct and his situations because the Respondent determining whether the Respondent’s need for his DEA Certificate of would be unable to prescribe the continued registration would be Registration. However, Judge Bittner, appropriate controlled medications inconsistent with the public interest. directly observing the Respondent’s needed by the patients. However, since Specifically, as to factor one, ‘‘(t)he testimony, noted that ‘‘(a)lthough the Respondent’s exclusion from recommendation of the appropriate state Medicare or Medicaid, North Forks has counsel for Respondent asserts that licensing board,’’ the Medical Board, Respondent has expressed remorse for the services of another psychiatrist who after conducting a hearing and his conduct, * * * Respondent’s only works three hours a week and sees the reviewing the evidence submitted, testimony to that effect in this Medicare patients. found that the Respondent had Pursuant to 21 U.S.C. 823(f) and knowingly submitted false invoices for proceeding was his comment that ‘I’m 824(a)(4), the Deputy Administrator may payment by the State. Accordingly, the extremely remorseful about it and I’ve revoke a DEA Certificate of Registration Medical Board sanctioned the said that.’ However, the thrust of his and deny any pending application for Respondent by suspending his medical testimony in this proceeding appeared such registration, if he determines that license and ordering him to perform to be that having to go through ‘another the continued registration would be community service. trial’ was unfair and tiring. In these inconsistent with the public interest. Further, as to factor five, ‘‘(s)uch other circumstances, I conclude that his Section 823(f) requires that the conduct which may threaten the public purported expressions of remorse are following factors be considered: health or safety,’’ the Respondent’s less than reliable.’’ (1) The recommendation of the conduct of submitting false invoices Given Judge Bittner’s doubts as to the appropriate State licensing board or placed into question his trustworthiness Respondent’s credibility and sincerity, professional disciplinary authority. and credibility. Also, Judge Bittner and the egregious nature of his conduct (2) The applicant’s experience in found that the Respondent’s testimony dispensing, or conducting research with in intentionally filing false documents before her lacked credibility: ‘‘I note at with the State, the Deputy respect to controlled substances. the outset that I did not find Respondent (3) The applicant’s conviction record Administrator finds that the public to be a credible witness. He seemed interest is best served by revoking the under Federal or State laws relating to more interested in tailoring his Respondent’s DEA Certificate of the manufacture, distribution, or testimony to his defenses than in Registration and denying and pending dispensing of controlled substances. accurately portraying relevant events.’’ (4) Compliance with applicable State, Such lack of credibility in 1994 causes registration application at the present Federal, or local laws relating to concern as to the Respondent’s future time. See Sokoloff v. Saxbe, 501 F.2d controlled substances. conduct if entrusted with protecting the 571, 576 (2 Cir. 1974) (stating that (5) Such other conduct which may public interest in administering ‘‘permanent revocation’’ of a DEA threaten the public health or safety. controlled substances. The Respondent Certificate of Registration may be These factors are to be considered in argued that since his conviction did not ‘‘unduly harsh’’). Like Judge Bittner, the disjunctive; the Deputy involve controlled substances, the after reviewing the record in total, the Administrator may rely on any one or a Government had not shown that his Deputy Administrator questions combination of factors and may give continued registration would be whether the Respondent is currently each factor the weight he deems inconsistent with the public interest. willing or able to meet the appropriate in determining whether a However, the Deputy Administrator responsibilities inherent in a DEA registration should be revoked or a agrees with Judge Bittner who wrote registration. pending application for registration ‘‘(i)t is well established that misconduct denied. See Henry J. Schwarz, Jr., M.D. Accordingly, the Deputy involving controlled substances is not a Administrator of the Drug Enforcement Docket No. 88–42, 54 FR 16,422 (1989). sine qua non for revocation of a DEA In addition, 21 U.S.C. 824(a)(5) specifies Administration, pursuant to the registration * * *.’’ See also Gilbert L. authority vested in him by 21 U.S.C. 823 that a DEA registration may be revoked Franklin, D.D.S., 57 FR 3441 (1992). and 824, and 28 CFR 0.100(b) and 0.104, or suspended if the registrant ‘‘has been Yet the Respondent has submitted hereby orders that DEA Certificate of excluded * * * from participation in a evidence concerning his rehabilitation. program pursuant to (42 U.S.C. 1320a– Specifically, Dr. Malcolmsen testified Registration AK6455237, issued to 7(a)).’’ Here, the record demonstrates extensively about the Respondent’s Richard M. Koenig, M.D., be, and it that the Respondent has been so excellent, honest and caring work, often hereby is, revoked, and any pending excluded. Although the Respondent voluntarily provided to the patients at application submitted by the attempted to contest elements of this North Fork, and about the Respondent’s Respondent is denied. This order is exclusion in these proceedings, the statements of remorse for his actions. effective January 18, 1996. Deputy Administrator agrees with Judge Dr. Malcolmsen also testified that she Bittner’s findings that: Dated: December 11, 1995. believed the Respondent had taken Stephen H. Green, The letter advising Respondent of his responsibility for his past misconduct, Deputy Administrator. exclusion from Medicare and state health and that she had never observed the programs specified that his exclusion was Respondent abuse his authority to [FR Doc. 95–30654 Filed 12–15–95; 8:45 am] mandated by 1320a–7(a), and Respondent handle controlled substances. She BILLING CODE 4410±09±M did not appeal that ruling. He is therefore precluded from attacking that finding further explained that if the collaterally in this proceeding. In light of the Respondent’s DEA registration was above, I conclude that Respondent was revoked, the clinic would suffer a loss excluded from programs pursuant to 1320a– of services because the Respondent 7(a) and that the exclusion constitutes would be unable to prescribe controlled 65072 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices

DEPARTMENT OF LABOR Signed at Washington, DC., this 5th day of The definition of the ‘‘local service December 1995. area of a primary transmitter’’ in 17 Employment and Training Russell T. Kile, U.S.C. 111(f) determines whether a Administration Acting Program Manager, Policy and broadcast station is local or distant to a Reemployment Services, Office of Trade cable system and consequently when it Adjustment Assistance. [NAFTAÐ00303; Lucas, Iowa, NAFTAÐ must submit a royalty fee for 00303A; Mt. Ayr, Iowa, NAFTAÐ00303B; [FR Doc. 95–30652 Filed 12–15–95; 8:45 am] retransmission of that signal. Cable Osceola, Iowa, and NAFTAÐ00303C] BILLING CODE 4510±30±M systems pay royalties for carriage of distant signals and may retransmit local Iowa Assemblies, Inc., Murray, Iowa; broadcast signals to their subscribers Amended Certification Regarding LIBRARY OF CONGRESS without incurring copyright liability. 1 Eligibility To Apply for NAFTA Prior to the passage of the Home Viewer Transitional Adjustment Assistance Copyright Office Act, the local service area definition [Docket No. 95±8] provided that a broadcast station was In accordance with Section 250(a), local in the area that it could ‘‘insist Subchapter D, Chapter 2, Title II, of the Copyright, Cable Compulsory License upon its signal being retransmitted by a Trade Act of 1974, as amended (19 USC cable system pursuant to the rules, AGENCY: Copyright Office, Library of 2273), the Department of Labor issued a regulations and authorizations of the Congress. Notice of Certification of Eligibility to Federal Communications Commission Apply for NAFTA Transitional ACTION: Notice of policy decision. in effect on April 15, 1976* * *’’ 17 U.S.C. 111(f) (1976). This was a Adjustment Assistance on January 12, SUMMARY: The Copyright Office of the reference to the Commission’s must- 1995, applicable to all workers at Iowa Library of Congress is announcing a carry rules in effect in 1976, and the Assemblies, Inc. in Lucas, Mt. Ayr and policy decision with respect to the Copyright Act fixed these rules for all Osceola, Iowa. examination and reporting of local future copyright determinations. At the request of the State Agency on broadcast signals in light of the Although these must-carry rules were behalf of the company, the Department amendment to section 111 of the ultimately declared unconstitutional, reviewed the subject certification. The Copyright Act made by the Satellite see Quincy Cable T.V., Inc. v. FCC, 768 company reports worker separations Home Viewer Act of 1994. For F.2d 1434 (D.C. Cir. 1985), cert. denied, will occur at the subject firm’s examining cable statements of account, 476 U.S. 1169 (1986) and Century manufacturing facilities in Mt. Ayr, the Office will use the same ADI list Communications v. FCC, 835 F.2d 292 Osceola, and Murray, Iowa. The workers used by the Federal Communications (D.C. Cir. 1987), cert. denied, 486 U.S. produce among other products, Commission for its must-carry/ 1032 (1988), they remain in effect for automotive wiring harnesses and wiring retransmission consent election, and purposes of 17 U.S.C. 111. See Quincy, will treat a broadcast signal as local for assembly. The Department’s review of 768 F.2d at 1454 n. 42. However, copyright purposes only within that the certification for workers of the because of the passage of time and station’s ADI. subject firm found that workers in Mt. changes in telecommunications law and Ayr and Osceola, Iowa are currently FOR FURTHER INFORMATION CONTACT: policy, the 1976 must-carry rules no covered under the certification. When Marilyn J. Kretsinger, Acting General longer reflect the realities of the current Counsel, or William Roberts, Senior marketplace. Congress, therefore, the certification was issued, the Mt. Ayr Attorney for Compulsory Licenses. amended the local service area and Osceola locations of the subject firm Telephone (202) 707–8380. Telefax definition in the Home Viewer Act to were not separately assigned a suffix (202) 707–8366. provide an additional means of number. The intent of the Department’s determining the local/distant copyright SUPPLEMENTARY INFORMATION: certification is to include all workers of status of broadcast stations. Iowa Assemblies, Inc. adversely affected I. Background The Home Viewer Act amendment by increased imports of wiring On October 18, 1994, the President of provides that, in addition to the area harnesses and assembly from Mexico or the United States signed into law the encompassed by the 1976 must-carry Canada. Therefore, the Department is Satellite Home Viewer Act of 1994. rules, a broadcast station is local for amending the certification for workers Public Law No. 103–369. In addition to copyright purposes in the area that of the subject firm to separately identify extending and amending the comprises that station’s television the Mt. Ayr and Osceola, Iowa locations, compulsory license for satellite carriers market as defined in § 76.55(e) of the and provide for the worker separations in 17 U.S.C. 119, the Home Viewer Act FCC’s rules, and any subsequent in Murray, Iowa. expanded the cable compulsory license modifications made by the FCC to that The amended notice applicable to definition of the ‘‘local service area of a market. In many circumstances, a NAFTA–00303 is hereby issued as primary transmitter’’ in 17 U.S.C. 111 to station’s television market under § 76.55(e) creates a larger local service follows: include a broadcast station’s ‘‘television market as defined in section 76.55(e) of area than under the 1976 must-carry ‘‘All workers of Iowa Assemblies, Inc., title 47, Code of Federal Regulations (as rules. Cable systems may use either the Lucas (NAFTA–303), Mt. Ayr (NAFTA– in effect on September 18, 1993), or any television market or the 1976 must-carry 303A), Osceola (NAFTA–303B), and Murray modifications to such television market (NAFTA–0303C) Iowa engaged in 1 made, on or after September 18, 1993, There is one exception to this rule: a cable employment related to the production of system which retransmits only local broadcast wiring harnesses and assembly who became pursuant to section 76.55(e) or 76.59 of signals must nonetheless submit a minimum royalty totally or partially separated from title 47 of the Code of Federal fee under 17 U.S.C. 111. However, if the system Regulations’’ (parenthetical in original). carries one or more distant signals, royalties are employment on or after December 8, 1993 are only paid for those distant signals, and the local eligible to apply for NAFTA–TAA under The amendment was made effective signals carried are copyright-free. As a practical Section 250 of the Trade Act of 1974.’’ beginning with the second accounting matter, there are very few cable systems which only period of 1994. carry local broadcast signals and no distant signals. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices 65073 rules, or both, in determining the local local or distant to a cable operator, which in where those counties are assigned to service area of each broadcast station turn determines whether the operator must different ADIs. Is the broadcast station they retransmit to their subscribers. pay a royalty fee for that station. Effective local for copyright purposes only in Section 76.55(e) of the FCC’s rules July 1, 1994, the local service area of a those counties assigned to its ADI, or are broadcast station for copyright purposes also defines a television market for purposes includes the area in which the station is there circumstances where the station of the Commission’s new must-carry entitled to insist upon carriage of its signal may be reported as local outside of its rules adopted to implement the Cable by a cable system (i.e. its must-carry zone), ADI? Television Consumer Protection and in accordance with the rules of the Federal III. Policy Decision Competition Act of 1992. Public Law Communications Commission in effect on 102–385. The section provides in its September 18, 1993, and any subsequent As part of its responsibility to entirety: modification of those rules. administer the cable compulsory license, the Copyright Office is resolving (e) Television market. For purposes of the Id. To date, this is all the Office has said must-carry rules: regarding the change made to the local both the issues raised in this Notice. (1) A local commercial broadcast television service area definition by the Home With respect to which ADI (or station’s market shall be defined as its Area Viewer Act. subsequent) list to use in examining of Dominant Influence (ADI) as determined statements of account, the Office will by Arbitron and published in its Television II. Policy Issues use only the list designated by the ADI Market Guide or any successor Amendment of the definition of the Commission for the must-carry/ publication, as noted below, except that for ‘‘local service area of a primary retransmission consent election. For areas outside the contiguous 48 states the transmitter’’ has led to questions in the determinations of the local/distant area of dominant influence may be defined administration of the cable compulsory status of a broadcast station, the Office using Nielsen’s Designated Market Area (DMA), where applicable, and that Puerto license. Two of these questions must be is clarifying the circumstances under Rico, the U.S. Virgin Islands and Guam will resolved in order for the Copyright which a station may be reported as local each be considered one ADI; Office to administer the cable for copyright purposes. compulsory license. The first question (2) A cable system’s television market(s) A. The ADI list shall be the one or more ADIs in which the involves the Copyright Office’s use of communities it serves are located; ADI in its examination of cable The amended local service area (3) In addition, the county in which a statements of account. As discussed definition expressly adopts Arbitron’s station’s community of license is located will above, the amendment to the local ADI list in effect on September 18, 1993, be considered within its market. service area definition was made plus any subsequent modifications Note: For the 1993 must-carry/ effective beginning with the second made to that list pursuant to § 76.55(e) retransmission consent election, the ADI accounting period of 1994, and cable or § 76.59 of the FCC’s rules. Section assignments specified in the 1991–1992 systems are now using broadcast 76.55(e) provides that the ADI list in Television ADI Market Guide, available from effect on September 18, 1993, is the list the Arbitron Ratings Co., 312 Marshall Ave., stations’ ADI for determining the local/ Laurel MD, will apply. ADI assignments will distant status of the signals. The appearing in the 1991–1992 Television be updated at three year intervals. For the question has arisen, however, as to the ADI Market Guide. 47 CFR 1996 election period, the 1994–1995 ADI list appropriate ADI information to consider 76.55(e)(Note). It is further provided will be used; the applicable list for the 1999 in calculating the local service area of a that 1991–1992 Television ADI Market election will be the 1997–1998 list, etc. broadcast signal. The Note to 47 CFR Guide list will remain in effect until the 47 CFR 76.55(e) (1993). The Home 76.55(e) states that the FCC is using the time of the 1996 must-carry/ Viewer Act fixes 47 CFR 76.55(e) as of 1991–1992 Television ADI Market retransmission consent, when the 1994– September 18, 1993, but expressly Guide for the 1993 must-carry/ 1995 ADI list will be used. While it is includes any subsequent modifications retransmission consent election, and presumed that the ADI list applicable to television markets made under that ADI assignments will be updated at for 1996 will account for the § 76.55(e) or § 76.59 of the three year intervals. 2 Should cable termination of publication of the Commission’s rules. Modifications were systems use the 1991–1992 Television Television ADI Market Guide, § 76.55(e) recognized by the Home Viewer Act ADI Market Guide for the 1994/2 makes it clear that the Commission will because, at the time of its passage, the accounting period and the 1995 only revise the ADI list at three-year Arbitron Company had discontinued its accounting year, or should they apply intervals. Because of the Home Viewer publication of the Television ADI the current ADI list to the corresponding Act’s direct reference to 47 CFR Market Guide and had filed for accounting period—i.e. the 1994 list to 76.55(e), the Copyright Office believes bankruptcy. the 1994 accounting year and the 1995 that it is consistent with legislative Subsequent to the enactment of the list to the 1995 accounting year, where intent to use only the ADI (or Home Viewer Act, the Copyright Office such information is available? replacement) list used by the amended its cable and satellite carrier The second question involves the Commission for the must-carry/ compulsory license rules and discussed determination of a broadcast station’s retransmission consent election. Thus, the changes brought about by the Act. ‘‘television market’’ for a cable system for the 1994/2 accounting period, and 59 FR 67635 (December 30, 1994). The that serves a community or both accounting periods for 1995, the new definition of the ‘‘local service area communities in more than one county Copyright Office will use the 1991–1992 of a primary transmitter’’ did not require Television ADI Market Guide in amendment of the rules; however, the 2 The Note further states that the 1994–1995 ADI determining the local/distant status of list will be used for the 1996 election, the 1997– broadcast signals. Cable operators Office described the change in the 1998 list for the 1999 election, etc. Arbitron, definition: however, discontinued the Market Guide after should use only this list for these accounting periods; in examining The other change to the cable compulsory publication of the 1993–1994 edition. New criteria, presumably Nielsen’s Designated Market Area, must Statements of Account, the Copyright license made by the 1994 Home Viewer Act be adopted before the 1996 must-carry/ Office will not recognize the ADI of a is the broadening of the section 111(f) retransmission consent election, and the definition of the ‘‘local service area of a Commission has stated that it will address the issue broadcast station derived from any primary transmitter.’’ The definition is used before October 1, 1996. See Opinion & Order in MM source other than the 1991–1992 to determine when a broadcast station is Docket No. 92–259 at 10 n. 45 (November 4, 1994). Television ADI Market Guide. For the 65074 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices

1996, 1997 and 1998 accounting years, determined by Arbitron and published deliver the signal to communities cable operators should use the list in its Television ADI Market Guide located in other ADIs. adopted by the Commission for the 1996 ** *’’ 47 CFR 76.55(e)(1). A broadcast We believe that this interpretation is must-carry/retransmission consent station’s ADI is also the area in which consistent with Congress’ intent in election, and, for subsequent years, the it is entitled to assert mandatory amending the local service area list adopted by the Commission for each carriage rights on cable systems located definition. The legislative history to the must-carry/retransmission consent in that ADI. See Broadcast Signal Home Viewer Act does not indicate any election period. If the Commission Carriage Issues, 8 FCC Rcd 2965, 2976– intention to equate the copyright local should make modifications to television 2977 (1993). Thus, the Office service area with the must-carry markets in accordance with §§ 76.55(e) acknowledged in its December 30, 1994, obligation, and to do so would do and/or 76.59, or should generate a Federal Register notice the violence to 17 U.S.C. 111(d)(1)(B) by television market list for the must-carry/ correspondence between a broadcast substantially reducing the occurrence of retransmission consent election other station’s must-carry area and its ADI; partially local/partially distant signals. than at three-year intervals, those however, it did not describe what Furthermore, Congress expressly modifications should be applied to their application, if any, this would have to recognized in the 1992 Cable Act that corresponding compulsory license cable systems straddling more than one broadcast stations could be considered accounting periods in determining the ADI. distant signals for copyright purposes in local service area of a broadcast station. communities where they enjoyed must- After reviewing the provisions of the carry rights. 1992 Cable Act, section B. Local/Distant Status Cable Television Consumer Protection 614(h)(1)(b)(ii). Nothing in the Home and Competition Act of 1992 (‘‘1992 In the December 30, 1994, adjustment Viewer Act indicates an intention to Cable Act’’), Public Law No. 102–385, of our regulations to account for the change this result. statutory changes made by the Home and the FCC’s implementing rules, it is Viewer Act, we described the Act’s apparent that there are circumstances, Dated: December 4, 1995. amendment to the local service area e.g., the ‘‘straddle’’ situation, where the Marybeth Peters, definition in 17 U.S.C. 111(f) as must-carry zone of a broadcast station Register of Copyrights. ‘‘includ[ing] the area in which the exceeds its ADI. The FCC stated in its Approved by: station is entitled to insist upon carriage Report & Order implementing the 1992 James H. Billington, of its signal by a cable system (i.e. its Cable Act’s must-carry requirements The Librarian of Congress. must-carry zone), in accordance with that in circumstances where a cable [FR Doc. 95–30458 Filed 12–15–95; 8:45 am] the rules of the Federal system serves a community or Communications Commission in effect communities in more than one county BILLING CODE 1410±31±P on September 18, 1993, and any and those counties are assigned to subsequent modification of those rules.’’ different ADIs, ‘‘all broadcast stations in 59 FR 67635 (December 30, 1994). We both ADIs will be considered ‘local’ for SECURITIES AND EXCHANGE believe we need to clarify this statement must-carry purposes.’’ 8 FCC Rcd at COMMISSION as it relates to cable systems that serve 2976. communities in more than one county We do not believe that the application [Release No. 34±36568; Filed No. SR± assigned to different ADIs. CBOE±95±62] Cable carriage by one system across of the must-carry rules adopted one or more ADIs does not appear to be pursuant to the 1992 Cable Act have any Self-Regulatory Organizations; an uncommon occurrence. Each county direct bearing in determining the size of Chicago Board Options Exchange, in the United States is allocated to a the local service area of a broadcast Incorporated; Notice of Filing of market based on which home-market station for copyright purposes. The Proposed Rule Change Regarding stations receive a preponderance of total copyright local service area is a Book-Entry Settlement of Securities viewing. Because many larger cable broadcast station’s television market as Transactions and Depository Eligibility systems typically serve several counties, defined in 47 CFR 76.55(e), which Requirements a ‘‘straddle’’ situation can occur where means that it is the station’s ADI, plus a cable system carries a broadcast signal any modifications made to the ADI by December 8, 1995. assigned to one market in communities the Commission under § 76.55 or § 76.59 Pursuant to Section 19(b)(1) of the within counties assigned to other of its rules.3 The Office should not have Securities Exchange Act of 1934 markets. This situation is further stated in the December 30, 1994, (‘‘Act’’),1 notice is hereby given that on complicated when such carriage is Federal Register notice that the local October 19, 1995, the Chicago Board pursuant to the FCC’s new must-carry service area was equal to the station’s Options Exchange, Incorporated rules. How should cable systems must-carry zone, since such zone can, in (‘‘CBOE’’) filed with the Securities and straddling different markets report certain circumstances, be considered to Exchange Commission (‘‘Commission’’) carriage of broadcast signals in those extend beyond a station’s ADI. Thus, in the proposed rule change described in markets for compulsory license the ‘‘straddle’’ situation, a cable system Items I, II, and III below, which items purposes? may only report carriage of a broadcast have been prepared primarily by CBOE. The Home Viewer Act amendment to station as local under 17 U.S.C. 111 in On October 26, 1995, CBOE filed an the 17 U.S.C. 111(f) local service area those communities assigned to the amendment to the proposed rule definition makes it clear that a broadcast station’s ADI, even though the system change.2 The Commission is publishing station’s television market is its ADI. may have must-carry obligations to this notice to solicit comments on the The Home Viewer Act defines ‘‘television market’’ by reference to 3 We acknowledge that changes made to a 1 15 U.S.C. § 78s(b)(1) (1988). § 76.55(e) of the FCC’s rules, which station’s ADI under 47 CFR 76.55(e) or 76.59 will 2 CBOE amended its proposal to correct a undoubtably be for reasons related to the must-carry typographical error in the filing. Letter from provides that a broadcast station’s rules; however, it is only changes made to a Michael L. Meyer, Schiff, Hardin & Waite, to Mark television market is ‘‘its Area of station’s ADI under these two rules that matter for Steffensen, Division of Market Regulation Dominant Influence (ADI) as copyright purposes. (‘‘Division’’), Commission (October 26, 1995). Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices 65075 proposed rule change from interested Project, several years ago the U.S. member firms settle transactions with persons. Working Committee recommended that traditional retail customers,7 the settlements and other movements of settlement of transactions in securities I. Self-Regulatory Organization’s corporate and municipal securities for that are not depository eligible,8 or Statement of the Terms of Substance of transactions among financial transactions in which settlement occurs the Proposed Rule Change intermediaries (brokers, dealers, and outside the U.S. Rule 30.136 also will CBOE proposes to adopt new Rules banks) and between financial not apply to transactions where the 30.136 and 30.137 in order to conform intermediaries and their institutional securities to be delivered in settlement its rules to those of other self-regulatory clients be effected only by book-entry of a transaction are not on deposit at a organizations regarding book-entry movements within a depository. securities depository and (1) the settlement of transactions in depository Thereafter, six national securities transaction is for same-day settlement eligible securities and regarding the exchanges and the NASD adopted and the deliverer cannot by reasonable establishment of depository eligibility uniform rules in conformity with the efforts deposit the securities prior to a requirements for issuers that apply to U.S. Working Committee’s depository’s cut-off time for same-day list securities on CBOE. recommendation.6 crediting of deposited securities or (2) II. Self-Regulatory Organization’s Because CBOE did not then provide a the deliverer cannot by reasonable Statement of the Purpose of, and market in depository-eligible securities, efforts deposit the securities prior to a Statutory Basis for, the Proposed Rule it did not adopt the uniform rule. It now cut-off date time established for that change is proposing the adoption of Rule issue of securities by the depository. 30.136, which would implement such a The latter exception is intended to In its filing with the Commission, book-entry settlement requirement for address corporate reorganizations and CBOE included statements concerning securities listed on CBOE. The addition other extraordinary activities. the purpose of and basis for the of Rule 30.136 will conform the rules of The second rule being proposed by proposed rule change and discussed any CBOE to those of other U.S. self- CBOE, Rule 30.137, also reflects a comments it received on the proposed regulatory organizations, which rules response to a directive from the Group rule change. The text of these statements are designed to ensure that the vast of Thirty to address the need to raise may be examined at the places specified majority of securities transactions clearing and settlement standards. The in Item IV below. CBOE has prepared effected in the U.S. markets will be rule is substantially identical to a summaries, set forth in sections (A), (B), settled by book-entry. uniform depository eligibility rule that and (C) below, of the most significant Subject to certain exceptions set forth was developed through the coordinated aspects of such statements.3 in the text of the rule and described effort of six national securities The purpose of the proposed rule below, Rule 30.136 will require the use exchanges and the NASD and that has change is to encourage book-entry of the facilities of a registered securities been incorporated into the rules of those settlement of securities transactions by depository for the book-entry settlement self-regulatory organizations.9 adding two new rules to Chapter XXX of all transactions in depository eligible Rule 30.137 will require that before a 4 of the CBOE rules. Both of the securities between a member firm and a domestic issuer’s issue of securities is proposed new rules are substantially the financial intermediary or a member of a listed that the issuer represent to CBOE same as rules previously adopted by six national securities exchange or a that the CUSIP number identifying the other national securities exchanges and registered securities association. The issue has been included in the file of the National Association of Securities rule also will apply to transactions in eligible issues maintained by a Dealers (‘‘NASD’’) in response to depository eligible securities between registered securities depository. This recommendations of the Group of member firms and their clients if requirement will not apply to a security Thirty, U.S. Working Committee (‘‘U.S. settlement is to be effected on a if the terms of such security cannot be Working Committee’’), Clearance and delivery-versus-payment (‘‘DVP’’) or reasonably modified to meet the criteria Settlement Project (‘‘Project’’), regarding receipt-versus-payment (‘‘RVP’’) basis. for depository eligibility at all registered book-entry settlement of securities securities depositories. In addition, the 5 As is the case under comparable rules transactions. In connection with the adopted by other self-regulatory rule will not apply to American organizations, Rule 30.136 will not Depository Receipts for securities of a 3 The Commission has modified the text of the apply to or affect the manner in which foreign issuer. summaries provided by CBOE. Rule 30.137 also sets forth additional 4 The rules in Chapter XXX govern the listing and trading of debt and equity securities, warrants, UIT recommended requiring book-entry settlement requirements that must be met before a interests, and such other securities as may be between financial intermediaries and between security will be deemed to be determined by CBOE’s Board of Directors. Chapter financial intermediaries and their institutional ‘‘depository eligible’’ within the XXX does not apply to the trading of option clients and depository eligibility for all new meaning of the rule. The rule specifies contracts. issuances. U.S. Working Committee, Implementing 5 The Group of Thirty is an independent, the Group of Thirty Recommendations in the different requirements for depository nonpartisan, nonprofit organization established in United States (November 1990). The U.S. Working 1978. In its March 1989 report, the Group of Thirty Committee’s recommendations were supported 7 Because retail customers do not settle their made nine recommendations for harmonizing strongly by the report of the Bachmann Task Force. trades on a DVP/RVP basis, the rule will not alter clearance and settlement practices worldwide. The Bachmann Task Force on Clearance and Settlement their current method of settlement. U.S. Working Committee, comprised of Reform in U.S. Securities Markets, Report 8 Under proposed Rule 30.136(d), depository representatives from brokerage firms, banks, other Submitted to the Chairman of the Securities and eligible securities means securities that (i) are part financial intermediaries, and major industry Exchange Commission (May 1992). of an issue (as identified by a single CUSIP number) organizations was formed to study the existing U.S. 6 Securities Exchange Act Release No. 32455 of securities that is eligible for deposit at a clearance and settlement system and to recommend (June 11, 1993), 58 FR 33679 (order approving securities depository and (ii) with respect to a reforms consistent with the Group of Thirty proposed rule change of the American Stock particular transaction are eligible for book-entry recommendations. After reviewing the nine Group Exchange (‘‘Amex’’), Boston Stock Exchange transfer at the depository at the time of settlement of Thirty recommendations, the U.S. Working (‘‘BSE’’), Midwest Stock Exchange (now the Chicago of the transaction. Committee concluded that at that time the U.S. Stock Exchange) (‘‘CHX’’), New York Stock 9 Securities Exchange Act Release No. 35798 substantially complied with all but two of those Exchange (‘‘NYSE’’), Pacific Stock Exchange (June 1, 1995), 60 FR 30909 (order approving recommendations, T+3 settlement and same-day (‘‘PSE’’), Philadelphia Stock Exchange (‘‘PHLX’’), proposed rule change of Amex, BSE, CHX, NYSE, funds settlement. In order to achieve T+3 and NASD regarding the book-entry settlement of PSE, PHLX, and NASD regarding uniform settlement, the U.S. Working Committee securities transactions). depository eligibility rules). 65076 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices eligibility depending upon whether a (B) Self-Regulatory Organization’s Margaret H. McFarland, new issue is distributed by an Statement on Burden on Competition Deputy Secretary. underwriting syndicate before or after [FR Doc. 95–30661 Filed 12–15–95; 8:45 am] The CBOE does not believe that the the date a securities depository system BILLING CODE 8010±01±M proposed rule change will impose any is available for monitoring repurchases burden on competition. of the distributed shares by syndicate [Release No. 34±36573; File No. 600±27] members (i.e., a ‘‘flipping tracking (C) Self-Regulatory Organization’s system’’). Statement on Comments on the Self-Regulatory Organizations; Currently, a flipping tracking system Proposed Rule Change Received from Clearing Corporation for Options and is being developed that will include a Members, Participants, or Others Securities; Order Approving securities depository service that (i) can Application for Exemption From Written comments on the proposed Registration as a Clearing Agency be activated upon the request of the rule change were neither solicited nor managing underwriter for a period of received. December 12, 1995. time that the managing underwriter III. Date of Effectiveness of the On December 14, 1992, the Clearing specifies, (ii) in certain circumstances Proposed Rule Change and Timing for Corporation for Options and Securities will require the delivering participant to 1 Commission Action (‘‘CCOS’’) filed with the Securities and provide to the depository information Exchange Commission (‘‘Commission’’) sufficient to identify the seller of such Within thirty-five days of the date of an application for exemption from shares as a precondition to the publication of this notice in the Federal registration as a clearing agency processing of book-entry delivery Register or within such longer period (i) pursuant to Section 17A of the instructions for distributed shares, and as the Commission may designate up to Securities Exchange Act of 1934 (iii) will report to the managing ninety days of such date if it finds such (‘‘Act’’) 2 and rule 17Ab2–1 thereunder.3 underwriter the identify of any other longer period to be appropriate and Notice of CCOS’s application was syndicate member or selling group publishes its reasons for so finding or published in the Federal Register on 4 member whose customer(s) sold (ii) as to which CBOE consents, the June 23, 1993. Fourteen comment distributed shares (but will not report to Commission will: letters were received in response to the notice of filing of the CCOS the managing underwriter the identity (a) By order approve such proposed application.5 On October 7, 1993, CCOS of such customer[s]) and in certain rule change or filed an amendment to its application 6 circumstances will report to such (b) Institute proceedings to determine setting forth its intention to register syndicate member or selling group whether the proposed rule change Chicago Board Brokerage, Inc. (‘‘CBB’’) member the identity of such should be disapproved. as a U.S. government securities broker customer(s). Prior to the availability of 7 IV. Solicitation of Comments pursuant to Section 15C of the Act and a flipping tracking system, the managing to proceed with CBB’s membership with underwriter may delay the date a Interested persons are invited to the National Association of Securities security is deemed ‘‘depository eligible’’ submit written data, views, and Dealers (‘‘NASD’’) as required by that for up to three months after trading has arguments concerning the foregoing. section.8 Notice of the amendment was commenced in the security. After the Persons making written submissions published in the Federal Register on availability of a flipping tracking should file six copies thereof with the April 22, 1994, to solicit comments.9 system, a new issue must be depository Secretary, Securities and Exchange One hundred eleven comment letters eligible before commencement of Commission, 450 Fifth Street, NW., were received in response to the notice trading on CBOE. Washington, DC 20549. Copies of the of filing of the amendment.10 This Order grants CCOS’s application for The proposed rule change is submission, all subsequent consistent with Section 6(b)(5) of the amendments, all written statements with respect to the proposed rule 1 CCOS is a wholly-owned subsidiary of the Board Act in that by reducing the number of change that are filed with the of Trade Clearing Corporation (‘‘BOTCC’’) which transactions in depository eligible provides clearing services for futures and Commission, and all written securities for which settlement is commodities transactions executed on the Board of communications relating to the Trade of the City of Chicago (‘‘CBOT’’). effected by the delivery of physical proposed rule change between the 2 15 U.S.C. § 78q–1 (1988). securities, by requiring that transactions Commission and any person, other than 3 17 CFR 240.17Ab2–1 (1994). between member firms and transactions those that may be withheld from the 4 Securities Exchange Act Release No. 32481 (June between member firms and clients that public in accordance with the 16, 1993), 58 FR 34105 [File No. 600–27] (notice of settle on a DVP or RVP basis generally filing of application for exemption from registration provisions of 5 U.S.C. 552, will be as a clearing agency) (‘‘CCOS Release’’). occur in a book-entry environment, and available for inspection and copying in 5 A complete list of comment letters for File No. by requiring securities listed in CBOE be the Commission’s Public Reference 600–27 is available for review in the Commission’s depository eligible, the efficiency of the Section, 450 Fifth Street, NW., Public Reference Room. U.S. clearance and settlement system 6 Letter from Dennis Dutterer, Executive Vice Washington, DC. Copies of such filing President and General Counsel, BOTCC, to Jonathan will be enhanced and the potential for will also be available for inspection and Katz, Secretary, Commission (October 6, 1993). systemic risk will be reduced. copying at the principal office of CBOE. Letter from Fred Grede, Vice President, Board of Furthermore, the proposal is designed to All submissions should refer to File No. Trade of the City of Chicago (‘‘CBOT’’), to Brandon Becker, Director, Division of Market Regulation foster cooperation and coordination SR–CBOE–95–62 and should be (‘‘Division’’), Commission (October 6, 1993). with persons engaged in regulatory, submitted by January 8, 1996. 7 15 U.S.C. § 78o-5 (1988). clearing, settling, and facilitating For the Commission, by the Division 8 15 U.S.C. § 78o-5(e)(1) (1988). transactions in securities and to remove of Market Regulation, pursuant to 9 Securities Exchange Act Release No. 33911 impediments to and perfect the 10 (April 15, 1994) 59 FR 19263 [File No. 600–27] delegated authority. (notice of filing of amendment to application for mechanism of a free and open market exemption from registration as a clearing agency). and a national market system. 10 17 CFR 200.30–3(a)(12) (1994). 10 Supra note 5. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices 65077

exemption from registration as a Using the CBB trading system, therefore, provide access through an interface with clearing agency subject to certain CBOT traders in government securities quotation vendors.19 limitations and conditions as set forth will be able to buy and sell the The system will permit users to below. government securities underlying CBOT execute basis trades as a single transaction where the price will reflect I. Description futures contracts and using dollar rolls will be able to execute trades that help the spread in basis points between the A. Trade Clearance and Settlement inventory management. CBB will futures contract and the underlying government securities. The government 1. Overview execute transactions for system participants as broker. All trades will be securities will be priced at a certain CCOS will provide clearance and effected through the CBB’s electronic number of basis points above or below settlement facilities for trades executed network. The settlement date for the futures contract.20 by CBB and its customers in the CBB outright purchase and sale transactions The system also will provide users trading system.11 As described in the will be the next business day except for with the ability to execute dollar roll amendment,12 CBB’s business will be when-issued (‘‘WI’’) securities which transactions. Dollar roll transactions are limited to acting as an intermediary for will settle on the day of issuance by the designed to facilitate the financing of U.S. government securities transactions U.S. Treasury. government securities through the paired through its computer system.13 lending of government securities in The CBB trading system is designed to Under the terms of the proposal, any exchange for cash and to facilitate the offer CBOT members an opportunity to CCOS participant or any customer of a lending of funds in exchange for execute a customized package of CCOS participant that is also a CBOT government securities.21 Dollar rolls transactions related to Treasury futures member or member firm (hereinafter will result in the creation of two 14 contracts traded on the CBOT. The collectively referred to as a CBOT simultaneous government trades. system will permit the trading of member) will be able to obtain a CBB CBB will have a morning trading government securities, independently trading terminal.17 Each CCOS session for dollar rolls from the opening and in conjunction with CBOT futures participant will be required to enter into of trading at 8:00 a.m. to 11:00 a.m. and on government securities (‘‘basis an agreement with CBB setting forth the an afternoon session for dollar rolls trades’’),15 and repurchase and reverse terms and conditions of access to and from 3:15 p.m. to 5:00 p.m.22 For dollar repurchase agreement contracts in use of CBB’s terminals. Using a CBB rolls executed during the morning 16 government securities (‘‘dollar rolls’’). terminal, a terminal operator will be session, the first leg will be for same day able to view the terminal displays to see (‘‘T’’) settlement, and the second leg 11 CBB is a wholly-owned subsidiary of the CBOT the prices and quantities of current bids will be for next day (‘‘T+1’’) settlement. and has requested no-action relief from the Commission staff with respect to the operation of and offers, which are displayed on an For dollar rolls executed during the the automated trading system for government anonymous basis, and to review its afternoon session, the first leg will settle securities. Letter from Mark D. Young, Kirkland and trading activity. on T+1, and the second leg will settle Ellis, Counsel for CBB, to Richard R. Lindsey, Division Director, Commission (December 11, CBB is developing several methods on the following business day (‘‘T+2’’). 1995). The staff issued a no-action letter to CBB for market participants to access the CBB will match member trades and granting the relief requested and the Commission is CBB trading system. CBB will: (1) will submit the matched trades to CCOS issuing this order based on its belief that CBB is in provide CBOT work station terminals on a real time basis so that trade data compliance with the terms and conditions of the executed through CBB immediately no-action letter. Letter from Richard R. Lindsey, which will access the CBB trading 23 Division Director, Commission, to Mark D. Young, system and include other market flows to CCOS. CCOS will perform the Kirkland and Ellis, Counsel for CBB (December 12, information and trading systems 1995). 19 18 Quotation vendors will offer CBB trading 12 Supra note 6. available through the CBOT; (2) screens and order entry capability through their 13 The government securities listed for purchase provide an interface between CBB’s terminals which are served by national or sale through the CBB system will consist of U.S. central computer and a CBOT member’s telecommunications networks. CBB will contract on Treasury bills, notes, and bonds in their various internal computer network; and (3) a nonexclusive basis with one or more quotation maturities which are deliverable under financial vendors, each having interactive capabilities, to futures contracts traded on the CBOT. carry the CBB system for use by CBOT members. 14 Only CBOT individual members, employees of includes a financing interest amount with 20 The futures leg of the basis trade will take the individual members, and employees of CBOT settlement occurring the next day. last reported trade price from the CBOT trading member firms will be permitted to operate 17 The Board of Directors of CCOS may permit floor as the futures transaction price. The terminals. Each terminal will be uniquely identified other clearing agencies registered with the transaction ticket for the government securities leg in its communication with the central site, and each Commission or that are exempted from registration of basis trades will include the commission charges terminal operator will be assigned an identification by the Commission access to some or all of the and accrued interest. Settlement for the government number. CBB will maintain complete, time- services offered by CCOS according to terms and securities leg will occur on the next business day sequenced electronic audit trails on all orders conditions prescribed by the Board of Directors. in the same manner as outright government entered on, and all transactions executed through, Clearing agencies that are granted access to CCOS’s securities trades. the CBB trading system. The recorded activity will services pursuant to CCOS Rule 309 will not be 21 The CBB terminals will list the dollar roll indicate, for a given order or transaction, the considered participants of CCOS under the rules spreads through bid and offer financing rates identity of the terminal operator entering, changing, except as determined by the Board of Directors. reflecting the annualized interest rates paid or or cancelling orders, the time such entry or change Letter from John C. Hiatt, President and Chief received on the transactions. The transaction was effected, and the date, time, volume, security, Executive Officer, BOTCC, to Jonathan Kallman, amount or value price on the trade date will reflect and price of each transaction executed through the Associate Director, Commission (September 13, the settlement value of the first leg of the dollar roll. trading system. 1994). The settlement value is the amount of funds 15 A basis trade is a trade in which the 18 The CBB trading system is based on a required to make or take delivery of the security. participants agree to simultaneously buy or sell modification of the CBOT’s Project A trading The transaction amount for the second leg of the government securities against the offsetting system. Project A, available to CBOT members, is dollar roll will reflect the fact that the holder of the equivalent CBOT treasury futures contract. The an electronic order entry facility developed to allow overnight bond will not earn the coupon interest basis represents the price differential between a trading over a local area network (for example, during the term of the transaction. government security and the futures delivery price. within the CBOT building) of CBOT’s futures 22 Unless otherwise noted, all times stated are 16 In a dollar roll transaction, the seller of the contracts, options on futures contracts, and other Eastern Standard Time. contract delivers notes or bonds to the buyer in financial products. The Project A system is 23 CBB will create, operate, and maintain the exchange for cash. Settlement occurs the same day. designed to facilitate trading by active order computer system that enables orders to be entered At the time of execution, the seller and buyer also matching or through the posting of bids/offers on and executed. CBB has developed trade matching agree to reverse the transaction at a price that an electronic bulletin board. Continued 65078 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices

clearance and settlement functions for specific to the U.S. government net the futures-equivalent positions of transactions executed through CBB, securities market. all government securities deliverable including: delivery versus payment CCOS will calculate margin with the corresponding futures contracts processing, position consolidation, and requirements at least twice daily, with to produce a net futures-equivalent original and variation margin one calculation reflecting trading position.30 The performance bond for all calculation and processing as discussed activity occurring from the 8:00 a.m. trades generally will be collected at 7:40 below. opening to 1:30 p.m. and with another a.m. on T+1. calculation reflecting trading activity CCOS will calculate each participant’s 2. CCOS & BOTCC Cross-Margining from 1:30 p.m. to 5:00 p.m. CCOS will variation margin pay/collect amount Agreement collect margin deficiencies arising from and transmit the data to BOTCC for CCOS and BOTCC will establish a participants’ morning trading activity at margin payment or collection. Payment cross-margining arrangement whereby 4:00 p.m. on that trade date (‘‘T’’) and or collection amounts for each all CCOS members, all of which are will collect margin deficiencies arising participant will include the combined BOTCC members or CBOT members from participants’ afternoon trading variation effects of the government affiliated with a BOTCC member, will activities at 7:40 a.m. on T+1. In the securities and futures positions in the hold certain futures and government event a clearing member fails to perform participant’s cross-margined account. securities cleared by the respective its obligations to CCOS, the original Participants will pay or collect midday clearing organizations in special cross- margin will be used to cover any variation margin in same-day funds by margin accounts.24 All futures positions financial liabilities which may result 4:00 p.m. each day, through their will be held at BOTCC, and all from the failed obligation. CCOS will settlement banks. BOTCC will pay out government securities will be held at retain the authority to collect additional 80% of variation gains in excess of 27 31 CCOS. Government securities and margin at any time. original margin deficits and will futures held in the cross-margin In order to margin government collect 100% of variation losses. securities and futures positions in a accounts at the respective clearing 2. Settlement Values organization will be margined as if held parallel fashion, CCOS will convert government securities to futures At 3:00 p.m., CCOS will establish a in a single account based upon the net settlement value for government risk of the positions. To facilitate the contract equivalents prior to original 28 securities trades executed between 8:00 cross-margining arrangement, CCOS and margin determination. CCOS will convert government securities positions a.m. and 1:30 p.m. That value will be BOTCC will establish procedures based on the prices collected at 2:30 whereby CCOS and BOTCC each will to futures-equivalents based upon conversion factors established and p.m. from GovPx, a government have a security interest in the positions securities pricing vendor. CCOS will held in the cross-margin accounts to published by the CBOT for the most similar futures delivery month and the mark new positions from their secure all obligations of the clearing transaction value,32 which will be members arising in connection with most similar futures contract par amounts (i.e., face values).29 CCOS will those positions. futures, the conversion factor is a means of equating bonds with various coupons and maturity dates 27 BOTCC, as facilities manager, will perform all B. System Safeguards with the standard bond set by BOTCC. The standard margin collection/payment functions on behalf of 1. Margin Payment/Collection bond, which is equal to the corresponding future, CCOS. CCOS will collect commissions and has an 8% coupon and a conversion factor of 1. settlement payments through its agent, the Bank of For example, assume there are two bonds, Bond CCOS will adopt, as one of its New York. X and Bond Y. Bond X is the standard bond having principal safeguards, a practice of 28 In establishing the original margin for an 8% yield to maturity and conversion factor of collecting original margin and variation government securities it clears, CCOS began with 1 (Bond X is equal to the corresponding future). margin on participant obligations.25 In the premise that cross-margined government Bond Y is worth 1.5 times Bond X (Bond Y could securities and futures products have essentially the have greater coupon rates or a longer period to essence, CCOS will use the margin same market and credit risks. Therefore, CCOS will calculation and payment time frames maturity). If the future is trading at 85, then Bond use the original margin rates for futures contracts X is worth 85, and Bond Y is worth 1.5 times 85. currently used by BOTCC in connection established by the Board of Governors of BOTCC Therefore, 1.5 is the conversion factor for Bond Y. with its clearance of CBOT futures following recommendations of the BOTCC Risk In order to determine the number of futures that contracts.26 CCOS will modify BOTCC’s Management Committee. equate with Bond Y, the face amount of Bond Y is The BOTCC Risk Management Committee is margining system to address risks multiplied by the conversion factor, producing the comprised of five of the nine Governors of the futures value amount. The futures value amount is BOTCC Board of Governors. All nine Governors are then divided by 100,000 (each futures contract software for U.S. Treasury bills, notes, and bonds, owners or officers of BOTCC clearing member firms. equals $100,000) to give the number of futures including when-issued securities, basis trades, and The BOTCC Risk Management Committee meets contracts equal to the bond. dollar rolls. once a month or at the call of the BOTCC Board 30 Futures on government securities act as an 24 Because all CCOS members are also BOTCC Chairman or the Risk Management Committee index of the many bonds deliverable into them. members or CBOT members affiliated with a Chairman. The Committee bases its Treasury bonds (‘‘T-bonds’’) having at least fifteen BOTCC member, all accounts at CCOS are cross- recommendation upon review by BOTCC and CBOT years remaining to maturity are deliverable into the margin accounts. staff of the conditions of the market place, T-bond future. Ten-year Treasury notes (‘‘T-notes’’) 25 Original margin represents a performance bond including: statistical analysis of central tendencies, must have maturities between six and one-half and that both buyers and sellers must post when dispersion, and correlations between price changes ten years to be deliverable into the ten-year T-note executing trades to assure that their respective of different commodities. Additionally, the future. Five-year T-note futures accept Treasury contractual obligations will be satisfied. Variation Committee draws upon the experiences of its notes with time to maturity between four years, margin is a mark to the market payment collected members and uses their judgement to predict three months and five years, three months. Two- on a twice daily basis to account for changes in the market conditions in the near future. From this year notes having maturities between one year, nine value of the positions before the delivery process. information, the Risk Management Committee will months and two years are deliverable into the two- 26 BOTCC collects clearing member margin on a typically set margin rates that cover approximately year T-note future. portfolio, or net basis, reflecting the overall risk to the 99th percentile of absolute daily price changes 31 CCOS will withhold distribution of any the clearing corporation associated with the totality over the previous one, three, and six month periods. variation margin gains from participants with of contracts in that clearing member’s portfolio. 29 The formula for the conversion of government original margin requirement deficits. BOTCC uses a portfolio-based simulation model, securities is: 32 The transaction value provided by CBB to the Standard Portfolio Analysis (‘‘SPAN’’) system, Futures-Equivalents=Government Securities Par CCOS will include the accrued interest paid or which establishes parameters to collect original Amounts×Conversion Factor÷Futures Par Amount received on each transaction. For normal deliveries margins based on the simulated losses of clearing Since bonds being delivered into futures contract the accrued interest at the time of the transaction member portfolios under various scenarios. obligations will have greater or lesser value than the and at marking to market are the same amount, but Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices 65079 established at the execution of the trade, With respect to loss allocation, under include the potential fragmentation of to their settlement value,33 which will the cross-margining arrangement clearance and settlement facilities for reflect gains or losses in the interim between CCOS and BOTCC, all the U.S. Treasury market the concern period, and CCOS will mark open government securities positions cleared that exempting CCOS will mean positions that were previously marked by CCOS will be maintained in a cross- ineffective and unequal regulation of to the prior day’s settlement value to the margin account for which BOTCC and clearing facilities for those securities, new settlement value. CCOS have agreed to assume joint and the concern that approval of CCOS Trades executed from 1:30 p.m. responsibility in the event that a default will not promote fair competition through the 5:00 p.m. end of the day’s or failure to settle occurs and there is a among clearing agencies. CCOS filed trading session will be marked to the shortfall in that account. BOTCC and several responses to the comments.39 3:00 p.m. settlement value, and the CCOS each are guaranteeing up to 50% The Commission received two letters variation margin on the entire position of the obligations owed to each other from the Commodity Futures Trading will be calculated at the end of the day. with respect to a defaulting participant’s Commission (‘‘CFTC’’) regarding Participants will pay or collect the cross-margin account after use of the CCOS’s application.40 BOTCC, as a second variation margin obligation the original margin deposits of the futures clearing organization, is subject following morning at 7:40 a.m. CCOS participant and proceeds from the to regulation by the CFTC under the will send delivery instructions for liquidation of the participant’s Commodity Exchange Act (‘‘CEA’’); normal settlement of government positions. Therefore, CCOS will have therefore, the Commission carefully securities transactions executed on T to adequate resources to protect itself and considered the comments of the CFTC the participants’ settlement banks at to fulfill its settlement obligations for a regarding CCOS’s application. In its first 11:30 a.m. on T+1.34 loss up to at least $60 million.36 letter to the Commission,41 the CFTC noted that because of its position as the 3. Loss Allocation and Liquidity II. Comment Letters regulator of BOTCC, it would have to Sources Public comment both supported and consider and address the potential 37 CCOS will begin operations with an opposed CCOS’s application. More impact of CCOS’s activity on the initial capitalization of $2 million. than sixty commenters, including financial integrity of BOTCC and on the Together with CCOS’s earnings, BOTCC several common members of the futures market for which it clears. will commit to provide CCOS with Government Securities Clearing Specifically, the CFTC was concerned additional capital as necessary to cover Corporation (‘‘GSCC’’) and CCOS, with BOTCC’s role as a guarantor of CCOS’s continuing costs of operations. supported the proposal. More than forty CCOS’s obligations and the impact on Because CCOS will rely on BOTCC for commenters opposed the proposal, BOTCC’s financial integrity of any certain liquidity resources and because raising three basic arguments as to why minimum capitalization or other BOTCC’s capital and credit lines are the Commission should deny the requirements imposed on CCOS by the 38 committed to its futures business, exemption request. These arguments Commission.42 The CFTC also stated BOTCC has agreed to dedicate specific that any arrangements presenting cross- credit and financial resources to CCOS, agreed to by CCOS and the Division, CCOS’s jurisdictional issues between the CFTC operations will be limited to a maximum of $24 and CCOS and BOTCC have established and the Commission would require a framework for allocating losses arising billion average daily net settlements of dollar rolls. These limits represent approximately five percent approval by both agencies. This would from cross-margined accounts between or less of government securities and average daily include cross-margining programs, the the two entities. volumes in dollar rolls. The Commission believes imposition of clearing limits and/or With respect to liquidity, CCOS will these limits are appropriate at this time in that they minimum margin requirements, and establish a committed credit facility are large enough to allow CCOS to commence effective operations yet of a limited nature that futures/cash basis trades traded on the which will be guaranteed by BOTCC. allows the Commission to observe the effects of the CBB and cleared through BOTCC and The credit facility initially will be $5 CCOS clearing and settlement activities on the CCOS. The CFTC urged a cooperative million and will be increased in government securities market. 36 I.e., $30 million from CCOS’s guaranteed credit effort between itself and the increments of $5 million for each $1 facilities (repayment of which is guaranteed by Commission to avoid duplicative or billion increase in CCOS’s daily average BOTCC) plus $30 million from BOTCC under its inconsistent regulation being imposed net settlements of government securities guarantee of cross-margining losses. on the affected entities. transactions over a ninety day period. 37 Supra note 5. The CFTC’s second letter 43 responded When the credit facility reaches $30 38 Commenters raised additional issues in opposition to CCOS’s application. These issues to CCOS’s amended application in million as a result of daily average net included the concern that the introduction of CCOS which CBOT set forth its intention to settlements of government securities as another government securities clearing agency register CBB as a government securities reaching $6 billion, CCOS will review would result in an increase in costs for U.S. broker and its willingness to enter into the size of the credit facility in Treasury brokers and the concern that in the future certain linkage arrangements with 35 decisions at GSCC will be made based on the fear consultation with the Division staff. of losing potential customers to CCOS rather than GSCC. The CFTC noted that the based on the best interest of the participants. With proposal to enter into a linkage for failed deliveries, the seller will have to pay the regard to the first point, the Commission believes incremental accrued interest for each day the fail that if in fact any increase in costs results from 39 The comment letters and CCOS’s responses are continues. The daily variation margin payments granting CCOS’s exemption application, the discussed in detail in the Discussion section of this will include this incremental accrued interest. benefits to the government securities market, such order. 33 Settlement values will reflect the settlement as innovation arising from competition, will 40 price established twice a day and will include outweigh any such costs. With regard to the second Letters from Jean A. Webb, Secretary, CFTC, to accrued interest but will not include commissions point, while the Commission believes that GSCC Jonathan G. Katz, Secretary, Commission (July 23, and finance charges from dollar rolls. will continue in the future to base its decisions on 1993 and May 31, 1994). 34 Participants may transact dollar rolls (with what is in the best interest of its participants and 41 Letter from Jean A. Webb (July 23, 1993), supra same-day settlement for the first leg) between 8:00 the government securities market and not on any note 40. a.m. and 11:00 a.m. on T+1 to offset delivery fear of losing current or potential participants, 42 Ultimately, this concern was alleviated by obligations due to settle on T+1. commenters should be comforted by the fact that changing the general BOTCC guarantee to a 35 As discussed below, $6 billion is the maximum GSCC is subject to Section 19(b) of the Act which guarantee of a limited committed credit facility. average daily net settlements of transactions in requires SROs to file with the Commission any Refer to ‘‘BOTCC Guarantee’’ above. government securities agreed to by CCOS and the proposed changes to their procedures, operations, 43 Letter from Jean A. Webb (May 31, 1994), supra Division during the exemptive period. Also as or rules. note 40. 65080 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices arrangement with GSCC could have institutional investors that trade The Commission will monitor closely positive effects on the government extensively among themselves over-the- efforts in this regard and expects prompt securities market, that the CBB/CCOS counter. These market participants often action to implement linkages and cross- amended proposal could increase rely on futures markets, such as the margin systems that are acceptable to competition among market participants, CBOT, for their derivative products as a the common membership so that that the CBB electronic trading system way to transfer to traders on these appropriate linkages are in place when would provide government securities markets position and market risks warranted. If it does not appear after six market participants with easier access to related to U.S. government securities. months that the parties are able to agree market information, and that the Traders on the futures exchanges, in to establish appropriate linkage and registration of CCOS as a clearing turn, must be able to buy and sell cross-margining facilities, the agency might lower the level of risk government securities to help manage Commission will consider whether to present in the government securities their own risk and position exposures mandate the development of linkage market. While the CFTC’s comments efficiently. and cross-margining facilities. If were generally positive, it also reiterated Approval of the CCOS application necessary, the Commission will use its its regulatory interests and the need to will allow CCOS and its parent, BOTCC, authority under the Act to direct that review the potential impact of the to provide the clearance and settlement the responsible parties act in their best various arrangements on BOTCC’s services that are necessary to support interests to establish ‘‘linked or financial integrity and to assure the CBB and CBOT proposals. This in coordinated facilities for clearance and compliance with the CEA. turn should help foster greater settlement of transactions in securities The Commission recognizes the integration of clearing facilities that ** * [and] contracts of sale for future validity of the CFTC’s concerns and serve the futures market and the delivery * * *.’’ 46 understands the importance of underlying cash markets and should Approval of the application also coordinating efforts among all regulators facilitate the development of cross- should help foster innovation in concerned with the government margin facilities between those markets. clearance and settlement of government securities market. The Commission will BOTCC already has extensive securities. The CCOS proposal will continue to coordinate with these arrangements with its clearing bank provide central clearing facilities for regulatory agencies to safeguard one of network to receive and deliver dollar rolls, which represent a type of the world’s largest securities markets. government securities among its repurchase agreement transaction. III. Discussion clearing members, and its clearing CCOS’s proposal was one of the first formal responses to the A. Overview members maintain government recommendations of the 1992 Joint The Commission is granting CCOS’s securities at those banks for their proprietary and customer accounts. As Report on the Government Securities application for exemption subject to the Market,47 and the Commission believes conditions described below. The described above, CCOS plans to build that the CCOS proposal may well have Commission believes such action is on those arrangements in providing its encouraged others, including GSCC, to consistent with the Act including the services in support of CBB. Exempting develop similar or wider services. goals of fostering cooperation and CCOS from clearing agency registration coordination with persons engaged in should allow CBB to move forward with B. Section 17A of the Act its proposal and should allow CCOS and the clearance and settlement of 1. Grant of Exemption securities transactions, removing BOTCC to obtain greater experience in impediments to and perfecting the managing risk exposures before taking Section 17A(b)(1) of the Act mechanism of a national system for the on self-regulatory responsibilities that authorizes the Commission to exempt prompt and accurate clearance and would otherwise accompany clearing applicants from some or all of the settlement of securities transactions, agency registration. clearing agency requirements of Section and protecting investors and the public Because many of CCOS’s likely users 17A if the Commission finds such interest. are GSCC members and use GSCC’s exemptions are consistent with the As noted above, CCOS proposes to services to clear and settle trades among public interest, the protection of provide clearing facilities in support of themselves, a linkage among CCOS, investors, and the purposes of Section CBB’s and CBOT’s proposals. CBB’s BOTCC, and GSCC to facilitate efficient 17A including the prompt and accurate proposed automated trading system for clearance of trades is essential.44 To this clearance and settlement of securities government securities represents an end, the Boards of Directors of GSCC, transactions and the safeguarding of 48 effort to make government securities BOTCC, and CCOS have been requested securities and funds. While the more readily available to CBOT to establish a joint user committee to GSCC’s and CCOS’s systems, are not necessary for members that trade futures on settle the outstanding linkage and cross- CCOS to commence operations. government securities and thereby margining issues and to report to the 46 15 U.S.C. §§ 78q–1 (a)(2)(A)(ii) and (d)(1) improves the efficiency of arbitrage GSCC, BOTCC, and CCOS Boards the (1988). between the futures and cash markets committee’s proposal for linkage and 47 Joint Report on the Government Securities and potentially increases liquidity in cross-margining within three months of Market, issued by the Department of Treasury, the 45 Securities and Exchange Commission and the Board both of those markets. Traders in these formation of the committee. of Governors of the Federal Reserve System markets often are called upon to accept (January 1992) at 31 (recommending that an position or market risks from 44 Market Reform Act of 1990, S. Rep. 101–300 at efficient processing system for government participants in the market for 58–62. President’s Working Group on Financial securities repo activity be developed). Markets, Interim Report, Appendix D (May 1988). 48 For legislative history concerning Section 17A government securities. The market for 45 Letter from Richard R. Lindsey, Division of the Act, see, e.g., Report of Senate Comm. on U.S. Treasury bonds, bills, and notes is Director, Commission, to John G. Macfarlane III, Housing and Urban Affairs, Securities Acts the deepest, most liquid market in the Chairman of the Board, GSCC, and David Johnson, Amendments of 1975: Report to Accompany S. 249, world. While these securities are traded Chairman of the Board, BOTCC (December 12, S. Rep. No. 75, 94th Cong., 1st Sess., 4 (1975); 1995). The Commission believes it is appropriate Conference Comm. Report to Accompany S. 249, all over the world, the primary U.S. for CCOS to begin limited operations prior to the Joint Explanatory Statement of Comm. of marketplace involves a core group of implementation of such arrangements because these Conference, H.R. Rep. No. 229, 94th Cong., 1st dealers, brokers’ brokers, banks, and arrangements, while important to coordinating Sess., 102 (1975). Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices 65081

Commission has never exercised its operation require further development and positions concerning satisfaction of authority to exempt an applicant before CCOS can be considered for the general criteria (‘‘Standards entirely from the requirements of registration under Section 17A of the Release’’).53 Section 17A, it has granted newly Act. The Commission believes that These statutory standards are registered clearing agencies narrowly granting CCOS an exemption from designed to assure the safety and drawn, temporary exemptions from registration subject to the regulatory soundness of the clearance and specific statutory requirements imposed requirements and Commission oversight settlement system. As previously stated, by Section 17A in a manner that on CCOS during the exemptive period the Commission, in granting CCOS’s achieves those statutory goals.49 should allow CCOS to further develop exemption is requiring CCOS to meet in The market break in October 1987 and its system for clearing and settling substantial form these same statutory the markets’ decline in October 1989 government securities in a safe and standards and is satisfied that CCOS’s demonstrated the central role of clearing sound manner before its seeks full operation will not be a threat to the agencies in U.S. securities markets in registration as a clearing agency. In safety or soundness of the national reducing risk, improving efficiency, and granting CCOS an exemption from market system. Furthermore, the fostering investor confidence in the clearing agency registration, the Commission will continue to monitor markets.50 In light of the foregoing, the Commission believes that such an CCOS’s operations to assure its Commission believes it is appropriate exemption is consistent with the soundness in the clearance and for applicants requesting exemption requirements of Section 17A and that settlement of government securities. from clearing agency registration to the framework of the exemption is such a. Safeguarding of Securities and Funds meet standards substantially similar to that the Commission retains adequate those required of registrants in order to regulatory power and oversight to Sections 17A(b)(3) (A) and (F) of the assure that the fundamental goals of ensure that CCOS’s services do not pose Act require a clearing agency be Section 17A (i.e., safe and sound a threat to the stability of the organized and its rules designed to clearance and settlement) will be government securities markets. facilitate the prompt and accurate achieved. The Commission is imposing clearance and settlement of securities Because the Commission believes that significant limits on CCOS as set forth transactions for which it is responsible CBB and CCOS will promote innovation below.52 Should CCOS determine that a and to safeguard securities and funds in in the trading and clearing of change in its operations or procedures is its custody or control or for which it is 54 government securities and will further necessary, CCOS will be required responsible. The Commission believes the integration of the futures and pursuant to this exemptive order to that CCOS meets these standards. government securities markets, it is amend its CA–1 and request that the Among other things, CCOS will maintain appropriate audit and internal approving CCOS’s application for Commission modify the exemptive 55 exemption in order that CCOS may order. The Commission’s oversight of controls and will make available begin limited operations without CCOS, in conjunction with the CFTC’s 53 Securities Exchange Act Release Nos. 16900 meeting the entire panoply of clearing oversight responsibilities of BOTCC, (June 17, 1980), 45 FR 41920 (announcement of agency registration requirements.51 should help nurture the establishment standards for the registration of clearing agencies) Although, as described below, CCOS is of safety mechanisms, such as cross- and 20221 (September 23, 1983), 48 FR 45167 being held to substantially the same margining, that further the goals of (omnibus order granting full registration as clearing agencies to The Depository Trust Company, Stock standards as other registered clearing competition and integration in the Clearing Corporation of Philadelphia, Midwest agencies, certain areas of CCOS’s government securities and futures Securities Trust Company, The Options Clearing markets. Furthermore, as competition Corporation, Midwest Clearing Corporation, Pacific Securities Depository, National Securities Clearing 49 E.g., in the Commission’s order approving leads to innovation and progress, the Corporation, and Philadelphia Depository Trust GSCC’s temporary registration as a clearing agency, Commission believes CCOS’s entry into Company). the Commission temporarily exempted GSCC from Refer also to Section 19 of the Act, 15 U.S.C. 78s compliance with the statutory standards of Sections the clearance and settlement of (1988), and Rule 19b–4, 17 CFR 240.19b–4 (1992), 17A(b)(3)(B) and 17A(b)(4)(B) of the Act regarding government securities should be a setting forth certain procedural requirements for a clearing agency’s rules designating classes of positive step towards the continued registration and continuing Commission oversight participants and the standards used by the clearing development of the world’s largest of clearing agencies and other self-regulatory agency to determine participation. The Commission government securities market. organizations. also exempted GSCC from Section 17A(b)(3)(C) 54 15 U.S.C. 78q–1(b)(3) (A) and (F) (1988). regarding fair representation of clearing agency 2. Registration Standards In addition to BOTCC’s responsibilities as participants in the selection of its directors. facilities manager, CCOS must assure itself that Securities Exchange Act Release No. 25740 (May Before granting registration to a BOTCC complies with all of the safeguards, as 24, 1988), 53 FR 19839. clearing agency, Section 17A of the Act appropriate, set forth in the section of the Standards 50 Gerald Corrigan, President of the Federal requires that the Commission make a Release regarding the safeguarding of securities and Reserve Bank of New York (‘‘FRBNY’’), noted: number of determinations with respect funds and prompt and accurate clearance and ‘‘[T]he greatest threat to the stability of the financial settlement of securities transactions; and that these system as a whole [during the 1987 market break] to the clearing agency’s organization, operations will be subject to examination by was the danger of a major default in one of these capacity, and rules. Paragraphs (A) CCOS’s independent public accountant, the clearing and settlement systems.’’ Luncheon through (F) of Section 17A(b)(3) set Commission and the appropriate regulatory agency Address: Perspectives on Payment System Risk to the same extent as in the case of a clearing Reduction by E. Gerald Corrigan, President, FRBNY, forth general criteria which a clearing agency which carries out its own processing. reprinted in The U.S. Payment System: Efficiency, agency must satisfy in order to be Standards Release, supra note 53. Risk and the Role of the Federal Reserve 129–30 registered. Congress reserved to the 55 Clearing agencies should have an audit (1990). Commission the task of making specific committee which selects or makes 51 Section 17A, as amended by the Market Reform determinations as to whether an recommendations to the Board of Directors of the Act, directs the Commission to use its authority to clearing agency regarding the selection of the facilitate the establishment of linked or coordinated applicant’s organization, capacity, and clearing agency’s public accountant. CCOS Rule 213 facilities for clearance and settlement of rules satisfy the general criteria. In requires the establishment of an audit committee transactions in securities, securities options, Securities Exchange Act Release No. consisting of at least three nonmanagement contracts of sale for future delivery and options directors of CCOS. The committee will, among thereon, and commodity options. [Market Reform 16900, the Division set forth its views other things, make recommendations to the Board Act of 1990, § 5, amending § 17A(a)(2) of the of Directors regarding the selection of CCOS’s Securities Exchange Act of 1934, 15 U.S.C. 78q–1 52 The limits are described in Section III., Part D., independent public accountants. (1990)]. Conditions. Continued 65082 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices reports to participants concerning its safeguards.59 The Commission is the CCOS Board through the CCOS internal accounting controls.56 In satisfied that CCOS’s organizational and Participant’s Advisory Committee, this addition, CCOS has developed several processing capacity meets the committee is only advisory in nature procedures to safeguard securities and requirements of the Act, explained in and its advice or recommendations is funds; prevent loss or destruction of the Standards Release, by providing a not binding on CCOS.61 securities, funds, or data; and to recover necessary flow of information to its The Commission believes that neither from losses that do occur.57 Board of Directors which will allow it the method in which CCOS’s directors to oversee management’s performance are selected nor the method for i. Organization and Processing Capacity and to assure the operational capability participant input meets the A clearing agency should be and integrity of CCOS. requirements of fair representation organized in a manner that effectively under Section 17A(b)(3)(C) of the Act establishes operational and audit ii. Financial Reports but that the request for an exemption is controls while fostering director Participants that have made clearing appropriate in this context, as it was in independence.58 As in the example set fund contributions or have money or the context of Delta Government forth in the Standards Release, CCOS securities in a clearing agency’s system Options Corp. CCOS expects that if its meets these standards by keeping its should receive timely, audited annual clearing volumes grow, it will file with Board of Directors informed of its financial statements. CCOS meets the the Commission for full registration as operations and the impact that new or requirements regarding financial a clearing agency. At that time, the expanded services or volume increases reports, and the distribution of financial Commission will reevaluate whether would have on its processing capacity. statements will enable CCOS’s Board of CCOS’s methods for assuring CCOS also will keep its Board of Directors and participants to remain participants representation in the Directors informed by reporting on apprised of the clearing agency’s selection of its Board of Directors and in periodic risk assessments of CCOS’s financial condition and the adequacy the administration of its affairs is operations, automated data processing and accuracy of its records.60 By making consistent with the Act. If in its systems, and facilities and by the financial statements available, CCOS reevaluation the Commission believes supervising the establishment, is assisting the Commission and other that because of changed circumstances maintenance and updating of appropriate regulatory agencies in the an exemption that does not comport discharge of their regulatory with the fair representation requirement CCOS proposes to employ outside independent responsibilities by facilitating access to is no longer justified, the Commission auditors rather than establish an internal audit important information that is necessary will modify the conditions or terminate department for CCOS. The outside independent in evaluating the safety and soundness CCOS’s clearing agency exemption.62 auditors will perform those duties typically of clearing agencies. performed by an internal audit department and will c. Financial Risk Management report to the audit committee, and conduct audit b. Fair Representation Commenters expressed concern about reviews as requested by the audit committee, but not less than once per fiscal year. The Commission Section 17A(b)(3)(C) of the Act the financial resources available to believes that CCOS’s method of establishing an requires that the rules of a clearing CCOS in the event of liquidity audit committee and its use of outside independent agency provide for fair representation of problems. Because CCOS will rely on auditors meets the requirements of the Act. BOTCC for certain liquidity resources Although the Standards Release recommends the the clearing agency’s shareholders or use of an internal audit department, the members and participants in the and because BOTCC’s capital and credit Commission has on previous occasions found the selection of the clearing agency’s lines are committed to its futures use of outside auditors acceptable and falling directors and administration of the business, commenters expressed within the requirements of the Act. See Securities concern that a shortfall could occur if a Exchange Act Release No. 27611 (January 12, 1990), clearing agency’s affairs. This section 55 FR 1890 (order granting Delta Government contemplates that users of a clearing member common to BOTCC and CCOS Options Corp. temporary registration as a clearing agency have a significant voice in the were to fail. In response, BOTCC has agency). direction of the affairs of the clearing agreed to dedicate specific credit and 56 The Standards Release noted that the objectives agency. financial resources to CCOS, and CCOS of internal accounting control are presumed to be and BOTCC have established a a fundamental aspect of management’s CCOS is a privately owned for profit responsibilities. CCOS proposes to direct its corporation run for the benefit of its sole framework for allocating losses between independent public accountants to prepare an shareholder, BOTCC. Therefore, the the two entities. As a condition to its annual report on CCOS’s system of internal exemption, CCOS has agreed to evaluate accounting controls, and present the report to the Board of Directors of CCOS will be CCOS Board of Directors. CCOS’s proposal to use selected from members of the Board of 61 As provided in CCOS Rule 501, the independent public accountants to produce an Governors of BOTCC, and the officers of Participant’s Advisory Committee will be annual report on its system of internal accounting CCOS will be elected by the Board of comprised of three to ten participants who may controls meets the requirements of the Act with advise CCOS on matters pertaining to the operation regard to the security and accuracy requirements Directors. While CCOS participants will have the opportunity to provide input to of CCOS. The purpose of the Participant’s Advisory under Section 17A(b)(3) (A) and (F) because it aids Committee is to provide representation to in assessing the safety and integrity of the clearing participants on matters which are of concern to agency operations and promotes confidence and 59 For a detailed description of the Commission’s them. In addition, participants will have prior increased participation in the national clearance policy on self-regulatory organization systems notice of changes to rules that may affect their and settlement system. reviews, refer to Securities Exchange Act Release rights, obligations, or clearing requirements. CCOS 57 CCOS proposes three levels of safeguards to No. 29185 (May 9, 1991), 56 FR 22490 [File No. S7– will accept comments from participants with prevent or minimize interruption of service as a 12–91] (release setting forth the Commission’s respect to any such changes; however, the result of hardware, systems software, or second automation review policy statement [‘‘ARP Participant’s Advisory Committee serves only in an applications software failures. The first level advisory capacity and any advice or II’’]). addresses procedural practices within CCOS to recommendation of the Committee is not binding 60 CCOS Rule 214 states that within 60 days after control migration of changes in application systems on CCOS. to the production environment and the the end of each of the Corporation’s fiscal years, 62 Because CCOS is being granted full exemption implementation of new systems. The second and CCOS shall deliver to each participant from registration as a clearing agency, a specific third levels address interruptions in service due to unconsolidated audited financial statements for the exemption is not being issued with regard to fair equipment and systems software failures at fiscal year then ended covered by a report prepared representation. Rather, the exemption from these different levels of severity, i.e. short and long term by CCOS’s independent public accountants. CCOS requirements is included within the grant of a interruptions. Rule 214 also states that upon request by any complete exemption from registration as a clearing 58 Standards Release, supra note 53. participant, CCOS shall deliver unconsolidated, agency. unaudited quarterly financial statements. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices 65083

its capital and liquidity resources that CCOS’s membership in both of orderly transaction of business with periodically, and BOTCC has agreed to these information sharing systems CCOS or other participants. In addition, supplement, in consultation with the should permit CCOS and other clearing CCOS Rule 302 requires participants in Commission and the CFTC, CCOS’s organizations to be more aware of CCOS to meet initial and continuing liquid resources as necessary to meet common member risks and to financial and operational standards as prudential standards. implement effective crisis management determined by the CCOS Board of In addition to its financial resources, procedures if needed. Directors and administered by CCOS CCOS has facilities to identify its The Commission believes that CCOS’s management.67 Participation in CCOS potential financial exposure from its rules and procedures are adequately will be open to members of BOTCC and participants and to collect margin designed to protect CCOS and its members of the CBOT that are affiliated deposits or other collateral adequate to participants against financial losses with members of BOTCC.68 The Board address that exposure. As discussed associated with its services. CCOS’s of Directors also may approve access by above, CCOS in conjunction with financial risk management initiatives, other clearing agencies that are BOTCC will calculate margin including its initial capitalization, its regulated by the Commission or are requirements and collect margin twice daily margin collection,65 and its excepted from regulation by the deposits from its participants for open committed credit facility, are aimed at Commission.69 positions. CCOS will obtain information preventing financial loss by participants from its participants regarding their and CCOS.66 As a result, the 67 CCOS will monitor each participant’s financial financial condition and will have the Commission believes that CCOS’s rules condition as measured by its financial stability, the authority to collect additional margin or level and quality of its earnings, and other generally and procedures and the methods by accepted measures of liquidity, capital adequacy, collateral if it deems it appropriate. which CCOS proposes to safeguard the and profitability. CCOS and BOTCC also will cooperate in financial security of its clearing 68 BOTCC’s by-laws require BOTCC members to sharing risk management information, to facilities adequately satisfies the be CBOT members, approved by the CBOT board the extent possible, with securities and of directors for BOTCC membership. In addition, requirements of the Act. the BOTCC board of directors sets, from time to futures clearing organizations where time, BOTCC membership requirements, including, CCOS and BOTCC members also are d. Participation standards but not limited to, financial and operational members. Section 17A(b)(3)(B) of the Act requirements, continuing compliance with CBOT The Commission believes that enumerates certain categories of persons and BOTCC rules, financial and other reporting, entering into additional information and such other factors as the BOTCC board may that a clearing agency’s rules must consider necessary or appropriate in assessing an sharing agreements is an area in which authorize as potentially eligible for applicant’s suitability for participation in BOTCC. CCOS should explore in order to help access to clearing agency membership BOTCC also has the authority to require additional ensure the safety and soundness of the and services. Section 17A(b)(4)(B) of the capital on a discretionary basis and parental clearance and settlement system and to Act contemplates that a registered guarantees on member proprietary positions. See, promote financial risk management. The e.g., BOTCC By-Law 401. clearing agency have financial BOTCC’s minimum financial requirements for Commission recommends that CCOS responsibility, operational capability, BOTCC corporate futures commission merchants become a part of the information sharing experience, and competency standards (‘‘FCM’’) include the greater of a specified amount system established between all of the that are used to accept, deny, or of capital or a percentage of funds required to be 63 segregated and secured pursuant to the commodities clearing houses. In condition participation of any Commodities Exchange Act, 7 U.S.C. §§ 1, et seq. addition, the Commission encourages participant or any category of (1988), combined with non-customer margin CCOS to pursue obtaining membership participants enumerated in Section requirements for proprietary trading. Once in the Securities Clearing Group 17A(b)(3)(B). The Commission believes admitted, a clearing member may operate below the 64 initial minimum, but must maintain a specific (‘‘SCG’’). The Commission believes that an exempt clearing agency should minimum amount of capital with no formal action impose the same standards. In addition, taken (Level I). When the clearing member’s initial 63 Since 1980, the Chicago Mercantile Exchange the Act recognizes that a clearing agency minimum falls below the Level I minimum, but (‘‘CME’’) and BOTCC have been sharing original remains above the Level II minimum, the clearing margin and pay/collect information. In 1987, an may discriminate among persons in the member is subject to detailed financial analysis information sharing agreement was executed admission to or the use of the clearing with a written report provided to senior between all U.S. commodity clearing houses. The agency if such discrimination is based management recommending no action or a change Options Clearing Corporation (‘‘OCC’’) became a on standards of financial responsibility, in status to Level III. At Level III the clearing party to this information sharing agreement in 1993. member must maintain a minimum amount of Letter from Dennis Dutterer, Executive Vice operational capability, experience and capital and is immediately subject to 125% of President and General Counsel/Secretary, BOTCC, competence. normal margin requirements and provision of pro to Margaret R. Blake, Attorney, Division of Market CCOS Rule 301 requires each member forma weekly capital computations for one month. Regulation, Commission (May 5, 1995). Pursuant to to maintain personnel and facilities If the capital ratios do not meet Level I standards the information sharing agreement, each commodity by the next month, the clearing member will be clearing house and the OCC send its margin adequate to ensure the expeditious and moved to Level IV status. The Risk Management requirements and daily cash flow information to Committee is notified when the firm is subject to BOTCC every night. The following morning, 65 Supra note 28. The Commission believes that Level III requirements. When the clearing member BOTCC sends the information back to the clearing the method by which CCOS converts government falls below the Level III minimum they will be houses so they can compare the margin account securities to futures equivalents in its margin immediately subject to 150% of normal margin excesses, deficits, and cash flows. calculations is a prudent risk management measure. requirements. A formal report will be prepared for 64 The SCG was established in 1989 as a result of 66 As discussed above, CCOS will begin the Risk Management Committee outlining the developments surrounding the October 1987 Market operations with an initial capitalization of $2 problem with a recommendation for appropriate Break and subsequent studies on the causes of the million and BOTCC’s commitment to provide action which may include a further increase in Market Break. The stated purpose of the SCG is to additional capital as necessary to cover CCOS’s margin requirements, restrictions on business increase cooperation and coordination among continuing costs of operations. CCOS will calculate activities or suspension or termination of clearing securities clearing entities and to facilitate the margin requirements at least twice daily and will privileges. Letter from Dennis A. Dutterer, General sharing of certain clearance and settlement collect margin deficiencies from participants on T Counsel, BOTCC, to Margaret R. Blake, Attorney, information regarding surveillance and member risk and on T+1 while retaining the authority to collect Division of Market Regulation, Commission (May 1, monitoring. While SCG membership is limited to additional margin at any time. CCOS will establish 1995). registered clearing agencies, the Commission a committed credit facility guaranteed by BOTCC. 69 Clearing agencies that are granted access to encourages SCG to review its membership The credit facility initially will be $5 million and CCOS’s services are not considered participants of standards and consider whether certain clearing will be increased in increments of $5 million for CCOS for the purposes of CCOS’s Rules except to agencies with conditional registration exemptions each $1 billion increase in CCOS’s daily average net the extent determined by the Board of Directors. should be eligible for membership. settlements over a 90 day period. Continued 65084 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices

The Commission believes that Although commenters fear The approach to one-account temporarily exempting CCOS from fragmentation in the clearance and processing for the clearance and Sections 17A(b)(3)(B) and 17A(b)(4)(B) settlement of government securities, the settlement of government securities of the Act is appropriate. CCOS rules do clearance and settlement of government transactions advocated by GSCC, where not meet the requirements of Section securities transactions already is subject one clearing agency compares, nets, and 17A(b)(3)(B) of the Act with regard to to diverse clearing arrangements. While settles all trades in government participants because CCOS rules do not GSCC is the only registered clearing securities, is not the approach taken by provide for membership by all of the agency providing clearance and the Commission when establishing the enumerated categories of persons. In settlement services in the government National System for clearance and addition, CCOS rules do not specify securities market, it is not the sole settlement. The Commission believes applicant and member financial government securities clearing facility. that rather than mandate centralized standards as contemplated in Section Banks currently clear and settle clearance and settlement in the 17A(b)(4)(B) of the Act.70 Financial and substantial amounts of government government securities market, it should operational membership standards securities transfers among themselves encourage the coordination of any depend on factors that CCOS will through the Federal Reserve System’s competing systems through develop based on the scope of CCOS’s book-entry wire system without any economically efficient linkages that operations. CCOS’s Board of Directors involvement by GSCC. Furthermore, ultimately will foster both competition will review these factors from time to BOTCC provides clearance and and investor confidence. For these time and establish membership settlement services for futures and reasons, the Commission, as a part of its standards based on its findings. options on government securities granting CCOS an exemption from Presently, however, the participant including the physical delivery of clearing agency registration, is urging standards have not been determined as government securities to satisfy futures CCOS, BOTCC, and GSCC to develop required by the Act, and an exemption delivery obligations. settlement interface and cross-margining from participation requirements is Section 17A(a)(2) of the Act directs programs.75 appropriate. the Commission, having due regard for the maintenance of fair competition 2. Illusory Regulatory Oversight C. Comments and the Commission’s among clearing agencies, to facilitate the As stated above, BOTCC will be the Responses establishment of linked or coordinated sole shareholder and will act as the 1. Fragmentation of the Clearance and facilities for clearance and settlement of facilities manager for the CCOS Settlement of Government Securities transactions in securities, securities operations. Because of the relationship between CCOS and BOTCC, some Some commenters believe that options, contracts of sale for future commenters expressed concern that the approval of CCOS’s exemption delivery and options thereon, and 72 Commission would be unable to oversee application will result in fragmentation commodity options. Moreover, the appropriately the operations of CCOS. of the clearance and settlement of requirement in Section 17A(b)(3)(B)(ii) Furthermore, these commenters stated government securities and will preclude that clearing agencies admit other that the Commission’s regulatory one account settlement. These clearing agencies as participants appears authority over CCOS would be illusory commenters believe allowing CCOS to to indicate that Congress, and the because CCOS would be controlled and settle government securities trades in a Commission which worked with operated by BOTCC. These commenters manner not effectively integrated with Congress in developing the 1975 73 stated that CCOS is merely a shell for the existing registered clearing Amendments, contemplated a national BOTCC and that approval of CCOS’s corporation process would be system for the clearance and settlement application will allow BOTCC to deleterious to the systemic risk of securities transactions in which there provide clearance and settlement management currently provided by could be multiple clearing agencies services for government securities. GSCC by causing lowered overall serving a securities market. Where more than one clearing agency Finally, several commenters noted their netting capability, incomplete for a market exists, the Commission concern with and objection to CCOS management of the risk exposure believes that the linking of these performing the services of a registered presented by individual firms, and clearing agencies, such as the clearing agency without the federal impairment of crisis management. The oversight imposed upon all other commenters argue that government envisioned linkage of CCOS, BOTCC, registered clearing agencies. These securities transactions will operate in and GSCC, promotes competition and commenters argued that for the safety the safest and most efficient manner if innovation while still allowing for one- and soundness of the national clearance participants have all of their account settlement. The Commission and settlement system, CCOS should be government securities trades netted, believes that one-account settlement can subject to the same standards and margined, and settled through one be achieved in a multiple-clearing requirements as all other registered central facility (‘‘one account agency environment through the use of clearing agencies. settlement’’).71 interclearing agency links and interfaces.74 Under the proposal, CCOS will share office space and staff with BOTCC, and Following Commission approval of its application and upon receipt of a bona fide request for access, other parties to the trades and regardless of the BOTCC will perform all margin CCOS will prepare and submit to the Commission markets in which the trades were executed. calculations and collection and payment for review, rules providing broader access to CCOS 72 Standards Release, supra note 53. services for persons other than those currently 73 Securities Acts Amendments of 1975, Pub. L. clearing corporation if the broker-dealer chose to do envisioned by the CCOS Rules, consistent with the No. 94–29 § 17A(a), 89 Stat. 97. so.’’ Later in that same release the Commission requirements of Section 17A of the Act. 74 In the Commission release addressing stated, ‘‘The development and expansion of 70 CCOS Rule 302 and Rule 309 anticipate the conditions for the National Securities Clearing interfaces during the past year, particularly the determination of participant financial standards by Corporation’s (‘‘NSCC’’) approval as a clearing establishment of regional interfaces for the the Board of Directors. At this time, however, the agency, the Commission stated that ‘‘even though processing of over-the-counter transactions, has standards remain undefined. a broker-dealer would be able to achieve one made one-account processing almost universally 71 One-account settlement enables a market account processing through any one of the clearing available.’’ Securities Exchange Act Release No. participant to settle all of its trades through one corporation components of the National System, a 12954 (November 3, 1976), 41 FR 49722. clearing agency regardless of the location of the broker-dealer would be able to use more than one 75 Supra note 45. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices 65085 functions for CCOS. Sharing office space exemption the Commission is requiring members that participate in cross- and staff among clearing agencies and CCOS to meet basically the same margining programs have lower margin contracting out certain clearing agency standards as those registered clearing requirements which help clearing functions is not unusual.76 agencies must meet, and believes that members manage their cash flows by The standards established for CCOS has set forth a plan to enable it increasing available cash to be used for registration of a clearing agency that to meet those standards.80 CCOS other purposes. In times of market stress hires a facility manager to perform data recognizes that it must comply with the and high volatility, lower margin or other processing functions requires regulatory standards governing the requirements could prove crucial in the clearing agency to maintain operations of clearing agencies in a maintaining the liquidity of clearing appropriate procedures to insure the manner consistent with its operational members and thus could enhance prompt and accurate clearance and structure and with the specific services liquidity in the market as a whole. By settlement of securities transactions.77 it will offer. CCOS has represented that enhancing market liquidity, cross- The clearing agency also should assure it intends to comply fully with all margining arrangements remove itself that the facilities manager relevant regulatory requirements impediments to and help perfect the complies with all of the appropriate applicable to other clearing agencies.81 mechanism of a national system for the safeguards set forth in the Standards prompt and accurate clearance and 3. Fair Competition Release. The Standards Release also settlement of securities transactions.85 requires any such clearing agency to Some commenters believe that the Because CCOS and BOTCC have assure itself that its facility manager will approval of CCOS’s application will not proposed a cross-margining plan cooperate fully with clearing agency promote fair competition among between themselves, the Commission auditors, Commission examiners, clearing agencies as contemplated by has encouraged CCOS, BOTCC, and independent public accountants, and Section 17A of the Act because CCOS GSCC to create and implement a cross- any other appropriate regulatory agency will have exclusive access to cross- margin arrangement so that fair to the same extent as a clearing agency margining with BOTCC with respect to competition in the clearing of which conducts its own processing government securities. The Commission government securities will exist. The functions. recognizes that to promote competition Commission believes that competition The Commission’s experience with among clearing agencies, the benefits of among clearing agencies should not be facilities management arrangements is CCOS’s operations (e.g., greater access based on margin levels but should be that the Commission can carry out its to the government securities market by based on technology, services, or clearing agency oversight persons other than primary dealers, the product types offered by the competing responsibilities through its jurisdiction development of improved systems clearing agencies. Therefore, the over the clearing agencies. Facilities capabilities and new services, and Commission views the implementation managers cannot, for example, perhaps lower prices to participants) of a cross-margining arrangement among unilaterally make systems changes that must not ‘‘impose any burden on CCOS, BOTCC, and GSCC as vital to the would alter the rules of the clearing competition not necessary or satisfaction of the statutory goals of agency or the rights and obligations of appropriate in furtherance of the Section 17A of the Act. Towards this clearing agency participants without purposes’’ of the federal securities end, CCOS, BOTCC, and GSCC have having those changes filed by the laws.82 entered into negotiations regarding clearing agency with the Commission.78 Since approval of the first cross- cross-margining and linkage agreements. To the extent that the Commission margining program in 1988,83 the However, because such an agreement needs access to a facilities manager’s Commission repeatedly has found that has not yet been finalized, the premises or personnel, the Commission cross-margining programs are consistent Commission believes it is appropriate to expects and has found clearing agencies with clearing agency responsibilities allow CCOS to begin operations with and their facilities managers to be under Section 17A of the Act. As the certain limits in place prior to the cooperative with Commission staff.79 Commission has previously noted, implementation of cross-margining and Regarding commenters’ concerns cross-margining programs, among other linkage agreements.86 things, tend to enhance clearing member about the need for uniform federal D. Conditions oversight, in granting its application for and systemic liquidity both in times of normal trading and in times of stress.84 This Order exempts CCOS from 76 In 1988, GSCC began operations with a Under routine trading, clearing registration as a clearing agency under facilities management agreement with NSCC Section 17A of the Act subject to certain whereby NSCC provides GSCC with the necessary 80 Id. conditions which the Commission administrative and technical services. GSCC 81 Letters from John C. Hiatt, President and Chief believes are appropriate for an entity continues to share staff and office space with its Executive Officer, BOTCC, to Jonathan G. Katz, operating under an exemptive affiliates, NSCC and International Securities Secretary, Commission (May 23 and June 22, 1994). Clearing Corporation. In fact, NSCC and GSCC do 82 15 U.S.C. 78q–1(b)(3)(I) (1988). framework. As explained in detail not operate their own clearance and settlement 83 Securities Exchange Act Release No. 26153 below, these conditions include: systems; instead, they contract that function out to (October 3, 1988), 53 FR 39567 (approving the Securities Industry Automation Corporation. nonproprietary cross-margining program between 85 77 Shortly after the 1987 market break, then Standards Release, supra note 53. OCC and ICC). Treasury Secretary Nicholas F. Brady referred to the 78 As discussed below, because CCOS will operate 84 E.g., Securities Exchange Act Release Nos. clearance and settlement system as the weakest link under an exemption from registration as a clearing 30413 (February 26, 1992), 57 FR 7830 (order in the nation’s financial system and noted that agency, it will not file rule changes under the approving OCC/Kansas City Board of Trade improvements to the clearance and settlement Section 19(b) process. Rather, CCOS will have to Clearing Corporation cross-margining program for system, such as those provided by cross-margining file amendments to its Form CA–1 exemption proprietary positions); 29991 (November 26, 1991), arrangements, would ‘‘help ensure that a securities application and request modification of its 56 FR 61458 (order approving expansion of OCC/ market failure does not become a credit market exemptive order to change its rules or procedures. CME cross-margining program to include positions failure.’’ The Market Reform Act of 1989: Joint 79 The Commission generally has not required held for market professionals); 29888 (October 31, Hearings on S. 648 before the Subcomm. on that facilities management contracts specifically 1991), 56 FR 56680 (order approving OCC/BOTCC Securities and the Senate Comm. on Banking, grant the Commission unlimited access to a cross-margining program for proprietary positions); Housing and Urban Affairs, 101st Cong., 1st Sess. facilities manager’s premises. If in the future the 27296 (September 26, 1989), 54 FR 41195 (order 225 (Oct. 26, 1989) (statement of Nicholas F. Brady, Commission perceives a need for express authority approving OCC/CME cross-margining program for Secretary of the Treasury). for such access, it will revisit the issue at that time. proprietary positions). 86 Supra note 45. 65086 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices

1. Establishment of acceptable linkage and CCOS’s request or by its own initiative, or systems is an appropriate method by cross-margining agreements between CCOS, the Commission may review whether which the Commission can exercise its BOTCC, and GSCC; the current volume limitations should regulatory responsibilities with regard 2. The Commission’s access to CCOS and be modified or removed. Such review related BOTCC facilities and records in order to CCOS. may be conducted even if the linkage to inspect CCOS’s operations and to insure 4. Notice of Defaults CCOS’s compliance with the federal and cross-margining agreements among securities laws and this Order; CCOS, BOTCC, and GSCC have not been CCOS will be required to notify the 3. The requirement that all proposed finalized. Commission of any defaults by material changes to CCOS’s rules, operations, participants so that the Commission can 2. Inspection and systems be submitted as proposed monitor the situation and determine if amendments to its Form CA–1; As noted above, pursuant to this all appropriate methods of recovery are 4. The requirement that CCOS notify the Order the Commission has the authority being utilized. Failure by a participant Commission of participant defaults; to inspect at any time the operations of 5. The establishment of sound automation or user could create or exacerbate review programs including system change CCOS in order to insure its compliance systemic risks. Prompt notification notification procedures and system outage with its obligations to safeguard should help facilitate cooperation and notification procedures; and securities and funds and to provide coordination among regulators and 6. Until the establishment of acceptable prompt and accurate clearance and market participants. linkage and cross-margining agreements settlement of securities transactions. As between CCOS, BOTCC, and GSCC, the facilities manager for CCOS, BOTCC’s 5. Automation Review requirement that CCOS limit its activity to no facilities and operations as they pertain CCOS also will be required to more than $3 billion net daily settlement for to CCOS are also subject to inspection government securities and $12 billion for establish a sound automation review dollar rolls. by the Commission in order that the program based upon the Commission’s Commission may assure itself that second automation review policy 1. Linkage and Cross-Margining BOTCC’s operations with regard to statement (‘‘ARP II’’).92 The automation Throughout this Order, the CCOS are in compliance with the safety review program should include Commission has emphasized the and soundness requirements set forth in appropriate planning processes (i.e., importance of linkage and cross- the Act. The Commission expects to contingency planning and security margining agreements between CCOS, coordinate any inspections of BOTCC assessment), independent reviews by BOTCC, and GSCC. While the with the CFTC. CCOS of its systems, notification to the Commission recognizes that such 3. Rule Changes Commission of significant systems agreements will entail substantial 90 changes, and procedures for timely negotiations among the parties, the Under Section 19(b)(1) of the Act, a notification of significant system registered clearing agency as a self- Commission also recognizes the outages. The Commission believes the regulatory organization must file importance of allowing CCOS to begin automation review program is essential proposed rule changes with the operations without further delay.87 for the safety and soundness of CCOS’s Commission for approval. The Therefore, the Commission is approving operations and the national market Commission uses the rule filing process CCOS’s application for exemption and system because it will require, among as a method to monitor and regulate the will allow CCOS to commence operating other things, CCOS to evaluate regularly operations of clearing agencies. Because with a volume cap of $3 billion net its processes related to the capacity and CCOS is not a registered clearing daily settlement for government vulnerabilities of its automated systems. securities and $12 billion for dollar agency, amendments to its rules need rolls.88 During CCOS’s initial period of not be made through use of the Section 6. Limits on Activity operation, the Commission anticipates 19(b) process. As a condition to this The Commission believes that until that CCOS, BOTCC, and GSCC will Order, however, should CCOS desire to acceptable linkage and cross-margining finalize linkage and cross-margining amend its rules, it must submit plans are in place, CCOS’s clearing agreements pursuant to the proposed amendments to its Form CA– 91 activity should be limited to one half of Commission’s recommendations at 1 for Commission review. The the maximum daily net settlement which time CCOS will be permitted to Commission believes that this method amounts agreed to by CCOS and the proceed to its exemptive limits of $6 of notifying the Commission of Division. These limit amounts are no billion and $24 billion.89 Either upon proposed changes at CCOS will allow more than $3 billion in net daily the Commission to conduct a thorough settlement for government securities, 87 As noted, a joint user committee established by examination of each proposed change and $12 billion for dollar rolls. Once the the Boards of Directors of GSCC, BOTCC, and CCOS and its potential effects on CCOS and will provide to the respective Boards within three linkage and cross-margining plans are in the clearance and settlement of place, CCOS’s activity may proceed to months of formation of the committee a report of government securities. Submission by its analysis and proposed resolutions to the the full amounts agreed to in this Order. outstanding linkage and cross-margining issues. CCOS of a proposed amendment to its The Commission reserves the right to The Commission expects prompt action with regard Form CA–1 each time it proposes to modify by order the terms, scope, or to the establishment of linkage and cross-margining make a change in its rules, operations, facilities, and if necessary, the Commission will use conditions of CCOS’s exemption from its authority under the Act to direct that such registration as a clearing agency, facilities be established. Supra notes 45–46 and during the exemptive period. In addition, limits on accompanying text. CCOS’s clearing capacity must be considered in including such terms, scope, or 88 These amounts are half of the maximum daily light of the limits to be placed on CBB as a condition that the Commission may net settlement amounts agreed to by CCOS and the government securities broker. CCOS will be limited issue in the future regarding Division, as discussed in note 35. The Commission to clearing $6 billion in net daily cash securities amendments to CCOS’s Form CA–1, if and $24 billion in dollar rolls on an average basis believes these limits are large enough to allow the Commission determines that such CCOS to begin effective operations while it works over a ninety-day period. Supra note 35. with GSCC to develop linkage and cross-margining 90 15 U.S.C. § 78s(b)(1) (1988). modification is appropriate for the facilities to advance efficient clearance and 91 CCOS will be required to amend its CA–1 settlement. application for any proposed changes to its stated 92 Securities Exchange Act Release Nos. 27445 89 These are the maximum average daily net policies, practices, or interpretations as that phrase (November 16, 1989) [54 FR 48704] (‘‘ARP I’’), and settlements agreed to by CCOS and the Division is defined in Rule 19b-4 (17 CFR 240.19b-4). 29185 (May 9, 1991) [56 FR 22489], (‘‘ARP II’’). Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices 65087 protection of investors or in the public Description of Respondents: Women- function of the agency, accuracy of interest. Furthermore, the Commission owned businesses burden estimate, in addition to ways to reserves the right to suspend or revoke Annual Responses: 2,750 minimize this estimate, and ways to this exemption or to censure or impose Annual Burden: 825 enhance the quality. limitations upon the activities, Comments: Send all comments Jacqueline White, functions, and operations of CCOS if the regarding this information collection to Acting Chief, Administrative Information Commission finds that CCOS has Harriet Fredman, Small Business Branch. violated or is unable to comply with any Administration, Women’s Business [FR Doc. 95–30680 Filed 12–15–95; 8:45 am] of the provisions set forth in this Order Ownership, 409 3rd Street, S. W., Suite BILLING CODE 8025±01±P or in its own rules or that CCOS has 6200, Washington, D. C. 20416. Phone failed without reasonable justification to No. 202–205–6673. Send comments enforce compliance with any provision regarding whether this information DEPARTMENT OF TRANSPORTATION of its own rules by one of its collection is necessary for the proper participants. performance of the function of the Coast Guard IV. Conclusion agency, accuracy of burden estimate, in [CGD 95±084] addition to ways to minimize this The Commission finds that CCOS’s estimate, and ways to enhance the Review of Icebreaking Program for the application for exemption from quality. East Coast of the United States registration as a clearing agency meets Dated: December 13, 1995. the standards and requirements deemed AGENCY: Coast Guard, DOT. Jacqueline White, appropriate for such an exemption ACTION: Request for comments. including those standards set forth Acting Chief, Administrative Information under Section 17A of the Act. Branch. SUMMARY: The Coast Guard is reviewing It is therefore ordered, pursuant to [FR Doc. 95–30679 Filed 12–15–95; 8:45 am] its domestic icebreaking mission along Section 19(a)(1) of the Act, that the BILLING CODE 8025±01±P the east coast of the United States from application for exemption from Maine to Virginia. Consistent with the registration as a clearing agency filed by President’s effort to reinvest the Clearing Corporation for Options Data Collection Available for Public government, this review is necessary to and Securities (File No. 600–27) be, and Comments and Recommendations assess the effectiveness of the present program, the impacts resulting from hereby is, approved subject to the ACTION: Notice and request for changes in the Coast Guard’s conditions listed in this Order. comments. icebreaking fleet, and the needs of the By the Commission. SUMMARY: future. The Coast Guard is requesting Margaret H. McFarland, In accordance with the Paperwork Reduction Act of 1995, this comments and data to assist in this Deputy Secretary. notice announces the Small Business review. [FR Doc. 95–30660 Filed 12–15–95; 8:45 am] Administration’s intentions to request DATES: Comments must be received on BILLING CODE 8010±01±P ′ approval on a new, and/or currently or before February 16, 1996. approved information collection. ADDRESSES: Written comments may be DATES: Comments should be submitted mailed to the Chief, Ice Operations SMALL BUSINESS ADMINISTRATION on or before February 16, 1996. Division, U.S. Coast Guard FOR FURTHER INFORMATION CONTACT: Headquarters, 2100 Second Street S.W., Data Collection Available for Public Jacqueline White, Management Analyst, Washington, DC 20593–0001, or may be Comments and Recommendations Small Business Administration, 409 3rd delivered to room 1202A at the above address between 8 a.m. and 3 p.m., ACTION: Notice and request for Street, SW., Suite 5000, Washington, DC Monday through Friday, except Federal comments. 20416. Phone Number: 202–205–6629. Copies of these collections can also be holidays. The telephone number is (202) 267–1450. SUMMARY: In accordance with the obtained. FOR FURTHER INFORMATION CONTACT: Paperwork Reduction Act of 1995, this SUPPLEMENTARY INFORMATION: notice announces the Small Business LCDR Robert Garrett, Icebreaker Administration’s intentions to request Title: Prime Contracts Program Facilities Branch, Ice Operations approval on a new, and/or currently Quarterly Report. Division, Office of Navigation Safety approved information collection. Type of Request: Extension of a and Waterway Services between 7:30 currently approved information a.m. and 4 p.m., Monday through DATES: Comments should be submitted Friday, except Federal holidays. on or before February 16, 1996. collection. Description of Respondents: Telephone (202) 267–1460, telefax (202) FOR FURTHER INFORMATION CONTACT: Procurement Center Representatives. 267–4425. Jacqueline White, Management Analyst, Annual Responses: 1,340. SUPPLEMENTARY INFORMATION: Small Business Administration, 409 3rd Annual Burden: 670. Street, S. W., Suite 5000, Washington, Comments: Send all comments Request for Comments D. C. 20416. Phone Number: 202–205– regarding this information collection to The Coast Guard encourages 6629. Copies of these collections can Susan Monge, Small Business interested persons to participate in this also be obtained. Administration, Office of Government review by submitting written views and SUPPLEMENTARY INFORMATION: Contracting, 409 3rd Street, SW., data on icebreaking operations on the Title: Office of Women’s Business Washington, DC 20416. Phone No.: 202– east coast of the United States. Persons Ownership Year End Follow Up 205–6471. submitting comments should include Survey Send comments regarding whether their names and addresses, identify this Type of Request: New Information this information collection is necessary docket (CGD 95–084), identify the Collection for the proper performance of the aspect of icebreaking operations on 65088 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices which comments are submitted, and longer provide icebreaking services the development, consideration and state the expected impacts on current along the East Coast. communication of motor vehicle safety icebreaking operations and the reasons 4. Private industry’s ability to provide research, as set forth in the MVSRAC for those impacts. Persons wanting icebreaking services. Charter. acknowledgment of receipt of comments 5. The need, if any, to replace the The meeting is open to the public, but should enclose stamped, self-addressed Coast Guard’s 65 foot icebreaking tugs attendance may be limited due to space postcards or envelopes. and the capabilities required of the availability. Participation by the public replacement vessels to minimize costs will be determined by the Committee Background while maintaining necessary support. Chairperson. Under Executive Order No. 7521 of This list of subjects is not intended to A public reference file (Number 88– December 21, 1936, the Coast Guard has suggest that the Coast Guard’s role or 01) has been established to contain the assisted as practicable in keeping the level of service should or will change. products of the Committee and will be channels and harbors along the It is intended to assist the Coast Guard open to the public during the hours of northeast and mid-Atlantic coast of the in evaluating the costs and benefits of 9:30 a.m. to 4:00 p.m. at the National United States open to shipping during its present icebreaking program and its Highway Traffic Safety Administration’s the winter and in preventing flooding needs for the future. Technical Reference Division in Room from ice jams. In doing so, the Coast Dated: December 12, 1995. 5108 at 400 Seventh Street, S.W., Washington, DC 20590, telephone: (202) Guard has attempted to meet the J. A. Creech, reasonable demands of commerce and to 366–2768. Captain, U.S. Coast Guard, Acting Chief, support other agencies in their Office of Navigation Safety and Waterway FOR FURTHER INFORMATION CONTACT: Ms. icebreaking efforts. Services. Barbara Coleman, Office of Research To accomplish this mission, the Coast [FR Doc. 95–30678 Filed 12–15–95; 8:45 am] and Development, 400 Seventh Street, Guard maintains a fleet of icebreaking S.W., Room 6206, Washington, DC BILLING CODE 4910±14±M tugs, ice-capable buoy tenders, and ice- 20590, telephone: (202) 366–1537. reinforced boats. This fleet has Issued on: December 13, 1995. undergone substantial changes since the National Highway Traffic Safety William A. Boehly, 1960’s. Replacement cutters and boats Administration generally have been larger and more Chairperson, Motor Vehicle Safety Research Advisory Committee. capable of meeting the changing Announcing the Thirteenth Meeting of [FR Doc. 95–30687 Filed 12–15–95; 8:45 am] requirements of their primary mission the Motor Vehicle Safety Research areas. However, they are fewer in Advisory Committee BILLING CODE 4910±59±P number and may not have all of the icebreaking capabilities of the vessels AGENCY: National Highway Traffic Safety Administration (NHTSA), DOT. Research and Development Programs they replaced. For example, the physical Meeting size of the larger cutters and boats may ACTION: Meeting announcement. restrict their ability to operate in the AGENCY: National Highway Traffic SUMMARY: upper reaches of rivers where ice jams This notice announces the Safety Administration, DOT. typically form. thirteenth meeting of the Motor Vehicle Safety Research Advisory Committee ACTION: Notice of meeting cancellation. On occasion, private interests have (MVSRAC). The Committee was operated or hired commercial tugs for SUMMARY: This notice announces the established in accordance with the icebreaking services. [Coast Guard cancellation of a public meeting at provisions of the Federal Advisory policy prohibits if from competing with which NHTSA was scheduled to Committee Act to obtain independent commercial icebreaking concerns.] describe and discuss specific research advice on motor vehicle safety research. However, commercial concerns and development projects. Further, the Discussions at this meeting will include apparently have not been able to meet notice requests comments regarding a NHTSA’s research programs, including worst-year ice conditions. proposed schedule change from critical injury control issues facing the quarterly meetings to biannual The Review agency. meetings. Consistent with the President’s effort DATE AND TIME: The meeting is BACKGROUND: The National Highway to reinvent government, the Coast Guard scheduled to begin at 9:00 a.m., on Traffic Safety Administration holds is now reviewing its East Coast Wednesday, January 17, 1996, and quarterly public meetings devoted icebreaking program to assess its conclude at 1:00 p.m., on Thursday, primarily to detailed presentations of effectiveness, to identify the impacts January 18, 1996. specific research and development resulting from changes in the Coast ADDRESSES: The meeting will be held in projects. Three meetings each year are Guard’s icebreaking fleet, and to Rooms 6244–48 of the U.S. Department held in Detroit, Michigan, and a fourth determine the program’s needs for the of Transportation Building, which is meeting is held in Washington, DC, in future. The Coast Guard is particularly located at 400 Seventh Street, S.W., conjunction with the National Highway interested in receiving comments and Washington, DC. Traffic Safety Administration’s quarterly data on the following subjects: SUPPLEMENTARY INFORMATION: In May meetings on safety performance 1. The Coast Guard’s present ability to 1987, the Motor Vehicle Safety Research standards and safety assurance satisfy the reasonable demands of Advisory Committee was established. programs. commerce for icebreaking along the East The purpose of the Committee is to MEETING CANCELLATION: The National Coast. provide an independent source of ideas Highway Traffic Safety Administration’s 2. The continuing need for the Coast for motor vehicle safety research. The public meeting devoted primarily to Guard to maintain icebreaking MVSRAC will provide information, presentations of specific research and capabilities along the East Coast. advice and recommendations to NHTSA development projects as announced in 3. The impact and alternatives on matters relating to motor vehicle the Federal Register (Vol. 60, No. 212, available should the Coast Guard no safety research, and provide a forum for page 55752) for December 19, 1995, has Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices 65089 been canceled. The meeting on safety Issued: December 12, 1995. The average actual cost of performance standards and safety William A. Boehly, Government-furnished headstones or assurance programs, scheduled for Associate Administrator for Research and markers during any fiscal year is December 20, 1995, and announced in Development. determined by dividing the sum of VA the same Federal Register notice has not [FR Doc. 95–30688 Filed 12–13–95; 4:25 pm] costs during that fiscal year for been canceled and will be held as BILLING CODE 4910±59±P procurement, transportation, Office of scheduled. Memorial Programs and miscellaneous administration, inspection and support ADDRESSES: Requests for further DEPARTMENT OF VETERANS staff by the total number of headstones information and comments may be AFFAIRS and markers procured by VA during that directed to the Office of the Associate fiscal year and rounding to the nearest Administrator for Research and Cost-of-Living Adjustments and whole dollar amount. Development, NRD–01, National Headstone or Marker Allowance Rate The average actual cost of Highway Traffic Safety Administration, Government-furnished headstones or AGENCY: Room 6206, 400 Seventh St., SW, Department of Veterans Affairs. markers for Fiscal Year 1995 under the Washington, DC 20590. The telefax ACTION: Notice. above computation method was $101. number is 202–366–5930. SUMMARY: As required by law, the Therefore, effective October 1, 1995, the maximum rate of reimbursement for SUPPLEMENTARY INFORMATION: NHTSA Department of Veterans Affairs (VA) is non-Government headstones or markers provides detailed presentations about its hereby giving notice of cost-of-living adjustments (COLAs) in certain benefit purchased during Fiscal Year 1996 is research and development programs in $101. a series of public meetings. The series rates and income limitation. These started in April 1993. The purpose is to COLAs affect the pension and parents’ Cost-of-Living Adjustments make available more complete and dependency and indemnity compensation (DIC) programs. These Under the provisions of 38 U.S.C. timely information regarding the 5312 and section 306 of Public Law 95– agency’s research and development adjustments are based on the rise in the Consumer Price Index (CPI) during the 588, VA is required to increase the programs. The twelfth meeting in the one-year period ending September 30, benefit rates and income limitations in series will be held on March 12, 1996, 1995. VA is also giving notice of the the pension and parents’ DIC programs in Detroit, Michigan. Thereafter, the maximum amount of reimbursement by the same percentage, and effective meetings on the agency’s research and that may be paid for headstones or the same date, as increases in the benefit development programs only will be held markers purchased in lieu of amounts payable under title II of the biannually, with the meeting sites Government-furnished headstones or Social Security Act. The increased rates alternating between Washington, DC, markers in Fiscal Year 1996, which and income limitations are also required and Detroit, Michigan, scheduled to be began on October 1, 1995. to be published in the Federal Register. held in conjunction with the agency’s The Social Security Administration DATES: These COLAs are effective has announced that there will be a 2.6 quarterly meetings on safety December 1, 1995. The headstone or percent cost-of-living increase in social performance standards and safety marker allowance rate is effective security benefits effective December 1, assurance programs. No other changes October 1, 1995. to the format for the research and 1995. Therefore, applying the same FOR FURTHER INFORMATION CONTACT: development programs meetings are percentage, the following increased Paul Trowbridge, Consultant, rates and income limitations for the VA planned. Each meeting will be Regulations Staff, Compensation and pension and parents’ DIC programs will announced in the Federal Register Pension Service (211B), Veterans be effective December 1, 1995: along with a request for suggested Benefit Administration, Department of presentation topics and deadlines for Veterans Affairs, 810 Vermont Avenue, TABLE 1.ÐIMPROVED PENSION submission of topics and questions. NW., Washington, DC 20420, (202) 273– Before the meeting, the agenda for the 7210. [Maximum annual rates] meeting listing the research and SUPPLEMENTARY INFORMATION: Under 38 (1) Veterans permanently and totally disabled development topics to be presented will U.S.C. 2306(d), VA may provide be published in the Federal Register. (38 U.S.C. 1521): reimbursement for the cost of non- Veteran with no dependents, $8,246 NHTSA requests comments from Government headstones or markers at a Veteran with one dependent, $10,801 interested parties on the proposed rate equal to the actual cost or the For each additional dependent, $1,404 schedule change from quarterly to average actual cost of Government- (2) Veterans in need of aid and attendance biannual meetings. Comments should be furnished headstones or markers during (38 U.S.C. 1521): Veteran with no dependents, $13,190 submitted by 4:15 p.m. on January 17, the fiscal year preceding the fiscal year in which the non-Government Veteran with one dependent, $15,744 1996, to the Office of the Associate For each additional dependent, $1,404 Administrator for Research and headstone or marker was purchased, (3) Veterans who are house bound (38 Development, NRD–01, National whichever is less. U.S.C. 1521): Highway Traffic Safety Administration, Section 8041 of Public Law 101–508 Veteran with no dependents, $10,080 Room 6206, 400 Seventh St., SW, amended 38 U.S.C. 2306(d) to eliminate Veteran with one dependent, $12,634 Washington, DC 20590. The telefax the payment of the monetary allowance For each additional dependent, $1,404 (4) Two veterans married to one another, number is 202–366–5930. in lieu of VA-provided headstone or marker for deaths occurring on or after combined rates (38 U.S.C. 1521): FOR FURTHER INFORMATION CONTACT: Rita November 1, 1990. However, in a Neither veteran in need of aid and at- Gibbons, Staff Assistant, Office of tendance or housebound, $10,801 precedent opinion (O.G.C. Prec. 17–90), Either veteran in need of aid and attend- Research and Development, 400 VA’s General Counsel held at that there ance, $15,744 Seventh Street, SW, Washington, DC is no limitation period applicable to Both veteran in need of aid and attend- 20590. Telephone: 202–366–4862. Fax claims for benefits under the provisions ance, $20,686 number: 202–366–5930. of 38 U.S.C. 2306(d). Either veteran housebound, $12,634 65090 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices

TABLE 1.ÐIMPROVED PENSIONÐ has remarried and is living with the parent and spouse, if this would be a Continued parent’s spouse, DIC shall be paid under greater benefit than that specified in [Maximum annual rates] Table 2 or under Table 4, whichever Table 2 for one parent. shall result in the greater being paid to Aid and attendance. The monthly rate Both veterans housebound, $14,469 the veteran’s parent. In the case of of DIC payable to a parent under Table One veteran housebound and one vet- remarriage, the total combined annual 2 through 4 shall be increased by $209 eran in need of aid and attendance, income of the parent and the parent’s if such parent is (1) a patient in a $17,575 spouse shall be counted in determing nursing home, or (2) helpless or blind, For each dependent child, $1,404 the monthly rate of DIC. or so nearly helpless or blind as to need (5) Surviving spouse alone and with a child Two parents not living together. The or require the regular aid and or children of the deceased veteran in cus- rates in Table 3 apply to (1) two parents attendance of another person. tody of the surviving spouse (38 U.S.C. who are not living together, or (2) an Minimum rate. The monthly rate of 1541): unmarried parent when both parents are Surviving spouse alone, $5,527 DIC payable to any parent under Tables Surviving spouse and one child in his or living and the other parent has 2 through 4 shall not be less than $5. her custody, $7,240 remarried. The monthly rate of DIC paid For each additional child in his or her to each such parent shall be $281 TABLE 5.ÐSECTION 306 PENSION reduced on the basis of each parent’s custody, $1,404 INCOME LIMITATIONS (6) Surviving spouses in need of aid and at- annual income, according to the tendance (38 U.S.C. 1541): following formula: Surviving spouse alone, $8,839 (1) Veteran or surviving spouse with no de- pendents, $9,381 (Pub. L. 95±588, section Surviving spouse and one child in his or TABLE 3 her custody, $10,548 306(a)). (2) Veteran with no dependents in need of For each additional child in his or her For each $1 of annual income custody, $1,404 aid and attendance, $9,881 (38 U.S.C. (7) surviving spouses who are housebound 1521(d) as in effect on December 31, The $281 1978). (38 U.S.C. 1541): monthly rate Which is But not more Surviving spouse alone, $6,758 shall be re- more than than (3) Veteran or surviving spouse with one or Surviving spouse and one child in his or duced by more dependents, $12,611 (Pub. L. 95± her custody, $8,466 588, section 306(a)). For each additional child in his or her $0.00 $0 $800 (4) Veteran with one or more dependents in custody, $1,404 .06 800 900 need of aid and attendance, $13,111 (38 (8) Surviving child alone (38 U.S.C. 1542), 0.7 900 1,100 U.S.C. 1521(d) as in effect on December $1,404 .08 1,100 9,381 31, 1978). (5) Child (no entitled veteran or surviving spouse), $7,668 (Pub. L. 95±588, section Reduction for income. The rate No DIC is payable under this table if annual income exceeds $9,381. 306(a)). payable is the applicable maximum rate (6) Spouse income exclusion (38 CFR minus the countable annual income of Two parents living together or 3.262), $2,992 (Pub. L. 95±588, section the eligible person. (38 U.S.C. 1521, remarried parents living with spouses. 306(a)(2)(B)). 1541 and 1542). The rates in Table 4 apply to each Mexican border period and World parent living with another parent; and War I veterans. The applicable each remarried parent, when both TABLE 6.ÐOLD-LAW PENSION INCOME maximum annual rate payable to a parents are alive. The monthly rate of LIMITATIONS Mexican border period or World War I DIC paid to such parents will be $264 veteran under this table shall be reduced on the basis of the combined (1) Veteran or surviving spouse without de- increased by $1,867. (38 U.S.C. 1521(g)) annual income of the two parents living pendents or an entitled child, $8,211 (Pub. together or the remarried parent or L. 95±588, section 306(b)). Parents’ DIC parents and spouse or spouses, as (2) Veteran or surviving spouse with one or computed under the following formula: more dependents, $11,840 (Pub. L. 95± DIC shall be paid monthly to parents 588, section 306(b)). of a deceased veteran in the following amounts (38 U.S.C. 1315): TABLE 4 Dated: December 8, 1995. Jesse Brown, TABLE 2 For each $1 of annual income Secretary of Veterans Affairs. [One parent. If there is only one parent, the The $264 [FR Doc. 95–30643 Filed 12–15–95; 8:45 am] monthly rate of DIC paid to such parent monthly rate Which is But not more shall be $391 reduced on the basis of the shall be re- more than than BILLING CODE 8320±01±M parent's annual income according to the fol- duced by lowing formula:] $.00 $0 $1,000 Poverty Threshold For each $1 of annual income .03 1,000 1,500 .04 1,500 1,900 AGENCY: Department of Veterans Affairs. The $391 .05 1,900 2,400 monthly rate Which is But not more ACTION: Notice. shall be re- more than than .06 2,400 2,900 .07 2,900 3,200 duced by SUMMARY: .08 3,200 12,611 The Department of Veterans Affairs (VA) is hereby giving notice of $0.00 $0 $800 .08 800 9,381 No DIC is payable under this table if the weighted average poverty threshold annual income exceeds $12,611. in 1994 for one person (unrelated No DIC is payable under this table if The rates in this table are also individual) as established by the Bureau annual income exceeds $9,381. applicable in the case of one surviving of the Census. One parent who has remarried. If parent who has remarried, computed on DATES: The 1994 poverty threshold is for there is only one parent and the parent the basis of the combined income of the consideration effective October 5, 1995, Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices 65091 the date on which it was established by on August 3, 1990, pages 31579–80. The subsequent poverty threshold figures as the Bureau of the Census. amendment provided that marginal notices in Federal Register. FOR FURTHER INFORMATION CONTACT: employment generally shall be deemed The Bureau of the Census recently Paul Trowbridge, Consultant, to exist when a veteran’s earned annual published the weighted average poverty Regulations Staff, Compensation and income does not exceed the amount thresholds for 1994. The threshold for Pension Service, Veterans Benefits established by the Bureau of the Census one person (unrelated individual) is Administration, Department of Veterans as the poverty threshold for one person. $7,547. Affairs, 810 Vermont Avenue, NW., VA noted that the weighted average Dated: December 8, 1995. Washington, DC 20420, (202) 273–7210. poverty threshold in 1988 for one Jesse Brown, SUPPLEMENTARY INFORMATION: VA person (unrelated individual) as Secretary of Veterans Affairs. published a final regulation amendment established by the Bureau of Census was [FR Doc. 95–30642 Filed 12–15–95; 8:45 am] 38 CFR 4.16(a) in the Federal Register $6.024 and stated we would publish BILLING CODE 8320±01±M 65092

Sunshine Act Meetings Federal Register Vol. 60, No. 242

Monday, December 18, 1995

This section of the FEDERAL REGISTER banking operations of foreign banking following a recess at the conclusion of contains notices of meetings published under organizations. the open meeting. the ``Government in the Sunshine Act'' (Pub. 3. Any items carried forward from a L. 94-409) 5 U.S.C. 552b(e)(3). previously announced meeting. PLACE: Marriner S. Eccles Federal Discussion Agenda: PLEASE NOTE Reserve Board Building, C Street THAT NO DISCUSSION ITEMS ARE entrance between 20th and 2lst Streets, BOARD OF GOVERNORS OF THE FEDERAL SCHEDULED FOR THIS MEETING. NW., Washington, DC 20551. RESERVE SYSTEM Note: If an item is moved from the STATUS: Closed. TIME AND DATE: 10 a.m., Thursday, Summary Agenda to the Discussion Agenda, MATTERS TO BE CONSIDERED: December 21, 1995. discussion of the item will be recorded. PLACE: Marriner S. Eccles Federal Cassettes will then be available for listening 1. Personnel actions (appointments, Reserve Board Building, C Street in the Board’s Freedom of Information Office, promotions, assignments, reassignments, and and copies can be ordered for $5 per cassette salary actions) involving individual Federal entrance between 20th and 21st Streets, by calling (202) 452–3684 or by writing to: NW., Washington, DC 20551. Reserve System employees. Freedom of Information Office, Board of 2. Any items carried forward from a STATUS: Open. Governors of the Federal Reserve System, previously announced meeting. Washington, DC 20551. MATTERS TO BE CONSIDERED: CONTACT PERSON FOR MORE INFORMATION: CONTACT PERSON FOR MORE INFORMATION: Summary Agenda: Because of their Mr. Joseph R. Coyne, Assistant to the Mr. Joseph R. Coyne, Assistant to the routine nature, no discussion of the Board; (202) 452–3204. Board; (202) 452–3204. You may call following items is anticipated. These (202) 452–3207, beginning at matters will be voted on without Dated: December 14, 1995. approximately 5 p.m. two business days discussion unless a member of the Jennifer J. Johnson, before this meeting, for a recorded Board requests that an item be moved to Deputy Secretary of the Board. announcement of bank and bank the discussion agenda. [FR Doc. 95–30817 Filed 12–14–95; 3:09 pm] holding company applications 1. Proposed amendments to Regulation K BILLING CODE 6210±01±P scheduled for the meeting. (International Banking Operations) concerning general consent authority Dated: December 14, 1995. (proposed earlier for public comment; Docket BOARD OF GOVERNORS OF THE FEDERAL Jennifer J. Johnson, No. R–0896). RESERVE SYSTEM Deputy Secretary of the Board. 2. Publication for comment of proposed amendments to Regulation K (International TIME AND DATE: Approximately 10:15 [FR Doc. 95–30818 Filed 12–14–95; 3:09 pm] Banking Operations) concerning interstate a.m., Thursday, December 21, 1995, BILLING CODE 6210±01±P 65093

Corrections Federal Register Vol. 60, No. 242

Monday, December 18, 1995

This section of the FEDERAL REGISTER Wednesday, December 6, 1995, make SOCIAL SECURITY ADMINISTRATION contains editorial corrections of previously the following corrections: published Presidential, Rule, Proposed Rule, 20 CFR Part 404 and Notice documents. These corrections are 1. On page 62378, in Table 3, in the prepared by the Office of the Federal first column, the second and third Register. Agency prepared corrections are entries should be combined to read [Regulation No. 4] issued as signed documents and appear in ‘‘Hook-and-line/Pot-gear’’. the appropriate document categories RIN 0960-AE21 elsewhere in the issue. 2. On page 62380, in Table 5, in the fourth column, ‘‘725’’ should appear When You Are A Full-Time Elementary opposite ‘‘Pacific cod Hook-and-line’’; or Secondary Student and ‘‘175’’ should appear opposite DEPARTMENT OF COMMERCE ‘‘Other nontrawl:’’. Correction National Oceanic and Atmospheric 3. On page 62381, in the third In proposed rule document 95–29534 Administration column, the Date above the signature beginning on page 62783 in the issue of should read ‘‘December 1, 1995’’. Thursday, December 7, 1995, make the 50 CFR Parts 611, 675, 676, and 677 BILLING CODE 1505±01±D follwing correction: [Docket No. 95112820±5280±01; I.D. 111495A] § 404.369 [Removed] On page 62786, in the second column, Groundfish Fishery of the Bering Sea the heading above amendatory and Aleutian Islands; Limited Access; instruction 7 should read as set forth Foreign Fishing; Proposed 1996 Initial above. Harvest Specifications BILLING CODE 1505±01±D Correction In proposed rule document 95–29722 beginning on page 62373 in the issue of federal register December 18,1995 Monday Fishery Products;FinalRule Processing andImportingofFish Procedures fortheSafeandSanitary 21 CFRParts123and1240 Food andDrugAdministration Services Health andHuman Department of Part II 65095 65096 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations

DEPARTMENT OF HEALTH AND 4. Records 3. Should Training be ‘‘Grandfathered?’’ HUMAN SERVICES 5. Relevance of Section 404 of the Act 4. Course Curriculum B. HACCP Pro and Con 5. Do Importers Need Training? Food and Drug Administration 1. Overview 6. Testing and Retraining 2. The Significance of the Illness Data 7. Gradations of Training 21 CFR Parts 123 and 1240 3. Exempt Specific Industry Segments? 8. Duties of the Trained Individual 4. Would Voluntary HACCP be Superior? K. Sanitation [Docket No. 93N±0195] 5. Other Issues 1. Background C. Should Some Types of Processors be 2. Should the Regulations Deal with RIN 0910±AA10 Exempt? Sanitation? 1. Exempt Low Risk? 3. Why Isn’t Part 110 (21 CFR Part 110) Procedures for the Safe and Sanitary 2. Exempt Small Processors? Adequate to Deal with Sanitation Processing and Importing of Fish and D. Definitions Concerns? Fishery Products 1. General 4. Why Isn’t the Proposed Approach 2. Cooked, Ready-to-Eat Fishery Product Appropriate? AGENCY: Food and Drug Administration, 3. Critical Control Point (CCP) 5. What is the Appropriate Approach to HHS. 4. Critical Limit (CL) Sanitation? ACTION: Final rule. 5. Fish a. Inclusion of Sanitation Controls in 6. Fishery Product HACCP Plans SUMMARY: The Food and Drug 7. Food Safety Hazard b. SSOP Administration (FDA) is adopting final 8. Harvester 6. Monitoring and Corrective Actions regulations to ensure the safe and 9. Importer 7. Records sanitary processing of fish and fishery 10. Lot of Molluscan Shellfish L. Imports products (hereinafter referred to as 11. Molluscan Shellfish 1. Background 12. Potable Water 2. Should Imports be Subject to These seafood), including imported seafood. 13. Preventive Measure Regulations? The regulations mandate the application 14. Process Monitoring Instument 3. Should Importers be Subject to These of Hazard Analysis Critical Control 15. Processing and Processor Regulations? Point (HACCP) principles to the a. Vessels, carriers, and retail 4. Memoranda of Understanding (MOU’s) processing of seafood. HACCP is a b. Warehouses 5. Importer Verification Procedures preventive system of hazard control that c. Other processing operations 6. Affirmative Steps: General can be used by processors to ensure the 16. Scombroid Toxin Forming Species 7. Foreign Processor HACCP Plans safety of their products to consumers. 17. Shellfish Control Authority 8. Other Affirmative Steps FDA is issuing these regulations because 18. Smoked and Smoke-Flavored Fishery 9. Importer Records Products 10. Determination of Compliance a system of preventive controls is the E. The HACCP Plan M. Guidelines or Regulations? most effective and efficient way to 1. Preliminary Steps 1. Background ensure that these products are safe. 2. Conducting a Hazard Analysis 2. Cooked, Ready-to-Eat Products and DATES: Effective December 18, 1997. 3. Types of Hazards Scombroid Species Submit written comments on the 4. When is a Hazard Reasonably Likely to 3. Smoked and Smoke-Flavored Fishery information collection requirements by Occur? Products February 16, 1996. 5. The Plan: Specific Considerations N. Molluscan Shellfish 6. Positive Versus Negative Recordkeeping 1. Background ADDRESSES: Submit written comments 7. Signing the Plan 2. Should There be Specific Requirements on the information collection 8. Relationship to Parts 113 and 114 for Raw Molluscan Shellfish? requirements to the Dockets 9. Sanitation in the Plan 3. Cooked Versus Raw Molluscan Shellfish Management Branch (HFA–305), Food 10. Nonsafety Issues 4. Shellfish Control Authorities and Drug Administration, 12420 11. ‘‘Shall Render Adulterated’’ 5. Shellfish From Federal Waters Parklawn Dr., rm. 1–23, Rockville, MD F. Corrective Actions 6. Tagging and Recordkeeping 20857. 1. Should Corrective Actions be Requirements Predetermined? 7. Other Considerations FOR FURTHER INFORMATION CONTACT: 2. Assessing the Product for Safety O. Compliance and Effective Date Philip C. Spiller, Center for Food Safety 3. Documenting Corrective Actions 1. Effective Date and Applied Nutrition (HFS–401), Food G. Verification 2. Public Meetings and Drug Administration, 200 C St. SW., 1. Overview and Comments 3. Penalties for Noncompliance Washington, DC 20204, 202–418–3133. 2. Need for Verification Requirement in 4. Preapproval of HACCP Plans For further information concerning Regulations 5. Filing Plans With FDA the guidance entitled ‘‘Fish and Fishery 3. Verifying the HACCP Plan 6. Third Party-Approval Products Hazards and Controls Guide,’’ 4. Verifying the Implementation of the Plan 7. The First Inspection contact: Donald W. Kraemer (address 5. Product Testing 8. Role of the FDA Investigator 6. Records Review 9. Disagreements and Appeals above). 7. Verifying the Hazard Analysis 10. Status of the ‘‘Guide’’ SUPPLEMENTARY INFORMATION: The H. Consumer Complaints 11. Trade with the EU contents of this preamble are listed in 1. Background 12. Measuring Program Success the following outline: 2. Consumer Complaints as Verification P. Other Issues Tools 1. Relationship to Other Programs Table of Contents 3. Agency Access to Consumer Complaints 2. ‘‘Whistleblower’’ Protection I. Background I. Records 3. Separation of Quality Control (QC) and A. The Proposal 1. Details and Signatures Production B. Factual Basis for the Proposal— 2. Retention and Storage 4. Education Summary 3. Confidentiality of Records 5. Traceback Mechanisms II. The Comments 4. Agency Access to Records 6. Tribal Governments A. Legal Basis 5. Agency Copying of Records 7. HACCP System Improvements 1. Introduction J. Training III. Paperwork Reduction Act of 1995 2. General Authority 1. The Need for Mandatory Training IV. Economic Impact 3. Insanitary Conditions 2. Who Should Provide Training? A. Introduction Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65097

B. Costs control those hazards. Comments Ensuring the safety of seafood 1. Alternative Model for Estimating the received by FDA on the draft Guide are presents special challenges to both the Costs under review. The agency intends to industry and the regulator. Seafood a. Small plant cost example 1 consists of hundreds of edible species i. Critical Control Points (CCP) publish the first edition of the Guide ii. Corrective Actions before the effective date of these from around the world. Depending upon b. Small Plant Cost Example 2 regulations. species and habitat, seafood can be 2. Other Cost Reports FDA established on the proposed rule subject to a wide range of hazards before 3. Seafood Prices a comment period of 90 days, to end on harvest, including bacteria and viruses, C. Benefits April 28, 1994. The agency also asked toxic chemicals, natural toxins, and 1. Safety Benefits for comment on the draft guidelines by parasites. The harvesting of previously 2. Summary of Safety Benefits the same date. During that comment underutilized species—a practice that is 3. Nutrition Benefits from Mandatory increasing because of the depletion of Seafood HACCP and Increased period, FDA held public meetings in Consumer Confidence nine cities to help ensure that the public traditionally harvested species—can be 4. Rent Seeking was aware of the proposal, to answer expected to create new source and 5. Export Benefits questions about its contents, and to process hazards that must be identified 6. Reduce Enforcement Costs encourage participation in the and controlled. a. Seizures rulemaking process through the Unlike beef and poultry, seafood is b. Detentions still predominately a wild-caught flesh c. Automatic Detentions submission of comments. In addition, at these meetings, FDA staff explained to food that frequently must be harvested d. Recalls under difficult conditions and at e. Injunctions the public how to use the draft 7. Other Benefits guidelines to develop HACCP controls varying distances from processing, C. Benefits in specific processing operations. transport, and retail facilities. It is also subject to significant recreational D. Costs and Benefits of Sanitation The agency received several written harvest, some of which finds its way E. Costs and Benefits Attributable to requests for an extension of the Foreign Governments into commercial channels. As fish comment period. After considering F. Conclusion farming (aquaculture) increases, new these requests, FDA published a notice G. Final Regulatory Flexibility Analysis problems emerge as a result of habitat, in the Federal Register on April 7, 1994 V. Environmental Impact husbandry, and drug use. VI. References (59 FR 16578), announcing a 30-day An additional complicating factor in List of Subjects extension of the comment period to May ensuring the safety of seafood is the fact I. Background 31, 1994, for both the proposed rule and that no other flesh food is imported in the draft guidelines. the quantity, or from as many countries, A. The Proposal B. Factual Basis for the Proposal— as seafood. Over 55 percent of seafood In the Federal Register of January 28, Summary consumed in this country is imported 1994 (59 FR 4142), FDA published a from approximately 135 countries. proposed rule to establish requirements In the preamble to the proposed rule, Several of these countries have relating to the processing and importing FDA stated five principal reasons for advanced regulatory structures for of seafood for commercial distribution this initiative: (1) To create a more seafood safety, but many others are in the United States. The requirements effective and efficient system for developing nations that lack involved the application of HACCP ensuring the safety of seafood than infrastructures capable of supporting principles by processors and importers currently exists; (2) to enhance national programs for seafood to ensure food safety to the maximum consumer confidence; (3) to take regulations comparable to those in more extent practicable. HACCP is a system advantage of the developmental work on developed nations. by which food processors evaluate the the application of HACCP-type To ensure safety, it is of utmost kinds of hazards that could affect their preventive controls for seafood that had importance that those who handle and products, institute controls to keep already been undertaken by industry, process seafood commercially these hazards from occurring or to academia, some States, and the Federal understand the hazards associated with significantly minimize their occurrence, government; (4) to respond to requests this type of food, know which hazards monitor the performance of those by seafood industry representatives that are associated with the types of controls, and maintain records of this the Federal government institute a products with which they are involved, monitoring as a matter of routine mandatory, HACCP-type inspection and keep these hazards from occurring practice. system for their products; and (5) to through a routine system of preventive In addition to publishing the provide U.S. seafood with continued controls. For the most part, however, proposed rule, FDA published in the access to world markets, where HACCP- seafood processors and importers are Federal Register of April 7, 1994 (59 FR type controls are increasingly becoming not required, through licensure or 16655), a notice of availability of draft the norm. examination, to demonstrate an guidelines, primarily directed toward The preamble to the proposal cited understanding of seafood hazards as a processors, on how to develop HACCP the conclusion of a 1991 study on prerequisite to being able to do controls for specific types of processing seafood safety by the National Academy business. In fact, there is evidence that operations. The notice of availability of Sciences’ (NAS) Institute of Medicine such an understanding does not exist in requested comments on the draft. that, while most seafoods on the market a significant portion of the industry. A Among other things, these draft are unlikely to cause illness to the survey conducted by FDA from 1992 to guidelines, which were titled the ‘‘Fish consumer, there are significant areas of 1993 of manufacturers of ready-to-eat and Fishery Products Hazards and risk and illnesses that do occur. The seafood products revealed that, in Controls Guide’’ (the Guide), study concluded that improvements in significant measure, firms have not been inventoried known likely food safety the current system of regulatory control employing the types of preventive hazards associated with many species of are needed and repeatedly processing controls necessary to ensure seafood and many processing methods recommended the application of a safe product by design. FDA and State and made recommendations on ways to HACCP controls where warranted. surveys have also revealed that many 65098 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations processors of smoked and smoke- system of seafood regulation. not changed substantively or were not flavored fish are operating outside of the Participation in the international trade the subject of significant comment. parameters that have been demonstrated in seafood is critical to U.S. consumers FDA will respond to those comments through scientific research to be and to the U.S. seafood industry. The that relate solely to the draft Guide necessary to ensure that the hazard from United States is the world’s second when the first edition of that document botulism is adequately controlled. largest seafood importing nation and the is completed and made available to the Because of seafood’s unique second largest exporter of fishery public. The agency intends to address characteristics (e.g., the fact that it is products. those comments in a notice of predominantly wild caught and presents The international movement toward availability to be published in the a wide range of possible hazards), FDA harmonization, coupled with the Codex Federal Register. began to question whether the current Alimentarious Commission’s adoption A. Legal Basis Federal regulatory system, which was of HACCP for international use, clearly developed for the general food supply, argue for the adoption of this approach 1. Introduction is best suited for the seafood industry. in the United States for seafood. Failure About 25 comments addressed the Seafood processors are subject to by the United States to adopt a legal basis for these regulations. Nearly periodic, unannounced, mandatory mandatory, HACCP-based system could half of these comments were either inspection by FDA. These inspections ultimately undermine its export success, companies that process foods other than provide the agency with a ‘‘snapshot’’ of with considerable economic seafood or trade associations that conditions at a facility at the moment of consequences. Such failure also would represent such companies, some of who inspection, but assumptions must be undermine the United States ability to indicated that they were motivated to made about conditions before and after meet growing international expectations comment, at least in part, by the that inspection. Concern about the that it enter into mutual recognition- possible precedent that these reliability of these assumptions over the type agreements with trading partners regulations could set for HACCP intervals between inspections creates based on HACCP. questions about the adequacy of the programs beyond seafood. Some of these system. II. The Comments comments deferred comment on the Inspections today verify the industry’s legal basis for the HACCP regulations FDA received over 250 submissions for seafood but commented on whether knowledge of hazards and controls from over 200 commentors on both the largely by inference. Whether a the legal basis that FDA was proposing proposed regulations and the draft for seafood would be appropriate for company produces products that are Guide. Individual companies, the adulterated, or whether conditions in its mandatory HACCP programs for other majority of which are in the seafood kinds of foods. plant are consistent with current good business, submitted slightly over half of manufacturing practice (CGMP), are FDA is issuing these HACCP the comments. Nearly 40 trade measures of how well the company regulations for seafood under various associations submitted comments. As understands what is necessary to sections of the Federal Food, Drug, and with the companies, the majority of produce a safe and wholesome product. Cosmetic Act (the act), including, most these associations represent seafood This system places a burden on the significantly, sections 402 (a)(1) and interests, but a significant minority have Government to find a problem and to (a)(4) and 701(a) (21 U.S.C. 342 (a)(1) memberships reflecting a range of food prove that it exists, rather than on the and (a)(4) and 371(a)). Section 402(a)(1) products. firm to establish for itself, for the of the act states that a food is regulator, and for consumers, that it has Comments were also received from adulterated if it bears or contains any adequate controls in place to ensure consumer advocacy and similar groups, poisonous or deleterious substance that safety. and coalitions of such groups. All may render the food injurious to health. Given the nature and frequency of the totaled, the views of over 50 Section 402(a)(4) of the act states that a current inspection system for seafood, it organizations were represented in these food is adulterated if it has been has failed to produce a situation in comments. prepared, packed, or held under which the public has full confidence in Other commenters included State insanitary conditions whereby it may the safety and wholesomeness of these agencies, the Association of Food and have been contaminated with filth, or products. There has been a similar Drug Officials (AFDO), the Interstate whereby it may have been rendered failure with respect to imports. Shellfish Sanitation Conference (ISSC), injurious to health. It is important to Media and other public attention on several scientific associations and recognize that section 402(a)(4) of the seafood safety, and on the adequacy of bodies, departments of three act addresses conditions that may the current regulatory program for universities, foreign governments, and render a food injurious to health, rather seafood, has been substantial in recent about 25 individuals. than conditions that have actually years. Many hearings on the sufficiency Overall, the comments covered caused the food to be injurious. See and direction of the Federal seafood virtually every aspect of the proposal United States v. 1,200 Cans, Pasteurized safety program have been held in both and guidelines. FDA appreciates the Whole Eggs, Etc., 339 F. Supp. 131, 141 Houses of Congress since the late effort, interest, and thoughtfulness (N.D. Ga. 1972). The question is thus 1980’s, and numerous bills have been reflected by these comments. whether the conditions in a plant are considered for the stated purpose of The following materials address the such that it is reasonably possible that improving seafood safety. This public significant comments that were received the food may be rendered injurious to concern has motivated representatives on the proposed regulations, both on the health. The agency believes that, if a of the U.S. seafood industry to request specific provisions of the proposal and seafood processor does not incorporate that FDA develop a HACCP-based on related matters. The materials on the certain basic controls into its procedures program for these products. provisions of the proposed regulations for preparing, packing, and holding Although not a public health issue, explain, among other things, why the food, it is reasonably possible that the international trade is also a major agency did or did not modify the food may be rendered injurious to consideration in determining the provisions based on the comments. Any health and, therefore, adulterated under advisability and benefits of a new provisions not addressed below were the act. Section 701(a) of the act Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65099 authorizes the agency to adopt this period, and several bills were proposed regulations, could be deemed regulations for the efficient enforcement introduced in both chambers. The high to have been the result of insanitary of the act. water mark for this activity occurred at conditions. Two comments expressed the end of the 101st Congress when the view that section 402(a)(4) of the act 2. General Authority differing seafood safety bills passed both does not concern food safety generally 1. One comment stated that FDA had chambers. These bills could not be but only safety problems caused by not met its responsibility to present the reconciled before the end of the term, insanitary conditions. shortcomings in the existing law when however, so nothing was enacted. The relevant case law supports a demonstrating the need for these Legislation introduced in the 102d broad reading of ‘‘insanitary.’’ In Nova regulations. Congress did not pass either chamber. Scotia, supra, 568 F.2d at 247, the court FDA believes that this comment is The fact that Congress has considered read ‘‘insanitary’’ to cover a wide set of misguided. The agency’s statutory the issue of seafood safety, however, circumstances necessary to ensure that authority is not deficient in this area. does not preclude FDA from food was not produced under FDA does have a responsibility, implementing a mandatory seafood conditions that may render it injurious however, to demonstrate that there is a HACCP program. The effect of to health. Specifically, the court need for the regulations, and that the legislation that was never enacted on a concluded that FDA’s regulations regulations are reasonably related to the Federal agency’s initiatives was mandating time-temperature-salinity purposes of the act that they are considered in National Confectioners requirements for smoked fish products designed to advance. FDA has fulfilled Association v. Califano, 569 F.2d 690, were within the agency’s statutory this responsibility. 693 n.9 (D.C. Cir. 1978), a case involving authority under section 402(a)(4) of the As outlined above, the act provides a a challenge to FDA’s statutory authority act. The court rejected the argument that broad statutory framework for Federal to issue good manufacturing practice ‘‘insanitary’’ limited coverage under regulation to ensure human food will regulations for candy making. The court section 402(a)(4) of the act only to not be injurious to health and to prevent rejected an argument that the existence bacterial hazards that could enter the commerce in adulterated foods. As the of legislation that was not enacted that raw fish from equipment in the record in this proceeding amply would have given FDA express processing environment and not to demonstrates, there is a range of authority to require some of the things proper processing to kill bacteria that circumstances and conditions that have that the agency included in its entered the processing facility in the raised concerns about how the safety of regulations indicated that Congress raw fish itself. seafood sold in this country is ensured. intended to exclude such authority from Acceptance of a restrictive reading of Given these concerns and its the act as it was then written. Instead, section 402(a)(4) of the act, the court in responsibility under the act, FDA has as will be discussed below, in Nova Scotia noted, would probably concluded that it is necessary to require upholding the validity of the invalidate several existing FDA that firms incorporate certain basic regulations, the court looked at whether regulations, including those relating to measures into how they process the statutory scheme as a whole justified the thermal processing of low-acid seafood. The agency also concludes that the promulgation of the regulations. canned foods in part 113 (21 CFR part failure to incorporate these measures It is true that a deliberate refusal by 113). When dealing with the public into a firm’s processing procedures Congress to authorize a specific program health, the court concluded, the statute would mean that the firm would be would at least be one factor to be should not be read too restrictively but producing the product under insanitary weighed in determining the validity of consistent with the act’s overall purpose conditions whereby it may be rendered a regulation. See Toilet Goods to protect the public health. (See also injurious to health. (See United States v. Association v. Gardner, 387 U.S. 158 United States v. Bacto-Unidisk, 394 U.S. Nova Scotia Food Products Corp., 568 (1967). The expiration of the 101st 784, 798 (1969); United States v. F.2d 240, 247 (2d Cir. 1977).) Congress before competing seafood bills Dotterweich, 320 U.S. 277, 280 (1943).) 2. A few comments took the view that could be reconciled did not, however, 4. Notwithstanding these cases, one FDA lacked the authority to issue these amount to a refusal on the part of comment cited the case of United States regulations because Congress had Congress to authorize a mandatory v. General Foods Corp, 446 F. Supp 740 considered legislation relating to HACCP program, including HACCP- (1978), aff’d 591 F.2d 1332 (2d Cir. seafood safety in recent years but had based inspections for seafood. Thus, 1978), for the proposition that a failure not enacted it. Much of this legislation FDA concludes that there is no merit to to have a HACCP plan could not alone contained provisions authorizing the the comments’ assertion. be a violation of section 402(a)(4) of the establishment of a mandatory Federal act because it would not constitute inspection program based on HACCP- 3. Insanitary Conditions insanitation. type principles. According to the 3. Several comments, most of whom FDA does not agree that the General comments, Congress’ failure to were trade associations or companies Foods case stands for this proposition. authorize this program after considering involved in the processing of products Rather, the court in General Foods doing so indicated that the contents of other than seafood, questioned whether explicitly recognized that ‘‘[b]ecause the FDA’s seafood HACCP regulations section 402(a)(4) of the act was an purpose of 402(a)(4) is to prevent remain within the domain of Congress appropriate authority upon which to contamination, or nip it in the bud, and have not been delegated to FDA to base a mandatory HACCP program. actual contamination of the finished implement. Most of the concern hinged on whether product need not be shown.’’ Id. at 752. FDA does not agree with this a failure to have a HACCP plan, or to Significantly, the court appeared to be contention. Unquestionably, seafood keep HACCP records, could really be impressed with the preventive controls safety has received considerable considered an ‘‘insanitary’’ condition that were in place in the defendant’s attention from Congress in recent years, under section 402(a)(4) of the act. Some plant and took these into consideration most notably in the late 1980’s through questioned whether safety issues in deciding that the agency had failed to the early 1990’s. Many hearings were relating to chemical or physical hazards, prove that section 402(a)(4) of the act held on the subject in both the House of or to pesticides, unapproved additives, had been violated. However, the court Representatives and the Senate during and drug residues, as included in the did not deal at all with the limits on 65100 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations

FDA’s authority to do rulemaking under grounds that they would permit only kinds of records to which FDA has sections 402(a)(4) and 701(a) of the act prosecution where processing access under section 703 of the act. The to establish standards for such conditions were completely sanitary, court concluded that the narrow scope preventive controls. but the records were deficient. Such an of section 703 of the act is not a Thus, it is not inconsistent with outcome, it was argued, would be limitation on the right of the agency to General Foods for FDA to adopt HACCP beyond the scope of section 402(a)(4) of require recordkeeping and have access regulations that are designed to define the act. to records that are outside the scope of the minimum steps that a seafood Citing Toilet Goods, the court rejected section 703 of the act, so long as the processor must take to ensure that the this argument and held that the primary recordkeeping requirement is limited, food that it produces is not prepared consideration was whether the statutory clearly assists the efficient enforcement under conditions that may render it scheme as a whole, not just section of the act, and the burden of injurious to health. Clearly, given the 402(a)(4) of the act, justified the recordkeeping is not unreasonably risks inherent in many seafood agency’s regulations. The court pointed onerous (569 F.2d at 693 n.9). operations, if a processor does not out that this consideration involved an The recordkeeping required under identify the critical control points in its inquiry into practicalities as well as these regulations passes the process, and does not monitor what goes statutory purpose, i.e., enforcement Confectioners test. First, the on at those points, there is a reasonable problems encountered by FDA and the recordkeeping requirements are limited. possibility that the food that it produces need for various forms of supervision in The HACCP recordkeeping and record will be injurious to health. order to accomplish the goals of the act. access requirements in the final rule are A primary objective of the seafood 5. Two comments expressed the view tied specifically to the critical control HACCP regulations is to establish a that the holding in Confectioners should points (CCP’s) in the manufacturing system of preventive controls for human be limited to the specific facts in that process. In other words, the food safety. The HACCP plan is a case. One comment stated that the case recordkeeping requirements are limited fundamental step in the development of only upheld FDA’s authority to impose to those points in the process at which these controls. It is the step in which the recordkeeping requirements on firms to control is essential if assurance that the manufacturer analyzes its process, facilitate recalls of potentially resultant product will not be injurious identifies the points at which problems dangerous products. The other comment to health is to be achieved. may occur, and establishes the noted that the case only granted FDA Second, the recordkeeping assists in parameters that must be met if those access to shipping records. The the efficient enforcement of the act. The problems are to be avoided. Thus, comment pointed out that FDA already recordkeeping requirements, by failure to have a HACCP plan would, in has access to such records from carriers focusing on the CCP’s, ensure that the fact, constitute an ‘‘insanitary under section 703 of the act. processor and the agency focus on those condition’’ as this term must be While it is true that the records that aspects of processing that most understood in light of the relevant case FDA was requiring, and to which the jeopardize food safety. Unlike the law. agency claimed access under the current inspection system, Section 402(a)(4) was added to the act regulations involved in Confectioners, recordkeeping in a HACCP-type system to ensure ‘‘the observance of those were source coding and distribution documents that preventive controls are precautions which consciousness of the records in order to facilitate recalls, the being followed and enables the regulator obligation imposed upon producers of court’s ruling involved broad principles to verify this fact. Such a system, perishable food products should require relating to the validity of the regulations therefore, assists in effective and in the preparation of food for generally and was not limited to recalls efficient enforcement of the act. consumption by human beings.’’ or shipping records. The court stated Finally, the HACCP-recordkeeping Hearings before the Senate Committee that in light of the statutory scheme as burden is not unduly onerous. It is on Commerce, S. 2800, 73d Cong., 2d a whole, ‘‘we find no basis for the limited to those aspects of processing Sess., Mar. 1934, as cited in United Association’s distinction between the that are critical to food safety. States v. 1,200 Cans, Pasteurized Whole FDA’s role in preventing and remedying Documentation that control is being Eggs, Etc., supra, 339 F. Supp. 140–141. commerce in adulterated foods. The maintained over these aspects of Clearly, HACCP reflects the emerging, agency believes that the Act imposes on processing need only be a minor internationally recognized the FDA an equal duty to perform each additional step in most instances. The understanding of the precautions role.’’ Id. at 694. This statement simply documentation required in the final rule necessary to produce safe food. These is not consistent with the narrow is narrowly tailored to ensure that only regulations embrace HACCP and reading suggested by the comment. essential information needs to be provide processors with directions for Rather, it fully supports FDA’s authority recorded. establishing HACCP systems and to adopt regulations to prevent the 6. Several comments questioned operating them as a matter of routine introduction of adulterated foods into whether FDA may have access to custom and habit that will ensure the interstate commerce. Clearly, HACCP records and plans on the safety of the food that they produce. compliance with FDA’s seafood HACCP grounds that the act does not explicitly Thus, FDA finds that operation under regulations will help to achieve that authorize such access. Some of these an effective HACCP system is necessary end. comments pointed to the lack of to meet a processor’s obligation under It is also true, as one comment authorization in section 704 of the act section 402(a)(4) of the act. pointed out, that section 703 of the act (21 U.S.C. 74), the provision that expressly grants FDA access to shipping authorizes the inspection of food 4. Records records and not to the kinds of processors and other types of In Confectioners, the court upheld processing records required in these establishments. The comments pointed FDA’s authority to issue regulations regulations. FDA cannot agree, however, out that section 704 of the act authorizes under section 402(a)(4) of the act that that Confectioners stands for the agency access to certain records relating included recordkeeping requirements. proposition that FDA should have to prescription drugs and medical The recordkeeping provisions of the access only to food manufacturers’ devices during the course of those regulations were challenged on the shipping records because those are the inspections but not to records relating to Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65101 foods. One comment felt that the FDA points out that it is not acting no statutory basis for FDA access to specific grant of records access for drugs under section 704 of the act. To ordinary food records. and devices in section 704 of the act effectuate the broad purposes of the act, The legal basis for FDA’s access to precluded expansion of access to there may be some circumstances in records has already been fully addressed records not specifically mentioned in which access to the records would be in this preamble. It is important to note the act. Other comments felt that FDA meaningless without the opportunity to that the agency is not claiming a right was barred from access simply because copy them. While the agency does not of access to food records coextensive the act does not expressly grant it. anticipate that copying will be with that for drugs and devices under FDA does not agree, as the agency’s necessary in most instances, perhaps the section 704 of the act. Rather, FDA is authority under sections 402 and 701(a) most readily predictable circumstance asserting a right to access to records that of the act to issue these regulations in which copying would be necessary is is narrowly tailored to advance the provides ample authority for records when an investigator needs assistance purposes of the sections of the act that access. The line of cases cited above from relevant experts in headquarters to it is implementing here, i.e., records stands for the proposition that a lack of evaluate the record. Without copying, it relating to the CCP’s in a firm’s process. explicit delegated authority does not would be necessary for the agency to While the agency is not sure what the invalidate agency regulations so long as rely solely on the notations and report comment meant by ‘‘ordinary’’ food the regulations are consistent with the of the investigator. records, it is worth pointing out that the act’s overriding purpose. In This reliance may not be adequate in position in this regulation on agency Confectioners, the court upheld FDA’s many circumstances. For example, there access to records is a longstanding authority to adopt recordkeeping may be a deviation from a critical limit interpretation for regulations of this requirements in the absence of an (CL) that poses no health risks. Without type. Agency access to processing and explicit delegation of authority. In that the ability to show a copy of the records production records has been required case, moreover, the court found no to someone within the agency with the since the early 1970’s in FDA’s evidence that Congress intended to necessary expertise in the area, an regulations for thermally processed low- immunize food processors from limited investigator would have to cite the acid foods packaged in hermetically recordkeeping (569 F.2d at 695). company for a violation. If, however, an sealed containers (part 113) and for Similarly, the court in Nova Scotia agency expert determined that the acidified foods part 114 (21 CFR 114). concluded, in the absence of such deviation posed no safety risks, the As discussed in the new section, these evidence, that there was no impediment agency could use its enforcement regulations were issued primarily under to a broad reading of the statute based discretion not to pursue a violation. the authority of both sections 402(a)(4) on the general purpose of the Congress 8. One comment expressed the view and 404 of the act (21 U.S.C. 344), in protecting public health (568 F.2d at that the act does not support a neither of which specifically mention 248). mandatory HACCP program that FDA has concluded, therefore, that access to records. includes access to records for the entire these regulations are consistent with 5. Relevance of Section 404 of the Act section 704 of the act and with the act seafood industry. According to the as a whole. Because the preventive comment, the act permits FDA access to 10. Several comments expressed the controls required by HACCP are records only under extreme conditions view that FDA should base HACCP essential to the production of safe food where there is a potential for injury, but, regulations on section 404 of the act as a matter of design, the statutory the comment noted, hazards are only rather than on section 402(a)(4) of the scheme is benefited by agency access to associated with a small percentage of act. Some of these comments were records that demonstrate that these fish. referring to these seafood HACCP controls are being systematically FDA cannot agree. While it is true that regulations, while others were primarily applied. The case law supports FDA’s those seafood-related illnesses that are concerned with any HACCP regulations authority to require such recordkeeping reported to public health authorities that FDA might issue for other foods. and to have access to such records. tend to be associated with a limited Other comments expressed the view Other countries, including Canada, number of species, potential hazards are that FDA’s existing low-acid canned the European Union (EU) Norway, much broader. As indicated above, the food regulations should serve as a Australia, and New Zealand, which 1991 NAS report on seafood safety model for new HACCP programs. have already implemented HACCP-type provides an extensive inventory of Because some of the low-acid canned systems, have deemed it necessary to hazards. food regulations have been issued under the success of their systems to provide For the benefit of the commentor it is section 404 of the act, all of these for recordkeeping and record access worth noting that if a processor is comments may have been making the along the lines of this regulation (for involved with species and processes for same general point. either their entire seafood industries or which there are no food safety hazards Most of those that advocated use of seafood export industries). Thus, it is that are reasonably likely to occur, a section 404 of the act as the legal basis widely accepted that recordkeeping and HACCP plan will not be necessary expressed concerns about the inspectional access are essential under these regulations. As will be appropriateness of relying on section components of a HACCP-type seafood discussed later in this preamble, the 402(a)(4) of the act and the narrow system. In addition, in order to maintain agency anticipates a post- grants of access to records in the act, other countries’ faith in the safety implementation dialog with firms on especially in section 704 of the act, and standards of U.S. seafood exports, FDA whether they have hazards that must be concluded that the act only grants the needs similar access to records showing controlled in accordance with these agency access to records under extreme HACCP implementation. regulations and, if so, how many. situations. One comment urged that 7. One comment expressed the view 9. One comment expressed the view FDA issue the seafood HACCP that the copying of records by FDA, as that the authority to inspect ordinary regulations under the authority of authorized by these regulations, is food records has not been asserted section 404 of the act in order to beyond the scope of section 704 of the before. This statement was made in enhance the agency’s ability to achieve act. support of the contention that there is compliance through the permit system. 65102 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations

Section 404 of the act is entitled concluded that most seafood in the U.S. monitoring records required here and ‘‘Emergency Permit Control.’’ It marketplace is unlikely to cause illness. the day-to-day processing records that authorizes FDA to establish a permit FDA believes that, for seafood at least, are required in LACF regulations. system for processors of food that may HACCP should be the norm rather than B. HACCP Pro and Con be injurious to health when two an exceptional remedy for an extreme conditions are met: (1) Contamination is situation. A functioning HACCP system 1. Overview reflects an understanding of the wide with microorganisms, and (2) the Nearly half of the comments included range of hazards to which seafood may injurious nature of the product cannot specific statements of support or always be subject and provides for a be adequately determined after the opposition for the concept of a systematic application of the preventive product enters interstate commerce. mandatory HACCP program to ensure controls necessary to minimize the Section 404 of the act authorizes FDA to the safety of seafood. The supporters inspect firms that operate under this occurrence of those hazards. It is the outnumbered the opponents by over 10 permit system but does not mention most effective and efficient way known to 1. of ensuring food safety as a matter of records or FDA access to records. Nearly all of those who supported the As indicated previously, FDA has design. In this regard, FDA has approach also had technical comments issued regulations under this authority. concluded that, for seafood, the efficient on various provisions in the proposal. Regulations at part 108 (21 CFR part enforcement of the act should not have Some conditioned their support on the 108) subpart A establish the permit to depend on a finding of an emergency availability of additional enforcement system generally. Regulations at part under section 404 of the act. 108 subpart B establish that acidified It is also worth noting that section 404 authorities or resources for FDA. These foods and thermally processed low-acid of the act would limit the application of aspects of their comments will be foods in hermetically sealed containers HACCP to hazards by reason of responded to elsewhere in this (i.e., low-acid canned foods, or ‘‘LACF’’) contamination from microorganisms. preamble. A small number of these meet the criteria in section 404 of the FDA is not aware of any HACCP expert comments supported the concept of a act and are therefore subject to the or authoritative body, including the mandatory HACCP program for seafood permit system. Subpart B requires National Advisory Committee for but opposed the proposal as drafted. processors of these foods to register with Microbiological Criteria for Foods The supporters of the concept FDA and to submit detailed information (NACMCF), which advocates limiting included most of the seafood trade to FDA on their manufacturing HACCP to these hazards only. A full associations that commented, processes. discussion of hazards to which seafood businesses, consumer advocacy As an adjunct to these regulations, HACCP should apply appears later in organizations, Federal and State FDA has also issued the regulations, this preamble. agencies, professional societies, referred to previously, at part 113 and FDA does not agree that section 404 academics, and a member of Congress. part 114 for these products. These latter of the act is the only basis for these The reasons for this support included: regulations require the maintenance of seafood HACCP regulations, or that it Enhancement of consumer confidence, day-to-day processing records that are would be a more appropriate basis. It is the superiority of HACCP-type retained by the processor and are in not clear, moreover, how section 404 of preventive controls over traditional addition to the processing information the act can be cited as supporting the CGMP-type controls and end-product that must be sent to FDA. FDA proposition that the agency only has sampling, the view that HACCP is the investigators have access to, and may access to records in extreme situations. most efficient and effective way to copy, these records (§§ 108.25(g) and As indicated earlier, section 404 of the ensure safety, and the view that a 108.35(h)). act contains no express grant of access mandatory HACCP system reflects an While the permit system may have to records. Again, FDA has concluded appropriate assigning of primary some compliance advantages, as pointed from the case law that, under responsibility to industry for producing out by one comment, there are other appropriate circumstances, the agency safe food. Other reasons included a considerations in this case that are more has access to specific types of records leveling of the competitive playing field, important. The permit system is, as the on foods and food processing for both domestically and internationally; title of section 404 of the act declares, specific purposes, where such access is the need for prompt adoption of a an ‘‘emergency’’ system. Because it is an not expressly provided for in the act, mandatory HACCP program by FDA to extreme remedy for extreme situations, but the agency cannot conclude that this enable the seafood industry to maintain FDA has used section 404 of the act right is limited to extreme situations. its market position in Europe and relatively sparingly. Some of the comments provided elsewhere throughout the world; greater In the case of seafood, although FDA examples of extreme situations to which productivity; and increased industry strongly believes that a HACCP system HACCP regulations should be limited control over processing. will correct deficiencies in the current from their standpoint. These examples One large seafood trade association system and provide significant further raise important issues that will be stated: assurance of safety, the agency cannot addressed elsewhere in this preamble. [The association] strongly supports the conclude that seafood is in an overall 11. Two comments expressed the adoption of a comprehensive regulatory state of emergency from a public health view that the LACF regulations should program by the FDA which is designed for standpoint. This conclusion is serve as a model for the types of records fish and seafood using HACCP principles. consistent with the position taken by that would be accessible under HACCP HACCP systems have been applied the NAS. The NAS’ Institute of regulations. successfully by individual firms in our Medicine, in its 1991 report entitled FDA did in fact use the LACF industry, and they have been shown to be a ‘‘Seafood Safety,’’ devoted hundreds of regulations as a model in that regard. very cost-effective way of controlling safety hazards. Of equal importance, the adoption pages to areas of risk and made The HACCP plan required here is of a HACCP-based regulatory program should numerous recommendations about similar to the scheduled processes that lead to more effective and efficient use of control measures, including the processors must submit in the LACF FDA resources, and less disruption of the application of HACCP where regulations. Likewise, there is little processing and importing of seafood for appropriate. However, the NAS also difference between the HACCP- consumers. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65103

A small number of comments It may be argued—and some given every opportunity to demonstrate expressed opposition to the mandatory comments made the point—that the best why no hazards exist in their HACCP approach for seafood, however. way to reduce the overall number of operations. One State comment expressed the view illnesses from raw molluscan shellfish 4. Would Voluntary HACCP Be is to provide additional resources to the that HACCP would not have any Superior? significant effect on reducing illnesses States to enhance their water from molluscan shellfish. Another classification and monitoring abilities. 13. Some comments believed that a comment stated that, overall, seafood- Classifying and patrolling shellfish voluntary approach to HACCP for related illness data do not justify harvesting waters are important means seafood would be preferable to a mandatory HACCP for seafood. (Several of preventing molluscan shellfish that mandatory approach. One reason given other comments questioned the need for have been contaminated from sewage for this view was that, under a these regulations in light of the NAS’ from entering the marketplace. mandatory system, the risk of regulatory conclusion that commercial seafood is However, additional Federal resources action by FDA would compel processors generally safe. These comments either will probably not be available for this to design HACCP controls that were the generally opposed the proposed purpose in the foreseeable future. It is minimum necessary to comply with the regulations as drafted, or opposed its imperative, therefore, that the system rule. There would be a significant application to the comments’ segments that is in place be made as efficient as disincentive for processors to design of the seafood industry, but did not possible. HACCP plans that have the greatest express opposition to mandatory It would be incongruous to exempt practical impact on food safety out of HACCP as a concept.) None of these from a national system of preventive fear that occasional failure to meet those comments supplied any new seafood- controls the processors of products higher standards would trigger a related illness data. identified by the NAS as the source of regulatory response. the greatest numbers of seafood- If voluntary HACCP systems were 2. The Significance of the Illness Data associated illnesses. FDA strongly already universal, or nearly so in the seafood industry, and they generally The preamble to the proposed believes that HACCP controls will help applied safety controls that were beyond regulations described broadly what is shellfish processors and regulators alike the minimum needed for safety, FDA known and not known about the extent to better focus on potential safety would see little reason to establish a of seafood-related illness in the United problems and less on tangential matters mandatory system. However, HACCP is States. Foodborne illnesses tend to be than historically has been the case. A not the norm, and given the current significantly underreported to public full discussion of the application of situation in the seafood industry, FDA health authorities. Consequently, HACCP to raw molluscan shellfish appears later in this preamble. finds that making HACCP mandatory is precise data on the numbers and causes necessary to ensure that safe, of foodborne illness in this country do 3. Exempt Specific Industry Segments? wholesome, and unadulterated product not exist. FDA does know, however, that 12. Comments stating that HACCP is produced. Thus, FDA is adopting part illness from seafood does occur, and systems should not be mandated for 123 (21 CFR part 123). that a wide variety of hazards have been specific industry segments usually The agency acknowledges the identified that could cause illness from referred to either the crab processing or possibility that, under a mandatory seafood (see Ref. 7, pp. 1–13). The the catfish industries. These comments system, firms will perceive that they are overwhelming majority of these hazards generally expressed the view that on safer ground with FDA if they are amenable to preventive controls. HACCP requirements for these establish minimum acceptable controls FDA’s draft Guide addresses controls for industries were not necessary. that are more easily met, rather than over 20 specific types of safety hazards. FDA advises that these regulations are more stringent controls that are beyond The primary purpose of these flexible enough so that HACCP-type the minimum necessary to ensure safety regulations is to ensure that preventive controls are not required where they are and, therefore, are harder to meet. For controls are systematically applied in not necessary, i.e., where it is example, in deciding what CCP’s to seafood processing as a matter of routine reasonably likely that hazards do not identify in a HACCP plan, a processor custom and usage, and in a way that can exist. It is the agency’s experience, might err on the side of inclusion under be verified by company management as however, that there are reasonably likely a voluntary plan but keep the number of well as by regulatory authorities. Thus, hazards associated with crabmeat as a CCP’s down to the minimum acceptable while the reported illness data are cooked, ready-to-eat product, including to FDA if having a plan is mandatory. highly relevant to whether these the growth of pathogens as a result of It remains to be seen whether regulations should be issued, they are time-temperature abuse of the product processors will really choose to behave not the sole basis for the regulations. and the potential for pathogen survival this way under a mandatory system. The For molluscan shellfish in particular, from inadequate pasteurization. There choices that processors will make may FDA agrees with the commenters who are reasonably likely hazards associated depend, in part, on FDA policy toward believe that the principles of the with the processing of catfish (e.g., HACCP plans that are beyond the National Shellfish Sanitation Program contamination from agricultural minimum. The logic in favor of the (NSSP) should continue to form the chemicals, improperly used aquaculture agency initiating regulatory action when basis for the molluscan shellfish safety drugs, and a variety of hazards resulting a processor fails to meet its own CL but program in this country. There is no from the in-plant processing succeeds in meeting a minimum level clear alternative to proper water operations). It is incumbent on that would have been an acceptable CL classification and patrol by State processors of these products to know to FDA, would be that the firm is out of authorities as the basis for molluscan and control such hazards. control vis a vis its own preventive shellfish safety. HACCP provides The agency recognizes that whether process. The logic against initiating processors with an excellent system for reasonably likely hazards exist involves regulatory action would be that the ensuring that these preventive-type case-by-case determinations. As will be processor is still in control in terms of controls are adhered to in a systematic discussed in the ‘‘HACCP plan’’ section meeting minimum necessary safety way. of this preamble, processors will be parameters, and that the product is, in 65104 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations

FDA’s opinion, safe to eat. As an between inspections will increase In addition, FDA intends to increase additional factor, FDA does not want to significantly, creating ‘‘an unenforced the frequency and improve the discourage firms from establishing industry honor system.’’ The consistency of processor inspections preventive controls for themselves that commenter, and some others, also through HACCP-based work sharing are beyond the minimum necessary to advocated additional enforcement partnerships with the States. One of the ensure safety. authorities. agency’s goals is for these regulations to In evaluating monitoring records, The success of this program will serve as a basis for partnerships that FDA will first determine whether the depend on a number of factors. One of involves a pooling of resources. recorded values are within the these factors, unquestionably, will be While FDA acknowledges the processor’s critical limits as set out in the ability of a regulatory authority, or comments’ concerns about resources, its HACCP plan. Where values are found authorities, to adequately monitor the agency would not agree that the that are outside the CL’s, the agency will processors’ HACCP systems through HACCP program should be abandoned determine the cause and extent of such inspections. If the frequency of because of resource constraints. Quite occurrences, and what corrective action, inspections is too low, safety may not be the contrary, resource constraints make if any, the processor has taken. Where ensured, consumer confidence may be it imperative that FDA seafood product that was involved in a CL eroded, and the accusation that the inspections be based on the most deviation was distributed without first program is self-regulatory may have effective and efficient system devised to being subjected to appropriate merit, even though a HACCP-based date. HACCP is that system. Moreover, corrective action, FDA will determine inspection allows the investigator to the agency believes that there is enough the cause and extent of the control view a firm’s critical operations over flexibility in a HACCP-based inspection failure. time, not just at the moment of the system to permit gradations in In determining the appropriate agency inspection. regulatory response to CL deviations, The use of a HACCP-based system implementation (e.g., focusing on the FDA will assess the public health risk bears on the adequacy of FDA’s most extreme hazards; selectively that the product poses. This assessment inspection resources in two important reviewing records) to accommodate will, in part, involve a determination of respects. The first is the effect of the use whatever resource situation exists at any whether the minimum limit necessary of HACCP-based inspections on given moment. to ensure safety was breached. FDA inspection frequencies. The time needed With regard to enforcement acknowledges that this level and the to conduct a HACCP-based inspection authorities, as made clear above, the act processor’s CL may not always be the will undoubtedly vary depending on the provides ample authority for the same. The agency is not likely to take number of hazards, complexity of the establishment and implementation of a action against a product that it finds operation, and other factors. The first HACCP-based system by FDA. poses no significant public health risk, round of HACCP inspections will likely Regardless of whether additional regardless of whether it has or has not take longer—possibly as much as twice authorities might be desirable, there met the processor’s CL. as long in high-risk and complex simply is no reason for FDA not to Nonetheless, processors must operations—as the CGMP-based proceed to establish and implement a establish controls to ensure that inspections FDA presently conducts, HACCP-based system forthwith. appropriate corrective actions are taken but the time-per-inspection is likely to 15. Another comment expressed when their CL’s are breached. Where drop significantly thereafter. It remains opposition to mandatory HACCP for the such controls fail, FDA expects to be seen whether inspection times will seafood industry on the grounds that processors to redesign their control eventually shorten to current times, or HACCP diverts the responsibility for mechanisms as necessary. Chronic whether HACCP-based inspections will ensuring a safe product from the failure to appropriately respond to CL always take longer on average. In any government to the fish processors. deviations demonstrates that a event, FDA finds some merit in the FDA’s intent is not to transfer its processor’s HACCP system is comments’ basic concerns about legitimate responsibilities with regard to inadequate, and that fact could cause inspection frequencies. FDA to have some regulatory concern. Second, as a countervailing matter, a food safety to the regulated industry. In 14. Another comment urged that HACCP-based inspection can be a more point of fact, the industry already has HACCP for seafood should be voluntary efficient and effective inspection than a responsibility under the law to produce on the grounds that FDA lacks the CGMP-based inspection, largely because a safe product. HACCP helps to clarify, resources and statutory enforcement it can be highly focused on matters that however, how responsibility for human authorities to operate a mandatory are critical to safety, and because access food safety is divided between industry system. Other comments expressed the to key safety monitoring records allows and the regulator. same types of concerns about FDA the investigator to evaluate the process Industry, as stated above, must take resources and enforcement authorities over time. Thus, some compensation for primary responsibility for the without concluding that a voluntary increased intervals between inspections production of safe food, while the system would be preferable. One will be provided by the fact that the regulator must be responsible for setting comment, from a consumer advocacy investigator gets not merely a snapshot standards (including program organization representing several other of the operation of the plant in time but regulations such as these), verifying that organizations, supported the concept of a broad view of how the plant has been the industry is doing its job, and taking a mandatory HACCP system but operated over the preceding months or remedial action when it is not. HACCP expressed reservations about FDA’s even years, as reflected in the plant’s requires that the industry be aware of ability to adequately perform HACCP- records. Thus, FDA concludes that, on the human food safety hazards that are based inspections of processors without balance, the somewhat longer reasonably likely to occur, and that additional resources. Other commenters inspection intervals that might occur industry operate under a system that is expressed the same kinds of concerns. under a HACCP-based system would be designed to ensure that those hazards The comment pointed out that because fully compensated for by the broader are not realized. Thus, HACCP enables HACCP inspections will take longer view provided by a HACCP-based the industry to demonstrate that it is than current inspections, the intervals inspection. meeting its legitimate responsibilities. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65105

5. Other Issues engaged in a series of ‘‘town meetings’’ should apply to high-risk products only. 16. One comment supported the in nine cities across the country shortly Roughly two-thirds of these comments concept of HACCP but expressed the after the proposal was published in preferred a high-risk approach. For the view that the regulation drafting process order to answer questions about the most part, they either did not define should be started over by forming a proposed regulations and encourage ‘‘high risk,’’ or defined it as including committee consisting of representatives comments. The public response to essentially the top three reported from various segments of the seafood FDA’s proposal contributed seafood- related illnesses (virus-related industry, and appropriate government substantially to the contents of the final from raw molluscan shellfish, and university personnel. A few other regulations. scombrotoxin, and ciguatoxin). For the comments expressed the view that FDA C. Should Some Types of Processors Be most part, other hazards were assumed had acted too quickly in issuing the Exempt? to represent a low risk. proposed regulations and also requested 17. One comment recommended that In the preamble to the proposed the regulations initially cover the that FDA start over by engaging in regulations FDA asked for comment on discussions with industry, foreign hazards reported at the highest levels of whether either processors of ‘‘low-risk’’ to the Centers for Disease Control and regulatory agencies, academia, and products or small processors, or both, consumers. These latter comments, Prevention (CDC) because these hazards should be exempted from the are at least known to be causing illness, which were mostly from companies not requirements of the final regulations. primarily involved in the processing of and that the agency should phase in The agency asked for information on other hazards as appropriate if the seafood, preferred a voluntary approach whether the regulatory burden could be to HACCP, with mandatory applications foodborne-illness reporting system were reduced without compromising the to reveal a need to do so. only in exceptional situations. FDA did public health protection goals of the Few comments were received on not act too quickly, or without regulations, and whether there exists a whether there could be a basis for appropriate consultation, in issuing the rational way to distinguish ‘‘high risk’’ distinguishing high risk from low risk proposal in this proceeding. As the from ‘‘low risk,’’ and big processors other than reported illnesses. Some preamble to the proposed rule from little processors, for purposes of comments suggested that the agency documented at some length, the HACCP. proposal was the culmination of an should consider severity of illness as a extensive process by FDA and others, 1. Exempt Low Risk? criterion. Some of these comments including the seafood industry itself, The most obvious way of specifically cited smoked and smoke- that led major representatives of that distinguishing high-risk products from flavored fish as products that should be industry to request the issuance of the low-risk products would be on the basis covered on this basis because of the proposal. Before that, industry trade of reported, confirmed, seafood-related devastating effects of botulism. A few associations testified repeatedly before illnesses. The preamble to the proposed comments expressed the view that Congress in the late 1980’s through the regulations pointed out some problems mandatory HACCP should be limited to early 1990’s in support of legislation with this approach. First, the agency hazards that can cause loss of life or that would have required a mandatory pointed out that the underreporting and irreversible injury. inspection system for seafood based on skewed reporting that occurs with Several comments objected to a ‘‘low HACCP principles. respect to foodborne illness creates risk’’ exemption in any form. Some FDA participated in pilot programs in significant concern as to whether pointed out that, given the the past such as the seafood HACCP reported illnesses represent a reliable underreporting and skewed reporting pilot conducted jointly by FDA and the enough factor to serve as the basis for that exists, the CDC foodborne-illness National Marine Fisheries Service an exemption to these regulations. reporting system does not provide a (NMFS) of the Department of Commerce Second, FDA stated that it was suitable basis for making determinations (DOC) in 1990 to 1991. In addition, FDA concerned that there could be a of comparative risk (i.e., high risk versus ran programs with seven other significant potential for harm that could low risk). These comments expressed countries. In developing these be controlled by HACCP but that would concern that linking the requirements of regulations, the agency also took not have shown up in the data that is these regulations to illness reporting advantage of information from the relied on to establish risk. For example, that has already occurred would have Model Seafood Surveillance Project while there may be no reported cases of the effect of exempting emerging (MSSP). The MSSP was conducted by botulism associated with some products hazards, at least until they caused the DOC at the request of Congress in that have the potential for Clostridium reported illness. 1986 to design an inspection system for botulinum toxin, the severity of the Other comments stated that there is seafood consistent with HACCP consequences of the hazard warrant no significant advantage to exempting principles. As part of the MSSP project, preventive controls. Likewise, while low-risk products because processors of 49 workshops were conducted involving there may be no reported cases of these products will have simpler 1,200 industry, State, and university domoic acid intoxication associated HACCP plans than those who process participants. Canada currently has a with shellfish from a particular area, products with more potential safety HACCP system, and the EU has issued preventive controls are warranted as hazards. One comment stated that a directives that move in that direction. soon as a such a case is made public. high risk-only approach made some The agency has concluded that Thus, the preamble asked whether sense but, as a practical matter, would sufficient field trials have already taken potential for harm might be a reasonable negate the added assurance to place to conclude that HACCP is a way to distinguish high-risk from low- consumers from HACCP that seafood is viable method of hazard control for the risk products for purposes of an safe and processed under some form of seafood industry. exemption. FDA was interested in regulation. According to this comment, Public input into the development of whether comments could provide from a large seafood trade association, it the HACCP approach contained in these usable criteria for such an exemption. is more important that the entire food regulations has been substantial. As About 45 comments addressed the category be recognized as having been described earlier in this preamble, FDA question of whether the regulations subjected to modern safety assurance 65106 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations procedures than that the regulations international trading partners are opting companies while requiring HACCP of exempt the low risk end of the industry. for complete systems. others. One State that has implemented FDA has considered these points of 2. Exempt Small Processors? view and has concluded that, at least for mandatory HACCP for seafood now, there is no reasonable way to 18. Over 60 comments addressed the processors observed that HACCP divide seafood products into high risk question of whether the regulations requirements had not proven to be an and low risk for purposes of these should exempt small businesses. About excessive burden to small businesses in regulations. The comments that five out of six of these comments that State. suggested defining ‘‘high risk’’ in terms opposed an exemption. Some comments that supported of the most frequently reported illnesses Those that supported an exemption including small businesses in the are correct that the volume of reporting for small businesses expressed concern coverage of the HACCP requirement tends to concentrate substantially in the about the effect of the general costs of recommended, nonetheless, that FDA three hazard areas mentioned above. implementation, particularly the costs should provide assistance to small Because illnesses that are confirmed and of training and recordkeeping. One businesses through guidelines, model reported tend to be those that are the comment observed that many small plans, and technical and financial most easily traced or diagnosed, businesses are economically-strapped, assistance. Some comments however, the relative significance of the old, family enterprises that support an acknowledged that small firms can work high level of reporting in these three often fragile local economy. Another through trade groups on common plans areas—as well as the drop-off in comment expressed the view that small and training. Other comments felt that dropping reporting in other areas—is not fully businesses should be exempt because small firms from the final regulations known. Moreover, illnesses associated they are not involved in international would adversely affect consumer with chronic hazards are virtually trade. One comment noted that the confidence. One comment expressed unreported because of the difficulties in highest volume producers (i.e., large fear that the international standing of associating such illnesses to specific businesses) are where a mistake affects FDA’s seafood safety program would be food sources. the most consumers. in jeopardy if the regulations were to The comments did not include any One comment recommended that exempt some firms. new data that would reveal whether the FDA develop exemption procedures to FDA does not know how to exempt risks associated with the most reported relieve small companies of paperwork small business without jeopardizing the illnesses are actually the highest risks or and training requirements, especially if public health objectives of the only the most apparent. No new they produce low-risk products. A few regulations. An exemption for small information was provided to allow FDA comments suggested that small processors of ‘‘low-risk’’ products to determine whether distinguishing businesses, or at least small businesses would run into the difficulties high risk from low risk on the basis of with good records, be exempt from explained above in the discussion of reported illnesses would constitute a ‘‘positive’’ recordkeeping, i.e., recording whether these regulations should only rational division for purposes of these the results of each monitoring. Under apply to ‘‘high-risk’’ products. FDA regulations. Nor has FDA been supplied this kind of exemption, small businesses agrees with the comments that, in the with information that would allow it to would only record unusual occurrences seafood industry, the size of the conclude whether other valid criteria and corrective actions. operation often does not coincide with exist. The majority of comments that argued the number or type of hazards that must FDA agrees with the comments that against exempting small businesses be controlled in order to ensure a safe pointed out that the requirements of provided a number of reasons. One product (i.e., small size does not HACCP are less when risks are low. comment pointed out that as much as automatically mean minimal hazards). Moreover, as will be discussed later in half of seafood consumed in the United For example, cooked, ready-to-eat this preamble, FDA has revised the final States is from small firms. Several seafood processing, a relatively complex regulations to provide that HACCP comments stated that size is not related manufacturing operation, typically plans are not required when there are no to risk. Small firms are the major requiring a larger than average number reasonably likely safety hazards to producers of many high-risk products of CCP’s, is concentrated in the small control. Thus, HACCP inherently tends (e.g. cooked, ready-to-eat and raw business portion of the seafood to distinguish between high- and low- molluscan shellfish). Thus, according to industry. Additionally, the processing of risk products without the need for the comment, the final regulations raw molluscan shellfish, a product explicit exemptions. would represent a futile exercise if identified by NAS as being associated FDA also agrees that broad small firms were not included. One with a disproportionately large exemptions would put at risk some of comment observed that small percentage of the seafood-borne the principal objectives of these companies sometimes represent more of illnesses, is most commonly performed regulations. Explicit exemptions make a risk potential than large companies by small firms. FDA also agrees that, the system less flexible and might not due to lack of enough trained quality because seafood businesses tend to be cover emerging situations for which control personnel. Other comments small, an exemption for small preventive controls are necessary to pointed out that small businesses with businesses could make HACCP the keep illnesses from occurring in the first simple operations would have simple exception, rather than the rule, in this place. A system that includes such plans and a minimum of recordkeeping. industry. exemptions would likely not provide as One comment pointed to difficulties The concerns expressed in the much consumer confidence as would a that FDA would have in administering comments about the possible adverse complete HACCP system. In addition, exemptions to the regulations, consequences of these regulations on FDA notes that the benefits to the particularly in distinguishing between small business, however, should not be industry in international trade from firms that were and were not entitled to taken lightly, and the agency has not adopting a HACCP system might be an exemption. Another concern done so. FDA has no desire to establish minimized if such exemptions were expressed by comments was the a mandatory regime that cannot be met adopted because the United States’ potential unfairness of exempting some by otherwise responsible companies, Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65107 small or otherwise, that are producing needed. There are unavoidable costs addressed the definitions were safe food. Indeed, these regulations are associated with this requirement. It is primarily concerned with the meanings based on the premises that: (1) imperative that these costs be affordable proposed for ‘‘fish,’’ fishery product,’’ Preventive controls for safety should be to small business and be no greater than ‘‘critical control point,’’ ‘‘cooked ready- within the reach of anyone who is necessary. As discussed at length in the to-eat,’’ and ‘‘importer.’’ As a result of producing seafood for commerce (i.e., ‘‘Training’’ section of this preamble, the comments as well as agency preventive controls should not be FDA has been extensively involved with decisions to modify other provisions in prohibitively burdensome, either a consortium called the ‘‘Seafood part 123, FDA has deleted, revised, and financially or conceptually); and (2) it is HACCP Alliance’’ (the Alliance) added definitions to those proposed at in the public interest that everyone who consisting of representatives from § 123.3. is producing seafood for commerce Federal and State agencies, industry, 2. Cooked, Ready-To-Eat Fishery should practice preventive control for and academia, to create a uniform, core Product human food safety. The fundamental training program that will meet the question that the issue of whether to requirements of these regulations and 19. The proposed regulations exempt small business raises is whether will cost very little. The agency is also contained a definition for ‘‘cooked, these premises are valid. aware of HACCP training that has been ready-to-eat fishery product’’ at Having fully considered the provided for years for members of § 123.3(b). The term was used at comments on this issue, FDA is not industry by NMFS and others. As an proposed § 123.10(a) and in the persuaded that awareness of likely food additional matter, FDA is allowing job appendices to the proposed regulations. safety hazards would cause financial experience to serve as a form of training The final regulations no longer contain hardship to small businesses, or that in order to avoid the unnecessary this term, and the appendices are not having reasonable, practical controls for expense to a processor of having to pay being codified. For these reasons, FDA those hazards will cause undue harm. for a HACCP course when at least one has eliminated the definition of As will be discussed in the ‘‘Records’’ employee already has knowledge that is ‘‘cooked, ready-to-eat fishery product’’ section of this preamble, the costs equivalent to that provided by the from the final regulations. associated with the recordkeeping course. Nonetheless, a large number of requirements of HACCP are really These efforts should alleviate the comments expressed concerns about the incidental to the cost of monitoring and concerns of those who believe that the definition as it was proposed. In need not place a significant burden on training requirement will be too general, the comments urged that small businesses. For example, after burdensome on small business. The certain products be excluded from the checking the temperature of a agency will monitor the situation definition of ‘‘cooked, ready-to-eat refrigerator, the observer need only take closely once this training gets fishery products;’’ those that are not an additional moment to document the underway. If costs turn out to be fully cooked by the processor or that result of the observation. The agency significantly higher than FDA will be recooked by the consumer, and cannot emphasize too strongly that, in anticipates, the agency will consider low-acid canned foods subject to the most instances, only very simple some modification to the requirement. provisions of part 113. recordkeeping is needed to adequately While the agency regrets that grant FDA recognizes the significance of the serve the purposes of the system. The monies are not available to small use of the term. Because the agency has question from the agency’s standpoint, businesses from FDA, the effort that the excluded use of the term in these final therefore, is whether the actual agency is investing in guidelines and regulations, it will defer consideration monitoring of critical operations, at training development is a form of of the comments until drafting of the reasonable frequencies, would be subsidy that should keep costs down Guide. prohibitively expensive to the small generally. 3. Critical Control Point (CCP) operator. FDA has not been provided with a basis for such a conclusion. D. Definitions FDA proposed at § 123.3(c) to define This leaves plan development and a critical control point as ‘‘a point in a 1. General training as costs. The guidelines that food process where there is a high FDA is making available on plan In addition to relying on the probability that improper control may development should help substantially definitions contained in the act and cause, allow, or contribute to a hazard to keep development costs down. FDA those in the umbrella good in the final food.’’ The word ‘‘hazard’’ is also aware that trade associations and manufacturing practice regulations at in this definition was intended to refer others are interested in developing part 110 (21 CFR 110), FDA proposed at primarily to food safety hazards. It model plans that, when used in concert § 123.3 (a) through (t) to define 20 terms could also have applied to quality and with the guidelines, should further that are essential to the interpretation of economic hazards, however, because the reduce the resources that a firm will part 123. Approximately 100 comments agency was proposing at § 123.6(c) to need for plan development. The addressed various aspects of the encourage processors to apply HACCP creation of a HACCP plan does require proposed definitions at § 123.3. to these hazards as well. some thought and effort by the The majority of the comments on 20. A significant number of comments processor to ensure that hazards and definitions were concerned with the urged the agency to modify the controls are understood and identified. meanings that FDA proposed for definition so that it clearly addresses Nonetheless, the guidelines and model ‘‘processor’’ (§ 123.3(n)) and only food safety. These comments plans will enable small processors to be ‘‘processing’’ (§ 123.3(m)). These recommended that the word ‘‘hazard’’ able to apply the thought and effort comments generally asked for should be prefaced with either ‘‘food necessary to create a HACCP plan with clarification about the applicability of safety’’ or ‘‘health,’’ or that FDA should maximum efficiency and minimum cost. the definitions to a given commercial codify the definition for ‘‘hazard’’ that FDA is requiring that all processors activity, or contended that the has been recommended by the either employ at least one trained definitions should be amended to either NACMCF. individual or contract for services from include or exclude certain activities. Several of the comments urged FDA at least one trained individual, as Most of the other comments that to adopt the NACMCF definition for 65108 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations

‘‘critical control point’’ so that the appropriately a part of these mandatory implies that the CL must be set to attain agency’s regulations would be HACCP regulations but should remain the lowest possible risk, unlike the consistent with nationally and subject to traditional good ‘‘reduce to an acceptable level’’ standard internationally agreed upon HACCP manufacturing practices controls (see, in the NACMCF definition for CCP. definitions. One objected to the phrases: e.g., § 110.80(b) (21 CFR 110.80(b))). As Although FDA agrees that the ‘‘high probability,’’ because of its discussed earlier, these regulations are definitions in these regulations should connotation in statistical applications; being issued, in part, under section closely adhere to the NACMCF’s ‘‘improper control,’’ because of a lack of 402(a)(4) of the act. That section recommended definitions, the agency a standard for proper control; and provides that a food is adulterated if it concludes that, in this instance, FDA’s ‘‘cause, allow, or contribute,’’ because it is prepared, packed, or held under wording is more descriptive for could allow the elevation of trivial insanitary conditions whereby it may regulatory purposes and more useful to concerns to critical control point status. have been rendered injurious to health. processors. However, FDA has been FDA is persuaded by those comments While decomposition in some species persuaded that the phrase ‘‘minimize that urged consistency with the can be injurious to health and is the risk’’ may be misinterpreted as NACMCF definition for ‘‘critical control therefore within the scope of section requiring outcomes that are not point.’’ The agency has, therefore, 402(a)(4) of the act, most decomposition realistically achievable by a processor. modified proposed § 123.3(c) affects the quality of seafood but not its To provide clarification and consistency (redesignated as § 123.3(b)) to read, safety. Decomposition that affects with the revised definition of ‘‘critical ‘‘Critical control point means a point, quality but not safety is subject to control point,’’ FDA has replaced the step, or procedure in a food process at section 402(a)(3) of the act. Therefore, phrase ‘‘minimize the risk’’ with the which control can be applied, and a FDA is not subjecting decomposition phrase ‘‘prevent, eliminate, or reduce to food safety hazard can as a result be that is not safety related to the an acceptable level’’ in the final prevented, eliminated, or reduced to requirements of these final regulations regulation (now codified as § 123.3(c)). acceptable levels.’’ The modified but will continue to regulate As noted previously, this language also language is consistent with the agency’s decomposition under traditional CGMP appears in the NACMCF definition of decision to limit the HACCP provisions control. ‘‘critical control point.’’ The new of part 123 to the avoidance of food FDA points out that it has defined language correctly provides for the safety hazards (see the ‘‘HACCP Plan’’ ‘‘food safety hazard,’’ a term that the making of scientific judgments about section of this preamble for discussion). agency uses in the definition of ‘‘critical appropriate degrees of hazard reduction, It is also compatible with modifications control point,’’ in § 123.3(f). The agency based on the nature of the hazard and described elsewhere in this preamble discusses this definition, which is the availability of controls, and is more aimed at greater consistency with the consistent with the NACMCF consistent than the proposed language NACMCF recommendations. The recommended definition, later in this with accepted HACCP convention. wording change will not have any section. 23. One comment stated that the word practical impact on the requirements of ‘‘identified’’ should be deleted from the 4. Critical Limit (CL) the regulations because the definition proposed definition. still reflects the agency’s intent to FDA proposed in § 123.3(d) to define FDA is not persuaded to make any require that seafood be processed in a a ‘‘critical limit’’ as ‘‘the maximum or modification to the definition in way that eliminates, to the extent minimum value to which a physical, response to this comment. The possible, the chance that it will be biological, or chemical parameter must ‘‘identified hazard’’ refers to the hazard rendered injurious to health by be controlled at a critical control point identified in the HACCP plan. procedures that are under the control of to minimize the risk of occurrence of the 24. One comment stated that the the processor. identified hazard.’’ In the preamble to phrase ‘‘in the end product’’ should be The NACMCF definition does not the proposed regulations, the agency added following the word ‘‘hazard’’ in contain the phrases that were objected explained that the proposed definition the proposed definition. to by one of the comments as described was intended to be consistent with the FDA is not persuaded to make any above. Thus, the concerns raised by this concept of the NACMCF recommended modification to the definition in comment have been resolved. definition, which reads, ‘‘a criterion that response to this comment. Food safety 21. A few comments, however, stated must be met for each preventive hazards are, by definition, those that that the definition should also apply to measure associated with a critical cause ‘‘a food to be unsafe for human the control of all decomposition because control point.’’ However, the proposed consumption.’’ This definition implies a it is a major problem associated with definition was also intended to be more consideration of the end product that seafood. explanatory than is the NACMCF will be offered for human consumption. FDA acknowledges that, because of definition, especially as it relates to the 25. One comment objected to the the highly perishable nature of fish, assignment of a minimum or maximum phrase ‘‘the maximum or minimum decomposition is probably the most value and in the relationship of these value’’ in the definition, stating that, as common problem associated with values to a minimization of the risk, in the case of certain food additives, seafood. The agency further rather than to an absolute elimination of there are situations where both a acknowledges the comments that risk. maximum and a minimum value exist, expressed concern that failure to control 22. Several comments stated that the and a processor is required to maintain this problem will continue to adversely proposed definition of a ‘‘critical limit’’ the process between these values. affect consumer confidence. The should be modified to be the definition FDA is not persuaded to make any industry especially should heed this recommended by the NACMCF. The changes to the proposed language in concern and consider the application of comments asserted that the NACMCF response to this comment. The word HACCP principles to decomposition, if definition is the internationally ‘‘or,’’ which the agency uses in the necessary, to help maintain the quality accepted standard, and that its use in definition, is inclusive. Thus, properly of its products. the regulations would avoid confusion. read, § 123.3(c) states that a CL is the Nonetheless, decomposition that is A few comments argued that FDA’s use maximum value, the minimum value, or not associated with safety is not of the phrase ‘‘minimize the risk’’ both the maximum and minimum Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65109 values within which the parameter must 27. Two comments contended that controls for C. botulinum in their be controlled to protect against the there should be separate definitions for HACCP plans. This hazard is already occurrence of a food safety hazard. finfish and shellfish, to differentiate addressed by the requirements in those For consistency with the definition of between relative levels of safety parts (see § 123.6(e) of these regulations ‘‘critical control point,’’ FDA has added concerns (e.g., high and low risk). and the ‘‘HACCP Plan’’ section of this the phrase ‘‘food safety’’ before the word FDA disagrees with this comment. preamble). ‘‘hazard’’ in the text of § 123.3(c). The Such a differentiation would serve no 29. One comment suggested that the language in the final regulation now purpose in these regulations. The language of the proposed definition reads, ‘‘Critical limit means the purpose of these regulations is to set up inappropriately excludes fish roe. maximum or minimum value to which a unitary system that responds to a FDA points out that the phrase ‘‘any a physical, biological, or chemical particular product based on the risks it edible human food product derived in parameter must be controlled at a presents, not to establish a system that whole or in part from fish,’’ in the critical control point to prevent, is divided up based on risk presented. proposal was intended to cover these eliminate, or reduce to an acceptable The merits of differentiating between products. FDA, however, has modified level the occurrence of the identified products on the basis of risk is the definition of ‘‘fishery product,’’ and food safety hazard.’’ addressed in the section of the preamble it no longer includes this language. entitled ‘‘Should Some Types of Therefore, to make clear that roe are 5. Fish Processors be Exempt?’’ covered, FDA has made explicit in the definition of ‘‘fish’’ that the roe of the 26. FDA proposed to define ‘‘fish’’ as 6. Fishery Product ‘‘fresh or saltwater finfish, molluscan covered animals are included. shellfish, crustaceans, and other forms FDA proposed to define ‘‘fishery 30. A significant number of comments of aquatic animal life other than birds or product’’ as ‘‘any edible human food urged that the definition exclude mammals.’’ A significant number of derived in whole or in part from fish, products that contain only a minimal including fish that has been processed comments suggested that FDA should amount of fish. These comments in any manner.’’ The preamble to the modify this definition to clarify whether suggested various standards that FDA proposed regulations stated that the it includes species such as sea snails, should apply to exclude such foods intent of the definition was to include from the definition. These included: abalone, frogs, alligators, turtles, other products that contain seafood as an Products that contain less than 50 reptiles, amphibians, sea cucumbers, ingredient as well as those products that percent fish; products that contain less plants, or algae. are comprised of seafood alone, because than 10 percent fish; products that FDA agrees that this type of hazards derived from seafood are contain 2 percent or less of cooked, or clarification would be helpful and has reasonably likely to occur in both types 3 percent or less of raw, fish; products modified the definition at § 123.3(d) to of products. in which fish is not a characterizing read: 28. A few comments urged that FDA ingredient; and products that contain Fish means fresh or saltwater finfish, exclude from the meaning of ‘‘fishery any nonfish ingredient unless a hazard crustaceans, other forms of aquatic animal product’’ any product that is made in analysis identifies a significant hazard life (including, but not limited to, alligator, whole or in part from commercially associated with the fish ingredient. The frog, aquatic turtle, jellyfish, sea cucumber, sterilized fishery products subject to the comments provided no justification for and sea urchin) other than birds or mammals, requirements of parts 113 and 114, (i.e., and all mollusks, where such animal life is the percentages suggested. intended for human consumption. thermally processed low-acid canned FDA agrees that foods that contain foods and acidified foods). inconsequential amounts of fish, such as The term ‘‘mollusks’’ includes FDA disagrees with this comment. Worcestershire sauce, are not the types abalone, sea snails, and land snails (e.g., Although such foods are required to be of foods that should come under the escargot and any other terrestrial produced in accordance with certain purview of these regulations. It is gastropods, such as the giant African HACCP-type control procedures to doubtful that they pose reasonably land snail (Achatina fulica)). The reduce the risk of the hazard of C. likely hazards associated with their fish addition of examples of aquatic animal botulinum toxin production, these components. Moreover, these products life and the mention of mollusks are control measures do not address other are neither represented nor perceived as intended to make clear which species potential hazards. For example, part 113 being fish-based foods. are covered by the term ‘‘fish.’’ Water- provides no assurance that the raw The comments provided FDA with no dwelling reptiles and amphibians other material used in the canning of tuna basis, however, upon which to select a than alligators, turtles, and frogs have will be free from contamination with specific minimum content of fish not been specifically listed because they dangerous levels of histamine. Likewise, ingredient for the definition of ‘‘fishery are not significant commercial food products made in part from low-acid product.’’ There is no obvious minimum sources in the United States. Finally, canned foods and acidified foods can percentage of fish on which to exempt FDA notes that, consistent with the also present hazards that must be a food that contains only a small proposed definition, aquatic plants addressed. For example, a salad made in amount of fish from the provisions of (including algae) are excluded. This part from canned tuna can be subjected these regulations. definition is consistent with the to recontamination with pathogenic Instead, the agency accepts the traditional treatment of these products microorganisms and time-temperature comment that, to meet the definition of by FDA. abuse during preparation. a ‘‘fishery product,’’ a food should be The new language also serves to Although FDA cannot exclude those characterized by the qualities of the fish emphasize that these regulations apply products made in whole or in part from that it contains. Thus, these regulations only to those products that are intended low acid canned foods or from acidified will apply to those foods whose basic for human consumption. This point was foods from the definition of a ‘‘fishery nature is defined by the fish that they explicit in the proposed definition for product,’’ it is worth noting that the contain. Accordingly FDA has modified ‘‘fishery product’’ but was inadvertently agency has exempted processors who the proposed definition (§ 123.3(e)) to not mentioned in the proposed are following the requirements of part read in part, ‘‘Fishery product means definition of ‘‘fish.’’ 113 or part 114 from having to include any edible human food product in 65110 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations which fish is a characterizing regulations. The examples of hazards in categorically rule out that these ingredient.’’ This revision will serve to the proposed regulations—and codified individuals could be the importer ensure that mandatory HACCP in these final regulations—are because sometimes they may be in a requirements do not apply to products consistent with the NACMCF definition position to make decisions relevant to that contain inconsequential amounts of for a food safety hazard. Therefore, for safety. fish from a public health standpoint. the sake of clarity, FDA has decided to 33. Several comments stated that FDA 31. One comment stated that fish oil characterize these examples in a should modify the definition of that is intended for use in human food definition § 123.3(f), which reads, ‘‘Food ‘‘importer’’ to specifically exclude should not be subject to the safety hazard means any biological, intermediary agents involved in the requirements of these regulations until chemical, or physical property that may importing process, such as freight it has been separated, through initial cause a food to be unsafe for human forwarders, licensed U.S. customs processing, from the oil that will be consumption.’’ The only difference brokers, food brokers, food jobbers, used for animal feeds and other between this definition and the carriers, and steamship representatives. industrial purposes. FDA does not find NACMCF recommendation is the These comments noted that, although that the comment provided sufficient addition of the word ‘‘human.’’ FDA has imported products may enter the United justification to treat this product included this word to prevent confusion States under the name of an differently from other human food about the application of these intermediary, this practice is done for products processed from fish. The regulations to pet or animal feed. convenience in handling the paperwork agency acknowledges that the hazards In keeping with the new definition, at the port of entry. The comments associated with these products may be and to provide further clarification stated that the intermediary has little minimal. If that is the case, the fish oil about the nature of the hazards that are responsibility for conducting the processor’s burden will also be minimal, required to be addressed by these negotiations with an overseas producer perhaps limited to training expenses regulations, the term ‘‘hazard’’ has been and rarely takes possession of the and the performance of a hazard changed to ‘‘food safety hazard’’ where products. Therefore, the comments analysis. Moreover, these regulations do it appears throughout the codified stated, the intermediary has limited not apply to products that are not for portion of this document. influence on the safety of the imported human consumption and fish oil 8. Harvester goods. Two comments pointed out, for processors that are confident that their example, that customs brokers that production will not be used for human FDA proposed to define ‘‘harvester’’ provide their clients with the service of consumption need not apply the as ‘‘a person who has an identification using the broker’s customs bond are number issued by a shellfish control requirements of these regulations. listed as the ‘‘importer of record’’ and authority for commercially taking may thereby, unintentionally, be 7. Food Safety Hazard molluscan shellfish by any means from regarded as importers under the 32. A number of the comments a growing area.’’ After review, the proposed definition, even though they recommended that FDA define ‘‘safety agency has concluded that it was not do not own or control the product being hazard’’ or ‘‘food safety hazard.’’ Several necessary to limit ‘‘harvesters’’ to those imported. of these comments recommended that persons who have an identification Conversely, two comments argued FDA adopt a definition that is consistent number, primarily because in some that agents, such as food brokers, should with the NACMCF recommended jurisdictions, identification numbers be included in the definition of an definition for ‘‘hazard.’’ The comments may not be issued by a shellfish control ‘‘importer’’ because they bring product were primarily concerned with the authority. Without this limitation, FDA into the United States and sell it. The coverage of these regulations. They has concluded that there is no need to comments argued that the brokers urged that the regulations be clear that establish a particular meaning for this should, therefore, be held responsible only food safety hazards need be term for the purposes of these for ensuring that the foreign processor addressed by the HACCP plan and regulations. Therefore, the agency has complies with the provisions of these argued that a definition would help to removed this definition from the final regulations, to avoid an unfair accomplish that. regulations. The NACMCF definition of ‘‘food advantage over domestic processors. FDA concludes, based on the safety hazard’’ reads, ‘‘A biological, 9. Importer information provided in the comments, chemical, or physical property that may FDA proposed to define ‘‘importer’’ as that these intermediaries can neither be cause a food to be unsafe for ‘‘a person, or his representative in the categorically included or excluded. consumption.’’ While FDA provided no United States, who is responsible for However, the agency recognizes that the definition of ‘‘food safety hazard’’ in the ensuring that goods being offered for number and type of comments on this proposed regulations, it did raise the entry into the United States are in issue demonstrate that the language of issue of the coverage of the regulations compliance with all laws affecting the proposed § 123.3(h) was inadequate to in proposed § 123.6(b) (redesignated as importation.’’ The preamble to the convey the agency’s intent, as § 123.6(c)), which mandated coverage of proposed regulations explained that the articulated in the preamble. For this food safety hazards only and listed nine importer is the owner of the imported reason, FDA has clarified the definition types of food safety hazards posed by goods or the owner’s representative in of ‘‘importer’’ in § 123.3(g) to read, in the various types of fish and fishery the United States. The preamble further part: products. This list included examples of noted that freight forwarders, food biological, chemical, and physical brokers, food jobbers, carriers, and Importer means either the U.S. owner or hazards. Additionally, the preamble to steamship representatives would not consignee at the time of entry into the United the proposed regulations discussed at usually be considered to be the importer States, or the U.S. agent or representative of the foreign owner or consignee at the time of length the significance of a number of of the product for the purposes of these entry into the United States, who is these types of hazards. regulations because they are not usually responsible for ensuring that goods being FDA agrees that the meaning ascribed in a position to make decisions that can offered for entry into the United States are in by the agency to a food safety hazard ensure the safety of the product. compliance with all laws affecting the should be as clear as possible in these However, the preamble did not importation. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65111

Reference to the owner or consignee of assignment of the ‘‘Importer of Record’’ of this rulemaking. The point of this the imported goods parallels the or the holder of the U.S. Customs Surety rulemaking it to determine whether language in section 801 of the act (21 Bond in determining the ‘‘importer’’ for FDA should require that HACCP be U.S.C. 381). the purposes of these regulations, as was followed in the processing of seafood. Because the ownership of imported suggested in the preamble to the The question of whether cooked products can change many times in a proposed regulations. In some instances molluscan shellfish that is being offered relatively short period of time after the ‘‘Importer of Record’’ or the holder for import into this country is being entry, the party who is the owner or of the U.S. Customs Surety Bond will harvested in a manner that creates consignee at the time that these not meet the qualifications of an public health concerns and unfair products are offered for entry must be importer that are set out in § 123.3(g). competitive advantages is a separate identified as the importer. As the person 10. Lot of Molluscan Shellfish matter that the agency will address, if that has the ability to decide whether to necessary, in the future. offer the product for entry, this person FDA proposed to define a ‘‘lot of Similar issues with respect to the use is in a position to ensure that the molluscan shellfish’’ as ‘‘a collection of of the term ‘‘fresh or frozen’’ and the product is processed under appropriate shellstock or containers of shellstock of term ‘‘raw’’ in proposed subpart C of controls and to demonstrate this fact to no more than 1 day’s harvest from a part 123 of these regulations and in FDA. single, defined growing area harvested proposed part 1240 are discussed in the FDA must be able to verify the by one or more harvesters.’’ Because of ‘‘Molluscan Shellfish’’ section of this existence of the evidence of compliance language changes that FDA has made in preamble (see comment 144). by the foreign processor. This evidence, subpart C of part 123, this term isno according to the provisions of § 123.12, longer used in the regulations. 12. Potable Water is to be in the possession of the Consequently, FDA has decided that FDA proposed to define ‘‘potable ‘‘importer.’’ It must be available in the there is no need to define this term and water’’ as ‘‘water which meets the U.S. has eliminated the definition. United States, however, if FDA is to Environmental Protection Agency’s consider the information in deciding 11. Molluscan Shellfish Primary Drinking Water Regulations as whether to admit the products. Thus, set forth in 40 CFR part 141.’’ Because where products are offered for entry by 34. Comments from a number of State of changes that the agency has made in a U.S. owner or consignee, that owner agencies, trade associations, seafood proposed § 123.10 (redesignated as or consignee will, for purposes of these processors, and the ISSC objected to the § 123.11), the term is no longer used in regulations, be considered the importer use of the term ‘‘fresh or frozen’’ in the these regulations. Consequently, FDA because it will have control of this proposed definition of ‘‘Molluscan has eliminated the definition. evidence. Where products are often shellfish.’’ The comments were offered for entry without a U.S. owner concerned because this definition Nonetheless, a significant number of or consignee, the U.S. agent of the would have the effect of exempting comments questioned when it would be foreign owner or consignee will be canned and any other heat-processed necessary for processing water to meet considered the ‘‘importer’’ for purposes molluscan shellfish from the source the definition of ‘‘potable water.’’ of these regulations to make clear who control, recordkeeping, and tagging Because it is likely that both terms (i.e., will be expected to have this evidence provisions of proposed subpart C of part processing water and potable water) will for such products. 123 and proposed § 1240.60(b). be used in the first edition of the Guide, FDA recognizes that the U.S. owner or The comments stated that limiting FDA will consider these comments consignee of the product, or the U.S. these provisions to raw products would during the redrafting of the Guide. representative of the foreign owner or allow foreign firms to continue to heat- 13. Preventive Measure consignee, at the time of entry into the treat or can molluscan shellfish that are United States may also serve other harvested from foreign waters that do FDA has added a definition for the functions. For example, it may also be not meet National Shellfish Sanitation term ‘‘preventive measure’’ at § 123.3(i). a food broker for, or warehouser or Program (NSSP) standards and to export Although the term was not used in the processor of, the product. It may, in them to the United States. The proposal, the concept of preventive some instances, also be the freight comments stated that this situation was measures was a fundamental part of the forwarder, customhouse broker, or not in the best interest of the public hazard analysis that was implicit in carrier for the product. These other health because of the potential for the proposed § 123.6(b). ‘‘Preventive functions will not matter, however, if presence of heat-stable natural toxins, measure’’ is used in the final regulations the person is the U.S. owner or such as paralytic shellfish poison or in § 123.6(a) in the description of a consignee of the product, or the U.S. amnesiac shellfish poison, as well as hazard analysis. representative of the foreign owner or chemical contaminants. The comments FDA proposed to require that all consignee, at the time of entry into the also complained that, because State processors create a HAACP plan. Based United States. From FDA’s experience, laws and regulations require that all on comments received, however, as while certainly not impossible, it is at molluscan shellfish harvested in the explained below, FDA has decided to least unlikely that this qualification will United States come from waters require that processors conduct hazard be met by the customhouse broker, the approved by a shellfish control analyses to determine whether they freight forwarder, the carrier, or the authority regardless of whether they are need to develop a HACCP plan. This steamship representative. to be consumed raw or decision necessitates that FDA define The agency has attempted to clarify cooked,continuing to allow foreign ‘‘preventive measure.’’ In accordance this definition by including a sentence processors who export cooked shellfish with the recommendations of the that reads, ‘‘For the purposes of this to the United States to use molluscan NACMCF (see Ref. 34, p. 189), a hazard definition, ordinarily the importer is not shellfish from unapproved growing analysis must identify both the food the custom house broker, the freight waters places the domestic shellfish safety hazards that are reasonably likely forwarder, the carrier, or the steamship industry at a competitive disadvantage. to occur and the preventive measures representative.’’ Further, FDA does not FDA believes that these comments are that are available to the processor to intend to rely exclusively upon the generally valid but are beyond the scope control such hazards. 65112 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations

Identifying the preventive measures is exclude fishing vessels, carriers, and harvested and transported would necessary in order to determine whether retailers from the definition of amount to leaving CCP’s unregulated. a processing step is a CCP for that ‘‘processor’’—and thus from direct One comment observed that carriers hazard. A processing step cannot be a coverage under these regulations— have an incentive to turn off CCP for a hazard if no preventive because of practical considerations, refrigeration units to save gas. measure is available at that step to such as the fact that the large size of the Several comments expressed the view control the hazard. The definition of U.S. fishing fleet and the large numbers that exclusion of vessels and carriers ‘‘preventive measure’’ in these of carriers and retailers would from the coverage of these regulations regulations is essentially the same as overwhelm any rational Federal unfairly makes processors responsible that recommended by the NACMCF. inspection system, and because the for these aspects of seafood production. agency believed that the public health One comment pointed out that vessels, 14. Process Monitoring Instrument goals of the regulations could still be especially those that harvest scombroid The term ‘‘process control met. toxin-forming species, should be legally instrument’’ was used in the proposal FDA expressed its tentative view that responsible for any safety hazards that for consistency with the phrase ‘‘the the HACCP regulations would affect they cause through improper handling. procedures * * * that will be used to fishing vessels and carriers indirectly Some comments asserted that HACCP control and monitor each of the critical though the controls that processors can be practiced on fishing vessels and control points.’’ For consistency with impose to meet their obligations under by carriers, at least with regard to the NACMCF principles of HACCP, HACCP. As for retail establishments, the temperature controls. FDA has modified the language of preamble explained that, historically, One State agency expressed the view § 123.6(c)(4) to eliminate the word they have been the regulatory that holding processors responsible for ‘‘control.’’ In order to achieve responsibility of State and local the behavior of fishing vessels has, in its consistency within these regulations, governments. FDA traditionally has experience, not worked, nor has the agency has concluded that the provided support through training, education of fishing vessel owners or appropriate term for such instruments technical assistance, and the voluntary compliance by owners. The is, therefore, a ‘‘process monitoring development of model codes. Since the comment did not document the basis for instrument.’’ issuance of the proposal, FDA has these conclusions, however. Some published its retail and institutional comments argued that, while it would 15. Processing and Processor ‘‘Food Code,’’ with the recommendation be difficult to include all vessels and Along with the term ‘‘importers,’’ the that it be adopted by State and local carriers, those involved with high-risk terms ‘‘processor’’ and ‘‘processing’’ jurisdictions. The Food Code covers products should be included. collectively define who is subject to handling and receiving practices at Comments in favor of excluding these regulations. retail, and its most recent version vessels and carriers from these HACCP includes HACCP elements. regulations noted that FDA’s rationale FDA proposed to define ‘‘processing’’ as: FDA’s approach to these issues is for exclusion was prudent given the [W]ith respect to fish or fishery products, number, location, and diversity of the handling, storing, preparing, heading, based on agency discretion and does not gutting, shucking, freezing, changing into derive from a lack of statutory authority. U.S. fishing fleet and the complexity of different market forms, manufacturing, FDA has broad authority to regulate transport arrangements. For carriers, one preserving, packing, labeling, or holding. Food that is shipped in interstate comment noted that partial loads that Practices such as heading or gutting intended commerce. While carriers are exempt are dropped off in different locations solely to prepare a fish for holding on board from most direct FDA regulation in would be especially difficult to control. a harvest vessel are excluded. This regulation accordance with section 703 of the act Some comments asserted that direct does not cover the operation of a retail (21 U.S.C. 373), the food being regulation of these entities was not establishment. transported is not exempt. Moreover, necessary because processors could FDA proposed to define ‘‘processor’’ as: FDA has authority under the Public establish minimum requirements as a [A]ny person engaged in commercial, condition of purchase, as part of their custom, or institutional processing of fish or Health Service Act (the PHS Act) (42 fishery products, either in the United States U.S.C. 264) to take such measures as it HACCP systems. Some comments urged, or in a foreign country. Persons engaged in deems necessary to prevent the however, that fishing vessels be subject the production of foods that are to be used introduction, transmission, or spread of to HACCP requirements when they in market or consumer tests are also communicable disease from foreign deliver directly to an entity that is not included. Persons who only harvest or countries into the States or from one subject to these regulations (e.g., a transport seafood, without otherwise State or possession into any other State restaurant). One comment argued that engaging in processing, are not covered by or possession. receiving firms should require that these regulations. FDA received a significant volume of product be in the same condition that it a. Vessels, carriers, and retail. As comment on the question of coverage by was in when it left the previous explained in the preamble to the these regulations of fishing vessels, processor. proposed regulations, the definitions of carriers, and retail establishments. The Some comments questioned the ‘‘processor’’ and ‘‘processing’’ excluded majority of comments strongly favored ability of fishing vessels and carriers to fishing vessels that essentially only inclusion of these entities within the comply with HACCP requirements. A harvest, transportation companies that scope of the these regulations. number of comments favored carry but do not otherwise process fish 35. The arguments relating to vessels alternatives to HACCP, such as and fishery products, and retail and carriers tended to overlap. Those guidelines and standard operating establishments. FDA invited comment who favored inclusion noted that procedures (SOP’s). on these exclusions. hazards—particularly those associated FDA is impressed by the strong In the preamble, FDA acknowledged with time-temperature abuse and support for inclusion, of fishing vessels that food safety hazards can be insanitation—can originate with fishing and carriers in the coverage of these introduced at these three points in the vessels and carriers. The comments regulations. Some of this support was commercial distribution chain. argued that not controlling the based on concern over the loss of However, FDA tentatively decided to conditions under which seafood is quality because of poor handling Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65113 practices (e.g., the effect of time- HACCP program may, at some later ‘‘processing.’’ According to these temperature abuse on shelf life and date, cause the agency to reconsider its comments, such establishments should spoilage unrelated to safety) rather than approach. not be exempt from HACCP on food safety considerations. For fishing vessels, FDA intends, for requirements. Nonetheless, members of these two the time being, to issue good handling Other comments took the view that industries should be aware that practice guidelines. To that end, the these regulations should not apply to significant concerns have been agency is studying those issued by the retail establishments, primarily for the expressed with regard to their practices. State of Alaska and by the Codex reasons provided in the preamble to the For some species and products, the Alimentarius Commission of the Food proposal. Some recommended that retail practices of fishing vessels and and Agriculture Organization/World establishments should not be subject to transporters can have significant public Health Organization, among other such the regulations so long as the Food Code health consequences. These practices available guidance. FDA will evaluate applies to them. Others suggested that can put pressure on a processor who is the effect of these guidelines, in HACCP should apply if the retail receiving these products to carefully addition to any requirements that States establishment buys directly from a scrutinize the condition of incoming have or may adopt regarding fishing fishing vessel or from sport fishermen. materials. The practices can also put vessel practices, and reassess at a later Some suggested better consumer pressure on a processor to determine date whether there is a need for education and voluntary HACCP-type whether carriers are suitable to transport mandatory Federal controls. The agency programs. their finished products (e.g., that invites continued correspondence and FDA agrees that there are hazards that carriers have proper refrigeration). the sharing of views on this matter. occur at the retail level that can render The agency appreciates the argument The comments that recommended meaningless the controls that may have that all entities that can affect safety in that vessels that sell directly to ‘‘non- been in place elsewhere in the chain of the distribution chain should accept and HACCP’’ establishments (e.g., production and distribution. The NAS share this responsibility. These points restaurants) should be required to have has cited retail and food service notwithstanding, FDA received no HACCP plans are advised that the Food establishments as sources of seafood- comment that provided information Code addresses the subject of source related illnesses (see Ref. 7, p. 27). FDA about how the agency could operate an control for retail establishments and is convinced—and the comments inspection program for carriers and recommends the requirement of HACCP support—that proper controls at the harvest vessels with its current plans for retail establishments in some retail level are imperative to ensuring a resources. For this reason, the agency circumstances. This matter relates safe product. concludes that such a program is principally to State and local laws and Nonetheless, FDA’s observation in the impractical at this time. is addressed below in the discussion of preamble to the proposed regulations When processors accept raw materials retail establishments. remains valid that retail establishments for processing, especially from vessels, For carriers, the situation is pose an inspection burden well beyond they assume some responsibility for the complicated by the restriction in section the capacity of FDA. No comments have condition of the incoming materials, 703 of the act that was described provided any basis for the agency to regardless of how others are regulated. previously. As one comment conclude otherwise or would justify the This is true under both general recommended, FDA has had significant shift of resources that would commercial law and the laws conversations with other Federal be necessary for FDA to even begin to administered by FDA. Carriers likewise agencies on the subject of transportation address the retail sector in a meaningful have responsibilities. If a carrier fails to of food and will continue to do so. In way. FDA notes that State and local exercise such controls as are necessary, the meantime, FDA strongly governments provide significant food that it carries may be rendered recommends that processors review the regulation of the retail food sector. FDA adulterated and the owner of the material in the Guide on how they can has committed the resources that it has product, i.e., the processor, could suffer exercise control over incoming raw available for addressing retail problems, product loss. Food handlers generally materials as well as over shipments of by providing training and technical should exercise sufficient control over their own products. One emerging area assistance to State and local the products in their custody to ensure that the agency is monitoring—and governments. Most significantly, FDA that any food safety hazards that are processors should consider also—is the has provided guidance in the form of reasonably likely to occur during that development of inexpensive time- the Food Code, which provides the period are being addressed. temperature sensors that indicate latest and best scientifically based As an additional matter, FDA agrees whether proper temperatures have been advice about preventing foodborne with those comments that advocated a maintained over a period of time. illness for adoption by those step-wise regulatory approach to these 36. The question of the inclusion of jurisdictions that have regulatory entities. retail establishments within the responsibility for food service, retail, Mandatory HACCP for seafood is a mandatory seafood HACCP system and vending operations. pioneering venture. While the involves some different considerations. It is worth noting that the Food Code groundwork has been prepared for it Processors have less influence, if any, suggests the use of HACCP controls at through pilot projects and other efforts over how their products are handled at retail in some circumstances where over the years, there is no substitute for retail than they do over how their comments argued for such controls as actual experience once it is operating. products are handled by vessel part of these regulations. Under the The agency would prefer, therefore, to operators or carriers. Some comments regulatory controls suggested in the construct the system through a series of pointed out, for example, that a Food Code, a retail establishment that manageable steps if it needs to do so, processor’s best efforts could be for purchases a scombroid toxin forming rather than to risk overextending itself naught if the product is subsequently species of fish from a recreational and the system initially. While these mishandled at retail. harvester, for example, would need a regulations exempt carriers and harvest Several comments pointed out that HACCP plan relating to how it will vessels from direct coverage, experience many retail establishments carry out ensure that fish had been handled so as with the application of a mandatory activities that meet the definition of to avoid time-temperature abuse. Under 65114 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations the Food Code, fish caught compared to complex processing result, subsequent processors will recreationally generally require the operations. Consequently, the preamble receive products that are generally free approval of a regulatory authority in to the proposed regulations invited of environmental hazards and thus will order to be sold to a retail comment on whether warehouses not need to establish HACCP controls establishment. The States should be should be exempted from the definition for them. More often than not, storing aware that the Food Code is responsive of ‘‘processor’’ and, by implication, will not be the first processing to concerns raised by comments in these whether ‘‘storing’’ should not be operation. Thus, a warehouse will not respects. FDA urges the States to included in the definition of usually be responsible for consider adopting the Food Code for ‘‘processing,’’ as one way of scaling the environmental hazards. The same retail and institutional operations. regulations back in terms of cost and principle holds true for hazards arising It is worth noting that the Food Code burden. during processing operations that occur applies HACCP requirements to retail 37. The comments split about evenly before storage in a warehouse. Those establishments as an exception for on this subject. Those that gave a reason hazards must be controlled during the extreme situations, rather than as the for including warehouses cited the need prior processing and generally not rule. There is still much to be learned to monitor storage temperatures for during storage. about the application of HACCP to retail species that are prone to safety hazards There may be occasions, however, establishments. Also, it may not be wise if they are temperature abused. Those when storage is the first processing to single out seafood for the application that opposed and provided a reason operation (e.g., when a warehouse will of HACCP at retail. Retail operations can tended to argue that storage alone be the first processor to receive raw be complex and involve the handling of should not subject an establishment to material fish from a fisherman or many types of foods. Trying to operate the requirements of the regulations. A aquacultural producer). Under these a HACCP system solely for seafood related concern was the view that circumstances, the warehouse, rather could divert attention away from warehouse operators do not have a than a distant owner of the product, important safety practices for high-risk thorough knowledge of the products may be in the best position to obtain products other than seafood. that they handle and only store products information that may be needed about For all these reasons, therefore, the that are provided to them by others. harvest site, fishing practices, and agency concludes that FDA should not This concern was expressed both by transportation to the dock that would be mandate HACCP systems for the seafood those who objected to the inclusion of germane to safety. There should be some component of retail establishments at warehouses and those who simply arrangement between the warehouse this time. Also, the agency has not been asked for clarification about the role of and the owner on this matter to ensure provided with any information on how warehouses. Others who asked for that environmental hazards are properly an FDA inspection program for such clarification expressed the view that addressed. establishments would be feasible. warehouses could be responsible for 38. One comment objected to the Nonetheless, the agency will take all conditions during storage. inclusion of storage within the comments on retail establishments After consideration of these definition of processing on the grounds under advisement for future comments, FDA has decided to retain that FDA should not dictate where consideration as the system evolves. warehouses (e.g., public storage CCP’s should be. It is important to note, however, that warehouses, foodservice distribution The agency is not attempting to do so. where a processor engages in mixed warehouses, and wholesale grocers) FDA acknowledges that whether storage operations (i.e., some retail and some within the definition of ‘‘processor’’ and is a CCP will depend on the wholesale), as in the case of cash-and- to retain ‘‘storing’’ within the definition circumstances. For example, refrigerated carry warehouses noted by one of the of ‘‘processing.’’ It is important to storage of a scombroid species will comments, the wholesale portion of the recognize that section 402(a)(4) of the likely be designated as a CCP, whereas operations will be subject to the act covers storage along with other dry storage of canned fish will not likely provisions of these regulations. As a forms of processing. It states that a be considered as such. further point of clarification in response product is adulterated if it is ‘‘prepared, 39. Another comment objected to to one comment, FDA has traditionally, packed, or held under unsanitary including ‘‘airline warehousing’’ within and will continue to, classify central conditions * * * whereby it may have these regulations. kitchens that distribute product to retail been rendered injurious to health.’’ If airlines hold product as part of their outlets that are owned by the same firm These regulations are being issued for usual course of business as carriers, they as a retail operation. the efficient enforcement of section are exempt from having HACCP plans in b. Warehouses. In the preamble to the 402(a)(4) of the act. Moreover, as accordance with section 703 of the act. proposed regulations FDA stated that described above, hazards can be c. Other processing operations. 40. A the definition of ‘‘processor’’ included introduced as well as controlled during few comments requested clarification on warehouses. Warehouses store fish and storage. HACCP is an appropriate whether waterfront facilities that unload fishery products, one of the operations system for the control of these hazards. vessels and pack the catch for shipment included in the proposed definition of FDA believes that the burden on to buyers are engaging in processing and ‘‘processing.’’ A ‘‘processor’’ is simply warehouses will be minimal given the thus meet the definition of ‘‘processor.’’ an entity that engages in processing. simplicity of the operation and the fact These firms perform activities such as There are food safety hazards that can that, in most cases, a warehouseman’s handling and storing that are included be introduced while storing a product responsibility under HACCP will only in the definition of processing and fall (e.g., in a warehouse). These hazards extend to conditions within the within the purview of the ‘‘prepared, include, among other things, pathogen warehouse that could cause a safety packed, or held’’ clause of section growth in cooked, ready-to-eat products hazard to occur. 402(a)(4) of the act. Additionally, these and histamine development in For the most part, hazards deriving activities warrant coverage under these scombroid toxin-forming species, as a from the environment (pesticides, etc.) regulations because of their relationship result of improper storage temperatures. will be controlled during the initial to reasonably likely hazards. For Nonetheless, the warehouse processing of the product (i.e., by the example, these firms are, by design, environment usually has few hazards first processor to take possession). As a usually the first processors to receive Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65115 the product from the fisherman or performed by custom packers, it is not fish on harvest vessels in the list of aquacultural producer. As such, they are the intent of these regulations to address exempted operations. often in the best position to control arrangements between a recreational FDA agrees that freezing is an environmental hazards, as was fisherman and a custom packer for the operation that is routinely used onboard previously discussed. They also often processing of fish for the personal use a harvest vessel in order to preserve the store the product, at least for short of the fisherman. The regulations only quality of the fish until it is landed for periods of time. In this capacity, they cover custom packing that is performed further processing (e.g., freezing may be responsible for ensuring that the on behalf of an owner who intends to performed onboard tuna harvesting product is not exposed to time- introduce the fish into interstate vessels). For this reason, the agency has temperature abuse, a phenomenon that commerce. Nonetheless, the agency revised the definition of ‘‘processing’’ to critically affects the safety of some does not believe that clarification to the include an exemption for onboard products. regulations is needed on this point. freezing. For these reasons, FDA has clarified 43. One comment urged that 46. One comment suggested that FDA the definition of ‘‘processing’’ at aquacultural producers that also also exempt onboard scallop shucking proposed § 123.3(m) (redesignated as eviscerate the fish before delivery to a operations. § 123.3(k)) to specifically include processing plant be required to comply Unlike shucking other molluscan dockside unloading. with the requirements of these shellfish, shucking scallops involves 41. One comment took the view that regulations. eviscerating, a procedure that falls only processors who own the products FDA agrees with the comment and within the exemption in § 123.3(k). that they are processing should be further states that the process of Consequently, onboard shucking of subject to these regulations and eviscerating is specifically included in scallops does not constitute processing suggested that the term ‘‘processor- the definition of ‘‘processing.’’ for purposes of these regulations. The owner’’ be substituted for ‘‘processor.’’ Eviscerating is excluded from the agency does not believe that a change in Several other comments questioned definition only when it occurs on a the definition is necessary in this whether custom processors that do not harvest vessel for the purpose of regard. own the product, should be subject to preparing the fish for holding en route 47. One comment suggested that, with the provisions of these regulations. to the processor. respect to molluscan shellfish, The definition of ‘‘processor’’ does 44. A few comments objected to FDA ‘‘processors’’ should include shellfish not hinge on ownership. As indicated including labeling in the definition of shippers, reshippers, shucker-packers, earlier, whether a product is adulterated ‘‘processing.’’ The comments argued repackers, and depurators. under section 402(a)(4) of the act that labeling operations are unlikely to The persons that perform all of these depends on the condition under which introduce hazards to the product. FDA types of operations are ‘‘processors’’ it was ‘‘prepared, packed, or held.’’ has considered these comments but under § 123.3(k)(1) and subject to the Ownership is not a relevant factor. finds that there is potential during some provisions of these regulations. Thus, Consistent with this principle, these labeling operations for the development the agency has concluded that no regulations define a processor as simply of hazards. For example, improperly change in the definition is necessary. an entity that engages in processing. controlled labeling operations for ‘‘Processing’’ is defined as including a scombroid species could result in time- 16. Scombroid Toxin-Forming Species number of activities, such as temperature abuse of the product, The term ‘‘scombroid toxin-forming manufacturing and packing, that are increasing the risk of histamine species’’ appears in § 123.6(c)(1)(vi) of normally performed by a custom packer. contamination. Cooked, ready-to-eat this final rule. While FDA did not Like warehouses that store products products could similarly be subjected to propose to define this term in the for distant owners, custom packers are time-temperature abuse, resulting in the codified portion of the proposed often in the best position to exercise potential for pathogen growth. The regulations, it did propose to define it HACCP controls for the products that inclusion of labeling in the list of in part 123 appendix B as: they process. Because of the real-time processing operations is not intended to [T]una, bluefish, mahi mahi, mackerel, nature of HACCP (i.e., because imply that this step should always, or sardines, herring, kahawai, anchovies, monitoring provides immediate even frequently, be considered a CCP. marlin, and other species, whether or not of feedback as to whether a hazard is being That can only be determined through the family Scombridae, in which significant controlled), the processor can most the conduct of a hazard analysis. levels of histamine may be produced in the effectively apply HACCP monitoring FDA proposed to exempt ‘‘heading or fish flesh by decarboxylation of free histidine controls to a food being processed, gutting intended solely to prepare a fish as a result of exposure of the fish after regardless of whether the processor is for holding on board a harvest vessel’’ capture to temperatures that permit the the actual owner of the food. FDA from the definition of ‘‘processing.’’ In growth of mesophilic bacteria. recognizes that it will often be beneficial drafting the proposed regulations, FDA Appendix B of part 123 is no longer for the custom processor and the owner was concerned that, in the absence of included in these regulations, as is of the product to fully discuss and agree such an exemption, harvest vessels that discussed elsewhere in this preamble. upon the HACCP controls that will be are presently heading or gutting fish Consequently, FDA is transferring the effected by the custom processor while would stop the practice to avoid being definition from part 123 appendix B to the product is in its possession. subject to the requirements of these § 123.3(m) to clarify the meaning of 42. One comment argued that custom regulations. FDA did not want an § 123.6(c)(1)(vi). packers should be included within the inadvertent consequence of these 48. A number of comments objected scope of these regulations because these regulations to be a reduction in product to the inclusion of herring in the list of processors often can or smoke quality. In addition, FDA tentatively scombroid toxin-forming species, recreationally caught products and are concluded that safety hazards arguing that there has been no often the only commercial entity that introduced by these operations are association between herring and cases of can assure the safety of such products. generally minimal. histamine poisoning. While the definition of ‘‘processing’’ 45. One comment noted that FDA In response to the comments, FDA has clearly covers the kinds of activities should include the practice of freezing modified the definition of scombroid 65116 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations toxin forming species to make specific It was never FDA’s intent to close included in the definitions section of reference to only tuna, bluefish, and Federal waters to molluscan shellfish the proposed regulations, the terms mahi mahi, since the overwhelming harvesting. These waters are beyond the ‘‘smoke-flavored fish’’ and ‘‘smoked majority of scombroid poisonings are jurisdiction of State shellfish control fish’’ were separately defined in associated with these types of fish. authorities, and no Federal agency appendix 1 to the proposal as: Processors should assess the potential of classifies them in the same way that ‘‘Smoked-flavored fish means fish that other species to product histamine. The States classify their own waters. FDA is is prepared by treating it with salt key to the definition is whether seeking a means to classify Federal (sodium chloride) and then imparting to significant levels of histamine may be waters. An agreement with NMFS it the flavor of smoke by other than the produced in the flesh of the fish. relating to the classification of Federal direct action of smoke, such as waters is one possible solution. For this immersing it in a solution of liquid 17. Shellfish Control Authority reason, FDA has modified proposed smoke,’’ and ‘‘Smoked fish means fish FDA proposed to define ‘‘shellfish § 123.3(o) to state that a shellfish control that is prepared by treating it with salt control authority’’ as ‘‘a Federal or State authority may be ‘‘a Federal agency.’’ (sodium chloride) and then subjecting it health authority, or foreign government This subject is also discussed in the to the direct action of smoke from health authority, legally responsible for ‘‘Molluscan Shellfish’’ section of this burning wood, sawdust, or similar the administration of a program that preamble. material.’’ FDA solicited comment on includes classification of molluscan 52. One comment urged that FDA the materials in appendix 1. Because the shellfish growing areas, enforcement of provide for the possibility of sovereign term is used in these final regulations harvesting controls, and certification of tribal governments serving as shellfish and FDA is concerned that there may be molluscan shellfish processors.’’ control authorities. confusion about its application, the 49. A few comments pointed out that FDA recognizes that the proposed agency has determined that a definition the definition should not require that a definition was deficient because it failed of ‘‘smoked and smoke-flavored fishery shellfish control authority be a State to include tribal governments in the list products’’ is needed in the codified ‘‘health’’ authority because in some of possible shellfish control authorities. portion of these regulations. FDA has States the responsibility is vested in The agency, the State of Washington, included one at § 123.3(s) that is other than a health agency, such as a and 19 Indian tribes have recently consistent with those proposed in the resource management agency. entered into a settlement that will likely appendix 1 to the proposal. Section FDA recognizes that these comments result in such an arrangement in the § 123.3(s) reads: are correct. For this reason, the agency State of Washington (Ref. 202). When has modified the language in § 123.3(o) such governments meet the necessary Smoked or smoke-flavored fishery products to read, in part, ‘‘State agency.’’ FDA means the finished food prepared by: (1) criteria, it is the intent of the agency to Treating fish with salt (sodium chloride), and believes that this term is sufficiently formally recognize them for purposes of (2) subjecting it to the direct action of smoke broad to encompass any of the present classifying shellfish growing waters and from burning wood, sawdust, or similar State arrangements. FDA has made a certifying shellfish processing plants for material and/or imparting to it the flavor of parallel change with respect to foreign inclusion on the Interstate Certified smoke by a means such as immersing it in government authorities, in order to Shellfish Shippers List. To provide for a solution of wood smoke. accommodate the same kind of this situation, FDA has modified the FDA received numerous comments on variations in regulatory arrangements. definition of ‘‘shellfish control the regulatory treatment of smoked and These final regulations similarly refer to authority’’ to include ‘‘sovereign tribal smoke-flavored fishery products, but a ‘‘foreign agency.’’ governments.’’ none that would affect this definition. 50. One comment, from a State FDA has also recognized that in many regulatory agency, stated that within the cases the functions of ‘‘classification of E. The HACCP Plan United States, FDA should be the molluscan shellfish growing areas, Approximately 100 comments responsible shellfish control authority enforcement of harvesting controls, and addressed one or more of the provisions and should mandate that processors certification of molluscan shellfish,’’ as of proposed § 123.6. This section of the register with FDA, much as it has done listed in the proposed regulations, are proposed regulations set out who must with low-acid canned foods and not carried out by a single agency. To write and implement a HACCP plan, medical devices. The comment further provide for such a situation, FDA has and what the HACCP plan must stated that a requirement in Federal modified the proposed language at include. regulations that State agencies perform § 123.3(o) to read, ‘‘program that 1. Preliminary Steps this function may be unconstitutional. includes activities such as,’’ rather than The comment misconstrued the simply ‘‘program that includes.’’ FDA proposed in § 123.6 to require provision. The provision is intended to that all processors of fish and fishery define the term ‘‘shellfish control 18. Smoked and Smoke-Flavored products prepare and implement a authority’’ rather than to provide Fishery Products HACCP plan that identifies the hazards substantive requirements. Furthermore, The terms such as ‘‘smoked fishery that are reasonably likely to occur and these regulations at no point mandate products,’’ ‘‘smoked fish,’’ ‘‘smoked and thus that must be controlled for that that States perform certain functions. smoke-flavored fishery products’’ were product. In the proposal, FDA 51. Some comments expressed used in the proposed regulations and acknowledged the process concern that the proposed definition of throughout appendix 1 to the proposal. recommended by the NACMCF for ‘‘shellfish control authority’’ was too As a result of decisions discussed developing a HACCP plan but did not narrow in that it did not include any elsewhere in this preamble, reference to propose to require that processors entities that could serve the function of ‘‘smoked and smoke-flavored fishery follow it. The process recommended by a shellfish control authority for Federal products’’ has been eliminated in these the NACMCF includes: Assembling a waters. The effect of the proposal, the regulations except in part 123, subpart HACCP team, describing the food and comments pointed out, would be to B. its distribution, identifying the intended close unnecessarily all molluscan While no definition of ‘‘smoked and use and consumers of the food, shellfish harvesting in Federal waters. smoke-flavored fishery products’’ was developing a flow diagram, verifying the Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65117 flow diagram, and performing a hazard either case, FDA is convinced that a recommendation for the assembly of a analysis (Ref. 34, pp. 187–188). All but processor’s decision to develop or not to HACCP team, in particular, could be a the last of these have been identified by develop a flow diagram will be, and significant burden for the many small NACMCF as the ‘‘five preliminary should be, driven by its perception of businesses operating in the seafood steps’’ of HACCP. the benefits of doing so. The comments industry. For these reasons, the final It was, and still is, the agency’s belief received on this subject were not regulations do not mandate any that processors would benefit from a sufficiently persuasive for the agency to preliminary steps that processors must process that included these five steps as conclude that a flow diagram should be perform as a prerequisite to conducting well as a hazard analysis in order to made mandatory. The comments a hazard analysis or drafting a HACCP successfully arrive at an appropriate provided no basis to find that in the plan. HACCP plan. Nonetheless, the agency absence of a flow diagram, a processor 2. Conducting a Hazard Analysis did not propose to require adherence to could not properly develop a HACCP the ‘‘five preliminary steps,’’ or plan, or that a plan, so developed, 54. A number of comments from trade explicitly propose to require that a would likely cause the HACCP program associations and processors objected to hazard analysis be performed. So long to fail. the requirement in the proposal that as the processor had, in the end, a As some of the comments pointed out, every processor have and implement a HACCP system that was appropriate for there may be some benefit to the written HACCP plan. These comments species and process, and was being regulator to have access to a flow contended that FDA should revise this implemented effectively, the agency diagram during an inspection, but this provision to require that a processor tentatively concluded that these convenience is not a sufficient reason to first conduct a hazard analysis to regulations did not need to manage the mandate it. FDA investigators will likely determine whether any food safety process any further. develop their own flow diagrams during hazards exist that can be controlled 53. A number of the comments their in-plant inspections and compare through HACCP and then prepare and contended that FDA should require that them with the decisions reached by the implement a HACCP plan only when firms adhere to these procedures in processor in the development of the the hazard analysis identifies at least preparing a HACCP plan. Specifically, a HACCP plan (e.g., the identification of one such food safety hazard. One few comments argued that the proposed hazards and CCP’s). While it may be comment stated that conducting a rule significantly diminished the beneficial for the investigator to be able hazard analysis is the first step in a two- potential effectiveness of HACCP by not to compare his or her flow diagram with step process, with developing a HACCP requiring that processors engage in the that of the processor, it is not essential plan being the second step. The ‘‘five preliminary steps.’’ The comments to the conduct of the inspection. comments urged consistency with the argued that inclusion of the preliminary FDA agrees with the comments that NACMCF recommendations in this steps would facilitate international trade stated that the other four elements of the regard. and reduce confusion on the part of ‘‘five preliminary steps’’ are desirable FDA agrees with the approach seafood importers and exporters through attributes of the HACCP development suggested by the comments and believes consistency with an internationally process. However, the agency has not that it is essentially consistent with recognized standard for HACCP. been persuaded that, in the absence of what the agency proposed. Although Several other comments urged that a regulatory requirement that they be FDA did not explicitly propose to the NACMCF recommendation for the followed, the HACCP program is require that every processor conduct a development of a process flow diagram, unlikely to succeed. In order to write an hazard analysis, completion of such an in particular, by a processor be made appropriate plan some or all of these analysis by every processor was implicit mandatory. These comments identified steps will likely have to be performed, in the requirement in proposed several benefits from such a even without a regulatory requirement § 123.6(b)(1) and (b)(2) that processors requirement: To facilitate employee to do so. However, if a processor can identify both the hazards that are implementation of the plan, to facilitate write a plan without these steps, the reasonably likely to occur and the CCP’s processor verification activities, to goals of the regulations will still have for each of these hazards. reduce the time needed for regulators to been met. For FDA to require them to In response to the comments, FDA has review the manufacturing process, and be performed and documented in every decided to clarify its regulations to to enable the regulator to determine case would add burden and reduce make the requirement that a hazard whether the processor properly flexibility unnecessarily. Moreover, analysis be conducted explicit rather considered the entire manufacturing FDA is unconvinced that any inhibition than implicit in order to clarify the steps process. One comment stated that FDA’s to foreign trade is likely to occur if that are required as part of a HACCP assumption that flow diagrams are adherence to these steps is not required. system. Moreover, this change allows burdensome or unnecessary is contrary FDA believes that foreign trading the agency to make clear that to the 1992 NACMCF Report which partners will be satisfied by the conducting the analysis may or may not notes that flow diagrams could be presence of a successful HACCP system lead to the preparation of a HACCP simple representations that accurately and will not reject U.S. exports because plan. depict the steps in a process, rather than steps preliminary to HACCP were not Thus, FDA is providing in § 123.6(a) detailed, technical drawings. documented. that processors shall conduct a hazard FDA acknowledges that, for the Even without a requirement analysis or have one conducted on their reasons stated in the comments, many mandating specific preliminary steps, behalf. It is the agency’s expectation that processors will find that the FDA believes that most processors will most seafood processors will, after development of a flow diagram is a follow the spirit, if not the exact letter, performing a hazard analysis, find it useful preliminary step to the of the recommended procedures. These necessary to control for at least one preparation of a HACCP plan. Other procedures provide the processor with a hazard and, therefore, be obligated to processors may find, however, that, recognized method of plan development prepare a HACCP plan. However, when because of the simplicity of their that will help lead to a successful no hazard is reasonably likely to occur, operations, the preparation of a written outcome. FDA is primarily interested in there is no reason to prepare a HACCP flow diagram is an unnecessary step. In that outcome. The NACMCF plan. Therefore, § 123.6(b) states, in 65118 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations part, ‘‘(b) The HACCP plan. Every cause seafood to be adulterated. The be regarded as part of HACCP because processor shall have and implement a comments argued that the hazards that they do not address acute health written HACCP plan whenever a hazard were not the focus of the HACCP regime hazards. A few comments suggested that analysis reveals one or more food safety established by the regulations could be existing regulatory programs are hazards that are reasonably likely to covered by more traditional food safety adequate to address these types of occur, as described in paragraph (a) of mechanisms. A review of these hazards. this section.’’ comments follows. On the other hand, comments from The agency does not believe that the 55. Several comments, from one trade association and a number of methodology of conducting hazard processors and trade associations, stated individuals acknowledged that drug analyses is sufficiently standardized at that the hazard analysis should only be residues and pesticide residues should this time to justify mandating what the used to identify those food safety be addressed by HACCP plans; where analysis must include. FDA encourages hazards that have the potential to cause they are likely to occur at levels over processors to utilize the NACMCF ‘‘serious adverse health consequences.’’ tolerance. Comments from a number of document as guidance in performing These comments stated that such processors of aquaculture-raised finfish this activity. In addition, the agency consequences included those that acknowledged that drug and pesticide recognizes that the best way for it to would trigger a ‘‘Class I’’ recall as residues are food safety hazards that verify a processor’s hazard analysis is defined by FDA, particularly those that affect their industry, but these indirectly, through its own evaluations involve contamination of the food with comments questioned the of whether a processor ought to have a pathogenic microorganisms. A Class I appropriateness of the control HACCP plan, and whether a HACCP recall involves a situation in which mechanisms provided in FDA’s draft plan appropriately identifies the food there is a reasonable probability that the Guide. Finally, comments from several safety hazards and CCP’s that are use of, or exposure to, a violative consumer advocacy groups expressed reasonably likely to occur. In other product will cause serious adverse continued concern for the hazards words, it is the end product of the health consequences or death and posed by environmental contaminants. hazard analysis, the HACCP plan and its would not be used to respond to Having considered these comments, implementation, that should be judged situations in which the health FDA confirms its tentative view, by the regulator. For this reason, the consequences are temporary, medically reflected in the proposal, that HACCP agency is not requiring that hazard reversible, or remote (21 CFR 7.3(m)(1) should be the norm, rather than the analyses be performed according to a and (m)(2)). Other processor comments exception, for controlling safety related standardized regimen, or that they be suggested the use of the phrase hazards in the seafood industry. documented in writing for FDA review. ‘‘significant food safety hazard’’ to limit Existing standards for such Even though FDA is not requiring that the scope of the HACCP regime without contaminants as drug residues, the hazard analysis be available to the proposing a definition for the phrase. pesticides, and industrial contaminants, agency, there may be cases in which it One comment stated that focusing on are established to ensure that their would be to the processor’s advantage to truly serious hazards is the only way to presence in foods does not render the have a carefully documented written keep the number of CCP’s to a food unsafe. Processors of fish and hazard analysis to show to FDA. Such minimum, so that a HACCP plan can fishery products are obliged to produce documentation may prove useful in realistically be implemented. The foods that meet these standards. resolving differences between the comment also stated that having too Processors are obliged to exercise processor and the agency about whether many CCP’s, or CCP’s that are not control over all food safety hazards that a HACCP plan is needed and about the related to serious health risks, would so are reasonably likely to occur. A failure selection of hazards, CCP’s, and CL’s. burden food processing personnel that to do so would mean that the food was Written hazard analyses may also be effective compliance with the HACCP prepared under insanitary conditions useful to processors in that they may plan would be undermined, and it whereby it may have been rendered help provide the rationale for the would be significantly more difficult to injurious to health or is otherwise establishment of critical limits and other control truly critical processes. adulterated. The criteria for including a plan components. Having the basis for Several of these comments argued that food safety hazard in a processor’s these decisions available may be helpful hazards should have immediate, as well HACCP plan should be the degree to when processors experience changes in as serious, health consequences before which the hazard is likely to develop in personnel, especially those associated being required to be identified in a that product (e.g., based on the with the HACCP process, and in HACCP plan. These and several other processing technique, the harvest responding to unanticipated CL processor comments generally location, the species) and not the nature deviations. expressed the view that hazards that can or immediacy of the illness or injury cause a food to be adulterated under the that it is likely to cause. 3. Types of Hazards act, but that do not have the potential FDA views as highly speculative the FDA received a number of comments to cause acute illness, should not be concerns, expressed by a few comments on the types of hazards that a mandatory required to be included in a HACCP from the food industry, that inclusion in HACCP system should control, and that plan. For example, two of the comments HACCP of those hazards that generally the hazard analysis should examine. stated that FDA should not use the require chronic exposure to produce The proposed regulations did not HACCP regulations to ensure disease will dilute HACCP systems to distinguish among hazards but proposed conformity with food additive the point of shifting industry resources to require that HACCP plans identify all regulations, pesticide residue away from acute toxicity hazards. No food safety hazards that are reasonably tolerances, or action levels for evidence was submitted to support such likely to occur. The comments that environmental contaminants. One claims. The pilot HACCP program addressed the question of what types of comment stated that although process conducted jointly by FDA and NMFS, hazards mandatory HACCP should controls that are similar to HACCP the current NMFS voluntary HACCP address generally preferred that its focus controls are often used by food program, and the NMFS Model Seafood be on some subset of hazards, rather manufacturers to monitor these kinds of Safety Program all included controls for than on the entire spectrum that could contaminants, the controls should not food additives, primarily a nonacute Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65119 food safety hazard, and there has been longstanding realization that the safety can best be controlled. Several other no diminution of control of acute of these types of products is variable comments expressed confusion about hazards as a result. Moreover, the and must be established on a use-by-use the application of HACCP to agency is convinced that when basis. Whether an additive, drug, or environmental hazards. determining, in accordance with pesticide is safe for a particular use, in The preamble to the proposed § 123.6(a), what contaminant hazards a particular food, at a particular level, regulations described the link between are ‘‘reasonably likely’’ to occur in a depends on factors such as the amount environmental hazards, such as natural particular type of product, most of the food that is consumed and, if the toxins (e.g., ciguatera toxin, domoic processors will have very few, if any, of additive, drug, or pesticide is ingested acid, and saxitoxin), histamine, and these chronic exposure-type hazards to in a living animal before capture, how various viral and bacterial pathogens, manage through HACCP as opposed to the product is metabolized in that and human disease. The NAS’ ‘‘Seafood through some other method of control. animal. Safety’’ report (Ref. 7, p. 1) suggested FDA intends to monitor the progress Therefore, a food additive that has that the most significant reduction in of the seafood HACCP program to judge, been approved for use in some foods, illness from seafood would come from among other things, whether the but not fish and fishery products, is the control of environmental hazards. application of HACCP to food safety deemed by the act to be unsafe for use To eliminate coverage of such hazards hazards generally, rather than to the with fish and fishery products. FDA is from these regulations would be to most extreme acute hazards, overloads not in a position to change this aspect eliminate the greatest share of the HACCP system and dilutes its of the law through regulations. anticipated benefits. effectiveness for all hazards. Until such Consequently, the agency has not The preamble to the proposed an effect is actually found to occur, FDA created an exemption from the regulations provided a number of ways is persuaded that the systematic requirement for HACCP controls for in which the processor can exercise application of preventive controls to safety hazards caused by the presence of control over environmental hazards. food safety hazards generally will unapproved additives or other products This control derives from the fact that provide the American consumers with that lack premarket approval for fish or responsible processors already exercise the most effective and efficient food fishery products. discretion in obtaining their raw safety system that has been devised to The agency is aware that it is possible materials. Control is achieved by date. If FDA were to determine that that some of these products may pose no checking tags on containers of HACCP needs to be scaled back in order meaningful risk in fish and fishery molluscan shellfish to ensure that they to make it work, the agency will take products at levels approved or allowed are harvested only from approved appropriate steps to make such a in other foods. It is the obligation of the waters, checking with fishermen to change. proponent of the use of the substance to ensure that finfish do not originate from One other factor bears mention in this follow applicable statutory procedure to harvest areas that are closed due to the regard. FDA has long been aware of establish this fact to FDA’s satisfaction. presence of excessive agricultural or consumer concern about environmental 57. In the preamble to the proposed industrial contaminants, and physically contaminants in fish and fishery regulation, FDA specifically invited examining incoming histamine-forming products. As previously mentioned, this comment on whether, in order to reduce species for evidence of decomposition concern was expressed in the comments the burden of HACCP on the industry, and insisting that harvest vessels to the proposed regulations. The chance as in the Canadian fishery products exercise control over the time and that these regulations will increase HACCP regulation, the agency should temperature of storage for these species. consumer confidence in the safety of limit its HACCP approach to cover only Similarly, processors of aquaculture- seafood products would be greatly those hazards that are introduced within raised species can audit or otherwise diminished if these regulations did not the confines of the processing plant. insist on a producer controls over the require processors to consider the risks This type of limitation would eliminate use of animal drugs or other hazards from these contaminants as part of their mandatory control of environmental resulting from inappropriate husbandry hazard analysis. hazards such as pesticides, natural practices. In a HACCP system, these are 56. A comment from a trade toxins, industrial contaminants, and examples of controls that can be applied association stated that, while there is aquaculture drugs through the HACCP at the first CCP, i.e., at the receipt of raw potential for an unapproved direct or system. materials. indirect food or color additive to be a One comment contended that a FDA concludes that the measures that health hazard, the use of an additive processor of fishery products would be a processor takes to ensure that its raw that has not been listed for use in fish in a difficult position attempting to materials are free of environmental but is routinely used throughout the exercise control over problems that hazards are a critical part of a seafood food industry would not necessarily be occur during harvesting. The comment HACCP program. Responsible likely to cause harm to human health. stated that the purpose of HACCP is to processors already exercise the kind of The comment said that a control for use require that each processor be control necessary to ensure that their of the additive should not be required responsible for minimizing those raw materials do not present such a to be included in a HACCP plan. serious hazards that it is in the best hazard. If a likely hazard exists, it Under the act, certain products, such position to control, but that the would not be sufficient to use the price as food additives, new animal drugs, proposed regulations would force the offered for raw materials to be the only including new animal drugs intended processor to take responsibility for measure to protect against the hazard. for use in aquaculture, and pesticides, hazards that it may be poorly suited to For these reasons, FDA has retained require premarket approval before they control. The comment argued that environmental hazards in the list of may be legally used. Moreover, this FDA’s intent was to deploy HACCP food safety hazards that processors approval can be limited so that the solely as a way of reducing the agency’s should consider in § 123.6(c)(1). To product may only be used legally on or inspectional burden. The comment clarify that there are hazards that occur with specific foods, or for specific further stated that the focus should be before receipt of raw materials that can purposes, for which approval has been on finding those few CCP’s within a be controlled nonetheless by obtained. This limitation reflects a specific process where a serious hazard examination or discretion at the 65120 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations receiving CCP, FDA has modified clarify whether the hazards identified in have determined that a contaminant § 123.6 by including the following its draft Guide are those that the agency represents a chronic health hazard, the sentence in § 123.6(a), ‘‘Such food safety believes are reasonably likely to occur standard control strategy to be hazards can be introduced both within under all conditions for the listed employed by processors for such and outside the processing plant species and processing methods. The contaminants is to ensure that their environment, including food safety comment further noted that residues of presence in food remains below specific hazards that can occur before, during, industrial or agricultural chemicals levels. and after harvest.’’ present in seafood are usually not Processors are advised of such For consistency, § 123.6(c)(2) needs a present at levels that are reasonably chronic health hazard determinations space here provides for both types of likely to be a safety hazard, even in through FDA action levels, publications CCP’s, and now reads: many of those species that are listed in (e.g., Federal Registers at 55 FR 14359, April 17, 1990; 58 FR 11609, February (2) List the critical control points for each the Guide as presenting that hazard. of the identified food safety hazards, As discussed in the preamble to the 26, 1993; and 58 FR 48368, September including, as appropriate: (i) Critical control proposed regulations, FDA recognizes 15, 1993), or other similar guidance points designed to control food safety that HACCP need not be used to control documents. If the contaminant is hazards that could be introduced in the every theoretical hazard, no matter how present in food in an amount that is processing plant environment, and (ii) remote the likelihood of its occurrence. above that level, the food represents a Critical control points designed to control Moreover, as discussed earlier in this hazard to health that the evidence from food safety hazards introduced outside the preamble, case law interpreting section the chronic studies shows is reasonably processing plant environment, including 402(a)(4) of the act has held that likely to occur. The question, then, is food safety hazards that occur before, during, conditions must be such as to create a whether the likelihood of finding a fish and after harvest. reasonable possibility that a hazard will in which the contaminant is at a higher Because most of the environmental occur in order for product to be than acceptable level is an event that is hazards to which fish are exposed will adulterated under that section of the reasonably likely to occur. For open be controlled by the first processor to law. (See United States v. 1,200 Cans, ocean species of fish, for example, a take possession of the fish from the Pasteurized Whole Eggs, Etc., 339 F. finding of pesticide residues above fisherman or aquacultural producer, Supp. 140–141.) nationally established tolerances can be whether that processor is located in the Unquestionably, historical occurrence a very rare event. For near shore species United States or in another country, of reported illness is an appropriate in certain locations, however, a finding subsequent processors need not focus starting place for the identification of above tolerance can occur often enough on these hazards in their HACCP plans. food safety hazards that are reasonably so as to warrant controlling for it as a For example, pesticide contamination of likely to occur in the absence of matter of reasonable prudence. inland and near shore finfish can be controls. For example, illness from The incidence of reported illness for effectively controlled by the first scombrotoxin in those species that form a particular hazard may also be processor by purchasing from fishermen the toxin if subjected to time and nonexistent or very low because the who do not harvest in areas that have temperature abuse after harvest is one of hazard may be too new to have been closed by regulatory authorities, the most frequently reported illnesses generated reported illnesses. The and drug residue contamination can be from seafood. Moreover, the emergence of natural toxins harmful to effectively controlled by the first relationship between abuse after harvest humans in species or in locales where processor by purchasing from and the formation of the toxin is well the toxin has not been found before is aquaculture producers who use animal established. FDA can say with comfort, a well known phenomenon in seafood. drugs properly. therefore, that scombrotoxin poisoning While FDA does not expect that HACCP 4. When Is a Hazard Reasonably Likely is a hazard that is reasonably likely to controls should be in place to control To Occur? occur in the absence of appropriate for the possibility of such hazards—the controls for scombrotoxin-forming hazard may or may not ever occur—the In the proposal, FDA identified nine species of fish. agency strongly believes that once a categories of safety hazards that might For some hazards, however, the hazard does emerge and is identified, occur in fishery products. The agency incidence of reported illness is very HACCP controls are highly appropriate tentatively concluded that a processor low. A good example is illness from the to keep illnesses from occurring. For the must establish HACCP controls when consumption of raw fish species that are duration of the a hazard, it must be one or more of the listed hazards is prone to parasites. The low number of treated as one that is reasonably likely reasonably likely to occur. reported illnesses is probably to occur. 58. A number of comments, from attributable to underreporting and to the To provide clarification on the above processors and a trade association, fact that controls for this hazard (e.g., points, FDA has modified § 123.6 by questioned whether certain of these commercial blast freezing that kills including the following sentence in new nine hazard categories by themselves parasites) generally exist. However, it is § 123.6(a): justify a HACCP plan. The comments well established that in the absence of challenged the likelihood that some of controls, infection from parasites is a A food safety hazard that is reasonably likely to occur is one for which a prudent these hazards would cause harm and hazard that is reasonably likely to occur processor would establish controls because asked for clarification on how a when a species that is prone to parasites experience, illness data, scientific reports, or processor is to determine whether a is consumed raw. other information, provide a basis to hazard is ‘‘reasonably likely to occur.’’ The incidence of reported illness that conclude that there is a reasonable possibility One comment held that, if the term is linked to a specific food is virtually that it will occur in the particular type of fish ‘‘reasonably likely to occur’’ is linked to nonexistent when the illness is the or fishery product being processed in the actual incidents of illness caused by a result of chronic exposure to a chemical absence of those controls. given hazard, it would be inappropriate contaminant. It is extremely difficult, To reinforce that it was not FDA’s to define some of the listed hazard for example, to link a specific case of intent to suggest that all of the nine categories as reasonably likely to occur. cancer to a specific contaminant in food. hazard categories that it listed in This comment also requested that FDA However, where public health officials § 123.6(c)(1) are reasonably likely to Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65121 occur in all circumstances, the agency FDA agrees with the suggestion for proposed regulations, histamine has modified the language in this the reason presented by the comments (scombroid toxin) development as a provision to read in part, and has modified § 123.6(b) accordingly, result of microbiological decomposition ‘‘Consideration should be given to to read, in part: in certain species of fish is a well whether any food safety hazards are A HACCP plan shall be specific to: (1) Each recognized food safety hazard (Ref. 5, p. reasonably likely to occur as a result of location where fish and fishery products are 24). There are some early indications, the following:’’ (the list of nine processed by that processor; and (2) Each however, that the development of categories follows in the text). kind of fish and fishery product processed by putrescine and cadaverine, also The Guide is not intended as a the processor. The plan may group kinds of byproducts of decomposition of fish, definitive list of the hazards that are fish and fishery products together, or group under certain circumstances, may also reasonably likely to occur, under all kinds of production methods together, if the represent food safety hazards (Ref. 203, conditions, for those species and food safety hazards, critical control points, p. 240). For this reason, FDA is hesitant processing methods listed. critical limits, and procedures required to be to limit the safety concern associated identified and performed in paragraph (c) of HACCP is a operation-specific with decomposition to the production of process. For this reason, the processor this section are identical for all fish and fishery products so grouped or for all histamine. Accordingly, FDA has must decide on a case-by-case basis production methods so grouped. modified § 123.6(c)(1)(vi) to read, what hazards it needs to address; that is, ‘‘Decomposition in scombroid toxin- what hazards are reasonably likely to 60. In the proposal, FDA specified forming species or in any other species occur. The purpose of the hazards that a HACCP plan must identify: The where a food safety hazard has been portion of the Guide is to provide a applicable food safety hazards; the associated with decomposition.’’ listing of hazards, by fish species and by CCP’s; the CL’s; the control and 62. Comments from two State finished product type, that FDA knows monitoring procedures; and the government agencies and a trade to have a reasonable potential for recordkeeping procedures. A few association stated that FDA should occurrence in the product. comments suggested that FDA use the eliminate parasites as a safety hazard FDA encourages processors to use the word ‘‘list’’ or ‘‘include’’ rather than that must be considered for inclusion in Guide, as well as any other available ‘‘identify’’ to describe a requirement for a processor’s HACCP plan. The information, to decide what hazards an item to appear in the HACCP plan. comments noted that, with respect to need to be addressed in any particular The comments suggested that it is not pathogens, FDA makes the assumption plan. Processors need to recognize that clear from the word ‘‘identify’’ whether that raw fish will be further processed they need to use judgment in applying the regulations are intended to require by cooking, and that, therefore, that the the Guide to their own particular that the plan contain or include the pathogens will be destroyed and not circumstances. For example, a processor actual values (e.g., the temperature of a pose a health hazard. The comments of one species of fish may find that refrigerator) or a description of the urged that the same rationale be applied pesticide contamination is listed as a procedures, or whether it is permissible to raw fish that may contain parasites. hazard for the species, but may be aware simply to make reference to their The comments further suggested that of credible data that demonstrate that existence in a guideline or other source. the retail level is appropriate point of the water from which it obtains its fish FDA’s intent is that a HACCP plan control for parasites, and that the is free of such contamination. In that explicitly include the value or a provisions of the Food Code are case, the processor is free to deviate description of the procedures for each of adequate to address this issue. from the guidance. FDA intends to the required HACCP elements. FDA The comments further argued that clarify the Guide on this point by agrees that a word such as ‘‘list’’ would parasites pose a hazard only in certain distinguishing between hazards that are be less ambiguous. Therefore, FDA has species that are consumed raw, and that reasonably likely to occur all of the time revised § 123.6 (c)(1), (c)(2), (c)(3), and mandatory control procedures for all (e.g., histamine in species that are prone (c)(4) by substituting the word ‘‘list’’ fish that are consumed raw would create to it) and hazards that are reasonably where the word ‘‘identify’’ appeared in an enormous economic hardship for likely to occur under certain the proposed regulations. some segments of the industry. In circumstances (e.g., certain toxins when FDA has also revised § 123.6(c) by particular, one of the comments a ‘‘bloom’’ is occurring). making another clarifying change. The contended that parasites have never agency has added the phrase ‘‘at a 5. The Plan: Specific Considerations been a problem in the large tunas that minimum’’ to the introductory are eaten raw, and that it should not be 59. FDA proposed that HACCP plans statement to make clear that the necessary to freeze such fish before they be specific to each processing location required plan contents do not restrict a are sold for raw consumption. and to each kind of fish and fishery processor from including additional FDA’s intent is to require control of product processed by a processor, information in the plan, where it may be parasites in a HACCP plan only in those except that the plan may group kinds of appropriate. instances when parasites are reasonably fish and fishery products together if the 61. Two comments requested that likely to occur in the portion of the flesh hazards, CCP’s, CL’s, and procedures FDA specify that decomposition, listed that is consumed, and the presence of required to be included in the plan are as one of the hazard categories in the the parasites will present a food safety identical. A few comments from proposal, is a hazard only in scombroid hazard (e.g., where the fish is offered for processors and trade associations toxin-forming species. raw consumption). To clarify this intent, suggested that production methods These comments stated that FDA has modified § 123.6(c)(1)(vii) to should also be allowed to be grouped decomposition in other species is not a read: together so long as the hazards and the safety hazard but is an economic and control procedures for the production aesthetic problem. Parasites, where the processor has methods are identical. The comments FDA agrees with the comments in knowledge or has reason to know that the parasite-containing fish or fishery product suggested that grouping would reduce part. FDA’s intent was to require control will be consumed without a process the paperwork burden on some of decomposition in a HACCP plan only sufficient to remove the hazard, or where the processors without altering the benefits when it represents a food safety hazard. processor represents, labels, or intends for attainable through HACCP. As described in the preamble to the the product to be so consumed. 65122 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations

With regard to the comparison made when they occur. For this reason, FDA ensure that the raw materials are free by comments that FDA is requiring has modified § 123.6(c)(4) to read, ‘‘(4) from these hazards. control of parasites in raw fish but not List the procedures, and frequency FDA believes that caution is pathogens in raw fish, the thereof, that will be used to monitor warranted on the subject of supplier characterization of FDA’s policy each of the critical control points to guarantees. Where more direct controls towards pathogens is inaccurate. The ensure compliance with the critical are available, they should be used. In sanitation provisions of these limits.’’ the case of aquaculture-raised fish, more regulations are designed, in large part, FDA has also eliminated the reference definitive controls than the acceptance to minimize the presence of pathogens in § 123.6(c)(4) to consumer complaints of a certificate attesting to the absence in fish and fishery products, whether as a monitoring tool. As explained in of unapproved drug residues alone are they are raw or further processed. The more detail in the ‘‘Consumer available to a processor, and these major opportunity for the introduction Complaints’’ section of this preamble, controls are not unduly burdensome. of enteric pathogens to processed fish FDA has concluded in response to They include the review of the and fishery products is from the comments that consumer complaints supplier’s animal drug control records processing environment as a result of generally do not provide the processor when the lot is offered for sale and a insanitary practices rather than by the with the kind of immediate feedback system of onsite audits of the supplier, carcass of the animal (Refs. 3, p. 267; about whether the process is under either by the processor or by a third and 7, p. 33). For this reason, sanitation control that monitoring should provide party. Such alternatives are also controls designed to prevent in a HACCP system. Consumer available for most raw material hazards contamination of fish flesh are complaints may provide the processor (e.g., checking container tags and important to minimize the levels of with information that would be useful harvester licenses as a means of enteric pathogens found on processed for verification purposes, however. controlling microbiological fish (Refs. 3, p. 10; 7, p. 27; 204; and These regulations therefore require contamination in molluscan shellfish, 205). The agency is convinced that, if processors to take consumer complaints and checking vessel storage records as a followed, these controls will be effective into account as verification tools means of controlling histamine in minimizing the presence of such (§ 123.8(a)(2)(ii). development in scombroid species). pathogens. Moreover, FDA has long Likewise, FDA has moved the However, the agency recognizes that enforced a zero tolerance for the reference in the proposed regulations to there may be some instances in which presence of Salmonella on raw fish, the calibration of process monitoring such controls are not possible, and based, in part, on the avoidability of instruments to the new ‘‘Verification’’ suppliers’ certificates or guarantees are such contamination through the section of these regulations (§ 123.8), the only available monitoring tool. In application of CGMP’s. and it has eliminated the specific those cases, verification of the 63. One comment stated that the term reference to computer software effectiveness of the certificates may be ‘‘physical hazards’’ in the proposal validation. As explained in more detail critical. Thus, the extent to which could be interpreted to include in the ‘‘Verification’’ section of this suppliers’ guarantees can be relied upon nonsafety related hazards. preamble, FDA has concluded in will have to be considered on a case-by- In § 123.6(c), physical hazards are one response to comments that calibration is case basis. However, FDA has made no of nine listed causes of ‘‘food safety a verification function that provides the change in § 123.6(c)(4) in response to hazards’’ that processors should processor with information about the comments. consider for listing in their HACCP whether its monitoring equipment is FDA has added § 123.6(c)(5) that plans (§ 123.6(c)(1)(ix)). Thus, the functioning properly. Computer describes requirements of the HACCP agency believes that the language of this software validation is a form of plan with regard to corrective actions. section clearly applies to food safety calibration and need not be addressed As explained in more detail in the hazards only, and no modification of the separately in these regulations. ‘‘Corrective Actions’’ section of this provision is necessary in response to 64. In the preamble to the proposed preamble, FDA has concluded in this comment. regulations, FDA asked for comment on response to comments that these FDA proposed that HACCP plans whether guarantees from suppliers regulations should provide the include the CL’s that must be met at should be considered as an acceptable processor with the option of each CCP. FDA received no significant way of meeting the proposed monitoring predetermining corrective actions. comment on this section (§ 123.6(c)(3)) requirement. Comments from a number Predetermined corrective action and has made no substantive changes to of processors responded that a procedures have the potential to enable it. certificate from a producer that a lot of a processor to take faster action when a FDA proposed to require that HACCP raw material fish is free from deviation occurs than would be possible plans include the procedures for both unacceptable levels of pesticide and in the absence of such procedures, and ‘‘monitoring’’ and ‘‘controlling’’ the drug residues should be an acceptable to make a more timely response to the CCP’s. FDA recognizes that monitoring means of monitoring the hazards of deviation when trained or otherwise and controlling serve different purposes, animal drug and pesticide residues in qualified individuals are not readily and that the appropriate HACCP aquaculture-raised fish. The comment available. principle is the monitoring of CCP’s to held that reliance on suppliers’ FDA has also added § 123.6(c)(6), ensure conformance with the CL (Ref. certificates may be necessary because of which describes the requirements of the 34, p. 197). How a processor exercises the logistical problems that could be HACCP plan with regard to verification. control is not critical to product safety associated with analyzing raw materials As explained in more detail in the so long as the CL is not exceeded. There for pesticides and drug residues. Of ‘‘Verification’’ section of this preamble, are many ways to maintain control. No particular concern, the comments said, FDA has concluded in response to one way or list of ways needs to be is the time necessary to analyze the comments that a processor needs to stated in the plan so long as monitoring samples. The comments further stated specifically include in its HACCP plan is taking place at an appropriate that the certificates should be based on the verification procedures that it will frequency to ensure that control is participation in an industry-wide use and the frequency with which it occurring and to detect CL deviations quality assurance program designed to will use those procedures. FDA finds Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65123 that inclusion of this information in the control if not caught in time and to require positive records over negative plan is necessary to underscore that a document compliance with, or records was to help prevent processor has an ongoing obligation to deviations from, CL’s. Comments from a unscrupulous processors from be sure that the verification steps that it large processor and a trade association circumventing the system. An has determined are necessary are readily stated that, based on their extensive additional comment supported limiting ascertainable by the processor and its experience with HACCP, positive mandatory HACCP recordkeeping to employees as well as by regulatory monitoring records provide a pattern of negative records because FDA could not officials. results and values that is much more rule out the possibility that future court FDA proposed to require that HACCP meaningful than sporadic negative decisions or changes in FDA policy plans provide for a recordkeeping records alone. Several comments stated might permit the disclosure of HACCP system that documents the monitoring that positive recordkeeping facilitates records in FDA’s possession, and of CCP’s. The proposed regulations also the taking of corrective action before the negative recordkeeping would reduce a provided that the records must include CL’s are exceeded. company’s potential exposure. the actual values obtained during Several comments stated that a FDA’s reasons for proposing positive monitoring and any consumer provision that required only negative records match those in the comments complaints that relate to the operation records would penalize the firms that that support these kinds of records. As of CCP’s or possible CL deviations. FDA already maintain records of all CCP the preamble to the proposed has removed the latter provision, observations. A few comments regulations noted, recordkeeping is the relating to consumer complaints, from suggested that neither firm management key to HACCP, enabling the processor § 123.6(c)(7). As explained above, these nor FDA could verify that the and the regulator to see the operation final regulations treat consumer monitoring procedures specified in a through time. Negative records alone do complaints as verification tools rather processor’s HACCP plan are being not allow this assessment over time and than monitoring tools. Consequently, carried out if only records of deviations do not provide assurance that the consumer complaints need not be from CL’s are kept, because there would appropriate monitoring was even included in a recordkeeping system that be no records to indicate that the other performed. documents the monitoring of CCP’s. A checks were actually being made. A FDA cannot conclude from the full discussion of issues relating to comment from a consumer group further comments that supported negative consumer complaints is presented in the argued that allowing the use of negative records that the burden of positive ‘‘Consumer Complaint’’ section of this records alone could create the recordkeeping is excessive or otherwise preamble. opportunity for processors to limit their outweighs the benefits. The agency monitoring, because no records would acknowledges that a requirement for 6. Positive Versus Negative be needed to demonstrate that such positive records may be more Recordkeeping monitoring was performed. burdensome than one that only requires The preamble to the proposed Most comments that supported the negative records. However, FDA regulations invited comment on use of negative records alone stated that received no new data on this issue. whether it was necessary for the results positive recordkeeping and the review Positive recordkeeping can be extremely of monitoring (i.e., the actual values) to of positive records was overly simple and need not take much longer be recorded regardless of whether a CL burdensome for both the industry and to perform than the monitoring was met (positive recordkeeping), or the regulator. A few comments stated necessary to determine whether the whether it was only necessary to record that positive records generate massive process is in control (e.g., noting the information when a CL was not met databases that disguise CL deviations, temperature of a refrigerator in a (negative recordkeeping). The agency rather than illuminate them. No logbook located next to the refrigerator). noted that negative recordkeeping is examples of this phenomenon were The agency is convinced that this presumably less expensive than positive provided, however. One comment minimal additional effort greatly recordkeeping. suggested that since FDA inspects most increases the chances that a processor’s 65. A substantial number of processors once a year or less, it is HACCP program will be successful. comments addressed this issue. questionable whether the agency would Based largely on FDA’s experience Approximately two-thirds of these be in a position to pick up trends in the with the positive recordkeeping comments, including those from trade data from a review of all the positive requirements in the low-acid canned associations, processors, Federal, State, records that would be retained. Another food and the acidified food industries, and foreign government agencies, comment stated that it is just as FDA does not agree that the volume of consumer advocacy groups, and a unrealistic to expect FDA investigators positive records that a system will professional society, supported to review all positive records as it is for generate will defeat the system by requiring positive records. The FDA to inspect all fish. A few comments hiding CL deviations or trends toward remaining one-third of the comments argued that the sheer volume of the such deviations. FDA’s regulations at that addressed this issue, from trade paperwork produced with positive parts 113 and 114 require that these associations, processors, and Federal recordkeeping would result in technical industries perform positive and State government agencies, argued or clerical errors by processors that recordkeeping at identified CCP’s. The that records should only be required could result in products being deemed industry itself requested this when a CL deviation occurs, or that by FDA to be adulterated. requirement. positive records should be required or Several comments suggested that a FDA has found that these processors encouraged, but that FDA should be system where CL deviations trigger have no trouble making positive granted access to only the negative remedial actions, which are properly records, and that both the processors records. documented, should be sufficient for themselves and the regulators become In general, the comments supporting FDA’s verification purposes. One adept at reviewing them and deriving the need for positive records recognized comment suggested that because benefits from them that would not have that monitoring records serve two major processors can falsify positive records as been available from negative records. purposes: To facilitate the identification well as negative records, FDA was These benefits have included being able of trends that would lead to a loss of mistaken if its motive for proposing to to pinpoint with confidence when a 65124 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations deviation began and ended, being able that these workers experience a sense of responsibility and will signal to all to react to trends toward a loss of responsibility and pride associated with employees that the firm regards the control, and being able to prove that making accurate daily notations, the HACCP plan as a document to be taken CCP’s were actually being monitored as processor can expect to benefit. seriously. Additionally, the often as necessary to ensure control. The Regarding public disclosure of records representative’s signature, along with relative volume of records has not as mentioned by one of the comments, the date of signing, would serve to served as a roadblock in this regard. FDA continues to believe that minimize potential confusion over the It is unlikely that FDA investigators possession of monitoring records by the authenticity of any differing versions or will review all monitoring records agency will be more the exception than editions of the document that might during routine inspections, except in the rule, and that these kinds of records exist. FDA has concluded that the highly unusual circumstances. As has are protected from public disclosure in burden of such a requirement would be been the case with FDA inspections of any event. The protection of records is minimal, and has added a new low-acid canned foods and acidified addressed in detail in the ‘‘Records’’ paragraph at § 123.6(d), that reads: foods, the agency will, in most cases, section of this preamble. FDA has therefore not modified the (d) Signing and dating the HACCP plan. (1) select records to represent the The HACCP plan shall be signed and dated, production since the last inspection. requirement that processors’ monitoring either by the most responsible individual This technique has proven to be both records include the actual values onsite at the processing facility or by a higher effective and efficient. obtained during the monitoring. level official of the processor. This signature As for the concern that the agency shall signify that the plan has been accepted 7. Signing the Plan will declare product adulterated on the for implementation by the firm. (2) The basis of technical or clerical errors in 66. In the preamble to the proposed HACCP plan shall be dated and signed: (i) positive-type records, the agency regulations, FDA specifically invited Upon initial acceptance; (ii) Upon any advises that it is not its intent to pursue comment on whether HACCP plans modification; and (iii) upon verification of the plan * * *.’’ regulatory action against product solely should be required to be signed by a because of clerical or related errors in representative of the firm and, if so, by As will be discussed fully in the mandatory records. FDA does not take whom. Approximately 30 comments ‘‘Verification’’ section of this preamble, such actions against processors of low- responded to the inquiry. About two- the adequacy of the HACCP plan must acid canned foods or acidified foods, thirds of these comments, from be reassessed, and modified as needed, and it will not do so against seafood processors, trade associations, whenever significant changes in the processors. FDA will consider the entire professional associations, and Federal, firm’s operations occur, but no less than situation, and its potential for impact on State, and foreign national governmental once per year. These reassessments and human health, in formulating a response agencies, supported the need for a modifications are necessary to ensure to deviations from these regulations. signature. The remaining comments, that the plan remains current and is As for the comment that FDA might mostly from processors and trade responsive to emerging problems. The as well mandate negative records associations, argued that a signature was signature of the firm representative will because positive records can be unnecessary. be valuable in documenting that these successfully falsified, FDA advises that Those that favored a requirement for reassessments and modifications are the possibility that records will be a signature on HACCP plans stated that performed as required. Particularly if no falsified—and that falsifiers will get the signature does the following: modification of the plan is needed, away with it—is an issue that involves Demonstrates formal adoption of the reassessment can be verified by FDA the fundamental credibility of the HACCP plan, solidifies responsibility only if documentation, such as a system. From FDA’s standpoint, the for adherence to the plan, and fosters a signature, is maintained by the firm. agency’s decades-long experience sense of management ownership. The reviewing positive records on low-acid comments made the following 8. Relationship to Parts 113 and 114 canned foods and acidified foods gives suggestions with regard to who should 67. A few comments urged that the it confidence that its investigators can be the signatory (in order of preference): final regulations provide that if a detect falsifications. However, FDA did Onsite manager, most responsible processor of low-acid canned fishery not propose positive records for the individual of the firm, any senior products is in compliance with FDA’s purpose of catching falsifiers. FDA manager, HACCP coordinator, and all regulations for these products under proposed positive records because this HACCP team members. Those part 113, it would also be in compliance approach confers benefits on both the comments that argued against a with these HACCP regulations with industry and the regulator that outweigh mandatory signature on the plan stated respect to the control of the hazard of the additional work of maintaining that the existence of a HACCP plan itself C. botulinum toxin production. The them. Aside from the view, to which constitutes management support for the regulations at part 113 establish FDA strongly adheres, that most plan. HACCP-type controls for this hazard. processors are honest and will not FDA agrees with the comments that FDA agrees that there is no need for falsify records, the agency strongly recommended a requirement for HACCP a processor to restate in its HACCP plan believes that most processors will plans to be signed by a representative of the requirements of part 113 or 114. It quickly see the benefits to themselves of the firm. As suggested by the comments, is also not necessary for such a a properly operating HACCP system such a signature will provide direct processor to institute controls in based on positive records and will insist evidence of management’s acceptance of addition to those specified in parts 113 that their records be accurately the plan for implementation. FDA and 114 in order to control the hazard completed. cannot stress enough that for HACCP to of C. botulinum toxin production. One such benefit should be a more succeed, there must be a clear Consequently, processors who must motivated workforce. HACCP commitment to it from the top of the comply with the requirements of part monitoring and recordkeeping can and firm on down. Management must set a 113 or 114 need not address this hazard should be done by the workers who strong example in this regard. A at all in their HACCP plans. However, operate the system at the CCP’s, not by signature requirement will remind it is important to note that other hazards quality control personnel. To the extent management of this important may be reasonably likely to occur in an Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65125 acidified or low-acid canned fishery recognizes that sanitation controls may A significant minority of the product. These hazards must be be difficult to fit in HACCP plans, with comments favored the treatment of addressed in the HACCP plan, as appropriate CL’s and corrective actions nonsafety hazards such as economic appropriate. For example, processors of sometimes being elusive. For this fraud and decomposition in the same canned tuna will likely need to identify reason, some processors may elect to manner in which safety hazards are in their HACCP plans how they will rely exclusively on sanitation controls treated in these regulations, with control the development of histamine that are not part of the HACCP plan. mandatory HACCP controls. These before the canning process. FDA considers either approach to be comments argued that: the same Accordingly, to clarify what is required acceptable, so long as whatever conditions of processing that affect the of processors of acidified and low-acid approach is chosen is fully occurrence of safety hazards affect the canned fishery products, FDA has implemented and followed. occurrence of such nonsafety hazards as added § 123.6(e), which reads: decomposition and economic fraud, 10. Nonsafety Issues For fish and fishery products that are making the two control systems subject to the requirements of part 113 or 114 68. FDA proposed in § 123.6(c) to compatible; an improvement in of this chapter, the HACCP plan need not list recommend, but not to require, that consumer confidence in seafood cannot the food safety hazard associated with the HACCP plans include controls for such be achieved without improvements formation of Clostridium botulinum toxin in nonsafety hazards as economic relative to economic deception and the finished, hermetically sealed container, adulteration and decomposition that are decomposition; decomposition is the nor list the controls to prevent that food not related to safety. Additionally, FDA number one cause of FDA legal action safety hazard. A HACCP plan for such fish proposed to append to the regulations at with respect to seafood; decomposition and fishery products shall address any other Appendix D guidance on how a is a good indication of time and food safety hazards that are reasonably likely temperature abuse, which has a to occur. processor can use a HACCP-based approach to ensure that fish and fishery significant impact on the growth of 9. Sanitation in the Plan products are in compliance with the pathogens; the seafood industry The question of the role of processing economic adulteration and misbranding considers economic fraud to be the most significant hazard affecting the plant hygiene (i.e., traditional sanitation provisions of the act. Approximately 75 marketing of its products; species controls) in HACCP is addressed at comments addressed these proposed substitution can be safety related, as in length in the ‘‘Sanitation’’ section of this provisions. The vast majority of these the case of the substitution of a preamble. As explained in that section, comments urged that proposed scombroid species for a nonscombroid FDA is requiring that processors address § 123.6(c) and proposed Appendix D of species; HACCP controls would likely plant sanitation by monitoring for part 123 be eliminated from the enhance compliance with existing certain key sanitation conditions and regulations. Some of these comments nonsafety standards; and inclusion of practices apart from critical control suggested that it might be appropriate controls for economic fraud and point monitoring activities, or by for the contents of proposed Appendix D to be included in the Guide. decomposition would not significantly including sanitation controls as part of increase the costs to industry. the HACCP plan, or by adopting some Those that argued for removal of the FDA concludes that the HACCP combination of these two approaches, at recommendation that HACCP be used to system will have to mature, and much the option of the processor. To reflect control nonsafety hazards from the will have to be learned, before it can be this approach, in paragraph (f) in § 123.6 regulations stated that: (1) HACCP for determined whether a mandatory on the inclusion of sanitation controls safety purposes will be a big enough HACCP program should include in the HACCP plan FDA has stated: ‘‘(f) challenge for both the industry and nonsafety matters. Because these Sanitation controls may be included in regulators, and that inclusion of regulations reflect a first step in terms the HACCP plan. However, to the extent nonsafety hazards might be of mandating HACCP, the agency is that they are monitoring in accordance overwhelming; (2) nonsafety hazards, comfortable as a matter of policy that with § 123.11(b), they need not be such as economic fraud and they should initiate a system that included in the HACCP plan and vice decomposition, are covered adequately focuses on food safety. Additionally, the versa.’’ by existing FDA regulations and statutory provisions that form the basis FDA recognizes that, in many standards and by industry quality for these regulations are safety processing operations (e.g., cooked, control programs; (3) inclusion of provisions. FDA’s application of HACCP ready-to-eat fishery products, smoked nonsafety hazards deviates from the is intended for the effective enforcement fishery products, and molluscan internationally recognized NACMCF of sections 402(a) (1) and (a)(4) of the shellfish) sanitation controls, such as recommendations; and (4) inclusion of act, which apply to products that hand and equipment washing and nonsafety hazards, even as a contain substances that may render the sanitizing, are critical to the safety of the recommendation, would dilute and product injurious to health and to food because they serve to minimize the jeopardize a desirable industry focus on processing conditions that are insanitary risk of pathogen introduction into safety. One comment stated that and that could render a product finished products that may not be processing plant personnel and injurious to health. Thus, the only real further cooked before consumption (Ref. supervisors should be trained to expect issue is whether the final regulations 3, p. 267). For this reason, some serious consequences when CL should retain the recommendations processors may elect to include the deviations occur because this heightens with regard to the application of HACCP control of sanitation conditions and their attention to monitoring and to nonsafety matters. practices in their HACCP plan in control. However, the comment further FDA is persuaded by the comments addition to, or in place of, monitoring argued, the consequence of violating a that the proposed recommendations for for such conditions and practices apart nonsafety CL is likely to be relatively HACCP controls of nonsafety matters, from the HACCP plan. Based in part on minor. The comment argued that, as a coupled with the presence of proposed experience gained from the seafood result, plant personnel and supervisors Appendix D of part 123, have the HACCP pilot project operated jointly by will become confused about the potential for causing confusion about FDA and DOC, however, FDA also significance of CL deviations. the agency’s expectations and 65126 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations enforcement policies. FDA recognizes to establish that instances of Consistent with the revisions to the the point raised by a number of noncompliance with the regulations do requirements for imported products comments that advisory provisions are not automatically constitute contained in § 123.12, the word often confused with or misapplied as adulteration. They contended that, ‘‘importers’’ has been eliminated from requirements. Given this fact and the because FDA will not be preapproving § 123.6. As described in the ‘‘Imported emerging nature of HACCP, FDA has HACCP plans, a negative finding on the Products’’ section of this preamble, the decided to eliminate proposed § 123.6(c) first FDA inspection could, under the proposed requirement that an importer and Appendix D of part 123. FDA will language that was proposed, cause the develop a HACCP plan (§ 123.11) has consider including the concepts that agency to consider all product produced been eliminated in favor of a underlay these provisions in the first to that point to be adulterated. The requirement for importer verification edition of the Guide, however, because comments stated that each case of procedures. This change eliminated the the Guide is understood as being the noncompliance should be evaluated on relevance of § 123.6 to importers. repository for recommendations relating its own merits. Consistent with the revision to to seafood HACCP. FDA fully agrees that each case § 123.6(a) and (b) that processors have The agency’s decision to eliminate should be judged on its merits but does HACCP plans only when a hazard reference to nonsafety hazards from not agree that it is necessary to change analysis reveals one or more food safety these regulations notwithstanding, such the regulations in order to establish this hazards that are reasonably likely to hazards as economic adulteration, principle. The purpose of § 123.6(g), occur, § 123.6(g) has been amended to decomposition not normally associated which sets out this language, is not to state that a processor’s failure to have a with human illness, general unfitness create a legal presumption that food is HACCP plan shall render the fish or for food, and misbranding constitute adulterated if there is not perfect fishery products adulterated only when violations of the act and are subject to adherence to these regulations but to a HACCP plan is necessary. make clear that certain types of regulatory action by FDA (see sections F. Corrective Actions 402(a)(3) and 403 of the act (21 U.S.C. preventive controls are so fundamental 343)). When inspections by FDA to ensuring the safety of seafood that if The fifth HACCP principle, as investigators reveal violations of these there is not adherence to them, the food articulated by the NACMCF, is that provisions of the act, FDA will take cannot be considered to have been processors establish the corrective enforcement action as it deems produced in accordance with section actions that they will take should appropriate. Processors who are able to 402(a)(4) of the act. monitoring show that a CL has been exceeded. The NACMCF’s expectation accommodate a HACCP system that As a practical matter, FDA expects to is that these corrective actions should be covers both safety and nonsafety exercise broad regulatory discretion in predetermined and written into the hazards may find advantage in doing so, deciding when violations of these processor’s HACCP plan. in order to better ensure compliance regulations warrant regulatory action, just as it does now for other situations. In the proposed regulations, FDA with existing nonsafety regulations and tentatively chose to incorporate the standards. The agency will analyze each case on its merits, based at least in part on the principle of corrective action without 11. ‘‘Shall Render Adulterated’’ potential for harm that exists. requiring predetermined corrective action plans in the processor’s HACCP FDA proposed to provide that: Failure of The agency’s primary concern is that a processor or importer to have and processors develop HACCP plans that plan. Instead, FDA proposed minimum, implement an HACCP plan that complies address the hazards that are reasonably generic corrective action procedures for with this section or to operate in accordance likely to occur. When deficiencies in processors to follow. In so doing, FDA with the requirements of this part, shall HACCP plans are detected during FDA was trying to minimize the burden of render the products of that processor or inspections, the agency usually will first the mandatory requirements of HACCP, importer adulterated under section 402(a)(4) attempt to seek voluntary correction of especially for small processors. FDA of the act. the situation. Only when such voluntary tentatively concluded that the The preamble to the proposed correction is not forthcoming is it likely procedures set out in proposed § 123.7 regulations explained that the proposed that FDA will elect to pursue regulatory represented the minimum requirements regulations set out those requirements action. It must be noted, however, that, necessary to ensure that processors that the agency had tentatively where HACCP plan deficiencies result respond effectively to deviations that concluded are the minimum necessary in significant potential for consumer could affect safety, and that if those to ensure that the processing of fish and harm, the agency will evaluate the need procedures were followed, specific fishery products will not result in for corrective action with respect to the corrective action plans, although product that is injurious to health. FDA product that has been produced as well desirable, would not be necessary. tentatively determined that such as to the HACCP plan itself. FDA proposed in § 123.7 to require minimum requirements include the In this regard, FDA notes that a that deviations from CL’s trigger a series establishment of HACCP preventive change from ‘‘shall’’ to ‘‘may’’ in the of actions, including: Segregating and controls. The preamble further provision would be more compatible holding the product, making a explained that section 402(a)(4) of the with guidelines than with regulations. determination of the acceptability of the act, among other things, deems a food to Consequently, the agency has retained product for distribution, taking be adulterated if it is prepared, packed, the term ‘‘shall’’ in § 123.6(g). However, appropriate remedial action with or held under insanitary conditions to clarify that a decision on whether to respect to the product and the cause of whereby it may have been rendered take regulatory action will involve the deviation, and documenting the injurious to health. discretion based on the public health actions taken. In the preamble to the 69. A significant number of significance of the violation, a sentence proposed regulations, FDA invited comments, primarily from processors has been added to indicate that when a comment on the wisdom of this and trade associations, opposed the violation occurs, FDA will evaluate the approach as opposed to requiring that proposed language of this provision. processors overall implementation of its predetermined corrective action plans The comments urged that the word HACCP plan in deciding how best to be made part of the HACCP plan. A ‘‘may’’ replace the word ‘‘shall’’ in order remedy the violation. large number of comments responded to Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65127 that request. Additional comments risk evaluation, and (4) product make determinations. On the other addressed the specifics of the proposed disposition. hand, FDA has not been provided with generic-type requirements in § 123.7. Many comments did not agree that information on which it can conclude corrective action plans should be that these benefits—as desirable as they 1. Should Corrective Actions Be required. A few comments argued that may be—need to be mandated in order Predetermined? developing a corrective action plan is to protect the public health. Processors 70. Approximately half of the impractical and can be unduly can build them into their HACCP comments supported the corrective restrictive because of the diversity and systems if they so choose, but the public action system proposed by the agency or complexity of seafood products and of health will be protected so long as a variation of it, and the other half seafood processing operations. One shipment of the affected product into called for mandatory predetermined comment noted that many situations commerce does not occur until the corrective action plans. Many of those exist in which the appropriate response significance of the deviation has been that supported mandatory corrective to a CL failure is not apparent until the assessed and appropriately resolved. action plans urged consistency with the details of the particular situation are This outcome is assured both with HACCP recommendations of the known. Several stated that a corrective specific predetermined corrective action NACMCF. These comments noted that action plan is less preferable than plans and with the minimum generic the NACMCF recommendations are having responsible and knowledgeable model that FDA is requiring as an consistent with Codex Alimentarius personnel, adequately trained in alternative. Without additional evidence Commission standards. They predicted HACCP, available to evaluate a from actual experience, which was not that compatibility of the final deviation from a CL. If such personnel provided by the comments, FDA cannot regulations with such international are available, one comment noted, conclude that the overall success of standards would minimize confusion deviations can be handled on a case-by- HACCP depends on whether processors for processors and importers, smooth case basis, with appropriate have specific predetermined plans for international adoption of HACCP documentation of the disposition of the events that might not necessarily occur. principles, and facilitate trade. The affected product. Consequently, FDA has revised comments stressed that predetermining Several comments argued that the § 123.7 to permit, but not to require, corrective action is an essential lack of a corrective action plan is not processors to include in their HACCP component of a processor’s HACCP sufficient evidence to demonstrate that plans any written corrective action program, with the seven principles a product is adulterated. The comments plans that they develop. When a being so closely intertwined that overall argued that the proposed requirement deviation from a CL occurs, § 123.7(a) success is probable only if all are intact. that a processor establish CL’s and requires that processors either: (1) A number of comments argued that a perform and record appropriate Follow a corrective action plan that is processor’s implementation of a corrective actions when these limits are appropriate for the particular deviation, corrective action plan would eliminate exceeded, provides sufficient or (2) follow the series of actions indecision and confusion about what demonstration of hazard control. provided in § 123.7(c). The steps in corrective action should be taken in the A number of comments that § 123.7(c) constitute a minimum generic event of a deviation from a CL. For advocated the concept of predetermined model for corrective actions and, as will example, one comment pointed out that corrective action plans urged that be explained below, closely match those corrective actions written into the processors be given the option of that were contained in the proposed HACCP plan would eliminate the need writing such plans or of following a regulations. for employees to substantiate to series of minimum mandatory actions, The final regulations at § 123.7(b) management the correctness of their like those proposed by FDA, when CL define an appropriate corrective action response to a deviation, because the failures occur. In the preamble to the plan as one that addresses both the corrective action plan would provide proposed regulations the agency did, in safety of the product that was being the right actions to be taken for each fact, encourage processors to processed when the CL failure occurred particular deviation. A few comments predetermine corrective actions as part and the cause of the deviation. In this stated that, if the appropriate corrective of the preparation of a HACCP plan. respect, the contents of the corrective actions are detailed in the HACCP plan, On this issue, the merits of the action plan are consistent with the responses by employees to CL failures various approaches tend to balance. views of the NACMCF (Ref. 34, pp. 199– are more likely to be immediate Consequently, FDA agrees with those 200). The corrective action must ensure (reducing product losses) and effective comments that urged that the that any unsafe product is not (reducing wasted effort). These regulations provide processors with the distributed. comments further noted that corrective option of developing their own FDA advises that action necessary to action plans are particularly necessary corrective action plans as part of their correct the product may involve any one when individuals qualified to make HACCP plans or of following a generic or more of the following steps: product safety evaluations are not model corrective action plan, provided Immediately reprocessing the product; readily available. in the regulations, should a deviation diverting the product to another use One comment asserted that the occur. where it can be used safely; segregating strength of the HACCP system is that it The agency accepts the view that the product, holding it, and having it is preventive, and that corrective action predetermined plans have the potential evaluated by a competent expert; or plans are fundamental in preventing a to provide processors with benefits, as destroying the product. In order to product, for which there is a safety pointed out by the comments, such as ensure that subsequent product is not concern, from reaching the consumer. faster action when a deviation occurs, subjected to the same deviation, the The comment further stated that written less need to justify to management the corrective action must be sufficient to corrective action plans should provide appropriateness of the corrective action bring the process back under control for the documentation of the following: after it has been taken, and a more (Ref. 34, pp. 199–200). FDA advises that (1) The cause of the deviation, (2) the timely response to the deviation when such action may involve, where action taken to ensure that the deviation trained or otherwise qualified appropriate: adjustments to those does not reoccur, (3) the results of the individuals are not readily available to process parameters that have an effect 65128 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations on the relevant CL (e.g., flow rate, indecision in responding to CL 2. Assessing the Product for Safety temperature, source of raw materials); deviations will not result in a public temporarily diverting product around a health problem in the absence of 72. FDA received comments on point in the process at which problems corrective action plans because the final specific aspects of the generic-type are being encountered; or temporarily regulations contain a set of well defined corrective action plan provided in stopping production until the problem actions that are to be followed if a proposed § 123.7(a). A significant can be corrected. deviation occurs and no predetermined number of comments opposed the Section 123.7(c) describes the steps plan exists. The actions outlined in provision that would have required an that a processor must take whenever § 123.7(d) ensure that no unsafe product ‘‘immediate’’ safety assessment when a there is a deviation from a CL but no will enter commerce, and that a CL deviation occurs. One comment corrective action plan to follow. As normalization of processing conditions stated that, because an appropriately stated above, these steps constitute a will be effected as quickly as possible. trained individual may not be minimum generic-type corrective action While the agency sees merit in the immediately available to make a plan. The objectives of these steps are argument that predetermined corrective determination of the acceptability of the the same as those of a preconceived action plans will, in many cases, be lot, the provision should be modified to plan: To ensure that adulterated product economically beneficial to a processor require segregation and holding of the does not enter commerce and to correct (e.g., minimize product loss and wasted affected product until either a timely the cause of the deviation. Because it is effort), such economic factors will, in safety review by a properly trained a generic-type plan that is intended to and of themselves, motivate processors individual has been completed, or a be applicable to any situation, some of to predetermine appropriate corrective determination has been made that the the steps, such as segregating and actions, but they do not mean that the appropriate predetermined corrective holding the affected product agency needs to require the adoption of action plan has been followed. A (§ 123.7(c)(1)), might not be necessary if predetermined plans. number of other comments also the corrective action had been 71. A few comments recommended suggested that the phrase ‘‘immediate predetermined. This aspect of the that FDA review corrective action plans review’’ be revised to ‘‘timely review.’’ generic-type plan may provide for adequacy during, or in advance of, One comment recommended that FDA processors with an incentive to the first regulatory visit. This review, specify a maximum amount of time in predetermine corrective actions the comments asserted, would help to which to evaluate the product, for whenever practical. avoid a situation in which the processor example within 24 hours. Another Another such incentive is the takes a corrective action in conformance comment advised that FDA permit requirement, at § 123.7(c)(5), that the with its HACCP plan, but the agency processors to cook or freeze fresh processor reassess the adequacy of its later determines that the action was product involved in a CL deviation, HACCP plan when a deviation occurs. inadequate. until an evaluation can be completed. This requirement does not exist where FDA agrees that immediate review is a corrective action plan exists. The FDA agrees that these comments reflect a desirable ideal but must not necessary. As long as the review reason for the distinction is that, on one occurs before the product is distributed, hand, if a processor has assessed its acknowledge that such a review ordinarily will not be feasible. If the public health will be sufficiently process and decided that CL failures are protected. Consequently, while likely to occur from time to time at processors complete their HACCP plans, § 123.7(c)(2) requires a review to particular points, those failures, when including any corrective action plans determine the acceptability of the they occur, do not represent a failure of that they choose to develop, before the affected product for distribution, it does the plan but a foreseeable occurrence. effective date of these regulations, they not require that the review be On the other hand, if the processor has may be able to obtain a review of those immediate, nor does it otherwise specify not made such an assessment, and a plans as part of a routine FDA a timeframe for review. If there is a failure occurs, it is not possible to say inspection. chance that the product is still fit for what the failure means. The processor In any event, the agency intends to commerce, FDA expects that economic must assess whether the deviation is the review corrective action plans that a considerations will dictate the timing of result of a system-wide problem that is processor includes as part of its HACCP not being properly addressed by the plan during routine regulatory the review. FDA agrees that, in many plan or simply a failure that could be inspections. Where the investigator cases, it would be advantageous for a expected to occur in the normal course finds a shortcoming in the corrective processor to cook or freeze a product of things. The failure must be fully action plan, the investigator will discuss pending results of a safety evaluation. assessed, and if it represents a failure of it with the processor. As with a failure The agency has no objection to such an the plan, the plan must be modified to to meet any other provision of these action as long as the processor reduce the risk of reoccurrence. regulations, in determining its response maintains the identity of, and its control The agency is convinced that the to such a shortcoming, the agency will over, the lot. corrective action approach contained in consider the totality of the situation and FDA has also modified § 123.7(c)(2) the final regulations (i.e., predetermined the likelihood that the shortcoming will from the proposal to require that the corrective action plans at the option of have an adverse impact on the safety of review of the product be conducted by the processor) adheres to the principles the product. If a corrective action plan someone with adequate training or of HACCP as recommended by has not actually been used as of the time experience, although FDA is not tying NACMCF (Ref. 34, pp. 199–200) and of the investigator’s review, and as a adequate training to training in HACCP will not result in undue burden, consequence of its review the agency (see § 123.10) as it did in the proposal. confusion, or trade difficulties. At the advises the processor that the corrective FDA made this change because, as same time, these regulations will action plan needs to be improved, it is comments pointed out, a 3-day course provide the flexibility needed to likely that FDA will advise the in HACCP would not necessarily qualify accommodate the varying levels of processor to follow the alternative someone to make many public health HACCP sophistication within the procedure in these regulations until the determinations of this nature. The basis industry. FDA is satisfied that employee upgrade occurs. for this modification is more fully Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65129 described in the ‘‘Training’’ section of ensuring that the HACCP plan is Of the comments that supported the this preamble. working properly, e.g., that it is being need for specifically-mandated followed, and that appropriate decisions verification activities, a significant 3. Documenting Corrective Actions are being made about corrective actions; number urged the agency to adopt such In § 123.7(d), FDA is retaining the and (3) ensuring that there is a requirement to be consistent with the proposed requirement that records of documented, periodic revalidation of HACCP recommendations of the corrective actions be kept. As with the the plan to make sure that it is still NACMCF. These comments noted that proposal, such records are subject to the relevant to raw materials as well as to the NACMCF recommendations are general recordkeeping requirements of conditions and processes in the plant. consistent with Codex Alimentarius § 123.9. The records must document the Commission standards. They predicted 2. Need for Verification Requirement in actions taken in following either a that compatibility of the final Regulations predetermined corrective action plan or regulations with such international the corrective action procedures In the preamble to the proposed standards would minimize confusion specified in § 123.7(c). regulations, FDA encouraged processors for processors and importers, smooth 73. One comment suggested that the to adopt verification practices but did international adoption of HACCP absence of written corrective action not propose to require that a processor’s principles, and facilitate trade. The plans would make it more difficult to HACCP plan specify the verification comments stressed that verification is document a response to a deviation. It procedures. Rather, the agency an essential component of a processor’s went on to explain that, with a plan, the tentatively concluded that verification HACCP program, and that the seven processor could simply note, for of a HACCP plan would effectively principles are so closely intertwined example, that ‘‘the product was occur through: (1) Comparison of the that overall success is probable only if recooked in accordance with ‘Section B plan to guidance documents such as all are intact. of the Plan.’’’ It pointed out that more FDA’s draft Guide; (2) technical One of the comments stated that extensive documentation would be assistance provided through trade verification should involve a continual necessary if a processor did not have a associations, universities, and review and improvement of the HACCP predetermined plan. government agencies; (3) mandatory system. The comment added that FDA does not agree with this review of monitoring and corrective verification is a primary responsibility comment. Section § 123.7(d) requires action records by trained individuals of processors, one that is equivalent in that the corrective action taken by a before product distribution; (4) importance to plan development. processor be fully documented. It is the mandatory reassessment of the Several comments stated that the agency’s intent that such documentation adequacy of the HACCP plan as a benefits of HACCP verification include: provide the specifics about the actions consequence of CL deviations; (5) Assurance that all CCP’s are identified, that were taken and not simply refer to reliance on the recommendations in assurance that the plan is being a written procedure. In the example FDA guidelines that processors of followed, a mechanism for third party given, records of the recooking cooked, ready-to-eat seafood products oversight of the plan development operation, equivalent to monitoring use the expertise of ‘‘processing process, a means of measuring the records for such an operation, i.e., authorities,’’ i.e., third-party experts; (6) success of a HACCP system, and cooking, would be necessary to mandatory training; and (7) investigator information on trends in the frequency document that the operation was review of the entire HACCP system and reasons for CL deviations. One performed in a manner that would during routine agency inspections. FDA comment suggested that firms should be render the product safe. Thus, similar requested comment on whether this required to perform verification documentation would be necessary approach is adequate to ensure that the activities at least annually. whether a plan exists or not. verification principle was being A few comments stated that although It is worth noting that § 123.7(d) now properly addressed. the proposed regulations included some states that corrective action records are 74. A large number of comments required practices that could be deemed subject to verification in accordance responded to this request. to be verification, such as the calibration with § 123.8(a)(3)(ii). This requirement Approximately one-third of these of process-monitoring instruments and is not new but reflects the fact that comments stated that FDA’s proposed plan reassessment and modification in record review is deemed to be a approach to HACCP verification was response to a CL failure, the entire verification activity in the final adequate. The other comments argued concept of verification should be regulations but was not classified as that verification should be specifically addressed more fully in a separate such in the proposal. A further mandated as a part of a firm’s HACCP section of the final regulations. One of discussion of this matter can be found program. these comments suggested that the in the section of this preamble that A few of the comments favoring the following verification activities be follows. proposed approach contended that a specifically mandated: Calibration of G. Verification HACCP plan lacking verification process control instruments, validation procedures should not be grounds for of software for computer control 1. Overview FDA to consider a product to be systems, and daily review of monitoring Verification is one of the seven adulterated. Several comments stated records. commonly recognized principles of that processors will engage in One comment stated that, without a HACCP. In the preamble to the verification activities without a requirement for specific verification proposed regulations, FDA requirement, as a natural outgrowth of activities, processors would rely strictly acknowledged and discussed the a HACCP program, because without on end-product testing to evaluate the recommendations of the NACMCF as such activities, HACCP will not work. success of the HACCP plan, and that they relate to verification. According to For this reason, they argued, it is not such an approach would diminish the the NACMCF, verification essentially necessary to mandate that verification effectiveness of the entire HACCP involves: (1) Verifying that the CL’s are procedures be included in processor’s system. Several comments stated that adequate to control the hazards; (2) HACCP plans. HACCP plan verification procedures 65130 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations should include detailed government and § 123.6(c)(6) and in a new section for Second, § 123.8(a)(1) requires that a industry audits and product analyses. verification, § 123.8. reassessment of the HACCP plan occur One comment, from a consumer Section 123.6(c)(6) requires that whenever there are any changes of the advocacy organization, challenged processors include in their HACCP type listed in these regulations that whether effective verification would plans a list of the verification could alter the plan, or at least annually. really occur through the measures cited procedures that they will use and the The NACMCF takes the view that in the preamble. The comment stated frequency of those procedures. This verification must occur on a periodic, that ‘‘third-party technical assistance’’ is provision is consistent with the view of regular basis (Ref. 34, p. 202), although not a mandatory part of the HACCP the NACMCF that a processor’s no specific timeframes are suggested. program and, therefore, can not be verification procedures should be FDA agrees with the NACMCF and the counted on as a verification procedure. addressed in the HACCP plan (Ref. 34, comments that verification of the It added that such technical assistance pp. 200–202). FDA does not expect that adequacy of the HACCP plan should be would tend to be performed during plan this requirement will be particularly conducted on a regular basis, even in development, and that verification must burdensome for the processor for two the absence of a recognized change, to be an ongoing procedure. The comment reasons. First, the requirement that ensure that the plan continues to stated that a ‘‘review of all HACCP- verification procedures be listed in the address all of the reasonably likely food monitoring records by trained HACCP plans is really only a variation safety hazards with appropriate CL’s individuals before distribution of of the proposal in that FDA proposed to and monitoring procedures. It is product’’ is not verifiable by the agency require a number of the activities that it essential that processors verify the because a firm can cut corners by having is now designating as verification adequacy of their plans and that this their employees sign the records activities in § 123.6(b)(4) (e.g., verification occur on a periodic basis. without reviewing them. The comment calibration of monitoring instruments Processors should conduct the review at argued that FDA auditing of consumer and review of consumer complaints). intervals that are appropriate for their complaints and mandatory in-process Second, a list of the steps that a processes. FDA agrees with one of the and end-product testing are important processor determines are appropriately comments, however, that this interval verification procedures. a part of the annual reassessment of the be no more than a year in order to HACCP plan need not be extensive or A few comments suggested that FDA ensure that the plan remains adequate to detailed. FDA recognizes that, at least should include a requirement that address the hazards associated with the initially, much of the annual written verification procedures be in species and processes (Ref. 206, p. verification procedure could take the place, but that the agency need not 1084). form of meetings and discussion, and The regulations at § 123.8(a)(1) prescribe specific verification activities, may not lend itself well to a detailed provide examples of changes that could or should do so only sparingly. listing of steps. FDA believes that the trigger a reassessment. These include FDA notes that the proposed annual verification procedure should be changes in raw materials, product regulations contained specific allowed to evolve, and that a formulation, processing methods or provisions identified by many of the requirement that the listing of steps in systems, finished product distribution comments as appropriate verification the plan be detailed before an annual systems, or the intended use or steps. For example, the proposed verification ever occurs could adversely consumers of the finished product. requirement that the HACCP plan affect that evolution. These examples are derived from the adequately address the food safety The new section on verification, NACMCF materials on the ‘‘five hazards that are reasonably likely to § 123.8, describes the minimum preliminary steps’’ that form the basis occur (§ 123.6(c) in this final rule) is a components of a processor verification for the HACCP plan (Ref. 34, pp. 188 continuing, rather than a one-time program. Among other things, the and 201). A change in any of these areas requirement. Thus, to continually be in agency has consolidated there those could necessitate a change in the plan compliance with it, a responsible aspects of the proposal that, according in order to respond to any new hazards processor would have to engage in some to comments, should be designated as that may have been introduced or to form of reassessment. Other provisions verification activities. Section § 123.8 maintain preventive control over in the proposal that comments contains little in the way of detail that existing ones. It is important to identified as verification steps included: was not included in the proposed recognize that this list is not all The required calibration of process regulations. In addition, it is designed to inclusive. monitoring instruments; the required be generally consistent with the Section 123.8(a)(1) requires that the validation of computer software; the verification concepts expressed by the plan reassessment be performed by an requirement that consumer complaints NACMCF, as requested by comments, individual that has been trained in be reviewed to assess whether they and at the same time, not unduly HACCP in accordance with § 123.10. indicate a problem at a CCP; and the burdensome. This requirement is a logical outgrowth requirement that HACCP-monitoring of the proposed requirement in § 123.9 and corrective action records be 3. Verifying the HACCP Plan that a HACCP-trained individual be reviewed before distribution of the Section 123.8(a) requires that responsible for the initial development product. FDA now realizes, however, processors with HACCP plans verify of, and subsequent modifications to, the that by not specifically requiring two aspects of their HACCP systems: (1) HACCP plan. These kinds of activities verification as such, the proposal That their HACCP plans are adequate to require an understanding of the generated considerable confusion about control food safety hazards that are principles of HACCP and plan whether FDA intended to include or reasonably likely to occur, and (2) that development as obtained through exclude the principle of verification their plans are being effectively training that is at least equivalent to the from processors’ HACCP programs. FDA implemented. Verifying these two course required in § 123.10. has concluded, therefore, that aspects is, essentially, what the Section 123.8(a)(1) also requires that, verification is important enough to be NACMCF refers to as the first and where a reassessment reveals that the an explicit part of the regulations. FDA second of the four processes of HACCP plan is inadequate, the has made it such in the final rule at verification (Ref. 34, p. 201). processor shall immediately modify the Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65131 plan. Failure of a processor to whether the HACCP plan is functioning computers are used as process- immediately modify its HACCP plan effectively on a day-to-day basis. It is monitoring instruments, they must be after it has determined that the plan is important to note that, for the most part, calibrated in accordance with inadequate would result in the the requirements in these sections were § 123.8(a)(2)(ii). The other functions that processor operating under a plan that is proposed in other parts of the a computer can perform, as listed above, not in conformance with these regulations and are now being compiled can be verified through procedures regulations. in § 123.8(a)(2) and (a)(3). Several required elsewhere in these regulations FDA recognizes that the methods that comments on these provisions pointed (e.g., recordkeeping can be verified processors will use to verify that the out that they were verification steps and through the review of records by a plan is still adequate will vary, based on should be referred to as such. FDA trained individual in accordance with individual preferences and past agrees and has brought them together in § 123.8(a)(3)). Consequently, the agency experience. FDA agrees with comments this new verification section of the final has concluded that it is not necessary that urged the agency to permit regulations. Section 123.8(a)(2) requires for these final regulations to include a maximum flexibility in the development that processors review consumer specific requirement for computer of verification procedures that are complaints (proposed at § 123.6(b)(4)), validation. tailored to individual operations. calibrate process monitoring Instead, the agency acknowledges that Nonetheless, the agency encourages instruments (proposed at § 123.6(b)(4)), the proper frequency of equipment processors to consider the guidance in and perform periodic end-product or in- calibration is entirely dependent upon the March 20, 1992, NACMCF process testing, as appropriate, in the type of instrument and the publication, ‘‘Hazard Analysis and accordance with written procedures for conditions of its use. Therefore, FDA is Critical Control Point System.’’ these activities in the HACCP plan. not being prescriptive in this regard. Moreover, FDA believes that the best Section II H. of this preamble FDA has, however, provided guidance way for the agency to judge the merits addresses the review of consumer on the subject in the draft Guide. of a processor’s annual verification will complaints at some length. Additional guidance should be be through its own continuing The provision on the calibration of obtainable from the manufacturer of the determinations of whether the monitoring instruments instrument. The nature and frequency of processor’s overall HACCP system (§ 123.8(a)(2)(ii)) is brought forward the calibration effort should be remains appropriate for the with no substantive change from the determined at the time of HACCP plan circumstances. These determinations proposal. Calibration is an important development and should be included in will occur as a product of the agency’s activity and involves readily defined the plan to ensure that it is regularly ongoing inspection program. procedures that can easily be provided and appropriately done. The agency is On this subject, FDA is sensitive to in the plan. the comment that the absence of Calibration can include the validation convinced that without such verification procedures from a HACCP of computer hardware and software. formalization, calibration, which, for plan should not, in and of itself, cause FDA proposed to require that the some instruments, may be done as a food to be deemed adulterated under HACCP plan detail the methods of infrequently as once per year, may be 402(a)(4) of the act. Nonetheless, the computer software validation to be used overlooked. absence of verification could jeopardize by the processor. FDA received a small 5. Product Testing the likelihood of success of the overall number of comments both for and program. For example, monitoring a against computer software validation as 75. Section 123(8)(a)(2)(iii), which critical cooking step with a thermometer a worthwhile part of verification. Two lists the performing of end-product or that has not been calibrated provides comments supported the need for in-process testing, is a new provision. little assurance that the CL is actually consumer software verification. But two FDA requested comment on what tests, being met, and failure to review records comments suggested that computer including or in place of end-product may allow the absence of monitoring or software verification would be an testing, should be used to measure the improper corrective action to go unnecessary expense because it would success of the HACCP program, both in unnoticed for extended periods of time. result in only marginally improved terms of individual firms and the Should the agency find itself in the reliability. national program as a whole, and how position of having to react to the The agency has worked extensively frequently such tests should be absence of adequate verification with the low-acid canned food industry administered (Ref. 208 at 4183). A large procedures in a processor’s HACCP to verify computer hardware and number of respondents addressed FDA’s plan, in deciding whether to bring software that the industry is now using request for comment. Approximately regulatory action, the agency will to operate or control various processing half of these comments supported the consider the totality of the situation, functions. That experience has need for an end-product testing and the likelihood that it would have an demonstrated to FDA both the requirement. The other half objected to adverse impact on the final food, as it desirability and the feasibility of such a requirement or suggested that the would in considering a processor’s verifying computer hardware and need should be determined on a case- failure to meet any specific provision. software. For low-acid canned foods, the by-case basis. industry is using computers to perform A number of consumer advocacy 4. Verifying the Implementation of the several functions, including monitoring organizations suggested that end Plan compliance with CL’s, controlling the product testing is essential because no The regulations at § 123.8(a)(2) and processing operations, taking corrective other verification mechanism provides (a)(3) require ongoing verification actions, and recordkeeping (Ref. 221). public confidence that HACCP programs activities in addition to the annual In a HACCP system such as that being are actually resulting in a safer product. reassessment. These ongoing activities established for seafood by these Several comments stated that regular are in keeping with the NACMCF’s view regulations, FDA is interested in microbiological testing would help a that verification must also take the form ensuring that hardware and software for processor determine whether there are of ‘‘frequent reviews’’ (Ref. 34, p. 201). computers that monitor compliance sources of contamination that are not Frequent reviews relate primarily to with a CL be verified. However, when being controlled. 65132 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations

A few comments suggested that such into HACCP plans, where appropriate. shipping products before the end of the testing should be performed more Consequently, the regulations at shift (lot). Several comments also stated frequently during plan development and § 123.8(a)(2)(iii) list end-product and in- that holding a product until the HACCP validation, and then reduced to some process testing as a verification activity records could be reviewed could result lower level as part of a firm’s at the option of the processor. in a product being subjected to verification efforts. Another comment The agency provided guidance unfavorable conditions during storage, suggested that testing should be concerning appropriate attributes for which could compromise both quality performed quarterly by those processors product testing in the draft Guide and and safety. with a poor record of compliance and intends to elaborate on it in the first Several comments urged that annually by those with a good record. edition of the Guide. processors be permitted to review the Several comments suggested that the HACCP records at the end of the day or 6. Records Review need for and frequency of product at the end of the shift, even if this analysis should be established as part of Section § 123.8(a)(3) requires that a review occurred after distribution. the HACCP plan development process. trained individual review all records Others suggested that record review One of these comments noted that the that document monitoring of CCP’s, the should be performed within a frequency of testing may fluctuate taking of corrective actions, the ‘‘reasonable time’’ of production of the depending, in part, upon changes in calibrating of any process control record. personnel, raw materials, equipment, instruments, and the performing of any The agency remains convinced that and product formulation. end-product or in-process testing. The the coupling of lot release with A number of comments stated that review of HACCP records by a trained verification-type record review provides end-product testing is a questionable individual was included in the a valuable added level of safety method for measuring the success of a proposed regulations at § 123.8(b). In assurance. This kind of record review HACCP system. One of these comments response to comments that urged before shipment is a regulatory stated that end-product testing measures consistency with the recommendations requirement for low-acid canned foods the effectiveness of the plan for a small, of the NACMCF, FDA has designated and acidified foods. FDA’s experience finite portion of production and has this review a verification function for with these industries is that record limited value in measuring the success purposes of the final regulations and has review before distribution has been of the HACCP plan overall. included it in the section on instrumental in preventing the One comment stressed that finished verification. Specifically, the proposed introduction of potentially hazardous product testing is contrary to the regulations provided that a HACCP- foods into commerce (Ref. 221). The concept of HACCP, i.e., a reliance upon trained individual review the agency encourages processors to preventive controls at critical points monitoring records, sanitation control institute such a program whenever throughout the system. Another records, and corrective action records possible. comment contended that mandatory before distribution of the product to However, FDA accepts from the microbiological analysis of foods would which the records relate. Under the comments that the proposed be inappropriate because: (1) proposal, the individual’s review would requirement would cause certain Statistically valid sampling programs for include records of process monitoring processors to delay shipping perishable pathogens are not economically feasible instrument calibration, because the products and thus present an because of the low incidence of agency characterized these records as unacceptable burden to them. The pathogens in most foods; (2) the use of monitoring records. agency therefore is not requiring that indicator organisms to predict the The comments that FDA received on record review occur before shipment. presence of pathogens is not always these provisions focused on the Uncoupling record review from lot reliable and, where it is not, can become proposed requirement that the review release leaves as the primary purpose merely a test for aesthetics; and (3) by the trained individual occur before for record review the periodic microbiological analysis of foods is the product could be shipped. Several verification that the HACCP plan is often costly, imprecise, and slow, and, comments objected, stating that such a appropriate and is being properly therefore, not suitable for real time data review before shipment was implemented. Record review needs to generation. unnecessary, because under the occur with sufficient frequency so as to The agency acknowledges the corrective action provisions of the ensure that any problems in the design shortcomings of product testing, proposed regulation, any CL deviation and implementation of the HACCP plan especially microbiological testing, used caught by the observer/operator would are uncovered promptly and to facilitate for process control as pointed out by the necessitate the segregation and holding prompt modifications. The concept is comments. The NACMCF, in its of the affected product before shipment roughly that of a ‘‘feedback loop,’’ with comments in response to FDA’s until the safety of the product could be information coming out of the record questions about product testing, assured. One comment further stated review process in such a timely manner reiterated its view that, while that linking lot release to record review that it can have impact on the verification is essential to the success of before shipment underestimates the production of subsequent lots of the HACCP, end-product testing has limited level of control attainable through the product. value for measuring the success of a monitoring and corrective action FDA is convinced that a weekly HACCP system. Comments also noted principles of HACCP. review of HACCP monitoring and that in-process or finished product Comments from several processors corrective action records would provide testing should not normally be a and trade associations stated that, for the industry with the necessary prerequisite for lot release under a some processors, it would be flexibility to handle highly perishable HACCP program. impractical to withhold the shipment of commodities without interruption, However, FDA recognizes that many every lot until HACCP records could be while still facilitating speedy feedback processors will find that product testing verified and signed. These comments of information. FDA is reluctant to has a role to play in the verification of noted that, with the use of today’s high allow the level of flexibility provided by HACCP systems, and the agency wishes speed processing lines, it is normal such language as ‘‘reasonable time,’’ out to encourage incorporation of testing practice for some processors to begin of concern for the confusion that it Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65133 would generate. FDA’s experience with possibility exists even though, more H. Consumer Complaints low-acid canned foods and acidified often than not, verification will not 1. Background foods has demonstrated that review of provide the kind of immediate feedback these kinds of records is a critical that the processor will receive from In the proposed regulations, FDA verification tool. FDA is, therefore, monitoring. Corrective actions based on tentatively concluded that each adopting the proposed provision as information received through processor’s HACCP system had to utilize any consumer complaints that § 123.8(a)(3) with one revision. As set verification will be exceptions to the the processor receives that allege a out in the final rule, it requires that the rule. However, processors should be problem with product safety. Several HACCP-trained individual review the mindful of the possibility. monitoring records of CCP’s and the provisions described how consumer records that document the taking of 7. Verifying the Hazard Analysis complaints were to be used. In one, FDA corrective actions within 1 week of the proposed to require that a processor’s making of the records, rather than before Section 123.8(c) requires that, monitoring efforts include the use of shipment, as a part of a processor’s whenever a processor does not have a consumer complaints, and that its verification activities (§ 123.8(a)(3) (i) HACCP plan because a hazard analysis HACCP plan reflect how they will be and (ii)). has not revealed any food safety hazards used. In a second provision, FDA FDA agrees, on the other hand, that that are reasonably likely to occur and proposed to require that, when a this principle need not apply to the that can be controlled through HACCP, processor receives a consumer review of records of such verification the processor must reassess the hazard complaint that may be related to the activities as process control instrument analysis whenever a change occurs that performance of a CCP or that may reflect calibration and product testing. The could reasonably affect whether such a a CL deviation, the processor determine frequency of these activities will be hazard exists. FDA has included whether a corrective action is variable and dependent upon the examples of such changes in § 123.8(c). warranted, and, if so, take one in accordance with the specified corrective HACCP plan development process. The list is identical to that provided in action procedures. FDA also proposed Consequently, setting a specific review § 123.8(a)(1), for when a plan must be frequency for these records is not to require that the taking of such reassessed. Consequently, any change in warranted. Section 123.8(a)(3)(iii) corrective actions be fully documented these factors should warrant a reflects this conclusion. It requires that in records. Finally, FDA proposed to the HACCP-trained individual review reassessment to be certain that a plan is require that consumer complaints that the calibration records within a still not needed. relate to the operation of a CCP or to a reasonable time after the records are FDA has concluded that, under a possible CL deviation be included as made, rather than before any additional mandatory HACCP system, the principle part of the processor’s HACCP records products are shipped. It also applies the of verification applies equally to a and be available for agency review and same ‘‘reasonable time’’ standard to any decision that a HACCP plan is not copying. end-product testing records that are necessary as it does to a decision that FDA’s rationale for proposing these made. the plan continues to be adequate. requirements was that consumer The proposed regulations did not Circumstances change, and processors complaints may be the first alert that a processor has that problems are address the review of end-product must be alert to whether the exemption occurring that are not being detected or testing records by a trained individual. from the requirement to have a plan The requirement in these final prevented by the processor’s HACCP continues to apply to them. regulations for a review of such records controls. While the goal of a HACCP reflects the principle contained in the Section 123.8(d) requires that system is to prevent all likely hazards proposal that there be a verification-type processors document calibration and from occurring, no system is foolproof. review by a trained individual of the product testing in records that are The agency tentatively HACCP records that are being created by subject to the recordkeeping concluded,therefore, that each HACCP the processor. In this respect, the requirements of the regulations at system should take advantage of responsibilities of the trained individual § 123.9. The requirement that records be consumer complaints as they relate to are unchanged from those that were kept of process monitoring instrument the operation of CCP’s. FDA also contemplated in the proposal, although calibration was included in the tentatively concluded that it might be details relating to those responsibilities proposed regulations at § 123.6(b)(5). necessary for the agency to review those have been modified based on the The requirement that records of end- complaints in order to be able to verify comments. product testing be kept is consistent whether a processor is taking necessary Section § 123.8(b) requires that with the general recordkeeping steps to review its HACCP controls and processors take appropriate corrective principles of HACCP. The one exception take corrective actions as necessary in action whenever a review of a consumer is that FDA is not requiring records that response to consumer complaints. The complaint, or any other verification document the review of consumer agency emphasized that it was referring procedure, reveals the need to do so. solely to complaints relating to the complaints. The agency is satisfied that This provision is essentially a operation of the HACCP CCP’s (i.e., the requirement for a processor to restatement of the proposal regarding those that allege a problem with human review consumer complaints relating to consumer complaints, expanded to food safety) and not to consumer include the results of verification potential safety concerns will be complaints generally. procedures for purposes of emphasis. sufficient for this kind of verification Verification was not specifically activity. Moreover, as explained in the 2. Consumer Complaints as Verification included in the proposal. FDA is discussion of consumer complaints Tools including a reference to it here to elsewhere in this preamble, FDA is 76. FDA received a large number of remind processors not to preclude the persuaded that most consumer comments on the advisability of possibility that information obtained complaints will involve matters handling consumer complaints in the through verification could lead to the unrelated to the mandatory HACCP manner that the agency proposed. taking of a corrective action. This system. Generally speaking, the comments 65134 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations addressed two broad issues: Whether These comments further argued that legitimate verification purpose in a consumer complaints are relevant to a consumer complaints are not identified HACCP system. HACCP system, and if they are relevant, in the NACMCF recommendations as a While consumer complaints are not how they should be used. The question useful verification tool. specifically addressed in the NACMCF of whether FDA should have access to A relatively small, diverse group of HACCP recommendations, the consumer complaints was a significant comments, including those from a verification portion of that document concern that comments found germane seafood processor, a seafood trade states, in part, that verification to both issues. Approximately one-fifth association, a State regulatory agency, inspections should be conducted, of the comments supported the an individual, and a professional ‘‘When foods produced have been proposed system or a variant of the organization, supported the handling of implicated as a vehicle of foodborne system (i.e., they believed that consumer complaints as proposed. One disease.’’ This statement is a recognition consumer complaints are relevant to a of these comments suggested that that information from sources outside HACCP system). Some of those who consumer complaints could be useful in the processing plant can and should be voiced general support urged more FDA’s efforts to verify that processors’ considered in the verification of a comprehensive agency access to HACCP programs are effective. HACCP plan. In fact, it is FDA’s consumer complaints, and others urged Another group of comments, from experience that consumer injury or that some restriction on agency access consumer advocacy organizations and a illness complaints to the agency be put in place. The remaining State regulatory agency, agreed that occasionally point out problems approximately four-fifths of the consumer complaints are an appropriate traceable to defective controls at the comments, principally from seafood and part of HACCP. One of the comments food processing facility (Ref. 207). other food processors and trade noted that the consumer performs the Where information that has potential associations, argued that consumer final quality control check, and that if relevance to food safety is available to complaints have no place in a HACCP a consumer finds a problem egregious a processor as a result of its own system. enough to take the time to write a letter, consumer complaint system, it is Those comments that opposed the the information contained in that letter entirely appropriate for the processor to mandatory use of consumer complaints should be considered in any evaluation consider that information in assessing in a HACCP system provided a variety of the adequacy of the relevant HACCP the adequacy of its HACCP program. of reasons. The comments argued that plan. The comment further argued that FDA accepts the possibility that many, if not most, consumer complaints that a consumer complaints are generally: (1) consumer complaints could bring to Unrelated to the safety of the product; processor receives will not be germane light unidentified CCP’s. This benefit, (2) not received in a timely manner that to safety, that many will turn out not to the comment contended, would not be would facilitate control of the process be valid, and that others will relate to possible under the proposed regulations and are, in this way, akin to finished events at retail or that are otherwise because the agency limited consumer product testing; (3) erroneous and beyond the ability of the processor to complaints in a HACCP system to those sometimes exaggerated or fraudulent; (4) control. Nonetheless, FDA strongly that may be related to a CL deviation at vague; (5) subjective and nonscientific; believes—and the comments support an existing CCP. Finally, one of the (6) associated with hazards that develop this view—that a responsible processor comments noted that the inclusion of during transportation, storage, and retail will at least review consumer consumer complaint access in the marketing, rather than processing, if complaints to determine their potential they identify food safety hazards of any proposed regulations is the one area in value and take steps to correct the kind; (7) not traceable to a specific which the agency delivers on its ‘‘water product or the process, when such stops processing plant or lot of product; and to table’’ commitment. are warranted. (8) not readily associated with a specific FDA is persuaded that consumer FDA has concluded, therefore, that CCP or CL failure, even where it is complaints generally will not make an processors should evaluate the likely that they are the result of a effective monitoring tool in a HACCP consumer complaints that they receive problem during processing. These system, primarily because they tend not to determine whether the complaints comments asserted that, therefore, to provide the kind of immediate, relate to the performance of CCP’s, or consumer complaints are not an reliable feedback expected of a HACCP- reveal the existence of unidentified appropriate monitoring tool. monitoring system. FDA agrees with the CCP’s, as part of their HACCP A number of these comments comments that suggested that verification procedures. The agency suggested that, given the problems listed monitoring procedures under HACCP acknowledges that the absence of above, sorting through the large volume must provide the processor with consumer complaints does not, by itself, of consumer complaints that are immediate feedback on whether the verify the adequacy of a HACCP system. received by most large firms to identify process is under control and be However, after taking into account all those few that might be able to be linked scientifically sound. the concerns raised by the comments, to the performance of a specific CCP FDA is not persuaded, however, that the agency is of the view that those would be a waste of both the processor’s consumer complaints are irrelevant to consumer complaints that a processor and the agency’s time. These comments HACCP systems. The agency received does receive, and that allege a safety stated that such a review of consumer no comments that were able to problem, can be of value as a complaints would divert their efforts demonstrate that outside sources of verification tool and should serve that from more productive tasks. information should not, where purpose. This conclusion is reflected in Several comments raised additional appropriate, supplement a processor’s the requirements of § 123.8 of these final questions about consumer complaints as own monitoring as a way of determining regulations (see discussion in the a HACCP verification tool. They whether the process is in control. ‘‘Verification’’ section of this preamble), suggested that there are better, more Moreover, a number of comments stated which lists the review of consumer effective means of verifying that the that they go to some lengths to examine complaints as an appropriate HACCP plan is working properly. These the consumer complaints that they verification activity (§ 123.8(a)(2)(i)). suggestions are covered in the receive. The question, then, is whether As explained earlier in this preamble, ‘‘Verification’’ section of this preamble. consumer complaints can serve some because the agency regards consumer Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65135 complaints as a verification tool rather rather than to mandate access to Unquestionably, FDA has an essential than a monitoring tool, FDA has corporate files. role to play as a regulatory verifier of modified § 123.6(c)(4) to eliminate the Several comments suggested that HACCP. As described earlier, the agency proposal requirement that the HACCP consumer complaint files should remain received a number of comments that plan describe how consumer complaints a private company matter, and that open raised concerns about the veracity of a will be used in the monitoring of CCP’s. access to these files is likely to result in mandatory HACCP system in the The agency has also modified regulatory abuse. A few comments absence of adequate regulatory review. § 123.6(c)(7) to eliminate the proposed further argued that, by mandating Moreover, FDA has concluded that this requirement that consumer complaints complaint file access, the agency would role cannot be carried out without the be part of a processor’s HACCP- penalize those firms with good ability to review HACCP plans and a monitoring records. consumer complaint gathering systems narrow category of processor’s records FDA has concluded that when a and possibly deter others from (i.e., those that relate to how a processor review of a consumer complaint reveals developing such systems. is controlling the critical safety aspects a need for the processor to take A relatively small, diverse group of of its operations). The agency is not corrective action (e.g., recall, comments, including seafood interested in expanding this access destruction, or reprocessing of the processors, a seafood trade association, beyond those records that are the product or modification of the process and a Federal government agency, minimum necessary to carry out this to reduce the risk of reoccurrence of the submitted that, while it is appropriate responsibility. problem), such action must be taken in for FDA to mandate that processors With regard to consumer complaints, conformance with the applicable utilize consumer complaints in FDA is persuaded by the comments that, corrective action procedures of these assessing the effectiveness of their especially when used as HACCP regulations. This conclusion is reflected HACCP program, it is not necessary for verification records rather than HACCP- in of § 123.8(b) which states that the agency to have direct access to the monitoring records as originally processors shall immediately follow the firms’ complaint files. The comments proposed, the public health benefits that procedures in § 123.7 whenever a suggested two alternatives to providing may accrue from agency access to these review of a consumer complaint, or any direct access to complaint files: (1) kinds of records would probably be other verification procedure, reveals the Allowing processors to prepare Notices minimal and are outweighed by the need to take a corrective action. The of Unusual Occurrence and Corrective concerns that have been expressed. corrective action provisions are Action (NUOCA) that described the FDA is satisfied that agency review of discussed in the ‘‘Corrective Actions’’ action taken in response to consumer a processor’s overall verification section of this preamble. complaints that relate to product safety; scheme, plus access to records that As suggested by several of the or (2) allowing processors to prepare a document any corrective actions that comments, records of corrective action matrix of complaints, as is currently were taken as a result of information relative to consumer complaints need used in the voluntary, fee-for-service obtained through consumer complaints, not include the original consumer HACCP program being operated by review of those complaints that complaint. However, it is unlikely that NMFS. consumers regularly send to the agency, a comprehensive record of the Others in this group suggested that the ability to conduct unannounced corrective action taken could be FDA have access only to written inspections, and access to monitoring generated without at least the critical complaints, or only to consumer records and plans, should be enough for information contained in the complaint, complaints, as opposed to trade FDA to adequately verify processor’s such as the nature of the complaint and complaints, which the comment argued HACCP systems. identification of the product in are often submitted for commercial FDA also accepts that the burden on question. Identification of the advantage only. One comment noted processors if they had to segregate complainant is not likely to be critical. that it would be impossible for complaints that have a potential processing vessels to retain consumer relationship to product safety from 3. Agency Access to Consumer complaints on board the vessel, and that those that relate to product quality, Complaints provision should be made for these to be economic issues, customer satisfaction, 77. Many comments questioned stored at the corporate office. Other and other nonsafety issues, would be whether FDA should have access to comments urged that FDA access to great and is not warranted by any consumer complaints. Several consumer complaints not include the potential gain in product safety. Many comments argued that no other food right to copy them, or that, in some firms would have to take this step to industry is required to provide access to other way, they be protected from make safety-related complaints available consumer complaints. A few public disclosure. to FDA. Similarly, the agency recognizes specifically cited the absence of such a Another group of comments, that a significant burden would be requirement in the low-acid canned composed of consumer advocacy placed upon its inspectional force if it foods regulations (part 113). organizations and a State regulatory had to verify that a processor had One comment noted that FDA has agency, urged that all consumer properly categorized its complaints. methods other than access to a complaints, regardless of their potential The alternative of FDA having access company’s consumer complaint file to relationship to product safety, be to all consumer complaints and making obtain information about product included in a processor’s HACCP its own determinations about which defects that affect safety, including records and be available for FDA relate to safety, as some comments direct calls from consumers and health review. These comments suggested that suggested, is simply not practicable. In professionals, MedWatch, and reporting the FDA investigator should make the addition, it is not the desire of FDA to to the Center for Disease Control and determination of which complaints are penalize those firms that have large, Prevention (CDC). Another comment relevant for follow up rather than the expensive complaint gathering systems, suggested that it would be more efficient firm. They further suggested that the by mandating that they provide all to devise a system whereby consumers investigator can ignore any complaints information so gathered for agency are encouraged to submit complaints that are not relevant to safety controls at review, or to discourage others from about product safety directly to FDA the processing facility. developing such systems. 65136 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations

In the preamble to the proposed 1. Details and Signatures FDA proposed to require the signature regulations, FDA stated that more than of the observer/operator on all records 78. FDA proposed that all HACCP- half of the seafood-related consumer involving observations or measurements monitoring records (including records of complaints that it receives relate to made during processing or related process-monitoring instrument product quality, filth, and economic activities. This specification of the kinds calibration), sanitation control records, deception concerns. Access to all of records in which signatures were and corrective action records identify consumer complaints is, therefore, required would have had the effect of the date of the activity that the record unnecessary to ensure product safety. exempting consumer complaints, which reflects. One comment recommended FDA has, therefore, removed from were considered to be monitoring that the final regulations should also what is now § 123.9(c) the requirement records in the proposal from this require that the time of each observation that consumer complaints relating to requirement. However, the use of be recorded, to make it easier to link safety be available to the agency. The consumer complaints as monitoring records to specific lots of product. A agency reiterates, however, that records has not been carried forward to comment from a trade association processors should utilize all available these final regulations. Consequently, requested that the records be required to information as they evaluate the limiting the records that must be signed identify the establishment where the adequacy of their HACCP plans and to involving observations or activity occurred to reduce the potential their implementation. Consumer measurements is no longer necessary, for confusion in firms with multiple complaints are one potential source of and FDA has deleted it for purposes of processing facilities. information, and a significant group of clarification (see § 123.9(a)). comments recognized the value of FDA agrees with both comments that FDA has also deleted the proposed consumer complaints in the verification the date and time on records will help provision that the observer/operator process. to connect information on the records to need not sign corrective action records. specific lots of product, and that the I. Records The agency proposed to require that name and location of the processor will only a trained individual sign these FDA proposed that records required help link information to a specific by the regulations: (1) Contain certain records. FDA is requiring the signature processing facility. or initials of the observer/operator on information, (2) be completed at the The agency has, therefore, modified time of the activity, (3) be signed by the corrective action records in order to be § 123.9(a)(1) and (a)(2) to state, in part, consistent with the corrective action operator or observer, (4) be reviewed for that the required records must include: completeness and compliance with the provisions of these regulations. In ‘‘(1) The name and location of the § 123.7, for example, processors may HACCP plan and signed and dated by processor or importer; (2) The date and the reviewer, (5) be retained for now predetermine their corrective time of the activity that the record actions in ways that empower observer/ specified periods of time, and (6) be reflects.’’ available for review and copying by operators to take corrective measures, 79. FDA proposed to require that FDA. especially in the absence of a trained FDA received a large number of HACCP-monitoring records (including individual. The likelihood that a trained comments that addressed these records of process-monitoring individual might not be present at the proposed recordkeeping requirements. instrument calibration) and sanitation moment when a corrective action must These comments were from a diverse control records be signed by the be initiated is enhanced by the fact that group of commenters, including large observer/operator. A few comments such an individual need not be an and small processors, trade associations, supported the proposed requirement on employee of the processor (see individuals, Federal, State, and foreign the grounds that it fosters accuracy and § 123.10). Conversely, the presence of a government agencies, consumer accountability in the recordkeeping trained individual during the initiation advocacy groups, professional societies, process. One comment opposed the of a corrective action need not preclude and academics. Several comments proposed requirement, raising concern the observer/operator from taking provided arguments that support the about the legal liability that it imposed corrective steps, as appropriate. Finally, need in a mandatory HACCP program upon the workers that sign the records. the agency has concluded that the for records in general, and none A few comments suggested that the burden imposed by requiring the specifically argued in opposition to that observer/operator be allowed to initial, signature or initials of the observer/ concept. Most of the comments instead of sign, the records. operator whenever that individual addressed specific issues that relate to FDA agrees with the comments that participates in the making of a recordkeeping. suggested that a signature on monitoring corrective action record is Those comments that supported the and sanitation control records is inconsequential. need for records stated that necessary to ensure accountability in 80. Several comments questioned recordkeeping is a key component of the recordkeeping process. FDA also whether the proposed requirement that HACCP. One processor’s comment hopes that it will enhance workers’ monitoring records include the noted that HACCP records must be kept sense of responsibility and pride in their ‘‘identity of the product, product code in good order so that problems can be participation in the HACCP system of ** *,’’ meant that all fish and fishery easily tracked to their root cause. One preventive controls. Regarding worker products were required to bear a comment stated that HACCP records liability, those that deliberately falsify product code. facilitate an evaluation of safety records are liable whether they sign the It was not the intent of the agency to conditions over time, rather than records or not. In any event, the require product codes on such products, through a ‘‘snap shot’’ inspection. falsification of records cannot be only to require that they be listed on Another processor noted that HACCP condoned and should not be tolerated appropriate records when they are used. recordkeeping is not overly by processors. The purpose of the proposed burdensome, and that the proposed FDA further agrees that the purpose requirement was to facilitate linkage regulations would not require it to for the observer/ operator’s signature is between records and product. To clarify maintain any records in addition to achieved if the observer/operator either this point, FDA has modified what is those that it already maintains. signs or initials the monitoring records. now § 123.9(a)(4) to read, ‘‘(4) Where Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65137 appropriate, the identity of the product transferred to another accessible It was not the intent of the agency to and the production code, if any.’’ location between seasonal packs, as long preclude such records. To make this fact 81. Several comments suggested that as they were returned during the next clear, FDA has added a new paragraph, FDA not specify the components of active season. Comments from several § 123.9(f), to the final regulation, which required records. These comments processors and trade associations urged reads, ‘‘(f) Records maintained on argued that many processors have the agency to modify the requirement to: computers. The use of records existing forms that can appropriately be (a) Allow for permanent transfer from maintained on computers is acceptable, used as HACCP records. the facility and (b) include both remote provided that appropriate controls are It is not FDA’s intent in § 123.9(a) to processing sites and processing vessels implemented to ensure the integrity of specify record format or content, beyond regardless of whether they close the electronic data and signatures.’’ certain minimum, essential seasonally. Comments from operators of In the Federal Register of August 31, components. Processor’s are encouraged processing vessels and remote 1994 (59 FR 45160), FDA proposed to use existing records, making processing sites and from a trade separate regulations at 21 CFR 11 that, modifications only as necessary to meet association requested that FDA allow if adopted, will become the standard for the previously described requirements. HACCP records to be kept on the determining what constitutes 2. Retention and Storage processing vessel or remote site for a appropriate controls for electronic period of time and then be transferred records, electronic signatures, and FDA proposed to require that permanently to the processor’s handwritten signatures executed to processors retain monitoring (including corporate, or closest business office. The electronic records. In the interim, process monitoring instrument comments argued that the records in processors are encouraged to look to calibration), sanitation control, and those locations would be more easily industry standards for guidance. corrective action records for 1 year after stored, safer, and more readily the date that they were prepared for 3. Confidentiality of Records accessible to regulators than they would refrigerated products and for 2 years for 85. In the preamble to the proposed be at remote sites and on processing frozen or preserved products. FDA also regulation, FDA stated that, as a vessels. Additionally, they argued that proposed that records used to preliminary matter, HACCP plans and corporate verification activities often substantiate the adequacy of equipment monitoring records appear to fall within would be performed at the land-based or processes be retained for 2 years after the bounds of trade secret or facilities. Transfer of the records to the date that they apply to products commercial confidential information these facilities would promote being processed. and would, therefore, be protected from verification in these circumstances. 82. Several comments stated that public disclosure by section 301(j) of the these proposed retention times were too Comments opposing the requirement act (21 U.S.C. 331) and by the Freedom long. Most of these comments suggested that the records be returned to a of Information Act (FOIA) and the record retention times of from 90 days seasonally closed facility once the Department of Health and Human to 1 year for refrigerated products and facilities reopened expressed concern Services (DHHS) and FDA regulations from 6 months to 1 year for frozen that return of the records to the promulgated pursuant to these laws. products. One comment argued that 1 reopened locations could result in lost FDA specifically invited comment on year is a sufficient period for record records. the issue of public disclosure of HACCP retention unless the records relate to a FDA has been persuaded to records and on whether FDA has any CL deviation, in which case they should accommodate the difficulties associated discretion about the releasability of any be held for 3 years. Another comment with record storage on processing HACCP records that it may eventually urged that the agency not mandate vessels and remote processing sites by have in its possession. A large number record retention times but require allowing HACCP records to be moved of comments responded to FDA’s processors to identify appropriate from such facilities to another request for comment, especially in the retention time requirements in their reasonably accessible location at the end context of the provision in the HACCP plans. of the seasonal pack without requiring regulations (§ 123.9(c) in this final rule), FDA rejects those comments that that the records all be returned for the that provides that all required records requested a reduction in the proposed following season (§ 123.9(b)(3)). and plans must be available for review mandatory record retention period. Additionally, the agency will, as and copying. While it may be true that most proposed, allow HACCP records from A large number of comments, from refrigerated products will be unusable any facility that is closed between processors, trade associations, within 90 days, as suggested by one of seasonal packs to be permanently professional associations, State and the comments, retention times of less transferred to another reasonably Federal agencies, and individuals, than 1 year do not provide for sufficient accessible location. However, FDA contended that HACCP records and access for the processor’s or FDA’s points out that, in most instances, the plans are trade secrets and should under verification activities. (See revised agency will need to examine processing no circumstances be released to the § 123.8(a)(1) and the accompanying records onsite in order to conduct an public. Comments from several preamble discussion of the minimum 1- effective verification inspection. For this consumer advocacy groups countered year frequency of plan reassessment.) reason, records must be so stored that that in many cases HACCP records and No new, substantive comment was they can be promptly returned to the plans will not contain trade secret provided relative to record retention processing facility upon demand by information or will contain only limited times for frozen or preserved products FDA. In order to maintain inspectional trade secret information, and that the that would warrant a reduction for those efficiency, the time period between an nonsecret parts (i.e., most of their products. FDA request for the records and their contents) should, therefore, be available Thus, FDA has made no changes to arrival should not ordinarily exceed 24 to the public. § 123.9(b). hours. Many of the comments that supported 83. FDA proposed that, in the case of 84. Several comments urged FDA to protection from public disclosure urged processing facilities that close between provide for the use of computers to that the final regulations contain seasonal packs, records could be maintain HACCP records. controls over the agency’s access to, and 65138 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations copying of, HACCP plans and records as rather than release the records specific need to do so. The agency the only guaranteed way to ensure themselves. The comment asserted that categorically rejects the view that FDA confidentiality. The comments argued this step would serve to inform should be a collection point for HACCP that the potential harm from exposure of consumers about the relative safety of records and plans so that they may be HACCP plans and records to the product and the effectiveness of the made publicly available. Nevertheless, competitors or to the public is HACCP system, while not divulging the apprehension expressed by many considerable and carries the threat of specific process parameters that are comments about the consequences of increased costs, misuse, and damage to trade secret or confidential commercial. public disclosure of these new types of the integrity of a firm and its products. Conversely, comments from consumer records is certainly understandable. Several comments contended that advocacy groups argued that, for the FDA agrees with the views expressed HACCP records will be trade secret most part, HACCP plans and records are by consumer advocacy organizations because they will be process-specific not trade secret or confidential that the public needs ways to be able to and, therefore, will contain such commercial. The comments asserted judge how and whether it is benefiting information as processing times and that much of the information contained from a HACCP system. Neither the temperatures. They stated that these in these plans and records involves the agency nor the industry can reasonably processing parameters may differ from application of basic sanitary engineering expect that the public will simply take company to company based on product and is already in the public domain, as the government’s word for it. It remains formulas. evidenced by the draft FDA Guide. to be seen, however, whether public A few comments argued that there is The consumer advocacy groups access to information about processors no precedent for public access to argued that, given the limited resources that processors have traditionally held industry-generated records. Some of that FDA can devote to monitoring as protected is the only way, or the best these comments stated that processing HACCP compliance, public access to way, to provide the public with records are regarded as trade secret HACCP records should be as broad as information about this system. under the LACF regulations, and they allowed under the law, so that FDA is considering how meaningful noted that § 108.35(d)(3)(ii) deems consumer confidence in, and data can be extracted from the processing information submitted to understanding of, the seafood supply inspectional process and prepared in FDA to be trade secret within the can be fostered. One comment asserted such a manner that it could be released meaning of 301(j) of the act and within that the public’s right and need to know without jeopardizing trade secret and the meaning of the FOIA. Other about matters involving public health confidential commercial information comments asked that FDA protect should be the basis from which the and yet be useful to both FDA and the HACCP plans and records in the same agency formulates public access policy. public in evaluating this program. FDA way that the agency protects processing Another comment stated that consumers is considering developing standardized and quality control data that are are the intended beneficiaries of the reports that would be completed by submitted to FDA under cooperative HACCP seafood proposal and therefore investigators at the conclusion of quality assurance agreements (i.e., should have the right to determine routine HACCP-based inspections and manufacturing methods or processes, through record inspection whether become part of agency files. As including quality control procedures, processors are properly implementing presently conceived, these reports are deemed not to be releasable unless the HACCP requirements. These would contain a summary of the status the information that they contain has comments urged FDA to routinely of the HACCP program in effect at the already been released or is otherwise no collect HACCP plans and records from firm, similar to the suggestion of two of longer trade secret or confidential processors to facilitate agency the comments. commercial per §§ 20.111(d)(2) and verification activities and public review Nonetheless, the question is whether, 20.114 (21 CFR 20.111(d)(2) and of the effectiveness of the HACCP as FDA preliminarily concluded, most 20.114)). system. One comment from a consumer plans and records to be generated under Several comments suggested that FDA advocacy group asserted that Public this program will be subject to specifically declare that: (1) HACCP Citizen Health Research Group v. FDA, protection under existing law and FOIA plans and records are trade secrets; (2) 704 F.2d 1280 (D.C. Cir. 1983) narrowly regulations. FDA’s experience in section 301(j) of the act and the FOIA defined trade secrets in such a way that seafood processing plants, its prohibit disclosure of trade secret or HACCP plans and the records at issue experience with HACCP, and its confidential commercial information in this rulemaking could not be understanding from the cost-benefit and give the agency no discretion considered trade secret. modeling that has been done in the whether to release these types of Unquestionably, adoption of a preparation of these regulations is that records; and (3) § 20.81 provides for mandatory HACCP system will place HACCP plans will take each processor disclosure of trade secret or confidential significant documentation requirements some time and money to develop. Thus, commercial information only if the on seafood processors. As a result, they the agency concludes that HACCP plans information has been previously will produce records that reflect generally will meet the definition of disclosed to the public. processing designs and equipment and trade secret, including the court’s One comment proposed that, if FDA certain types of day-to-day operations. definition in Public Citizen Health felt obliged to release some HACCP- They will be available to FDA. FDA Research Group v. FDA, supra. Plans related information pursuant to FOIA strongly believes that it is in the public that incorporate unique time- requests, reports of regular inspections interest to require that these records be temperature regimens to achieve be released instead of HACCP plans and maintained, and that the agency have product safety, or other parameters that records, because such reports are likely access to them. Such records and access are processor-specific and that are the to contain less sensitive information. are necessary to effectuate a mandatory result of considerable research and Another comment suggested that, to system of preventive controls for safety. effort, will surely meet this definition. avoid releasing proprietary information, As stated in the preamble to the Moreover, there is value in a plan to the agency should describe or explain proposed regulations, FDA expects to a company that produces it for no other information that is contained in HACCP take possession of records on a case-by- reason than that it took work to write. plans and records in general terms case basis, and only when there is a The equity in such a product is not Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65139 readily given away to competitors. FDA (d) Public disclosure. (1) Subject to the necessary to review. The comments knows from its own experience that limitations in paragraph (d)(2) of this section, noted that this approach would be plant configurations tend to be unique all plans and records required by this part are similar to § 108.35(h) in the LACF to individual processors, or at least have not available for public disclosure unless regulations, because processors are they have been previously disclosed to the familiar and satisfied with such unique features (Ref. 222). While public as defined in § 20.81 of this chapter, generic plans will have great utility in or they relate to a product or ingredient that procedures. many circumstances, they serve has been abandoned and they no longer FDA remains convinced that access to primarily as starting points for represent a trade secret or confidential HACCP documents is essential to the processors to develop their own plans. commercial or financial information as agency’s verification of a firm’s HACCP FDA expects that its Guide will help defined in § 20.61 of this chapter. system. A key feature of the HACCP verification process is access by serve that purpose, but firms will still The agency acknowledges that there government investigators to the HACCP need to expend time and money to tailor could be exceptions to this general rule. plan, to monitoring records kept HACCP to their individual The nature of information in HACCP according to the plan, and to records of circumstances. plans and records varies. Some of it corrective actions that were taken in Additionally, the agency has come to could be generally available processing response to CL deviations. Examination the conclusion, as a matter of policy, methodology or procedures, based on of HACCP records enables an that records and plans should be generic or model HACCP plans or investigator to see how the processing protected to the extent possible in order guidelines developed by the agency or to promote the implementation of facility or the importer operates over some other public source, that is time rather than how it is functioning at HACCP across the seafood industry. sufficiently reflective of an industry FDA has concluded that the public will one particular moment in time. standard that it has little if any Additionally, it will enable the regulator benefit from the protection of records proprietary value. In such a case, in because it will actually strengthen the to review the adequacy of the response to an FOIA request, there may processor’s or the importer’s preventive HACCP system. So long as the not be a valid reason for protecting this legitimate public need to be able to control system itself. information. The agency has concluded FDA rejects the idea of being required evaluate the system can be met through that there should be a provision that to request in writing access to HACCP other means, the confidentiality of makes clear that it will make plans and records. The agency is HACCP records and plans generally will information available in appropriate convinced that it has sufficiently foster the industry’s acceptance of circumstances. Consequently, the final limited its access to those records and HACCP. Even though HACCP may be regulations in § 123.9(d)(2), state: plans that are minimally necessary to mandatory under these regulations, in (2) However, these records and plans may adequately evaluate the adequacy of a order for it to succeed, processors must be subject to disclosure to the extent that firm’s HACCP system. Section 123.9(c) be committed to it because they see they involve materials that are otherwise has been modified slightly to clarify to value in it for themselves. Fear of public publicly available, or that disclosure could which records FDA is required to be disclosure of matters that have long not reasonably be expected to cause a granted access. been regarded as confidential business competitive hardship, such as generic-type The comments are correct that the matters could significantly undermine HACCP plans that reflect standard industry emergency permit regulations for low- practices. that commitment. FDA concludes, acid canned foods at § 108.35 require therefore, that it is in the public interest There is precedent for describing in that FDA issue a written request for to foster tailored HACCP plans that regulations the records that have access to monitoring records. However, demonstrate understanding and protected status. The low-acid canned the written request has proven to be thought, rather than promote the use of food regulations at § 108.35(l) provide merely a mechanical exercise. It has not rote plans and minimally acceptable that, except under certain limited in any way served to affect the outcome standards due to fear of public situations, filed scheduled processes of FDA access to records, nor is it disclosure. submitted to FDA are not available for associated with any managerial control FDA understands that it cannot make public disclosure. Additionally, over the activities of FDA investigators, promises of confidentiality that exceed § 108.35(d) provides that data submitted with respect to the kind or numbers of the permissible boundaries established to the agency to support these processes records to which they seek access. under FOIA, nor does the agency wish are to be treated as trade secret. These Moreover, the bottled water regulations to do so in this case. The agency still materials are analogous to HACCP at § 129.80(h), promulgated subsequent does not expect that it will be in plans, and their treatment is consistent to the low-acid canned food regulations, possession of a large volume of plans with the agency’s views relative to the do not contain a requirement for the and records at any given moment. protected status of HACCP plans. The issuance of a written request for records. However, given the significant interest comments that suggested that the low- FDA is not aware of any undue concerns in this subject as conveyed by the acid canned foods regulations grant expressed by the bottled water industry comments, FDA has concluded that the trade secret status to the monitoring relative to agency abuse of its records final regulations should reflect the fact records that are required to be kept by access authority as a result of the lack that the HACCP plans and records that part 113 are incorrect. These records are of a written request requirement in do come into FDA’s possession will not provided any special status in those those regulations. FDA further notes generally meet the definition of either regulations. that its investigators are required to trade secret or commercial confidential present a written notice of inspection to materials. A statement to this effect in 4. Agency Access to Records management of the firm at the start of the final regulations will help to make 86. Several comments suggested that each inspection. The notice explains the this fact as widely understood as the final regulations should require authority of the investigator to conduct possible and will clarify the agency’s processors to provide access by FDA to an inspection of the facility. The agency position on this matter. This fact is HACCP records only after the has concluded that there is no need to codified at § 123.9(d)(1), which reads as submission by the agency of a written further encumber the efficient follows: request for specific records it deems enforcement of these regulations with a 65140 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations written request for those records to involving CL deviations would employees of the firm, and others felt which it is entitled to have access. It has inappropriately restrict the agency’s that it excluded officials of State chosen to use the more recent ability to evaluate potential problems in regulatory agencies that may adopt these regulations, bottled water, as the model the identification of CCP’s, the regulations by reference. for these regulations with respect to establishment of CL’s, and other The intent of the proposed regulations records access. scientific issues, which, in some cases, was to grant records access to regulatory may be beyond the expertise of agency agency officers and employees, not 5. Agency Copying of Records investigators. officers or employees of a firm. The 87. A large number of comments Industry comments have expressed language was intended to be flexible opposed the provision in the proposal considerable concern, as discussed in enough to cover State officials if their that provided for FDA copying of the ‘‘Compliance’’ section of this agency adopted the regulations by HACCP plans and records, mostly preamble, that there will be no reference. FDA has changed the wording because of concern about public mechanism for dialog with the agency if of the regulations to address these disclosure. Several comments stated a firm disagrees with an investigator’s concerns. that the agency should be permitted to findings with regard to the sufficiency The modified paragraph in § 123.9(c) obtain copies only to support a of HACCP plans and records. The reads: regulatory action and only after FDA has agency is strongly committed to dialog (c) Official review. All records required by obtained a subpoena. Several other whenever possible. Provision of a means this part and all plans and procedures comments suggested that FDA be by which senior reviewers at agency required by this part shall be available for permitted to copy only those records headquarters will have access to HACCP official review and copying at reasonable that relate to a CL failure. plans and records will facilitate that times. Several comments requested that FDA process. J. Training provide safeguards to control potentially FDA has concluded that the abusive regulatory practices by restrictions on copying of records A large number of comments establishing rules to be followed when suggested by the comments would addressed the proposed training copying records. The comments stated significantly interfere with that access. requirements. FDA proposed to require that the rules should accomplish the It would be highly inefficient for FDA that each processor and importer following: Identify investigators to identify a special class of employ at least one individual who has authorized to copy records, limit investigators that are permitted to copy successfully completed a training course copying to records pertaining directly to HACCP records and plans. FDA that has been approved by FDA on the CCP’s, require prior written investigators are responsible for application of HACCP to fish and authorization for copying from the conducting inspections and fishery products processing. FDA also investigator’s supervisor, require that investigations to enforce a wide array of proposed that the trained person or the authorization identify the specific regulations, and FDA field managers persons be responsible for, at a records to be copied and the reason that need the flexibility to assign work in an minimum, developing and modifying they are needed, require that a efficient and effective manner. Copying, the HACCP plan, evaluating the responsible company executive receive like record access, is limited to the adequacy of corrective actions taken in each request before any copying is records specified in § 123.9(c). It would response to CL deviations, and permitted, and permit the company to be highly impractical for supervisory reviewing monitoring records before question the purpose for the request preapproval to be accorded to an shipment. before records are copied. investigator for the copying of specific In the preamble to the proposed Comments from several consumer records. Until an investigator has regulations, FDA specifically requested advocacy groups, on the other hand, evaluated a HACCP plan and validated comment on: (1) Whether the need for supported the agency’s need to copy the operations of the plant, it is not training could be satisfied by different records. likely that the investigator will know gradations of training (e.g., based on There are two primary reasons for the with any certainty what HACCP records complexity or size of operation or on the agency to copy HACCP plans and are appropriate for review. Additionally, degree of risk posed by the products records: (1) To facilitate expert review of inspections are often done in remote being produced); (2) whether other such issues as the identification of locations and under highly flexible training formats, such as video tapes, appropriate hazards and CL’s in HACCP itineraries that preclude close contact might be effective, at least under some plans and the evaluation of the between the investigator and particular circumstances (e.g., a small business adequacy of corrective actions taken in supervisor. Certainly, FDA investigators whose processing involved few response to CL failures; and (2) to will make every effort to obtain HACCP hazards); (3) whether, assuming the document suspected inadequacies of the plans and records from responsible regulations are adopted by FDA, HACCP plan or the firm’s individuals of the firm and will, if training in HACCP received before they implementation of the plan for possible necessary, explain the relevance of the are effective should be ‘‘grandfathered’’ regulatory followup. requested records to the recordkeeping as fulfilling the training requirement; Limiting the copying of records to requirements of these regulations. and (4) whether some or all of the those situations in which regulatory The agency is unconvinced of the training requirements should be deleted action is contemplated or in which a need to modify § 123.9(c) in response to or modified as a means of reducing the subpoena could be obtained would the aforementioned comments, except burden on the industry. serve neither the needs of the industry that reference to consumer complaints nor the agency. Resolution of in this section has been eliminated as 1. The Need for Mandatory Training differences in food safety control discussed in the ‘‘Consumer 89. Most of the comments that strategies through scientific review and Complaints’’ section of this preamble. addressed the question of whether there dialog, where possible, is superior to 88. Several comments questioned the should be a mandatory training reliance solely upon the legal system for phrase ‘‘duly authorized officers and requirement expressed support for it. A such resolution. Similarly, limiting the employees’’ used in this section. Some significant portion of these comments copying of records to instances felt that it referred, at least in part, to acknowledged the need for at least one Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65141 trained individual at each processing regulations. The AFDO regional him or her with the individual who has, facility. Those that provided reasons for affiliates have agreed to work within in effect, apprenticed with the trained their support contended that properly their regions to identify regulatory and individual without having to send the trained personnel are essential to the industry training needs and qualified apprentice to a course in HACCP development and effectiveness of trainers who are interested in training, assuming, of course, that the HACCP controls, and that training is participating in the Alliance-sponsored apprenticeship has imparted a level of necessary to ensure consistency of training. They have also agreed to serve knowledge at least equivalent to that approach. as the course coordinators for the that could be provided by the training. Those few comments that expressed Alliance-sponsored training, which will The agency has modified the regulations reservations about the overall HACCP be conducted on a cost-recovery basis. to provide for this kind of situation by training requirement generally The Alliance is developing a 3-day permitting adequate job experience to acknowledged the need for a trained course, divided about equally among: qualify and individual to perform the individual in the plant but opposed a (1) The fundamentals of HACCP, based functions of the trained individual. compulsory training program. Two on the recommendations of the Note that all references in this comments, from State governments, NACMCF; (2) the requirements of these preamble to a trained individual mean expressed concerns about the financial regulations and the recommendations of an individual who meets the burden of training on small businesses the Guide; and (3) a practical exercise in requirements of § 123.10 through either and questioned the need for making HACCP plan development. completion of a course or job experience such a provision mandatory. FDA is sensitive to the concerns that provides an equivalent level of The overwhelming support in the expressed about the cost of training but knowledge. comments for HACCP training is is optimistic that training will not be indicative of the nearly universal view unnecessarily burdensome on small 2. Who Should Provide Training? that training is essential to the effective business, either in actual out- of-pocket 90. A significant number of comments implementation of a HACCP system. As expenses or in lost productivity. As was identified organizations or individuals stated in the preamble to the proposed previously mentioned, FDA is working that they considered to be qualified to regulations, this view is shared by the with the Alliance to produce a low cost, conduct or develop HACCP-training NAS based on the success of the 3-day HACCP-training course for the courses. The majority of the comments, training requirement in FDA’s HACCP- seafood industry, that is intended to which included remarks from based regulations for low-acid canned meet the requirements of these processors, trade associations, and State foods at part 113 (Ref. 54). The primary regulations. Current plans are for the governments, suggested that FDA concern expressed about mandatory course to be offered through a variety of should either conduct such training or training is the cost. public institutions, including Sea Grant at least approve the relevant course The agency is convinced that its colleges. As indicated earlier, in this material. A few of the comments that efforts with the Alliance will facilitate setting the course is expected to be recommended that FDA conduct the the development and implementation of offered on a cost recovery basis. It is courses also recommended that FDA a low cost training program. As likely that the course will also be provide the courses at no cost or mentioned above, the Alliance is a offered by private institutions, using financially support the training. The cooperative effort between Federal and their own fee structure. comments that endorsed FDA approved State food regulatory agencies, The other cost associated with the courses asserted that this approach academia, and the fish and fishery training requirement is the lost would result in a standardized, products industry to provide support to productivity for the duration of the comprehensive training program that the industry in meeting its needs course. FDA is convinced that, with the emphasizes the minimum acceptable relative to HACCP training, technical flexibility in course structure, described HACCP requirements. assistance, and research. Presently, the elsewhere in this section, training can Other comments recommended that Alliance Steering Committee is be taken at times when it would least training programs could be conducted comprised of representatives of FDA, affect the operations of the firm (e.g., by NFPA or other trade associations, the U.S. Department of Agriculture during an off-season, at night). ISSC, Sea Grant colleges and other (USDA), NMFS, AFDO and its six Moreover, FDA is convinced by the academic institutions, consultants, and regional affiliates, the Sea Grant comments that, as a general rule, the State and local regulatory agencies. The Colleges, the ISSC, the National benefits of training will significantly comments acknowledged the cost Fisheries Institute, and the National outweigh the burden. The agency has savings that could be realized with trade Food Processors Association (NFPA). concluded that with certain association- provided training and The goals of the Alliance are to modifications from the proposal as through the HACCP training experience develop: a HACCP training course that described below, training should remain already possessed by the NFPA. One will meet the requirements of these a feature of these regulations. comment suggested that allowing many regulations, a mechanism for delivering The agency has made one training programs would offer hundreds the training to the fish and fishery modification in response to requests of professionals the opportunity to products industry, a compendium of that it modify the training requirement contribute to the development of established methods for controlling to reduce financial burden, especially HACCP. A few comments suggested that hazards in the fish and fishery products on smaller processors. FDA FDA publish a listing of approved industry, and a mechanism for acknowledges that a short course in training courses. coordinating the research efforts of the HACCP has its limitations. For example, A comment from the ISSC cautioned participating agencies to facilitate the a 3-day course might not have anything that organization does not support the development of improved methods of important to offer to an individual who shifting of public health training in the hazard identification and control. has significant job experience working area of molluscan shellfish away from The training course materials are in with or for an individual who is well- itself. The comment further stated that an advanced stage of development and versed in HACCP. In such a situation, if the organization would work are expected to be publicly available the processor loses the trained cooperatively with the Alliance in the shortly after the publication of these individual, it should be able to replace development of a HACCP-training 65142 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations course, which it suggested should be opportunity for high quality HACCP FDA has concluded that it is not in a Federally subsidized and ISSC training for State or local regulators as position to grandfather HACCP training endorsed. well as for processors. received before the issuance of these A few comments suggested that the Because FDA will not be approving in regulations. Blanket grandfathering Alliance be permitted to develop the advance specific courses other than the would pose the risk of sanctioning standard for HACCP training, and that Alliance curriculum, and in response to training that does not fully prepare the results be shared with all comments, the final regulations have processors for operating under these prospective trainers. A few additional been modified at § 123.10 to require that regulations, and case-by-case comments urged that HACCP training be training courses be ‘‘at least equivalent grandfathering would be unduly based on the recommendations of to the standardized curriculum demanding on agency resources. NACMCF, because such efforts would recognized as adequate by the U.S. Food On the other hand, the agency will result in a training program that was and Drug Administration.’’ FDA had not presume that HACCP training well defined. proposed to require that training courses received prior to the issuance of these FDA generally agrees with these be ‘‘approved by the Food and Drug regulations will have to be repeated. comments. The agency does not intend Administration.’’ FDA will challenge the adequacy of to run HACCP-training courses for the prior training only when a processor’s 3. Should Training Be ‘‘Grandfathered?’’ industry. Rather, FDA must, of performance demonstrates a lack of necessity, focus its HACCP training on 91. A large number of comments understanding of HACCP principles. government investigators. The agency addressed the question of whether Nonetheless, FDA encourages anticipates that industry training will be training in HACCP received before the processors to update any prior training conducted privately and through effective date of these regulations to ensure that they have a thorough academia. This division of labor is should be ‘‘grandfathered’’ as fulfilling understanding of the requirements of based on the model that has worked the training requirement. All of these these regulations. It may well be that well for the training requirement for comments supported the grandfathering many traditional HACCP courses will low-acid canned foods. of such training. Many of the these need only minimal supplementation to FDA agrees, moreover, that there comments recommended specific accommodate them to the provisions of should be widespread opportunity for training courses that FDA should these regulations, and that there will be conducting HACCP training. It is not the grandfather. Approximately half of these no need for a processor to repeat an agency’s intent to specify or limit the comments requested that those trained entire course. As mentioned above, field of qualified trainers. under NMFS’ HACCP training program partial, supplemental courses may be The training course that is under be grandfathered. Those that provided offered, or reading materials developed development by the Alliance is based on reasons referenced the large number that by the course offerer and sent to the the recommendations of the NACMCF. had been trained at the time of the processor may suffice. There are After reviewing the final draft of the writing of the comment (1,310 numerous possibilities. Alliance training materials, FDA intends domestically and 394 overseas) and FDA is also not in a position to make to publish a notice of availability of the stressed that NMFS’ training was more determinations in advance about the documents in the Federal Register. It is comprehensive than that which would acceptability of courses that will be the agency’s intent to utilize the be necessary under FDA’s HACCP offered after the issuance of these Alliance materials as the standard approach, especially because the NMFS regulations. FDA agrees with the against which other course materials program covers nonsafety hazards in comment that, in order to do so, the may be judged. addition to safety hazards. agency would have to develop a system The agency strongly encourages Other comments supported for course evaluation. Review of course trainers to evaluate their courses, past, grandfathering HACCP courses materials, auditing of course present, and future, against the Alliance conducted by NFPA, Sea Grant colleges, presentations, testing, and other materials when they become available State regulatory agencies and those evaluation tools that FDA might have to and to modify or adapt curricula, where organizations sanctioned by such employ are labor intensive and are not necessary, to ensure that they are agencies to provide HACCP training, the most efficient use of agency consistent with, and provide at least an and Pacific Fisheries Services. One resources. Rather, the adequacy of equivalent level of instruction to, the comment suggested that graduation courses will have to be evaluated by Alliance course. Where previously from a Better Process Control School, as FDA on a case-by-case basis, when conducted training fails to meet this required by parts 113 and 114 for inspectional or other evidence causes standard, it may suffice to provide processors of acidified and low-acid the agency to question whether the supplemental materials or instruction so canned foods, should be considered to course meets the requirements of that the cumulative training is at least meet the requirements of these § 123.10. equivalent to the Alliance course. FDA regulations. Another comment urged The ultimate determination of the also encourages the fish and fishery that any training program based on the success of training is whether products industry to confirm with past HACCP principles recommended by the processors are operating effective or prospective trainers that a particular NACMCF should be grandfathered. HACCP systems. In the initial stages of course is equivalent to and consistent One comment suggested that, in order the program, at least, FDA’s primary with the Alliance materials. The agency to grandfather courses, FDA would need focus will have to be on whether has no plans to publish a list of to develop a system to determine the HACCP plans are adequate, and the ‘‘approved’’ courses other than the effectiveness of the training that has systems are being effectively Alliance course materials. been conducted. The comment implemented. FDA’s interest in the Finally, it should be noted that FDA recommended the use of testing or adequacy of training will increase when resources will not be sufficient to fund curriculum review as evaluation tools. plans and systems fail to demonstrate an the training of all appropriate regulators The comment further encouraged the adequate understanding of HACCP and (i.e., State or local regulators). The development of a formal approval its application to seafood. agency is confident, however, that process for previously conducted Nonetheless, FDA can state that the Alliance training will provide a low cost training. Better Processing School curriculum for Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65143 acidified and low-acid canned foods of understanding at least equivalent to universe of experts to those who have will not be adequate to meet the training that provided by the Alliance training taken a course based on the Alliance 3- requirement of these regulations. The program. FDA is aware that video tape day curriculum. The issue of the use of Better Processing School was developed training is widely used for a variety of consultants and other experts will be to instruct acidified and low-acid purposes. The agency cannot conclude further discussed later in this section. canned food processors in how to safely that video-based HACCP training will process such products to control the not accomplish the purposes of the 5. Do Importers Need Training? hazard of the development of botulinal training requirement. For remote site 95. A few comments suggested that toxin in accordance with the processors, video-based training may be FDA should provide separate or requirements of parts 113 and 114. The the only practical method available. specialized training aids for importers. course does not provide instruction in It is unlikely, however, that two or Two of these comments noted that the principles of HACCP or address three 2-hour video tapes, as one importers have not, historically, been other hazards (e.g., histamine comment suggested, will provide an involved with the processing of seafood development) to which these products equivalent level of training to the 3-day commodities. The comments requested might also be exposed. Alliance course under development. On that FDA work with trade associations the other hand, a series of video 4. Course Curriculum that represent importers in setting up presentations, perhaps in conjunction workshops, developing specialized 92. A few comments suggested that with a 1-day workshop, may be training materials for importers, and the training be divided into a basic adequate. recognizing training provided by foreign HACCP core and interchangeable 94. A few comments addressed the institutions. segments based on the portions of the length of the training course. One FDA has reassessed the need for industry of interest to the students (e.g., suggested that 3 days would be overly training to accomplish the HACCP vessels, cooked, ready-to-eat fishery burdensome on small businesses functions assigned to importers, products, molluscan shellfish, and because of the loss of manpower during especially in light of changes in the smoked fish). the course. Another suggested that 3 imports provisions of these final As mentioned previously, the days was not long enough to furnish the regulations. These changes are fully Alliance course includes three needed information. One comment discussed in the ‘‘Imports’’ section of segments: A basic HACCP core, the suggested that the length of training this preamble. In summary, importers requirements of these regulations, and should be based on the level of are now required to conduct verification the development of a HACCP plan. The experience of the student and the level activities but are no longer required to first two segments are applicable to the of complexity of the processing have full HACCP plans of their own entire fish and fishery products operation. industry. The Alliance has FDA has concluded, based, in part, on unless they also meet the definition of acknowledged the need to develop its participation in the Alliance, that the a ‘‘processor.’’ FDA has concluded that industry-specific features for the third 3-day Alliance curriculum is the HACCP training, while desirable, is not segment. The agency is in agreement minimum necessary to develop an essential to the preparation of importers’ with the Alliance and with the comment adequate understanding of HACCP verification procedures, as specified at in this regard and would encourage the principles and essentials of HACCP plan § 123.12(a)(2). For this reason, training development of such directed courses. development. If the curriculum were is not required for importers, and all 93. In response to FDA’s invitation to reduced any further, processors would reference to required training for comment on the advisability of alternate risk having to take more time later to importer functions has been dropped training formats, several comments implement their HACCP systems as a from § 123.10. expressed support for the use of video result of trial and error, and as a result, Nonetheless, the agency is aware that tapes by small processors of low-risk the quality of their HACCP programs importers may be unfamiliar with the products. A few additional comments would be jeopardized. technical aspects of fish and fishery did not specifically address video taped Nonetheless, FDA is not specifying in product processing and HACCP control training but stated that, while it is the regulations how long the course procedures. Knowledge about these desirable to have uniform training, must take, only that it be equivalent in matters would be helpful for purposes ultimately training should involve terms of curriculum to the standardized of verification. To meet this need, FDA ‘‘whatever it takes.’’ One comment curriculum recognized as adequate by plans to include in the Guide specific suggested that home study courses and the agency. If true equivalency can be materials relating to importers’ education via television might be achieved in less time, FDA would have verification procedures. In addition, as acceptable alternatives to more formal, no objection. Moreover, depending has traditionally been the case, the for-fee training mechanisms. A few upon the circumstances, FDA would agency intends to continue to interact comments opposed courses that consist have no objection to training that can be with, and provide information to, the exclusively of video tapes, based on imparted in segments at convenient import industry through trade concern for a potential limitation in the times so as to cause only a minimal associations and other forums, within level of understanding that could result disruption to the work schedule. the limits of budget constraints. from this type of noninteractive training Section 123.10, therefore, states that Moreover, importers may want to method. the training must be ‘‘at least equivalent participate in the training courses that FDA agrees with the comments that to the standardized curriculum are offered by the Alliance. expressed concern with teaching recognized as adequate by the U.S. Food Finally, the agency agrees with the methods, such as video tapes, that lack and Drug Administration.’’ This comment that suggested that training instructor/student interaction. However, provision will also accommodate the overseas should be conducted by foreign in the interest of providing flexibility in use of food processing experts, who institutions recognized for their meeting the training requirement of have received training in HACCP that is expertise in seafood processing and these regulations, the agency has far more extensive than that planned by HACCP control. This issue will be concluded that any teaching format is the Alliance. FDA recognizes that it further discussed in the ‘‘Imports’’ acceptable so long as it provides a level would be inappropriate to limit the section of this preamble. 65144 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations

6. Testing and Retraining depends on factors such as the public some larger processing operations that 96. Several comments supported the health significance of the infraction. The may already have trained staff. The agency agrees with the comments mandatory use of testing to assess agency has administrative warnings that suggested that the need for HACCP whether an individual has successfully and, when necessary, a range of training does not vary solely by the size completed HACCP training. Two regulatory actions available to it. (See of the processor. An understanding of comments further recommended that the ‘‘Compliance’’ section of this the principles of HACCP is essential for the agency could consider the training preamble for a more thorough the successful implementation of a requirement to be met if a person discussion of compliance philosophy HACCP program, regardless of successfully passes an examination. under HACCP and available remedies.) establishment size. The agency agrees The agency is not opposed to testing Ultimately, however, it will be the with the assertion that, in many cases, at the end of a course but prefers not to processor who will be responsible for the training needs of small businesses mandate that courses include tests. correcting the deficiencies in its HACCP may, in fact, be greater than those of Trainers will be free to include or not system. Part of that responsibility will large firms, because they frequently lack include testing as part of their training be determining the most appropriate method of resolving any failure to fully the trained quality control and research efforts. The issue of student evaluation and development staffs that are common is one that is still being debated in the understand HACCP principles, whether through remedial training, hiring a in large firms. Moreover, small Alliance relative to Alliance-sponsored businesses comprise a significant training courses. consultant, or taking some other step. So long as an appropriate outcome can be portion of certain high-risk segments of However, testing alone does not the fish and fishery products industry, provide the kind of exposure to the obtained, FDA would prefer not to mandate any particular method of such as processors of molluscan concepts of HACCP that is necessary to shellfish and cooked, ready-to-eat result in company understanding and remediation in these regulations. Processors certainly may wish to products. Training will be critical to commitment. The function of training is ensure the success of HACCP in these to prepare industry to meet the consider additional education as an option, however. segments. requirements of the regulations, not to Although the agency expects that the test competency. The true test will be 7. Gradations of Training complexity of HACCP plans will vary whether processors are able to with the number and type of hazards 99. Several comments addressed implement their HACCP systems. associated with a processing operation, whether the HACCP training Processors will be judged as plans are an understanding of the basic principles requirement could be satisfied by reviewed, and plant operations are of HACCP, and how to apply those different gradations of training, evaluated, during inspections. principles to the processor’s operations, depending on the complexity or size of 97. A few comments recommended will remain essential. The curriculum the operation or on the degree of risks mandatory retraining or continuing under development by the Alliance is posed by the product being produced. education. The comments stated that as designed to provide a very basic The majority of these comments new information about the science of grounding in these matters. As stated fish and fishery products hazards and supported the concept of variable levels earlier, the Alliance has acknowledged the technology of their control becomes of HACCP training. Most did not a need to tailor part of the course so that available, there will need to be some provide the basis of their support. Those it can be directed toward specific method for introducing this information that did suggested that small or large industry segments. This approach may to previously trained individuals. One scale processing of low-risk products be the best way to provide flexibility in comment, on the other hand, urged that would not likely require any special the program, so that training can match training be limited to a single event and training, and that small scale processing the degree of complexity and risk that not be subject to periodic renewal. of even high-risk products would allow is encountered by the processor. FDA The primary purpose of the training is for individual examination of every fish, will continue to encourage the to teach the fundamentals of HACCP. an option that is not possible in large development of industry-specific These are unlikely to change over time. scale processing. One comment further training features. A comprehensive discussion of seafood suggested the use of variances to The agency is not persuaded that the hazards and controls is far too extensive exclude certain industry members from ability of a processor to individually for inclusion in a 3-day training session. the training requirement, rather than examine all fish because of the small The agency has concluded that providing a blanket exemption for a scale of operations will reduce the information about the technology that is segment of the industry. processor’s need to understand the available to control hazards should be A minority of the comments on this hazards associated with seafood and the made available to the industry through subject opposed any variations in the specifics of a systematic approach for the Guide, the Alliance Compendium of level of training. Several of these controlling them. FDA has long taken Established Processes, and other modes comments stated that the necessity for the position that observing each fish on of technical assistance. FDA supports HACCP education and training does not an assembly line is an inappropriate the idea of continuing education and vary based on the size of a company, way to ensure seafood safety (Ref. 208, will encourage it, but the agency is not and that a standard training curriculum p. 4146). While matters relating to the prepared to mandate it in these final should be developed for all companies, quality of the fish can be observed in regulations. regardless of their size. Some of these this manner, safety matters often cannot. 98. A comment suggested that the comments stated that smaller processing regulations mandate remedial or operations may be inherently less safe, 8. Duties of the Trained Individual enhanced training for a first time and that, cumulatively, they represent a 100. Several comments suggested that violator whose infractions have resulted large amount of the seafood making its a firm be permitted to hire a consultant, from a misunderstanding of HACCP way to the consumer. One comment or an outside expert, who is not an principles. stated that smaller processing employee of the firm, to perform the Whenever an infraction occurs, the operations may actually have a greater functions required of a trained nature of the remedy that is warranted need for employee training, compared to individual. Two trade associations Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65145 argued that contracting for the would actually require each firm to have a firm’s HACCP plan or making complex development of a HACCP plan by a more than one trained individual scientific evaluations. professional consultant could be more because of work weeks that routinely Another comment suggested that it efficient and cost effective, especially exceed 40 hours, vacations, illnesses, was unrealistic to expect that a training for many small companies. Related and employee turnover. The program would provide the level of comments pointed out that some of the consequence, the comments suggested, expertise necessary for a person to make proposed functions of the trained would drive up the cost of training. a determination on whether a deviation individual either did not require a FDA acknowledges that, for certain may have rendered a product injurious person to be onsite continually (e.g., situations, these comments may be to health or otherwise adulterated. plan development) or required expertise correct. However, the agency has made FDA generally agrees with these that could not realistically be obtained three changes in the final regulations to comments. It was never the agency’s in a 3-day course (e.g., making decisions minimize this possibility. First, as stated intent to limit the processor’s use of about whether product that has been above, a processor may hire trained experts to employees whose training subject to a deviation is safe to release consultants on an as-needed basis. included the course prescribed by these into commerce). Second, as discussed in the regulations, especially in the areas of While the agency considers training ‘‘Verification’’ section of the preamble, HACCP plan development and the employees to be preferable to hiring the regulations do not include the evaluation of CL deviations and outside consultants in terms of fostering proposed requirement that a trained corrective actions (i.e., making the appropriate corporate culture and individual review monitoring records evaluations about whether product that commitment to HACCP, FDA recognizes before the product to which the records has been subject to a deviation is safe to the importance of ensuring the relate is shipped. These final regulations ship). While FDA is convinced that a flexibility that firms, especially small require only a weekly review. As a short course in HACCP principles is businesses, may need to comply with result, the need to have a trained important to the success of the overall the regulations in a cost-effective individual onsite every day has become program, the agency also recognizes that such a course has its limitations. manner. The agency also accepts that for substantially reduced. Third, as FDA has deleted the proposed some processors, the expertise that may described below, FDA has decided not be needed from time to time could best requirement that the HACCP-trained to require that the trained individual individual be required to evaluate CL be provided by an expert consultant. evaluate CL deviations and corrective Consequently, the agency is modifying deviations and corrective actions to actions. This modification reduces still allow for the use of experts in other § 123.10 to read as follows: ‘‘* * * the further the need to have a trained following functions shall be performed appropriate scientific disciplines that individual onsite at all times. In have not been trained in accordance by an individual who has successfully addition, as described previously, the completed a course of instruction with these regulations. For example, the agency is allowing processors to employ ** *.’’ The requirement that agency does not expect that a processor individuals whose training has been processors employ a trained individual will be able to determine the public obtained through on-the-job experience. has been eliminated. Moreover, FDA has health consequences of every possible Thus, for example, a processor that modified § 123.10(c) to state, ‘‘The deviation without the assistance of needs the services of two trained trained individual need not be an experts. The kind of expertise necessary individuals could satisfy the employee of the processor.’’ would likely involve disciplines other 101. A number of comments asked requirements of these regulations by than HACCP. Moreover, the agency whether the regulations would require a employing an individual who has been agrees that it is unreasonable to expect separate trained individual for each trained in an adequate course and a that successful completion of a 3-day processing location of each company or second individual who has apprenticed HACCP course alone would qualify an just one per company. sufficiently with the first individual to individual to make determinations FDA intends that the functions have mastered the subject. about the safety of products involved in enumerated in § 123.10 be performed by As a related matter, the provision in a CL failure. HACCP training in such a a trained individual. The number of the final regulations that provides for situation could only reasonably be employees a processor must train, or the the development of corrective action expected to help ensure that appropriate consultants that must be hired, in order plans (see the ‘‘Corrective Actions’’ corrective action measures are taken and to ensure that trained individuals section of this preamble) could recorded from a HACCP perspective. perform these functions is left to the eliminate the need to bring an expert Consistent with this change, FDA has judgment of the processor. For some onto the scene in many instances in modified § 123.7(c)(2) to state that a firms, one individual will be sufficient. which corrective action is necessary. determination of acceptability for Others will need to secure the services The processor may be able to follow the distribution into commerce of products of more than one such individual, either corrective action plan without having to that may have been affected by a as employees or as consultants. Whether rely on an expert or trained individual. deviation must be made by individuals these individuals are located at each This procedure could permit further with the expertise to make such a facility, at a corporate headquarters, at savings. determination, and that such a consulting firm, or at some 103. Some comments suggested that individuals need not be those who meet combination of these arrangements is to there should be different categories of the requirements of § 123.10. be determined by each individual trained individuals, with different Nonetheless, FDA expects that, at a processor. responsibilities. These comments, from minimum, an individual trained in 102. A few comments were concerned individuals, processors, and trade accordance with these regulations will about the logistics of the routine associations, asserted that a firm should perform the verification function of functions that the agency proposed must have one HACCP trained person capable reviewing records of corrective actions be performed by someone with HACCP of conducting or overseeing the routine to ensure that they are complete, and training (i.e., record review and operation of the HACCP program, but that an appropriate corrective action deviation handling). Specifically, they that this individual should not was taken (i.e., one that was argued that the proposed requirements necessarily be responsible for designing predetermined in the HACCP plan, or 65146 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations one that was determined by a qualified and skills that are obtained through to be cooked by the consumer; (3) expert to be sufficient to render the training in HACCP. sanitation practices directly affect the product safe). Section 123.10(c) requires Section 123.10(c) requires that a chemical and physical safety of seafood that the trained individual perform trained individual perform certain products; (4) nearly half the consumer certain record reviews associated with record reviews as enumerated in complaints relating to seafood that FDA the verification principle of HACCP, § 123.8(a)(3). This requirement is not receives in a typical year are related to including reviews of corrective action new except for the review of records of plant or food hygiene; and (5) records (see § 123.8(a)(3)(ii)). end-product testing, if any. End-product inspections conducted by FDA and FDA has modified § 123.10 from the testing was not addressed in the NMFS demonstrate that a significant proposal to clarify and to conform this proposal but, as explained in the portion of seafood processors operate section to other features of the ‘‘Verification’’ section of the preamble, under poor sanitation conditions. regulations. A summary of these has been added as an optional The MSSP, conducted by NMFS, modifications follows. verification activity. The review of end- concluded that sanitation controls could FDA has revised § 123.10(a) to clarify product testing records by a trained be included in HACCP plans without that when a trained individual develops individual is a logical outgrowth of the overloading HACCP. Moreover, the an HACCP plan for a processor, this principle that was reflected in the FDA/NMFS HACCP-based seafood pilot effort may involve adapting a model or proposal in § 123.8(b) that a trained program included sanitation CCP’s. generic-type plan for use by that individual review all HACCP records for Nonetheless, FDA tentatively concluded processor. FDA received a significant completeness and consistency with that monitoring and recordkeeping for number of comments on the pros and written HACCP procedures. the 18 specific sanitation conditions cons of model or generic-type HACCP Finally, it should be noted that the specified in the proposal should be plans. This subject is addressed in requirement in the proposed regulations permitted to occur outside of a various places in the preamble, most that trained individuals perform certain processor’s HACCP plan so as not to notably in the section entitled ‘‘Other functions for importers has been overload it. Because these sanitation Issues.’’ In summary, the development dropped entirely. This deletion is controls relate to an entire facility, not of model plans can be of great benefit consistent with the changes that FDA is just to a limited number of CCP’s, FDA to the industry, especially small making in the provisions that applied to felt that they would not all fit well businesses, so long as the model plans importers in this final rule. These within an HACCP plan. FDA took this prescriptive approach are tailored by processors to meet their revisions are described elsewhere in this to sanitation to assist processors so that individual situations and are not simply preamble. In summary, importers are they would not have to figure out how, copied verbatim. The agency is given alternatives to having HACCP or whether, to include sanitation in convinced that, in most cases, generic or plans and are not required to take the their HACCP plans and to help them model plans will need to be modified to kinds of actions for which a trained resolve the sanitation problems that the some extent to fully accommodate the individual has been determined to be seafood industry has chronically specifics of the processor’s operations. essential. experienced. By requiring a specific, Section 123.10(b) provides, in part, K. Sanitation daily sanitation regime that incorporates that the trained individual is 1. Background HACCP-type features (i.e., monitoring responsible for reassessing and and recordkeeping) to help the modifying the HACCP plan in FDA proposed to require that processor track sanitation in its plant, accordance with corrective action processors conduct sanitation FDA hoped to foster a culture of, and procedures specified in § 123.7(c)(5). inspections at specified frequencies to commitment to, good sanitation This requirement is not new. It should ensure that each of up to 18 specified practices that has been lacking in a be noted, however, that, unlike the sanitation conditions are maintained in significant portion of the industry. proposal, the final rule requires the the processing facility where they are trained individual to perform these relevant to the type of processing being 2. Should the Regulations Deal With functions only when the processor does performed. The agency also proposed to Sanitation? not have a predetermined corrective require that processors maintain FDA requested comment on whether action plan that addresses the specific sanitation control records, and that they sanitation control measures should be deviation. As explained in the take and document corrective actions addressed by processors in accordance ‘‘Corrective Action’’ section of this when the specified conditions were not with the proposed approach, or whether preamble, a review and reassessment of met. In addition, FDA encouraged, but the regulations should require that the plan should not ordinarily be did not propose to require, processors to processors address sanitation in their necessary when a corrective action was make use of written SSOP’s to ensure HACCP plans. anticipated, as reflected by the existence that the necessary sanitation measures More than 250 comments addressed of a predetermined corrective action were implemented. various aspects of the proposed plan. FDA tentatively concluded that sanitation requirements, more Section 123.10(b) also requires that a sanitation controls are necessary in comments than addressed any other trained individual perform the annual these regulations because: (1) Sanitation aspect of the proposed regulations. reassessment of the processor’s HACCP practices directly affect the Approximately 100 of these comments plan as required by § 123.8(a)(1). A new microbiological safety of seafood addressed FDA’s questions about the feature of the regulations, this products that are not further cooked by approach to sanitation control in these requirement parallels the mandate that the consumer, such as cooked, ready-to- regulations. The remaining comments each processor engage in verification eat products, smoked products, raw focused on specific sanitation activities (see § 123.8(a)). It is a logical molluscan shellfish, and other fish that provisions. outgrowth of the principle, central to are consumed raw; (2) sanitation 104. Approximately 10 percent of both the proposal and this final rule, practices are relevant to the those that responded to the requests that plan development be performed by microbiological safety of seafood supported the proposed approach. individuals who possess the knowledge products even where these products are These comments were from processors, Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65147 consumer advocacy groups, State, effective sanitation controls are essential applicability to all foods. A variation on Federal, and foreign government to the proper functioning of a HACCP that concern was the view that the agencies, and a trade association. system. As with comments that sanitation standards in part 110 need Approximately five percent of the supported the proposed approach, a few not be codified in these regulations comments, from processors, trade of these comments identified sanitation because they are adequately expressed associations, and State government as a prerequisite to HACCP. in that part. The NACMCF pointed out agencies, objected to the inclusion of The comments that objected to the that the CGMP’s have proven adequate any explicit sanitation controls in these inclusion of any sanitation requirements for a wide variety of processed foods regulations. It is not clear, however, in these regulations provided reasons under FDA’s jurisdiction. Some whether the latter comments were that the agency believes are more comments stated that part 110 should be objecting to sanitation controls as part of relevant to the question of how these made mandatory for seafood and fully HACCP where appropriate for safety or regulations should address sanitation enforced. to any sanitation approach beyond than to whether they should address the Good sanitation is already mandatory HACCP. The remaining approximately issue. For this reason, the arguments for all foods. Section 402(a)(4) of the act 85 percent of the comments, principally presented in these comments are deems food to be adulterated if from processors, trade associations, and addressed later in this section. processed under insanitary conditions. State and Federal government agencies, FDA accepts the view expressed by The CGMP’s in part 110 articulate the generally acknowledged the need for the overwhelming majority of comments kinds of conditions and practices that these regulations to address sanitation (i.e., those that advocated the proposed need to be followed in order to avoid in seafood processing plants but approach and those that advocated other producing an adulterated product under objected to one or more of the specifics sanitation control mechanisms) that section 402(a)(4) of the act. of the proposal. sanitation is relevant to the goals of Nevertheless, while FDA has been Those that supported the proposed these regulations and should be enforcing the sanitation standards approach argued that sanitation controls addressed in them. The primary source contained in part 110 for many years, as are a critical component of the of pathogenic microorganisms for most indicated earlier, it has not succeeded in regulations because: (1) Addressing the fish (i.e., wild-caught fish) is the developing a culture throughout the insanitary practices in the seafood processing plant environment (Ref. 3, p. seafood industry in which processors processing industry is essential to 267). The control of sanitation in the assume an operative role in controlling improved consumer confidence; (2) plant is the most effective way to sanitation in their plants. The statistics effective sanitation controls are a minimize pathogens, and, for products relating to the incidence of insanitation prerequisite to the proper functioning of that are not given a final heat treatment cited in the preamble to the proposed a HACCP system; and (3) sanitation after packaging, it is the only way to regulations (Ref. 208 at 4161–4162) controls are critical to the management minimize them at that stage in the chain clearly demonstrate that such a culture of microbiological hazards in both of distribution (Refs. 3, p. 10; 7, p. 27; is not adequately in place. The products that will not be cooked by the 204; and 205). This situation is nearly following observation about culture in consumer and those that will be cooked, the reverse of that for red meat and the preamble to USDA’s proposed the latter because of the potential for poultry, where pathogens are likely to HACCP rules for beef and poultry is cross-contamination in the kitchen. The have originated from the raw materials applicable here as well: comments suggested that a prescriptive before they enter the plant (Refs. 36, p. ** * Identification of sanitation approach to sanitation is warranted 197; 209; and 210, p. 1). requirements has been viewed by some because the FDA and NMFS inspection A significant body of opinion holds, establishment owners and personnel as the results cited in the preamble to the moreover, that good sanitation is a inspector’s responsibility. Such proposal documented the failure of a necessary foundation for HACCP. This establishments often fail to take the initiative significant percentage of the industry to view was articulated in comments to to find and remedy insanitary conditions, control key sanitation conditions and this rulemaking and in the proposed relying instead on the inspector to find practices. Moreover, these comments rule to establish HACCP and other deficiencies. (Ref. 211, p. 6788) continued, the enumeration of specific requirements for the beef and poultry Moreover, FDA points out that while controls relieves the industry of the industries issued by USDA (Ref. 211). the CGMP’s state that sanitation controls burden of identifying the most USDA proposed both SOPs for should occur as frequently as necessary, significant areas of concern. sanitation as a prerequisite to a HACCP they are silent with regard to monitoring Several comments stated that plan and sanitation as part of HACCP by the processor to ensure for itself that sanitation requirements for seafood where critical for safety (Ref. 211, p. sanitation controls are being followed. processors are necessary because 6789). For these reasons, FDA concludes that guidelines do not have the force of FDA concludes, therefore, that these part 110 alone has not proven to be regulation and therefore are more regulations cannot fully address all adequate for the seafood industry. In difficult to enforce. One comment stated matters relevant to safety, or order to ensure that firms take full that including sanitation requirements significantly contribute to the responsibility for sanitation in their in these regulations would simplify restoration of consumer confidence in plants, which is strongly related to the compliance for seafood processors seafood without providing for major production of safe and wholesome because the HACCP and sanitation improvements in sanitation. Therefore, seafood, FDA has concluded that it is requirements would be in one place. these regulations address sanitation. necessary to include sanitation One comment stated that some requirements in these regulations. processors would be more inclined to 3. Why Isn’t Part 110 (21 CFR Part 110) implement sanitation control measures Adequate To Deal With Sanitation 4. Why Isn’t the Proposed Approach if all processors were subject to the Concerns? Appropriate? same mandatory requirements. 105. Some comments asserted that it 106. Many comments that agreed that Many of the comments that objected would be adequate to rely on the sanitation should be addressed in the to the manner in which FDA proposed existing CGMP’s in part 110, which regulations, as well as some that to treat sanitation acknowledged that provide guidance of general opposed addressing it, objected that the 65148 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations proposal was too prescriptive. These These comments have general merit regulations (Ref. 208 at 4161–4162), comments asserted that: (1) The and have persuaded the agency that a demonstrate a need for a system in proposed 18 sanitation controls are less prescriptive approach is which processors are responsible for not overly prescriptive and inflexible and appropriate to ensure that the only meeting these baseline standards are not appropriate for all processors; (2) regulations do not impose impractical, but also routinely auditing their the codification of prescriptive unduly burdensome, or excessively facilities and operations to ensure that sanitation requirements as regulations rigid requirements. they are meeting them. In this way, the limits the ability of processors to keep 107. Another concern with FDA’s sanitation requirements of these pace with advances in science and approach was that codifying specific regulations build upon existing technology; (3) the proposed sanitation sanitation control procedures would not sanitation requirements, at the Federal, controls have the effect of establishing enable processors to keep their State, and local levels. eighteen CCP’s, which are not always sanitation programs updated with The more generalized nature of these appropriate; and (4) the proposed advances in science and technology. As final regulations with respect to sanitation provisions duplicate or an example, the NACMCF comment sanitation should mitigate the concerns contradict existing State or NSSP cited recent industry experience with of the comments that complained about requirements. FDA will respond to these other foods that has shown that the the conflict between, and duplication criticisms. proposed requirement of midshift with, existing sanitation standards. Many comments that argued that the cleaning and sanitizing in packaging As discussed elsewhere in this 18 specific sanitation controls that FDA rooms for ready-to-eat foods, may with preamble, FDA encourages adoption of proposed were too prescriptive many current sanitation practices these regulations by State and local provided examples of how this actually be counterproductive to the regulatory agencies. FDA is convinced approach could deny processors the control of Listeria monocytogenes. The that, in many cases, the regulations can flexibility necessary to develop and NACMCF advised that codification of a be quite easily overlaid on existing implement sanitation programs that are midshift cleaning requirement would State, local, and NSSP requirements. effective for the specific conditions in have prevented these industries from 5. What Is the Appropriate Approach to which they are to be used. Some of modifying their cleaning procedures to Sanitation? these examples are as follows: adjust to the new information. FDA agrees that sanitation Based on its review of the comments, (1) A few comments challenged the requirements should be sufficiently FDA has been convinced that a proposed ‘‘easily cleanable’’ standard flexible to permit the incorporation of modification of its approach to for equipment, suggesting that in some new information and better procedures. sanitation is appropriate. FDA applications (e.g., at sea processing and 108. A number of the comments, concludes that its approach in the old equipment) this standard may not be including more than half of those that proposal was too inflexible and could attainable and may not be necessary as opposed any new form of sanitation have made it more difficult in certain long as the equipment is, in fact, controls, argued that the sanitation circumstances to incorporate new cleaned; control approach proposed by FDA technologies and information. (2) A large number of comments would effectively establish eighteen The comments argued for one or more challenged the proposed 4-hour mandatory sanitation CCP’s that may of several approaches that they equipment cleaning frequency, not always be appropriate. identified as being more appropriate suggesting that it is unwarranted in These comments may have been the than FDA’s proposed approach: (1) some situations (e.g., refrigerated result of a misunderstanding of the Requiring that each processor develop processing facilities) because it is relationship between processor HACCP and follow a SSOP that is specifically inconsistent with actual microbiological plans and the proposed sanitation tailored to a processing operation; (2) growth rates. It is unduly burdensome controls. While the proposed controls including sanitation controls in the in other situations (e.g., surimi involved monitoring and recordkeeping, HACCP plan where they are critical to processing facilities), according to the they were not proposed as part of a product safety; and (3) retaining the comments, because it would limit shifts processor’s HACCP system. FDA did not general approach of the proposed to 4 hours, would interrupt production, intend to designate them as CCP’s. FDA regulations but somehow reducing the and would require hours of equipment believes that the provisions of these number of specific requirements. breakdown time; final rules make clear that the necessary Approximately 85 percent of those that (3) A few comments challenged the sanitary controls need not be considered opposed the way that sanitation was proposed ‘‘impermeable’’ standard for to be CCP’s. treated in the proposal advocated one or gloves and outer garments that contact 109. A large number of the comments a combination of the first two of the food or food contact surfaces, suggesting that objected to the manner in which approaches, with the recommendations that in some instances it was FDA proposed to handle sanitation evenly split between the two. The small impractical (e.g., filleting fish); argued that the proposed sanitation number of comments that objected to (4) A significant number of comments provisions are redundant with State and including any specific sanitation challenged the proposed 4-hour hand local regulations and, with respect to requirements in the regulations may sanitizer strength test frequency, molluscan shellfish, with the NSSP. also have been arguing that sanitation suggesting that replacement of dips FDA acknowledges that the NSSP and should not be part of HACCP but should rather than checking concentration may most State seafood control programs be controlled solely through CGMP’s. be appropriate, as may be the use of include provisions, much like FDA’s a. Inclusion of sanitation controls in automated hand washing and sanitizing CGMP’s, that are designed to control HACCP plans. systems; and, processing plant sanitation. These other 110. There was strong support in the (5) A number of comments challenged provisions, like the CGMP’s, serve as comments for the inclusion of sanitation the proposed requirement that hand baseline standards for sanitation. controls in HACCP plans, particularly washing and sanitizing stations be However, the rates of noncompliance where the controls are necessary to located in processing areas, suggesting with existing CGMP standards, as protect the safety of the product. The that they need only be easily accessible. detailed in the preamble to the proposed comments stated that a processor’s Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65149 hazard analysis may reveal the need to alternatives to the prescriptive approach accordance with § 123.11(b). These control certain aspects of sanitation in to sanitation in the proposal preferred a conditions and practices will also be the HACCP plan, especially to control SSOP, either alone or in combination discussed in the next section. hazards involving microbiological with critical sanitation controls in Both § 123.11(d) and § 123.6(f) contamination. One comment noted that HACCP. Significantly, the NACMCF provide that sanitation controls that are sanitation controls are likely to be was among those that made this monitored in accordance with components of the HACCP plans of suggestion. NMFS’ comment stated that, § 123.11(b) need not be included in the molluscan shellfish processors. in its experience, the development of HACCP plan and vice versa. The Given the strong support that SSOP’s by processors in its voluntary purpose of these provisions is to allow sanitation controls should be included program has been associated with processors to incorporate those in HACCP plans where they are critical marked improvement in sanitation. sanitation controls into their HACCP to safety, FDA has no objection to Many comments stated that much of the plans that they believe are appropriately processors including sanitation controls seafood processing industry already has addressed through HACCP, without in their HACCP plans. Consequently, SSOP’s, and that those that do not having to duplicate those controls in a these final regulations state in § 123.6(f) should develop them. separate sanitation program. and § 123.11(d) that sanitation controls FDA agrees that the development by 6. Monitoring and Corrective Actions for safety may be included in HACCP processors of an SSOP would be a plans. beneficial step. FDA therefore is The regulations no longer contain The agency has concerns, however, as recommending in § 123.11(a) that: specific monitoring frequencies to to whether including sanitation controls ensure that proper sanitation conditions in a HACCP plan will be adequate to Each processor should have and are being met, as was proposed at ensure that appropriate conditions exist implement a written sanitation standard § 123.10(c). In keeping with the agency’s operating procedure (herein referred to as decision to reduce the prescriptive in a plant. The conditions that would be SSOP) or similar document that is specific to addressed in the HACCP plan will likely each location where fish and fishery products nature of the sanitation requirements, be those that are most critically and are produced. § 123.11(b) now requires that each directly related to product safety. Other processor monitor the conditions and situations that are relevant to safety, but An SSOP places the primary burden practices during processing with in a less direct way, would probably not for identifying relevant controls on the sufficient frequency to ensure, at a be controlled through HACCP. For food processor. To meet this burden, it minimum, conformance with certain example, following the NACMCF will be necessary for the processor to key sanitation conditions and practices recommendations for hazard analysis think through each operation and as specified in part 110. and HACCP plan development would identify where, and how frequently, 112. The agency arrived at this likely result in the identification of a appropriate sanitation measures are approach in response to the comments. number of equipment and hand washing necessary. The process of doing so will As part of the agency’s efforts to achieve controls at CCP’s in the HACCP plan for foster the type of culture that FDA is flexibility, it examined the 18 sanitation the processing of a cooked, ready-to-eat trying to promote, in which processors controls that it proposed at § 123.10(a) product to minimize the risk of assume an operative role in controlling in light of the comments that argued microbiological contamination but not sanitation in their plants. that they were overly prescriptive. FDA in the identification of these same FDA is adopting § 123.11 pursuant to proposed the 18 sanitation controls to controls in the HACCP plan for a raw sections 402(a)(4) and 701(a) of the act ensure that, where relevant to the finished product that would normally to ensure that seafood is not produced processing operation, important areas of be cooked before consumption. In the under insanitary conditions whereby it concern were addressed in each plant. latter case, however, attention to may be rendered injurious to health. It The preamble addressed at some length sanitation would still be important in grows directly out of proposed § 123.10, why each of them was significant and the processing plant to prevent but, as stated above, it reflects the relevant to safety. Moreover, although contamination of the product, given that agency’s efforts to make the sanitation considerable comment was received that the ultimate consumer cook may be requirements more flexible. challenged the manner in which a inadequate, or that the product, once FDA has not elected to make the particular processor should address contaminated, could be a source of development of an SSOP mandatory these sanitation conditions and the cross-contamination to other foods. because it recognizes that some situations in which they should be Likewise, the potential for processors may be able to achieve considered applicable, only two contamination of either a cooked, ready- satisfactory sanitation conditions and comments challenged the significance of to-eat product or a raw product as a practices without having to commit these conditions or the need for them to result of rodent activity in a processing their sanitation control procedures to be controlled when they are determined plant, or as a result of improper use of writing. The agency remains convinced to be germane, and neither comment pesticides on or near the product, would however, that such satisfactory provided a basis for doubting the not likely be identified in a HACCP conditions are unlikely to be achieved significance of these controls. plan. All of these conditions are without periodic monitoring of the FDA concludes that, where relevant to relevant to the safety of the product and operations. For this reason the agency a processor’s operation, the processor should be addressed by processors. It is has retained at § 123.11(b) the should monitor sanitation conditions not clear whether HACCP can fully mandatory sanitation monitoring and practices relating to the general succeed in plants that are not in control requirements proposed at § 123.10(c). subject areas reflected by the 18 specific of general sanitation practices. Sanitation monitoring will be further sanitation controls because they are The inclusion of sanitation in HACCP— discussed in the next section of this important for ensuring the safety of the as desirable as it may be—will not fully preamble. product. As in the proposal, each resolve this problem. Where a processor elects to develop processor will be responsible for b. SSOP. an SSOP it should specify how it will determining which of the subject areas 111. As indicated above, a significant meet those sanitation conditions and are relevant to its plant and process. number of comments that addressed practices that are to be monitored in However, unlike the proposal, the 65150 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations processor will be free to tailor the processor should not have to deal with physical separation of raw and cooked sanitation controls to the circumstances that issue. product, and to plant design to prevent of its operation, as long as it does so in FDA acknowledges that many State contamination. a manner that ensures the effectiveness and local jurisdictions exercise control Employees and food contact surfaces of those controls. The regulations do not over both public and private water can serve as vectors in the transmission specify the manner in which control supplies. In the case of private wells, of pathogenic microorganisms to the must be achieved. FDA will provide they often permit and inspect the food. These microorganisms can be guidance on how to ensure appropriate construction of the well and collect introduced to the product from outside sanitation control in the Guide. FDA is periodic water samples for areas, rest rooms, contaminated raw deferring consideration of the comments microbiological and chemical attributes. materials, waste or waste receptacles, that it received on the specific Where such is the case, it may be floors, and other insanitary objects. In sanitation control measures that it reasonable for the processor to rely the processing of cooked products, the described in the proposal until it upon these measures. However, in the raw material may also serve as a prepares the Guide. absence of appropriate controls by a reservoir of pathogenic microorganisms. In order to ensure that processors public authority, FDA has concluded Employees or equipment that touch the monitor the general subject areas that the processor must exercise raw material can transmit these reflected by the 18 specific sanitation whatever control is necessary to ensure microorganisms to the cooked product controls listed in the proposal, FDA has that the water supply is safe. To do (Refs. 7, 63, 64, 73, 74, 84, and 85). concluded that it is appropriate to list otherwise would be to subject the Finally, proper construction of the in the regulations the sanitation controls product to an unacceptable safety risk processing plant is essential if other that should be considered. This list will from the contaminants that may be sanitary measures are to be successful. ensure that the most significant introduced by the water. For example, incompatible operations, sanitation controls are considered by the (2) The condition and cleanliness of such as handling of raw materials and processor in formulating the measures food contact surfaces, including handling of cooked product, should be that it will institute in its plant. utensils, gloves, and outer garments isolated (Refs. 71, 74, 87, and 88). The controls that FDA is listing in (§ 123.11(b)(2)). This control derives (4) The maintenance of hand washing, § 123.11(b) no longer contain sanitation from proposed § 123.10 (a)(3) through hand sanitizing, and toilet facilities standards that are beyond part 110 or (a)(5) relating to the design, (§ 123.11(b)(4)). This control derives repeat specific standards that are workmanship, materials, and from proposed § 123.10 (a)(8) and contained in that part. Instead, maintenance of food contact surfaces; (a)(16), relating to the location and § 123.11(b) now states that the processor the cleaning and sanitizing of these maintenance of hand washing and shall ensure that actions are taken to surfaces, including the frequency of sanitizing facilities, and toilet facilities. ensure that those sanitary conditions cleaning and sanitizing; the that are contained in part 110 and that impermeability of gloves and outer Employee’s hands can serve as a are relevant to the plant are maintained garments that contact food; and the vector for the transmission of in eight general areas: maintenance of gloves and outer pathogenic microorganisms to the food. (1) The safety of the water that comes garments. Hand washing and sanitizing, when into contact with food or food contact Utensils, equipment, aprons, gloves, performed using suitable preparations surfaces or is used in the manufacture outer garments, and other food contact are effective means of preventing such of ice (§ 123.11(b)(1)). This control surfaces can be vehicles for microbial transmission. Toilet facilities eliminate derives from proposed § 123.10 (a)(1) contamination of both the raw and from the processing environment and (a)(2) relating to water quality and finished products. Food contact surfaces pathogenic microorganisms shed in treatment and to cross connections that contain breaks, pits, cuts, or fecal material (Refs. 63, 64, 73, 74, 84, between potable and nonpotable water grooves, or that are porous or corroded, and 85). systems. may harbor pathogenic microorganisms (5) The protection of food, food Water is used in virtually all seafood that can migrate to the product and packaging material, and food contact processing facilities for washing contaminate it. These kinds of surfaces surfaces from adulteration with product, equipment, and employees’ are difficult to clean (Refs. 65, pp. 20, lubricants, fuel, pesticides, cleaning hands, for transporting fish in flumes, and 36–48; 72, pp. 166–167; 73; and 83). compounds, sanitizing agents, and as an ingredient. Contaminated Where food contact surfaces are condensate, and other chemical, water can serve as a vehicle for constructed of toxic materials, the physical, and biological contaminants contamination of the product, both product may be directly contaminated (§ 123.11(b)(5)). This control derives directly and indirectly (Refs. 63; 64; 65, (Ref. 74). Inadequately cleaned food from proposed § 123.10(a)(9), (a)(11), p. 49; 66; 67; and 68, pp. 1 and 2). Cross contact surfaces can serve as a reservoir and (a)(12), relating to the protection of connections, which include situations for pathogenic microorganisms, food from various microbiological, that allow for back siphonage into a especially if biofilms are allowed to chemical, and physical contaminants. potable system from a nonpotable form, in which microorganisms can be The use of toxic compounds (e.g., system under negative pressure entrapped and shielded from the action pesticides, cleaning and sanitizing conditions, can result in the chemical or of cleaning and sanitizing compounds. agents, and lubricants) is frequently microbiological contamination of the (3) The prevention of cross- necessary in the processing potable water system (Refs. 64; 65, pp. contamination from insanitary objects to environment. Food and food packaging 50 and 51; 68; 71; and 72). food, food packaging material, and other materials should be protected or This matter was one of the two, as food contact surfaces, including removed from areas where pesticides indicated above, about which FDA utensils, gloves, and outer garments, are used, and caustic cleaning received a comment that challenged the and from raw product to cooked product compounds should be thoroughly need for a sanitation control. A (§ 123.11(b)(3)). This control derives removed from food contact surfaces comment suggested that the safety of the from proposed § 123.10 (a)(6), (a)(7), before processing begins (Ref. 74). water supply is within the jurisdiction (a)(13), and (a)(18), relating to employee Condensate which forms on an of local health authorities, and that a practices to prevent contamination, to insanitary surface and then falls on the Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65151 product may carry with it pathogenic 113. FDA proposed at § 123.10(a)(14) with the appropriate sanitation microorganisms (Ref. 65, pp. 24–25). that, ‘‘Refrigeration units that store raw standards. In fact, a number of This measure is the second about materials, in-process, or finished fish or comments listed this issue as a which FDA received a comment that fishery products that are cooked, ready- significant reason for their objection to challenged the value of having a to-eat, smoked, or made in whole or in the overall proposed approach to sanitation control. A comment part from scombroid toxin forming sanitation control. The comments suggested that preventing the formation species shall be operated at a suggested that sanitation recordkeeping of condensate on ceilings above temperature of 40 °F (4.4 °C) or below.’’ is costly and has not been demonstrated processing is, in some situations, The purpose of the proposed to be effective. None of these comments physically impossible. The comment requirement was to ensure that provided any data in support of their did not suggest that condensate is processors control the microbiological statements. Some argued that, while irrelevant to safety. hazards associated with refrigerated they accepted the notion of records for FDA reasserts that condensate is storage for these particularly susceptible CCP monitoring, they opposed records relevant but acknowledges that there are products. A significant number of of sanitation monitoring. instances in which it may be impractical comments argued the control of The remaining comments that for it to be fully eliminated. In these temperature in refrigerated storage is a addressed the issue of sanitation instances, after taking all reasonable processing hazard rather than a records, from consumer advocacy measures to minimize the development sanitation issue, and should be covered groups, an individual, a Federal of condensate, the processor will need by a firm’s HACCP plan. government agency, a trade association, to take steps to protect the product from FDA agrees with these comments and and a seafood broker, supported the the dripping condensate or to ensure has not included a provision on need for such records. These comments that the surface from which it is refrigeration in the sanitation section of argued that sanitation records are dripping is sanitary. The development these regulations. A large number of essential to ensure that processors of a written SSOP processor should comments were received relative to the adhere to established sanitary standards, tailor its sanitation controls to its appropriateness of a 40 °F (4.4 °C) limit. and that they need not be extensive. particular situation in order to These comments are no longer relevant FDA does not find the arguments accomplish this objective. to these regulations but will be against the requirement for sanitation (6) The proper labeling, storage, and addressed in the redrafting of the Guide. control records to be compelling. The use of toxic compounds (§ 123.11(b)(6)). FDA has also incorporated the agency concludes that the burden will This control derives from proposed corrective action requirement relative to be minimal. Checklist type or simple § 123.10(a)(10), relating to the overall sanitation conditions proposed at notation records will suffice in most handling of toxic compounds to protect § 123.10(d) in § 123.11(b). Section instances. Creating them should be against contamination of food. Improper 123.11(b) the processor shall, correct in incidental to monitoring. Monitoring to use of toxic compounds is a frequent a timely manner those sanitation ensure that sanitation is under control is cause of product adulteration conditions and practices that are not the responsibility of all processors. throughout the food industry. Proper met. The phrase ‘‘in a timely manner’’ Monitoring and recording of labeling, storage, and use of the did not appear in the language of sanitation conditions is as much a key compounds is necessary to minimize proposed § 123.10(d). However, it was to the success in improving those the risk of occurrence of such incidents implicit that corrections should be made conditions, and, hence, to increasing (Ref. 74). as quickly as possible so as not to consumer confidence in the seafood (7) The control of employee health subject subsequently processed product processing industry, as is the conditions that could result in the to conditions that could both jeopardize development by a processor of an SSOP. microbiological contamination of food, their safety and render them As in the case of HACCP records, food packaging materials, and food adulterated. FDA has added the phrase sanitation records require that contact surfaces (§ 123.11(a)(7)). This for clarity. processors engage in systematic control derives from proposed Note that the other corrective action monitoring of their own sanitation § 123.10(a)(15), relating to the exclusion requirements in these regulations, i.e., practices and conditions. It enables of persons who appear to have an those in § 123.7, do not apply to them to see trends. Moreover, illness, wound, or other affliction that sanitation controls that are exclusively participation in recordkeeping helps could be a source of microbial addressed in § 123.11. The controls in empower the work force and foster contamination. § 123.7 apply to a processor’s HACCP responsibility. It also allows the Employees can serve as a reservoir of system only. regulator to assess a processor’s diseases, such as salmonellosis, compliance over a period of time, not shigellosis, and hepatitis, that can be 7. Records just at the time of an inspection. transmitted to consumers by foods. 114. FDA received approximately 20 FDA believes that the records bearing Additionally, open sores, boils, or comments that addressed the issue of on the monitoring of relevant sanitation infected wounds present the potential sanitation records. Many others conditions and practices and FDA’s for contamination of the food with such discussed recordkeeping in general but access to such records are all essential pathogenic microorganisms as did not specifically mention records of if § 123.11 is to be an effective Staphylococcus aureus (Refs. 22, 74, sanitation controls. These latter regulatory strategy. Therefore, FDA has and 84). comments have already been addressed concluded that the recordkeeping (8) Exclusion of pests from the food in the ‘‘Records’’ section of this requirement proposed at § 123.10(b) will plant (§ 123.11(b)(8)). This control preamble. be retained. To reflect other derives from the proposed requirements Of those that commented specifically modifications in this section, § 123.11(c) at § 123.10(a)(17). Pests, such as rodents, on sanitation records, approximately has been modified to read, ‘‘Each birds, and insects carry a variety of three-fifths, from processors and trade processor shall maintain sanitation human disease agents, which they can associations, objected to the proposed control records that, at a minimum, introduce to the processing environment requirement that processors maintain document the monitoring and (Refs. 63, 64, 73, and 84). records that demonstrate compliance corrections prescribed by paragraph (b) 65152 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations of this section. These records are subject part 123, FDA proposed that importers approach. These comments will be to the requirements of § 123.9.’’ of fish and fishery products take steps addressed later in this section. Additionally, FDA has moved the to ensure that their shipments are FDA did not receive any comments requirement that sanitation corrections obtained from such processors. that persuaded it that imports should be be documented from proposed § 123.10 Specifically, FDA proposed that exempt from the requirements of these (d) to § 123.11 (b). importers: (1) Have and implement a regulations. On the contrary, the Finally, FDA notes that § 123.11 does HACCP plan that describes how the comments reflect a nearly universal not contain any mention of importers. product will be processed while under recognition that the safety of seafood The lack of a mention of importers in their control; (2) maintain a copy of the cannot be adequately ensured if the this section reflects the position that the foreign processor’s HACCP plan; and (3) majority of products (that is, imports) agency is taking in these regulations take affirmative steps to ensure that the are not subject to the same controls as that, to the extent that importers are also imported fish or fishery product was domestic products. processors, they would be subject to the produced in conformance with the Therefore, the agency has not sanitation requirements in this section. foreign processor’s HACCP plan and modified the regulations’ basic To the extent that they serve as with the proposed sanitation approach for imports. importers only, the sanitation requirements. The agency also proposed 116. Only two comments objected to provisions are not relevant to their that importers need not take affirmative the concept that imported fish or fishery operations. steps if the fish or fishery product was products should meet the same requirements as those for domestic L. Imports imported from a country with which FDA has a MOU documenting the products. One of these comments 1. Background equivalency of the foreign inspection argued that FDA should be tolerant of a system with the U.S. system. foreign processor that may not have the The majority of seafood consumed in knowledge or time to develop a HACCP the United States is imported. FDA’s 2. Should Imports Be Subject to These plan before its product is ready for surveillance system for imports largely Regulations? export and urged the agency to develop consists of reviewing the customs a temporary waiver system to 115. Approximately 70 comments entries for fish and fishery products accommodate such firms. being offered for entry into the United addressed various aspects of the FDA is convinced that a 2-year States, engaging in wharf examinations proposed requirements for imports. implementation period, as discussed in and sample collections for laboratory Approximately half of the comments the ‘‘Effective Date and Compliance’’ analysis, and placing products with a that addressed the import provisions section of this preamble, will provide history of problems on automatic argued that it is necessary to subject sufficient time for processors, both detention. As with domestic imported products to the same within and outside the United States, to inspections, this method is basically a regulatory requirements as domestically develop and implement HACCP plans ‘‘snapshot’’ approach that places a processed products. These comments and otherwise come into compliance significant burden on the government to were submitted by processors, trade with the provisions of these regulations. uncover problems. It has failed to result associations, State and foreign The comment provided no basis for in full compliance or consumer government agencies, professional treating foreign processors any confidence in the safety of imported associations, and individuals. Many of differently than domestic processors in seafood. Consequently, the agency these comments argued that exempting this regard. tentatively concluded that HACCP foreign processors from the 117. Another comment suggested that controls should apply to imported fish requirements of these regulations would raw material fish and fishery products and fishery products as well as to put the domestic industry at an unfair imported for further processing in the domestic products. Among other things, economic disadvantage. Other United States should be exempt from FDA proposed that the definition of comments stated that the import the requirements of the regulations but ‘‘processor’’ explicitly include those requirements would increase consumer provided no reason to support that who process seafood in foreign confidence in seafood because they position. countries. would ensure that imported fishery The exemption requested by the In addition, FDA tentatively products have been produced under the comment would make it difficult, if not concluded that the importer should same HACCP requirements and held to impossible, to control environmental share some responsibility with the the same sanitation standards as hazards that may be associated with foreign processor for safety. More often domestically produced product. A few these products. This preamble and the than not, it is an U.S. importer, rather comments suggested that imported preamble to the proposed regulations than the foreign processor, who actually products are more likely to present fully discuss the conclusions of the offers imported fish and fishery safety hazards than domestically- NAS, which identified raw material products for entry into the United produced products because of a lack of hazards, such as microbiological States. The preamble noted that, while understanding of CGMP’s on the part of contamination in molluscan shellfish many importers are conscientious about foreign processors. One comment and natural toxins in both shellfish and the safety of the products that they asserted that a number of countries, finfish, as among the most pressing import, others have little understanding including Canada, the EU, Iceland, and problems that must be addressed to of the potential hazards associated with Thailand are in varying stages of ensure seafood safety. For the most part, their products. Thus, the agency establishing HACCP programs for their these hazards are best addressed at the tentatively concluded that the existing own domestic seafood processors. time of harvest and by primary system of import controls had not Most of the remaining comments processors, through HACCP, at the time promoted a sense of responsibility in (approximately one-half) did not of receipt. In many cases, there is little the import industry. comment on whether HACCP controls opportunity for control beyond the latter Therefore, in addition to proposing to should be required for imported fish point. Raw material fish and fishery require that foreign processors that and fishery products but discussed products for further processing export to the United States comply with aspects of the agency’s proposed comprise a substantial portion of fish Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65153 and fishery products imported into the foreign processors to be exposed to the that they lack the expertise, manpower, United States (Ref. 212, p. 49). Thus, to requirements of these regulations. and facilities to evaluate the adequacy exempt foreign processing of such of a processor’s HACCP controls. One 3. Should Importers Be Subject to These products from the requirements of these comment stated, ‘‘Many of the people Regulations? regulations would be to greatly diminish involved in importing never see the the scope and, therefore, the overall 119. Approximately half of those who product and know nothing about fish— effectiveness of these regulations. commented on the import provisions these are people in a small room with 118. One comment that supported the addressed whether the importer should a battery of phones!’’ Another comment need for equitable treatment of imported be required to take steps to ensure that argued against placing reliance for and domestically produced products its shipment originates from a foreign assuring the safety of imported seafood urged the agency to provide the same processor that operates under HACCP. on persons who have a financial interest opportunities for processors abroad to Approximately half of these comments in the product but lack the required familiarize themselves with the favored the concept and half opposed it, knowledge about seafood safety. requirements of these regulations as it with both groups being diverse in their One comment argued that requiring does the domestic industry. The representation. importers to exercise control over their comment argued that just printing the Of those who opposed it, many suppliers has no parallel in the argued that these requirements should regulations in the Federal Register proposed domestic HACCP scheme. The be the responsibility of the government, would not fulfill that responsibility. The comment stated that domestic and that FDA should not require that comment further suggested that FDA processors must control the hazards that importers enforce them. A number of send copies of guidance materials to all are introduced during their processing these comments further argued that known foreign seafood processors, operations but need not be involved in equivalent foreign government preferably in their native language. verifying the control of those hazards inspection systems cannot be presumed associated with their supplier’s FDA acknowledges the difficulty in to be in place, and that the only way to reaching foreign processors with operations. Some comments argued that achieve a ‘‘level playing field’’ is for the responsibility for controlling information about the requirements of FDA to perform inspections of foreign these regulations. However, mass hazards that are reasonably likely to processors at the same frequency, and occur should be assigned to the foreign mailings to, and multiple translations using the same standards, that the of, these regulations and the Guide for processor, while others argued that it agency applies to domestic processors. should be assigned to the U.S. processor all foreign seafood processors that One comment suggested that it may be to whom the importer sells the product. export to the United States would not be necessary to obtain legislative authority One comment asserted that importers practicable for FDA. to perform foreign inspections, as a are not in a position to exercise control The agency intends to reach foreign condition of importation. Another over the processing of products in processors primarily by briefing foreign comment suggested that FDA auditing foreign plants any more than they are in embassy staffs and by communicating of foreign processor compliance would a position to exercise control over how with U.S. importers during public and give importers assurance that the the products are handled by their trade association meetings. Based on products that they obtain from such customers. experience in disseminating information sources had been produced in Most of those comments that about U.S. requirements to the import accordance with appropriate U.S. supported the concept of importer community, the agency expects that standards. responsibility provided no reason. these two groups will provide the One comment, while not opposed to However, one comment stated that necessary information and guidance mandatory importer responsibilities, requirements on importers would materials (in the appropriate languages) nonetheless argued that FDA should ensure that someone in the United to the foreign processors that they spend as much time and effort States would be legally responsible for represent. This same approach was used inspecting foreign processors as it does the safety and wholesomeness of each in disseminating information about the on domestic processors because over 50 imported product. proposed regulations. In fact, FDA percent of the seafood consumed in the FDA recognizes that requiring became aware of a Japanese translation United States is imported. The comment importers to take steps to ensure that of the proposal shortly after it issued. continued that, ‘‘to do any less would be foreign processors from whom they In addition, FDA traditionally has an unfair burden to domestic processors purchase seafood products are in provided training and technical and would not accomplish the stated compliance with these regulations could assistance for foreign processors and goal to significantly improve the safety necessitate significant changes in the government officials on a variety of food of seafood consumed in the U.S.’’ operations of importers who have control topics, within the constraints of One comment argued that there is no limited their activities to matching budget and manpower. These projects real cost savings in assigning importers buyers with sellers based on product have principally been conducted in the responsibility of verifying foreign specifications that may have had little to developing countries, often those in processor compliance rather than do with safety. However, for two which the agency has become aware of assigning that responsibility to FDA, reasons, FDA cannot agree that a particular problem that threatens the because importers will merely pass responsibility with regard to safety is safety of products offered for entry into along the additional costs to the inappropriate for importers. the United States. FDA anticipates that consumer. Another comment noted that First, it has always been the these kinds of projects will continue, many small importers obtain products importer’s responsibility to offer for and that they will focus more closely on from over 25 countries, and that they entry into this country products that are HACCP. FDA also expects that HACCP cannot afford to provide the not adulterated under U.S. law. It is a training, performed in accordance with surveillance necessary to ensure prohibited act, under section 301(a) of the standardized training materials compliance. the act, to introduce into interstate under development by the Alliance (see Another comment argued that many commerce an adulterated food. Thus, an the ‘‘Training’’ section of this preamble), importers function simply as brokers, importer would be committing a will provide further opportunity for connecting a buyer with a seller, and prohibited act if it failed to ensure that 65154 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations the food that it is offering for import FDA’s entry requirements and will be find that they would not be expected to into the United States is not adulterated safe for consumption. FDA also do so. under section 402 of the act, including disagrees with those comments that 4. Memoranda of Understanding section 402(a)(4), one of the principal suggested that a requirement that (MOU’s) provisions on which these regulations importers take steps to ensure that the are based. products they offer for entry have been 120. Many of the comments that Currently, however, the importer is produced under a HACCP plan is an objected to the importer responsibility not required to operate in a proactive abrogation of FDA’s responsibilities. As provisions of the proposal on the manner to ensure that it is meeting this stated previously, the industry has a grounds that the government is the responsibility. Rather, the importer need responsibility to ensure that the food appropriate entity to ensure foreign only offer products for entry into that it introduces into interstate processor compliance, stated that the commerce and thereby place the burden commerce is not adulterated. FDA has a most effective means of ensuring such on the government to find a problem. responsibility to verify that industry is compliance would be for FDA to enter Many importers traditionally have meeting its obligation and to take into MOU’s with the governments of purchased ‘‘FDA rejection insurance’’ to remedial action if industry fails to do so. exporting nations. Approximately one- hedge against that possibility. The Importers, who are usually the owners third of those that commented in any government can shift the burden to the of the products that they are offering way on the importer provisions urged importer by placing the importer’s into commerce, are a part of that FDA make the negotiation of MOU’s a products on automatic detention if it industry. FDA cannot accept that high priority. Only one comment finds problems that warrant such a step, importers have no responsibility to objected to the development of MOU’s. but in most instances the burden ensure that their products are not Several comments argued that FDA remains on the government. adulterated. should develop MOU’s with all Second, responsible importers The agency recognizes that probably countries from which seafood is understand the issues related to the the most effective way for a regulatory imported. One of these comments safety of the seafood products that they agency to evaluate a processor’s pointed out that to do otherwise would import and customarily require that compliance with the HACCP and unfairly cause the obligations of foreign suppliers conform to their sanitation requirements is through importers to vary considerably. A few product specifications and applicable onsite inspection of facilities, practices, comments argued that the existence of U.S. regulations relating to safety. These and records. FDA has performed a an MOU should be a prerequisite for the importers take various measures to limited number of inspections of foreign importation of seafood products from a ensure that a foreign processor can processors and, within its budgetary country. One of these comments stated comply with their specifications and limitations, will continue to do so to that mandatory MOU’s would reduce safety requirements before they agree to enforce these regulations. However, the complexity of the present import purchase products from the foreign such inspections are costly, and any surveillance situation, reduce the processor. attempt to significantly increase their number of countries exporting seafood Thus, it is feasible for importers to number would require additional to the United States, and encourage the take steps to ensure that they are not resources. development of improved food safety offering adulterated products for entry FDA will continue its traditional programs in exporting countries. into U.S. commerce. Requiring such import surveillance role, utilizing entry Another comment asserted that MOU measures will not be a significant added document review, wharf examinations, development is appropriate because burden for many importers, particularly sample collections, and automatic government-to-government as HACCP principles become more detentions as screening tools. These relationships and audits can be free of widely used and understood in tools indirectly evaluate the adequacy of influence from packers and importers, international commerce. Foreign HACCP and sanitation controls and will whereas foreign suppliers may be prone processors that want to participate in continue to be useful in detecting to provide false assurances about their the export market, not only to the significant problems. While end-product programs to prospective importers. United States but to the EU, Canada, testing and evaluation are not adequate One comment urged FDA to fully and an increasing number of other substitutes for preventive controls in describe the process and criteria for countries, will implement HACCP and ensuring the safety of a product, they developing and evaluating MOU’s and sanitation control programs and will be can provide verification where expressed concern about the process prepared to address an importer’s needs appropriate (Ref. 34, pp. 201–202). because of the varying level of for verification. FDA has concluded that requiring sophistication of foreign seafood control FDA does not agree that there is no HACCP controls, together with import programs. One comment stated that the parallel in the domestic scheme to the surveillance and periodic inspections of foreign government should be importer’s responsibility to ensure that importers to ensure their compliance responsible for evaluating the foreign the goods it is offering were produced with the requirements of § 123.12, will processor’s HACCP plan, inspecting the under HACCP. Domestic processors, better ensure the safety of imports than foreign processor, periodically like importers must work with their the current system. analyzing products produced by the suppliers (e.g., fishermen) to ensure that In a related matter, § 123.3(g) makes foreign processor, and issuing health all reasonably likely hazards (e.g. clear that, under ordinary certificates. A few comments stated that natural toxins and agricultural and circumstances, freight forwarders, FDA should monitor the effectiveness of industrial chemical contaminants) are custom house brokers, carriers, or the foreign government’s control controlled. FDA is confident that steamship representatives will not be program in a manner that is authorized importers, like processors, will realize required to fulfill the obligations of an in the MOU. These comments stated that ensuring that foreign processors importer. It is possible, although FDA that, under the MOU’s, the foreign institute preventive control systems is a has no way to know with any certainty, government should provide FDA with cost effective means of ensuring that the that some of those that objected to being periodic lists of processors that meet the products that they offer for entry into required to fulfill those obligations requirements of these regulations, or, the United States will consistently meet would, as a result of these clarifications, alternately, that all seafood processors Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65155 in the country would be required to foreign regulatory authority to ensure factors such as the capability of the meet the requirements. compliance by foreign processors. foreign regulatory authority. One comment urged FDA to publish FDA is therefore retaining the In any case, all agreements can be periodic reports on the status of MOU’s provision on MOU’s from the proposal expected to provide for FDA verification on seafood products and to make them but modifying it to provide that, where of the effectiveness of the foreign available to all importers. This comment an importer elects to obtain a fish or programs, including onsite visits. FDA and others argued that it should be fishery product from a country with is principally interested in two- way FDA’s responsibility to notify importers which FDA has an active MOU or other agreements, that is, agreements that about changes in the status of MOU’s, similar agreement, the importer need acknowledge the acceptability of the rather than be the responsibility of the not engage in any independent U.S. regulatory system to the foreign importer to find out about any changes. verification activities. government as well as the acceptability One of these comments noted that, The agency has developed an internal of the foreign regulatory system to the because a change in the status of an protocol for developing MOU’s and is U.S. government. MOU could be very detrimental to negotiating agreements with several The agency will make every importers, there must be sufficient lead countries. FDA is committed to reasonable effort to communicate with time to allow importers to develop negotiating as many MOU’s as possible. the industry about changes in the status alternate verification procedures when Also in the Federal Register of June 15, of MOU’s through Federal Register changes do occur. 1995 (60 FR 31485), FDA published the notifications and other means. FDA is Another comment urged FDA to notice of availability of a new open to suggestions about the best ways coordinate with U.S. importers and Compliance Policy Guide on MOU’s. to communicate in this regard. exporters in developing a schedule for Nevertheless, it will ultimately be the However, it is not reasonable to MOU development. The same comment importer’s responsibility to keep expect that an agreement could be urged FDA to assign more resources to appraised of any changes in the status reached with all countries from which the development of MOU’s. of MOU’s. On the other hand, one comment seafood is imported into the United The agency is also receptive to the stated that the MOU development States. The barriers to achieving such a views of the seafood industry and others process is overly open-ended and could result include the inadequacy of foreign about how countries should be result in inconsistencies between regulatory programs and the lack of prioritized for the purpose of domestic and foreign requirements. The interest on the part of some foreign negotiating MOU’s. Any information comment argued that this inconsistency governments in entering into an that the agency receives on this topic could result in an economic agreement. The availability of FDA will be coupled with existing disadvantage for domestic processors. resources also can affect at least how information concerning the likelihood FDA agrees with those comments that long it takes FDA to enter into a of negotiation success and the types and urged that the agency give high priority particular MOU. quantity of products typically offered to the establishment of MOU’s with U.S. For these reasons, the existence of an for entry from the country in question. seafood trading partners. In the absence MOU or similar agreement as a of significant numbers of agency requirement of entry of fish or fishery 5. Importer Verification Procedures inspections of foreign processing products into the United States would 121. The remaining comments facilities, FDA acknowledges that an result in an enormous negative discussed specific aspects of the MOU can be the most efficient and economic impact to a major segment of proposed importer requirements. Some effective mechanism for ensuring that the U.S. seafood industry. Moreover, of these comments argued that the foreign processing plants are operating such a restriction is not warranted from responsibilities that were proposed for in compliance with the requirements of a public health perspective given the importers are onerous, unworkable, and these regulations. FDA also agrees that alternative means of verifying the inefficient but offered nothing in the potential for signing an MOU with existence of HACCP controls that are support of these assertions. FDA is likely to serve as an incentive for provided in these regulations. A number of comments objected to the improvement of regulatory food Experience obtained in part in the the proposed requirement that all control programs and processing international portion of the FDA/NMFS importers have and implement a conditions in seafood exporting seafood HACCP pilot project has HACCP plan. Several of these comments countries, especially where the demonstrated that foreign seafood contended that an importer’s plan can existence of an MOU serves to excuse regulatory programs vary considerably, only address the hazards that occur the importer of products from that both in their capabilities and in their during the time that products are under country from certain verification structures. Likewise, foreign seafood the importer’s control (i.e., from the activities. processing conditions are highly time the importer takes possession of FDA has concluded that the variable. Thus, FDA cannot simply the product until it is shipped to its development of MOU’s or similar follow a boiler plate format in customer), and that requiring that the agreements with foreign regulatory negotiating MOU’s. Rather, they must be plan cover this point is inconsistent agencies is an appropriate method for tailored to the specifics of the situation with the principles of HACCP. One ensuring that foreign processors that presented by a particular country. It is comment agreed that an importer export to the United States are in possible that some agreements can should be required to develop a plan if compliance with the requirements of provide simply for the submission of it also processes the product, as in the these regulations. Moreover, as lists of approved processors to FDA at case of an importer who stores the suggested by several comments, the regular intervals; others may require product. The comment asserted that, in agency has determined that, where an much more extensive FDA involvement such a case, however, the importer’s MOU exists, there is no need for the before and after goods flow under the HACCP plan would be minimal. The importer to perform any independent agreement. Some agreements may cover comment further asserted that the verification procedures for purposes of all of a country’s seafood processors, foreign processor should be the party these regulations. In this situation, the while others may be targeted to specific responsible for developing a HACCP importer should be able to rely upon the species or product forms, depending on plan that addresses the hazards 65156 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations introduced during processing in the NACMCF listed water activity, pH, requirements of these regulations. In foreign plant. The comment histamine content, and, perhaps, order for product specifications to be recommended that, as an alternative to pathogen limits as examples of meaningful, importers must take steps having a HACCP plan, an importer specifications that importers might set to establish that their suppliers are in should be able to develop SOP’s that in an effort to ensure product safety. fact operating in a manner that can outline the steps that it will take to The agency agrees with the comments reasonably be expected to produce a determine whether to purchase the that product specifications can be useful product that meets those specifications. product from a foreign supplier. tools with which importers can exercise Effective verification involves A number of comments supported the some control over the products that they scrutinizing the standard, much like proposed requirement for importer purchase and offer for entry into the evaluating whether the HACCP plan HACCP plans but provided no reasons United States. In fact, FDA stated in the continues to be appropriate, and for their support. preamble to the proposed regulations scrutinizing performance to determine The agency agrees that it would be that the purpose of an importer’s plan whether the standard is consistently inappropriate to require that importers was, in part, to include criteria for how reached, much like reviewing have and implement a HACCP plan the importer will decide to purchase monitoring records (Ref. 34, p. 201). regardless of whether they process the seafood. FDA is also encouraged by the FDA is adopting this approach in products they import. As stated fact that the comments generally agreed § 123.12(a)(2)(ii). elsewhere in this preamble, HACCP is a that having product specifications Among the affirmative steps that FDA system that provides immediate would not constitute a new burden for proposed that a processor take were: (1) feedback, through the monitoring of many importers. Obtaining the foreign processor’s CCP’s, as to whether a process is under For these reasons, the agency in HACCP-monitoring records; (2) control. Unless an importer is also a § 123.12(a)(2)(i), is requiring that the obtaining a certificate from a foreign processor, there are no CCP’s in the importer’s written verification government inspection authority classic sense for the importer to procedures include product certifying that the firm is operating monitor, and from which to obtain real- specifications that are designed to under a valid HACCP plan or time feedback. Consequently, only ensure that the product is not certification on a lot-by-lot basis; (3) where importers also process in adulterated under section 402 of the regularly inspecting a supplier’s accordance with the definition of that Federal Food, Drug, and Cosmetic Act facilities; (4) periodic end-product term at § 123.3(k) will they be required because it may be injurious to health or testing by the importer or a private to have and implement a HACCP plan have been processed under insanitary laboratory hired by the importer; or (5) that meets the requirements of § 123.6. conditions. These are the adulteration other such verification measures as Those food safety hazards that can be sections that relate to the safety of fish. appropriate. FDA listed these controlled by the foreign processor must In many cases, importers will find affirmative steps as examples of the be addressed in the foreign processor’s existing Federal food safety standards, types of measures that would be HACCP plan in accordance with § 123.6. including tolerances and guidelines, to acceptable to the agency. FDA does not Consequently, FDA has revised the be useful specifications. In other cases, wish to predetermine all the possible regulations to limit the responsibilities specifications may need to be tailored to ways that an importer could perform of importers. Instead of having to the circumstances. For example, the affirmative steps. maintain their own HACCP plan, under importer might need to ensure that the 123. A number of comments objected § 123.12(a), in the absence of an MOU temperature of a modified atmosphere to each of the affirmative steps that FDA or similar agreement, importers only packaged product, when it comes off a listed in the proposed regulations, and need to maintain and implement written ship, is 38 °F (in such foods there is a a few expressed support for each. verification procedures for ensuring that risk of C. botulinum type E growth and However, few of the comments provided the fish and fishery products that they toxin development which can occur at any reasons for their positions. offer for import into the United States temperatures as low as 38 °F), although One comment suggested that the best have been processed in accordance with the CGMP’s at § 110.80(b)(3)(i) state means by which an importer can ensure the requirements of these regulations. only that refrigerated foods should be that the conditions at a foreign The only exception to this rule would stored at 45 °F or below. The importer processing facility are at least equivalent be if the importer itself engages in is encouraged to seek the advice of to those required of domestic processors processing, such as holding food, in qualified experts, as needed, in setting is for the importer to verify the which case the importer would, as specifications. The same resources adequacy and implementation of the stated above, also be a processor and available to help domestic processors in foreign processor’s HACCP plan during subject to § 123.6. setting CL’s are available to importers, a visit to the facility. Another comment 122. In determining the nature of the including the Guide; Sea Grant stated that, ‘‘without both audits and verification procedures that an importer Institution and other academics; HACCP records, foreign plants (possibly must have and implement, FDA Federal, State, and local food safety domestic facilities too) will not adhere considered the comments that regulatory agencies; consultants; the to the letter of the FDA regulation and addressed the appropriate functions and Alliance and other training courses; and assure safe product in the market.’’ existing procedures of importers. published literature. Conversely, a number of comments Several comments noted that importers argued that it would be unworkable for routinely purchase products according 6. Affirmative Steps: General importers to conduct inspections of to specifications and observed that these As a second part of the importer’s foreign processors. One of these specifications could be the basis for verification procedure, FDA is comments stated that to justify the reasonable control measures for essentially retaining from the proposal, expense of such an undertaking would importers. The NACMCF recommended in § 123.12(a)(2)(ii), the requirement that necessitate that a highly trained, that importers be required to maintain the importer take affirmative steps to competent individual perform the product specifications that are relevant ensure that the products being offered function. to product safety for fish and fishery for entry are actually being produced As stated earlier, FDA remains products that they import. The under controls that meet the convinced that importers must exercise Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65157 sufficient control over the fish and products are adulterated under section adequate to enable an importer to verify fishery products that they offer for entry 402(a)(4) of the act (see § 123.12(d)). that the products being imported are into their country to ensure that the 125. One comment urged that safe in accordance with the products are produced pursuant to the certification be permitted on a requirements of these regulations. requirements of these regulations. The continuing basis rather than requiring As described previously, the agency recognizes that any one of the lot-by-lot certification. NACMCF recommendations describe affirmative steps may not be appropriate FDA agrees that continuing two primary goals of verification: (1) or feasible for a particular importer or certification is appropriate and notes Ensure that the plan is adequate to foreign processor. The regulations allow that the language and intent of the address the hazards that are likely to importers to select an affirmative step proposed regulations would have affect the product; and (2) ensure that that is workable for their circumstances allowed for it. Nonetheless, in an effort the plan is being consistently and to develop appropriate affirmative to further clarify this situation, the implemented. The affirmative steps steps other than those listed in the agency provided in § 123.12(a)(2)(ii)(B) listed in § 123.12(a)(2)(ii) are designed regulations (see § 123.12(a)(2)(ii)(F)). that: ‘‘Obtaining either a continuing or to address both of these functions. For However, such measures must provide lot-by-lot certificate * * *’’ will be one example, obtaining HACCP and at least an equivalent level of assurance way to satisfy the requirement that an sanitation monitoring records from the of foreign processor compliance as that importer take affirmative steps to ensure foreign processor (§ 123.12(a)(2)(ii)(A)) provided by the listed affirmative steps. that the product is produced in enables the importer to confirm that the Additionally, FDA has modified the accordance with the requirements of foreign processor has addressed the importer requirements to allow for the this part. relevant hazards and sanitation performance of any of the affirmative 7. Foreign Processor HACCP Plans concerns (i.e., those for which there are steps by a competent third party monitoring records), and that it is 126. Approximately 15 comments monitoring to ensure that these (§ 123.12(b)). This provision provides addressed whether importers should be even greater flexibility to importers in concerns are under control during the required to have on file copies of the production of lots that are shipped to meeting the requirements of these HACCP plans of each of their foreign regulations. the importer. Similarly, obtaining processors. Approximately half of these governmental or third party certification Thus, FDA is not persuaded that the comments supported such a affirmative steps are not feasible or of foreign processor compliance with requirement, although for the most part the requirements of these regulations appropriate and has included them in they provided no reasons for their (§ 123.12(a)(2)(ii)(B)) or inspecting the these final regulations. support. The other half objected to the foreign processor directly 124. A comment argued that requirement. One of these comments (§ 123.12(a)(2)(ii)(C)) enables the government certificates should not be argued that possession of a foreign importer to confirm that the foreign acceptable unless they are issued by processor’s HACCP plan would be processor has an adequate HACCP plan countries with which FDA has signed cumbersome for the importer and would and SSOP, and that the relevant an MOU or similar agreement. The provide no assurance that product sanitation and safety concerns are being comment asserted that, especially in shipped by that processor was controlled for those lots that are shipped developing countries, there may be processed in accordance with the plan. to the importer. The affirmative step different interpretations of the One comment cautioned that it would options provided for by regulations, and differences in be unrealistic to expect that importers § 123.12(a)(2)(ii)(D) and (a)(2)(ii)(E) are competency, credibility, infrastructure, could make any but a rudimentary discussed later in this section. intent, and uniformity that might bring judgment as to the adequacy of foreign Consequently, FDA has not included the utility of such certificates into processors’ HACCP plans. Such a requirement that importers of fish and question. judgments, these comments asserted, fishery products have on file the HACCP FDA acknowledges that it is likely to should be reserved for the regulator plans of each of their foreign suppliers have a higher level of confidence in when the plans are assessed during in these final regulations. certificates received from a government inspections of importers’ records. Nonetheless, FDA points out that entity with which it has signed an One comment cited the possibility of maintaining copies of these plans could agreement than with one with which no breaches in confidentiality because be one of several measures that an agreement exists. However, as discussed commercially sensitive material would importer could incorporate into its above, it is unlikely that the agency will be supplied to importers. A related affirmative steps. Therefore, these final be able to negotiate an MOU with every comment suggested that, to solve the regulations in § 123.12(a)(2)(ii)(D) country that exports seafood to the confidentiality problem, the foreign incorporate the concept as one of the United States. Thus, there may be processors’ HACCP plans should be affirmative steps that an importer may countries that have excellent filed directly with FDA rather than with choose to use for verification purposes. certification programs with which FDA, importers. 127. One comment noted that the for a variety of reasons, simply does not Although the agency continues to plans of foreign processors would have an opportunity to enter into an believe that a foreign processor’s normally be prepared in the native agreement. Moreover, if the agency HACCP plan provides a useful basis for language of the country of origin and learns, either through its own routine verification, FDA is persuaded by the asked whether FDA would require that surveillance activities, consumer comments that there are logistical and these documents be translated into complaints, or other means, that there is other issues that could render the English. On the other hand, another evidence that a country is routinely retention of HACCP plans by importers comment recommended that HACCP issuing certificates inappropriately, the unmanageable in some cases. FDA has plans be maintained in both the agency will try to inform firms that also concluded that, in most cases, language of the native country and in import fish or fishery products from that affirmative steps such as those listed in English. country that it will expect them to use § 123.12(a)(2)(ii) (e.g., onsite inspection FDA agrees with the comment that other means of verification if they want by the importer and certification by a argued that a copy of a processor’s to avoid the appearance that those foreign government agency) will be HACCP plan would not, by itself, 65158 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations provide adequate assurance that a given to agree upon another means of formulations of two of the affirmative shipment of imported product was providing for importer verification. steps in the proposal did not make processed in compliance with that 130. Regarding the comment that specific reference to sanitation. To avoid HACCP plan or that the sanitation suggested that all foreign processors file confusion over what the affirmative requirements of § 123.11 were met. One their plans with FDA, the resource steps should cover, § 123.12(a)(2)(ii)(A) additional thing is needed to provide demands on the agency that would now reads ‘‘Obtaining from the foreign such assurance: a written guarantee come with such an undertaking would processor the HACCP and sanitation from the foreign processor that the be prohibitive. FDA cannot accept this monitoring records * * *’’ and products shipped to the importer are suggestion. § 123.12(a)(2)(ii)(B) reads ‘‘* * * processed in accordance with these 8. Other Affirmative Steps certifying that the imported fish or regulations. The guarantee is necessary fishery product is or was processed in to demonstrate that the HACCP and As a related matter, FDA has accordance with the requirements of sanitation control systems are being determined that, in the absence of a this part.’’ implemented for products shipped to requirement that importers maintain a 131. Several comments asked the the importer. An importer should be copy of the foreign processor’s HACCP agency to specify the frequency with able to make a reasonable judgement plan, finished product tests alone are which the importer affirmative steps about the validity of the guarantee insufficient as an importer affirmative must be taken. A few comments through a rudimentary review of the step to ensure that the foreign processor suggested that the frequency should be plan, as described below. Therefore, is operating in accordance with these no greater than the frequency of FDA is including these requirements in regulations. Finished product testing equivalent FDA verification activities. § 123.12(a)(2)(ii)(D). alone has a small statistical likelihood It would not be practical for the of detecting defects in a product, FDA is also providing in agency to specify frequencies for especially when the occurrence of such § 123.12(a)(2)(ii)(D) that the foreign affirmative steps that would be a defect is an uncommon event, as is the processors’ HACCP plans that are appropriate in all circumstances. case with most seafood hazards (Ref. maintained by importers be written in Consistent with the frequency of 213). The proposed requirement for the English, so that they will be meaningful monitoring by processors, importers importer to obtain a copy of the foreign should take affirmative steps to monitor to the importer and will allow for processor’s HACCP plan, in addition to their suppliers with sufficient frequency regulatory review. performing finished product testing, to accomplish its purpose—that is, to 128. As stated above, one comment would have provided indirect evidence provide the importer with reasonable cautioned the agency about the ability of that HACCP controls are in place and assurance that the foreign processor is many importers to evaluate the would have lent support to a operating in compliance with these adequacy of HACCP plans that they conclusion, based upon the analytical regulations. might retain. findings, that the relevant hazards are It would be inappropriate to tie FDA acknowledges that many under control. In the absence of such importer affirmative step frequencies to importers may not have the technical evidence, the importer cannot average FDA sampling and inspection expertise to evaluate the adequacy of reasonably conclude that the hazards frequencies. FDA sample collection and seafood HACCP plans. However, the are being controlled based solely on a inspection frequencies are determined, agency is convinced that, as a result of negative analytical finding. For this in part, by the compliance history of the importers’ assessment of the food reason FDA has required in individual firms, agency priorities, and safety hazards that are reasonably likely § 123.12(a)(2)(ii)(E) that such sampling overall agency resources, not simply on to be presented by the product, the be accompanied by a written guarantee a desired average minimum rate of importer should have developed some from the foreign processor that products verification. Thus, FDA’s rate of general expectations about the content being shipped to the importer are inspection has no bearing on how of the HACCP plan (e.g., which hazards processed in a manner consistent with frequently an importer should monitor a should be addressed). The importer the requirements of these regulations. supplier. should be able to spot any obvious The guarantee provides the importer 132. A number of comments urged shortcomings and to discuss them with with reasonable assurance that HACCP that the agency permit importers to the foreign processor. It is not enough and sanitation controls are in place and contract with third parties to perform that importers simply file away the are being implemented, in a manner verification activities on their behalf. documents upon receipt. Importers may similar to the way that the foreign Two comments opposed such a find it advantageous to make a judgment processor’s HACCP plan would have provision but did not provide reasons about the likelihood that their product under the requirements of the proposed for their position. specifications will be met and to insist regulations. Under this alternative, the Several comments urged that that they be given a guarantee that importer would not have to maintain a certificates by nongovernmental third contains assurances that the copy of the HACCP plan. parties be accepted as an affirmative specifications will be met. For clarification and consistency step. One of these comments, from a 129. Regarding the comment that within the document, FDA has revised trade association, suggested that an complained about the potential loss of the language of two of the affirmative equivalent arrangement has been confidentiality of foreign processor steps to include reference to the accepted by FDA in controlling the HACCP plans that are provided to sanitation provisions of the regulations. importation of canned mushrooms from importers, since the agency has In both the proposed regulations and the Peoples Republic of China. This eliminated the requirement that all these final regulations the stated same comment argued that a system importers retain copies of foreign purpose of the affirmative steps is to where individual importers inspect each processor plans, the significance of this enable the importer to verify that the of their suppliers is highly inefficient. issue has been minimized. In the case fish or fishery product was processed The comment suggested that a single, where a foreign processor does not wish under conditions that meet both the technically competent party should to share its plan with the importer, the HACCP and sanitation requirements of perform the inspections. The trade processor and the importer would need these regulations. However, the association offered to serve as a Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65159 clearinghouse for the reports of such essential in documenting for the benefit that if assurances that this was the case inspections. Likewise, the association of importers and the agency the did not exist, the product would appear offered to serve as a clearinghouse for affirmative steps of importers, in the to be adulterated and would be denied finished product sample results for same way that it is essential in entry. This section of the proposed imported products, reducing the documenting the monitoring, corrective regulations provided five types of number of samples needed when the action, and verification activities of evidence that the agency would same product is imported by a number processors. For this reason, the agency consider as adequate to provide such of importers. The comment further has retained the recordkeeping aspect of assurance. suggested that the association be the proposal for importers, in a manner 134. A few comments supported these permitted to hold foreign processor that is consistent with the overall provisions. However, a few comments HACCP plans for its members, and approach for importers in these final suggested that, if the importer is unable perhaps for nonmembers. The comment regulations. Section 123.12(c), which to provide assurance that a HACCP argued that acceptance of this treats importer records identically to system is in place, the importer should suggestion would reduce the number of processor records, reads, ‘‘The importer be permitted to conduct finished duplicate records for the same product shall maintain records, in English, that product testing rather than having the stored by various importers. document the performance and results product denied entry. One comment The agency accepts that third party of the affirmative steps specified in urged that importers be held only to a verification can be an appropriate and paragraph (a)(2)(ii) of this section. These ‘‘best efforts’’ standard in determining efficient control mechanism. Such a records shall be subject to the applicable whether their suppliers are in system is consistent with the use of provisions of § 123.9.’’ compliance with these regulations. This third parties by processors for plan 133. FDA proposed that importers comment suggested that if an importer development, record review, and CL encourage foreign processors to obtain cannot determine that such compliance deviation evaluation. Therefore, FDA HACCP training. A few comments urged exists after using its best efforts, the has added a new provision at the agency to make it clear that foreign importer’s product should not be § 123.12(b), that reads, ‘‘An importer processors must comply with the same banned from the United States. may hire a competent third party to training requirements as are applicable The purpose of these regulations is to assist with or perform any or all of the to domestic processors. One comment cause processors of fish and fishery verification activities specified in urged the agency to permit HACCP- products, both domestic and foreign, to paragraph (a)(2) of this section, training courses for foreign processors to develop and implement HACCP systems including writing the importer’s be conducted in the country of origin by of preventive controls to ensure the verification procedures on the ‘‘an official agency.’’ safety of their products. The importer importer’s behalf.’’ It is worth pointing FDA agrees that the need for training requirements are designed to impose an out that where an importer uses the is the same for foreign processors as it obligation on importers to ensure that, services of a third party, the importer is for domestic processors. The intended like domestic products, the products remains responsible for the verification benefits of the training requirements are that they are importing are not procedures that are performed. The fully discussed in the ‘‘Training’’ adulterated within the meaning of importers must be able to demonstrate section of this preamble. Nonetheless, section 402(a)(4) of the act. This that appropriate verification measures the agency finds that the proposed requirement means that importers must have been performed. This step may requirement that importers encourage be able to satisfy themselves, and involve providing an FDA investigator foreign processors to obtain training is ultimately FDA, that the fish and fishery with a copy of the foreign processor’s unnecessary. Foreign processors that products that they are offering for HACCP plan, results of end-product ship seafood products to the United import were produced subject to a sampling, results of an onsite States are advised of the training HACCP system and sanitation controls inspection, the foreign processor’s requirement of these regulations in the designed to prevent insanitary monitoring records, or the foreign same way that they are advised of the processing conditions that may render processor’s written guarantee. Third other requirements of these regulations, the food injurious to health. If an parties must, of course, be competent to through publication of the regulations. importer does not have evidence that perform the duties in question, and FDA In addition, as mentioned elsewhere in shows that the products were produced reserves the right to challenge such this preamble, FDA intends to provide subject to such controls, it should not competency. The agency has no the embassies of seafood exporting offer the product for import into this objection to the use of clearinghouses countries with information concerning country. The lack of such evidence for importer verification activities, as these regulations in order that they may creates the appearance of adulteration long as the forgoing requirements are in turn provide it to the processors in that cannot be overcome by the met. their countries. Consequently, FDA is collection and analysis of a finished product sample by an importer. Given 9. Importer Records not adopting this provision. FDA has no objection to HACCP the problems that can arise in seafood As previously mentioned, the training being performed in the country processing if HACCP and sanitation proposed regulations would have of origin by ‘‘an official agency’’ or other controls are not in place, under sections required that importers develop and entity, as long as the course of 402(a)(4), 701(a), and 801(a) of the act, implement a HACCP plan. One effect of instruction is at least equivalent to that FDA is adopting § 123.12(d), which such a requirement would have been provided by the standardized course provides that if evidence does not exist that importers would have had to under development by the Alliance. that an imported fish or fishery product maintain appropriate records. As has has been processed under conditions been explained, FDA is adopting only 10. Determination of Compliance that are equivalent to those required of those essential components of the FDA proposed to require that there be domestic processors, the product will proposed approach that the agency evidence that imported fish and fishery appear to be adulterated. considers to be practicable for products were processed under Section 123.12(d) derives from importers. One such component is conditions that comply with the proposed § 123.12 (a) and (b). FDA has recordkeeping. Recordkeeping is requirements of these regulations, and combined these provisions and, as 65160 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations suggested by a comment, has used 137. One comment expressed concern certain bacteria. Scombrotoxin can terminology consistent with the rest of that the same foreign processor HACCP result in a mild to severe allergic the regulation in § 123.12(d). While plan might be reviewed by different response in humans. proposed § 123.12 (a)(1) through (a)(5), FDA investigators in different ports of The guidelines for these products which described the types of evidence entry, and that these investigators might contained advice about hazards that are that could be used to demonstrate reach different conclusions as to its reasonably likely to occur and on details compliance with the proposed adequacy. The comment urged that the for HACCP plans for the control of these regulations, reflected important agency coordinate such reviews, as well hazards. In addition to asking for principles for the importation of fish, as reviews of importers’ affirmative comments on the substance of the based on the comments, FDA finds that steps, in a way that would minimize guidelines, the agency asked for these provisions were causing inconsistencies. comment on whether these guidelines confusion, and that the statute can FDA acknowledges that the situation should remain as guidelines, or whether appropriately be implemented without might well arise where different some or all of them should be adopted including them in the final rule. For this investigators review the same foreign as regulations. As regulations, they reason, FDA has not adopted these processor HACCP plan as a part of would, essentially, tell processors that provisions. different importer inspections. To certain hazards must be controlled in 135. One comment asked what minimize inconsistencies in such their HACCP plans, identify in advance documents, if any, would have to be reviews, the agency intends to train its critical points in the processing of these presented to FDA at the time of entry inspectional staff in the requirements of products that processors must control to concerning the status of the foreign these regulations and the application of minimize these hazards, and tell processor. Another comment suggested HACCP principles to seafood processors what they would have to do, that importers should note on the entry processing, including training on the at a minimum, to maintain proper documents that a HACCP plan is Guide. The agency also intends to control of those critical points. available for the foreign processor. This develop guidance relative to importer In another appendix to the proposed comment stated that FDA would have verification activities. regulations, FDA published excerpts an opportunity to review the plan as M. Guidelines or Regulations? from the draft Guide, mentioned earlier part of its determination of whether to in this preamble, for the stated purposes allow entry of the product. 1. Background of publicizing the existence of that draft FDA is not requiring that evidence of Guide and of providing processors with the importers’ affirmative steps be FDA recognizes that many processors information about the types of guidance presented along with the existing U.S. will need guidance in the preparation of that the agency expected would be Customs Service entry documents as a HACCP plans, and that HACCP plans available in it. matter of routine practice. It is possible will vary in complexity. The agency is that, in some circumstances, such a step committed to providing the industry One of the excerpts that FDA will be necessary (e.g., where the agency with technical assistance that includes published was guidance on the has reason to believe that inappropriate general guidelines for HACCP plans and processing of smoked and smoke- conditions exist in the foreign the contents of plans for specific types flavored fish. These products represent processing facility). However, typically, of products and processes. a significant hazard relative to the importer will be able to retain such As part of FDA’s seafood HACCP contamination with C. botulinum, evidence in its files and to make it proposal, the agency included especially when packaged in reduced available to the agency when FDA guidelines, in the form of appendices, oxygen atmosphere packaging. FDA performs an inspection at the importer’s on how processors of cooked, ready-to- requested comment on whether this place of business. Such a system is eat products and products involving guidance should remain solely within necessary because of the time that is scombrotoxin-forming species could the Guide, whether it should be necessary for the agency to properly meet various provisions of the proposed provided an appendix to the review the importer’s documentation of regulations relating to the development regulations, or whether it should be its affirmative steps and of the foreign and implementation of HACCP plans. adopted as regulations. The effect of processors’ HACCP plans. Nonetheless, FDA regards these products as being adopting these materials as regulations the agency is willing to explore alternate high-risk relative to other seafoods. would be the same as for the appendices methods of implementing the import They involve special considerations or described above. requirements of these regulations, such special hazards for which additional If these materials remained in the as that suggested by the comment. FDA guidance would likely be useful. form of guidelines, processors would be welcomes a continuing public dialog Cooked, ready-to-eat fishery products free to adopt them or not, so long as about this matter. present an elevated risk of a measures that provide an equivalent or 136. One comment asked whether microbiological hazard compared to superior degree of safety are FDA would maintain an approved list of most other seafood products. They are implemented. foreign processors. cooked as part of processing and might 138. Approximately 55 comments The agency has no plans to maintain not receive additional cooking by responded to FDA’s request for such a list, nor is it apparent upon what consumers before consumption. comment on whether these materials basis such a list would be prepared. A Consequently, to be safe, these products should remain as guidelines or be possible exception would be as part of must not contain pathogens at a level adopted as regulations. The majority of an MOU arrangement, where the foreign that will cause disease and must not be comments preferred guidelines. A few country would agree to provide a list of subjected to time-temperature abuse that comments suggested that FDA initially ‘‘approved’’ firms to FDA. In such a would allow any existing pathogens to issue guidelines, then possibly convert situation, FDA would use reasonable grow to unacceptable levels. them to regulations after gaining means to inform the import industry of Scombrotoxin-forming species are fish experience with them as adjuncts to a the purpose and contents of the list and that can form a toxin if exposed after functioning HACCP system or after pilot update them as rapidly as possible death for significant periods to testing them. A few comments preferred when changes are made. temperatures that permit the growth of to retain some of the materials as Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65161 guidelines and convert others to argued that minimum standards would modified and improved if they remain regulations. avoid confusion about what is as guidelines, at least for the time being. Over one-third of those who enforceable, and what is not. They FDA agrees that all of these guidelines commented on this subject supported pointed out that as regulations, these should appear solely in the Guide. guidelines in general, without provisions could be more readily There are no appendices to these final distinguishing among the three enforced. regulations. guidelines. They argued that guidelines FDA believes that all of these 3. Smoked and Smoke-Flavored Fishery are in keeping with the general comments have merit. Guidelines can Products philosophy of HACCP that processors provide flexibility that regulations assume responsibility for the safety of sometimes lack. Moreover, because they The guidance for smoked and smoke- their products. Some stated that detailed are advisory in nature, guidelines are flavored fish contained specific regulations for processors to follow less likely to be followed by rote. processing parameters (i.e., time and would not provide an adequate FDA thus agrees that, ideally, HACCP temperature of smoking and finished incentive to processors to develop a full should serve as a catalyst for processors product salt and nitrite concentrations) understanding of the hazards associated to develop a full understanding of the to be met in the processing of such with their products or processes. The relationships between their products products, and control mechanisms for result could be the development of rote and processes and human food safety ensuring that they are met. C. botulinum HACCP plans that might be inadequate and to devise controls for ensuring toxin production is prevented in for safety in specific situations. safety. There may well be more than one smoked and smoke-flavored fish by Some comments pointed out that, way to reach an appropriate safety controlling these interrelated variables, while guidelines can assist processors to endpoint. Regulations might not always as well as by controlling the identify controls, guidelines probably take such alternatives into account. temperature of the product throughout could never properly identify the CCP’s On the other hand, in those cases the chain of distribution. and limits for all processors given the 139. Approximately 25 comments uniqueness of individual processing involving high-risk products where addressed whether these materials methods. In the case of regulations, adherence to scientifically established should be regulations or guidelines. processors would be obliged to adhere minimum standards or procedures is About half of the comments, to the presented limits regardless of necessary to ensure a safe product by representing State and Federal their appropriateness to the operation. design, and those minimums are not Many of these comments preferred the likely to change, there is good reason to regulatory agencies, professional flexibility that guidelines provide in make those minimums something more associations, and others, urged that the permitting HACCP controls to evolve than advisories. In those types of materials be codified as regulations. The with a changing knowledge base and situations, it makes no sense to act as if remainder, representing processors and new technologies. Some expressed the work that scientifically established trade associations, requested that the concern that if the guidelines were the minimum processing conditions had guidelines remain as guidelines. adopted as regulations, the industry not been done. A number of the comments that urged that the smoked and smoke-flavored fish would bear an unnecessary burden of 2. Cooked, Ready-To-Eat Products and guidelines be issued as regulations having to petition FDA for amendments Scombroid Species in order to accommodate new products asserted that regulations are more easily or processes. Modifications to the These, then, are the considerations enforceable, would provide clear regulations could take considerable that FDA has weighed. In the case of direction to the industry, and would time. cooked, ready-to-eat products and provide much needed nationwide Several comments specifically products made in whole or in part from uniformity in the processing of smoked objected to adopting either the scombroid toxin-forming species, FDA fish. One comment from a State guidelines for cooked, ready-to-eat is persuaded that the guidelines should regulatory agency observed that products or the guidelines for remain as guidelines, at least until there processors are not adhering to existing scombroid toxin-forming species, or is enough experience with them to guidelines, such as the 1991 both, as regulations. The reasons were determine whether a change to recommendations for these products by generally the same as those given by regulations is warranted. The agency AFDO, and are unlikely to change their those comments that supported the use has concluded that processors should be operations in response to another of guidelines generally. given maximum flexibility, at least guideline. Several comments argued One comment did express the concern initially, to identify the reasonably that the States need Federal regulations that adopting the scombroid guideline likely hazards and the CCP’s and CL’s to support their own efforts to regulate as regulations would have the effect of for those hazards that are most the industry and to foster uniformity adopting a policy action level for appropriate for their manufacturing among the various existing State histamine as a defacto regulation processes. FDA will examine over time requirements. One of these comments without a formal notice and comment whether processors are achieving an also stated that such regulations are rulemaking. adequate degree of preventive control needed to ensure the safety of smoked Several comments requested that for these products under the guidelines, fish, because the product has a history guidelines only appear in the Guide, and whether they are doing so by of involvement in botulism outbreaks, is and not in appendices to the following the guidelines exactly or handled more than most other products, regulations, to alleviate confusion. partially or by relying on alternative increasing the risk of microbiological However, FDA did receive a number approaches. contamination, and is frequently not of comments that urged the agency to FDA acknowledges that many cooked prior to consumption. One adopt these guidelines as regulations. comments objected to the details of the comment suggested that the guidelines These comments cited a need for appendices. These comments will be be tested in pilot programs before minimum enforceable standards for addressed when the first edition of the making them mandatory, and that these products to ensure the protection Guide is published. FDA recognizes that research information on smoked fish be of the public health. The comments these materials will be more easily disseminated to industry through 65162 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations technical bulletins, workshops, and number of States have longstanding there is little safety concern with air- meetings. concerns that the actions of a significant packaged smoked or smoke-flavored fish Several of the comments that portion of the smoked fish industry do (hot or cold smoked) containing as little suggested that the proposed guidelines not demonstrate a full appreciation for as 2.5 percent water phase salt (less than remain as guidelines argued that FDA the nature of the risks. FDA and New the minimum stated in the guidelines), has not demonstrated that present York State surveys of the smoked fish and requested that FDA reexamine the practices in the smoked fish industry industry in the late 1980’s, for example, existing scientific data. A few comments are causing risks that would justify showed that many processors did not stated that air-packaged smoked fish has regulations, and that there have been no routinely control their T-T-S a limited shelf life in the refrigerated recent incidents of botulism attributable parameters. state and that NMFS research has shown to smoked fish. Several comments stated The comments have not persuaded that spoilage occurs before toxin that most of the problems with smoked FDA that, even without regulations, production. One comment stated that fish in the past have resulted from abuse processors will employ preventive NMFS, New York State Department of of the product at retail or by the controls to ensure the safety of these Agriculture and Markets, and AFDO all consumer. products as a matter of design and not consider a minimum water-phase salt A few comments objected to FDA’s of chance. Botulism derives from one of content of 2.5 percent to be acceptable contention that large portions of the the most dangerous toxins known to for air-packaged products. industry do not conduct final product exist. Controls to prevent the formation A few comments suggested that an testing and to the inference that all of this toxin cannot be left to chance. alternative to specifying T-T-S smoked fish processors do not monitor HACCP controls for this hazard are parameters would be to require that all the composition of their products. The highly appropriate because HACCP processors have a scheduled process for comments stated that responsible requires that the processor analyze its air-packaged products. The comment companies do conduct product testing operation to determine how hazards stated that this requirement has been on a regular and routine schedule, have affecting its product can arise, and that successful in the State of New York and scheduled processes, and are aware of it institute specific controls to prevent has enabled industry to produce what they are doing. those hazards. The majority of products with water-phase salt Other comments recommended that comments that addressed smoked and concentrations that are lower than those FDA enforcement of the current smoke flavored fish products either proposed by FDA. A few comments CGMP’s, coupled with State and local supported the concept of HACCP suggested that the high salt levels enforcement of the Food Code for controls or did not argue against them. proposed by FDA for smoked and smoked products that are produced in 140. The question, therefore, is smoke-flavored products would be restaurants, retail, and food service whether, in addition to requiring counterproductive to those government establishments, would make it HACCP plans for these products, FDA programs aimed at reducing salt in the unnecessary to treat smoked fish should mandate specific CCP’s, human diet and would be unacceptable, products any differently than other minimum CL’s, monitoring frequencies, or only marginally acceptable, to products under these HACCP and other matters that processors would consumers. Other comments suggested regulations. One comment suggested have to include in their HACCP plans. that the necessary minimum salt levels that guidelines would have the same If the agency were to codify draft for smoked and smoke-flavored fish impact as regulations because HACCP guidelines as regulations, the agency might be reduced by shortening the plans would be rejected by FDA if they would be answering that question in the shelf life of the product or by storing do not contain the recommended affirmative. The preamble to the and distributing the product frozen. controls, and because States would proposed regulations identified the T-T- The comments have persuaded FDA adopt the guidelines as regulations. S parameters in the draft guidelines as that it may be possible for processors to One comment argued that the being scientifically established use parameters other than those in issuance of prescriptive regulations minimums for ensuring that toxin FDA’s draft guidelines and still produce would eliminate the diversity in the produced by C. botulinum will not be a safe product. Moreover, the NACMCF types of smoked fish products available produced over the shelf life of the has recently endorsed AFDO’s and result in a ‘‘homogeneous’’ market. product under refrigerated conditions recommended parameters for smoked Another comment counseled that the and under conditions of moderate and smoke-flavored fish. Most notably, issuance of a regulation would cause temperature abuse. FDA has been urged these recommendations differ from Alaskan native salmon processors to for years to mandate such T-T-S those in FDA’s draft guidelines in that abandon their traditional trade. parameters for these products. In 1988 they provide for a minimum finished The agency remains convinced that and 1989, for example, AFDO passed product water phase salt content in air- smoked and smoke-flavored fish is a resolutions asking FDA to expedite the packed product of 2.5 percent, whereas potentially hazardous food. While cases development of regulations for the safe the FDA proposal provided for a range of botulism have not been attributed to processing of smoked fish. The of minimum values of from 2.5 percent commercially prepared smoked or comments to this rulemaking that to 3.5 percent, depending upon other smoke-flavored fish in over 30 years, the supported regulations over guidelines processing parameters. outbreaks of the 1960’s clearly support the mandating of specific T-T- The agency acknowledges, therefore, demonstrate the potential for such S parameters. that some recommended T-T-S occurrence. Virtually all the research However, a significant number of parameters differ from those in FDA’s that has been conducted establish that other comments challenged whether draft guidelines. FDA acknowledges the processors need to control time, some of the parameters in the guidelines possibility that other safe T-T-S temperature, and salinity (T-T-S) were actually minimums, as FDA had parameters exist as well. It is reasonable parameters and other matters for these contended. They specifically objected to to suppose that there is more to be products in order to provide adequate the minimum water-phase salt levels in learned about how the development of barriers to toxin production (Ref. 214). the draft guidelines for air packaged C. botulinum toxin is controlled in these As the preamble to the proposed smoked and smoke-flavored fish. products, given the lack of reported regulations pointed out, FDA and a Generally, these comments stated that illnesses in recent years. Thus, while Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65163

FDA strongly believes that the T-T-S requirements be codified but not as part complement, and thereby better parameters in its draft guidelines of sanitation. support, State programs. provide effective controls for botulism, These regulations require in subpart B Molluscan shellfish consumed raw or the agency accepts that they are not of part 123 that the processors of partially cooked pose unique public necessarily the only effective controls, smoked and smoke-flavored fish health risks. As the preamble to the or that all effective controls have been describe in their HACCP plans how they proposed regulations noted, they identified. are controlling the food safety hazard probably cause the majority of all Consequently, the agency has associated with the formation of toxin seafood-related illnesses in the United concluded that, at least for now, the by C. botulinum. Specific types of States. This situation is not unexpected, most appropriate place for such controls will be provided in the Guide. given the nature of the product and the guidance on T-T-S parameters and Because evisceration is one form of way that it is consumed. The preamble related matters is the Guide, and that it control for this toxin, it will be covered documented a relationship between the would not be appropriate to adopt in the Guide as well and need not be microbiological quality of molluscan specific parameters for the processing of included in the regulations. shellfish growing waters and the smoked fish by regulation. However, Consequently, FDA has not included incidence of molluscan shellfish-borne because of the extreme nature of the this proposed provision in these final disease. It also noted that naturally hazard, and in response to comments, regulations. occurring toxins may accumulate in molluscan shellfish because they are FDA has chosen to codify a rudimentary N. Molluscan Shellfish performance standard for the control of filter-feeding animals. The NSSP was established as a botulism in these products from the 1. Background cooperative program among FDA, State draft guidelines (item number 11). As In addition to the general HACCP regulatory agencies, and the molluscan incorporated at subpart B, § 123.16, the provisions in subpart A of part 123, shellfish industry, relying on section performance standard reads: FDA proposed subpart C of part 123— 361 of the PHS Act (42 U.S.C. 264), to In order to meet the requirements of ‘‘Raw Molluscan Shellfish,’’ which set provide for the classification and patrol subpart A of this part, processors of smoked forth specific requirements for the of shellfish growing waters and the and smoke-flavored fishery products, except processing of fresh or frozen molluscan inspection and certification of shellfish those subject to the requirements of part 113 shellfish. Proposed subpart C of part 123 processors. The preamble to the or 114 of this chapter, shall include in their described certain types of controls that HACCP plans how they are controlling the proposal reaffirmed FDA’s support for processors of these products must the NSSP but noted the difficulties that food safety hazard associated with the include in their HACCP plans in order formation of toxin by C. botulinum for at are associated with ensuring the safety least as long as the shelf life of the product to meet the requirements of subpart A of these uncooked products. As the under normal and moderate abuse of part 123. preamble stated, FDA tentatively conditions. Specifically, FDA proposed to require determined that it could strengthen and that processors of raw molluscan This requirement responds in part to provide additional support for the shellfish identify in their HACCP plans cooperative program through these the comments that proposed that FDA how they are controlling the origin of regulations. require that all processors scientifically the molluscan shellfish that they establish scheduled processes for process. FDA proposed to require that 2. Should There Be Specific smoked and smoke-flavored fish, rather these controls include accepting only Requirements for Raw Molluscan that mandate specific T-T-S parameters molluscan shellfish that originated from Shellfish? and other matters. It requires processors growing waters that are approved by a FDA received approximately 45 to establish CL’s that are both shellfish control authority, that are from comments about the proposed appropriate to their operation and harvesters that are licensed or from requirements for raw molluscan scientifically sound. Because botulism processors that are certified by a shellfish. The responses were from is undoubtedly a hazard that must be shellfish control authority, and that are processors, trade associations, State and controlled in the production of these properly tagged or labeled. In addition, Federal government agencies, products, subpart B of part 123 does not FDA proposed to require that processors individuals, consumer advocacy groups, impose a requirement that would not maintain records to document that each and a foreign country. Approximately exist in its absence. It has been included lot of raw molluscan shellfish meets half of these comments urged FDA to for emphasis and as a reminder to these requirements. FDA also proposed eliminate proposed subpart C of part processors. The Guide will provide to amend § 1240.60 (21 CFR 1240.60) to 123 and the proposed amendment to processors with assistance with regard provide for a system of tagging for § 1240.60, while the other half to specific T-T-S parameters and related shellstock and labeling for shucked acknowledged the advisability of matters. molluscan shellfish as a means of source including these kinds of provisions but 141. FDA proposed that, with certain identification. commented on, or questioned, various exceptions, fish to be smoked or salted It is important to note that shellfish specifics of them. be eviscerated and free of residual control authorities in the United States The comments that generally viscera. The preamble to the proposed are generally agencies of State supported the need for specific regulations explained that salted or governments, and that the tagging of requirements for raw molluscan smoked uneviscerated fish present a molluscan shellfish is an important shellfish were from trade associations, potential hazard for the development of aspect of State shellfish control molluscan shellfish industry members, C. botulinum toxin production. The programs. As discussed below, reference consumer advocacy groups, Federal and viscera of fish contain the majority of C. to aspects of existing State programs in State government agencies, individuals, botulinum normally present. these Federal regulations is not and a professional organization. A One comment argued that the entire intended to supplant or override the number of comments noted that special evisceration provision should be moved State programs in any way. Rather, these requirements for molluscan shellfish are to the Guide. Another comment provisions are intended to strengthen warranted because of the association of suggested that specific evisceration the Federal system in ways that will these products with illness. One 65164 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations comment in particular stated that, with shellfish growing waters; and improper provisions will complement the efforts respect to seafood, molluscan shellfish handling by caterers and consumers. of the States. FDA recognizes that while ‘‘serve as the primary source of illness The comment concluded that the States are making significant and due to ingestion.’’ One comment noted proposed HACCP provisions for important efforts to ensure that all that Federal regulations relating to molluscan shellfish will, therefore, not shellfish harvested in their jurisdiction source of origin controls for raw reduce the incidence of illness are taken only from open waters and molluscan shellfish would enable FDA attributable to such products. then properly tagged, some shellfish to lend support to the States in the As previously mentioned, FDA is a that do not meet these requirements administration of the NSSP. Another partner with State and foreign inevitably escape State control. The new comment suggested that the proposed regulatory authorities and with industry provisions will allow FDA to take action regulations would improve FDA’s in the NSSP. The NSSP Manual of against shellfish that are not harvested regulatory effectiveness with regard to Operations provides the standards for from open waters or that are not molluscan shellfish control. The State and foreign molluscan shellfish properly tagged if it encounters such comment from the ISSC stated that ‘‘The regulatory programs that belong to the shellfish in interstate commerce and Conference has long recognized and cooperative program, as well as for make the gravamen of such action the supported expansion of FDA authority processors. The participating States origination from unopen waters or the to assist States in assuring the safety of routinely adopt those standards as law lack of proper tagging itself, rather than molluscan shellfish.’’ or regulations, but the NSSP itself has evidence that the shellfish are injurious The comments that suggested that neither Federal nor State regulatory to health. subpart C of part 123 and the stature. Second, the regulations require that amendment to § 1240.60 be deleted Each participating State and foreign processors only use shellfish that were from State government agencies nation classifies and monitors its originate from growing waters that have and seafood processors. A number of the molluscan shellfish growing waters, been approved for harvesting and that comments that suggested deletion of the controls harvesting, inspects molluscan have been properly tagged. Failure to do proposed provisions stated that the shellfish processors, and issues so can result in Federal regulatory tagging and labeling requirements of the certificates for those that meet the action against the product or against the NSSP are designed not to serve as a shellfish control authority’s criteria. processor itself. This fact should control to prevent harvesting from FDA evaluates State and foreign provide a significant incentive to closed areas but to assist States in molluscan shellfish control programs processors to ensure that they are not tracing shellfish that are implicated in and publishes monthly the ‘‘Interstate receiving shellfish that do not meet illness outbreaks back to the harvest Certified Shellfish Shippers List,’’ these requirements. area. The comments went on to state which lists the molluscan shellfish Taken as a whole, rather than that harvesters who illegally harvest processors that are certified under the diminishing in any way the importance from closed waters do not identify the cooperative program. States that are in of State programs, FDA’s regulations shellfish as originating from the closed the program are not willing to receive elevate the importance of those area. The comments maintained that shellfish from noncertified shippers. programs. These regulations make preventing illegal harvesting is the key FDA disagrees with the comments proper origin and tagging—concepts to reducing the incidence of illness, and that suggest that establishment of the that derive directly from the NSSP— that the only known method to achieve proposed source controls in Federal keys to the unimpeded movement of this goal is through effective law regulations would supplant the similar shellfish in interstate, as well as enforcement, including the patrol of and, in some cases more stringent, intrastate, commerce. closed waters. requirements of participating States and Moreover, these requirements extend A number of these comments argued foreign nations or the standards set forth these control measures to imported that increased FDA funding and support in the NSSP. Rather, the agency is products, enabling FDA to more for State molluscan shellfish control and convinced that they will reinforce and efficiently and effectively ensure the patrol efforts would do more than the support these requirements and safety of imported raw molluscan proposed rule to deter illegal harvesting, standards. shellfish. At present, the agency must to increase States’ compliance with the The molluscan shellfish industry is resort to advising State regulatory NSSP, and reduce the number of subject to significant regulatory authorities of the prospective entry of illnesses caused by molluscan shellfish. oversight in those States that participate raw molluscan shellfish from an The comments went on to state that the in the NSSP. However, the quality and uncertified source (Ref. 216, part V, p. proposed regulations unnecessarily effectiveness of State laws and 5). While States normally take action duplicate the requirements now in place enforcement activities can vary against uncertified imported raw in the Manual of Operations for the considerably as a function of the molluscan shellfish, FDA is aware that NSSP. They contended that formal financial and administrative support uncertified imports enter interstate adoption of NSSP requirements into available to the responsible State units commerce (Ref. 107). Federal regulations would release State (Ref. 7, p. 15). For example, FDA FDA acknowledges that uniform agencies from their cooperative documented discrepancies in State Federal tagging and record-keeping relationship with FDA under the NSSP. enforcement practices during its 1994 requirements will not completely One comment noted that the evaluation of State programs to eliminate illegal harvesting. The agency weaknesses in State molluscan shellfish determine compliance with the NSSP agrees with the comments that rigorous control programs are in areas not standards (Ref. 215). Moreover, although enforcement of closed area restrictions addressed by the proposed regulations, all harvesting States participate in the by State regulatory agencies will always such as improperly classified growing NSSP, many other States do not. be needed. Unquestionably, increased waters; the ability of State growing Based on these factors, FDA proposed, funding would help State efforts to water classification programs to respond and is now adopting, subpart C of part classify and patrol growing areas. to breakdowns at waste water treatment 123 and amendments to § 1240.60 to However, FDA does not have resources facilities or unexpected climatic events support and strengthen the shellfish for this purpose. Nonetheless, the that affect the quality of molluscan program in two ways. First, these agency remains convinced that there are Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65165 significant, positive steps that can be acknowledges that HACCP plans and consumption of raw molluscan taken to strengthen source controls as specific source control requirements shellfish, particularly in medically part of HACCP, and thereby to support cannot serve as a substitute for compromised individuals. During the the cooperative program. improvements in the food safety system period of 1984 through 1994, the agency A processor’s most significant safety that directly address these weaknesses. expended nearly $1 million to alert the control for raw molluscan shellfish is at Regulatory systems will always have public to the risks of raw molluscan the point of receipt. If processors refuse their strengths and weaknesses, and shellfish consumption by distributing to accept molluscan shellfish for which research to better understand and brochures to consumer groups, groups there is no assurance that they have control hazards will always be needed. that represent those with special been legally harvested, the incentive for Nonetheless, these comments provide medical conditions, and consumers; illegal harvesting would be eliminated. no reason for FDA to abandon its efforts developing a video news release; issuing FDA participation in a number of covert to remedy existing agency weaknesses press releases; and establishing the toll- investigations into illegal molluscan and, in particular, to lend support to the free, FDA Seafood Hotline. Included in shellfish harvesting in recent years has States in those areas to which these this expenditure is the agency’s efforts convinced the agency that, in many regulations do relate. to inform the medical community about cases, processors are aware of the illegal 141. One comment stated that the illnesses associated with the harvesting activity of their suppliers references cited in the preamble to the consumption of raw molluscan shellfish (Ref. 217). If the provisions of these proposed regulations in support of the by providing informative articles to regulations can help foster a culture tagging requirements (Refs. 102 through medical bulletins and journals and by change in that respect, shellfish safety 109) do not provide convincing mailing brochures and news articles to will be significantly enhanced. evidence of a need for such a measure. target professional groups. The agency Based on these considerations, the The comment stated that, for the most will continue its consumer education agency proposed that, as a universal part, the references that FDA cited efforts, but such efforts alone will be aspect of the HACCP plans for these document corrective actions taken by insufficient to address the hazards products, molluscan shellfish State regulatory agencies that would posed by the consumption of raw processors engage in certain activities to likely be the same measures that FDA molluscan shellfish harvested from ensure that the products that they officials would take under the proposed unapproved growing waters. The receive originate only from waters that regulations. In addition, the comment existing and planned consumer have been approved by a shellfish stated that a failure to have properly education efforts are geared toward control authority (e.g., checking tags on tagged shellfish does not always mean individuals in high-risk consumer containers of shellstock, licenses of that the shellfish were harvested groups, advising them to avoid fishermen, and certification of illegally. The comment pointed out that molluscan shellfish that have not been suppliers). Molluscan shellfish that are the absence of a tag could mean simply fully cooked. The risks posed by clearly improperly tagged or from that the tag was lost. viruses, toxins, and many bacteria are to questionable sources must be rejected The references in the question contain the population as a whole. There is little by processors as a requirement of their examples of problems associated with advice that the agency could provide HACCP plans. It is reasonable to molluscan shellfish tagging, that would enable consumers to protect conclude that, as more processors adopt recordkeeping, and harvesting. FDA themselves from these kinds of hazards HACCP and exercise greater control cited these references to demonstrate in molluscan shellfish. over their suppliers, the amount of that, in some cases, the deterrent effect illegally harvested shellfish offered for of existing State tagging requirements 143. Several comments questioned the sale will decrease, because the market and sanctions is inadequate to prevent validity of FDA’s statement that for such product will decline. problems from arising (Refs. 102, 103, molluscan shellfish consumed raw or While it is true that the tagging and 109). The problems documented in partially cooked pose unique public requirements of the NSSP were the references helped persuade FDA to health risks and probably cause the primarily designed as a means of tracing propose Federal source control majority of all seafood-related illnesses back molluscan shellfish involved in requirements to help deter the interstate in the United States. incidences of illness to their harvest shipment of shellfish from unapproved The comments provided no data upon area, they have also served as a key harvest areas. FDA did not intend to which to conclude that either the NAS component in efforts by FDA and State imply that the State actions that were or FDA is wrong in this regard. FDA regulators and industry to ensure that documented in these references were remains convinced that the statements molluscan shellfish that are placed in incorrect, or that FDA would have made in the preamble to the proposed commerce originate from areas that are responded in a different manner. FDA regulations are valid, and that the approved by a shellfish control continues to believe that the references references support these statements. authority. It is certainly true that the are relevant and supportive to its 3. Cooked Versus Raw Molluscan tags on containers of molluscan intended assertion. Shellfish shellfish that are harvested from closed A few comments maintained that a waters are often falsified to disguise better strategy for decreasing illness 144. Comments from a number of their true origin. However, such from the consumption of molluscan State agencies, trade associations, falsification carries potential Federal shellfish would be to increase the seafood processors, and the ISSC and State penalties and is a focus of education efforts of FDA and of the ISSC objected to the use of the terms ‘‘raw’’ current molluscan shellfish control that are directed toward consumers and and ‘‘fresh or frozen’’ in the title of part programs. the medical community to alert 123 subpart C and the text of the Regarding the comments that pointed susceptible individuals to the risks proposed regulations on shellfish. These to weaknesses in State programs, at associated with the consumption of raw comments were concerned because retail, in the classification of molluscan molluscan shellfish. these terms would have the effect of shellfish growing waters, and elsewhere, The agency agrees that consumer exempting canned and any other heat- which are not directly addressed by education can play a vital role in processed molluscan shellfish from the these regulations, the agency reducing illnesses associated with the source control, recordkeeping, and 65166 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations tagging provisions of subpart C of part shellfish that originate from waters introduced a formal approval process 123 and § 1240.60(b). approved for harvesting by a shellfish for waters under its purview through a The comments stated that limiting control authority. The term ‘‘shellfish Federal shellfish control authority. these provisions to raw products would control authority’’ is defined at Under the current system, State allow foreign firms to continue to heat- § 123.3(o) to include foreign government agencies are responsible for approving treat or can molluscan shellfish that are health authorities that are legally molluscan shellfish growing waters. harvested from foreign waters that do responsible for the administration of a However, State jurisdiction extends not meet NSSP standards and to export program that includes classification of only to waters that are within three them to the United States. The molluscan shellfish growing areas. miles of the shore. Waters beyond that comments stated that this situation was 145. Two trade associations point but up to 200 miles offshore are not in the best interest of the public questioned how a processor could under the jurisdiction of the Federal health because of the potential for the evaluate the competency of a foreign government. The comments pointed out presence of heat-stable natural toxins, shellfish control authority. They stated that the harvesting of molluscan such as paralytic shellfish poison or that FDA should require that a foreign shellfish is permitted in all of the amnesiac shellfish poison, as well as country that exports shellfish to the oceanic waters under Federal control chemical contaminants. The comments United States have an agreement with unless there is a specific Federal action also complained that, because State the agency that establishes that a to declare an area unsafe under the laws and regulations require that all competent shellfish control authority provisions of the Magnuson Fishery molluscan shellfish harvested in the exists in that country, and that the Conservation and Management Act. The United States come from waters foreign shellfish program meets NSSP comments further noted that large approved by a shellfish control standards. One comment from a seafood volumes of molluscan shellfish are authority regardless of whether they are processor argued that it would be harvested in Federal waters. to be consumed raw or cooked, unreasonable to require processors to How Federal waters will be classified, continuing to allow foreign processors verify that molluscan shellfish from all and by whom, has not been fully who export cooked shellfish to the over the world are caught or cultivated resolved. The comments are correct that United States to use molluscan shellfish in waters that meet NSSP standards. the proposed requirement, if from unapproved growing waters places The comment stated, moreover, that a incorporated into the final rule, would the domestic shellfish industry at a processor could not keep abreast of pose significant problems for molluscan competitive disadvantage. Other which countries have current shellfish shellfish processors who receive comments requested that FDA clarify agreements with FDA and which product harvested from Federal waters. whether canned shellfish were included countries do not. Therefore, FDA has modified § 123.28(b) in subpart C of part 123 but did not FDA acknowledges the merits of to allow for the receipt of molluscan suggest that canned and other heat- requiring that a foreign country that shellfish that are harvested in U.S. processed shellfish be included. exports shellfish to the United States Federal waters except where such FDA has responded to these have an agreement with the agency but waters are specifically closed to comments generally in response to has concluded that, given the harvesting by an agency of the Federal comment 34, supra. The agency adds significance of such a requirement and government. This provision is the following points: the agency’s failure to raise the consistent with the provisions of the It is important to recognize that possibility of imposing it in the Magnuson Act. foreign processors who export cooked proposal, it is beyond the scope of this It is worth noting that, by allowing molluscan shellfish to the United States rulemaking. Even though FDA is not Federal waters to be open unless they now will have to have HACCP systems imposing such a requirement, it is the are specifically closed, this system is the through which they identify and control case that the only means by which a opposite of the State system, under hazards that are reasonably likely to processor can ensure that the molluscan which waters are closed unless they are occur. These hazards include heat stable shellfish of foreign origin that it receives affirmatively classified so as to be open. toxins and chemical contaminants that are in compliance with the requirements This difference is reasonable from a would cause these products to be of subpart C of part 123 of these public health standpoint because there adulterated under U.S. law. regulations is by determining whether is less likelihood that Federal waters To further clarify that the the foreign shellfish control authority is will be affected by pollution than will requirements of subpart C of part 123 formally recognized by FDA. It is not near shore State waters. apply only to the processing of likely that the processor could employ Furthermore, because there is no molluscan shellfish that are not heat any other process that would give it Federal authority to license shellfish treated or treated in some other manner assurance that molluscan shellfish harvesters who fish in Federal waters, by the processor to eliminate harvesting waters that are approved by FDA has modified § 123.28(c) to require microorganisms of public health the shellfish control authority are only that a harvester be in compliance concern, FDA has modified the language properly classified. Such a with such licensure requirements as at § 123.20 to read, ‘‘This subpart determination is appropriately may apply to the harvesting of augments subpart A of this part by performed through government to molluscan shellfish, rather than setting forth specific requirements for government audit. specifically requiring licensure. processing fresh or frozen molluscan 5. Shellfish From Federal Waters 6. Tagging and Recordkeeping shellfish, where such processing does Requirements not include a treatment that ensures the 146. Comments from a significant destruction of vegetative cells of number of trade associations and 147. FDA proposed recordkeeping microorganisms of public health seafood processors stated that a requirements for processors to follow concern.’’ requirement that shellfish originate only with respect to shellstock and shucked in waters ‘‘approved for harvesting by a molluscan shellfish in § 123.28 and 4. Shellfish Control Authorities shellfish control authority’’ would requirements for the information to be FDA proposed to require that preclude harvesting in Federal waters included on the shellstock tag in processors only process molluscan unless the Federal government § 1240.60. A few comments stated that Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65167 the proposed molluscan shellfish tag industry have had difficulty tracing the would have allowed shipping and record requirements were too implicated shellfish to their sources, documents to provide the required specific, and that placing such especially after they have been in the information for bulk shipment, and the requirements in the form of regulations possession of several different latter would not. FDA agrees with the would make it difficult to make timely processors (Refs. 99; 100; 102–106; 109; comments that recommended providing changes to these requirements as future 218; and 219, pp. 37–39). These for the use of shipping documents and needs may dictate. The comments difficulties in tracing the shellfish have has modified § 1240.60(b) to provide the asserted that FDA or the ISSC may wish occurred because the shellfish were not needed consistency. Under existing to modify the content or form of in compliance with the tagging and industry practice the truck, cage, or molluscan shellfish tags or records to recordkeeping provisions of the NSSP. vessel hold serve the same purpose as improve product traceability. They The requirements at § 123.28 will enable a container for the shellstock, making suggested that FDA write the tagging FDA to help the States to enforce tagging impractical. In that case, the and recordkeeping requirements at minimum tagging and recordkeeping shipping document serves the same § 123.28 and § 1240.60 in general terms requirements for imported and domestic function as the tag. and allow the specific form and products. Moreover, the agency believes However, the agency does not agree information required on the tags to be that placing the tagging and with the suggestion that containers of addressed by the NSSP. The comments recordkeeping requirements in Federal shellstock in large shipments be allowed went on to urge that, if the agency were regulations will emphasize the to be covered by shipping documents in determined to include specific tagging nationwide importance of this lieu of tags. FDA cannot justify treating and recordkeeping requirements as part information in protecting the public shellstock in large shipments differently of the final regulations, they should be health, as described earlier. than shellstock in smaller shipments, fully consistent with current NSSP 148. One comment noted that the nor could the terms ‘‘large’’ or ‘‘small’’ guidelines. NSSP does not specify that the name of be readily defined. Large shipments can It is not the agency’s intent that the the harvester must be on a molluscan be subdivided, perhaps many times, or provisions of § 123.28 and § 1240.60 shellfish tag, but that the proposed commingled with other lots of would preclude the ISSC or State regulations would require this molluscan shellfish. The source agencies from adopting additional information. information would, therefore, be recordkeeping or tagging requirements. The NSSP specifies that the number necessary on each container to ensure The recordkeeping and tagging assigned to the harvester by the shellfish proper identification. Without tags, the requirements in these regulations are control authority must be listed on the identity of individual containers could the minimum necessary to ensure that tag. The agency recognizes that there be lost. FDA is requiring that all shellfish can be traced through may be a variety of effective ways to shellstock, even after repacking, bear a distribution channels, back to the identify the harvester of the molluscan tag that identifies the prescribed harvest source. FDA explained why shellfish, depending on the method of information, including the identification each of the specific requirements is harvest, State requirements, and local of the harvesters to ensure that all necessary in the preamble to the tradition. For this reason, the agency has shellstock is readily traceable proposed regulations, and the comments modified § 1240.60(b) to read that the (§ 1240.60). did not take issue with the agency’s tag shall disclose: 7. Other Considerations explanation with respect to any of the particulars. Therefore, FDA disagrees ** * by whom they were harvested (i.e., the 150. Comments from a few trade with the comments that the identification number assigned to the associations and from seafood recordkeeping or tagging requirements harvester by the shellfish control authority processors stated that FDA should are more restrictive than they need to or, if such identification numbers are not require a production code on each be, or that they would interfere with the assigned, the name of the harvester or the container of shucked molluscan name or registration number of the shellfish. The comments suggested that NSSP tagging program. harvester’s vessel). Moreover, as stated previously, the the code consist of an identifying mark agency has drafted the regulations For consistency, FDA has made a that allows the processor to determine broadly enough so as not to conflict similar change in § 123.28(c)(5). where the remainder of the lot was with any improvements that the ISSC 149. A significant number of shipped, and where and when the may wish to make in the form that a tag comments recommended that FDA relevant shellstock was harvested. may take or in how information on tags modify § 1240.60(b) to allow bills of FDA agrees that production codes can is to be stored. The definition of the lading or other shipping documents to be useful on containers of shucked word ‘‘tag’’ at § 123.3(t) (added at accompany bulk shipments of shellstock molluscan shellfish to facilitate trace § 1240.3(u) for consistency) reads, in in lieu of tags, as long as they provide back of questionable product. The part, ‘‘a record of harvesting information the same information. A few comments agency encourages the use of codes by attached to a container of shellstock suggested that bills of lading or other molluscan shellfish processors. ** *.’’ This definition is sufficiently shipping documents be used in lieu of However, such a requirement is not broad to include such systems as bar tags on individual containers of within the scope of the proposed codes, embossed plastic, or other shellstock when a shipment consists of regulations. The agency will consider nontraditional methods of identification a large volume of shellstock in sacks or whether such a requirement should be that may be used by the industry in the boxes. Several comments asked for pursued in a separate rulemaking. future. The agency is supportive of clarification of the impact of the 151. Comments from several efforts to improve the existing methods proposed requirements on current consumer groups stated that if a of recording harvesting information. repacking operations that commingle warning label is not mandated by FDA Nonetheless, it is important for the shellstock from various harvesters into on raw molluscan shellfish to alert at- regulations to identify the minimum one container. risk consumers of the danger to health specific information that must appear FDA recognizes that an inconsistency posed by the product, FDA should on a tag. During past illness outbreaks, existed between proposed § 123.28 and require that Gulf Coast oyster processors FDA, State regulatory agencies, and proposed § 1240.60 because the former adequately cook the product to 65168 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations eliminate risks from Vibrio vulnificus ‘‘relayed’’ to an open growing area for possible that a HACCP plan that during periods when shellfish cannot be harvest at a later date. In addition, the contains the controls specified in harvested free from this bacterium. They comments pointed out that the word subpart C alone of part 123 still might further stated that cooking should not be ‘‘approved’’ is a formal classification not meet all the requirements of § 123.6. required when the shellfish are free designation used in the NSSP. These FDA has made two modifications in from this bacterium. comments said that harvesting is § 1240.60(b) for clarity only. Where the FDA agrees that effective controls are permitted from areas with other than proposed regulations required that the needed to protect consumers from the ‘‘approved’’ classifications but would tag identify the ‘‘* * * place where hazard posed by V. vulnificus in Gulf appear to be prohibited under the harvested * * *,’’ FDA has added, ‘‘(by Coast oysters during certain times of the provisions of proposed § 123.28(b). The State and site).’’ This change makes year. The agency is evaluating the comments suggested use of the term § 1240.60(b) consistent with potential effectiveness of a variety of ‘‘open’’ growing waters, which would § 123.28(c)(2). Additionally, where the control mechanisms. Mandating specific apply to several different NSSP harvest proposed regulations stated that mechanisms, however, would be area classifications. improperly tagged or labeled product outside the scope of this rulemaking. FDA agrees that the word ‘‘originate’’, would be ‘‘subject to seizure and FDA is therefore taking these comments as used in proposed § 123.28(b), is too destruction,’’ FDA has amended the under advisement. restrictive and has revised this section language to read, ‘‘subject to seizure or 152. A few comments urged that the to say ‘‘harvested from.’’ With regard to refusal of entry, and destruction.’’ This word ‘‘processor’’ be changed to the word ‘‘approved,’’ FDA concludes change is to make clear that, for ‘‘certified dealer and licensed harvester’’ that no change is warranted. The imported products, the appropriate throughout § 123.28 to make the proposal neither adopted nor referenced regulatory procedure is refusal of entry, terminology consistent with the NSSP the NSSP growing water classification rather than seizure. and to clarify that these requirements system. The phrase ‘‘approved for apply to everyone who buys and sells harvesting’’ should not be construed to O. Compliance and Effective Date shellfish before the shellfish reach the be limited to those waters classified by 1. Effective Date retail marketplace. The comments also a State under the NSSP as ‘‘approved’’ recommended changing the word areas. The phrase ‘‘approved for FDA proposed that these final ‘‘shipper’’ to ‘‘processor or packer’’ in harvesting’’ is used in the final regulations be effective and enforced 1 the provision that is codified at regulations for its common sense year after the date that they are § 123.28(d)(3) in these final regulations meaning (i.e., those areas from which published in the Federal Register. The to include the shucker, repacker, harvesting is allowed), which FDA purpose of this proposed effective date shipper, reshipper, or depurator. believes is appropriate. was to provide processors with enough As mentioned in the ‘‘Definitions’’ 154. For clarification purposes, time to develop and implement HACCP section of this preamble, the agency has definitions for the terms ‘‘certification plans. The agency invited comment on concluded that the definition for number’’, ‘‘shellfish control authority’’, whether 1 year would be adequate. ‘‘processor’’ covers all NSSP and ‘‘tag’’ have been added at 156. FDA received more than 60 classifications of shellfish dealers, § 1240.3(s), (t), and (u), respectively. comments about the proposed effective without specifically naming each one. These definitions are taken directly date. Virtually all comments agreed that For consistency throughout the from § 123.3. the agency should provide some period regulations, use of the term will remain 155. One comment urged that the before the regulations become effective. unchanged. regulations be modified to specifically The comments either agreed with a 1- FDA agrees, however, that the word state that a HACCP plan for raw year implementation period or ‘‘shipper,’’ as the agency used it in the molluscan shellfish that contains the requested a longer period of 2 years or proposed regulations, could cause controls specified in subpart C of part more. There were also a number of confusion because that term has a 123 is deemed to meet the requirements comments that responded to the different meaning in the NSSP Manual of § 123.6. agency’s question about whether of Operations. Therefore, FDA has The agency disagrees with this implementation dates should be changed the language of the final comment. The requirements of subpart staggered based on such factors as size regulations to read ‘‘packer or C of part 123 are designed to control the of firm and level of risk. repacker.’’ The certification number of environmental hazards associated with A minority of comments stated that 1 the packer or repacker is readily the harvest waters from which year for implementation is adequate. available to the processor since it is molluscan shellfish are taken, These comments argued that after 1 required, under the NSSP standards, on particularly those relating to sewage- year, the industry would have had 3- each label of shucked product. For related pathogens, chemical years notice of the requirements. The consistency, FDA has modified contaminants, and natural toxins. For comments argued that 3 years was § 1240.60(c) to also read ‘‘packer or this reason, they must be included in sufficient total time to be informed repacker’’ where it had previously read the HACCP plans of all raw molluscan about impending regulations. Another ‘‘processor.’’ shellfish processors. However, they are comment stated that one year might be 153. A few comments stated that not intended to control process-related sufficient for the seafood industry, but proposed § 123.28(b), which referred to hazards resulting from, for example, other food industries could need molluscan shellfish that ‘‘originate from time-temperature abuse of the product, considerably more time. growing areas that are approved for improper use of food additives, or metal Several comments recommended that harvesting,’’ appears to prohibit fragments. To control these hazards, the FDA provide an implementation period processors from using products from processor needs to follow the general of longer than 1 year but did not harvest waters classified under the approach set out in subpart A of part recommend a specific alternative. These NSSP as ‘‘conditionally restricted.’’ 123. The agency has developed the two comments were concerned that HACCP Under the NSSP, shellstock taken from subparts to be complementary and has training would not be completed in time such waters cannot be directly marketed strived to eliminate any redundancy in for a 1-year implementation date; that for human consumption but can be their provisions. Thus, it is theoretically foreign processors would need more Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65169 time to implement HACCP; and that 1 that 2 years must be provided to achieve compliance with existing year after Canada required HACCP for establish training programs and to give requirements. its seafood industry, only half of its participants enough time to take them. FDA also finds that there is not an firms had complied. Two years is also the minimum time adequate basis at this time for staggering The largest number of comments on necessary to train regulatory personnel. the starts based on size or risk. The this topic recommended that FDA make The additional time is also necessary so arguments for and against staggering the regulations effective 2 years after that the States will have a full generally parallel those for and against publication. The reason most often cited opportunity to understand and respond exempting firms from these regulations was that it will be more than 1 year to the effects of these regulations. It will altogether on the basis of either size or before most of the affected firms can also increase the likelihood that more risk. These arguments are discussed in complete HACCP training. The next agreements with other countries will the section of this preamble entitled most frequently cited reason was that exist. ‘‘Should Some Types of Processors Be firms and trade associations needed The additional year will also increase Exempt?’’ In summary, a good case can more time for HACCP plan the opportunity for processors to engage be made that implementation by small development. Several comments also in ‘‘voluntary’’ HACCP inspections in firms should not be delayed because discussed the time required to modify advance of the effective date in order to such firms account for much of the equipment and raise capital; to respond obtain preliminary, nonregulatory products with significant potential for to initial, voluntary reviews of HACCP feedback from the agency on their risk, such as cooked, ready-to-eat plans by regulatory agencies; and for progress. products. Moreover, most seafood Federal, State, and local officials to The agency acknowledges that it has processors are small firms. Risk-based, understand HACCP and how to enforce urged the industry to begin preparing as opposed to size-based, criteria for it and to arrange for cooperative for HACCP well before the issuance of staggering firms would inevitably be enforcement. A few comments stated these final regulations. However, as this arbitrary to some degree because data that FDA needs sufficient time to preamble amply demonstrates, a from foodborne illness reporting develop agreements with foreign significant number of questions were systems tend to skew the reports toward countries. raised as a result of the proposal that more easily diagnosable illnesses. Several comments contended that The comments received on the subject could not be answered until now. more than 2 years should be allowed to of staggering do not provide a ready way Moreover, the entire support structure implement the regulation. These to overcome these problems. Moreover, for HACCP, including the issuance of comments mentioned the cultural the 2-year effective date (rather than 1 the first edition of the Guide and the change that HACCP will require and year as proposed), guidance, technical development of training courses, model concern about the impact that the assistance, and training that will be regulations will have on small firms as plans, and other forms of technical available to all processors should make well as on large firms with multiple assistance that will be useful to the staggering much less necessary than it products and lines. They also industry, and especially to small otherwise might have been. mentioned the time needed for training. businesses, will not be in place in time As stated above, however, the agency Over 20 comments recommended that to permit a 1-year effective date. welcomes feedback on the progress that FDA stagger effective dates. A majority On the other hand, more than 2 years processors are making to implement of these comments stated that such a does not appear at this time to be HACCP that could have a bearing on phased-in start-up should be based on warranted. The agency is concerned that whether staggering or an extension of product risk. The remainder of the additional time would adversely affect the effective date would be appropriate, comments split in favor of either the momentum for this program without especially for small businesses. considering both the size of a firm and adding significantly to the likelihood 157. Several comments asked for a the risk from the products it makes or that it will succeed. form of staggering based on when an just the size of a firm. On the other hand, FDA is sensitive inspection occurs before the effective A smaller number of comments to the need to ensure that small date. These comments stated that argued against a staggered start. These businesses will not incur an processors who voluntarily submit to comments expressed the view that small unreasonable threat to their survival by inspection under the regulations before firms and foreign products should not an effective date that is too short. The the effective date and are advised that be treated differently and pointed out agency intends to monitor the progress their HACCP systems are not yet in that all firms will already have had 3 of the industry after the regulations are compliance with the regulations should years of notice. Some of these comments published and invites feedback on this have at least a 6-month grace period to stated that it would be hard to justify subject. If FDA determines that the correct the problems. The example staggering implementation based on risk effective date is placing a significant given in these comments was that of a when the illness data are so incomplete. and unreasonable burden on the processor who is so advised 1 day Others expressed the view that industry, particularly on small before the effective date and thus is administering a staggered start would businesses, the agency would be willing inevitably out of compliance on the use up valuable resources and only to consider an extension for as much as effective date. result in confusion; that staggering one additional year or some form of As reflected in the comments, would put some firms at a competitive additional technical assistance. The inspections of HACCP systems before disadvantage; and that it might agency would consider whether the the effective date will occur because a encourage procrastination. delay is needed for training, drafting firm desires feedback and volunteers for After fully considering all of these plans, or taking other measures that it when an FDA investigator arrives for comments, FDA agrees with the directly relate to the installation of a an inspection. That feedback will comments that suggested that a 2-year HACCP system, or whether the time is constitute informal advice only and will effective date is appropriate. Based on needed to comply with existing provide training for the investigator as FDA’s participation with the Alliance CGMP’s, which are a prerequisite for well as for the processor. There may be that is developing training materials for HACCP. FDA will likely be reluctant to some advantage to a processor to obtain this program, FDA has come to realize give firms an extended period of time to feedback and training sooner rather than 65170 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations later, but the results will have no formal FDA has a longstanding practice of should be required to file a HACCP plan status with the agency and would not tailoring its regulatory response to the and obtain approval from FDA before warrant an extension of the effective facts. A deviation from any of the implementing the plan. The remaining date. provisions of these regulations, comments, from processors, trade The agency has heard considerable including those involving the control of associations, and a foreign government, concern that it will automatically seek sanitation, carries the potential for agreed with FDA’s tentative conclusion to seize or otherwise remove from regulatory action pursuant to section that HACCP plans need not be commerce all products being produced 402(a)(4) of the act. However, FDA submitted to the agency or preapproved under a HACCP system that is intends to enforce these regulations in a before they are implemented. determined to be deficient in any manner that focuses on those deviations Some of the comments favoring respect. That concern is unfounded. The that have the greatest potential for preapproval argued that FDA should consequence of being out of compliance causing harm. It is not FDA’s intent to have control over the design of each with HACCP requirements, on the first pursue regulatory action against a plan before it is implemented to ensure inspection after implementation or product or a processor exclusively for that all of the CCP’s are identified, and otherwise, is addressed throughout this clerical errors or minor errors of that appropriate records will be kept. section. In summary, FDA’s reaction omission. To do so would certainly not Other comments contended that, in the will depend, as it does today, on the be an efficient use of agency resources, absence of a preapproved plan, a overall public health significance of the nor would it be in the best interests of processor may implement a plan that deficiency. the consuming public. FDA would later judge to be inadequate, The penalty provisions for food found possibly raising concerns about the 2. Public Meetings to be adulterated are described at product already produced under the 158. One comment suggested that ‘‘Prohibited Acts and Penalties,’’ in plan. FDA conduct public meetings to explain chapter III of the act. The statutory Several comments in opposition to the requirements of these regulations to sanctions that FDA may seek include preapproval argued that it would be too the seafood processing industry between seizure and condemnation of a food and expensive and difficult for both FDA the publication date and effective date injunction and criminal penalties and the processors (the latter because of these regulations. The comment also against a person (i.e., a firm and its implementation would be delayed while encouraged a coordination of research, responsible management). processors waited for FDA to training, and educational efforts FDA may also use existing preapprove the plan and every between industry and FDA in order to administrative procedures, such as subsequent change to the plan). One facilitate the implementation of this warning letters and conferences with a comment expressed concern that, in HACCP program. processor, to bring instances of formally approving a HACCP plan, FDA fully agrees with the comment. noncompliance to the processor’s regulatory authorities would assume It is the intent of the agency to engage attention as it frequently does under its some responsibility for the HACCP in a dialog with industry, through a current inspection programs. system of an individual processor. combination of public meetings and The agency cannot state precisely A few comments stated that HACCP discussions at trade association what type of action it will take when it plans will evolve as operations are meetings, to facilitate a thorough detects a deficiency because FDA adjusted, based on the processor’s understanding of the regulations. FDA’s evaluates each deficiency on a case-by- verification activities. These comments affiliation with the Alliance reflects the case basis to determine the public argued that a requirement for the agency’s commitment to a cooperative health significance of the violation and preapproval of HACCP plans would relationship among industry, the appropriate response. encumber a processor’s ability to update government (Federal and State), and its HACCP plan. academia in the areas of research, 4. Preapproval of HACCP Plans The resource situation since the training, and technical assistance. In the preamble to the proposed proposal was issued in January, 1994, regulations, FDA tentatively concluded has not changed in any way that would 3. Penalties for Noncompliance that HACCP plans would not have to be make the preapproval of HACCP plans 159. A significant number of submitted to the agency or otherwise by FDA practicable. Thus, FDA’s comments, from processors and trade preapproved before their analysis of the comments has focused associations, requested that FDA implementation by processors. The on whether a lack of preapproval raises address how noncompliance with the reasons for the agency’s tentative significant implementation problems mandatory sanitation control conclusion included: (1) HACCP plans that the agency must address. The procedures will be handled. Several of should be judged in the context of the comments have not convinced the these comments also requested that FDA processing plant, a process best agency that it does. FDA finds that a describe the penalties that can be accomplished during routine FDA preapproval system would unduly imposed upon a processor and its inspections of processing facilities; and burden the agency’s resources, without officers for: Failure of a processor to (2) the agency does not have sufficient providing significant advantages to the have and implement a HACCP plan; resources to review HACCP plans from public health. The effectiveness of a noncompliance with sanitation control all domestic and foreign seafood HACCP plan, including monitoring, procedures; and failure to meet minor processors in advance of either HACCP recordkeeping, and verification, can best requirements of the regulations, such as implementation by the processor or the be evaluated under actual operating the lack of a signature on a document. conduct of HACCP-based inspections by conditions. One comment stated that FDA’s legal FDA. The preapproval of HACCP plans is authorities and enforcement procedures 160. Approximately 20 comments distinguishable from the situation for do not provide a means for the agency addressed this issue. About two-thirds low acid canned foods, where FDA to respond in a manner that is related of these comments, from consumer reviews submissions of scheduled to the severity of deficiencies—that is, a advocacy groups, processors, trade processes and revisions to these less severe response to a less significant associations, and State government processes without hinging that review deficiency. agencies, contended that a processor on a visual inspection of the facility. For Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65171 low-acid canned foods, the submission processors. The comments suggested Second, establishing, certifying, and relates solely to the adequacy of the that FDA selectively audit a sample of auditing a network of third parties cooking process to control one hazard processor HACCP plans from the file whose approvals FDA would (C. botulinum). This process lends itself copies, perhaps based on product risk, automatically accept would impose to a paper evaluation. the presence or absence of certain significant burdens on the agency that FDA agrees with the comments that CCP’s, or other relevant factors. Some of FDA could not accommodate. suggested that a requirement for agency these comments recommended that FDA As discussed above, FDA is engaging approval of a processor’s changes to an request voluntary submission of plans in significant efforts to facilitate the existing HACCP plan would prior to the implementation deadline. development of appropriate HACCP unnecessarily slow the process of plan A file, or library, of HACCP plans of plans. The overall high level of policy improvement. The ability to modify the all seafood processors would likely guidance and technical assistance that plan quickly based on feedback from present various benefits from the will be available to processors from FDA verification activities is an important standpoint of trend analysis and and a variety of other sources should aspect of HACCP that could be degraded program evaluation. The agency finds, minimize the incidence of processors by a preapproval requirement. however, that the burdens would developing and implementing plans that With regard to the concern that the outweigh the benefits, largely for the do not address those hazards that are lack of plan preapproval will expose a same reasons that rule out the reasonably likely to occur. Therefore, processor to risk of product loss if a preapproval of plans by FDA. For FDA is not providing for third-party HACCP plan, under which it had been example, the library would have to be approval of HACCP plans. operating, is deemed by FDA to be updated every time that any processor 7. The First Inspection inadequate, the agency advises that updated its plan. Therefore, FDA is not there are several issues that should requiring that processors file their plans In the preamble to the proposed mitigate this concern. First, the agency with the agency. regulations, FDA tentatively concluded is committed to providing guidance, in that, after the effective date of these 6. Third Party-Approval the form of the Guide, to assist regulations, FDA’s review of processors’ processors in the development of 162. Several comments urged FDA to HACCP plans and procedures would HACCP plans that are likely to be include a provision requiring third- occur at the time of the routine acceptable to the agency. The Guide will party approval of processors’ HACCP establishment inspection. FDA be further discussed later in this section. plans, especially if preapproval by FDA requested comment on whether the first Second, FDA is convinced that the is not required. The comments HACCP review should be nonregulatory, training requirements of these suggested that the lack of a requirement even though the inspection of the regulations will serve to inform the for a processor to use a disciplinary processor would otherwise be regulated industry about the team approach to develop a HACCP regulatory. expectations of the agency with respect plan, as suggested by the NACMCF, 163. Approximately 30 comments, to HACCP plan content. FDA is working coupled with infrequent FDA mostly representing processors and closely with the Alliance to ensure that inspections, could mean that a trade associations, addressed this issue. training reflects FDA policy. processor might operate for years All but one of the comments asked that Third, FDA recognizes and accepts without an appropriate plan. The the first review of a processor’s HACCP that, for HACCP plans to be effective comments noted that competent plan and procedures be nonregulatory. and efficient, they must be tailored to processing authorities are available to Approximately one-fourth of these the operating conditions of the provide third-party plan approvals and comments further asked that the second individual processor. Of necessity, this audits. such evaluation also be nonregulatory. fact means that there may be multiple On the other hand, one comment The comments stated that a ways to control an individual hazard. argued that a requirement for third party nonregulatory visit by FDA would assist Consequently, FDA investigators will be HACCP plan approval is not necessary. the processor in determining trained to objectively evaluate the This comment stated that a deficiencies in its plan without fear of processor’s HACCP plan from the nonregulatory first inspection would enforcement action and would provide standpoint of whether it accomplishes obviate any form of preapproval. FDA investigators with hands-on its intended function (i.e., hazard FDA recognizes that some processors experience in a HACCP-based control), rather than whether it follows may benefit from obtaining third-party inspection. The comments suggested any preconceived model. assistance in developing their HACCP that this arrangement would foster a Finally, as described earlier, for the plans and in evaluating their cooperative spirit between the agency HACCP program, FDA intends to implementation. An independent audit and the industry and would provide the respond proportionally to deficiencies is often helpful in locating problems in time necessary for the investigator to that it finds during inspections. The a system and offers the benefit of discuss with the processor how the plan nature of the agency’s response will bringing in expertise not always should be tailored to address the details depend on the totality of the situation possessed by many seafood processors. of the processor’s operation. and on the public health implications of FDA is aware that some processors have One comment stated that the the deficiency. When circumstances engaged in these kinds of arrangements initiation of a sweeping, new program permit, the processor will be given the in the past and encourages their use. will generate many questions and will opportunity to make appropriate However, the agency cannot agree that necessitate innumerable judgments on corrections. third party assistance should serve as an the part of both processors and ‘‘approval’’ for regulatory purposes. investigators. The comment suggested 5. Filing Plans With FDA First, to maximize consistency and fair that it would be preferable for these 161. A few comments stated that FDA treatment, the responsibility for the questions and judgments to occur should require processors to file HACCP initial HACCP plan evaluation (outside during nonregulatory visits. plans with the agency, not necessarily to of the processor’s own verification On the other hand, one comment obtain preapproval, but to allow FDA to activities) belongs to FDA, through suggested that the first review of a compile HACCP plans from all seafood routine inspections of processing plants. processor’s HACCP plan should be 65172 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations regulatory, because once the effective discretion when it finds a basis for food science, and most have an date has been reached, compliance with concern about a processor’s HACCP academic background in the sciences. the regulations should be enforced. plan or procedures that relate to a They will also receive training during FDA agrees with the comments that matter about which policy is still being the implementation period that focuses suggested that a smooth transition to a formulated. on compliance with these regulations. mandatory HACCP system of preventive However, the agency is concerned The investigators will be exposed to the controls is more likely the result of that there could be significant problems Guide, among other sources, for dialogue than regulatory action. For if it officially designated its HACCP information about potential hazards to HACCP to succeed, processors must be review during the first inspection as be considered for particular products committed to it because they perceive being nonregulatory. First, such a step and processes. This exposure, coupled benefits to themselves from its use other could create unfair situations. For with investigators’ experience with the than simply the avoidance of regulatory example, FDA could find itself in the industries with which they work, will sanctions. position of pursuing regulatory action give them a sound basis for making FDA has concluded that a 2-year against one processor for failure to screening determinations about the effective date, rather than the 1-year adequately control a particular hazard adequacy of processors’ HACCP plans. date that was proposed, will provide while, at the same time, treating a There is little doubt that the caliber of substantial opportunity for dialogue. similar deficiency by another processor investigator screening decisions will Moreover, the proportional response to as ‘‘nonregulatory.’’ Second, it could improve with experience with these problems that FDA intends to employ, foster actions by firms to avoid regulations and with exposure to more taking into account the newness of the application of the regulations, such as and varied processor HACCP programs. system, should obviate many of the name changes or reorganizations to FDA is confident that its field comments’ concerns about excessive create the argument that the ‘‘new firm’’ investigative staff will quickly adjust to regulatory sanctions early in the is entitled to a nonregulatory inspection. the task of fostering compliance with process. Consequently, FDA concludes Third, it is not clear how long such a these regulations, as they have to past that an officially designated, policy should last. Arguably, the initiatives. nonregulatory first inspection is not reasons in support of a nonregulatory Where investigators are unsure about necessary. first inspection become much weaker in the adequacy of a processor’s HACCP FDA has concluded that 2 years is the case of a firm that goes into business plan, they will have ready access to, and sufficient time for a processor to train for the first time a number of years after will be encouraged to consult with, employees or secure properly trained the effective date of the program. district, regional, and headquarters consultants, perform a hazard analysis, For all of the foregoing reasons, FDA experts. Investigators will also be develop a HACCP plan, and implement has concluded that it can accomplish instructed to discuss with plant and evaluate HACCP control procedures the things that led it to inquire about the management the reasons and scientific that will comply with these regulations. possibility of, and the comments to support for hazard analysis and HACCP The additional year will enable the support, designating the first HACCP plan decisions that are in question. agency’s field investigative force and the inspection as a nonregulatory inspection Where, because of the complexity of a industry to begin sorting out many of without making such a designation and particular situation, the investigator the issues that are likely to develop creating the problems that such a cannot reach a decision about the during implementation. designation could cause. adequacy of a particular aspect of a As stated earlier, the agency intends processor’s HACCP plan, the 8. Role of the FDA Investigator to perform informal HACCP evaluations investigator will be instructed to collect of willing processors during routine 164. In the preamble to the proposal, as much information, including inspections conducted during the 2-year FDA stated its tentative conclusion that supporting data, as is necessary in order implementation period. These its investigators would, among other to facilitate further agency review. evaluations should serve to aid the things, evaluate the adequacy of Therefore, FDA concludes that the development of both the industry’s processors’ HACCP plans during routine existing system adequately addresses HACCP programs and the agency’s inspections. A few comments objected the concerns of the comments. HACCP inspectional skills. They will to this role for the investigators. These 9. Disagreements and Appeals also largely take the place of the comments stated that investigators proposed type of nonregulatory should be responsible for verifying that 165. A significant number of inspections. the processor has performed a hazard comments, primarily from processors FDA agrees with the comment that analysis; developed a HACCP plan and trade associations, stated that FDA pointed out that the initiation of this where warranted; implemented the should have a mechanism to resolve program will generate many questions HACCP plan; and recognized, corrected, differences between an FDA investigator and issues that will have to be worked and recorded deviations from the and a processor regarding the adequacy out between processors and the agency. HACCP plan. The comments further of the processor’s HACCP plan, Moreover, FDA accepts that, despite the stated that investigators should not be in especially given the subjective nature of years of groundwork and the pilot a position to challenge the adequacy or the determination as to what the programs that have been the basis for design of a HACCP plan. hazards are that are reasonably likely to agency policy decisions to date, there The comments pointed out that occur and that therefore must be will be details that will have to evolve HACCP plans are tailored for each controlled through HACCP. The over time as the program is operation, designed by either a company comments contended that a cooperative implemented. It is highly likely that this team or a knowledgeable individual discussion between FDA and the evolution will continue well after the thoroughly familiar with the operation. processor’s HACCP experts would be effective date of these regulations. FDA They questioned whether an FDA preferable to an enforcement will take this factor into account in its investigator would have the expertise to confrontation, and that this discussion initial interactions with processors after determine the acceptability of the plan. would allow a processor to explain its the effective date. The agency may find Many FDA investigators already have decisions and procedures. Other it appropriate to use its regulatory considerable training in HACCP and comments urged FDA to formalize an Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65173 appeal process in the regulations that appropriate controls by species and by but if it starts presenting itself in fish would establish a processor’s rights to product type. The preamble said that and becomes known, it may warrant a contest any HACCP compliance action the information contained in the draft new hazard analysis that may identify it by FDA. Moreover, these comments Guide is the kind of information that as ‘‘reasonably likely’’ for a period of stated that FDA should not take would likely result in a HACCP plan time. enforcement action based on a that is acceptable to the agency. FDA FDA also recognizes that disagreement in the field between an received considerable comment on the circumstances may occur in which investigator and the developers of the contents of the draft Guide and intends hazards will exist that are not identified plan. to publish a redrafted first edition in the Guide. These hazards may be the As previously mentioned, agency shortly after the publication of these result of a previously unidentified investigators will be instructed to regulations. phenomenon (e.g., the identification of discuss their concerns about potential 166. A number of comments a natural toxin in a species previously inadequacies in processor HACCP plans expressed concern about how the Guide not associated with that toxin) or of with the management of the firm in an would be used by FDA investigators unique conditions in the way that the effort to learn the basis of the firm’s when evaluating a processor’s HACCP product is handled by a particular decisions. If the investigator retains plan. The commenters were troubled by processor (e.g., unusual equipment or concern that a plan is inadequate in the prospect that FDA investigators processing methods). Thus, a definitive some regard even after discussing it would not be trained to evaluate HACCP determination of ‘‘reasonably likely to with the firm, the investigator will list plans that differ from the Guide, and occur’’ can come only as a result of a findings on the report that is provided that, therefore, they would take carefully conducted hazard analysis to the management of the firm at the exception to a HACCP plan that deviates performed for a specific product under conclusion of the inspection from the Guide. The comments stated specific processing conditions. (Inspectional Observations, FDA483). that industry experience with HACCP FDA recognizes that a HACCP The FDA483 only represents the demonstrates the need to provide approach requires flexibility and will opinion of the investigator and is not flexibility so that HACCP plans can be endeavor to make the Guide consistent necessarily the final opinion of the tailored to the specific operating with such flexibility. FDA will provide agency. The investigator will document conditions of a processor. training to its investigators so that they the processor’s response to, or Other comments stated that the Guide will be prepared to evaluate a HACCP explanation of, the findings listed on the did not provide express guidance on the plan that is not consistent with the FDA483 report. meaning of the key phrase ‘‘reasonably Guide and to evaluate the effectiveness It has been longstanding FDA policy likely to occur.’’ The comments stated of controls that differ from those to conduct an internal review of that the Guide should clarify whether it suggested in the Guide. The agency investigators’ inspectional findings is FDA’s intention that the hazards agrees that the Guide is not a ‘‘safe before initiating regulatory action. There identified in the Guide are the harbor’’ for all situations. Processors is an opportunity at each stage for ‘‘reasonably likely’’ hazards under all who utilize the Guide should compare discussion between the firm and the conditions for the specific species and it to their own circumstances and make agency. These FDA review practices processing operations that are listed. whatever adjustments in the approach will not change under a HACCP-based Several comments cautioned that the suggested in the Guide that are system. Guide should not be characterized as a necessary. Based on the foregoing, the agency ‘‘safe harbor,’’ i.e., that FDA should not concludes that the concern expressed in promote strict adherence to the Guide 11. Trade With the EU the comments about possible regardless of the circumstances. Such a 167. One comment suggested that, precipitous compliance action as a characterization, they argued, could because of directives issued by the EU, result of the findings of FDA cause processors to omit the critical many processors may need early investigators is unwarranted. It is worth hazard analysis step in HACCP plan recognition of their HACCP programs by repeating that the agency intends to development and risk developing plans FDA. The comment further suggested engage in conflict resolution through that do not fit the conditions of their that early recognition could be used by dialogue wherever possible and processes. the agency as a means of training FDA appropriate. Given these facts, FDA has The Guide is, in the agency’s opinion, inspectional personnel. concluded that a provision for a special a compilation of the best available FDA is aware of the directives of the appeals process for matters concerning information on the subject of hazards EU. The agency intends to consider how these regulations is not necessary. and controls in seafood processing. It it can best help processors respond to contains FDA’s recommendations as to 10. Status of the ‘‘Guide’’ those directives, among other factors, as the hazards that it believes are it formulates its plans for In the preamble to the proposed ‘‘reasonably likely’’ to occur in specific implementation of these regulations. regulations, FDA discussed the ‘‘five species and finished product forms preliminary steps’’ to HACCP under ordinary circumstances, but it 12. Measuring Program Success recommended by the NACMCF. These also provides information on rarer In the preamble to the proposed steps lead a processor through a logical hazards as well. FDA recognizes that the regulations, FDA asked for comment on process for identifying hazards that are first edition of the Guide must clearly what tests should be used to measure likely to occur in a product and for distinguish between the two. the success of the HACCP program as a developing a HACCP plan. In an effort The term ‘‘reasonably likely’’ is now whole, and how often those tests should to facilitate this process, especially for effectively defined in § 123.6(a). It is be conducted. the many small businesses involved in worth noting that, under § 123.6(a), 168. A significant number of seafood processing, FDA is developing whether a hazard is ‘‘reasonably likely’’ comments stated that indicators of the the Guide, a draft of which was made will depend, at least in part, on the success of the seafood HACCP program available shortly after publication of the circumstances that exist at the time that could include: A reduction in the proposed regulations. The draft Guide the hazard analysis is conducted. For number of seafood-borne illnesses; provides information on hazards and example, a certain toxin might be rare, improved consumer confidence in 65174 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations seafood consumption; and a reduction 169. One comment suggested that In the preamble, FDA acknowledged in the number of violative products that end-product testing should be used by that many States are under considerable enter the marketplace. Several FDA for program surveillance purposes, pressure to cut back on programs where comments stated that periodic particularly for imports. This comment there is an overlapping Federal program. inspections of, and sampling at, encouraged FDA to conduct statistically Nonetheless, the agency urged States to processors and importers by FDA, State, reliable baseline and monitoring maintain, if not strengthen, their and foreign officials, coupled with surveys, modeled after those used in the seafood programs and to work with FDA illness reporting from a strengthened MSSP, conducted by NMFS, to: (1) to develop an integrated Federal/State, CDC program, would provide adequate Determine how often consumer hazards HACCP-based seafood control program. verification of the effectiveness of the occur; (2) set specific goals, objectives, 171. Approximately 12 comments, program. However, two other comments and operational strategies for the representing processors, trade stated that the success of the seafood HACCP program; and (3) provide a associations, and State government HACCP program cannot be measured means by which the program’s success agencies, recommended that FDA solely by a decrease in illnesses, can be measured. coordinate its HACCP program with because many food-borne illnesses are FDA has historically collected and existing State and Federal seafood the result of problems in the retail analyzed surveillance samples during control programs. Several comments sector, which is neither covered by and outside the course of its routine emphasized that a coordinated effort these regulations nor adequately inspections. The purposes for these would ensure uniform application and regulated by the States. sample collections, in many ways, align interpretation of HACCP principles, The agency agrees with those with those suggested by the comment. while preventing duplication of effort comments that suggested that the The agency is committed to continued that wastes limited enforcement ultimate goal of these regulations should surveillance sampling and intends to resources. One comment stated that be the improved safety of fish and use such sampling in an assessment of such a coordinated effort would be fishery products—a reduction in the the HACCP program. facilitated if only a single HACCP plan actual number of seafood-related 170. Another comment suggested that were required for each processing illnesses. FDA will continue to closely HACCP will only be successful in facility, rather than one that was monitor the CDC system, as well as improving confidence in seafood if the designed to meet FDA requirements and reports of illness and death attributable program is accompanied by a consumer another that would meet State requirements. Another comment noted to the consumption of seafood that it education effort that explains the that a multitude of differing HACCP receives from other sources, for trends benefits of HACCP. The comment regulations would only serve to confuse that may indicate an emerging problem encouraged FDA to perform a baseline processors and dilute the effectiveness or the intensification or modification of study that assesses the level of of the Federal program. The comment an existing problem. However, the consumer anxiety with respect to further recommended that FDA work agency also agrees with those comments seafood consumption and compare it to with AFDO to promote State laws and that suggested that, because many of the the results of a study that it performs regulations that are compatible with seafood-related illnesses are attributable sometime in the future. FDA agrees that another major goal of FDA’s HACCP program. to recreational or subsistence fishing or these regulations is to increase One comment suggested the formation to problems in the retail and food- consumer confidence in the safety of of a task force representing the food service sectors (Ref. 7, pp. 2; 15; 27; and seafood. The agency recognizes that industry, FDA, USDA, and DOC to work 28), improvements in process controls publication and enforcement of towards the goal of reducing regulatory that result from the implementation of regulations aimed at improving seafood duplication. HACCP may not be fully reflected by a safety alone will not achieve that goal. The agency agrees that there is a need reduction in the number of illnesses. Consumers must be informed of the for Federal/State partnership to Additionally, as has been previously benefits of producing products under facilitate the efficient implementation of discussed, the CDC system encompasses HACCP preventive controls. Within its HACCP programs. FDA believes that only reported illnesses and is an budgetary constraints, the agency coordination with the States would imperfect means of judging reductions intends to engage in a program of permit both the agency and the States to in actual numbers of illnesses. FDA is consumer education for that purpose. leverage their inspectional resources. supportive of a strengthening of the CDC The prospect of baseline and followup FDA, as well as the States, would reporting system. studies of consumer confidence (or benefit by dividing the workload and Based in part on the comments anxiety) will also be considered. sharing data and other information. received, the agency will be looking at Such coordination would also benefit ways to assess a relationship between P. Other Issues industry through consistent inspections success of the HACCP program and FDA received a number of additional and regulatory requirements. levels of consumer confidence, levels of comments that did not address any The agency has already begun to violative product in the marketplace, specific provision of the proposal, coordinate its efforts with the States on improvements in the quality and although some of them were in response seafood. The formation of the Alliance, quantity of preventive controls to invitations in the preamble to to which AFDO is a member, is one throughout the industry; and the results comment on various subjects. such endeavor. The Alliance is of FDA and cooperating State and described in detail in the ‘‘Training’’ foreign inspections. As indicated in the 1. Relationship to Other Programs section of this preamble. summary of the Regulatory Impact In the preamble to the proposed With FDA’s support, AFDO passed a Analysis elsewhere in this preamble, regulations, FDA invited comment on resolution supporting the development FDA is planning to evaluate key features how FDA’s HACCP program for seafood of FDA/State partnership agreements at of this program within the first several processors should mesh with existing its 1994 meeting in Portland, ME (Ref. years of implementation. This State HACCP programs for seafood, in 220). The resolution specifically evaluation will include an assessment of order to avoid imposing inconsistent recommended that HACCP be the basis its effectiveness. Federal and State HACCP requirements. of such partnerships and noted the Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65175 shared roles of FDA and State regulators through Federal/State partnerships to While the agency is confident, based in seafood safety, the limited resources seek consistency in State regulatory in part on its experience reviewing of both levels of government, and the approaches to HACCP for seafood records in the low-acid canned food existence and the potential impact of inspection and through the NSSP program, that it can detect falsification, the Alliance. process and the ISSC to attain this goal FDA also expects from experience that Meanwhile, FDA is increasing its use specifically for molluscan shellfish. it will be alerted to possible wrongdoing of partnership agreements with State Moreover, processors in each State must from time to time by employees of enforcement agencies. For instance, the comply with Federal HACCP processors even in the absence of Northeast Region of FDA has entered requirements if their product moves in whistleblower protection. FDA has into a threeway partnership agreement interstate commerce. For these reasons, received, and acted upon, confidential with the Northeast Food and Drug the agency has concluded that there is information from employees of Officials Association and individual no need for Federal preemption of State regulated firms for decades. This States to provide industry with HACCP regulatory requirements. assistance has proven invaluable on training at the retail level. FDA also 174. Several comments encouraged many occasions. The only protection to expects to enter into partnership FDA to work closely with NMFS to these employees available from FDA has agreements with States to implement coordinate FDA’s program with the been confidentiality. HACCP pilot programs for foods other existing NMFS’ HACCP program. The The question raised by the comments than seafood. FDA’s Northeast Region comments noted that cooperation with is whether, in addition to the actions has already signed such an agreement NMFS would help the two agencies against the product or the processor that with the Commonwealth of avoid wasteful duplication of effort and would be available to FDA as a result of Massachusetts, and more are would reduce the burden on those firms violations of the requirements of the act anticipated. already operating under the NMFS and these regulations, there must be These initiatives demonstrate the program. specific protection for employees in agency’s desire to coordinate its efforts FDA agrees with these comments and order for the program to succeed. The with the States. The agency’s notes that FDA and NMFS are agency has concluded that, like other cooperative efforts in the area of HACCP coordinating their HACCP programs to FDA programs, this program can be reflect a trend. The agency has used successful in the absence of specific ensure compatibility. Nonetheless, FDA cooperative efforts in other areas, such whistleblower protection, and that advises that the NMFS program is a as pesticide sampling and workplan congressional action would be necessary voluntary, fee-for-service program and is sharing. FDA will continue to explore to provide protection other than likely to continue to include features ways to coordinate the Federal and State confidentiality. role in the regulation of seafood. that go beyond the requirements of these FDA cannot provide whistleblower 172. A number of comments regulations, especially in the area of protection in these regulations. FDA recommended that States act as the preventive controls for economic fraud believes—and case law bears out—that primary enforcement agencies for these and plant and food hygiene. there must be a nexus between the HACCP regulations, while FDA’s A 1974 MOU between FDA and conduct being required by regulations responsibility would be to evaluate the NMFS recognizes the respective roles of and the focus of the underlying statute, States’ compliance with HACCP the two agencies and commits the two in this case primarily section 402(a)(4) inspection protocols. Some of these agencies to consistency and of the act. An analysis of the application comments suggested that such a cooperation. FDA will continue to work of section 402(a)(4) of the act to these program could be patterned after the with NMFS to maintain a coordinated regulations can be found in the ‘‘Legal NSSP. Federal effort. Basis’’ section of this preamble. FDA is adopting these HACCP 2. ‘‘Whistleblower’’ Protection While FDA has determined that an regulations to implement and enforce assessment of processing risks and a the act. While FDA plans to work 175. A few comments urged that these plan that ensures that these risks are cooperatively with the States in all ways regulations include ‘‘whistleblower’’ minimized has the requisite nexus to possible, the agency cannot delegate its protection for employees of seafood section 402(a)(4) of the act, and that this authority under the act. It is possible processors. Whistleblower protection is nexus justifies adopting these that in some aspects of seafood designed to protect workers from being regulations, the agency does not see a processing, the States will serve as the fired or otherwise discriminated against sufficient nexus between whistleblower primary enforcement agencies, with for revealing wrongdoing by their protection and the prevention of FDA serving primarily an auditing employers. The wrongdoing in this case, adulteration of food. If a firm retaliates function. However, responsibility for presumably, would likely involve the against an employee who brings enforcing the act and these regulations falsification of HACCP records. The complaints or other information about must remain with FDA. comments argued that: ‘‘Whistleblowers the firm to FDA, the implication of such 173. A number of comments, from are iispensable as the eyes and ears for an action is that there is a condition at processors, trade associations, and one overextended FDA personnel making the firm that may need investigation, consumer advocacy group, maintained limited spot checks. The public’s line of not that the products produced by the that FDA’s HACCP regulations should defense will be no stronger than the firm are necessarily adulterated. It may preempt any existing State HACCP shield protecting industry worker’s be the case that the products are programs. The comments contended rights to obey and help enforce this adulterated, but such a conclusion does that Federal preemption would law.’’ not flow as directly from section ultimately reduce confusion caused by One concern that FDA has heard 402(a)(4) of the act as does the conflicting State programs, reduce costs, about the credibility of a HACCP system conclusion that seafood products not and promote uniformity. Examples of is that important records can be produced under a HACCP plan have the specific areas of conflict were not falsified. It is alleged that, without been produced under insanitary provided by the comments. whistleblower protection, it is much conditions whereby they may have been As was previously stated, FDA less likely that the agency will know rendered injurious to health. For this intends to work through AFDO and about falsifications. reason, FDA concludes that it lacks 65176 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations clearcut authority to provide handling. In addition, FDA asked for instructions would increase consumer whistleblower protection in these comment on appropriate education and confidence in these products. One regulations. information that should be directed industry comment noted that a task toward consumers and recreational force composed of industry, Federal and 3. Separation of Quality Control (QC) fishermen, even though education State agencies, and consumers should and Production aimed at these groups is actually outside agree on the appropriate statement. 176. A few comments requested that the scope of this rulemaking. FDA made Some comments indicated that safe the regulations mandate structural this request based on a recognition that handling instructions might be independence within a processing firm HACCP cannot reasonably be expected appropriate for high-risk products. between ‘‘HACCP QC [quality control] to solve every problem. The agency The remainder of the comments on personnel’’ and ‘‘production’’ recognizes that HACCP must be this issue disagreed that safe handling personnel. Otherwise, according to the integrated into a comprehensive instructions for seafood should be comments, ‘‘HACCP QC personnel program for seafood safety. Education is required by FDA. Many of these could still be hired and fired by a another important component of that comments noted that most seafood production supervisor.’’ program. As one comment noted: products include such instructions FDA does not believe that a change in voluntarily. One trade association the regulations would be beneficial in ** * the responsibility for seafood safety should be met at every level of seafood commented that such a requirement this regard. It is important to recognize distribution, from harvesters to processors to would limit retailers’ flexibility and that, under HACCP, production retailers, restaurants and, finally, the creativity and impose significant new personnel are the observer/operators consumers themselves. Regulations are not a costs on retailers and consumers. Most who perform the initial monitoring of substitute for informed and responsible of those comments noted that requiring CCP’s as well as the recordkeeping that behavior and it is impractical to extend the scope of the proposed regulations to new information would detract from documents the results of this other labeling requirements. monitoring. The operation of the everyone involved in handling and consuming seafood. FDA appreciates these comments and HACCP system must involve the whole The comments overwhelmingly the different points of view that they organization, not just QC personnel. represent. The agency will use the However, it is reasonable to expect endorsed the value of education. They comments in its deliberations on this that, where practical, verification strongly supported education for: (1) issue. activities should be performed by Consumers on the handling and 179. Finally, FDA described some of individuals other than those who made purchasing of seafood, especially its educational efforts aimed at the records in the first place. For through brochures at the point of medically compromised individuals verification, the agency encourages the purchase and information available at about avoiding raw molluscan shellfish kind of organizational separation that is pharmacies, and on the significance of and invited comment on types of being urged in the comments. HACCP, especially with regard to the The agency recognizes, however, that government’s verification role; (2) education and information activities many seafood companies will not be recreational fishermen, provided by the that might be useful in this regard. The large enough to have distinct, State during licensure (with guidance agency received about a dozen independent organizational units that from the Federal government) and comments on this subject. can verify each other’s work. The through articles in popular fishing and Most of these comments addressed seafood industry is characterized by outdoors magazines; (3) subsistence whether there should be mandatory small businesses. FDA has concluded fishermen; (4) retailers, including food warning labeling for raw molluscan that such a requirement is not practical service and restaurants. shellfish. A majority of the comments for this industry. FDA greatly appreciates these stated that the agency should require It is worth noting that the regulations comments. The agency agrees that warning labeling. Three comments from at parts 113 and 114 for low-acid education is an essential consumer groups stressed the need to canned foods and acidified foods complementary activity to HACCP as protect high-risk individuals. One State contain recordkeeping requirements and well as to other aspects of FDA’s overall government commented that warnings some verification requirements that are seafood program. The comments will be for raw molluscan shellfish should be similar to the provisions of these taken into account as the agency tied to specific locations and times of regulations. In certain respects, parts develops its educational program. year. One professional association 113 and 114 served as models for the 178. FDA also invited comment on requested that the warning state that the seafood HACCP program. Those whether the agency should consider shellfish should only be eaten if it is regulations have succeeded even though proposing to require handling certified and tagged. they do not require a separation instructions for consumers on the Three comments stated that warning between QC personnel and production labeling of seafood. Any action that FDA labels would be inappropriate. One personnel. Given this history, the were to take along these lines would be comment noted that shellfish are not agency is reluctant to mandate the as part of a separate rulemaking. consumed in enough quantity to be a internal structure of seafood processors. The agency received about 20 problem. Another comment stated that comments on this issue. Approximately warning labels would unduly alarm 4. Education half of those comments supported the those not at risk and that better channels 177. FDA received a number of notion of mandatory safe handling exist for educating those at risk. comments on the subject of seafood instructions. One business noted that A few comments did not specifically safety education. These comments were safe handling instructions would help to address warning labels but in response to an invitation in the ensure the safety of a product through recommended that FDA target advice preamble to the proposed regulations for the distribution chain, while another directly to compromised individuals. comments on risk reduction activities business said that such instructions had Those comments suggested that FDA that could be regarded as a real potential to decrease seafood- direct information to the medical complementary to HACCP, primarily related illness. One individual community involved in the treatment of directed toward postprocessing commented that safe handling those individuals. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65177

Again, FDA thanks the comments for market impacts. The other comment that effectiveness of HACCP. The comment providing views on a matter that is mentioned this subject was from an cited: outside the scope of this rulemaking. academic, who expressed the view that [P]oor commitment by company FDA is working to provide information the regulations will have a major impact management and lack of allocation of to at-risk populations and its strategy on on tribal groups involved in fisheries necessary resources; improper training; lack how best to do so is evolving. The and contains unfunded Federal of understanding and planning in all stages agency will take the comments into mandates. The comment did not of implementation of a plan[,] and failure to account as it develops policy in this elaborate. Neither of these comments recognize the need to understand the area. justifies any change in these regulations. corporate culture change which must In summary, the agency agrees that The agency remains interested in accompany an effective HACCP program. education is an essential fostering consultation with tribal FDA agrees with this comment but complementary activity to HACCP as communities as they see fit and hopes that company management will well as to other aspects of FDA’s overall encourages correspondence from tribal embrace HACCP and recognize the seafood program. The comments governments. benefits that it offers to the firm. relating to education will be useful to 7. HACCP System Improvements III. Paperwork Reduction Act of 1995 the agency as it develops its education programs. 182. A comment urged that there be This final rule contains collections of a process to continually amend or information that are subject to review by 5. Traceback Mechanisms update these regulations. the Office of Management and Budget 180. One comment recommended that FDA points out that such a (OMB) under the Paperwork Reduction FDA develop and incorporate methods mechanism exists in its regulations. Act of 1995 (Pub. L. 104–13). The title, to trace back fish and mandate such Under § 10.30 (21 CFR 10.30), interested description, and respondent description traceback in these regulations. The persons are provided with a process by of the information collections are shown comment described the use of bar codes which they can petition the agency to below along with an estimate of the and computer-based tracking numbers amend and update these regulations. annual recordkeeping and periodic by a meat products company that enable From a less mechanistic viewpoint, reporting burden. Included in the it to trace a specific cut of meat from a the agency recognizes that these estimate is the time for reviewing store or restaurant to its source. regulations represent a pioneering instructions, searching existing data The agency acknowledges that program that has not been attempted sources, gathering and maintaining the traceback to the water would be useful before. While the agency believes that data needed, and completing and for certain species of fish associated sufficient groundwork has been laid to reviewing the collection of information. with certain hazards, e.g., ciguatoxin. adopt these regulations and to begin to Title: Reporting and recordkeeping On the other hand, traceback to the implement them, FDA also requirements for processors and water for scombrotoxin would not be acknowledges that full scale importers of fish and fishery products particularly useful, although traceback implementation will reveal under the provisions of 21 CFR parts through the distribution chain to find modifications that may be necessary, 123 and 1240. Procedures for the Safe out the source of mishandling would be both in the short and long terms. and Sanitary Processing and Importing useful. The agency urges the industry to Consequently, the agency will be highly of Fish and Fishery Products. consider this comment. FDA advises receptive to feedback from all parties Description: This regulation that it is willing to explore this idea who are affected by these regulations implements the use of Hazard Analysis further, although not as part of this and will remain open to changes that and Critical Control Point (HACCP) rulemaking. are necessary in the regulations. The methodology to ensure that processed ‘‘Verification’’ section of this preamble and imported fish and fishery products 6. Tribal Governments reflects the agency’s interest in are safe within the meaning of sections 181. FDA received a few comments on evaluating this program. 402(a)(1) and 402(a)(4) of the Federal the effect of these regulations on tribal 183. A number of comments asked for Food, Drug, and Cosmetic Act (21 U.S.C. governments. The preamble to the improvements in the foodborne-illness 342(a)(1) and 342(a)(4)). proposed regulations noted that reporting system operated by CDC. Description of Respondents: Executive Order 12875 of October 26, Some comments urged collaboration Businesses or other for profit 1993, requires, among other things, between FDA and CDC. One comment organizations. consultation with tribal governments advocated the creation of an active Although the January 28, 1994, before the formal promulgation of reporting system. proposed rule provided a 60 day regulations containing unfunded These comments are essentially comment period (extended to 90 days in Federal mandates. While FDA does not outside the scope of this rulemaking. the April 7, 1994, Federal Register, 59 believe that these regulations impose an Nonetheless, the agency recognizes that FR 16578) under the Paperwork unfunded Federal mandate, the agency the strength of the foodborne-illness Reduction Act of 1980, and this final wishes to foster consultation on matters reporting system bears directly on the rule incorporates the comments that might significantly affect tribal ability of the agency to measure the received, as required by 44 U.S.C. communities. Consequently, FDA public health impact of HACCP. Both section 3507(d), FDA is providing requested comment on the economic FDA and CDC agree that underreporting additional opportunities for public effect of the regulations on tribal is an undesirable feature of the current comment under the Paperwork governments. system. FDA and CDC have been Reduction Act of 1995, which applies to FDA received no comments from collaborating on an active-type reporting this final rule and was enacted after the tribal governments. One comment, from system. The limiting factor, however, expiration of the comment period. a tribal business, stated that the impact will always be resources. Significant Therefore, the agency solicits public of the regulations on tribal governments improvements in the current system comment on the information collection will be beneficial because they will will involve considerable expense. requirements in order to: (1) Evaluate result in safe products, positive 184. One comment provided views on whether the proposed collection of consumer perceptions, and positive factors that would limit the information is necessary for the proper 65178 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations performance of the functions of the collection techniques or other forms of approve, modify or disapprove the agency, including whether the information technology, e.g., permitting information collection requirements. information will have practical utility; electronic submission of responses. Sections of this final rule require that (2) evaluate the accuracy of the agency’s Individuals and organizations may certain businesses collect information estimate of the burden of the proposed submit comments on the information and keep records. Under Public Law collection of information, including the collection requirements by February 16, 104–13 Federal agencies are required to validity of the methodology and 1996, and should direct comments to estimate the hours and costs attributable assumptions used; (3) enhance the FDA’s Dockets Management Branch to collections of information, as defined quality, utility, and clarity of the (address above). in 44 U.S.C. 3502(3), that are required information to be collected; and (4) Prior to the effective date of this final by Federal regulation. Table 1 sets forth minimize the burden of the collection of rule, FDA will publish a notice in the an estimate of the hours that are information on those who are to Federal Register when the information required annually for compliance with respond, including through the use of collection requirements in this rule are each section in part 123 that requires appropriate automated, electronic, submitted for OMB approval, and again regulated entities to collect or record mechanical, or other technological when OMB makes a decision to information.

TABLE 1.ÐESTIMATED AVERAGE ANNUAL INFORMATION COLLECTION AND RECORDKEEPING BURDEN

No. of re- No. of re- sponses Hours per Total 21 CFR spond- per re- re- hours ents spond- sponse 2 ent 1

123.6(a),(b),(d) ...... 4,850 1 16 77,600 3 123.6(c)(5) ...... 4,850 4 0.3 5,280 123.8(a)(1),(c) ...... 4,850 1 4 19,400 123.12(a)(2)(ii) ...... 1,000 80 0.2 16,000 123.6(c)(7) ...... 4,850 280 0.3 470,400 123.7(d) ...... 1,940 4 0.1 1,940 123.8(d) ...... 4,850 47 0.1 22,795 123.11(c) ...... 4,850 280 0.1 135,800 123.12(c) ...... 1,000 80 0.1 8,000 123.12(a)(2) ...... 20 1 20 4,000 3 123.10 ...... 24 1 24 116,400 3 First year total burden hours ...... 877,615 Annual recurring total hours ...... 679,615 1 Based on an estimated average of 280 working days per year. 2 Estimated average time per 8 hour work day unless one time response. 3 Nonrecurring burdens. The above estimates include the information collection requirements in the following sections: 123.16 Smoked FishÐprocess controls (see 123.6(b)) 123.28(a) Source ControlsÐMolluscan Shellfish (see 123.6(b)) 123.28(c),(d) RecordsÐmolluscan shellfish (see 123.6(c)(7)) 123.9 Records control general (see recording and records)

The time and costs of these activities certain corrective actions and to information collection and will vary considerably among verification procedures. recordkeeping, and, more significantly, processors and importers of fish and In addition, the estimate does not did not account for existing regulatory fishery products, depending on the type include collections of information that requirements and usual and customary and number of products involved, and are a usual and customary part of business practices, as described above. the nature of the equipment or businesses’ normal activities. For The agency has recalculated the instruments required to monitor critical example, the tagging and labelling of recordkeeping burden in a manner that control points. The burdens have been molluscan shellfish (§ 1240.60) is a is more consistent with the intent of estimated using the typical small customary and usual practice among Public Law 104–13. Therefore, the seafood processing firm as a model seafood processors. Consequently, the burdens presented in Table 1 are those because these firms represent a estimates in Table 1 accounts only for actually associated with collecting and significant proportion of the industry. new information collection and recording the pertinent HACCP The burden estimate in Table 1 recording requirements attributable to information. The burdens for HACCP includes only those collections of part 123. plan development, plan reassessment, information under this rule that are not There are no additional capital costs and record review are also included in already required under current statutes associated with this regulation that are the recalculated burden. In estimating and regulations and are being added by not also attributable to the preexisting the time for the preparation of a HACCP this rule. For example, the current good requirements of part 110. plan, the agency believes that a manufacturing practices provisions in FDA estimated in the proposal that significant portion of the training hours 21 CFR part 110 already require that all the total burden to all respondents can also be characterized as time spent food processors ensure good sanitary would be 2,826,850 hours. That on preparation of the plan. practices and conditions, monitor the estimate, however, significantly Additionally, the agency recognizes quality of incoming materials, monitor overestimated the burden because it that the regulations will place a burden and control food temperatures to included activities performed by on seafood importers. For this reason, prevent bacterial growth, and perform domestic processors that are not related FDA has included in the burden Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65179 estimate the time necessary for directs agencies to assess all costs and FDA has also concluded that, pursuant importers to develop a written benefits of available regulatory to the Unfunded Mandates Act, the verification plan, verify compliance of alternatives and, when regulation is regulatory option selected is the least imports, and keep records of their necessary, to select regulatory burdensome option to accomplish the verification activities. approaches that maximize net benefits goal of controlling all physical, Few comments provided information (including potential economic, chemical, and microbiological hazards on the number of hours that a processor environmental, public health and safety reasonably likely to be present in would expend on information collection effects; distributive impacts; and seafood. and recordkeeping, as described in the equity). The Regulatory Flexibility Act As a part of the preamble to the preamble to the proposed regulation. (Pub. L. 96–354) requires analyzing proposed regulation, FDA published a One comment estimated that the annual options for regulatory relief for small summary of the Preliminary Regulatory burden would vary from 200 to over 700 businesses. Impact Analysis (PRIA) and placed on hours, depending on the type of The Unfunded Mandates Reform Act file with FDA’s Docket Managements product, and another comment (Pub. L. 104–4) requires (in section 202) Branch the complete PRIA. In addition, suggested that one hour per day, or 365 that agencies prepare an assessment of FDA has placed the full final Regulatory hours per year, would be required. One anticipated costs and benefits before Impact analysis on file at Dockets comment stated that the agency’s proposing any rule that may result in an Management Branch (address above). estimate of 650 hours per year was annual expenditure by State, local and FDA has fully reviewed the reasonable. Another comment estimated tribal governments, in the aggregate, or information on which the PRIA was four to five hours per day, or 1,820 by the private sector, of $100,000,000 based, the comments on the PRIA, and hours per year as the likely burden. (adjusted annually for inflation). The other available information on the costs None of these comments provided Unfunded Mandates Reform Act also and benefits of HACCP for the seafood information to support how the requires (in section 205) that the agency industry. Based on this review, FDA has commenters arrived at their estimates. identify and consider a reasonable arrived at two estimates of the costs in It seems likely that the estimates number of regulatory alternatives and, this final rule as well as upper and suggested by the comments were from these alternatives, select the least lower estimates of benefits. As can be calculated based on the same errors that costly, most cost-effective, or least seen in the agency’s summary of costs the agency made in the proposal, that is, burdensome alternative that achieves and benefits are summarized in Table 2, by combining the burdens associated the objective of the rule. Even though FDA believes that the costs of the final with HACCP data collection and FDA finds that the costs of this final rule will range from $677 million to recordkeeping with other HACCP rule may be below $100 million a year, $1.488 while the benefits will range activities unrelated to information estimating these costs is a difficult task from $1.435 to $2.561 billion. In its final collection and recordkeeping, with involving uncertainties. This analysis, analysis, the agency maintains that the usual and customary information together with the preamble published in total benefits of this mandatory seafood collection and recordkeeping practices, the Federal Register and supporting HACCP rule will exceed the total costs. and with collections of information analysis and materials, constitutes a Regulatory Options required by the provisions of the final RIA. Therefore, FDA has treated Federal Food, Drug, and Cosmetic Act the final rule as an economically The agency raised and received and implementing regulations. This significant regulatory action under comment on a number of regulatory conclusion is supported by the fact that Executive Order 12866. Consequently, options in the PRIA. The most some of the comments expressed the agency has completed this full RIA significant two options raised were agreement with the agency’s which demonstrates that this rule is regulating only high risk products or the calculations. For these reasons, FDA consistent with the principles set forth most serious hazards and providing concludes that no changes in its in the Executive Order and in these two regulatory relief for small businesses. corrected calculations are necessary to statutes. In addition, this document has The first option is inconsistent with the respond to the comments. been reviewed by the Office of objective of this regulation, to control all IV. Economic Impact Management and Budget as an physical, chemical or microbiological economically significant regulatory hazards reasonably likely to be found in A. Introduction action under Executive Order 12866. seafood products. Although FDA has In accordance with Executive Order FDA has concluded that the net benefits not granted relief only for small 12866 and the Regulatory Flexibility of this rule (benefits minus costs) are business, the agency has extended the Act, FDA has examined the impacts of largest for the regulatory option selected compliance date for all firms from 1 the final rule. Executive Order 12866 as specified by Executive Order 12866. year to 2 years.

TABLE 2.ÐSUMMARY OF TOTAL COSTS AND BENEFITS

Costs adjusted Costs from from NMFS Benefits lower Benefits upper Year FDA models model (mil- (millions) (millions) (millions) lions)

1 ...... $69 $162 $73 $108 2 ...... 42 9173 108 3 ...... 41 83 85 156 4 ...... 38 80 87 158

Total1 ...... 677 1,482 1,435 2,561 1The total defines the total discounted costs and benefits beyond the 4th year and discounted at 6 percent. 65180 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations

B. Costs the agency has completed a full TABLE 3.ÐDISAGGREGATED COSTS Regulatory Impact Analysis. FROM ADJUSTED NMFS MODELÐ In the PRIA, FDA was reluctant to rely only on results of the limited experience The agency received approximately Continued with HACCP in the seafood industry. 230 comments on issues involving the Million FDA balanced the reports of some PRIA. These comments are fully seafood firms, which showed that the summarized and addressed in the full RIA which is included in the record as Total ...... 80 costs of HACCP were low, with a study Total discounted costs beyond the 4th year of the costs of HACCP that had been Reference 229. However, because of the and discounted at 6 percent, the costs are done under contract with NMFS by A. problems with these comments noted $1,482 million. T. Kearney, Inc. (Contract No. above, FDA did not generally use them NA88AA–H–SK006). This study in the revised estimates reported here 1. Alternative Model for Estimating the showed significantly higher costs (as and in the full RIA. The reasons for this Costs are more fully explained in the full RIA. reflected in the range of cost estimates In addition to the cost estimate based These adjusted NMFS model cost summarized above) but had several on the NMFS modeling, FDA is estimates result in per plant costs for flaws that engender skepticism about its presenting a second cost estimate for domestic manufacturers of $23,000 in results as well. For example, none of the these regulations. The uncertainties the first year and $13,000 in subsequent plants that were the subjects of the associated with the choices made by years. Total costs for compliance with study had actually implemented seafood processors to control hazards these regulations using the adjusted HACCP, and the system whose costs justify providing a range of potential NMFS data are shown in Table 3. FDA were studied was significantly more costs based on more than one model. demanding than the system embodied has also concluded that the PRIA In examples created by seafood in the 21 CFR part 123. Despite these represents a reasonable upper estimate experts within FDA, the cost of facts, the cost estimates in the PRIA of the costs of HACCP. Table 3 also compliance with these regulations was were based on the results of the NMFS summarizes the specific cost estimates estimated for two small hypothetical study because FDA considered it to that FDA arrived at using data from the seafood processors that the agency represent the best evidence available at NMFS model with cost refinements believes to be representative of a that time. received from commenters and FDA significant portion of the seafood seafood industry experts. As explained more fully below, FDA industry. One of the plants is assumed used modeling technique and the to be in substantial compliance with experience reported about seafood firms TABLE 3.ÐDISAGGREGATED COSTS existing CGMP requirements. Therefore, to produce estimates that are in general FROM ADJUSTED NMFS MODEL the costs experienced by that plant are agreement and that are approximately attributable exclusively to the one-fourth of those estimated in the Million establishment and maintenance of a NMFS study reported in the PRIA. HACCP system. The other plant has 1st Year: some CGMP deficiencies that the agency In estimating the costs in this PRIA, Domestic manufacturers and Im- there are three checks that have helped porters ...... $112 believes are typical of those displayed ensure the accuracy of the costs that Major plant repair and renovation 13 by seafood processors. This plant is would be imposed by adoption of this Sea Grant expertise ...... 1 identical to the first plant except for the regulation. The first is the cost Repackers and warehouses ...... 14 CGMP deviations. The costs calculated comments, but these, the agency’s Harvesters for rejected raw prod- for this second plant represent the cost analysis revealed, were in most cases uct ...... 1 associated with the establishment and rather general, not well supported, and Shellfish vessels ...... 3 maintenance of HACCP as well as costs of only marginal assistance. The second Foreign processors ...... 18 associated with the correction and is modeling by FDA experts based on monitoring of sanitation conditions. their experience with the use of HACCP Total ...... 162 The models concern two plants that in the seafood industry; working with cut and package tuna which is received aquatic species and the public health 2d Year: frozen and that also distribute orange problems that they present; inspecting Domestic manufacturers ...... 65 roughy fillets. The complexity of the and studying both seafood plants and Sea Grant expertise ...... 1 processing operations, and the nature low acid canned food plants (which Repackers and warehouses ...... 14 and number of hazards, are assumed to have operated under HACCP principles Shellfish vessels ...... 1 be roughly equivalent to that of the for almost two decades); and Foreign processors ...... 10 other types of operations. FDA participating in the FDA–NMFS seafood recognizes the difficulty in validating pilot. The results of this modeling are Total ...... 91 these assumptions. Nonetheless, the detailed below. The third source is results demonstrate that processors may information that FDA received from 3d Year: have costs that are significantly below firms that have actually implemented Domestic manufacturers ...... 65 the averages estimated by means of the HACCP. Even though FDA finds that the Sea Grant expertise ...... 1 NMFS report. As discussed later, data costs of this final rule may be below Repackers and warehouses ...... 14 received from firms that have IQF Shellfish plants ...... 3 $100 million, estimating these costs is a implemented HACCP are generally difficult task involving some Total ...... 83 supportive of the results of this uncertainties. The agency recognizes modeling. that the rule may affect in a material 4th Year: a. Small plant cost example 1. This is way a sector of the economy. Therefore, Domestic manufacturers ...... 65 the example of a firm that is a processor FDA has treated the final rule as a Sea Grant expertise ...... 1 of frozen tuna steaks and distributor of significant regulatory action under Repackers and warehouses ...... 14 imported orange roughy fillets who Executive Order 12866. Consequently, receives all fish frozen. This plant is Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65181 located in a major seafood processing already occurring and the marginal cost iii. Verification. (8) Record review— region, so there is no need for plant for the recordkeeping is negligible. ($400). This involves a review of five personnel to travel to other cities to The processor drills a representative sanitation records, five receiving receive training as it would be available sample of each lot and performs an records, and a log book for the cutting locally. This processor operates 280 organoleptic examination for operation. These are expected to be very days per year. The plant manager is paid decomposition of the tuna. It is assumed simple (e.g., check mark records). $15 per hour and production workers that this monitoring is not being done Consequently, this review is expected to are paid $8.50 per hour. No food safety previous to this regulation and takes 20 take 30 minutes per week billed at $15 hazards are reasonably likely to occur in minutes per lot for 4 lots per day. per hour. orange roughy, so a written hazard Monitoring is billed at $8.50 per hour. (9) Review hazard analysis & HACCP analysis shows hazards for tuna only. Also, there is a cost for a new drill ($50) plan—($60). This is expected to take 4 This processor has no need to make and it is assumed that recordkeeping hours per year at $15 per hour. CGMP improvements so the plant costs costs are negligible. (10) Administrative changes—20 are limited to the following: (5) Cutting CCP (metal fragments)— percent of all of the other costs in the (1) Training—($760). This is ($0). A worker checks the saw blade at first year and 10 percent in the second calculated as follows: $400 tuition plus every break to look for broken saw teeth year. and keeps a log of checking on the teeth. the opportunity cost of training time b. Small plant cost example 2. The Monitoring takes a few minutes per ($24 hours x $15 per hour). The categories of costs that are different from break. It is assumed that there is a processor is expected to do most of the Example 1 are explained below. hazard analysis during the class. negligible marginal cost for the (2) HACCP Plan Refinement—($240). monitoring and recordkeeping. Fish is (1) Plant Sanitation Audit—($2,800). This is calculated by taking 16 hours weighed, packed, labeled and returned This will need to be done 3 times daily billed at $15 per hour using the FDA to the freezer. taking approximately 20 minutes for Fish and Fishery Products Hazards and ii. Corrective actions. (6) Problems each audit. It is assumed that some Controls Guide. with incoming product—($0). It is minimal sanitation assessment is (3) Plant Sanitation Audit—($0). This expected that product rejects in the first already being done once per day, but an is done 3 times daily for 20 minutes year would be higher but they would additional 40 minutes would be each time. However, because the firm is return to current levels in the second required to perform three adequate modeled as being in compliance with year as harvesters became aware of the audits. Again, it is assumed that there is existing CGMP’s, it is assumed that processor’s new requirements. The total a negligible cost for recordkeeping. these audits are already being done. It cost for the industry is $1 million for the (2) Extra Equipment Cleaning and is assumed that there is a negligible cost first year and zero in the following Sanitizing—($2,480). This is assumed to for recordkeeping. years. Because harvesters and not take 1 hour per day billed at $8.50 per i. Critical Control Points (CCP). (4) processors bear the cost of rejected raw hour. Also, additional water, and Receiving CCP (histamine)—($3,200). product, this cost is included in Table cleaning and sanitizing materials are This processor gets a freezing log from 4 as a separate line item and not in assumed to cost $100. the tuna harvester and makes a visual Table 3 which includes only costs borne (3) Eliminate Fly Infestation—($330). check of the fish to see that they are by processors. Torn screens need to be repaired taking frozen. The processor keeps a copy of (7) A saw tooth breaks every two 2 hours billed at $8.50 per hour. Also, the freezing log and makes a note of the years—($20). A worker needs to screening materials assumed to cost $15 visual check. The fish are then examine potentially affected product are needed. An exterminator to apply transferred to a plant freezer. The every 2 years. This is expected to take pesticides costs $300. monitoring takes 15 minutes per lot for 4 hours billed at $8.50 to check two Table 4 represents the models 4 lots per day. Similar monitoring is hours worth of cutting. described above in tabular form.

TABLE 4.ÐFDA MODELS OF SMALL PLANTS

Small plant 1 (no GMP Small plant 2 (GMP Category costs) costs) Year 1 Year 2Ð Year 1 Year 2Ð

Training ...... 760 0 760 0 HACCP plan refinement ...... 240 0 240 0 Sanitation audit ...... 0 0 2,800 2,800 Receiving CCP ...... 3,200 3,200 3,200 3,200 Cutting CCP ...... 0 0 0 0 Sawtooth monitoring ...... 20 20 20 20 Record review ...... 400 400 400 400 HACCP plan review ...... 60 60 60 60 Equipment cleaning ...... 0 0 2,500 2,500 Eliminate pests ...... 0 0 330 0 Administration ...... 940 370 2,100 900 Per plant costs ...... $5,600 $4,000 $12,400 $9,900

In order to estimate an average plant seafood industry, 20 percent of small the small firms are similar to the model cost from these FDA model plants, FDA firms are similar to the model plant that plant that is in compliance with current assumed that, based on the results of the requires some GMP improvements CGMP’s (Small Plant 1). The agency has agency’s 1990/1991 survey of the (Small Plant 2) and that 80 percent of also assumed that the cost of 65182 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations compliance for large firms is the same controls, formalized sanitation weighting the proportion of the industry as that of small firms. There are programs, and record keeping systems they are assumed to represent, average offsetting considerations that have led in place than small firms. Additionally, plant costs are estimated to be $6,400 in the agency to make this assumption in large firms are more likely to take on the first year and $4,800 in subsequent this model. For example, agency new monitoring regimes with their years. experience suggests that it is likely that existing quality control and production The foreign processor costs associated staffs than are small firms. The agency small firms will, on average, have larger with this rule and passed on to U.S. believes that these considerations would sanitation costs and thus incur greater consumers are estimated to be 13 counteract each other and should result expenses to rectify existing CGMP percent of the average domestic plant in fairly equal costs for large and small deviations. Large firms, on the other costs. The total cost of this regulation firms. hand, are more likely to have a greater To complete the FDA model, FDA using this method of cost modeling is number of products and processing assumed that exporters (one- half of the $71 million in the first year and $38 lines, resulting in greater costs of plan 1,000 large firms) would only need to million in the fourth year and beyond. development and monitoring. However, spend $1,000 in order to comply with Total costs for compliance with these the agency believes that large firms are this rule. Combining the two plant total regulations using the FDA model are more likely to already have preventive costs as reported in Table 4 and shown in Table 5.

TABLE 5.ÐDISAGGREAGATED COSTS FROM FDA MODEL

1st Year Costs: Domestic manufacturers and importers ...... $32 million. Major plant repair and renovation ...... 13 million. Sea Grant expertise ...... 1 million. Repackers and warehouses ...... 14 million. Harvesters for rejected raw product ...... 1 million. Shellfish vessels ...... 3 million. Foreign processors ...... 5 million. Total ...... 69 million. 2d Year Costs Domestic manufacturers ...... $ 23 million. Sea Grant expertise ...... 1 million. Repackers and warehouses ...... 14 million. Shellfish vessels ...... 1 million. Foreign processors ...... 3 million. Total ...... 42 million. 3d Year Costs: Domestic manufacturers ...... 23 million. Sea a grant expertise ...... 1 million. Repackers and warehouses ...... 14 million. IQF Shellfish plants ...... 3 million. Total ...... 41 million. 4th Year (and subsequent years) Costs Domestic manufactures ...... 23 million. Sea Grant expertise ...... 1 million. Repackers and warehouses ...... 14 million. Total ...... 38 million. Total Discounted Costs: Beyond the 4th year and discounted at 6 percent, the costs are $677 million.

There are a number of explanations found that only about 20 percent of the cooked, ready-to-eat products as well as that would account for the uncertainty firms were out of compliance. In warehouses and repacking operations. It between the FDA and NMFS models. addition, the FDA cost model assumes should be noted that these costs are Virtually all of the difference can be the simplest, least expensive corrective reported only as an additional source of explained by the two different estimates action to solve the CGMP violation. The information. They were not used to of what it would take to come into NMFS model did not use the same generate FDA’s model plants. compliance with 21 CFR part 110 approach in all cases. The cost information obtained from (FDA’s CGMP regulations). In the case 2. Other Cost Reports industry includes responses to a 1991 of the NMFS study, the contractors evaluation questionnaire from four firms estimated the cost of coming into full Reports received by FDA on the cost that participated in the FDA/NOAA compliance with all CGMPs. Using this of implementing HACCP discussed seafood HACCP pilot in 1990–1991. It methodology, they found that below appear generally to support the also includes information provided to approximately 80 percent of the plants results of FDA modeling across the FDA from seven firms through the were out of compliance. On the other seafood industry. While the modeling assistance of the National Food hand, the FDA model uses the results of was limited to certain types of small Processors Association. (These 7 firms FDA’s own survey of the industry, operations, the firms for which FDA has operate a total of 44 processing plants.) which only listed plants as being out of information on reported costs represent It further includes information from two compliance if the CGMP violations were a cross section of processing operation seafood trade associations, the National related to potential contamination of the types, including canned, fresh, frozen, Fisheries Institute and the New England seafood product. In this case, FDA smoked/salted, molluscan shellfish, and Fisheries Development Association Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65183

(NEFDA), which provided FDA with estimates developed for NMFS of the routine monitoring. Recording the summary information about member costs of operating HACCP systems for results of these observations, as required firms that had implemented HACCP small businesses are consistent with the by the regulations, need involve only systems. The 2 seafood trade FDA model and with the reports to FDA minimal additional cost. by trade associations discussed above.1 associations provided information on 16 3. Seafood Prices firms. NEFDA operated a HACCP pilot Thus, three independent sources of with member firms through a Federal information suggest that annual HACCP A number of comments referred to the grant. All of this information was costs, at least for small businesses, are effect that the regulation will have on received by FDA before the publication within a range of $3,000 to $6,000 per the price of seafood that consumers of the proposed regulations and was plant if sanitation costs are not experience at the retail level. In the reported in the PRIA. After the included. Although the HACCP cost PRIA, it was presumed that most of the publication of the proposal, FDA estimates made for NMFS did not cost of compliance of the proposed received information from a large include certain aspects of a HACCP regulations would be passed on to processor-exporter on its HACCP start- system such as HACCP plan consumers. In the PRIA, it was up costs. This processor reported start development, plan verification, and calculated that if the domestic industry up costs of $1,000 per plant. In total, taking corrective actions, the estimates passed on to consumers all of the costs FDA has information on 86 plants (Refs. did include the costs of operating estimated in the PRIA, prices for 129 and 223). HACCP systems for quality and domestically produced seafood would Many of these firms have economic adulteration in addition to increase by less than 1 percent in the implemented HACCP as participants in safety. These costs were not included in first year and less than one-half of 1 either pilot programs, the NOAA fee-for- the NMFS cost estimates reported here. percent in succeeding years. It was service program, or the State of Alaska The FDA HACCP system involves safety noted in the PRIA that price changes of program, and therefore their HACCP only and is therefore less expensive. such magnitude are unlikely to have a systems have been subject to some form It is also worth noting that three significant impact on general seafood of third party verification. Virtually all independent sources (FDA’s own purchases. Some commenters claimed that all of of these plants have developed HACCP inspection experience, NMFS the cost of the regulation would be born plans, many of which included critical inspection experience with plants by processors, and that none of the control points for quality or economic purchasing its voluntary inspection increase in cost would be passed on to fraud or both in addition to safety. In services, and the contractor’s report for consumers. These commenters this respect, many firms implemented a NMFS) confirm the existence of explained that seafood is currently at a more extensive form of HACCP than is sanitation deficiencies in some seafood plants. Because FDA holds that these disadvantage compared to other flesh being mandated by FDA. foods for consumers’ food dollars More complete information on start- conditions must be corrected under because seafood has a higher price per up costs received from 22 firms who existing requirements, the costs pound. If the relative price of seafood have implemented HACCP is associated with these corrections will be were to increase further, consumers summarized in Table 6. Some of these borne by processors regardless of would eat less seafood. The commenter costs are for multi-plant firms and some whether sanitation provisions are also explained that domestic seafood for firms operating only one plant. included in the seafood HACCP regulations or somewhere else. processors are at a competitive disadvantage compared with seafood TABLE 6.ÐSTART-UP COSTS Sanitation controls for processors may address a number of enteric pathogens that can be imported at low cost (i.e., No. of firms Start-up costs ($) discussed elsewhere in this analysis lower wages). If domestic processors including Salmonella, Shigella, were to raise their prices, seafood 4 <1,000 hepatitis A, L. monocytogenes, imports would take an even larger part 15 1,000±5,000 campylobacter, and C. botulinum. of the seafood market away from 1 5,000±10,000 Contamination may come from either domestically produced seafood. 1 10,000±15,000 the raw product or from poor hygiene Other comments said that processors 1 >20,000 practices such as insufficient control of will pass on all of the cost of the vermin (flies and rodents) or insanitary regulation, and that the regulation will FDA notes that there are several water. In addition, poor sanitation may cause the consumer price of seafood to uncertainties with these data. The cause contamination of the product with rise. Some said that the price increase agency does not have sufficient pesticides, lubricants, cleaning would be large enough to cause a information to extrapolate the costs compounds, or other toxic substances decrease in seafood consumption. observed by these firms to the entire because of improper labeling, storage or Both theories have some merit, industry. FDA also does not know the use. The system in the seafood HACCP although neither is completely correct. extent of previous HACCP-type regulations is based on the monitoring The agency agrees that, all other things activities in these firms so that they may of sanitation conditions by processors. remaining the same, an increase in the have different incremental costs than FDA is not aware of any method for price of seafood will decrease seafood the industry average. Additionally, for processors to take control of the consumption and increase the subsequent year costs, some of the firms sanitation conditions within their plants consumption of other fresh foods. reported costs that exceeded the start-up other than by a method that involves However, the decision of a consumer to costs shown in the table although some purchase a product depends on a were below, and it is not clear if costs 11 The costs referred to here are those estimated number of factors. that might be incurred in order to for NMFS for the type of HACCP system it was Seafood includes many invertebrate comply with CGMP’s are represented. studying. For the purposes of the PRIA and RIA, and vertebrate species which vary in Nevertheless, the range of reported FDA made adjustments to the costs estimated for price per pound, often by over 100 costs, are consistent with the FDA NMFS so as to be consistent with FDA’s own regulation. These adjusted costs from the NMFS percent, for a particular species model for a processing operation that models are the estimates presented earlier in this (depending, in part, on seasonal does not incur such costs. Notably, the document. supply). Such diversity, compared with 65184 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations meat and poultry, makes it clear that among other things, the presence or cost of the regulation by the total there is not perfect substitution among absence of close substitutes. Thus, for domestic production, the commenters the flesh foods. Nevertheless, data bases example, if there are close substitutes suggested estimating price changes for on food consumption are equally clear and the price of a good goes up, each market segment. The advantages of at showing that as people have consumers will not continue to this approach are that different types of increased their consumption of various consume the higher priced good but seafood are treated separately (the seafood products, they have reduced switch to one of the substitutes. change in the price of raw tuna might their consumption of meat and poultry. If manufacturers know that consumers be very different from the change in the There are other nonprice factors in the will not switch to a substitute when price of ready-to-eat shrimp cocktail) consumption decision. A consumer there is a price increase, then they are and that different sized firms are treated survey found that taste, quality, and free to pass along all of the increased separately (small firms may be forced to freshness were rated above price costs (from complying with the raise prices more than large firms). (‘‘moderately important’’) in decisions regulation) in the form of price FDA agrees that this method of to order seafood in a restaurant or to increases. However, where there are determining price changes is more purchase for preparation at home. In a close substitutes for seafood, such as legitimate than the method employed in survey of retailers’ experiences, other flesh foods, consumers respond to the PRIA. However, FDA did not receive consumers ranked quality ahead of price price increases by reducing their any information from commenters that in making seafood selections and rated consumption of the high priced good. would enable the agency to calculate the need for information on cooking as Rather than attempting to pass on all of prices in this manner. It is worth noting, a concern equal to price (Refs. 244 and the costs of the regulation in the form however, that the contractor that 225). of higher prices, producers must accept performed the study upon which many Another relevant consideration is the reduced profits and bear some, if not all, of the estimated costs in this RIA are fact that a disproportionate percentage of the burden of the cost increase. based did take product type into of seafood is consumed in restaurants as In very competitive markets, such as account when estimating cost increases. a luxury item where the cost of the raw the market for flesh food, where meat, That contractor estimated a range of cost material is not as important a factor in fish, and poultry are considered increases from negligible to 1.3 percent, the purchasing decisions made by these substitutes, producers bear the entire depending on the product. Again, it is consumers. burden of any increases in fixed costs. important to note that that study All of this information is consistent Fixed costs are costs that do not change, included costs for the control of types with other data in this analysis that despite the size of the firm and changes of hazards not covered by this final suggests that a 1 percent change in price in the level of output. Examples of fixed regulation. results in less than one-half of one costs are costs of plant, equipment, and Finally, while the methodology used percent change in seafood consumption. management; much of these costs are in the PRIA might not produce accurate Another major factor that lessens any expected to be borne by processors. price changes, it suggests that overall competitive cost advantage meat and Because large firms spread fixed costs price increases due to this regulation poultry products might experience from over larger output, they may be able to could well have a negligible effect on an increase in seafood cost is that USDA pass on these costs when smaller firms demand. is proposing similar HACCP regulations cannot. for meat and poultry. USDA’s proposal, In addition, also in the short run, C. Benefits if finalized for meat and poultry producers may bear some portion of the In the PRIA, FDA estimated that the products, suggests that all segments of variable costs that cannot be profitably proposed option, which is being the flesh food market may face cost passed on to consumers. Variable costs adopted in this final rule, would: (1) increases in the near future. It is entirely are costs that vary with changes in the Reduce the amount of foodborne illness possible that the price of seafood amount of output. Examples of variable that results from consumption of relative to meat and poultry will not costs are costs of raw materials and seafood and; (2) generate significant change. The agency agrees that some hourly labor. However, it is likely that nutrition benefits as a result of the seafood imports have a cost advantage much of the variable costs will be increased consumption of seafood over domestically produced seafood, passed on to consumers. (brought about by a decrease in primarily due to lower labor and capital When firms in a competitive market consumer anxiety) with a concomitant costs of production. However, because cannot pass on all of a cost increase in decrease in the consumption of meat the regulation applies to imports as well the short run, profits decline. Beyond and poultry; (3) reduce the amount of as domestic products and because some point profits become either so low rent seeking (rent seeking is a term importers from EU member nations will or negative that the firm is forced to economists have applied to activities soon be under HACCP requirements and close (discussed more fully in the which do not contribute to societal experiencing increased costs, it is Regulatory Flexibility Analysis below). welfare but only seek to transfer reasonable to assume that the price of In the long run, the exit of these resources from one party to another); imported seafood relative to domestic marginal firms reduces the industry and (4) generate export benefits by seafood will not change. supply (of seafood) and permits the allowing U.S. exporters to continue to In the short run, the ability of remaining firms to raise prices to cover export to countries requiring HACCP. producers to pass on cost increases is the full costs of production, both The last benefit, the export benefit, is largely determined by the elasticity of variable and fixed costs. Thus, in the characterized as the benefit to firms demand (the degree to which consumers long run, seafood prices will rise by the exporting to countries that require reduce their consumption of a good in full cost of the regulation. federal oversight and certification of response to a given increase in price) A few comments requested a better HACCP programs. In addition to the and the elasticity of supply (the degree analysis of price changes. These benefits cited in the PRIA, the agency is to which producers increase their commenters criticized the approach addressing benefits derived from production of a good in response to a used to estimate price increases in the reduced enforcement costs, and is given increase in price). The elasticity of Executive Summary of the PRIA. Rather discussing other unquantified benefits demand is determined in turn by, than dividing the estimated domestic of adopting the seafood HACCP Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65185 regulations. The agency has fully poor fishing practices by recreational relatively small in the near term because considered all of the comments on fishermen. there does not yet exist a rapid, benefits. These estimates are more fully In order to calculate the number of inexpensive test for this toxin. explained in the full RIA. What follows cases (annual cases resulting from Processors and commercial fishermen is FDA’s conclusion as to how these exposure to hazards associated with must rely on information about whether benefits should be valued. seafood consumption) that would be geographic areas are ciguatoxic. reduced by HACCP, each of the four Moreover, many illnesses are 1. Safety Benefits experts followed a series of methodical attributable to recreational harvest. In the tables below, FDA presents steps. The first was to determine the Hepatitis A virus: This illness derives revised estimates of the benefits of types of seafood associated with each mostly from molluscan shellfish. For mandatory HACCP for seafood hazard. The second step consisted of molluscan shellfish, the controls are processors. Several changes from the reviewing the various aspects of the rule harvesting from approved waters and preamble to the proposal are to determine the areas of seafood good sanitation in the plant. These noteworthy. First, based on the harvesting and processing that the rule regulations specifically involve both comment that said that FDA had could affect. The third step was to types of controls. The upper bound underestimated the number of cases, eliminate those cases that could not be number is 50 percent of the total FDA has reestimated the baseline affected by the rule. estimated number of illnesses largely numbers of cases for certain illnesses These would be cases that seafood because of the problems that states have (Ref. 226). Next, some changes were processors could neither eliminate in patrolling and controlling illegally made to the valuations of particular through processing nor prevent from harvested molluscan shellfish. cases, as better information was being introduced, either by their own Norwalk virus: This illness derives obtained concerning the probabilities of staff or by control over raw materials. from raw molluscan shellfish that are death per type of illness. Finally, as Cases caused or controlled by factors contaminated from human pollution in mentioned above, some changes have outside of the HACCP system include harvesting areas. Control involves been made to the estimates of the recreational harvest (approximately 20 harvesting from approve waters. These percentages of the illnesses reduced. percent of all seafood harvested) that regulations include this kind of control. Although Canada, for example, has does not pass through processing plants The upper bound number is 50 percent mandatory HACCP for its seafood and problems caused by restaurant, of the total estimated number of processors, no data exist on the efficacy supermarket or consumer improper illnesses largely because of the problems of HACCP. Therefore, for the cooking or mishandling. In addition, that states have in patrolling and percentages of the illnesses reduced, there will be some types of hazards that controlling illegally harvested FDA used three different types of its will not, for the foreseeable future, be molluscan shellfish and because of the experts (seafood experts, controllable by means other than uncertainty of the control of sewage epidemiologists familiar with microbial avoiding contaminated waters, which from harvesting and recreational hazards, and microbiologists) to address will not be 100 percent effective vessels. the efficacy of seafood HACCP. Each of (ciguatera, for example). Until rapid, Vibrio vulnificus: This illness these experts reviewed the literature on inexpensive tests are developed, HACCP essentially derives from eating raw each type of hazard as well as the cannot be 100% effective at controlling molluscan shellfish from the Gulf of requirements of HACCP. The ranges these hazards. Mexico. Vibrio vulnificus is a naturally reflect likely upper and lower bounds Once each expert had accounted for occurring, ubiquitous, marine organism. on how effective HACCP will be at those cases that could not potentially be The lower and upper bound numbers controlling production deficiencies by reached by this rule, the experts then reflect the fact that controls are newly processors, including indirect controls assessed the likely effectiveness of emerging for this organism and still exerted by processors on the owners of control steps associated with broad have uncertainties associated with harvesting vessels. In addition, the sanitation improvements and mandatory them. tables reflect the fact that some of the controls on specific hazards and specific Table 6a sets out the new estimates of cases of illness are not addressable by species. baseline cases of foodborne disease this rule as they are caused by either Ciguatera: Both the lower and upper related to HACCP and the range of cases consumer or restaurant mishandling or bound reductions in illness are averted by HACCP.

TABLE 6a.ÐESTIMATE OF ANNUAL CASES AVERTED

Estimated Number of Number of Hazard number of cases avert- cases avert- cases 1 ed (lower) 2 ed (upper) 1

Anasakis ...... 100 25 60 Campylobacter jejuni ...... 200 100 150 Ciguatera ...... 1,600 96 200 Clostridium botulinum ...... 10 3 5 Clostridium perfringens ...... 200 100 150 Diphyllobothrum latum ...... 1,000 250 600 Giardia ...... 30 15 23 Hepatitis A Virus ...... 1,000 150 500 Other Marine Toxins ...... 20 ...... 1 Norwalk Virus ...... 100,000 15,000 50,000 Other Vibrio's ...... 1,000 200 500 Paralytic Shellfish Poisoning ...... 10 ...... 1 Salmonella non typhi ...... 200 100 150 Scombrotoxin ...... 8,000 4,000 6,000 65186 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations

TABLE 6a.ÐESTIMATE OF ANNUAL CASES AVERTEDÐContinued

Estimated Number of Number of Hazard number of cases avert- cases avert- cases 1 ed (lower) 2 ed (upper) 1

Shigella ...... 200 100 150 Vibrio vulnificus (3d year) ...... 60 12 30

Total ...... 113,630 20,151 58,520 1 These numbers were determined in consultation with representatives from the Centers for Disease Control and Prevention. 2 The upper and lower bounds were determined by a panel of scientists at CFSAN (Dr. George P. Hoskin, Dr. Karl C. Klontz, Dr. Kaye I Wachsmuth and Dr. Thomas C. Wilcox. Table 7 reflects revised estimates of the total cost of seafood illness.

TABLE 7.ÐANNUAL COST OF SEAFOOD ILLNESS

Value per Total cost of Hazard case seafood illness

Anasakis ...... $1,703 $170,332 Campylobacter jejuni ...... 9,390 1,877,924 Ciguatera ...... 15,247 24,395,438 Clostridium botuli num ...... 223,252 2,232,524 Clostridium perfrin gens ...... 6,551 1,310,164 Diphyllobothrum latum ...... 2,753 2,752,617 Giardia ...... 6,104 183,112 Hepatitis A Virus ...... 22,669 22,668,870 Other Marine Toxins ...... 269 5,380 Norwalk Virus ...... 575 57,500,000 Other Vibrio's ...... 2,955 2,954,842 Paralytic shellfish poisoning ...... 92,356 1,200,628 Salmonella non-typhi ...... 8,199 1,639,756 Scombrotoxin ...... 339 2,708,755 Shigella ...... 16,750 3,349,961 Vibrio vulnificus ...... 2,008,917 120,535,039

Total ...... 245,485,342

Table 8 shows the estimates of the efficacy of mandatory seafood HACCP at reducing foodborne disease in the third year following the date of implementation (undiscounted).

TABLE 8.ÐESTIMATE OF THE EFFICACY OF MANDATORY HACCP AT REDUCING FOODBORNE DISEASE IN THE THIRD YEAR

Lower bound Upper bound Hazards estimate (3d estimate (3d year) year)

Anasakis ...... $42,583 $102,199 Campylobacter jejuni ...... 938,962 1,408,443 Ciguatera ...... 1,463,726 3,049,430 Clostridium botulinum ...... 558,131 1,116,262 Clostridium perfringens ...... 655,082 982,623 Diphyllobothrum latum ...... 688,154 1,651,570 Giardia ...... 91,556 137,334 Hepatitis A Virus ...... 3,400,331 11,334,435 Other Marine Toxins ...... 269 Norwalk Virus ...... 8,625,000 28,750,000 Other Vibrio's ...... 590,968 1,477,421 Paralytic Shellfish Poisoning ...... 46,178 Salmonella non-typhi ...... 819,878 1,229,817 Scombrotoxin ...... 1,354,377 2,031,566 Shigella ...... 1,674,981 2,512,471 Vibrio vulnificus (3d year) ...... 24,107,004 60,267,519

Total ...... 45,010,733 116,097,537

Finally, in response to the comments, FDA has attempted in Table 9 to associate particular hazards with categories of seafood (to the extent the data allow). Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65187

TABLE 9.ÐASSOCIATION OF PARTICULAR HAZARDS WITH CATEGORIES OF SEAFOOD

Estimated Hazards number of Affected species cases

Anasakis ...... 100 Raw Finfish. Campylobacter jejuni ...... 200 Cooked Ready-to-Eat Fish, Smoked Fish, Molluscan Shellfish. Ciguatera ...... 1600 Tropical, reef associated species of finfish. Clostridium botulinum ...... 10 Vacuum Packaged Fish, Smoked and Salted Fish. Clostridium perfringens ...... 200 Cooked Ready-to-Eat Fish, Smoked Fish, Molluscan Shellfish. Diphyllobothrum latum ...... 1000 Raw Finfish. Giardia ...... 30 Cooked Ready-to-Eat Fish, Smoked Fish, Molluscan Shellfish. Hepatitis A Virus ...... 1000 Cooked Ready-to-Eat Fish, Smoked Fish, Molluscan Shellfish. Other Marine Toxins ...... 20 Molluscan Shellfish. Norwalk Virus ...... 100,000 Molluscan Shellfish. Other Vibrio's ...... 1,000 Cooked Ready-to-Eat Fish, Smoked Fish, Molluscan Shellfish. Salmonella non-typhi ...... 200 Cooked Ready-to-Eat Fish, Smoked Fish, Molluscan Shellfish. Scombrotoxin ...... 8,000 Scombroid Species of Finfish. Paralytic Shellfish Poisoning ...... 10 Molluscan Shellfish. Shigella ...... 200 Cooked Ready-to-Eat Fish, Smoked Fish, Molluscan Shellfish. Vibrio vulnificus ...... 60 Molluscan Shellfish.

Total ...... 113,630

2. Summary of Safety Benefits in consumer confidence would offset a One commenter noted that the reason price increase resulting from HACCP large firms support HACCP is because The safety benefits are shown by year costs. they must have HACCP to export to in Table 10 (undiscounted). The agency was equally concerned Europe. The commenter noted that about possible nutrition benefits as to mandated HACCP would ‘‘ensure that TABLE 10.ÐSAFETY BENEFITS whether there would be an exact all domestic processing firms face the exchange in the nutrient profile between Lower bound Upper bound same costs, thereby reducing any Year benefits benefits fish as prepared and meat and poultry. competitive disadvantage.’’ The agency finds that some fish dishes FDA does not agree that this is a 1 ...... 32,957,233 67,897,751 as consumed are eaten fried or served justification for HACCP. The reason for 2 ...... 32,957,233 67,897,751 with heavy sauces, and that different implementing HACCP is to reduce the 3 ...... 45,010,733 116,097,537 species of fish have different fat profiles. incidence of foodborne disease. 4 and beyond 45,010,733 116,097,537 Thus, for some consumers who make However, FDA agrees that this ‘‘rent- substitutions of fish meals for meat and seeking’’ argument may explain some 3. Nutrition Benefits From Mandatory poultry, it is not totally clear if there support for HACCP by larger exporting Seafood HACCP and Increased will be a favorable decrease in fat firms. It is important to note, however, Consumer Confidence intake. Because there are too many that there are small firms who export to In the PRIA, FDA estimated what the unknown variables surrounding these Europe as well. substitutes and the lack of sales data, potential nutrition benefits might be if 5. Export Benefits reduced consumer anxiety over seafood the agency is unable to quantify this benefit. In the PRIA, FDA asserted that one safety led to increased sales. FDA benefit (unquantified) of the rule was to hypothesized that this might lead to 4. Rent Seeking allow firms now exporting to the EU to consumers eating lower fat meals (on Rent seeking activities were continue to do so because of the EU average) as they replaced higher fat meat characterized in the proposal as ‘‘public requirement for a federally overseen and poultry with lower fat seafood. and private resources (which) have been voluntary HACCP program. Several The agency has considered this issue expended in attempts to alter the level commenters noted that some countries in greater detail in the full RIA. FDA of regulatory effort toward seafood that import seafood from the United acknowledged in the PRIA that the safety, as well as alter which Federal States are beginning to require HACCP. entire estimate of nutrition benefits agency should oversee the industry.’’ One commenter noted that more than 30 resulting from increased sales of seafood ‘‘Rent seeking’’ is a term economists percent of seafood produced in the at the expense of meat and poultry sales have applied to activities that do not United States is exported. The same is speculative. Although the agency contribute to societal welfare but only commenter noted the disruption in believes that increased consumer seek to transfer resources from one party trade when French authorities did not confidence would result from having a to another. An example often given is coordinate their seafood safety state-of-the-art HACCP system in place lobbying to change the ownership of a requirements with ‘‘other officials.’’ for the seafood industry, no data were government granted special privilege so Several commenters noted the need for received to confidently predict the that profits change hands. In many more Memoranda of Understandings ultimate increase in the quantity of cases, however, it is difficult to (MOU’s) between the United States and seafood sold as a result of this distinguish between activities that other countries for seafood. One regulation. Sales data of this type were ultimately indirectly benefit society suggested that such MOU’s be based also not available before or after the from those that only transfer profits. The upon HACCP as defined by various agency initiated its low acid canned proposal hypothesized that one benefit international bodies. Finally, one food regulations. Finally, the agency of the regulation was to reduce the commenter noted that FDA ‘‘should take was unable to determine if any increase social costs of rent seeking. into account how the international 65188 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations community is implementing HACCP this regulation) would be inspection of 6. Reduced Enforcement Costs before the agency imposes regulations product that is offered for entry into the Comments qualitatively mentioned that may create unnecessary trade EU on an entry-by-entry basis and the other benefits including fewer product barriers.’’ payment of a significant fee for these As discussed in the PRIA, this recalls and other enforcement actions. inspection services. With approximately FDA agrees that there will be fewer program will benefit those seafood 2 billion pounds being exported each processors who are exporting to nations product recalls, seizures, injunctions year, this savings of resources amounts and detentions of seafood and seafood requiring HACCP. However, as also to, at a minimum, $20 million per year. noted in the PRIA, there is in place a products. As examples of what benefits federally overseen HACCP program, In addition, although the EU has could have accrued in 1994, the agency specifically, the program being offered announced the requirement that HACCP has calculated the value of each of these to processors by the National Marine be in place by January 1, 1996, adoption actions and addressed them below. Fisheries Service (NMFS). of a U.S. plan reduces some of the a. Seizures. A seizure is a civil action FDA has made an estimate of the cost uncertainty for U.S. firms and firms designed to remove violative goods from savings to exporting firms of being in exporting to the United States consumer channels. Table 11 shows the FDA’s mandatory program in lieu of the concerning the ultimate form of an actions and their associated costs that NMFS program. The alternative to internationally agreed upon HACCP follow a determination that a violation NMFS review (if FDA were not to adopt requirement. exists and that goods should be seized.

TABLE 11.ÐSEIZURE STEPS

Action Hours/Other Cost

Federal personnel collect and analyze samples, write up recommendations (program 120 ...... $12,840 and general counsel), review the case and make recommendations to the U.S. attor- ney. U.S. attorney files complaint and Court orders goods arrested ...... 16 ...... 1,712 U.S. Marshal and other federal official seizes goods at location ...... 8 ...... 856 Travel ...... 200 Firm hires attorney to contest/accept action ...... 16 ...... 1,712 Food is reconditioned by firm ...... 16 firm ...... 1,712 16 Federal lower valued food 2 ...... 1,712 Food is denatured (converted to a non-food use) or; ...... 16 firm ...... 1,712 8 Federal lower valued food 2 ...... 856 Food is destroyed ...... 8 firm ...... 856 8 Federal lost food 1 ...... 856 1 The rate of $107 per hour represents the cost of a loaded (including equipment and benefits) employee plus headquarters support of approxi- mately 70 percent. 2 Total seizure costs are calculated in Table 12. Table 12 shows the seizures in 1994. Assuming that half of all seizures are prevented each year, the benefits are expected to be approximately $290,000 each year.

TABLE 12.ÐSEIZURES IN 1994

Administra- Problem No. Action 2 Total tive costs 1

Decomposition (Destroy) ...... 5 $17,320 $46,565 $320,925 Filth (Denature) ...... 3 17,320 8,709 78,087 Chemicals (Destroy) ...... 2 17,320 10,108 54,856 Other (Destroyed) ...... 4 17,320 14,212 126,128

Total ...... 14 ...... 3 579,996 1 Costs of items (1) through (4) in the preceding Table totaled are $17,320. 2 The actions that are typically taken for each type of hazard are listed in the PROBLEM column. Costs include the value of destroyed food multiplied by the number of actions or, in the case of denaturing, it is assumed that 10 percent of the value of the product is retained. No food was reconditioned. 3 This number may well underestimate the benefit. FDA recently completed a seizure proceeding (not filed in 1994) in which $5 million of prod- uct was condemned. Thus, preventing seizure can have a significantly higher value than that reflected in this table. b. Detentions. A detention is a procedure for preventing violative products from entering the United States. Table 13 shows the actions and their associated costs that follow a determination that a sample is violative, the following actions take place.

TABLE 13.ÐDETENTION STEPS

Action Hours/other Cost 2

Federal personnel send a detention notice to the importer with an opportunity to introduce testimony ...... 2 ...... $214 Importer hires attorney and introduces evidence. Submits response application ...... 16 ...... 1,712 Determination of action to take ...... 24 ...... 2,568 Reshipment allowed, or ...... 10 ...... 1,070 Travel, Cost to Reship ..... 200 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65189

TABLE 13.ÐDETENTION STEPSÐContinued

Action Hours/other Cost 2

Product is denatured, or ...... 8, Loss of value,2 Cost of 856 denaturing,2, Reselling costs 2. Goods are destroyed under Federal supervision ...... 16, Loss of product 1. 1 These costs are calculated in table 14 which gives estimates of the numbers and estimated costs for detentions in 1994. 2 Seizure can have a significantly higher value than that reflected in this table.

TABLE 14.ÐDETENTIONS IN 1994

Number of Detention Detention Reason Quantity 1 Dollars 1 detentions disposition 2 admin 3

Borates ...... 25 21,484 1,827,173 183,017 112,350 C. botulinum ...... 1 113,790 363,434 363,434 4,494 E.coli/coliforms ...... 14 254,774 742,786 149,413 62,916 Histamines ...... 2 98,023,014 1,361,714 273,199 8,988 Lead ...... 2 102,188 87,440 9,044 8,988 Listeria/Other Pathogens ...... 51 2,792,808 21,369,692 4,274,794 229,194 Mercury ...... 11 7,338,900 12,720,272 1,272,327 49,434 Poisonous/Deleterious sub-nec ...... 7 180,000 446,025 446,025 31,458 Salmonella/arizona ...... 129 221,543,300 76,137,973 15,228,451 579,726 Staphylocci ...... 6 55,810 199,550 40,766 26,964 Sulfites ...... 23 713,653 8,100,620 810,362 103,362 Unsafe food additivesÐNEC ...... 5 67,160 540,201 540,201 22,470

Total ...... 276 ...... 23,591,033 1,240,344 1 Quantity and dollars include the total amount of both detentions and automatic detentions and are shown to illustrate how detentions were calculated. 2 Disposition included reshipping which was estimated to be 10 percent times the number of shipments (quantity) times the value per shipment (dollars/quantity); reconditioning which was estimated to be 20 percent of the value of the shipment (dollars) or destruction which was estimated to be 100 percent of the value of the shipment. 3 Administrative costs are estimated to be $4,494 per detention, the sum of the first three rows of the previous table. Assuming just half of these detentions are prevented by HACCP, benefits to the federal government and industry would be approximately $12 million per year. c. Automatic detentions. Automatic detentions place each lot of imported products on detention upon arrival at the border until the importer has demonstrated that the products do not violate the Federal Food, Drug, and Cosmetic Act. This is normally done by the importer hiring independent labs to sample each lot. Table 15 shows the number and types of relevant automatic detentions that took place in 1994.

TABLE 15.ÐAUTOMATIC DETENTIONS IN 1994

Number of Reason automatic de- Sample cost1 Storage cost2 tentions

Borates ...... 53 $132,500 $182,717 C. botulinum ...... 104 260,000 36,343 E.coli/coliforms ...... 8 20,000 74,279 Histamines ...... 63 157,500 136,171 Lead ...... 1 2,500 8,744 Listeria/Other Pathogens ...... 236 590,000 2,136,969 Mercury ...... 397 992,500 1,272,027 Pesticide chlorothalanil ...... 1 2,500 50 Poisonous and Deleterious sub-nec ...... 4 10,000 44,603 Salmonella/arizona ...... 759 1,897,500 7,613,797 Staphylocci ...... 0 0 19,955 Sulfites ...... 12 30,000 810,062 Underprocessed ...... 3 7,500 15,454 Unsafe food additivesÐNEC ...... 3 7,500 54,020

Total ...... 1,644 4,110,000 12,405,191 1 1 Calculation of costs assumes that, for each product placed on automatic detention, 10 lots per year will be analyzed with 1 sample each at a cost of $250 per sample. 2 Assumes storage costs equals 10 percent of the stated value of the goods.

Again assuming that half of the above each year, then the benefits will be d. Recalls. The costs of recalls to a automatic detentions are eliminated approximately $6 million per year. firm vary from inexpensive notification 65190 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations of consignees to several million dollars, FDA assumes that the costs of recalls table 16. FDA audit checks for seafood depending on the nature of the hazard, borne by firms are directly related to the took 474 hours in 1994. FDA assumes the type of seafood, the cost and amount distribution costs associated with the that total FDA costs per recall were of product involved, and the products and to the size of the proportional to audit hours. The cost distribution chain of the product. The contaminated lots. Distribution costs per hour of an audit check is $107, costs of a recall include searching for account for about one-third of the final giving an FDA audit cost of $50,718 the recalled products, removing them value of seafood. FDA assumes that the (474 x 107). FDA collected 72 samples from retail and wholesale outlets, firm must bear the full amount of the at $250 per sample, giving sample costs replacing the adulterated product, distribution costs of the recall. In of $18,000 (72 x 250). FDA thus effectiveness checks, and disposal or addition, the other costs listed above estimates additional costs due to recalls reconditioning. In some cases recalls raise the total cost of recalls borne by to be $68,718 ($50,718 + $18,000). The cause marketing disruptions, loss of shelf space, and subsequent losses in firms to one-half the value of the total recall cost is estimated to be sales via publicity. product. FDA uses one-half the value of $2,530,624 ($2,461,906 + $68,718). FDA costs include investigative and the product as the base for the estimate Again, the estimate for the purpose of analytical time and expenses, of total recall costs. The total recall cost this benefits analysis assumes that half administrative costs, cost of samples, of seafood processing firms in 1994 is of all recalls will be prevented or about and auditing time. estimated to be $2,461,906, as shown in $1,250,000.

TABLE 16.ÐRECALLS IN 1994

Fish Hazards Amount Total

Canned tuna ...... Filth, decomposed, punctured cans, short 6,599 cases ...... $150,687 weight. Crab ...... L. monocytogenes ...... 16,156 lbs ...... 64,624 Escolar fish ...... Decomposed, sc ombroid, illness ...... 1,719 lbs ...... 1,614 Herring, salted Schmaltz ...... L. monocytogenes ...... 1,200 lbs ...... 1,740 Hilsha fish ...... Salmonella ...... 2,000 lbs ...... 2,100 Lobster ...... L. monocytogenes, salmonella ...... 25,920 lbs ...... 243,648 Mahi mahi, fresh ...... Decomposed ...... 575 lbs ...... 834 Nova chips ...... L. monocytogenes ...... 54 lbs ...... 157 Oysters, shellstock ...... V. vulnificus ...... 9,219,430 lbs ...... 1,843,886 Oysters, shucked ...... V. vulnificus ...... 21,944 lbs ...... 87,776 Sardines, flat fillets ...... Rusty, leaky, decomposed ...... 33,600, 13 oz cans ...... 50,400 Smoked catfish, salmon, sturgeon, tuna ...... L. monocytogenes ...... 1,060 lbs ...... 2,963 Tuna steaks ...... Decomposed ...... 7,110 lbs ...... 11,477

Total ...... 2,461,906.00

e. Injunctions. Injunctions are the HACCP has been implemented, FDA has corrective actions including shutting most severe form of domestic penalties received information that firms have down a line when a critical limit has whereby a firm is enjoined from found cost-saving innovations in other been exceeded, and (3) are rewarded for producing/distributing a product until a areas as they implement HACCP. These this decision rather than penalized or violation is remedied. There are innovations are considered trade secrets forced to rigorously defend their approximately 5 injunctions by FDA by firms and thus, their description actions, then employee morale may against seafood products each year (actual process innovations) and increase. Such an increase in morale, if costing the firm an average of about quantification is impossible as firms valid, may lead to greater productivity. $70,000 and FDA an average of about have not released this data into the However, it is in the direct financial $30,000 each or about $500,000 per public domain. This phenomenon interest of every company to maintain year. These costs include court costs, involves unexpected savings and employee morale such that any analytical testing costs, inspections efficiencies as a result of establishing a additional benefit from this regulation is costs, and lost production costs. Again, new system in a processing operation. likely to be small. if this rule reduced injunctions by half, The majority of firms that have A final benefit will be realized for societal savings would be $250,000. previously instituted HACCP reported finfish where processing plants and Total enforcement benefits are the that they believed that the advantages vessels, in an effort to control for sum of all of the reduced enforcement they derived from HACCP were worth histamine formation, keep fish cooled costs estimated to be approximately $20 the costs to them in terms of better from harvest to retail. This will million per year. control over their operations, better simultaneously decrease the sanitation, and greater efficiencies, such 7. Other Benefits decomposition rate that causes seafood as reduced waste. Virtually all foresaw to be thrown out because of organoleptic Commenters also mentioned benefits long-term benefits from operating under problems. The same situation exists including better process control HACCP. relative to cooked, ready-to-eat products (resulting in lower production costs) Improved employee morale depends and smoked fish. One retailer cited and improved employee morale. on how HACCP is implemented. If, for losses of 4 percent to 8 percent of all FDA believes that there may be ‘‘re- example, employees are (1) participating seafood because of decomposition. If engineering’’ types of benefits in day-to-day monitoring of critical some of this decomposition begins prior associated with these regulations. For control points, (2) allowed through to arrival at the retail level and is both seafood and other foods for which corrective action plans to participate in reduced in any degree by this Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65191 regulation, benefits could potentially be E. Costs and Benefits Attributable to from $1.435 billion to $2.561 billion and large. Foreign Governments include benefits from safety, nutrition, However, FDA recognizes that there is FDA has reported the portion of the increased consumer confidence, rent also a short term cost (e.g., as molluscan increased costs that are expected to be seeking activities, exports, and reduced shellfish harvesters attempt to supply passed on to U.S. consumers by foreign enforcement costs. processors with untagged shellfish or processors. The justification for this from vessels without sanitary facilities G. Final Regulatory Flexibility Analysis action is that FDA has not included aboard and find the harvest rejected). The Regulatory Flexibility Act (Pub. safety benefits that foreign consumers The same will also be true for finfish L. 96–354) requires analyzing options may enjoy when foreign firms that which have not been properly for regulatory relief for small businesses. export to the United States introduce temperature controlled from harvest to In the PRIA, FDA listed for comment a HACCP into their plants. FDA has also processor. These harvests will be series of regulatory options on how to discarded although this behavior is not included, as a benefit of this regulation, grant regulatory relief for small firms. In expected to occur often, or more than reduced enforcement actions toward that document, FDA defined small firms once in any instance. products produced by foreign firms and as having less than $1 million in annual reduced illnesses that U.S. consumers gross revenue (for non-shrimp D. Costs and Benefits of Sanitation suffer from imported seafood. processors) and less than $2 million for In a benefit-cost analysis, costs and A portion of the costs and benefits of shrimp processors. In the PRIA, benefits are attributable to choices made this rule derive from the improvements regulatory options for small business among competing options. However, in in the facilities and CGMP’s in seafood relief included: plants. Although all food manufacturing this rule, there are difficulties in (1) Requiring HACCP-type controls for plants are required to produce food assigning the costs and benefits to those critical control points in under sanitary conditions now, FDA’s choices made by FDA to require HACCP individual plants that have a history of experience, and that of others, indicate of domestic and foreign seafood failure. that many seafood processors are not processors. This difficulty arises (2) Exempting very small processors producing seafood under those because other countries either already from the requirements in the proposed conditions. The sanitation, monitoring, require HACCP or have indicated that regulatory option. and recordkeeping provisions of this they will do so in the near future—for (3) Allowing a longer implementation rule are expected to drive processors to both their domestic and imported period such that HACCP requirements improve their sanitation conditions and seafood products. No costs or benefits may be phased in over a longer period thus reduce the need for FDA to enforce should be ascribed to choices made by of time. CGMP’s through regulatory actions. the U.S. Government in this rule that (4) Providing generic HACCP plans These provisions will produce net affect firms already complying with (without mandatory control points) for increases in societal welfare with foreign regulations, if the regulations are certain types of operations, providing accompanying costs and benefits. the same and no changes need to be federal verification, or less frequent Current goods manufacturing made to be in compliance with the U.S. monitoring of critical control points. practices include such things as regulation. FDA received a large number of cleanliness and habits of personnel, the Thus, foreign firms in those countries comments on these options and on the conditions of buildings and facilities, who export to the United States may be costs that small businesses would incur equipment, production and process required to comply first with the U.S. as a result of the proposed option. controls, and conditions of warehousing plan or first with their own country’s The agency has fully considered all of and distribution of the product. It is plan; the timing is impossible to predict. the comments received on its regulatory difficult to differentiate between costs However, FDA does have evidence from flexibility analysis and has responded to and benefits that are HACCP-related and the European Union that the seafood these comments in the full RIA. What those that are sanitation-related. For produced by the following countries (at follows is a summary of FDA’s major example, processors are required under least seafood for export) have met the conclusions from the analysis. HACCP to keep records that show that EU standard for HACCP— Albania, FDA received comments on whether CGMP’s such as ‘‘Measures such as Australia, Austria, Belgium, Brazil, there should be exemptions for sterilizing, irradiating, pasteurizing, Canada, Chile, Columbia, Denmark, processors based on either the size of freezing, refrigerating, controlling pH or Ecuador, England, Faro Is., Finland, the processor or the degree of risk controlling aw that are taken to destroy France, Germany, Greece, Holland, associated with the product or process. or prevent the growth of undesirable Iceland, Indonesia, Ireland, Italy, Japan, For example, one commenter supported microorganisms, particularly those of Luxembourg, Mexico, Morocco, New the exemption of small firms on the public health significance, shall be Zealand, Norway, Peru, Philippines, basis that small firms that represent 75 adequate under the conditions of Sweden, Taiwan, Thailand, and Turkey. percent of the industry in terms of the manufacture, handling, and distribution number of plants, produce less than 10 to prevent food from being adulterated F. Conclusion percent of the seafood consumed. within the meaning of the act’’ are being As the above analysis demonstrates, FDA has concluded that there should followed (see 21 CFR 110.80(a) (2) and FDA finds that the estimated benefits be no exemptions for small firms. Small (4)). However, the benefits derive from exceed the estimated costs. The processors often engage in relatively making plant and processing changes, estimated costs are approximately one high risk seafood processing, and an uncovering problems in processing due third of those in the PRIA, ranging from exemption based on size could to recordkeeping and taking corrective $677 million to $1.488 billion. These inappropriately exempt high risk action which prevents hazardous estimated costs were based primarily on operations. An exemption based on risk seafood from being sold. Thus, HACCP the reports of some seafood firms and might entail knowing which seafood and CGMP’s are inextricably modeling done by FDA experts based on might be responsible for a reported and intertwined and it is difficult to their experience with HACCP but also confirmed illness. The agency finds calculate the marginal benefits and considered the study done under however that because underreporting marginal costs of each. contract with NMFS. The benefits range and skewed reporting of foodborne 65192 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations illnesses occurs it is not always directly in output attributable to HACCP will be not been applied on a large scale to possible to relate the reported illnesses borne by small processors who go out of ongoing commercial enterprises in the to risk. This subject is also discussed at business. Although close to 80 percent United States. For this reason all of the length in the preambles to both the of seafood processors are classified as agency’s estimates of firm behavior, proposed and final rule. small, small processors account for only costs and benefits necessarily involve One comment recommended that no 10 percent of total industry output (Ref. substantial uncertainty. As explained in firms be completely exempt, but that 228). In the case of a 0.37 percent this Regulatory Impact Analysis, FDA some firms be subject to different decline in total processing output has used modeling techniques and HACCP requirements depending on represents a decline in the output of informed judgements rather than firm size. The smaller the firm, the less strict small processors of 3.7 percent (0.37 empirical data to estimate many effects. the record-keeping, testing, and percent divided by 0.10). If the decline In order to determine the accuracy of monitoring requirements. The use of a in the number of processors were these estimates, and also to assist in short form for recordkeeping and proportional to the decline in the output possible mid-course corrections, FDA informal monitoring was supported in of small processors, the reduction in the and HHS plan to conduct an evaluation some comments. number of processors would be 3.7 study during the first few years after the Again, this is a topic that is percent in the case of a 1 percent price effective date of these regulations. This extensively covered in the preamble to increase. FDA is uncertain as to what study could focus on each major type of the final rule. FDA notes that HACCP price increase will actually occur. one-time or continuing compliance cost, depends on the degree of risk and The agency finds that the number of on different types of firms, on different complexity of processing and that small seafood processors that go out of sizes of firms (with particular attention HACCP requirements for each plant are business will be determined by the cost to the smallest firms), and on both costs calibrated based on these factors. per unit (or per plant) of implementing required by the regulation and on costs Whether the plant is large or small, if HACCP, the effect of HACCP on seafood that firms may incur unnecessarily. It there are few hazards and simple prices, the ability of small plants to pass could also address the ability of firms to processes, HACCP requirements are costs on to consumers, the current understand and implement HACCP inherently minimal. If there are no practices of the plants and the properly, and any other problems that hazards, no HACCP plan is required. implementation time. The analysis has may impede rapid and inexpensive Overall, however the agency believes assumed that the regulation will have implementation. This study could also that many smaller firms are associated no positive effect on the demand for include an exploratory analysis of with simpler processes and that the seafood. If the regulation in fact benefits, addressing both improvements HACCP system already accommodates increases consumer confidence in in processing as measured by the commenter’s concern. seafood sufficiently to increase the elimination of hazards and, to the extent In the long run, as processors adopt demand for seafood, then the effect on permitted by existing data systems, HACCP and attempt to pass costs on to small business would be less. early trends in reported incidence of consumers, the retail price of seafood Although the economic impact on illness caused by seafood. will rise by less than 1 percent. In the small firms is difficult to predict, many absence of an increase in consumer small firms should be able to implement V. Environmental Impact demand that may result from this HACCP at low cost, as they have already regulation, as the price of seafood rises, fulfilled many of its basic requirements. The agency has previously considered consumers will purchase less seafood. The closer a firm’s current practices are the environmental effects of this rule as As producers fail to sell all of the to HACCP, the lower the cost of HACCP announced in the proposed rule (59 FR seafood offered at the higher price, and the more likely is firm survival. 4142, January 28, 1994). No new output must fall. Moreover, output must Some small firms occupy market niches information or comments have been decrease in the highest cost sector of the that allow them to pass on more of their received that would affect the agency’s industry, generally small processors. costs than the industry average, previous determination that there is no Although it is possible that small increasing their likelihood of survival. significant impact on the human processors will cut back production but The effect of HACCP on small seafood environment, and that an environmental stay in business, the small profit processors depends on their costs of impact statement is not required. margins of some small seafood compliance and on the changes in the VI. References producers strongly imply that the relative price of seafood. FDA expects reduction in output will come about the relative price increase attributable to The following references have been because small processors go out of HACCP to be small. For many small placed on display in the Dockets business. For every one percent increase firms, the flexibility built into the Management Branch (address above) in the price of seafood, approximately regulation strongly implies that HACCP and may be seen by interested persons 140 small processors could go out of costs will be low. In consideration of between 9 a.m. and 4 p.m., Monday business. The estimated number comes small firms, the agency has extended the through Friday. from the following calculation. FDA has effective date to 2 years from estimated that as costs are passed on, publication. FDA will also be 1. Committee on Diet and Health, Food and HACCP will raise the price of seafood to publishing a Guide that will provide Nutrition Board, Commission on Life Sciences, National Research Council, ‘‘Diet consumers. The price elasticity of small processors with valuable demand, which is the percentage change and Health: Implications for Reducing information for developing and Chronic Disease Risk,’’ National Academy in quantity purchased divided by the implementing HACCP. Additionally, the Press, Washington, DC, 1989. percentage change in price, is estimated agency, in cooperation with Sea Grant 2. National Heart, Lung, and Blood to be ¥0.37 for seafood (Ref. 227). A Universities and others through the Institute, DHHS, ‘‘National Cholesterol one percent increase in the price Seafood HACCP Alliance, will be Education Program: Report of the Expert consumers pay for seafood should providing to small firms assistance on Panel on Population Strategies for Blood therefore reduce the quantity purchased training and other needs. Cholesterol Reduction, Executive Summary,’’ by 0.37 percent (1 percent times ¥0.37). FDA recognizes that HACCP is an NIH Publication No. 90–3047, National FDA believes that the entire reduction innovative regulatory system that has Institutes of Health, Bethesda, MD, 1990. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65193

3. Hackney, C., and D. Ward, ed., 25. New York State Good Manufacturing Nations, ‘‘Joint FAO/WHO Food Standards ‘‘Microbiology of Marine Food Products,’’ Practices Regulation for Smoked Fish Programme, Codex Alimentarius Van Nostrand Reinhold, 1991. Products, 1990. Commission, 20th Session, Geneva 28 June– 4. Roper, W. L., Director, Centers for 26. Eklund, M. W. et al., ‘‘Inhibition of 7 July 1993, Report of the 25th Session of the Disease Control, letter to the Honorable John Clostridium Botulinum Types A and E Toxin Codex Committee on Food Hygiene D. Dingell, May 2, 1990. Production by Liquid Smoke and NaCl in Washington D.C., 28 October–1 November 5. Otwell, W. S., ‘‘Seafood Safety in Hot-Process Smoke-Flavored Fish,’’ Journal 1991.’’ Question,’’ MTS Journal, 25(1):23–29. of Food Protection, 45(10):935, 1982. 47. ‘‘Communication From The President 6. FDA, DHHS, ‘‘Seafood Safety,’’ May 10, 27. Program Evaluation Branch, Office of of the United States Transmitting the Final 1993. Regulatory Affairs, FDA, DHHS, ‘‘Field Legal Text of the U.S.–Canada Free-Trade 7. Ahmed, F. E., ed., Committee on Summary Seafood Accomplishments/ Agreement, The Proposed U.S.–Canada Free- Evaluation of the Safety of Fishery Products, Expenditures FY 1984—FY 1992,’’ November Trade Agreement Implementation Act of Food and Nutrition Board, Institute of 1992. 1988, and a Statement of Administrative Medicine, NAS, Seafood Safety, National 28. FSIS, USDA, ‘‘Meat and Poultry Action, Pursuant to 19 U.S.C. 2112(e)(2), Inspection 1991: Report of the Secretary of Academy Press, 1991. 2212(a),’’ House Document 100–216, July 26, Agriculture to the U.S. Congress.’’ 8. Rhodehamel, E. J., ‘‘Overview of 1988. 29. Snyder, M. I., memorandum, ‘‘FDA Biological, Chemical, and Physical Hazards,’’ 48. Rhodehamel, E. J., ‘‘FDA’s Concerns Rejection Insurance,’’ May 7, 1993. With Sous Vide Processing,’’ Food HACCP: Principles and Applications, Van 30. Sunde, S., ‘‘A Sea of Uncertainties,’’ Nostrand Reinhold, 1992. Technology, 46(12) 73–76, 1992. Seattle Post-Intelligencer, February 25, 1993. 49. Cook, D. W., and Ruple, A. D., ‘‘Vibrio 9. Colwell, R. R. ed., ‘‘Natural Toxins and 31. Wilms, H. G., memorandum, ‘‘State Human Pathogens in the Marine Vulnificus and Indicator Bacteria in Seafood Resources,’’ May 17, 1993. Shellstock and Commercially Processed Environment,’’ Report of a Sea Grant- 32. Spencer, H., ‘‘The Role of Government Oysters From the Gulf Coast,’’ Journal of Sponsored Workshop, A Maryland Sea Grant in a Mandatory HACCP Based Program,’’ Food Protection, 55(9):667–671, 1992. Publication, undated. Dairy, Food and Environmental Sanitation, 50. FDA, DHHS, ‘‘Food and Drug 10. Stone, R., ed., ‘‘Single-Celled Killer in July 1992. Administration Pesticide Program: Residue Monterey Bay,’’ Science, November 22, 1991. 33. Bauman, H. E., ‘‘Introduction to Monitoring 1991,’’ Journal of the Association 11. Letter to John A. 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NMFS, NOAA, U.S. Department of Committee on Commerce, Science, and Advisory Report, Maryland Sea Grant Transportation, U.S. Senate, June 30, 1992. Commerce, ‘‘The Report of the Model Seafood Surveillance Project: A Report to the Program, Publication No. UM–SG–MAP–81– 14. Mayer, B. K., and D. R. Ward, 02, 1981. ‘‘Microbiology of Finfish and Finfish Congress,’’ draft dated February 5, 1993. 36. Subcommittee on Microbiological 53. Gorga, C., and Ronsivalli, L. J., ‘‘Quality Processing,’’ Microbiology of Marine Food Assurance of Seafood,’’ Van Nostrand Processing, Van Nostrand Reinhold, 1991. Criteria, Committee on Food Protection, Food and Nutrition Board, National Research Reinhold, New York. 15. Spitzig, P., memorandum, 54. Schaffner, R. M., ‘‘Introduction to ‘‘Decomposition Data From the Seafood Council, An Evaluation of the Role of Microbiological Criteria for Foods and Food Canned Foods: Principles of Thermal Process Regulatory Action Database,’’ May 14, 1992. Control, Acidification and Container Closure 16. FDA, DHHS, ‘‘The Fish List: FDA Ingredients, National Academy Press, 1985. 37. Lee, J. S., and K. S. Hilderbrand, Jr., Evaluation’’ The Food Processors Institute, Guide to Acceptable Market Names for Food 1982. Fish Sold in Interstate Commerce,’’ 1988. ‘‘Hazard Analysis & Critical Control Point Applications to the Seafood Industry,’’ 55. Corlett, D. A., Jr., and Pierson, M. D., 17. Letter From Skip Widtfeldt, Seafood ‘‘Hazard Analysis and Assignment of Risk Permit Coordinator, State of Alaska Oregon Sea Grant, ORESU-H–92–001, 1992. 38. Weddig, L. J., letter to the Honorable Categories,’’ HACCP: Principles and Department of Environmental Conservation, Donna E. Shalala, February 25, 1993. Applications, Van Nostrand Reinhold, 1991. to Alaska Seafood Processors, January 17, 39. Iani, L. J., letter to Tom Billy, April 1, 56. Farber, J. M., ‘‘Listeria mono-cytogenes 1992. 1993. in Fish Products,’’ Journal of Food 18. Nardi, G., ‘‘HACCP: A View From the 40. Peeler, T., ‘‘Review of the FDA/NOAA Protection, 54: 922–924, 1991. Inside,’’ American Seafood Institute Report, Seafood Pilot,’’ undated. 57. Lovett, J., Francis, D. W., and April 1992. 41. Food and Agriculture Organization of Bradshaw, J. G., ‘‘Outgrowth of Listeria 19. Coons, K., ‘‘HACCP is Here,’’ Seafood the United Nations, ‘‘Fishery Statistics: Mono-cytogenes in Foods,’’ Foodborne Supplier, May/June 1992. Commodities 1990,’’ vol. 71, Rome, 1992. Listeriosis, Society for Industrial 20. Kraemer, D. W., memorandum, 42. NMFS, NOAA, U.S. Department of Microbiology, Elsevier Science Publishers, ‘‘Unique Nature of Seafood Processing Commerce, ‘‘Fisheries of the United States, New York, 1990. Industry,’’ May 6, 1993. 1991,’’ Silver Spring, MD, 1992. 58. Farber, J. M., and Peterkin, P. I., 21. Kraemer, D. W., memorandum, ‘‘High 43. NMFS, NOAA, U.S. Department of ‘‘Listeria Monocytogenes, a Food-borne Risk Survey—Cooked Ready to Eat Results,’’ Commerce, ‘‘Current Fisheries Statistics No. Pathogen,’’ Microbiology Reviews, 55: 476– March 1, 1993. 9202: Imports and Exports of Fishery 511, 1991. 22. Bryan, F. L., ‘‘What the Sanitarian Products Annual Summary, 1992.’’ 59. Warner, E. T., memorandum, ‘‘New Should Know About Staphylococci and 44. The Council of the European York District Smoked Fish Inspection Salmonellae in Non-Dairy Products: I. Communities, ‘‘Council Directive of 22 July Results,’’ May 24, 1993. Staphylococci,’’ Journal of Milk and Food 1991 Laying Down the Health Conditions for 60. Wilson, B. F., memorandum, ‘‘Seafood Technology, 31(4):110–116, April 1968. the Production and the Placing on the Market Consumer Complaint Data,’’ April 15, 1993. 23. Golden, D. A., E. J. Rhodehamel, and of Fishery Products,’’ Official Journal of the 61. Data summary sheets. D. A. Kautter, ‘‘Growth of Salmonella spp. in European Communities, No. L 268/15. 62. Wilson, B., memorandum, ‘‘Sanitation Cantaloupe, Watermelon, and Honeydew 45. GATT Secretariat, ‘‘Draft Final Act Data from 1991–1992 Abbreviated Melons,’’ Journal of Food Protection, Embodying the Results of the Uruguay Round Inspections,’’ April 13, 1993. 56(3):194–196, 1993. of Multilateral Trade Negotiations,’’ 63. Bryan, F. L., ‘‘Microbiological Food 24. FDA Smoked or Salted Fish December 20, 1991. Hazards Today—Based on Epidemiological Assignment (FY 89), and compilation of data, 46. Codex Alimentarius Commission, Food Information,’’ Food Technology, pp. 52–64, dated December 19, 1988. and Agriculture Organization of the United September 1974. 65194 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations

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Bencivengo, and F. Del Corral, ‘‘Comparison to Staten Island for the Presence of 166. Centers for Disease Control, of Lithium Chloride-Phenylethanol- Clostridium Botulinum,’’ Applied ‘‘International Outbreak of Type E Botulism Moxalactam and Retail-Level Meats, Poultry, Microbiology, 15(4):964, 1970. Associated With Ungutted, Salted and Seafood,’’ Applied and Environmental 151. Ward, B. Q. et al., ‘‘Survey of the U.S. Whitefish,’’ Morbidity and Mortality Weekly Microbiology, 55:599–603, 1989. Gulf Coast for the Presence of Clostridium Report, 36(49):812, 1987. 65196 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations

167. Centers for Disease Control, ‘‘Botulism 186. Eklund, M. W., D. I. Wieler, and F. T. McClure, D. Archer, R. B. Read, Associated With Commercially Distributed Poysky, ‘‘Outgrowth and Toxin Production of ‘‘Microbiological Quality of Crabmeat During Kapchunka—New York City,’’ Morbidity and Nonproteolytic Type B Clostridium Processing,’’ Journal of Food Protection, Mortality Weekly Report, 34(35):546, 1985. Botulinum at 3.3 to 5.6 °C,’’ Journal of 48(1):44–49, January, 1985. 168. Badhey, H. et al., ‘‘Two Fatal Cases of Bacteriology, 93(4):1461, 1967. 205. Phillips, F. A., and J. T. Peeler, Type E Adult Food-borne Botulism With 187. Solomon, H. M. et al., ‘‘Effect of Low ‘‘Bacteriological Survey of the Blue Crab Early Symptoms and Terminal Neurologic Temperatures on Growth of Clostridium Industry,’’ Applied Microbiology, 24:958– Signs,’’ Journal of Clinical Microbiology, Botulinum Spores in Meat of the Blue Crab,’’ 966, 1972. 23(3):616, 1986. Journal of Food Protection, 40(1):5, 1977. 206. Microbiology and Food Safety 169. Establishment Inspection Reports 188. Ohye, D. F., and W. J. Scott, ‘‘Studies Committee of the National Food Processors (EIR’s) conducted by FDA. in the Physiology of Clostridium Botulinum Association, ‘‘HACCP Implementation: A 170. Letter to D. A. Kautter from Alan L. Type E,’’ Australian Journal of Biological Generic Model for Chilled Foods,’’ Journal of Hoeting, July 31, 1987. Science, 10:85, 1956. Food Protection, 56(12):1077–1084, 171. Codex Alimentarius Commission, 189. National Research Council, ‘‘An December 1993. ‘‘Thirteenth Session of the Codex Committee Evaluation of the Role of Microbiological 207. FDA Memorandum to Patricia Spitzig on Fish and Fishery Products, RCP–25, Criteria for Foods and Food Ingredients,’’ p. from Oliver D. Cook, July 11, 1995, Recommended International Code of Practice 249, National Academy Press, Washington, concerning relationships between consumer for Smoked Fish,’’ 1979. DC. complaints and process controls. 172. Codex Alimentarius Commission, 190. Federal Standard, ‘‘Sanitation 208. Department of Health and Human ‘‘Thirteenth Session of the Codex Committee Standards For Fish Plants,’’ FED-STD–369, Services and Food and Drug Administration, on Fish and Fishery Products, RCP–26, Academy of Health Sciences, U.S. Army, Fort ‘‘21 CFR Parts 123 and 1240: Proposal To Recommended International Code of Practice Sam Houston, Houston, TX, August 2, 1977. Establish Procedures for the Safe Processing for Salted Fish,’’ 1979. 191. Masso T. W., letters to T. Schwarz and Importing of Fish and Fishery Products; 173. Eklund, M. W., ‘‘Significance of With AFDO Resolution No. 8, June 8, 1990. Proposed Rule,’’ 59 FR 4142, No. 19, January Clostridium Botulinum in Fishery Products 192. Bryan, F. L., ‘‘Application of HACCP 28, 1994. Preserved Short of Sterilization,’’ Food to Ready-to-eat Chilled Foods,’’ Food 209. Roberts, T. A., ‘‘Contamination of Technology, 35(12):107, 1982. Technology, 44(7):70, 1990. Meat: The Effects of Slaughter Practices on 174. Schmidt, C. F., R. V. Lechowich, and 193. Tartakow, I. J., and J. H. Vorperian, the Bacteriology of the Red Meat Carcass,’’ J. F. Folinazzo, ‘‘Growth and Toxin (eds.), ‘‘Foodborne and Waterborne Diseases: Journal of the Royal Society of Health, (1), Production by Type E Clostridium Botulinum Their Epidemiologic Characteristics,’’ p. 50– 1980. Below 40 °F,’’ Journal of Food Science, 52, AVI Publishing Co., Westport, CN, 1981. 210. Huss, H. H., ‘‘Assurance of seafood 26:626, 1961. 194. Rhodehamel, J. E., N. R. Reddy, and quality’’, FAO Fisheries Technical Paper 334, 175. CPG No. 7108.17; Salt-cured, Air- M. D. Pierson, ‘‘Botulism: The Causative Food and Agriculture Organization of the Dried, Uneviscerated Fish (53 FR 44949, Agent and its Control in Foods: A Review,’’ United Nations, Rome, 1994. November 7, 1988), Docket No. 88D–0306. Food Control, 3(3):125–143, 1992. 211. Department of Agriculture, Food 176. Graham, P. P., R. S. Hamilton, and M. 195. FDA, ‘‘Human Foods; Current Good Safety and Inspection Service, ‘‘9 CFR Parts D. Pierson, ‘‘Influence of Bringing Procedures Manufacturing Practice (Sanitation) in 308, 310, 318, 320, 325, 326, 327, and 381: on Salt Content and Distribution in Smoked Manufacturing, Processing, Packing, or Pathogen Reduction; Hazard Analysis and Whitefish Chubs,’’ Journal of Food Holding Smoked Fish,’’ 34 FR 17176, October Critical Control Point (HACCP) Systems; Processing and Preserving, 10:295, 1986. 23, 1969. Proposed Rule,’’ 60 FR 6774, No. 23, 177. Deng, J., R. T. Toledo, and D. A. 196. FDA, Part 110—Current Good February 3, 1995. Lillard, ‘‘Effect of Smoking Temperatures on Manufacturing Practice in Manufacturing, 212. National Marine Fisheries Service, Acceptability and Storage Stability of Packing, or Holding Human Food (21 CFR National Oceanic and Atmospheric Smoked Spanish Mackerel,’’ Journal of Food part 110). Administration, U.S. Department of Science, 39:596, 1974. 197. FDA, FDA Inspections Manual, Commerce, Fisheries of the United States, 178. Chan, W. S., R. T. Toledo, and J. Deng, Chapter 5, Establishment Inspection, 1993, Current Fisheries Statistics No. 9300, ‘‘Effect of Smokehouse Temperature, Subchapter 530, Food. Silver Spring, MD, May, 1994. Humidity, and Air Flow on Smoke 198. Center for Disease Control, ‘‘Fish 213. Bauman, H. E., ‘‘Introduction to Penetration into Fish Muscle,’’ Journal of Botulism—Hawaii, 1990,’’ Morbidity and HACCP’’, HACCP: Principles and Food Science, 40:240, 1975. Mortality Weekly, 40(24):412–414, June 21, Applications, edited by Pierson, M. D., and 179. Pelroy, G. A. et al., ‘‘Inhibition of 1991. D. A. Corlett, Van Nostrand Reinhold, New Clostridium Botulinum Types A and E Toxin 199. FDA, ‘‘Studies in Food Sanitation York, 1992. Formation by Sodium Nitrite and Sodium Control—Year Five, Contract No. 223–80– 214. Eklund, M. W., ‘‘Significance of Chloride in Hot-process (Smoked) Salmon,’’ 2295, Task XVI, Effect of Controlled Clostridium Botulinum in Fishery Products Journal of Food Protection, 45(9):833, 1982. Humidity of Processing Ovens at High Preserved Short Of Sterilization,’’ Food 180. Eklund, M. W., testimony presented at Operating Temperatures on Production of Technology, December 1982. New York State Department of Agriculture Smoked Fish,’’ June 14, 1984. 215. Diane E. Thompson, Associate and Markets’ hearing, May 13, 1989. 200. Printout of FDA FY 90/91 Domestic Commissioner for Legislative Affairs, letter to 181. Newberry, R. E., Letter to City Smoked Fish and Fishery Products Assignment Representative Edolphus Towns, December Fish Co., Use of Colors in Smoked Salmon, Inspection Data as of August 6, 1991. 14, 1994, concerning molluscan shellfish March 11, 1985. 201. Daniels, Richard W., ‘‘Applying safety. 182. National Fisheries Institute, Inc., HACCP to New Generation Refrigerated 216. FDA, ‘‘Import Seafood Products ‘‘Techniques For Smoking Fish,’’ Foods at Retail and Beyond,’’ Food Compliance Program FY*95/96/97*,’’ Washington, DC. Technology, June 1991. Compliance Program Guidance Manual, 183. Borgstrom, G., ‘‘Smoking,’’ in ‘‘Fish as 202. Consent Decree Regarding Shellfish (Program 7303.844), October 1994. Food, Processing: Part I, Vol. 3,’’ p. 88, Sanitation Issues, No. 9213, Subproceeding 217. July 11, 1995, Memorandum to the Academic Press, New York, 1965. 89–3, United States of America, et al., Administrative Record for Docket No. 93N– 184. Kautter, D. A., memorandum, Plaintiffs, v. State of Washington, et al., 0195 from Don Kraemer, CFSAN, FDA, ‘‘Aqueous Phase Salt Concentration for Defendants, May 5, 1994. concerning illegal harvesting of molluscan Vacuum Packaged Cold-smoked Fish,’’ April 203. Taylor, S. L., and S. S. Sumner, shellfish. 6, 1990. ‘‘Determination of Histamine, Putrescine, and 218. Dowell, S. F., C. Groves, K. B. 185. Eklund, M. W. et al., ‘‘Feasibility of Cadaverine,’’ Seafood Quality Determination, Kirkland, et. al., ‘‘A Multistate Outbreak of a Heat-pasteurization Process for the edited by D. E. Kramer and J. Liston, Elsevier Oyster-Associated Gastroenteritis: Inactivation of Nonproteolytic Clostridium Science Publishers B. V., Amsterdam, Implications for Interstate Tracing of Botulinum Types B and E in Vacuum- November, 1986. Contaminated Shellfish,’’ Journal of packaged, Hot-process Smoked Fish,’’ 204. Wentz, B. A., A. P. Duran, A. Infectious Diseases, University of Chicago, Journal of Food Protection, 51(9):720, 1988. Swartzentruber, A. H. Schwab, F. D. vol. 171, 1995. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65197

219. Aristequieta, C., I. Koenders, D. 123.9 Records. United States, who is responsible for Windham, et. al., ‘‘Multistate Outbreak of 123.10 Training. ensuring that goods being offered for Viral Gastroenteritis Associated with 123.11 Sanitation control procedures. entry into the United States are in Consumption of Oysters—Apalachicola Bay, 123.12 Special requirements for imported compliance with all laws affecting the Florida, December 1994–January 1995,’’ products. Morbidity and Mortality Weekly Report 1995, importation. For the purposes of this Subpart BÐSmoked and Smoke-Flavored 44:37–39. definition, ordinarily the importer is not Fishery Products 220. Association of Food and Drug the custom house broker, the freight Officials, ‘‘1994 Proceedings Issue of The 123.15 General. forwarder, the carrier, or the steamship Association of Food And Drug Officials,’’ 123.16 Process controls. representative. September 1994. Subpart CÐRaw Molluscan Shellfish (h) Molluscan shellfish means any 221. Kraemer, D., memorandum, ‘‘FDA edible species of fresh or frozen oysters, Experiences with Low-Acid Canned Foods,’’ 123.20 General. clams, mussels, or scallops, or edible 123.28 Source controls. August 17, 1995. portions of such species, except when 222. Kraemer, D., memorandum, ‘‘Unique Authority: Secs. 201, 402, 403, 406, 409, the product consists entirely of the Configuration of HACCP Plans,’’ August 17, 701, 704, 721, 801, 903 of the Federal Food, 1995. Drug, and Cosmetic Act (21 U.S.C. 321, 342, shucked adductor muscle. 223. Letter from Jim Yonker of Ocean 343, 346, 348, 371, 374, 379e, 381, 393); secs. (i) Preventive measure means Beauty Seafood to Mary Snyder, FDA Office 301, 307, 361 of the Public Health Service physical, chemical, or other factors that of Seafood, dated June 29, 1995. Act (42 U.S.C. 241, 242l, 264). can be used to control an identified food 224. Perkins, Caroline, ‘‘1993 SB Consumer safety hazard. Survey Findings,’’ Seafood Business, Nov./ Subpart AÐGeneral Provisions (j) Process-monitoring instrument Dec. 1993, 12:7, p.47. means an instrument or device used to 225. Freeman, Kris, Eighth Annual Retail § 123.3 Definitions. indicate conditions during processing at Survey, Seafood Business, Sept/Oct 1993 The definitions and interpretations of a critical control point. 12:6, p.46. terms in section 201 of the Federal (k)(1) Processing means, with respect 226. Amler, Robert W. and Bruce H. Dull, Food, Drug, and Cosmetic Act (the act) to fish or fishery products: Handling, Closing the Gap: The Burden of Unnecessary and in part 110 of this chapter are storing, preparing, heading, Illness, ‘‘Infectious and Parasitic Diseases’’ by applicable to such terms when used in Bennett, John V., M.D. et al., Oxford eviscerating, shucking, freezing, University Press, New York, 1987. this part, except where they are herein changing into different market forms, 227. Marasco, Richard, ‘‘Food from the Sea: redefined. The following definitions manufacturing, preserving, packing, An Economic Perspective on the Seafood shall also apply: labeling, dockside unloading, or Market,’’ Marine Economics: Production and (a) Certification number means a holding. Marketing of Seafood Products, December unique combination of letters and (2) The regulations in this part do not 1974, p. 1031. numbers assigned by a shellfish control apply to: 228. Dressel, David M. and Teh-Wei Hu, authority to a molluscan shellfish (i) Harvesting or transporting fish or ‘‘The U.S. Seafood Processing Industry: An processor. fishery products, without otherwise Economic Profile for Policy and Regulatory (b) Critical control point means a engaging in processing. Analysts,’’ National Fisheries Institute in point, step, or procedure in a food Cooperation with the National Marine (ii) Practices such as heading, Fisheries Service, 1983. process at which control can be applied, eviscerating, or freezing intended solely 229. Final Regulatory Impact Analysis. and a food safety hazard can as a result to prepare a fish for holding on board be prevented, eliminated, or reduced to a harvest vessel. List of Subjects acceptable levels. (iii) The operation of a retail 21 CFR Part 123 (c) Critical limit means the maximum establishment. or minimum value to which a physical, (l) Processor means any person Fish, Fishery products, Imports, biological, or chemical parameter must engaged in commercial, custom, or Reporting and recordkeeping be controlled at a critical control point institutional processing of fish or fishery requirements, Seafood. to prevent, eliminate, or reduce to an products, either in the United States or 21 CFR Part 1240 acceptable level the occurrence of the in a foreign country. A processing identified food safety hazard. includes any person engaged in the Communicable diseases, Public (d) Fish means fresh or saltwater production of foods that are to be used health, Travel restrictions, Water finfish, crustaceans, other forms of in market or consumer tests. supply. aquatic animal life (including, but not (m) Scombroid toxin-forming species Therefore, under the Federal Food, limited to, alligator, frog, aquatic turtle, means tuna, bluefish, mahi mahi, and Drug, and Cosmetic Act and under jellyfish, sea cucumber, and sea urchin other species, whether or not in the authority delegated to the Commissioner and the roe of such animals) other than family Scombridae, in which significant of Food and Drugs, title 21 CFR chapter birds or mammals, and all mollusks, levels of histamine may be produced in I is amended as follows: where such animal life is intended for the fish flesh by decarboxylation of free 1. New part 123 is added to read as human consumption. histidine as a result of exposure of the follows: (e) Fishery product means any human fish after capture to temperatures that food product in which fish is a permit the growth of mesophilic PART 123ÐFISH AND FISHERY characterizing ingredient. bacteria. PRODUCTS (f) Food safety hazard means any (n) Shall is used to state mandatory Subpart AÐGeneral Provisions biological, chemical, or physical requirements. property that may cause a food to be (o) Shellfish control authority means Sec. unsafe for human consumption. a Federal, State, or foreign agency, or 123.3 Definitions. 123.5 Current good manufacturing practice. (g) Importer means either the U.S. sovereign tribal government, legally 123.6 Hazard Analysis and Hazard Analysis owner or consignee at the time of entry responsible for the administration of a Critical Control Point (HACCP) plan. into the United States, or the U.S. agent program that includes activities such as 123.7 Corrective actions. or representative of the foreign owner or classification of molluscan shellfish 123.8 Verification. consignee at the time of entry into the growing areas, enforcement of 65198 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations molluscan shellfish harvesting controls, analysis reveals one or more food safety ensure compliance with the critical and certification of molluscan shellfish hazards that are reasonably likely to limits; processors. occur, as described in paragraph (a) of (5) Include any corrective action plans (p) Shellstock means raw, in-shell this section. A HACCP plan shall be that have been developed in accordance molluscan shellfish. specific to: with § 123.7(b), to be followed in (q) Should is used to state (1) Each location where fish and response to deviations from critical recommended or advisory procedures or fishery products are processed by that limits at critical control points; processor; and to identify recommended equipment. (6) List the verification procedures, (2) Each kind of fish and fishery (r) Shucked shellfish means and frequency thereof, that the product processed by the processor. The molluscan shellfish that have one or processor will use in accordance with plan may group kinds of fish and fishery both shells removed. § 123.8(a); (s) Smoked or smoke-flavored fishery products together, or group kinds of products means the finished food production methods together, if the food (7) Provide for a recordkeeping system prepared by: safety hazards, critical control points, that documents the monitoring of the (1) Treating fish with salt (sodium critical limits, and procedures required critical control points. The records shall chloride), and to be identified and performed in contain the actual values and (2) Subjecting it to the direct action of paragraph (c) of this section are observations obtained during smoke from burning wood, sawdust, or identical for all fish and fishery monitoring. similar material and/or imparting to it products so grouped or for all (d) Signing and dating the HACCP the flavor of smoke by a means such as production methods so grouped. plan. (1) The HACCP plan shall be immersing it in a solution of wood (c) The contents of the HACCP plan. signed and dated, either by the most smoke. The HACCP plan shall, at a minimum: responsible individual onsite at the (t) Tag means a record of harvesting (1) List the food safety hazards that processing facility or by a higher level information attached to a container of are reasonably likely to occur, as official of the processor. This signature shellstock by the harvester or processor. identified in accordance with paragraph shall signify that the HACCP plan has (a) of this section, and that thus must be been accepted for implementation by § 123.5 Current good manufacturing controlled for each fish and fishery the firm. practice. product. Consideration should be given (2) The HACCP plan shall be dated (a) Part 110 of this chapter applies in to whether any food safety hazards are and signed: determining whether the facilities, reasonably likely to occur as a result of (i) Upon initial acceptance; methods, practices, and controls used to the following: process fish and fishery products are (i) Natural toxins; (ii) Upon any modification; and safe, and whether these products have (ii) Microbiological contamination; (iii) Upon verification of the plan in been processed under sanitary (iii) Chemical contamination; accordance with § 123.8(a)(1). conditions. (iv) Pesticides; (e) Products subject to other (b) The purpose of this part is to set (v) Drug residues; regulations. For fish and fishery forth requirements specific to the (vi) Decomposition in scombroid products that are subject to the processing of fish and fishery products. toxin-forming species or in any other requirements of part 113 or 114 of this species where a food safety hazard has § 123.6 Hazard Analysis and Hazard chapter, the HACCP plan need not list been associated with decomposition; the food safety hazard associated with Analysis Critical Control Point (HACCP) (vii) Parasites, where the processor Plan. the formation of Clostridium botulinum has knowledge or has reason to know toxin in the finished, hermetically (a) Hazard analysis. Every processor that the parasite-containing fish or shall conduct, or have conducted for it, sealed container, nor list the controls to fishery product will be consumed prevent that food safety hazard. A a hazard analysis to determine whether without a process sufficient to kill the there are food safety hazards that are HACCP plan for such fish and fishery parasites, or where the processor products shall address any other food reasonably likely to occur for each kind represents, labels, or intends for the of fish and fishery product processed by safety hazards that are reasonably likely product to be so consumed; to occur. that processor and to identify the (viii) Unapproved use of direct or preventive measures that the processor indirect food or color additives; and (f) Sanitation. Sanitation controls may can apply to control those hazards. Such (ix) Physical hazards; be included in the HACCP plan. food safety hazards can be introduced (2) List the critical control points for However, to the extent that they are both within and outside the processing each of the identified food safety monitored in accordance with plant environment, including food hazards, including as appropriate: § 123.11(b) they need not be included in safety hazards that can occur before, (i) Critical control points designed to the HACCP plan, and vice versa. during, and after harvest. A food safety control food safety hazards that could be (g) Legal basis. Failure of a processor hazard that is reasonably likely to occur introduced in the processing plant to have and implement a HACCP plan is one for which a prudent processor environment; and that complies with this section would establish controls because (ii) Critical control points designed to whenever a HACCP plan is necessary, experience, illness data, scientific control food safety hazards introduced otherwise operate in accordance with reports, or other information provide a outside the processing plant the requirements of this part, shall basis to conclude that there is a environment, including food safety render the fish or fishery products of reasonable possibility that it will occur hazards that occur before, during, and that processor adulterated under section in the particular type of fish or fishery after harvest; 402(a)(4) of the act. Whether a product being processed in the absence (3) List the critical limits that must be processor’s actions are consistent with of those controls. met at each of the critical control points; ensuring the safety of food will be (b) The HACCP plan. Every processor (4) List the procedures, and frequency determined through an evaluation of the shall have and implement a written thereof, that will be used to monitor processors overall implementation of its HACCP plan whenever a hazard each of the critical control points to HACCP plan, if one is required. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65199

§ 123.7 Corrective actions. § 123.8 Verification. these reviews shall be, at a minimum, to (a) Whenever a deviation from a (a) Overall verification. Every ensure that the records are complete, critical limit occurs, a processor shall processor shall verify that the HACCP and that these activities occurred in take corrective action either by: plan is adequate to control food safety accordance with the processor’s written (1) Following a corrective action plan hazards that are reasonably likely to procedures. These reviews shall occur that is appropriate for the particular occur, and that the plan is being within a reasonable time after the deviation, or effectively implemented. Verification records are made. (2) Following the procedures in shall include, at a minimum: (b) Corrective actions. Processors shall paragraph (c) of this section. (1) Reassessment of the HACCP plan. immediately follow the procedures in (b) Processors may develop written A reassessment of the adequacy of the § 123.7 whenever any verification corrective action plans, which become HACCP plan whenever any changes procedure, including the review of a part of their HACCP plans in accordance occur that could affect the hazard consumer complaint, reveals the need to with § 123.6(c)(5), by which they analysis or alter the HACCP plan in any take a corrective action. predetermine the corrective actions that way or at least annually. Such changes (c) Reassessment of the hazard they will take whenever there is a may include changes in the following: analysis. Whenever a processor does not deviation from a critical limit. A Raw materials or source of raw have a HACCP plan because a hazard corrective action plan that is materials, product formulation, analysis has revealed no food safety appropriate for a particular deviation is processing methods or systems, finished hazards that are reasonably likely to one that describes the steps to be taken product distribution systems, or the occur, the processor shall reassess the and assigns responsibility for taking intended use or consumers of the adequacy of that hazard analysis those steps, to ensure that: finished product. The reassessment whenever there are any changes that (1) No product enters commerce that shall be performed by an individual or could reasonably affect whether a food is either injurious to health or is individuals who have been trained in safety hazard now exists. Such changes otherwise adulterated as a result of the accordance with § 123.10. The HACCP may include, but are not limited to deviation; and plan shall be modified immediately changes in: Raw materials or source of (2) The cause of the deviation is whenever a reassessment reveals that raw materials, product formulation, corrected. the plan is no longer adequate to fully processing methods or systems, finished (c) When a deviation from a critical meet the requirements of § 123.6(c). product distribution systems, or the limit occurs and the processor does not (2) Ongoing verification activities. intended use or consumers of the have a corrective action plan that is Ongoing verification activities finished product. The reassessment appropriate for that deviation, the including: shall be performed by an individual or (i) A review of any consumer processor shall: individuals who have been trained in complaints that have been received by (1) Segregate and hold the affected accordance with § 123.10. the processor to determine whether they product, at least until the requirements (d) Recordkeeping. The calibration of relate to the performance of critical of paragraphs (c)(2) and (c)(3) of this process-monitoring instruments, and the control points or reveal the existence of section are met; performing of any periodic end-product unidentified critical control points; and in-process testing, in accordance (2) Perform or obtain a review to (ii) The calibration of process- determine the acceptability of the with paragraphs (a)(2)(ii) through (iii) of monitoring instruments; and, this section shall be documented in affected product for distribution. The (iii) At the option of the processor, the review shall be performed by an records that are subject to the performing of periodic end-product or recordkeeping requirements of § 123.9. individual or individuals who have in-process testing. adequate training or experience to (3) Records review. A review, § 123.9 Records. perform such a review. Adequate including signing and dating, by an (a) General requirements. All records training may or may not include individual who has been trained in required by this part shall include: training in accordance with § 123.10; accordance with § 123.10, of the records (1) The name and location of the (3) Take corrective action, when that document: processor or importer; necessary, with respect to the affected (i) The monitoring of critical control (2) The date and time of the activity product to ensure that no product enters points. The purpose of this review shall that the record reflects; commerce that is either injurious to be, at a minimum, to ensure that the (3) The signature or initials of the health or is otherwise adulterated as a records are complete and to verify that person performing the operation; and result of the deviation; they document values that are within (4) Where appropriate, the identity of (4) Take corrective action, when the critical limits. This review shall the product and the production code, if necessary, to correct the cause of the occur within 1 week of the day that the any. Processing and other information deviation; records are made; shall be entered on records at the time (5) Perform or obtain timely (ii) The taking of corrective actions. that it is observed. reassessment by an individual or The purpose of this review shall be, at (b) Record retention. (1) All records individuals who have been trained in a minimum, to ensure that the records required by this part shall be retained at accordance with § 123.10, to determine are complete and to verify that the processing facility or importer’s whether the HACCP plan needs to be appropriate corrective actions were place of business in the United States modified to reduce the risk of taken in accordance with § 123.7. This for at least 1 year after the date they recurrence of the deviation, and modify review shall occur within 1 week of the were prepared in the case of refrigerated the HACCP plan as necessary. day that the records are made; and products and for at least 2 years after the (d) All corrective actions taken in (iii) The calibrating of any process date they were prepared in the case of accordance with this section shall be control instruments used at critical frozen, preserved, or shelf-stable fully documented in records that are control points and the performing of any products. subject to verification in accordance periodic end-product or in-process (2) Records that relate to the general with § 123.8(a)(3)(ii) and the testing that is part of the processor’s adequacy of equipment or processes recordkeeping requirements of § 123.9. verification activities. The purpose of being used by a processor, including the 65200 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations results of scientific studies and equivalent to that provided through the (7) Control of employee health evaluations, shall be retained at the standardized curriculum. conditions that could result in the processing facility or the importer’s (a) Developing a HACCP plan, which microbiological contamination of food, place of business in the United States could include adapting a model or food packaging materials, and food for at least 2 years after their generic-type HACCP plan, that is contact surfaces; and applicability to the product being appropriate for a specific processor, in (8) Exclusion of pests from the food produced at the facility. order to meet the requirements of plant. (3) If the processing facility is closed § 123.6(b); The processor shall correct in a timely for a prolonged period between seasonal (b) Reassessing and modifying the manner, those conditions and practices packs, or if record storage capacity is HACCP plan in accordance with the that are not met. limited on a processing vessel or at a corrective action procedures specified (c) Sanitation control records. Each remote processing site, the records may in § 123.7(c)(5), the HACCP plan in processor shall maintain sanitation be transferred to some other reasonably accordance with the verification control records that, at a minimum, accessible location at the end of the activities specified in § 123.8(a)(1), and document the monitoring and seasonal pack but shall be immediately the hazard analysis in accordance with corrections prescribed by paragraph (b) returned for official review upon the verification activities specified in of this section. These records are subject to the requirements of § 123.9. demand. § 123.8(c); and (c) Official review. All records (d) Relationship to HACCP plan. (c) Performing the record review Sanitation controls may be included in required by this part and all plans and required by § 123.8(a)(3); The trained procedures required by this part shall be the HACCP plan, required by § 123.6(b). individual need not be an employee of However, to the extent that they are available for official review and copying the processor. at reasonable times. monitored in accordance with (d) Public disclosure. (1) Subject to § 123.11 Sanitation control procedures. paragraph (b) of this section they need not be included in the HACCP plan, and the limitations in paragraph (d)(2) of (a) Sanitation SOP. Each processor vice versa. this section, all plans and records should have and implement a written required by this part are not available sanitation standard operating procedure § 123.12 Special requirements for for public disclosure unless they have (herein referred to as SSOP) or similar imported products. been previously disclosed to the public document that is specific to each This section sets forth specific as defined in § 20.81 of this chapter or location where fish and fishery products requirements for imported fish and they relate to a product or ingredient are produced. The SSOP should specify fishery products. that has been abandoned and they no how the processor will meet those (a) Importer verification. Every longer represent a trade secret or sanitation conditions and practices that importer of fish or fishery products shall confidential commercial or financial are to be monitored in accordance with either: information as defined in § 20.61 of this paragraph (b) of this section. (1) Obtain the fish or fishery product chapter. (b) Sanitation monitoring. Each from a country that has an active (2) However, these records and plans processor shall monitor the conditions memorandum of understanding (MOU) may be subject to disclosure to the and practices during processing with or similar agreement with the Food and extent that they are otherwise publicly sufficient frequency to ensure, at a Drug Administration, that covers the available, or that disclosure could not minimum, conformance with those fish or fishery product and documents reasonably be expected to cause a conditions and practices specified in the equivalency or compliance of the competitive hardship, such as generic- part 110 of this chapter that are both inspection system of the foreign country type HACCP plans that reflect standard appropriate to the plant and the food with the U.S. system, accurately reflects industry practices. being processed and relate to the the current situation between the (e) Tags. Tags as defined in § 123.3(t) following: signing parties, and is functioning and are not subject to the requirements of (1) Safety of the water that comes into enforceable in its entirety; or this section unless they are used to contact with food or food contact (2) Have and implement written fulfill the requirements of § 123.28(c). surfaces, or is used in the manufacture verification procedures for ensuring that (f) Records maintained on computers. of ice; the fish and fishery products that they The maintenance of records on (2) Condition and cleanliness of food offer for import into the United States computers is acceptable, provided that were processed in accordance with the appropriate controls are implemented to contact surfaces, including utensils, gloves, and outer garments; requirements of this part. The ensure the integrity of the electronic procedures shall list at a minimum: data and signatures. (3) Prevention of cross-contamination (i) Product specifications that are from insanitary objects to food, food designed to ensure that the product is § 123.10 Training. packaging material, and other food not adulterated under section 402 of the At a minimum, the following contact surfaces, including utensils, Federal Food, Drug, and Cosmetic Act functions shall be performed by an gloves, and outer garments, and from because it may be injurious to health or individual who has successfully raw product to cooked product; have been processed under insanitary completed training in the application of (4) Maintenance of hand washing, conditions, and, HACCP principles to fish and fishery hand sanitizing, and toilet facilities; (ii) Affirmative steps that may include product processing at least equivalent to (5) Protection of food, food packaging any of the following: that received under standardized material, and food contact surfaces from (A) Obtaining from the foreign curriculum recognized as adequate by adulteration with lubricants, fuel, processor the HACCP and sanitation the U.S. Food and Drug Administration pesticides, cleaning compounds, monitoring records required by this part or who is otherwise qualified through sanitizing agents, condensate, and other that relate to the specific lot of fish or job experience to perform these chemical, physical, and biological fishery products being offered for functions. Job experience will qualify an contaminants; import; individual to perform these functions if (6) Proper labeling, storage, and use of (B) Obtaining either a continuing or it has provided knowledge at least toxic compounds; lot-by-lot certificate from an appropriate Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations 65201 foreign government inspection authority smoked and smoke-flavored fishery (2) The location of harvest by State or competent third party certifying that products, except those subject to the and site; the imported fish or fishery product is requirements of part 113 or 114 of this (3) The quantity and type of shellfish; or was processed in accordance with the chapter, shall include in their HACCP (4) The date of receipt by the requirements of this part; plans how they are controlling the food processor; and (C) Regularly inspecting the foreign safety hazard associated with the (5) The name of the harvester, the processor’s facilities to ensure that the formation of toxin by Clostridium name or registration number of the imported fish or fishery product is being botulinum for at least as long as the harvester’s vessel, or an identification processed in accordance with the shelf life of the product under normal number issued to the harvester by the requirements of this part; and moderate abuse conditions. shellfish control authority. (D) Maintaining on file a copy, in (d) To meet the requirements of English, of the foreign processor’s Subpart CÐRaw Molluscan Shellfish paragraph (b) of this section, processors HACCP plan, and a written guarantee who receive shucked molluscan § 123.20 General. from the foreign processor that the shellfish shall accept only containers of imported fish or fishery product is This subpart augments subpart A of shucked molluscan shellfish that bear a processed in accordance with the this part by setting forth specific label that complies with § 1240.60(c) of requirements of the part; requirements for processing fresh or this chapter. Processors shall maintain (E) Periodically testing the imported frozen molluscan shellfish, where such records that document that all shucked fish or fishery product, and maintaining processing does not include a treatment molluscan shellfish have met the on file a copy, in English, of a written that ensures the destruction of requirements of this section. These guarantee from the foreign processor vegetative cells of microorganisms of records shall document: that the imported fish or fishery product public health concern. (1) The date of receipt; is processed in accordance with the § 123.28 Source controls. (2) The quantity and type of shellfish; requirements of this part or, and (a) In order to meet the requirements (3) The name and certification (F) Other such verification measures of subpart A of this part as they apply as appropriate that provide an number of the packer or repacker of the to microbiological contamination, product. equivalent level of assurance of chemical contamination, natural toxins, compliance with the requirements of and related food safety hazards, this part. PART 1240ÐCONTROL OF processors shall include in their HACCP COMMUNICABLE DISEASES (b) Competent third party. An plans how they are controlling the importer may hire a competent third origin of the molluscan shellfish they 2. The authority citation for 21 CFR party to assist with or perform any or all process to ensure that the conditions of part 1240 continues to read as follows: of the verification activities specified in paragraphs (b), (c), and (d) of this Authority: Secs. 215, 311, 361, 368 of the paragraph (a)(2) of this section, section are met. Public Health Service Act (42 U.S.C. 216, including writing the importer’s (b) Processors shall only process 243, 264, 271). verification procedures on the molluscan shellfish harvested from importer’s behalf. 3. Section 1240.3 is amended by growing waters approved for harvesting revising paragraph (r), and by adding (c) Records. The importer shall by a shellfish control authority. In the maintain records, in English, that new paragraphs (s), (t), and (u) to read case of molluscan shellfish harvested as follows: document the performance and results from U.S. Federal waters, the of the affirmative steps specified in requirements of this paragraph will be § 1240.3 General definitions. paragraph (a)(2)(ii) of this section. These met so long as the shellfish have not * * * * * records shall be subject to the applicable been harvested from waters that have (r) Molluscan shellfish. Any edible provisions of § 123.9. been closed to harvesting by an agency species of fresh or frozen oysters, clams, (d) Determination of compliance. of the Federal government. mussels, and scallops or edible portions There must be evidence that all fish and (c) To meet the requirements of thereof, except when the product fishery products offered for entry into paragraph (b) of this section, processors consists entirely of the shucked the United States have been processed who receive shellstock shall accept only adductor muscle. under conditions that comply with this shellstock from a harvester that is in (s) Certification number means a part. If assurances do not exist that the compliance with such licensure unique combination of letters and imported fish or fishery product has requirements as may apply to the numbers assigned by a shellfish control been processed under conditions that harvesting of molluscan shellfish or authority to a molluscan shellfish are equivalent to those required of from a processor that is certified by a processor. domestic processors under this part, the shellfish control authority, and that has (t) Shellfish control authority means a product will appear to be adulterated a tag affixed to each container of Federal, State, or foreign agency, or and will be denied entry. shellstock. The tag shall bear, at a sovereign tribal government, legally Subpart BÐSmoked and Smoke- minimum, the information required in responsible for the administration of a flavored Fishery Products § 1240.60(b) of this chapter. In place of program that includes activities such as the tag, bulk shellstock shipments may classification of molluscan shellfish § 123.15 General. be accompanied by a bill of lading or growing areas, enforcement of This subpart augments subpart A of similar shipping document that contains molluscan shellfish harvesting controls, this part by setting forth specific the information required in § 1240.60(b) and certification of molluscan shellfish requirements for processing smoked and of this chapter. Processors shall processors. smoke-flavored fishery products. maintain records that document that all (u) Tag means a record of harvesting shellstock have met the requirements of information attached to a container of § 123.16 Process controls. this section. These records shall shellstock by the harvester or processor. In order to meet the requirements of document: 4. Section 1240.60 is amended by subpart A of this part, processors of (1) The date of harvest; revising the section heading, by 65202 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations redesignating the existing text as applicable or, if such identification or with a tag, shipping document, or paragraph (a) and adding the word numbers are not assigned, the name of label that does not bear all the ‘‘molluscan’’ before the word the harvester or the name or registration information required by paragraphs (b) ‘‘shellfish’’ the two times that it appears, number of the harvester’s vessel). In and (c) of this section, shall be subject and by adding new paragraphs (b), (c), place of the tag, bulk shellstock to seizure or refusal of entry, and and (d) to read as follows: shipments may be accompanied by a destruction. bill of lading or similar shipping § 1240.60 Molluscan shellfish. document that contains the same Dated: October 3, 1995. * * * * * information. David A. Kessler, (b) All shellstock shall bear a tag that (c) All containers of shucked Commissioner of Food and Drugs. discloses the date and place they were molluscan shellfish shall bear a label Donna E. Shalala, harvested (by State and site), type and that identifies the name, address, and Secretary of Health and Human Services. quantity of shellfish, and by whom they certification number of the packer or [FR Doc 95–30332 Filed 12–11–95; 10:40 am] were harvested (i.e., the identification repacker of the molluscan shellfish. number assigned to the harvester by the (d) Any molluscan shellfish without BILLING CODE 4160±01±P shellfish control authority, where such a tag, shipping document, or label, federal register December 18,1995 Monday Inmates; FinalRule Correspondence BetweenConfined 28 CFRPart540 Bureau ofPrisons Justice Department of Part III 65203 65204 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Rules and Regulations

DEPARTMENT OF JUSTICE witnesses in a legal action in which subchapter C of 28 CFR, chapter V is both inmates are involved. As revised, amended as set forth below. Bureau of Prisons paragraph (b) designates the Wardens of SUBCHAPTER CÐINSTITUTIONAL both institutions as the approving MANAGEMENT 28 CFR Part 540 officials where one of the inmates is [BOP±1042±F] housed in a non-federal institution or if PART 540ÐCONTACT WITH PERSONS approval is being granted on the basis of IN THE COMMUNITY RIN 1120±AA38 exceptional circumstances. As a Correspondence: Correspondence conforming change, reference in the 1. The authority citation for 28 CFR Between Confined Inmates introductory text to the Warden as the part 540 is revised to read as follows: approving official in exceptional Authority: 5 U.S.C. 301, 551, 552a; 18 AGENCY: Bureau of Prisons, Justice. circumstances has been removed. U.S.C. 1791, 3621, 3622, 3624, 4001, 4042, ACTION: Final rule. Because the circumstances permitting 4081, 4082 (Repealed in part as to offenses the approval by the unit manager of committed on or after November 1, 1987), SUMMARY: In this document, the Bureau correspondence between inmates are 5006–5024 (Repealed October 12, 1984 as to of Prisons is amending its regulations on ordinarily fact specific (i.e, the other offenses committed after that date), 5039; 28 correspondence to provide unit inmate is either a member of the U.S.C. 509, 510; 28 CFR 0.95–0.99. managers with the authority to approve immediate family, or is a party or 2. In § 540.17, the introductory text correspondence in certain witness in a legal action in which both and paragraph (b) are revised to read as circumstances between inmates in inmates are involved), no adverse follows: different federal institutions. These impact on inmates is anticipated. amendments are intended to provide for Approval based upon other exceptional § 540.17 Correspondence between the continued efficient and secure circumstances remains with the confined inmates. operation of the institution. Warden. An inmate may be permitted to EFFECTIVE DATE: December 18, 1995. The Bureau of Prisons has determined correspond with an inmate confined in ADDRESSES: Office of General Counsel, that this rule is not a significant any other penal or correctional Bureau of Prisons, HOLC Room 754, 320 regulatory action for the purpose of E.O. institution if the other inmate is either First Street, NW., Washington, DC 12866, and accordingly was not a member of the immediate family, or is 20534. reviewed by the Office of Management a party or witness in a legal action in FOR FURTHER INFORMATION CONTACT: Roy and Budget. After review of the law and which both inmates are involved. Such Nanovic, Office of General Counsel, regulations, the Director, Bureau of correspondence may be approved in Bureau of Prisons, phone (202) 514– Prisons has certified that this rule, for other exceptional circumstances, with 6655. the purpose of the Regulatory Flexibility particular regard to the security level of SUPPLEMENTARY INFORMATION: The Act (Pub. L. 96–354), does not have a the institution, the nature of the Bureau of Prisons is amending its significant impact on a substantial relationship between the two inmates, regulations on correspondence (28 CFR number of small entities. and whether the inmate has other part 540, subpart B). A final rule on this The Bureau is publishing this regular correspondence. The following subject was published in the Federal regulation as an interim rule in order to additional limitations apply: Register October 1, 1985 (50 FR 40109) implement streamlining measures * * * * * through more efficient use of staff while and was amended on February 1, 1991 (b)(1) The appropriate unit manager at (56 FR 4159). still soliciting public comment. Members of the public may submit each institution must approve of the Current provisions in § 540.17 specify correspondence if both inmates are that in instances where correspondence comments concerning this rule by writing to the previously cited address. housed in Federal institutions and both is permissible between inmates inmates are members of the same confined in separate institutions, the These comments will be considered before the rule is finalized. immediate family or are a party or Wardens of both institutions must witness in a legal action in which both approve of the correspondence. In order List of Subjects in 28 CFR Part 540 inmates are involved. to make better use of staff resources, the Prisoners. (2) The Wardens of both institutions Bureau is revising the introductory text must approve of the correspondence if and paragraph (b) of this section to Kathleen M. Hawk, one of the inmates is housed at a non- designate the unit managers in both Director, Bureau of Prisons. Federal institution or if approval is institutions as the approving officials in Accordingly, pursuant to the being granted on the basis of instances where both inmates are rulemaking authority vested in the exceptional circumstances. housed in federal institutions and both Attorney General in 5 U.S.C. 552(a) and inmates are either members of the same delegated to the Director, Bureau of [FR Doc. 95–30641 Filed 12–15–95; 8:45 am] immediate family or are parties or Prisons in 28 CFR 0.96(p), part 540 in BILLING CODE 4410±05±P federal register December 18,1995 Monday Meeting; ProposedRule Approval ofAnalyticalMethods;Public Method FlexibilityandStreamlining 40 CFRParts136and141 Notice Workshop onTraceMetalsAnalysis; Protection Agency Environmental Part IV 65205 65206 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Notices

ENVIRONMENTAL PROTECTION FOR FURTHER INFORMATION CONTACT: reservations early. The hotels are within AGENCY Questions concerning this notice can be walking distance of the meeting directed to Marion Thompson by phone facilities. [FRL±5346±4] at (202)260–7117 or by facsimile at Background Workshop on Trace Metals Analysis (202)260–7185. SUPPLEMENTARY INFORMATION: Meeting The USEPA Office of Water’s interest AGENCY: U.S. Environmental Protection arrangements are being coordinated by in trace metals determinations has been Agency. DynCorp, Inc. For information on driven by the development of ambient ACTION: Notice of meeting. registration, contact Cindy Simbanin, water quality criteria (WQC) in response 300 N. Lee Street, Suite 500, Alexandria, SUMMARY: The Office of Water is to Congressional mandates in the 1987 VA 22314. Phone: (703)519–1386. sponsoring two workshops to aid Water Quality Act. Ambient water Facsimile number: (703)684–0610. attendees in resolving the problems quality criteria require determinations Space is limited and reservations are associated with the sampling and of metals at levels significantly lower being taken on a first come, first served analysis of trace metals, including the than those required by technology-based basis. No fees will be charged to attend. difficulty in precluding contamination. Hotel reservations for Massachusetts effluent limits or achievable by routine These workshops will be held in may be made by contacting the Holiday environmental laboratory analyses. conjunction with the Public Meetings Inn-Government Center in Boston at Agenda Topics on Method Flexibility and Streamlining (617)742–7630. Guest rates are $101 Approval of Analytical Methods at 40 single and $121 double occupancy, The Office of Water’s purpose in CFR Part 136 announced concurrently including tax. Reservations must be sponsoring these workshops is to assist in the Federal Register. made by January 5, 1996, and you must State and Regional authorities, regulated DATES: EPA will conduct the Trace specify that you are affiliated with community, and commercial Metals Workshops on Wednesday, USEPA/TM to qualify for the quoted laboratories in understanding the January 24, 1996, in Boston, rate. requirements and techniques necessary Massachusetts and on Tuesday, For the Chicago meeting, hotel to determine trace metals at EPA’s February 13, 1996, in Chicago, Illinois. reservations may be made by contacting ambient WQC levels. These workshops Registration for each workshop will Marriott Reservations at (800)228–9290. will focus on sampling and analysis begin at 10:00 AM. Each workshop will Guest rates are $91 single and double techniques, data review, and quality be held from 12:00 PM to 5:00 PM. occupancy. These rates are subject to assurance measures necessary to ADDRESSES: The workshop on January applicable state and local taxes. support reliable trace metals 24, 1996, will be held in the O’Neill Reservations must be made by January measurements for data gathering and Auditorium, Thomas P. O’Neill Jr. 20, 1996, and you must reference the compliance monitoring purposes. Federal Building, 10 Causeway Street, event as the EPA TM Meeting and Tudor T. Davies, Boston, Massachusetts. The workshop request the Chicago Marriott-Downtown on February 13, 1996, will be held in in order to qualify for the group rate. Director, Office of Science and Technology. the Morrison Room, Metcalfe Building, Accommodations are limited at each [FR Doc. 95–30570 Filed 12–15–95; 8:45 am] 77 West Jackson, Chicago, Illinois location, so please make your BILLING CODE 6560±50±P Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65207

ENVIRONMENTAL PROTECTION DynCorp, Inc. For information on and technologies by organizations AGENCY registration, contact Cindy Simbanin, outside of EPA. 300 N. Lee Street, Suite 500, Alexandria, Agenda Topics 40 CFR Parts 136 and 141 VA 22314. Phone: (703) 519–1386. Facsimile number: (703) 684–0610. The purpose of the public meetings [FRL±5346±3] Space is limited and reservations are on 304(h) streamlining is to outline plans for method flexibility and for A Public Meeting on Method Flexibility being taken on a first come, first served streamlining proposal and promulgation and Streamlining Approval of basis. No fees will be charged to attend. Hotel reservations for Massachusetts of new methods at 40 CFR Part 136 Analytical Methods may be made by contacting the Holiday under Section 304(h) of the Clean Water AGENCY: U.S. Environmental Protection Inn-Government Center in Boston at Act, and to elicit stakeholder views Agency (EPA). (617) 742–7630. Guest rates are $101 regarding these plans. The following ACTION: Notice of meeting. single and $121 double occupancy, topics will be addressed at the public including tax. Reservations must be meetings: SUMMARY: The Office of Science and made by January 5, 1996. When making • Increasing method flexibility to Technology within EPA’s Office of reservations, you must specify that you allow use of new technologies and to Water is conducting two public are affiliated with USEPA/TM to qualify identify modifications that are meetings on approaches to method for the quoted rate. acceptable within the scope of existing flexibility and streamlining the proposal For the Chicago meeting, hotel methods and do not require proposal of and promulgation of analytical methods reservations may be made by contacting an alternate method— at 40 CFR Part 136 under Section 304(h) Marriott Reservations at (800) 228–9290. —Interpretation of flexibility in existing of the Clean Water Act and 40 CFR Part Guest rates are $91 single and double 40 CFR part 136 methods 141 of the Safe Drinking Water Act. occupancy. These rates are subject to —Advantages and disadvantages of These 304(h) streamlining public applicable state and local taxes. method flexibility (no flexibility, meetings will be held in conjunction Reservations must be made by January limited flexibility, and unlimited with the Trace Metals Workshops 20, 1996, and you must reference the flexibility) announced concurrently in the Federal event as the EPA TM Meeting and —Proposal to allow nearly unlimited Register. request the Chicago Marriott-Downtown ‘‘front-end’’ method modifications as These two public meetings follow the in order to qualify for the group rate. long as the determinative technique is first public meeting on this topic held Accommodations are limited at each not changed and method performance on September 28, 1995, in Seattle, location, so please make your is demonstrated to be equivalent reservations early. The hotels are Washington. The Seattle meeting was • Establishing standardized quality located within walking distance of the announced in an FR notice titled, ‘‘A control (QC) and QC acceptance criteria meeting facilities. Public Meeting and Availability of to support determination of method Documents on Streamlining Approval of Background equivalency Analytical Methods at 40 CFR Part 136 • Streamlining the method proposal and flexibility in Existing Test Under Section 304(h) of the Clean Water Act, EPA is responsible for process to take advantage of emerging Methods’’ [FRL–5294–6]. This FR notice analytical technologies in a timely provided extensive supplementary promulgating analytical methods at 40 CFR Part 136 for use in monitoring manner— information regarding the 304(h) —Standardized format for preparing streamlining effort and made available pollutant discharges. EPA uses these methods to support development of new methods several supporting documents. The —Three-tiered method validation supporting documents and a summary effluent guidelines promulgated at 40 CFR Parts 400–499, and both EPA and process based on method use of the Seattle meeting can be obtained —OST coordination of method through the address given in this notice. the regulated community use the methods for establishing compliance submission and approval DATES: EPA will conduct the public with National Pollutant Discharge • Harmonization of 40 CFR Part 136 meetings on 304(h) streamlining on Elimination System (NPDES) permits methods with other EPA methods to Thursday, January 25, 1996, in Boston, and other monitoring purposes. The allow standardization of methods across Massachusetts and on Wednesday, methods approved for use at 40 CFR EPA programs February 14, 1996, in Chicago, Illinois. Part 136 have been developed by EPA, • Other streamlining issues— Registration for each meeting will begin by industrial associations such as the —Standardized data elements for at 8:00 AM. Each meeting will be held American Society for Testing Materials, reporting, to allow access to Agency from 9:00 AM to 5:00 PM. and by other governmental agencies databases in a standardized data ADDRESSES: The meeting on January 25, such as the U.S. Geological Survey. In format 1996, will be held in the O’Neill the past, the methods proposal and —Withdrawal of 40 CFR Part 136 Auditorium, Thomas P. O’Neill Jr. promulgation process has been methods that contain outdated Federal Building, 10 Causeway Street, cumbersome, and has not provided the technologies Boston, Massachusetts. The meeting on flexibility to take advantage of new —Incorporating new methods into the February 14, 1996, will be held in the analytical technologies in a timely Federal Register by reference and Morrison Room, Metcalfe Building, 77 manner. In response to the making them available through other West Jackson, Chicago, Illinois. Administration’s Environmental suitable venues, to reduce publication FOR FURTHER INFORMATION CONTACT: Technology Initiative, EPA is proposing expense Questions concerning this notice can be a comprehensive Section 304(h) The Office of Ground Water and directed to Marion Thompson by phone streamlining initiative to increase Drinking Water, which is within EPA’s at (202) 260–7117 or by facsimile at method flexibility to allow use of Office of Water, is also developing (202) 260–7185. emerging technologies and to expedite approaches to increasing method SUPPLEMENTARY INFORMATION: Meeting the method approval process, to flexibility and streamlining the approval arrangements are being coordinated by encourage development of new methods of analytical methods at 40 CFR Part 141 65208 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules under sections 1401 and 1445 of the however, that the supporting documents for SDWA compliance methods. Despite Safe Drinking Water Act (SDWA). To that are available with this notice were these potential differences in method better coordinate these efforts within the developed only for 304(h) methods and flexibility approaches between 304(h) Office of Water, EPA will discuss within the requirements of the CWA. and SDWA methods, EPA believes there flexibility and streamlining approaches The approaches and specifically is a significant benefit in conducting for 304(h) and drinking water methods allowing unlimited ‘‘front-end’’ public meetings on the perspectives of at these two public meetings. EPA modifications might not be appropriate both programs. believes the public will benefit from a for methods approved under the SDWA. Tudor T. Davies, joint meeting, because the flexibility In contrast to the 304(h) documentation, and method approval issues, the less front end flexibility in sample Director, Office of Science and Technology. regulated contaminants and the collection and work-up procedures and [FR Doc. 95–30555 Filed 12–15–95; 8:45 am] methods currently approved at Parts 136 more flexibility in the determinative BILLING CODE 6560±50±P and 141 are very similar. EPA notes, measurement steps may be appropriate federal register December 18,1995 Monday Rulemaking; ProposedRule Direct FinalRuleProcedure;Petitionsfor 49 CFRPart106 Administration Research andSpecialPrograms Transportation Department of Part V 65209 65210 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules

DEPARTMENT OF TRANSPORTATION include a self-addressed, stamped without going through another round of postcard. The Dockets Unit is located in intra- and inter-agency review. If a Research and Special Programs Room 8421 of the Nassif Building, 400 significant adverse comment were Administration Seventh Street S.W., Washington, DC received, the agency would withdraw 20590–0001. Office hours are 8:30 am to the rule before the effective date and 49 CFR Part 106 5:00 pm Monday through Friday, except issue a notice of proposed rulemaking. [Docket No. RSP±1, Notice No. 95±15] on public holidays when the office is As noted in the report, ‘‘this approach closed. avoids the second round of clearances RIN 2137±AC75 FOR FURTHER INFORMATION CONTACT: and review, which otherwise delays Direct Final Rule Procedure; Petitions Nancy E. Machado, Office of the Chief rules, wastes time, and should be for Rulemaking Counsel, RSPA, Department of superfluous * * * Theoretically, the Transportation, 400 Seventh Street, second review ought to be very quick, AGENCY: Research and Special Programs SW., Washington, DC 20590–0001; but clearing any document through Administration (RSPA), DOT. Telephone (202) 366–4400. numerous government offices takes time. The paper shuffling also wastes ACTION: Notice of proposed rulemaking SUPPLEMENTARY INFORMATION: In reviewers’ time by requiring them to (NPRM). Executive Order 12866, ‘‘Regulatory look at something twice when once Planning and Review’’ (58 FR 51735; SUMMARY: would have sufficed.’’ (‘‘Improving To further the goals of October 4, 1993), the President set forth Regulatory Systems,’’ p. 42.) Executive Order 12866 on Regulatory the Administration’s regulatory Planning and Review, and in response In responding to both the letter and philosophy and principles. The the spirit of the Executive Order and the to the recommendations of the National Executive Order contemplates an Performance Review and the NPR Recommendations, the Secretary of efficient and effective rulemaking Transportation has directed Administrative Conference of the process, including the conservation of United States, RSPA is proposing to administrations within the Department limited government resources for of Transportation to focus on implement a new and more efficient carrying out its regulatory functions. procedure for adopting noncontroversial improvements that can be made in the Furthermore, ‘‘Improving Regulatory way in which they propose and adopt rules. This ‘‘direct final rule’’ procedure Systems,’’ an Accompanying Report of involves issuing a final rule that regulations. the National Performance Review, RSPA is proposing to adopt a new provides notice and an opportunity to recognized the need to streamline the comment, with a statement that if RSPA § 106.39 that provides for the use of regulatory process and recommended direct final rule procedures for does not receive a significant adverse the use of ‘‘direct final’’ rulemaking comment or notice of an intent to file a noncontroversial rules, such as minor, procedures to reduce needless double substantive changes to regulations; significant adverse comment, the rule review of noncontroversial rules. will become effective on a specified date incorporation by reference of the latest The former Administrative edition of technical or industry without further publication of the text of Conference of the United States (ACUS) the rule. RSPA would publish a standards; extensions of compliance adopted Recommendation 95–4, dates; and other noncontroversial rules. subsequent document in the Federal ‘‘Procedures for Noncontroversial and Register to confirm that no significant RSPA intends to continue issuing Expedited Rulemaking,’’ which certain final rules with no opportunity adverse comment was received, and endorses direct final rulemaking as a reiterate the effective date. If a for comment; these include editorial procedure that can expedite rules in changes and designation of hazardous significant adverse comment or notice of appropriate cases. (See 60 FR 43108; an intent to file a significant adverse substances as hazardous materials, as August 18, 1995.) ACUS studied the required by the Comprehensive comment were received, RSPA would efficiency, adequacy and fairness of the publish a document in the Federal Environmental Response, administrative procedures used by Compensation, and Liability Act. RSPA Register before the effective date of the Federal agencies in carrying out direct final rule withdrawing the rule or solicits comment on the advisability of administrative programs, and made using direct final rules for these a part of the rule. recommendations for improvements to RSPA also proposes to amend its categories of rules, as well as the agencies, collectively or suggestions for other types of rules that rulemaking procedures to: Specify in individually, and to the President, could be issued as direct final rules. more detail the required contents of a Congress, and the Judicial Conference of When RSPA believes that a petition for rulemaking; and provide the United States. ACUS found direct rulemaking in these categories is that petitions for rulemaking and final rulemaking appropriate where a unlikely to result in significant adverse petitions for reconsideration will be rule is expected to generate no comment, it would use the direct final reviewed and acted upon by the significant adverse comment. ACUS rule procedure. The direct final rule Associate Administrator and that defined a significant adverse comment would advise the public that no decisions of the Associate Administrator as one where the commenter explains significant adverse comments are may be appealed to the Administrator. why the rule would be inappropriate, anticipated and unless significant DATES: Comments must be submitted no including challenges to the rule’s adverse comment or intent to submit a later than February 16, 1995. underlying premise or approach, or significant adverse comment is received, ADDRESSES: Address comments to the would be ineffective or unacceptable in writing, within a certain period of Dockets Unit (DHM–30), RSPA, U.S. without a change. time (generally 60 days), the rule will Department of Transportation, Under the direct final rulemaking become effective on a specified date Washington, DC 20590–0001. procedure, an agency would issue a (generally 90 days after publication). If Comments should identify the docket final rule with a statement that, if the no significant adverse comments are and notice number and be submitted, agency received no significant adverse received, RSPA would issue a when possible, in five copies. Persons comments, the rule becomes effective subsequent document advising the wishing to receive confirmation of automatically at a specified time after public that no significant adverse receipt of their comments should publication of the direct final rule comments were received, and that the Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65211 rule will become, or did become, enforcement, preemption, general analysis or a regulatory evaluation is not effective on the date previously definitions, etc.’’ warranted. specified in the direct final rule. Direct RSPA also proposes to amend Executive Order 12612 final rules would not be subject to § 106.17 to clarify the procedures for petitions for reconsideration under 49 participation by interested parties in the This action has been analyzed in CFR 106.35. rulemaking process. accordance with Executive Order 12612 If RSPA received a significant adverse RSPA also is proposing to amend (‘‘Federalism’’), and RSPA has comment or notice of intent to file a § 106.31 to specify in more detail the determined that preparation of a significant adverse comment, RSPA required contents of a petition for federalism assessment is not warranted. would publish a document in the rulemaking. In this way, RSPA hopes to Regulatory Flexibility Act Federal Register withdrawing the direct provide clear guidance to those who final rule, in whole or in part. If RSPA would like to participate in the I certify that this proposal will not, if believed it could incorporate the rulemaking process by availing promulgated, have a significant adverse comment in a subsequent direct themselves of this mechanism. economic impact on a substantial final rulemaking, without generating Establishing clear procedures will number of small entities. This further significant adverse comment, it reduce the number of incomplete certification is subject to modification as could do so. If RSPA believed that the petitions filed with RSPA; furthermore, a result of a review of comments significant adverse comment raised an well-prepared, detailed petitions will received in response to this proposal. issue serious enough to warrant a ease RSPA’s job and enable it to process Paperwork Reduction Act substantive response in a notice-and- petitions in a timely and efficient comment process, it could publish a manner. In particular, proposed There are no information collection notice of proposed rulemaking, § 106.31(c) would state that, if the requirements in this proposed rule. following the procedures provided in 49 proposed action has a potential impact Regulation Identifier Number (RIN) CFR 106.11–106.29. Publishing the rule on the regulated industry or other as a proposal gives an opportunity to entities, the Associate Administrator A regulation identifier number (RIN) comment to persons who may not have may request the petitioner to submit is assigned to each regulatory action commented earlier because they wanted information and data concerning that listed in the Unified Agenda of Federal the rule to go into effect immediately. If impact to assist in rulemaking analyses Regulations. The Regulatory Information a significant adverse comment applies required under Executive Orders 12866 Service Center publishes the Unified to part of a rule and that part can be and 12612, the Regulatory Flexibility Agenda in April and October of each severed from the remainder of the rule Act, the Paperwork Reduction Act and year. The RIN number contained in the (for example where a rule deletes the National Environmental Policy Act. heading of this document can be used several unrelated regulations), RSPA This proposal is consistent with ACUS to cross-reference this action with the would adopt as final those parts of the Recommendation 86–6, Petitions for Unified Agenda. rule that were not the subject of a Rulemaking, which suggests how significant adverse comment. agencies may improve the handling of List of Subjects in 49 CFR Part 106 RSPA is proposing to adopt ACUS’s petitions for the issuance of rules. See Administrative practice and definition of ‘‘significant adverse 51 FR 46985; Dec. 30, 1986. procedure, Hazardous materials comment.’’ (The U.S. Coast Guard RSPA also proposes to amend 49 CFR transportation, Oil, Pipeline safety. adopted this definition in its recently 106.31, 106.33, 106.35 and 106.37 to issued final rule on direct final In consideration of the foregoing, 49 provide that petitions for rulemaking rulemaking, 60 FR 49222; Sept. 22, CFR Part 106 is proposed to be amended and petitions for reconsideration be 1995.) Specifically, a significant adverse as follows: filed with the appropriate Associate comment would be one that explains Administrator, who will review and why the rule would be inappropriate, PART 106ÐRULEMAKING issue determinations granting or including a challenge to the rule’s PROCEDURES denying the petitions in whole or part. underlying premise or approach, or RSPA also proposes to add a new 1. The authority citation for part 106 would be ineffective or unacceptable § 106.38 to provide that any interested would continue to read as follows: without a change. Comments that are party may appeal a decision of the frivolous or insubstantial would not be Authority: 33 U.S.C. 1321; 49 U.S.C. 5101– Associate Administrator, issued under considered adverse under this 5127, 40113, 60101–60125; 49 CFR 1.53. § 106.33 or § 106.37, to the procedure. A comment recommending a Administrator. §§ 106.31, 106.33, 106.35, 106.37 rule change in addition to the rule [Amended] would not be considered a significant Rulemaking Analyses and Notices adverse comment, unless the 2. Sections 106.31(a), 106.33, Executive Order 12866 and DOT commenter states why the rule would be 106.35(b), (c), and (d) and 106.37 would Regulatory Policies and Procedures ineffective without the additional be amended by adding the word change. This proposed rule is not considered ‘‘Associate’’ immediately before the RSPA would amend § 106.3 to clarify a significant regulatory action under word ‘‘Administrator’’ wherever it that RSPA’s Chief Counsel has the section 3(f) of Executive Order 12866 appears. delegated authority to conduct and was not reviewed by the Office of 3. In § 106.3, a new paragraph (d) rulemaking proceedings. This authority Management and Budget. The rule is not would be added to read as follows: has been delegated to the Chief Counsel considered a significant rule under the § 106.3 Delegations. in RSPA Order 1100.2A (May 19, 1992.) Regulatory Policies and Procedures of Specifically, the Chief Counsel has been the Department of Transportation [44 FR * * * * * delegated authority to ‘‘develop and 11034]. Because of the minimal (d) Chief Counsel. issue rulemaking documents, other than economic impact of this proposed rule, 4. In § 106.17, paragraph (a) would be final rules, for procedural rules, such as preparation of a regulatory impact revised to read as follows: 65212 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules

§ 106.17 Participation by interested with the requirements of this section, state that unless RSPA receives a persons. accompanied by a written statement significant adverse comment, or notice (a) Any interested person may indicating the deficiencies in the of intent to file a significant adverse participate in rulemaking proceedings petition. comment, within a specified time, by submitting comments in writing 6. Section 106.35 would be amended generally 60 days after publication, the containing information, views or by revising the first sentence of rule will become effective on a specified arguments in accordance with paragraph (a) to read as follows: date, generally 90 days after publication. instructions for participation in the § 106.35 Petitions for reconsideration. (c) For purposes of this section, a rulemaking document. (a) Except as provided in § 106.39(d), significant adverse comment is one * * * * * any interested person may petition the which explains why the rule would be 5. In § 106.31, paragraph (b) would be Associate Administrator for inappropriate, including a challenge to revised and new paragraphs (c) and (d) reconsideration of any regulation issued the rule’s underlying premise or would be added to read as follows: under this part. *** approach, or would be ineffective or § 106.31 Petitions for rulemaking. * * * * * unacceptable without a change. Comments that are frivolous or * * * * * 7. Part 106 would be amended by (b) Each petition filed under this adding a new § 106.38 to read as insubstantial will not be considered section must— follows: adverse under this procedure. A (1) Summarize the proposed action comment recommending a rule change § 106.38 Appeals. and explain its purpose; in addition to the rule will not be (2) State the text of the proposed rule (a) Any interested person may appeal considered a significant adverse or amendment, or specify the rule a decision of the Associate comment, unless the commenter states proposed to be repealed; Administrator, issued under § 106.33 or why the rule would be ineffective (3) Explain the petitioner’s interest in § 106.37, to the Administrator. without the additional change. (b) An appeal must be received within the proposed action and the interest of (d) If no significant adverse comment 20 days of service of written notice to any party the petitioner represents; and or notice of intent to file a significant petitioner of the Associate (4) Provide information and adverse comment is received, RSPA will Administrator’s decision, or within 20 arguments that support the proposed issue a subsequent document advising days from the date of publication of the action, including relevant technical, the public of that fact and that the rule scientific or other data as available to Associate Administrator’s decision in the Federal Register. will become, or did become, effective on the petitioner, and any specific known the date previously specified. Direct cases that illustrate the need for the (c) It is requested, but not required, that three copies of the appeal be final rules issued under this section are proposed action. not subject to petitions for (c) If the potential impact of the submitted to the Administrator. (d) Unless the Administrator reconsideration under § 106.35. proposed action is substantial, and otherwise provides, the filing of an information and data related to that (e) If RSPA receives a significant appeal under this section does not stay impact are available to the petitioner, adverse comment or notice of intent to the effectiveness of any rule. the Associate Administrator may file a significant adverse document, 8. Part 106 would be amended by request the petitioner to provide— RSPA will publish a document in the adding a new § 106.39 to read as (1) The costs and benefits to society Federal Register withdrawing the direct follows: and identifiable groups within society, final rule in whole or in part, and may quantifiable and otherwise; § 106.39 Direct final rulemaking. incorporate the adverse comment into a (2) The direct effects (including subsequent direct final rule or may (a) Where practicable, RSPA will use publish a notice of proposed preemption effects) of the proposed direct final rulemaking to issue the action on States, on the relationship rulemaking. A notice of proposed following types of rules: rulemaking will provide an opportunity between the Federal Government and (1) Minor, substantive changes to for public comment, generally a the States, and on the distribution of regulations; power and responsibilities among the (2) Incorporation by reference of the minimum of 60 days, and will be various levels of government; latest edition of technical or industry processed in accordance with (3) The regulatory burden on small standards; §§ 106.11–106.29. businesses, small organizations and (3) Extensions of compliance dates; Issued in Washington, D.C. under the small governmental jurisdictions; and authority delegated in 49 CFR part 1.53 and (4) The recordkeeping and reporting (4) Other noncontroversial rules RSPA Order 1100.2A (May 19, 1992). requirements and to whom they would where RSPA determines that use of Dated: December 12, 1995. apply; and direct final rulemaking is in the public Judith S. Kaleta, (5) Impacts on the quality of the interest and that a regulation is unlikely natural and social environments. to result in adverse comment. Chief Counsel. (d) The Associate Administrator may (b) The direct final rule document that [FR Doc. 95–30669 Filed 12–15–95; 8:45 am] return a petition that does not comply is published in the Federal Register will BILLING CODE 4910±60±P federal register December 18,1995 Monday Large PositionRules;ProposedRule Government SecuritiesActRegulations: 17 CFRParts400and420 Domestic Finance Office oftheUnderSecretaryfor Treasury Department ofthe Part VI 65213 65214 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules

DEPARTMENT OF THE TREASURY Building, 1500 Pennsylvania Avenue, prescribing the manner in which N.W., Washington, D.C. 20220. positions and accounts are to be Office of the Under Secretary for FOR FURTHER INFORMATION CONTACT: Ken aggregated; identifying the types of Domestic Finance Papaj, Director, or Don Hammond, positions to be reported; determining Assistant Director, Government the securities that would be subject to 17 CFR Parts 400 and 420 Securities Regulations Staff, at 202– the rules; and developing the form, RIN: 1505±AA53 219–3632. (TDD for the hearing manner and timing of reporting. The impaired is 202–219–3988.) proposed rules address these points. Government Securities Act Regulations: Large Position Rules SUPPLEMENTARY INFORMATION: Participation in Rulemaking Process/ I. Background Solicitation of Comments AGENCY: Office of the Under Secretary for Domestic Finance, Treasury. Statutory Authority In formulating the process to be used to develop large position rules, the ACTION: Proposed rule. In response to certain events that Department, early on, made a decision occurred in the government securities SUMMARY: The Department of the to obtain the views of the market Treasury (‘‘Department’’ or ‘‘Treasury’’) market in 1990–1991—short squeezes in participants who would be directly is publishing for comment proposed the two-year Treasury notes issued in affected by such regulations. We also rules that would establish a new Part April and May 1991 and bidding decided that it would be useful to improprieties in several auctions of explain the Department’s initial 420 providing recordkeeping and 1 reporting requirements pertaining to Treasury securities in 1990–1991 — thoughts on the structure and purposes large positions in certain Treasury Congress included in the Government of the rules, to explore various Securities Act Amendments of 1993 conceptual approaches to designing a securities. The proposed regulations are 2 being issued pursuant to the (GSAA) a provision granting the large position recordkeeping and Government Securities Act Department the authority to write rules reporting system and to obtain industry Amendments of 1993, which authorized for large position reporting in certain comment and feedback before actually the Secretary of the Treasury to Treasury securities. Specifically, drafting proposed rules. We believed prescribe rules requiring persons Section 104 of the GSAA, which that market participant involvement in amended Section 15C of the Securities the rulemaking initiative from its outset holding, maintaining or controlling 3 large positions in to-be-issued or Exchange Act of 1934, authorizes the would facilitate greater understanding recently-issued Treasury securities to Treasury to adopt rules requiring of, and support for, the final rules when keep records and file reports of such specified persons holding, maintaining implemented. or controlling large positions in to-be- large positions. Accordingly, in order to involve issued or recently-issued Treasury The proposed recordkeeping rules market participants and other interested securities to maintain records and file require any person or entity that parties at the earliest phase of the reports regarding such positions.4 This controls a position equal to or greater rulemaking process, the Department provision is intended to improve the than $2 billion in a Treasury security to issued an Advance Notice of Proposed information available to the Treasury maintain and preserve certain records Rulemaking (ANPR) on January 24, and other regulators regarding very large that enable the entity to record, compile, 1995.5 The ANPR addressed several key positions of recently-issued Treasury aggregate and report large position issues, concepts and approaches to be securities held by market participants information. The proposed reporting considered in developing large position and to ensure that regulators have the rules require entities to file a large recordkeeping and reporting rules, and tools necessary to monitor the Treasury position report with the Federal Reserve solicited comments, suggestions and Bank of New York if their reportable securities market. The GSAA gave the Department wide recommendations regarding how the position equals or exceeds the large requirements should be structured. position threshold in a particular latitude and discretion in determining several key features and conditions that Rather than repeating that information Treasury security as specified by the here, readers are encouraged to review Treasury in a notice requesting large would form the underpinnings of the large position recordkeeping and the ANPR to familiarize themselves position information. The Department’s with these issues. The ANPR also proposed large position rules are reporting rules. Among the most significant of these features were: contains a detailed historical intended to provide the Treasury and background that provides a fuller other securities regulators with defining which persons (individually or as a group) hold, maintain or control understanding of the events and information on concentrations of control circumstances that resulted in the that would enable them to better large positions; determining the minimum size of positions to be establishment of this regulatory understand the possible reasons for authority, the purposes and objectives to apparent significant price distortions reported; determining what constitutes ‘‘control’’ for the purposes of the rules; be achieved from large position rules, and the causes of market shortages in and the Congressional intent behind this certain Treasury securities. 1 For a discussion of the events that gave rise to legislation. DATES: Comments must be received on the establishment of large position reporting The 90-day comment period on the or before February 16, 1996. authority, see the Joint Report on the Government ANPR was extended, in response to an ADDRESSES: Comments should be sent Securities Market, Department of the Treasury, industry request, for an additional 30 Securities and Exchange Commission and Board of 6 to: Government Securities Regulations Governors of the Federal Reserve System, (1992); days through May 24, 1995. In Staff, Bureau of the Public Debt, Salomon Brothers Inc. Press Releases dated August response to the ANPR, the Department Department of the Treasury, 999 E 9 and 14, 1991; S. Rep. No. 103–109 (July 27, 1993); received seven comment letters which Street, N.W., Room 515, Washington, H.R. Rep. No. 103–255 (September 23, 1993); and are summarized in the next section of 60 FR 4576 (January 24, 1995). D.C. 20239–0001. Comments received 2 Pub. L. No. 103–202, 107 Stat. 2344 (1993). the preamble. will be available for public inspection 3 15 U.S.C. 78o-5. and copying at the Treasury Department 4 Pub. L. No. 103–202, Sec. 104; 107 Stat. 2344, 5 60 FR 4576 (January 24, 1995). Library, Room 5030, Main Treasury 2346–2348; 15 U.S.C. 78o-5(f). 6 60 FR 20065 (April 24, 1995). Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65215

In addition to considering the views from the Treasury’s auction rules (e.g., letter did not necessarily address all expressed by the commenters to the positions to be included in a reportable aspects of the ANPR. ANPR, Department staff has also large position, definition of a reporting Six commenters were largely consulted with various regulatory entity and method of aggregating supportive of a large position reporting agencies (i.e., staff of the Securities and positions) which have been in effect system provided that such a reporting Exchange Commission (SEC), the since March 1993 and are understood by system would not be overly burdensome Commodities Futures Trading many of the major participants in the for market participants. However, one Commission, the Board of Governors of Treasury securities market.7 This should commenter opposed the concept of large the Federal Reserve System and the reduce the time and costs that affected position reporting entirely. This party Federal Reserve Bank of New York entities will need for training their believed that ‘‘the current auction (FRBNY)) in developing this proposal. employees on the large position rules. reporting rules have already addressed We intend to continue to involve adequately the prior problems with interested market participants and the Scope of Large Position Rules market manipulation,’’ and that an regulatory agencies in the development It is important for all market unintended consequence of large of the large position regulations through participants to recognize that large position rules could be fewer the completion of the rulemaking position rules create a requirement to participants in the government process. Accordingly, the Department maintain records and report information securities market, which, in turn, would welcomes and strongly encourages about such positions. However, these result in higher borrowing costs. market participants to submit comments requirements only apply to entities that On-Demand vs. Automatic Reporting on the proposed rules and any hold or control (i.e., exercise investment suggestions for reducing burdens on the Five commenters supported an on- discretion) large positions, as demand reporting system which would industry while still achieving the determined by the Department, in objectives of the rules. be triggered by specific requests from specific Treasury security issues. the Treasury for large position Balancing of Regulatory and Market Accordingly, there is no obligation on information on a particular Treasury Needs executing brokers and dealers to report security. One respondent, however, The Department has attempted to large trades nor is there an affirmative favored an automatic, regular reporting strike a balance between achieving the duty to inform their customers of the system triggered whenever a reporting purposes and objectives of the statute large position recordkeeping and entity’s holdings in a security reached a and minimizing costs and burdens to reporting requirements being proposed certain threshold. those entities affected by the as part of this rulemaking. The primary reason expressed by regulations. For the following reasons, The Department reiterates that large those commenters favoring an on- we believe that the rules being proposed positions are not inherently harmful and demand reporting system was that this successfully achieve this balance. there is no presumption of manipulative approach would be significantly less First, the proposed rules envision or illegal intent on the part of the burdensome and costly than an reports to be submitted only in response controlling entity merely because a automatic reporting system. Many to a specific request by the Treasury for position is large enough to be subject to commenters noted that an automatic large position information on a the Treasury rules. In addition, the reporting method would impose more particular Treasury security issue. proposed rules do not establish trading complex systems development Under this approach, reporting should or position limits or require the requirements and greater operational be an infrequent event required identification of large traders or the costs due to the need for daily primarily in response to pricing reporting of large trades. Finally, the monitoring of positions across multiple anomalies in a specific Treasury GSAA specifically provides that the securities. In addition, automatic security rather than a regular, on-going Department shall not be compelled to reporting could create a disincentive to process resulting from a certain pre- disclose publicly any information buy and hold large positions that exceed determined large position threshold required to be kept or reported for large a fixed reporting threshold. Finally, on- being exceeded in a broader range of position reporting. In particular, such demand reporting was viewed by securities. information is exempt from disclosure several respondents as being better able Second, the proposed rules establish under the Freedom of Information Act.8 to address price distortions and provide a minimum large position threshold of II. Comments Received in Response to more useful information since the $2 billion below which the Treasury ANPR request for large position information would not request large position reports. would be targeted to specific market As a result, we believe that very few Seven comment letters were received situations and security issues. entities would be required to file large in response to the ANPR. The letters The respondent favoring an automatic position reports. were submitted by two trade reporting system argued that on-demand Third, the recordkeeping organizations, one primary dealer, a reporting ‘‘would be difficult and costly requirements would generally not apply Federal Reserve Bank, a bank regulatory to communicate to all relevant parties.’’ to any reporting entity (as defined in the agency, a commercial bank and an The commenter also felt that on-demand rules) that did not control a position insurance company.9 While all requests might trigger unwanted market that equalled or exceeded $2 billion in comments are summarized below, each reactions, while a regular reporting a Treasury security. system ‘‘would provide more consistent Fourth, for those entities currently 7 Uniform Offering Circular for the Sale and Issue monitoring of the market and would be subject to recordkeeping rules of the of Treasury Bills, Notes and Bonds, 31 CFR Chapter less confusing to the market over time.’’ SEC, the Treasury or the bank regulatory II, Subchapter B, Part 356. agencies, the proposed rules impose 8 5 U.S.C. 552(b)(3)(B). Definition of Reporting Entity only minor additional recordkeeping 9 Public Securities Association, Investment Six commenters were in agreement Company Institute, Chemical Securities Inc., the requirements and only if certain Federal Reserve Bank of New York, the Board of that the definition of ‘‘reporting entity’’ conditions are present. Finally, the Governors of the Federal Reserve System, Chemical should conform with the definition of proposed rules adopt several concepts Bank, and CNA Insurance Companies, respectively. ‘‘bidder’’ as defined in the uniform 65216 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules offering circular.10 The aggregation rule auctions,11 to $4–5 billion. Some excluding bills may be appropriate, ‘‘but with regard to affiliates, for example, is commenters also expressed the view a good case will need to be made that a concept with which many market that the threshold should be larger short interest is always small relative to participants are already familiar and under an automatic reporting system the net supply, or that supply provides an appropriate model for a than under an on-demand system to conditions and price movements large position reporting rule. Similarly, minimize the compliance burden preclude sustained and possibly the commenters supported a process, associated with automatic reporting. injurious squeezes.’’ One commenter said that there is no similar to the ‘‘separate bidder’’ process Components of a Position provided for in the uniform offering need to define ‘‘large position’’ in circular, by which separately managed advance under an on-demand reporting The four commenters addressing this entities within a corporate or system (the large position threshold issue agreed as a starting point that net partnership structure can request that would be specified in the Treasury long settled cash positions should be Treasury recognize them as separate notice requesting large position reports), included in a ‘‘large position.’’ reporting entities. and there may be no ‘‘one-size-fits-all’’ Two commenters said that the threshold. definition of ‘‘large position’’ should be Definition of ‘‘Control’’ consistent with the definition of ‘‘net Definition of ‘‘Recently-Issued’’ There was similar concurrence on the long position’’ in the uniform offering 14 definition of ‘‘control.’’ Nearly all The scope of Treasury’s large position circular. Both felt that financing parties that addressed this issue reporting authority is limited to transactions (repos, securities borrowed, expressed the view that control should recently-issued and to-be-issued etc.) should be excluded from the large be evidenced by either proprietary Treasury securities. Discretion to define position calculation since it is too ownership or investment discretion over the term ‘‘recently-issued’’ was given to difficult to apply the concept of control a Treasury security. The commenters the Treasury. Although the commenters to securities used in such transactions. were in similar agreement that the differed somewhat on the specifics of Calculating a net financing position is concept of ‘‘control’’ should not be the preferred meaning of ‘‘recently- particularly difficult, according to one issued,’’ all agreed that it should of the commenters. Examples provided extended to merely beneficial 12 ownership or custodians. Specifically, include the ‘‘on-the-run’’ (most- included the problems of differentiating the commenters held that entities acting recently issued) security of a particular deliver-out from hold-in-custody and as custodians should not be required to type. Opinions were fairly evenly tri-party repurchase agreements, and of report positions in Treasury securities divided on whether ‘‘recently-issued’’ separating overnight repos from term over which they have no investment also should include only the most repos, particularly those with recent ‘‘off-the-run’’ issue or the two discretion. mandatory substitution provisions. Both most recent ‘‘off-the-run’’ issues. One of these commenters, however, could Definition of ‘‘Large’’ Position commenter said that there is no need to support a requirement to report define ‘‘recently-issued’’ under an on- The commenters generally felt that financing transactions on a gross basis if demand reporting system. the large position threshold should be Treasury believes financings need to be large enough to both detect Types of Securities Covered included. The other two commenters felt that concentrations of control and avoid Based largely upon the presumption financing transactions should be overly burdensome, frequent reporting that Treasury note and bond issues are included in the definition of a by market participants. Opinions were 13 more likely to be ‘‘on special’’ (in reportable position to encompass a fairly evenly divided on whether a short supply) than bills, two wider range of transactions from which securities position should be defined as commenters said that bills should be an entity can exert immediate control ‘‘large’’ based on a percentage of the excluded from large position reporting. over a Treasury security. Both total outstanding issue size or a specific One such commenter also cited the advocated reporting such transactions dollar amount. complexity, burdens and costs on a gross basis. One commenter noted Those preferring a percentage ‘‘associated with implementing systems that a position that might look flat on a standard commented that this method is to track positions on weekly-issued net basis may in fact be exposed if fails a better indicator of concentration of securities * * *.’’ One commenter, become a problem. Moreover, the control than a straight dollar standard, however, said that all types of Treasury commenter contended, matched-book given the large range of issue sizes securities (bills, notes and bonds) and tri-party repo activity might result among various maturities. Suggested should be eligible for reporting, ‘‘since in a small net position, and yet be used percentages ranged from 10 percent to any type of Treasury security could be as a tool to achieve a short squeeze. 25 percent of a particular issue. One the subject of a concentration of commenter felt that, if an automatic control.’’ Another commenter took a Recordkeeping Requirements reporting system is implemented, the more neutral position, saying that The issue of what records should be percentage should be consistent with kept by reporting entities was largely the Treasury’s auction rules, i.e., ‘‘large’’ 11 31 CFR 356.13(a). unaddressed except that the should be defined as 35 percent of the 12 A Treasury security is considered to be ‘‘on-the- commenters felt that these records, and securities awarded in an auction. run’’ when it is the newest security issue of its maturity (e.g., in October the two-year note issued their associated retention periods, Those favoring a fixed-dollar September 30 would be ‘‘on-the-run’’ while the should closely correspond to records threshold did so on the basis of clarity, two-year note issued August 31 would be ‘‘off-the- already required to be maintained by ease of administration, and, run’’). An on-the-run security is normally the most liquid issue for that maturity. reporting entities under existing consequently, improved compliance. 13 When securities are ‘‘on special,’’ market securities and banking laws. Most Suggested dollar thresholds ranged from participants desiring to borrow the particular respondents stated that reporting $2 billion, to correspond to the net long security must accept an interest rate significantly entities should not be required to keep position reporting threshold for lower than the prevailing repo rate for unspecified collateral. Conversely, the owners of the securities records in electronic form, since such a can finance their position at exceptionally low 10 31 CFR 356.2 and Appendix A. interest rates. 14 31 CFR 356.13(b). Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65217 requirement could be burdensome for minimum size for a large position is 2. Section 420.2 entities that do not have systems for applied. Definitions. This section provides for electronic recordkeeping. We believe it is appropriate to the definitions of terms that are integral III. Section-by-Section Analysis of exclude certain entities from the to the large position rules. Unless Proposed Regulations application of the rules based on the otherwise defined in this section, terms existing availability of position used in part 420 have the same A. Section 400.1. Scope of Regulations information on these organizations and/ meanings provided in section 400.3. or concerns about the confidentiality of A new paragraph is proposed to be ‘‘Control’’—The concept of control this information. Accordingly, added to Part 400 to describe the revolves around three elements: paragraphs (b) and (c) of section 420.1 statutory basis for the large position beneficial ownership, possession provide exemptions from part 420 to the rules. The paragraph also states that the (custody) and investment discretion. holdings of foreign central banks, large position rules are located in Part The beneficial owner is the party with foreign governments, international 420. the actual ownership interest in the monetary authorities and Federal Treasury security. The beneficial owner B. Part 420. Large Position Reporting Reserve Banks (FRBs). The exemptions may or may not always be aware of its for the foreign entities are limited to ownership position in a given security 1. Section 420.1 their respective positions maintained at if it does not manage its own Applicability. This section sets out the FRBNY. The exemptions are also investments and it may not have the scope of the large position consistent with the position expressed possession of the Treasury securities recordkeeping and reporting rules by by the Senate and House during even if it makes its own investment identifying the types of Treasury consideration of the legislation.16 decisions (especially likely with book- securities covered and by defining the One commenter, responding to the entry Treasury securities). Possession or universe of entities potentially affected. ANPR, expressed concern about custody is evidenced by an Section 420.1 reflects the Department’s granting exemptions specifically to organization’s ability to service the initial determination that all marketable these foreign entities. However, the securities directly (e.g., transfer the Treasury securities—bills, notes and Department believes the proposed securities, receive interest and principal bonds—should be included within the approach is appropriate since the payments). The beneficial owner may scope of the rules. However, arguments exemptions are limited in their scope by perform this function for its own have been made that features and applying only to the portion of the holdings, but the mechanics of book- characteristics of the bill market, such organization’s position that is entry Treasury securities require that a as the frequency of issues (i.e., weekly) maintained at the FRBNY. Any depositary institution act in this and reopenings, the size of bill auctions positions held by the exempt entities at capacity on behalf of others at some and the availability of several locations other than the FRBNY are not level in the custody chain for all instruments that are close substitutes for exempted and will be subject to the Treasury securities. Additionally, book- bills (e.g., various money market large position recordkeeping and entry Treasury securities may involve instruments), make it more difficult to reporting rules. The proposed more than one custodian in the holding 17 accumulate concentrations of ownership exemption for those Treasury securities of a specific security entitlement. of Treasury bills. Comments are that FRBs hold and control for their own Investment discretion is the authority to specifically requested on whether accounts is also based on the make and execute decisions about the Treasury bills should be included in the Department’s access to this information. purchase, sale and retention of large position recordkeeping and The Department recognizes that on securities. In the institutional market for reporting rules. rare occasions it may be necessary to Treasury securities, which is of critical importance in developing large position On its face, part 420 applies to any request large position information on reporting rules, the granting of type of entity, foreign or domestic, that Treasury securities that are not within investment discretion to an investment might control a large position in a the parameters of the proposed adviser to manage all or some portion of specific Treasury security. This broad definition of recently-issued (paragraph an entity’s portfolio is common. construct of potential application is 420.2(g)) but that are within the scope It is our view that, for the purposes of consistent with the statutory purpose: of the intent of the statute. For example, large position reporting, the most ‘‘Large position reporting also would be in August 1991, Treasury might have important criterion in the definition of useful in assuring that regulators can sought large position information on the control is that of investment discretion. monitor the positions of major market April 1991 two-year note, given that the While beneficial owners receive the participants other than government security was still ‘‘on special’’ in the economic benefit of holding a Treasury securities brokers or dealers under repurchase agreement market and there security, frequently, they do not make certain circumstances. In particular, it was a significant concentration of the decision to purchase/sell/retain the will provide assurance that the ownership. While this security, at that Treasury security and, as mentioned, government can compel disclosure of time, would have been outside the may not, on a day to day basis, be aware position information when necessary scope of the currently proposed from all large market participants, definition, the Department believes it is 17 The Federal Reserve Banks maintain book-entry including a group of relatively necessary to reserve the right to collect security accounts for depository institutions and unregulated entities called ‘hedge large position information in such other entities such as government and international funds.’ ’’ 15 As described in the preamble circumstances. Accordingly, we have agencies and certain foreign central banks. In their book-entry accounts at the Federal Reserve, the discussion of sections 420.3 and 420.4, included within the rule a reservation to depository institutions may maintain their own the number of entities that may actually request information on additional security holdings and holdings for customers, be affected by large position rules is Treasury security issues consistent with which may include other depository institutions, significantly narrowed when the the purposes of the GSAA. dealers, brokers, institutional investors and individuals. In turn, the depository institution’s customers may maintain accounts for their 15 H.R. Rep. 103–255, September 23, 1993, at pg. 16 139 Cong. Rec. H–10967 (daily ed. November customers. This creates a tiered chain of custodial 25. 22, 1993) Statement of Chairman Dingell on S. 422. relationships. 65218 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules of their ownership interest. Since a Following this definition, an investor elements of a large position. If an purpose of large position reporting is to would only be responsible for reporting aggregating entity has no affiliates, then understand better any pricing anomalies its proprietary holdings if it retained it is also a reporting entity. Each for a particular Treasury security issue investment discretion over the component of a reporting entity is in a timely fashion, defining control positions. This approach would avoid individually an aggregating entity. based on beneficial ownership would double reporting of these positions. ‘‘Reportable Position’’ 20—The scope not be particularly useful because a Additionally, a custodian would only of the definition of reportable position reporting entity could have difficulty have responsibility for reporting on any directly affects the complexity of assembling the information needed to large positions for which it had calculating such a position and the file a large position report and would be investment discretion. A custodian amount of time needed to file a large potentially unaware of the reasons why would not have any obligation to report position report. The definition of a the security involved was purchased. on positions for which it maintained reportable position should be broad Likewise, custody (without securities solely in a safekeeping enough to encompass the most investment discretion) does not provide capacity. significant ways that an investor may a good basis for determining control. A ‘‘Reporting Entity’’—This term is control a Treasury security issue, definition based on custody would most defined to be consistent with the balanced against the difficulty and cost certainly involve multiple reporting of definition of a bidder in the uniform of compiling the information. the same security position since each offering circular.19 This concept Additionally, because of the complexity tier in the custody chain would be provides for the treatment of all in defining this term, it is useful to base required to report. This approach would affiliated entities as a single entity for the definition, to the maximum extent diminish the value of any large position purposes of determining the quantity of feasible, on concepts familiar to market reports received. Also, because under Treasury securities controlled. participants. these circumstances the custodian Additionally, the definition permits For participants in the Treasury would not be a party to the investment specific affiliates to be treated separately securities market, a familiar concept is decision, reporting on the positions held or ‘‘carved-out’’ from the reporting that of ‘‘net long position’’ in the in safekeeping would shed very little entity based on stated principles of uniform offering circular.21 The uniform light on the objectives of the investor. separateness. offering circular definition includes the Therefore, Treasury has decided to Applying this approach, a ‘‘reporting par amount of: (1) Immediate (cash) define control as the authority to entity’’ will aggregate each of the positions; (2) when-issued positions for exercise investment discretion. This positions in a specific Treasury security to-be-issued and reopened issues; (3) definition is supported in six of the that is held by itself and all affiliates forward settling positions; (4) positions seven comment letters. Investment that control positions, and will report a in futures contracts requiring delivery of discretion can be exercised by the single position to the FRBNY. Any the specific security; and (5) STRIPS beneficial owner, a custodian or an affiliate that exercises independent (Separate Trading of Registered Interest investment adviser. The party investment discretion, and whose and Principal of Securities) principal responsible for making investment position information is not available to components of the specific security. decisions, regardless of where it is in other affiliates, will be permitted to This is an appropriate place to begin the tiered system, is the most relevant report separately from the overall entity development of a reportable position reporting entity for large position provided it has requested such a ‘‘carve- because it is not only familiar to many reporting since the actions and out’’ and received written recognition market participants but also includes objectives of the decision maker are from the Treasury. Merely establishing the most common elements of control in what we are trying to determine. A ‘‘Chinese walls’’ or similar procedures is the cash market. The combination of single party exercising investment not sufficient. If an entity has already these five elements is defined as the net discretion for multiple beneficial received such written recognition under trading position—the first component of owners could control a potentially large the uniform offering circular, it will not a reportable position. amount of Treasury securities without have to reapply for the purposes of large The Department is requesting that any single beneficial owner having a position reporting. commenters specifically address the reportable position. Additionally, such Defining the term ‘‘reporting entity’’ treatment of forward positions. While investment advisers could possibly based on the bidder concept from the forward positions are a component of distribute custody of the securities in a auction rules has the advantage of the net long position defined in the manner that would keep any individual relying on an existing body of uniform offering circular, there may be custodian below the reporting regulations, thus minimizing confusion reasons to exclude them from the threshold. However, using the exercise and the need for market participants to definition of reportable position because of investment discretion as a measure of learn new rules. The bidder definition is forward positions may be less effective control, an investment adviser’s well known to most large participants in in controlling a security or may act to aggregate positions would be reportable the Treasury market (from their auction conceal settled positions. For example, regardless of the number of beneficial participation) and has functioned the proposed large position rules permit owners or custodians involved and effectively since March 1993 when the a reporting entity to reduce the size of would be treated separately from any rules were implemented. This approach its settled position by the amount of a positions over which the beneficial was also endorsed in four comment owners had retained investment letters. 20 A reportable position for the purposes of the discretion. Finally, a definition of This definition also introduces a new term, ‘‘aggregating entity,’’ which is large position rules differs from a reportable control based on investment discretion position for purposes of the uniform offering is consistent with the treatment of defined separately. An aggregating circular. In the uniform offering circular, a investment advisers under the uniform entity is a single legal entity (e.g., a reportable net long position is a position that has offering circular.18 parent company or affiliate within a met the necessary criteria to be reported on a reporting entity) that may control tender. In the context of the large position rules, a 18 Treasury intends to clarify this treatment in a reportable position defines the components of a proposed rule in the near future. 19 See supra note 10. potential large position. 21 See supra note 14. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65219 short forward settling position. Should excluding fails from the determination also does not differentiate between this treatment be permitted? Treasury of a large position and instead requiring types of repos (e.g., overnight, term). As especially welcomes the views of submitters of large position reports to an example, a security that has been market participants on this subject. disclose information about fails as a received through a reverse repo and Options and certain futures contracts memorandum entry. Since a position contemporaneously repoed out to a (i.e., cash-settled or those requiring that remains unsettled after its third party will be included at the gross delivery of securities other than the scheduled settlement date is not par amount of the reverse in the entity’s specific security that is the focus of included in the computation of a net long position. Gross reporting yields large position reporting) continue to be trading position, including fails may act this result even though the security was excluded because they do not provide to artificially increase the size of the no longer in the possession of the the holder with either immediate reported position. This result is reporting entity since it had been control or an effective way to apparent if fails-to-deliver were to be a contemporaneously repoed out. The manipulate the price of a specific positive addition to a reportable proposed approach will result in the security. For options, an entity would position since a past settlement date potential for multiple entities including only gain control of the security at the short trade, unlike a short forward a position for the same specific Treasury time the position is exercised, at which position, would not reduce the size of security in their respective time the security would become a an entity’s reportable position. computations and reportable positions. component of a reportable position. Additionally, commenters are asked to However, the resultant double counting Large positions in the excluded futures consider whether fails should be treated is not considered to be a problem contracts are already reported to the differently from forwards given their because it provides additional Commodity Futures Trading similarities. information about entities that have Commission.22 Thus, this information The sum of the net trading position, various legal claims to the security and will be available to the Department and gross financing position and the net fails that may potentially benefit from any other regulatory agencies, if needed, position is a reporting entity’s total possible market disruptions. without imposing additional reporting reportable position. An optional exclusion is proposed requirements. ‘‘Gross Financing Position’’—To that will permit a reporting entity to Financing transactions are proposed achieve the statutory intent, financing voluntarily exclude from the to be included in a reportable position transactions should be included in a computation of its gross financing because of the important influence they reportable position. The more difficult position certain securities received have on the available supply of a question is how to include them. Within through financing transactions. This Treasury security. The legislative the generic construct of financing exclusion would apply to situations in history behind the large position transactions, there are multiple types of which the securities received were reporting authority supports the transactions including: repurchase and subject to a right of substitution on inclusion of financings, especially reverse repurchase agreements, behalf of the delivering counterparty, repurchase agreements.23 The approach securities borrowed and loaned, tri-party custodial relationships, or for including financing transactions is securities pledged and received in custody of the securities being retained addressed below in the definition of a pledge, and any other form of credit by the party granting the legal interest gross financing position. The gross collateralized by Treasury securities. in the securities (hold-in-custody). financing position is the second Since the intent of large position These Treasury securities would be component of a reportable position. reporting is to obtain information about eligible for exclusion based on a Finally, the Department believes that the control of Treasury security presumption that the receiving a third component—‘‘fails’’—should be positions, an effective approach for organization did not have effective included in the definition of reportable incorporating financing transactions is control of the securities despite having position. An investor’s net fails position to include them on a gross basis (no ‘‘received’’ them. The exclusion is (fails to receive less fails to deliver) netting) in the reportable position of the optional because its use, while indicates ownership rights to a security entity that has received the securities. benefiting the entity taking advantage of without the cost of financing. All fail Under this approach, the seller/lender it, does not diminish the usefulness of positions should be included without of the securities would not include the the resultant large position reports. If it differentiating between types of financing transaction in its calculation were made mandatory, many potential counterparties (i.e., broker-dealers, of the gross financing position since it reporting entities might find it too costly customers). A large ‘‘fail-to-receive’’ would already have reflected the and burdensome to differentiate position may exacerbate, or benefit positions that provided it with control information on financings at this level from, a squeeze by maintaining high of the securities (i.e., cash positions, of detail. If the amount excluded is large demand for a specific security. In reverse repos) in the calculation. enough to cause the reporting entity to analyzing existing market Reporting in this manner would provide fall below the reporting threshold, then discontinuities, the knowledge of the regulators with information about the a report should not be filed. existence of any large net fail-to-receive broader universe of market participants The gross financing position is then positions could help determine the that had possible control of the Treasury combined with the other two cause and potential resolution of a tight security, regardless of how they might components of a reportable position to supply condition. have subsequently financed or determine the total reportable position Commenters are also requested to transferred it. held by a reporting entity. For purposes address the treatment of fails. No differentiation is made in the of the calculation, all positions would Specifically, the Department is computation between the types of be valued at the par amount of the interested in receiving comments on financing transactions (e.g., repos, securities involved. whether the proposed treatment of fails securities lending) since, despite ‘‘Large Position Threshold’’—The positions is more appropriate than different legal frameworks, they are large position threshold is the dollar generally equally effective ways of amount of a reportable position at or 22 17 CFR Parts 15 to 18. obtaining control. The first part of the above which the requirement to file a 23 See supra note 15 at pg. 44. gross financing position computation large position report is triggered. Since 65220 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules the large position rules take an ‘‘on- of any reporting entity that has a reporting rules as well as the purposes demand’’ approach to reporting, the reportable position that equals or and objectives of the statutory authority specific large position threshold for any exceeds the large position threshold in underlying such rules. The main focus given Treasury security issue may vary. a particular Treasury security issue as of our analysis involved selecting the However, since the threshold would not specified by the Department. This approach that best balanced the be known in advance, we believe that it section also specifies the method by purposes of the statute and any new will be beneficial to provide some which Treasury will provide notice to regulatory burdens that would be certainty to market participants by the marketplace requesting large created. (Readers are referred to the setting a minimum dollar amount position reports, the specific ANPR for a more detailed discussion of (‘‘floor’’)—$2 billion—below which information that must be provided on these issues and other background reports would not be requested. the large position reports, where they information pertaining to large position Establishing a floor should minimize must be filed and the time frame for reporting.) 24 compliance costs. For example, many their submission. This section also The primary purpose of any large entities, based on this level of the floor, permits either the Treasury or the position reporting system is to enable may decide that no modifications would FRBNY, acting as the Treasury’s agent, the Treasury and the other regulators to be needed to their computer systems or to request additional information from a understand better the possible reasons trading strategies since the rule would reporting entity if either organization, for apparent significant price distortions not apply to them (i.e., the firms would after analyzing the large position and the causes of market shortages in not expect their positions ever to reach reports, requires further data to gain a certain Treasury securities. Large the floor amount). Of the six more complete understanding of the position reports are also intended to commenters who addressed this issue, extent and nature of the concentration provide regulators with information on three endorsed a variable threshold of positions in a particular Treasury concentrations of control for market method (one respondent actually security. A sample reporting format for surveillance purposes and for supported a fixed percentage method, large position information is illustrated enforcement of the securities laws, as which would lead to a variable dollar in Appendix B to the rule. well as to enable Treasury policy level since it would be based on the makers to make better decisions Analysis of Alternative Reporting amount issued of a specific security). concerning any possible government ‘‘Recently-Issued’’—Despite the Methods actions that might be taken in response determination that any large position The method of reporting large to apparent price anomalies. A critical reporting would be done on an on- positions is a central issue in the factor in evaluating the two alternative demand basis, the Department believes development of large position rules, large position reporting methods was that it is useful to set out a general since the method selected will the extent to which they would meet the description of which Treasury securities significantly affect the compliance overriding legislative and policy would be within the scope of the rule. burdens of, and costs incurred by, the objective of strengthening the ability of For convenience, the definition of entities subject to the large position the regulatory agencies to deter possible recently-issued includes when-issued regulations. manipulation of the Treasury securities securities from the time of The Department evaluated two market. announcement of the issue. Thus, when- distinct approaches for reporting large On-Demand Reporting System issued securities would be considered position information: an ‘‘automatic’’ or the most recent issue of a security type. regular reporting method and an ‘‘on- The requirements outlined in In response to the commenters and in demand’’ reporting method. Under an paragraph 420.3(a) reflect the consideration of the Treasury securities automatic, regular reporting process, Department’s decision to propose an on- that could be of most interest to large position reports would be required demand reporting system for large regulators, we have proposed that as a to be filed whenever a reporting entity position information. Reports would be regular matter, recently-issued would be equalled or exceeded the large position required in response to a specific limited to the three most recent issues threshold stated in the rules for any request, issued by the Treasury, for large of a Treasury security (bill, note or covered Treasury security. Depending position information. bond) if issued quarterly or more upon the particular method used in a An on-demand reporting approach frequently and the two most recent regular reporting system, reports could will enable the Department to target issues if issued less frequently. either be required on a one-time basis or large position reporting to a specific Currently, this latter condition exists they could continue to be required each issue of a Treasury security in response only for the 30-year bond. The day the entity exceeded the large to particular circumstances or unusual definition of recently-issued for this position threshold and would cease market activity. This would ensure the security, which is currently issued semi- only when its positions in the Treasury availability of information for market annually, was limited to the two most security fell below the threshold level. surveillance and enforcement purposes recent issues because a three-most- In contrast, in an on-demand reporting in those specific instances where it is recent definition would have, on a system, reports would be triggered by a most needed, thus satisfying the regular basis, encompassed a time notice from the Treasury requesting primary objective of this regulatory period of nearly a year and a half. As large position information on a specific authority, while obviating the need to discussed earlier, the Department issue of a Treasury security from those collect information on securities that are intends to reserve the right to broaden reporting entities whose positions at not of interest. In contrast, under a the scope of this definition, on a limited that time equalled or exceeded the large regular reporting system, reports would exception basis, consistent with the position threshold specified in the be required when the large position purposes of the GSAA. notice. threshold had been exceeded; therefore, In evaluating the method of reporting reports would be filed even in situations 3. Section 420.3 that should be employed, the where there were no price distortions, Reporting. The provisions of this Department took into consideration the anomalies or evidence of possible section require large position reports to events that gave rise to Congress’ grant be filed by the designated filing entity of authority to prescribe large position 24 See supra note 5. Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65221 market manipulation. This would result system significantly minimizes the access, to one or more of the electronic in unnecessary costs for, and burdens regulatory costs and burdens on market financial wire services. Thus, the on, both market participants and the participants compared to those that likelihood that the Treasury notice government. In addition, a regular would be incurred if the Treasury were requesting large position reports would reporting method could increase the to require regular reporting. fail to come to the attention of a possibility that investors would take In analyzing the different reporting potential reporting entity is extremely deliberate actions to reduce their models, the Treasury also took into remote. holdings of Treasury securities to avoid consideration the fact that a large The press release would include exceeding the ‘‘large’’ position reporting segment of market participants who are information about how to obtain a threshold. This could result in likely to be subject to Treasury’s large sample large position report and the decreased market participation, reduced position reporting rules—the 37 primary name and telephone number of a liquidity and increased borrowing costs. dealers—already submit regular position Departmental contact person to answer An on-demand reporting system reports to the FRBNY on a voluntary questions about the report. would avoid the need to set a uniform basis for on-the-run Treasury notes and Since the Federal Register is the large position threshold that would bonds. By adopting an on-demand designated federal publication for apply to some or all Treasury issues as reporting system, we have attempted to providing official notice, publishing the would be required under an automatic minimize, as much as possible, any Treasury notice in that document is reporting approach. The Treasury would duplicate reporting by these entities. legally sufficient for ‘‘constructive have the flexibility and latitude to Triggering Event: Treasury Request for notice’’ of the request despite lagging establish a tailor-made large position Information the issuance of the press release. threshold each time it requests large position reports. This permits a large The provisions of paragraph 420.3(a) Designated Filing Entity position threshold to be based on the propose that the requirement to report Under paragraph 420.3(b), the latest supply of, and market conditions large position information would be designated filing entity is responsible for, a specific Treasury security, which triggered by a notice issued by the for preparing and submitting the large can vary considerably. Treasury specifically requesting such position reports on behalf of a reporting On-demand reporting should be less information. The notice would identify entity in response to a Treasury notice onerous and costly for market the specific Treasury security issue to be requesting large position information. participants. Any modifications to reported, the applicable large position The identity of the designated filing existing computer systems to compile, threshold (in no case less than $2 entity must be given on any large summarize, compare and report the billion) for that issue and the date or position report submitted. 26 positions would be less complex than dates as of which the large position Each reporting entity, as defined in for the required continual review of information must be reported. paragraph 420.2(i), whose reportable multiple securities positions under a The notice requesting large position position equals or exceeds the large regular reporting method. Under a reports would be communicated by position threshold, must have one, and regular reporting approach, firms would issuing a press release and subsequently only one, designated filing entity. A publishing the notice in the Federal need to modify existing computer reporting entity that consists of only one Register. Given the relatively short systems or develop entirely new component is the designated filing reporting deadline in the proposed systems to continuously collect, monitor entity. For those reporting entities that rules, this two-pronged notice approach and report positions in when-issued and consist of multiple affiliates or satisfies the dual objectives of recently-issued Treasury securities. aggregating entities, one entity must be operational efficiency and legal Since reports would need to be filed selected to be the designated filing sufficiency. A Treasury press release has whenever positions equalled or entity. That entity is responsible for the advantage of achieving wide, timely exceeded the large position threshold, receiving and compiling the large distribution of the notice without a the systems would have to be designed position information from each of the significant time lag. Although this to compute the overall positions in a approach relies on third-party services aggregating entities, computing the large number of separate Treasury over which the Treasury has no control, reportable position and preparing and security issues (approximately 23 it is reasonable to expect that the major filing the large position report. separate CUSIPs 25 based on the news and financial publications and the An official authorized to file reports definition of recently-issued in various electronic financial wire on behalf of the designated filing entity paragraph 420.2(g)) and then compare services (e.g., Telerate, Reuters, shall sign the large position report and the amount of the positions to the large Bloomberg, Knight-Ridder) would certification attesting to the accuracy, position threshold on a daily basis to disseminate the Treasury notice as completeness and reliability of the determine if reports would have to be quickly as their respective technological information being reported. This official produced. There would be an even capabilities allow. The electronic must be one of the following: the chief greater burden on those entities that financial wire services and news financial officer, the chief operating would manually compile this publications can also be relied upon to officer, the chief executive officer, or the information. accurately present the Treasury’s managing partner or equivalent of the Recognition of the costs that would be request for large position information. designated filing entity. The contact imposed on market participants has We believe that any market participant, person named on the large position been a critical consideration in our including a foreign entity, that may report should also be a representative of attempt to develop large position rules control a large position in a Treasury the designated filing entity but need not that strike a balance between regulatory security is likely to subscribe, or have be the authorized official. oversight and market efficiency. We Further, any designated filing entity is believe that an on-demand reporting 26 To understand the price and supply dynamics required, under the applicable provision of the security under scrutiny better, the Treasury in section 420.4, to make and maintain 25 The CUSIP number is the unique identifying reserves the right to request that entities submit number assigned to each separate security issue and positions covering a multi-day, historical time each separate STRIPS component. frame rather than just one day. 65222 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules additional records on behalf of the (b) Line 2, net when-issued positions positive number (long position), a entire reporting entity.27 for to-be-issued and reopened issues; negative number (short position), which (c) Line 3, net forward settling should be shown in parentheses, or zero Information Required on Large Position positions, including next-day settling (flat position). Only securities trades Reports positions; that have actually settled should be Paragraph 420.3(c), together with (d) Line 4, net positions in futures included in line 1, cash/immediate net Appendix B, sets forth the specific contracts that require delivery of the settled positions. Accordingly, auction information that must be provided in specific security that is the subject of purchases that have not yet been settled the large position report. For those the large position report (but not futures or issued should be included in the total reporting entities that have a number of contracts for which the security that is reported on line 2, when-issued aggregating entities or affiliates, the the subject of the large position report positions. amount to be reported for each of the is one of several securities that may be For line 6, Gross Financing Position, positions is the total, combined net delivered and not futures contracts that netting of these positions is not amount. All positions are to be reported are cash-settled); permitted although certain items may be as of the close of the business/ (e) Line 5, net holdings of STRIPS excluded. (See paragraph 420.2(c).) For transaction day for the date specified. In principal components of the specific reporting entities that take advantage of those instances where Treasury requests security that is the subject of the large this limited exclusion, the gross positions covering multiple dates, position report; financing position should not include separate reportable position calculations (f) Line 6, the gross financing the amount of security issues received must be submitted for each date. The position, which is the sum of the gross from financing positions over which the rule does not require, nor does the par amounts of a security issue received reporting entity does not exercise Treasury intend, for firms to calculate from financing transactions (e.g., reverse control. Rather, the amount associated their positions as of some specific point repurchase transactions, bonds with the exclusion should be reported during the trading day. However, in borrowed, securities received in pledge in the Memorandum Entry #2. order to meet the deadline for reporting, and collateralized credit extended); Line 7, Net Fails Position, can only be the designated filing entity may need to (g) Line 7, net fails position, which is reported as a positive number (which determine a cut-off time for foreign fails to receive less fails to deliver in the indicates fails to receive exceed fails to entities. specific security issue; and deliver) or zero (which reflects fails to The following administrative (h) Line 8, Total Reportable Position, receive are totally offset by, or are less information must be provided on the which is the sum of lines 1–7. than, fails to deliver). All amounts must be reported in large position report: Reporting Format (a) The name of the reporting entity; millions at par value. See Appendix B (b) The address of the principal place for a sample reporting format. Rather than designing and mandating of business of the reporting entity; The large position report provides for a specific reporting form, the Treasury (c) The name and address of the two memoranda entries. Memorandum is proposing to allow the reporting designated filing entity; Entry #1 is the sum of the gross par entities to develop their own large (d) The description of the Treasury amounts of a security issue delivered as position reports, provided the reports security being reported, including the part of a financing transaction (e.g., contain all of the required information CUSIP number; repurchase agreements, securities as prescribed in the rules, in the order (e) The date or dates for which the loaned, securities pledged and stated in Appendix B. By permitting the information is being reported (which collateralized loans). This amount reporting entities to design their own should be the same date(s) as that should not be included in the gross large position report, firms will be able (those) stated in the Treasury notice financing position (line 6) as noted in to integrate the report into their existing requesting the large position reports); item (f) above. Memorandum Entry #1 is systems as they see fit and avoid the (f) The date the report was submitted; required. unnecessary burden of transferring the (g) The name and telephone number Memorandum Entry #2 is to be information from internally generated of a contact person of the designated reported by those entities that take the reports to a Treasury-mandated form. filing entity to whom questions can be voluntary exclusion pursuant to While firms will have a certain amount directed regarding any information on paragraph 420.2(c) to reduce the gross of latitude and discretion in designing a the report; financing position reported on line 6. large position report, the information on (h) The name and title of the person The amount shown is the amount of the various positions that constitute the authorized to submit the report (as securities received from financing total reportable position must be previously described); positions over which the reporting reported in the order shown in (i) A certification statement attesting entity does not have effective control paragraph 420.3(c) and in the sample/ to the accuracy, completeness and due to arrangements such as third-party prototype report in Appendix B. This reliability of the information being custodial structures, hold-in-custody will facilitate analysis of the data. submitted; and relationships or substitution rights. This Failure to include any of the required (j) The signature of the authorized amount should not be included in the information, including administrative official specified in (h). amount reported on line 6. information, on the large position report The following large position Lines 1–5 of the large position report will constitute non-compliance with the information must be reported in the are consistent with the items that rule. exact order as noted: determine the net long position for (a) Line 1, cash/immediate net settled auction reporting purposes.28 As with Filing of Large Position Reports: Where, positions; the auction rules, the amounts to be When and How reported for each of the items on lines Pursuant to paragraph 420.3(d) the 27 Since designated filing entities are also 1–5 are the net of any long and short large position report must be submitted aggregating entities, they would also be required under §§ 420.4(b) or (c) to maintain records positions, so that the entry can be a to the FRBNY. The report must be pertaining solely to their own securities received before 12:00 noon, Eastern transactions. 28 See supra note 14. time, on the second business day after Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65223 the issuance of the Treasury press identifying repurchase agreements by The notice and reporting requirements release requesting large position reports. their terms or types (e.g., overnight are proposed to be identical to a call for Given that large position reports would repos, term repos, tri-party repos, hold- large position information in which the generally be requested by the in-custody repos). Reporting entities are Department is concerned about price Department in response to certain required to make good faith attempts to anomalies and concentrated ownership. market conditions or activity, the respond to inquiries and provide any ‘‘Test’’ reporting is consistent with the proposed rule has a fairly short response additional data requested in an statutory purpose since the Department time for submission of the reports. The expeditious manner. believes it is both necessary and one and one-half day reporting deadline appropriate to help ensure that an on- Testing of Large Position Reporting balances the need for timely information demand program of large position Systems with the recognition that some time is reporting is conducted effectively. required to compile the information. The Department wishes to underscore 4. Section 420.4 The reporting time frame should not the importance of accurate, reliable and present significant problems since the timely reporting of large position Recordkeeping. Section 15C(f)(2) of information would be derived from information by affected market the Securities Exchange Act of 1934 records required to be maintained by the participants. As the agency of the authorizes the Secretary to promulgate reporting entities. Additionally, we Federal government most concerned rules requiring large position holders to understand that most large firms with minimizing the interest cost on the make and preserve records related to engaged in the securities business public debt, the Treasury believes that large position reporting requirements. compile their positions on a daily basis. the United States is best served by a Section 420.4 sets forth the proposed Finally, since reporting is ‘‘on-demand,’’ liquid and efficient market for Treasury recordkeeping rules supporting large the filing of a large position report will securities that is not overburdened with position reporting under that authority. be an exceptional event not requiring regulation, but, at the same time, is not The proposed recordkeeping rules are regular preparation. viewed as being subject to divided into two classes: (1) records The Treasury requests comments from manipulation. In developing these required for entities that are currently market participants on the proposed proposed rules, the Treasury has subject to recordkeeping rules of federal reporting time frame, specifically attempted to pursue a modest approach securities or federal bank regulators concerning any potential obstacles, that balances the need for additional (paragraph 420.4(b)); and (2) records burdens or other factors that would regulation with a desire to minimize the required for all other entities, such as make meeting the deadline problematic, burdens on, and costs to, the industry hedge funds, insurance companies, and and the extent of any extra costs that and to preserve the efficiency of the pension funds (paragraph 420.4(c)). would be incurred. Treasury securities market. Under paragraph 420.4(a)(1), the The rule, in paragraph 420.3(d), also Compliance with these large position recordkeeping rules would apply to all provides that the large position report rules—the maintenance of reliable aggregating entities that may control may be filed in any manner or media records and the accurate and timely components of their respective reporting (i.e., hard copy, facsimile or other reporting of large position information— entity’s reportable position as of the electronic transmission) that is is essential to preserving and effective date of the final large position acceptable to the FRBNY. As mentioned strengthening the integrity of the rules, but only if the aggregating earlier, the reporting entities are Treasury securities market. One of the entities’ respective reporting entity had permitted to produce or generate their primary concerns with an on-demand a reportable position in any Treasury own large position reports. reporting system is the increased security equal to or in excess of $2 potential for inaccurate or incomplete billion (the minimum large position Follow-Up Inquiries information on large positions due to threshold) at any time during the prior The requirement to file a large unfamiliarity by market participants two-year period ending 90 days after position report in response to a specific with the reporting requirements. Large publication of the final rule. Thus, all Treasury notice requesting this position information will be extremely reporting entities (through their information is expected to be an important for policymakers at Treasury, respective aggregating entities) will be occasional event. The requirement is in consultation with other regulatory responsible for determining whether satisfied upon receipt of the report by officials, in determining whether, and they have controlled a reportable the FRBNY within the required time what course of, action should be taken position of at least $2 billion in a frame and in the required format as to alleviate a concentration of control in Treasury security during the two-year prescribed in paragraph 420.3. The a particular Treasury security. Thus, it period. For some firms, this will proposed rule does not impose a is imperative that market participants necessitate a thorough review of their continuous reporting requirement. fully understand and comply with the records to determine if their reportable However, the Treasury and the FRBNY large position recordkeeping and positions reached that level. staff may contact a designated filing reporting requirements. In addition, under paragraph entity after receiving a large position To ensure that market participants 420.4(a)(2), in instances where a report to discuss any aspect of the remain knowledgeable about the rules, reporting entity controlled a reportable report, seek clarification of the specifically how to calculate and report position of at least $2 billion in a information provided or request a reportable position, the Treasury Treasury security during the two-year additional documents or information. intends to ‘‘test’’ the reporting system by period, its designated filing entity will The purpose of such inquiries or requesting large position reports at least be required to submit a letter to the requests for data would be to annually, regardless of market FRBNY certifying that it has in place, or understand the concentration of conditions for a particular security. The will have in place by the effective date positions better. The Treasury or the Treasury does not intend to notify of the final rules, a recordkeeping FRBNY staff may also request further market participants that its request for system (including policies and detail on any position reported, such as large position reports is merely a test. procedures) capable of making, breaking out the gross financing Commenters are asked to address this verifying the accuracy of, and position into its component parts or proposed treatment of ‘‘test’’ reporting. preserving the requisite records. This 65224 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules letter must be signed by one of the broker-dealers, registered investment custodians of government securities following officials of the designated advisors, and registered investment outside of their trust departments, the filing entity: the chief financial officer, companies; Treasury recordkeeping recordkeeping provisions of paragraph the chief operating officer, the chief rules applicable to registered 450.4(c) of the GSA regulations also executive officer, or the managing government securities broker-dealers, apply.31 The Department views the partner or equivalent. The letter must be financial institutions that have filed or information required by the received by the FRBNY within 120 days should file notice as government recordkeeping rules of paragraph after publication of the final rule. securities broker-dealers, and depository 450.4(c) as comparable to the basic The Department believes this institutions that hold government information required in the records of requirement would ensure that entities securities as custodians; and bank original entry under the existing rules of having a history of controlling large regulatory agency recordkeeping rules the SEC, the Treasury, and the bank Treasury securities positions would applicable to banks that conduct regulatory agencies. have supporting records in place in the securities transactions for customers.29 The Department believes that event their reportable positions reach an The Department has determined that reportable positions can be constructed announced large position threshold for all of these recordkeeping rules require relatively easily from the a specific issue, thereby triggering the the affected entities to make and keep aforementioned records required by the submission of a large position report. records of original entry (i.e., journals, federal regulatory agencies. As a result, These potential large position holders blotters, or similar records) containing the Department has decided, with would have several months to develop itemized records of all of the entities’ respect to large position rules, not to methods to meet the proposed securities transactions, including propose any new recordkeeping rules recordkeeping requirements since there information pertaining to the amount for aggregating entities that are: (1) will be a delayed effective date for the and identification of each security or subject to the existing federal rules. Subsequent to the effective date of instrument. Records of original entry are recordkeeping requirements, and (2) not the rules, aggregating entities within a basic, detailed records that cover, designated filing entities. reporting entity that had not previously among other things, all transactions However, an aggregating entity that is had a reportable position in a Treasury related to the components of a also a designated filing entity would be security equal to or greater than $2 reportable position. Most of the existing required to maintain specific large billion but whose reportable position regulations of the federal securities and position-related records in addition to reaches or exceeds $2 billion would be federal bank regulators also require the its existing securities-related records. subject to the large position affected entities to maintain order (Each reporting entity would have only recordkeeping requirements from that tickets or memos and various ledgers one designated filing entity.) First, the point forward. containing much of the same designated filing entity would be Regardless of the date aggregating information required in the records of required to make and maintain copies of entities become subject to the original entry.30 all of the large position reports it filed. recordkeeping rules, their being subject The proposed treatment of depository Also, since the designated filing entity, to the rules is based on whether the institutions that exercise investment in some cases, would have to collect reportable position of their reporting discretion warrants specific discussion and combine information received from entity reaches the large position with respect to recordkeeping other aggregating entities within its threshold, not on whether the position requirements because such entities are reporting entity, the designated filing of the aggregating entity itself reaches potential reporting entities. Depository entity would be required to make and that threshold. Thus, an aggregating institutions that exercise investment maintain supporting documents or entity may be subject to the discretion are generally subject to the schedules (e.g., worksheets) that are recordkeeping rules even though its securities recordkeeping requirements used to compute the reportable position own position has been substantially of the bank regulatory agencies (12 CFR and to prepare large position reports. below the threshold. 12, 12 CFR 208, or 12 CFR 344), The designated filing entity would also regardless of whether or not they be required to make and keep a chart Entities Subject to Recordkeeping Rules exercise investment discretion within showing the organizational entities (e.g., of Federal Securities or Federal Bank their trust departments. aggregating entities, if applicable) whose Regulators (Paragraph 420.4(b)) In addition, for those rare cases in data is combined for purposes of In developing the proposed which depository institutions exercise calculating a reportable position. recordkeeping rules, the Department investment discretion and act as The Department believes that sought to strike an appropriate balance requiring supporting schedules would between ensuring that large position 29 17 CFR 240.17a–3, 240.17a–4, and 240.17a–7 enhance the ability of the designated holders maintain records that document (for registered brokers and dealers); 17 CFR filing entity to produce accurate and 275.204–2 (for registered investment advisers); 17 and facilitate the generation of accurate CFR 270.31a–1, 270.31a–2, and 270.31a–3 (for timely large position reports. Moreover, reports and minimizing recordkeeping registered investment companies); 17 CFR 404.2 the retention of supporting schedules burdens on large position holders. and 404.3 (for registered government securities and organizational charts would be Accordingly, the Department examined brokers and dealers); 17 CFR 404.4 (for noticed indispensable in responding to follow- financial institutions); 17 CFR 450 (for depository existing securities-related recordkeeping institution custodians that exercise investment up inquiries from the regulatory rules of the SEC, the Treasury, and the discretion); and 12 CFR Part 12, Part 208, or Part agencies and in the course of any in- bank regulatory agencies to determine if 344 (for banks conducting securities transactions for depth review or reconstruction of a the records required under those rules customers), respectively. reporting entity’s reportable position 30 Most of the existing recordkeeping rules also conducted by the Treasury, the FRBNY, include the type of information require affected entities to maintain position necessary to create large position records, which provide a composite listing of the or the SEC. reports. long and short positions in each security for which Specifically, the Department the broker-dealer or other entity is responsible. 31 Recordkeeping requirements for depository examined the following recordkeeping However, position records do not include institutions acting solely as custodians were not information on positions resulting from certain considered because these entities do not meet the regulations: SEC recordkeeping unsettled and off-balance sheet transactions (e.g., proposed definition of having control under regulations applicable to registered when-issued trades and futures). paragraph 420.2(b). Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65225

Designated filing entities would be affected entities sufficient time to make In accordance with this requirement, the required to retain the additional records the necessary preparations for Department has submitted the collection for the same period specified in their compliance. Only subsection 420.4(a) is of information contained in this notice existing securities-related recordkeeping not subject to this date but instead of proposed rulemaking for review. rules.32 In instances where contains its own specific dates for Under the Act, an agency may not recordkeeping rules contain more than compliance. conduct or sponsor, and a person is not one retention period (e.g., SEC Rule 17a- IV. Special Analysis required to respond to, a collection of 4), paragraph 420.4(b)(4) of the information unless it displays a valid proposed rule specifies that the longest The proposed rules reflect the OMB control number. Comments on the retention period will apply. Treasury’s interest in meeting collection of information may be regulators’ informational needs while Other Entities (Paragraph 420.4(c)) submitted to the Office of Information minimizing the costs and burdens on and Regulatory Affairs, Office of Certain entities that have the potential market participants. The rules propose Management and Budget, Attention: to control large positions, or portions to adopt an on-demand reporting Desk Officer for Department of the thereof, in Treasury securities within a system, which will significantly Treasury, Washington, D.C. 20503; and reporting entity (e.g., hedge funds and minimize operational and compliance to the Government Securities insurance companies) are not currently costs for market participants compared Regulations Staff, Bureau of the Public subject to federal requirements to make with the costs that would have been Debt, at the address specified at the and preserve securities-related records. incurred if a regular reporting system beginning of this document. To ensure that such entities make and were required. Further, in an effort to The collection of information in this preserve records that document and avoid imposing new requirements, the proposed regulation is contained in facilitate the generation of accurate large proposed regulations adopt, for the most proposed §§ 420.3 and 420.4. The position reports—while minimizing the part, existing federal recordkeeping proposed reporting requirements in burden on these entities—the requirements for the largest segment of § 420.3 would require the designated Department proposes that all market participants that would be filing entity of any market participant, aggregating entities (within their subject to the rules. The proposal whose position equals or exceeds the respective reporting entities) in this requires limited records to be announced large position threshold for category make and maintain records of maintained by those entities that are not a specific issue of a Treasury security, original entry (the equivalent of blotters currently subject to federal rules to or journals). These documents should be make and preserve securities-related to report information to FRBNY. relatively easy for large, sophisticated records. Additionally, the establishment Although the Treasury cannot be certain investors to implement. In fact, it is our of a minimum floor of $2 billion for the of the number of market participants understanding that most such investors large position threshold will also greatly that would have large reportable already produce and maintain such reduce the number of market positions for a specific issue on which records as part of their on-going participants potentially subject to the information is requested, we believe business and accounting control proposed rules. Therefore, based on the that very few entities would likely have systems. very limited impact of the proposal, it to file reports because the proposed Like the recordkeeping system is the Department’s view that the minimum reporting threshold is $2 applicable to entities that are subject to proposed regulations are not a billion. Further, Treasury expects that federal securities-related recordkeeping ‘‘significant regulatory action’’ for the its requests for information will be rules, an aggregating entity that is also purposes of Executive Order 12866. relatively infrequent, and estimates that a designated filing entity would be In addition, pursuant to the there will only be an average of five required to make and maintain the Regulatory Flexibility Act,33 it is hereby reports filed in response to any following large position-related records certified that the proposed regulations, particular request. in addition to its records of original if adopted, will not have a significant The proposed recordkeeping entry: copies of all of the large position economic impact on a substantial requirements in § 420.4 require any reports it filed, supporting documents or number of small entities since the aggregating entity to make and preserve schedules (e.g., worksheets) used to proposal establishes a minimum large certain records as of the effective date, prepare large position reports, and a position threshold of $2 billion. This but only if it has, during a specified chart showing the organizational assures market participants that the period, controlled a portion of its entities (e.g., aggregating entities, if Treasury would not request large reporting entity’s reportable position in applicable) whose data is aggregated in position reports for positions below that any Treasury security when that order to calculate a reportable position. minimum amount. The Department reportable position is equal to or in Such records would have to be does not believe that small entities will excess of the $2 billion minimum large preserved by the designated filing entity control positions of $2 billion or greater position threshold specified in for at least six years, the first two in an in any Treasury security. Accordingly, § 420.2(d). For each reporting entity easily accessible place. the inapplicability of the proposed subject to the recordkeeping rules as of regulations to small firms indicates that the effective date, the designated filing 5. Section 420.5 there is no significant impact. As a entity will be required to submit a letter, Effective Date. Section 420.5 sets out result, a regulatory flexibility analysis is on a one-time basis, certifying that it has the effective date for both the not required. in place, or will have in place, a recordkeeping and reporting provisions The Paperwork Reduction Act of 1995 recordkeeping system capable of of the large position rules. The rule requires that collections of information making, verifying the accuracy of, and provides for a delayed effective date prescribed in the proposed rules be preserving the requisite records. As approximately six months after submitted to the Office of Management mentioned above, while Treasury publication of the final rule. This period and Budget for review and approval.34 expects that very few entities would of time is provided in order to give likely control positions in excess of the 33 5 U.S.C. 601, et seq. stated threshold that would require 32 See supra note 29. 34 44 U.S.C. 3507(d). reporting, a larger group of entities will 65226 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules be required to submit the one-time published an ANPR 35 which requested § 400.1 Scope of regulations. letter. comments on a number of specific * * * * * For aggregating entities currently issues, including the approach and (e) Section 104 of the Government subject to, and in compliance with, structure for a large position Securities Act Amendments of 1993 recordkeeping rules of federal securities recordkeeping and reporting system. (Pub. L. 103–202, 107 Stat. 2344) or federal bank regulators, and subject to The estimated reporting and amended Section 15C of the Act (15 the large position recordkeeping rules, recordkeeping burden hours are based U.S.C. 78o–5) by adding a new there are no additional recordkeeping on a review of tenders submitted in subsection (f), authorizing the Secretary requirements, with one exception. If the Treasury auctions, position reports that of the Treasury to adopt rules to require aggregating entity is the designated primary dealers already complete and specified persons holding, maintaining filing entity for its reporting entity, then voluntarily submit to FRBNY, or controlling a large position in to-be- it is required to make and maintain recordkeeping requirements that are issued or recently-issued Treasury copies of any large position reports already in place for federally-regulated securities to report such a position and filed; supporting documents or participants in the government make and keep records related to such schedules used to compute data for such securities market and discussions with a position. Part 420 of this subchapter large position reports, including any the industry and other regulators. contains the rules governing large information received from aggregating Treasury invites further comments on: position reporting. entities within the reporting entity; and (1) Whether the proposed collection of * * * * * an organizational chart showing the information is necessary for the proper 3. Part 420 is added to read as follows: entities that are aggregated in performance of functions of the developing a reportable position. Treasury, including the practical utility PART 420ÐLARGE POSITION Those aggregating entities that must of the information; (2) the accuracy of REPORTING comply with the proposed rules but are the Treasury’s estimate of the burden; not subject to paragraph 420.4(b) must (3) enhancement of the quality, utility, Sec. 420.1 Applicability. make and preserve journals, blotters or and clarity of information to be other records of original entry 420.2 Definitions. collected; and (4) minimizing the 420.3 Reporting. containing an itemized record of all burden of the collection of information transactions that fall within the 420.4 Recordkeeping. on respondents, including through the 420.5 Effective Date. definition of a reportable position. This use of automated collection techniques provision accounts for the greatest Appendix A to Part 420—Separate Reporting or other forms of information percentage of estimated recordkeeping Entity technology. burden hours. However, this Appendix B to Part 420—Sample Large requirement is significantly less than Estimated total annual reporting and Position Report the full range of books and records recordkeeping burden: 4,940 hours. Authority: 15 U.S.C. 78o–5(f). requirements currently applicable to Estimated annual number of entities subject to federal securities- recordkeepers: 100. § 420.1 Applicability. related recordkeeping requirements. If Estimated annual number of (a) This part, including the the aggregating entity is also a respondents: 10. Appendices, is applicable to all persons designated filing entity, the Estimated annual frequency of that participate in the government requirements for a designated filing response: On occasion. securities market, including, but not limited to, government securities entity are also applicable. List of Subjects The collection of information is brokers and dealers, depository intended to enable the Treasury and 17 CFR Part 400 institutions, registered investment other regulators to understand better the Administrative practice and companies, registered investment possible reasons for any apparent procedure, Banks, banking, Brokers, advisers, pension funds, hedge funds significant price distortions and the Government securities, Reporting and and insurance companies, that may possible causes of market shortages in recordkeeping requirements. control a reportable position in a certain Treasury securities. The recently-issued Treasury bill, note or collection of information will help 17 CFR Part 420 bond as those terms are defined in ensure that the Treasury securities Foreign investments in U.S., § 420.2. market remains liquid and efficient, and Government securities, Investments, (b) Notwithstanding paragraph (a) of is not viewed as subject to Reporting and recordkeeping this section, foreign central banks, manipulation. The proposed rules apply requirements. foreign governments and international to all market participants controlling monetary authorities are exempt from large positions, as defined in the rules. For the reasons set out in the this part for the portion of any Per paragraph 420.3(c), it is a mandatory preamble, 17 CFR Chapter IV, reportable position they control that is requirement that reporting entities with subchapter A is proposed to be held at the Federal Reserve Bank of New reportable positions that equal or exceed amended as follows: York. the specified threshold in a Treasury PART 400ÐRULES OF GENERAL (c) Notwithstanding paragraph (a) of notice respond through their designated APPLICATION this section, Federal Reserve Banks are filing entities by filing a report in the exempt from this part for the portion of required format and within the specified 1. The authority citation for part 400 any reportable position they control for reporting time frame. is revised to read as follows: their own account. In developing the proposed rules, we (d) Notwithstanding the definition of Authority: 15 U.S.C. 78o–5. have consulted with affected entities recently-issued, the Department reserves and regulatory agencies, and expect that 2. In § 400.1, paragraph (e) is added as the right to collect large position this process will continue through the follows: information on Treasury security issues development of a final rule. As that are older than those specified, previously mentioned, Treasury 35 See supra note 5. provided that such action is consistent Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65227 with the purposes of the Act (15 U.S.C (4) Net futures contract positions that in, retention of, or financing of, 78o–5(f)). require delivery of the specific security; Treasury securities are considered, and collectively, to be one reporting entity. § 420.2 Definitions. (5) Net holdings of STRIPS principal For the purposes of this part: components of the security. § 420.3 Reporting. (a) ‘‘Aggregating entity’’ means a (g) ‘‘Recently-issued’’ means: (a) A reporting entity is subject to the single entity (e.g., a parent company or (1) With respect to Treasury securities reporting requirements of this section affiliate) that is combined with other that are issued quarterly or more only when its reportable position equals entities, as specified in paragraph (i) of frequently, the three most recent issues or exceeds the large position threshold this section, to form a reporting entity. of the security (e.g., in early April, the specified by the Department for a In those cases where an entity has no January, February, and March 2-year specific Treasury security issue. The affiliates, the aggregating entity is the notes). Department shall provide notice of such same as the reporting entity. (2) With respect to Treasury securities threshold by issuance of a press release (b) ‘‘Control’’ means having the that are issued less frequently than and subsequent publication of the authority to exercise investment quarterly, the two most recent issues of notice in the Federal Register. Such discretion over the purchase, sale, the security. notice will identify the Treasury retention or financing of specific (3) With respect to a reopened security issue to be reported; the date or Treasury securities. Only one entity security, the entire issue of a reopened dates (as of close of business) for which should be considered to have security (older and newer portions) the large position information must be investment discretion over a particular based on the date the reopened security reported; and the applicable large position. is reissued by the Department (or position threshold for that issue. It is the (c) ‘‘Gross financing position’’ is the scheduled to be reissued for when- responsibility of a reporting entity to sum of the gross par amounts of a issued securities). take reasonable actions to be aware of security issue received from financing (4) For all Treasury securities, a such a notice. transactions, including, but not limited security announced to be issued or (b) A reporting entity shall select one to, reverse repurchase transactions, auctioned but unissued (when-issued), entity from among its aggregating bonds borrowed, securities received in starting from the date of the issuance entities (i.e., the designated filing entity) pledge, and collateralized credit announcement. The most recent issue of as the entity designated to compile and extended. In calculating the gross the security is the one most recently file a report on behalf of the reporting financing position, a reporting entity announced. entity. The designated filing entity shall may not net its positions against (h) ‘‘Reportable position’’ is the sum be responsible for filing any large repurchase transactions, securities of the net trading positions, gross position reports in response to a notice loaned, securities pledged or other financing positions and net fails issued by the Department and for deliveries of the security issue. positions in a specified issue of maintaining the additional records However, a reporting entity may elect to Treasury securities collectively prescribed in the applicable paragraph reduce its gross financing position by controlled by a reporting entity. of § 420.4. the par amount of the security received (i) ‘‘Reporting entity’’ means any (c) (1) In response to a notice issued in transactions: in which the corporation, partnership, person or under paragraph (a) of this section counterparty retains the right to other entity and its affiliates. For the requesting large position information, a substitute securities; that are subject to purposes of this definition, an affiliate reporting entity with a reportable third party custodial relationships; or is any: entity that is more than 50% position that equals or exceeds the that are hold-in-custody reverse owned, directly or indirectly, by the specified large position threshold stated repurchase agreements. aggregating entity or by any other in the notice shall compile and report (d) ‘‘Large position threshold’’ means, affiliate of the aggregating entity; person the amounts of the reporting entity’s with respect to a reportable position, the or entity that owns, directly or reportable position, as follows: dollar par amount such position must indirectly, more than 50% of the (i) net trading position comprising: (A) cash/immediate net settled equal or exceed in order for a reporting aggregating entity; person or entity that owns, directly or indirectly, more than positions, entity to be required to submit a large (B) net when-issued positions, 50% of any other affiliate of the position report. The large position (C) net forward positions, including aggregating entity; or entity, a majority threshold will be announced by the next-day settling, Department and may vary with each of whose board of directors or a majority (D) net futures contracts that require notice of request to report large position of whose general partners are directors delivery of the specific security, and information and with each specified or officers of the aggregating entity or (E) net holdings of STRIPS principal Treasury security. However, under no any affiliate of the aggregating entity. components of the security; circumstances will a large position (1) Subject to the conditions (ii) gross financing position; and threshold be less than $2 billion. prescribed in Appendix A, one or more (iii) net fails position. (e) ‘‘Net fails position’’ is the net par aggregating entities, either separately or (2) The large position report should amount of ‘‘fails to receive’’ less ‘‘fails together with one or more other include the following two additional to deliver’’ in the same security. The net aggregating entities, may be recognized items as memoranda: fails position, as reported, may not be as a separate reporting entity. Any entity (i) A total that includes the amounts less than zero. that previously has received recognition of securities delivered through (f) ‘‘Net trading position’’ is the net from the Treasury as a separate bidder repurchase agreements, securities sum of the following respective in Treasury auctions pursuant to loaned, securities pledged, and positions in the specific security issue: Appendix A of 31 CFR Part 356 is also collateralized loans and other securities (1) Cash/immediate net settled recognized as a separate reporting entity deliveries. This total should not be positions; without further action. reflected in the gross financing position; (2) Net when-issued positions; (2) Notwithstanding this definition, and (3) Net forward positions, including any persons or entities that intentionally (ii) If the reporting entity has elected next-day settling; act together with respect to the investing to exercise the option available in 65228 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules

§ 420.2(c) to reduce the amount of the the request of the Department or the company with the applicable gross financing position by the par Federal Reserve Bank of New York, recordkeeping provisions of the amount of securities received but over timely provide any supplemental Commission, the Department, or the which the reporting entity did not have information pertaining to such report. appropriate regulatory agencies for effective control, the amount not financial institutions shall constitute § 420.4 Recordkeeping. included. The total amount of reduction compliance with this section, provided should be deducted from the gross (a)(1) Notwithstanding the provisions that if such entity is also the designated financing position prior to determining of paragraphs (b) and (c) of this section, filing entity it: the reportable position. an aggregating entity must make and (1) Makes and keeps copies of all large (3) An illustration of a sample report maintain records pursuant to this part as position reports filed pursuant to this is contained in Appendix B. Each of the of its effective date, but only if the part; net trading position elements shall be aggregating entity has controlled a (2) Makes and keeps supporting netted and reported as the applicable portion of its reporting entity’s documents or schedules used to positive or negative number (or zero). reportable position in any Treasury compute data for the large position The gross financing position and net security when such reportable position reports filed pursuant to this part; fails position should each be reported as of the reporting entity has equaled or (3) Makes and keeps a chart showing a single entry. If the amount of the net exceeded the minimum large position the organizational entities that are fails position is zero or less, report zero. threshold specified in § 420.2(d) (i.e., $2 aggregated (if applicable) in determining All of these items should be reported in billion) during the prior two-year period a reportable position; and the order specified above. All position ending [90 days after publication of the (4) With respect to recordkeeping amounts and their components should final rule]. Subsequent to the effective preservation requirements that contain be reported at par in millions of dollars. date, an aggregating entity that controls more than one retention period, (4) All balances must be reported as a portion of its reporting entity’s preserves records required by of the close of business of the reporting reportable position in a recently-issued paragraphs (b)(1)-(3) of this section for date(s) specified in the notice. Treasury security, when such reportable the longest record retention period of (5) Each submitted report must position of the reporting entity equals or applicable recordkeeping provisions. include the following administrative exceeds the minimum large position (c) Records to be made and kept by information in addition to the reportable threshold, shall be responsible for other entities. (1) An aggregating entity position: the name of the reporting making and maintaining the records that is not subject to the provisions of entity, the address of the principal place prescribed in this part. paragraph (b) of this section shall make of business, the name and address of the (2) In the case of a reporting entity and preserve a journal, blotter, or other designated filing entity, the Treasury whose reportable position in any record of original entry containing an security that is being reported, the Treasury security has equaled or itemized record of all transactions that CUSIP number, the report date or dates exceeded the minimum large position fall within the definition of a reportable for which information is being reported, threshold during the prior two-year position, including information showing the date the report was submitted, the period ending [90 days after publication the account for which such transactions name and telephone number of the of the final rule], each such reporting were effected and the following person to contact regarding information entity’s designated filing entity shall information pertaining to the reported, and the name and position of submit a letter to the Federal Reserve identification of each instrument: the the authorized individual submitting Bank of New York certifying that it has type of security, the par amount, the this report. The report must also be in place, or will have in place by the CUSIP number, the trade date, the signed by the authorized individual, effective date, a recordkeeping system maturity date, the type of transaction who must be one of the following: the (including policies and procedures) (e.g., a reverse repurchase agreement), chief financial officer, the chief capable of making, verifying the and the name or other designation of the operating officer, the chief executive accuracy of, and preserving the records person from whom sold or purchased. officer, or the managing partner or required pursuant to this section. (2) If such aggregating entity is also equivalent of the designated filing (3) The letter specified in paragraph the designated filing entity, then in entity. The designated filing entity must (a)(2) of this section must be signed by addition it shall make and preserve the also include in its report, immediately one of the following: the chief financial following records: preceding the signature, a statement of officer, the chief operating officer, the (i) copies of all large position reports certification as follows: chief executive officer, or the managing filed pursuant to this part; The reporting entity submitting this report partner or equivalent of the designated (ii) supporting documents or and the person(s) by whom it is executed filing entity and must be received by the schedules used to compute data for the hereby certify that all information contained Federal Reserve Bank of New York no large position reports filed pursuant to in the report is accurate and complete and later than [120 days after publication of this part; and that the reporting entity is in compliance the final rule]. (iii) a chart showing the with the requirements of 17 CFR Part 420. (b) Records to be made and preserved organizational entities that are (6) The report must be filed before by entities that are subject to the aggregated (if applicable) in determining noon Eastern time on the second recordkeeping provisions of the a reportable position. business day following issuance of the Commission, the Department, or the (3) With respect to the records press release. appropriate regulatory agencies for required by paragraphs (c) (1) and (2) of (d) A report to be filed pursuant to financial institutions. As an aggregating this section, each such aggregating paragraph (c) will be considered filed entity, compliance by a registered entity shall preserve such records for a when received by the Federal Reserve broker or dealer, registered government period of not less than six years, the first Bank of New York. The report may be securities broker or dealer, noticed two years in an easily accessible place. filed in any manner acceptable to the financial institution, depository If an aggregating entity maintains its Federal Reserve Bank of New York. institution that exercises investment records at a location other than its (e) A reporting entity that has filed a discretion, registered investment principal place of business, the report pursuant to paragraph (c) shall, at advisor, or registered investment aggregating entity must maintain an Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65229 index that states the location of the ‘‘(1) Exchanging any of the following Formula for Determining a records, and such index must be easily information with any other aggregating entity Reportable Position—Continued (a) positions that it holds or plans to acquire accessible at all times. [$ Amounts in millions at par value] in a Treasury security; (b) investment § 420.5 Effective Date. strategies that it plans to follow regarding Memorandum #1: Report one The provisions of this part, except for Treasury securities; and (c) financing total which includes the gross § 420.4(a), shall be first effective on [180 strategies that it plans to follow regarding par amounts of securities de- days from the date of publication of the Treasury securities, or livered through repurchase final rule. If the date does not fall on the ‘‘(2) In any way intentionally acting agreements, securities loaned, last day of the month, then move the together with any other aggregating entity securities pledged, and date to the end of the month.]. with respect to the purchase, sale, retention collateralized loans. Not in- # Appendix A to Part 420—Separate Reporting or financing of Treasury securities. cluded in item 6 (Gross Fi- Entity ‘‘The above-named entity agrees that it will nancing Position) as reported promptly notify the Department in writing above...... $ll Subject to the following conditions, one or # when any of the information provided to Memorandum 2: If the optional more aggregating entity(ies) (e.g., parent or exclusion was taken to reduce subsidiary) in a reporting entity, either obtain separate reporting entity status changes or when this certification is no the amount of the Gross Fi- separately or together with one or more other nancing Position by the longer valid.’’ aggregating entity(ies), may be recognized as amount of securities received a separate reporting entity. All of the Any entity that previously has received but that the reporting entity following conditions must be met for such recognition as a separate bidder in Treasury did not have effective control entity(ies) to qualify for recognition as a auctions from the Department pursuant to 31 over (e.g., third party custodial separate reporting entity: CFR Part 356 is also recognized as a separate structures, hold-in-custody re- (1) Such entity(ies) must be prohibited by reporting entity without further action. lationships, counterparty re- law or regulation from exchanging, or must tained contractual right to sub- have established written internal procedures Appendix B to Part 420—Sample Large stitute), indicate the total (i.e., Chinese walls) designed to prevent the Position Report. exchange of information related to amount of reduction here. De- duct from item #6 (Gross Fi- transactions in Treasury securities with any ll other aggregating entity; Formula for Determining a nancing Position)...... $ (2) Such entity(ies) must not be created for Reportable Position Administrative Information To Be Provided the purpose of circumventing these large [$ Amounts in millions at par value] in the Report position reporting rules; Name of Reporting Entity: (3) Decisions related to the purchase, sale Date For Which Information Is Address of Principal Place of Business: or retention of Treasury securities must be Being Reported: lll Name and Address of the Designated Filing made by employees of such entity(ies). 1. Cash/Immediate Net Settled Entity: Employees of such entity(ies) who make Positions ...... $ll Treasury Security Reported on: decisions to purchase or dispose of Treasury CUSIP Number: securities must not perform the same 2. Net When-Issued Positions for Date or Dates for Which Information Is function for other aggregating entities; and To-Be-Issued and Reopened Is- ll Being Reported: (4) The records of such entity(ies) related sues ...... +$ Date Report Submitted: to the ownership, financing, purchase and 3. Net Forward Settling Positions ll Name and Telephone Number of Person to sale of Treasury securities must be Including Next Day Settling .... +$ Contact Regarding Information Reported: maintained by such entity(ies). Those records 4. Net Positions in Futures Con- must be identifiable—separate and apart from tracts Requiring Delivery of Name and Position of Authorized similar records for other aggregating entities. the Specific Security ...... +$ll Individual Submitting this Report (Chief To obtain recognition as a separate 5. Net STRIPS Principal Compo- Financial Officer, Chief Operating Officer, reporting entity, each aggregating entity or nents of the Specific Security . +$ll Chief Executive Officer, or Managing Partner or Equivalent of Designated Filing Entity): group of aggregating entities must request 6. Gross Financing Position (In- Statement of Certification: ‘‘The reporting such recognition from the Department cludes total of securities re- entity submitting this report and the pursuant to the procedures outlined in ceived through reverse repos, person(s) by whom it is executed hereby § 400.2(c) of this title. Such request must bonds borrowed, securities re- certify that all information contained in the provide a description of the entity or group ceived in pledge, report is accurate and complete and that the and its position within the reporting entity, collateralized credit extended.) +$ll reporting entity is in compliance with the and provide the following certification: 7. Net Fails Position (Fails to Re- requirements of 17 CFR Part 420.’’ ‘‘[Name of the entity(ies)] hereby certifies ceive less Fails to Deliver. If Signature of Authorized Person Named that to the best of its knowledge and belief equal to or less than 0, report Above: it meets the conditions for a separate 0.) ...... +$ll reporting entity as described in Appendix A 8. Total Reportable Position ...... =$ll * * * * * to 17 CFR part 420. The above named entity Date: also certifies that it has established written Darcy Bradbury, policies or procedures, including ongoing Deputy Assistant Secretary (Federal Finance). compliance monitoring processes, that are designed to prevent the entity or group of [FR Doc. 95–30766 Filed 12–14–95; 1:59 pm] entities from: BILLING CODE 4810±39±W federal register December 18,1995 Monday Poland Rate QuotaonItalian-TypeCheesesFrom Proclamation 6859ÐToModifytheTariff- The President Part VII 65231

65233

Federal Register Presidential Documents Vol. 60, No. 242

Monday, December 18, 1995

Title 3— Proclamation 6859 of December 13, 1995

The President To Modify the Tariff-Rate Quota on Italian-Type Cheeses From Poland

By the President of the United States of America

A Proclamation 1. On May 17, 1995, the United States and Poland signed a Record of Understanding Between Poland and the United States of America on Agricul- tural Items, which provides for an increase in the allocation to Poland of the in-quota quantity of the tariff-rate quota on Italian-type cheeses. 2. Section 404(d)(3) of the Uruguay Round Agreements Act (‘‘the URAA’’)(19 U.S.C. 3601(d)(3)) authorizes the President to allocate the in-quota quantity of a tariff-rate quota for any agricultural product among supplying countries or customs areas and to modify any allocation as the President determines appropriate. 3. Accordingly, pursuant to section 404(d)(3) of the URAA, I have determined that it is appropriate to proclaim an increase in the allocation to Poland of the in-quota quantity of the tariff-rate quota for Italian-type cheeses. 4. Section 604 of the Trade Act of 1974, as amended (‘‘the 1974 Act’’)(19 U.S.C. 2483), authorizes the President to embody in the Harmonized Tariff Schedule of the United States (‘‘the HTS’’) the substance of the relevant provisions of that Act, and of other Acts affecting import treatment, and actions thereunder, including the removal, modification, continuance, or imposition of any rate of duty or other import restriction. The modification of the allocation to Poland of the in-quota quantity of the tariff-rate quota for Italian-type cheeses is such an action. NOW, THEREFORE, I, WILLIAM J. CLINTON, President of the United States of America, acting under the authority vested in me by the Constitution and the laws of the United States of America, including but not limited to section 404(d)(3) of the URAA (19 U.S.C. 3601(d)(3)) and section 604 of the 1974 Act (19 U.S.C. 2483), do proclaim that: (1) Additional U.S. note 21 to chapter 4 of the HTS is modified by deleting the quantity ‘‘1,100,000’’ set out opposite Poland and inserting ‘‘1,325,000’’ in lieu thereof. (2) This proclamation is effective with respect to goods entered or withdrawn from warehouse for consumption on or after the date of signature of this proclamation. IN WITNESS WHEREOF, I have hereunto set my hand this thirteenth day of December, in the year of our Lord nineteen hundred and ninety-five, and of the Independence of the United States of America the two hundred and twentieth.

[FR Doc. 95–30819 œ– Filed 12–15–95; 8:45 am] Billing code 3195–01–P i

Reader Aids Federal Register Vol. 60, No. 242 Monday, December 18, 1995

CUSTOMER SERVICE AND INFORMATION CFR PARTS AFFECTED DURING DECEMBER

Federal Register/Code of Federal Regulations At the end of each month, the Office of the Federal Register General Information, indexes and other finding 202±523±5227 publishes separately a List of CFR Sections Affected (LSA), which aids lists parts and sections affected by documents published since Public inspection announcement line 523±5215 the revision date of each title. 352...... 64115 Laws 3 CFR 354±356...... 64115 Public Laws Update Services (numbers, dates, etc.) 523±6641 Proclamations: 360...... 64115 For additional information 523±5227 6641 (Modified by 380...... 64115 Proclamation Presidential Documents 401 ...... 62189, 62321, 62710 6857) ...... 64817 443...... 62710 523±5227 Executive orders and proclamations 6763 (Modified by 457...... 62710 The United States Government Manual 523±5227 Proclamation 906...... 65017 6857) ...... 64817 Other Services 984...... 65018 6853...... 62185 Electronic and on-line services (voice) 523±4534 1212...... 65019 6854...... 62187 Ch. VII...... 64297 Privacy Act Compilation 523±3187 6855...... 62979 955...... 63609 523±5229 TDD for the hearing impaired 6856...... 63389 959...... 63610 6857...... 64817 1002...... 62017, 62018 ELECTRONIC BULLETIN BOARD 6858...... 65015 1004...... 63612 6859...... 65233 1099...... 63612 Free Electronic Bulletin Board service for Public Law numbers, Executive Orders: 1260...... 62019 Federal Register finding aids, and list of documents on public 11533 (see EO 1280...... 64297 inspection. 202±275±0920 12981) ...... 62981 Ch. XIV ...... 64297 FAX-ON-DEMAND 12002 (continued by 1755...... 64311 EO 12981)...... 62981 Ch. XXXII...... 63393 You may access our Fax-On-Demand service. You only need a fax 12924 (see EO 3200...... 63368 machine and there is no charge for the service except for long 12981) ...... 62981 3305...... 62974 distance telephone charges the user may incur. The list of 12981...... 62981 3411...... 63368 documents on public inspection and the daily Federal Register’s 12982...... 63895 Proposed Rules: table of contents are available using this service. The document Administrative Orders: 226...... 62227 numbers are 7050-Public Inspection list and 7051-Table of Memorandum of 250...... 62999 Contents list. The public inspection list will be updated December 6, 1995 ...... 63391 457...... 63457 immediately for documents filed on an emergency basis. 5 CFR 985...... 62229 NOTE: YOU WILL ONLY GET A LISTING OF DOCUMENTS ON 1005...... 65023 FILE AND NOT THE ACTUAL DOCUMENT. Documents on Ch. XVI ...... 62319 1011...... 65023 public inspection may be viewed and copied in our office located 532...... 62701 1046...... 65023 at 800 North Capitol Street, N.W., Suite 700. The Fax-On-Demand 890...... 62987 1280...... 62298 telephone number is: 301±713±6905 1900...... 62702, 63576 1487...... 63983 Proposed Rules: 1491...... 63983 FEDERAL REGISTER PAGES AND DATES, DECEMBER 317...... 63454 1492...... 63983 412...... 63454 1495...... 63983 61645±62016...... 1 7 CFR 8 CFR 62017±62188...... 4 62189±62318...... 5 17...... 62702, 63576 214...... 62021 29 ...... 62172, 62974, 63762 62319±62700...... 6 31...... 62172 9 CFR 62701±62980...... 7 32...... 62172 1±3...... 64115 62981±63392...... 8 51...... 62172 49±54...... 64115 63393±63608...... 11 52 ...... 62172, 62708, 62709 70±75...... 64115 63609±63896...... 12 53...... 62172 77...... 62988 63897±64114...... 13 54...... 62172 77±80...... 64115 64115±64296...... 14 56...... 62172 82...... 64115 64297±65016...... 15 58...... 62172 85...... 64115 65017±65234...... 18 60...... 62974 91±114...... 64115 70...... 62172 116±118...... 64115 81...... 62974 124...... 64115 99...... 62974 130...... 64115 100...... 62974 145...... 64115 101...... 62974 147...... 64115 160...... 62172 151...... 64115 202...... 62974 156...... 64115 300...... 64115 160±162...... 64115 301...... 64115 166±167...... 64115 318±322...... 64115 319...... 62319 10 CFR 330...... 64115 9...... 63897 340...... 64115 440...... 64314 ii Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Reader Aids

475...... 62316 1512...... 62989 301...... 64402 39 CFR 476...... 62316 Proposed Rules: 20...... 61660 478...... 62316 28 CFR 303...... 62352 Proposed Rules: 60...... 62733 Proposed Rules: 1203...... 62662 3001...... 65051 20...... 63984 540...... 65204 17 CFR 50...... 65032 29 CFR 40 CFR 475...... 62318 3...... 63907 215...... 62964 9...... 62930, 63417 476...... 62318 200...... 62295 52 ...... 62737, 62741, 62748, 478...... 62318 240...... 62323 2606...... 61740 2616...... 61740 62990, 63417, 63434, 63938, Proposed Rules: 2617...... 61740 63940, 64126 11 CFR Ch. II ...... 65046 2619...... 64325, 64327 60...... 64329 100...... 64260 1...... 63995 2621...... 64324 63 ...... 62930, 62991, 63624, 102...... 64260 3...... 64132 2627...... 64324 64330 109...... 64260 30...... 63472 2629...... 61740 70 ...... 62032, 62753, 62758, 110...... 64260 400...... 65214 2676...... 64327 62992, 63631 114...... 64260 420...... 65214 Proposed Rules: 81...... 62741, 62748 124...... 63417 12 CFR 18 CFR 102...... 61679 1602...... 63010 140...... 63941 3...... 64115 Ch. I ...... 63476 1910...... 62360 156...... 64282 203...... 63393 375...... 62326 1915...... 62360 180 ...... 62330, 63437, 63945, 327...... 63400, 63406 63947, 63949, 63950, 63953, 19 CFR 1926...... 62360 701...... 63613 63954, 63956, 63958, 63960 Proposed Rules: 19...... 62732 30 CFR 185...... 62330 31...... 63461 24...... 62732 906...... 64115 270...... 63417 213...... 62349 146...... 62732 917...... 62734 763...... 62332 221...... 63660 151...... 62732 943...... 63922 Proposed Rules: 226...... 62764 20 CFR Proposed Rules: 52 ...... 62792, 62793, 63019, 230...... 62349 202...... 64000 63491, 64001, 64135 404...... 62329 250...... 62050 206...... 64000 61...... 61681 Ch. III ...... 62345 Proposed Rules: 211...... 64000 63...... 64002 404 ...... 62354, 62783, 65093 70 ...... 62793, 62794, 64404 13 CFR 250...... 63011 416...... 62356 251...... 63011 81 ...... 62236, 62792, 62793 140...... 62190 122...... 62546 21 CFR 256...... 63011 Proposed Rules: 756...... 62786 123...... 62546 108...... 64356 5...... 63606 906...... 62789 136...... 65207 116...... 64356 20...... 63372 913...... 62229 141...... 65207 120...... 64356 123...... 65096 950...... 65048 180 ...... 62361, 62364, 62366, 121...... 63987 176...... 62207 64006 122...... 64356 177...... 61654 33 CFR 186...... 62366 131...... 64356 182...... 62208 162...... 63623 261...... 62794 184...... 63619 165...... 62330 372...... 64407 14 CFR 186...... 62208 Proposed Rules: 403...... 62546 23...... 62730 510...... 63621 52...... 63489 501...... 62546 25...... 63901, 64315 520...... 63621 151...... 64001 721...... 64009 39 ...... 61645, 61647, 61649, 522...... 63621 62192, 62321, 63411, 63412, 558...... 63622 34 CFR 41 CFR 63414, 63613, 63615, 63617, 803...... 63578 75...... 63872 301±11...... 62332 63762, 64315, 64316, 64317 807...... 63578 668 ...... 61760, 61776, 61796, 42 CFR 71 ...... 61652, 61653, 62194, 1240...... 65096 61830 62323, 63415, 65020 Proposed Rules: 674...... 61796 400...... 63124 97 ...... 63416, 63904, 63905, 801...... 61670 675...... 61796 405...... 63124 63906 803...... 61670 676...... 61796 410...... 63124 Proposed Rules: 804...... 61670 682 ...... 61750, 61796, 65021 411...... 63124, 63438 1...... 64129 897...... 61670 685 ...... 61790, 61796, 61820 412...... 63124 39 ...... 62051, 62772, 62774, 690...... 61796 413...... 63124 23 CFR 62776, 62799, 63465, 63468, Proposed Rules: 414...... 63124 63470, 63663, 63665, 63988, Proposed Rules: 361...... 64476 415...... 63124 63990, 63992, 64129, 65032, 667...... 62359 646...... 64108 417...... 63124 65035, 65036, 65038 424...... 63440 61...... 64129 24 CFR 36 CFR 489...... 63124 71 ...... 61666, 61667, 61668, 81...... 61846 1415...... 64122 1004...... 63634 61669, 62053, 62351, 62782, Proposed Rules: Proposed Rules: Proposed Rules: 63007, 63993, 65041, 65042, 3500...... 63008 1...... 62233 413...... 62237 65043, 65044, 65045 13...... 62233 141...... 64129 26 CFR 43 CFR 143...... 64129 1 ...... 62024, 62026, 62209, 37 CFR 10...... 62134 63913, 64320 10...... 64125 15 CFR 20...... 63913 253...... 61654 44 CFR Proposed Rules: 25...... 63913 255...... 61655 65 ...... 62213, 62333, 62335 960...... 62054 53...... 62209 259...... 61657 67...... 62337 2013...... 64131 301...... 62209 Proposed Rules: Proposed Rules: 602...... 64320 202...... 62057 67...... 62369 16 CFR Proposed Rules: 455...... 62195 1 ...... 62229, 63009, 63478, 38 CFR 45 CFR 1145...... 62023 64401 1...... 63926 1180...... 63963 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Reader Aids iii

47 CFR 675...... 62373, 65093 TRANSPORTATION Contingent fees; comments 0...... 61662 676...... 62373, 65093 DEPARTMENT due by 12-26-95; 1...... 64348 677...... 62373, 65093 Federal Aviation published 10-26-95 36...... 65011 Administration ENVIRONMENTAL 73 ...... 62218, 62219, 62220, REMINDERS Airworthiness directives: PROTECTION AGENCY 63645, 64348, 64349, 65021 The rules and proposed rules de Havilland; published 12- Clean Air Act: 80...... 62927 in this list were editorially 1-95 State operating permits 90...... 61662 compiled as an aid to Federal Cessna; published 12-1-95 program-- Proposed Rules: Register users. Inclusion or Kentucky; comments due 36...... 65010 exclusion from this list has no Comments Due Next by 12-26-95; published 64...... 63491, 63667 legal significance. 11-24-95 68...... 63667 Week 73 ...... 62060, 62061, 62373, Water pollution control: AGRICULTURE 63669, 65052 Rules Going Into Effect Sewage sludge; use or DEPARTMENT 76...... 63492, 65052 Today disposal standards; Agricultural Marketing comments due by 12-26- 48 CFR AGRICULTURE Service 95; published 10-25-95 DEPARTMENT 31...... 64254, 64255 Cherries (tart) grown in FARM CREDIT 970...... 63645 Agricultural Marketing Michigan et al.; comments ADMINISTRATION Service Proposed Rules: due by 12-29-95; published Farm credit system: 6...... 63876 Lime research, promotion, and 11-29-95 Funding and fiscal affairs, 8...... 65054 consumer information order; Oranges, grapefruit, loan policies and 9...... 62806 published 12-18-95 tangerines, and tangelos operations, and funding 10...... 65054 COMMERCE DEPARTMENT grown in Florida; comments operations-- 15...... 63023, 65054 National Oceanic and due by 12-28-95; published Global debt; comments 26...... 63876 Atmospheric Administration 11-28-95 due by 12-26-95; 31...... 65054 Fishery conservation and Potatoes (Irish) grown in-- 32...... 65054 published 11-24-95 management: Idaho and Oregon; 42...... 65054 Loan policies and Gulf of Mexico and South comments due by 12-26- 45...... 65054 operations-- Atlantic coastal migratory 95; published 11-24-95 52...... 65054 Loan information pelagic resources; Prunes (dried) produced in 53...... 65054 published 11-17-95 disclosure; comments 215...... 64135 California; comments due by due by 12-26-95; 219...... 64135 FEDERAL 12-26-95; published 11-24- published 11-24-95 236...... 64135 COMMUNICATIONS 95 COMMISSION FEDERAL 242...... 64135, 64138 Tomatoes grown in Florida; COMMUNICATIONS Radio stations; table of 252...... 64135 comments due by 12-26-95; COMMISSION 253...... 64135 assignments: published 11-24-95 Common carrier services: 1535...... 64408 Illinois; published 11-8-95 AGRICULTURE Calling party telephone 1552...... 64408 HOUSING AND URBAN DEPARTMENT number-- DEVELOPMENT Food and Consumer Service 49 CFR DEPARTMENT Privacy requirements; Child nutrition programs: 1 ...... 63444, 62762, 63648 Mortgage and loan insurance comments due by 12- 192...... 63450 programs: National school lunch 27-95; published 12-11- program-- 95 219...... 61664 Single family mortgage 553...... 62221, 63648 insurance; special Cheese alternate products Radio stations; table of 571...... 63651, 63965 forbearance agreement specifications removal; assignments: 1043...... 63981 procedures; published 11- comments due by 12- Georgia; comments due by 1160...... 63981 16-95 27-95; published 11-27- 12-26-95; published 11-8- Proposed Rules: 95 INTERSTATE COMMERCE 95 106...... 65210 COMMISSION COMMERCE DEPARTMENT New Mexico; comments due 571...... 62061, 64010 Motor carriers and nonrail National Oceanic and by 12-26-95; published 50 CFR licensing procedures: Atmospheric Administration 11-9-95 Oklahoma; comments due 25...... 62035 North American Free Trade Fishery conservation and by 12-26-95; published 32...... 62035 Agreement (NAFTA)-- management: 11-9-95 611...... 62339 Mexican motor carriers; Gulf of Alaska and Bering 625...... 64349 freight operations; Sea and Aleutian Islands FEDERAL HOUSING 638...... 62762 published 12-13-95 groundfish; comments due FINANCE BOARD 641...... 64350 JUSTICE DEPARTMENT by 12-28-95; published Federal home loan bank 649...... 62224 Prisons Bureau 11-29-95 system: 650...... 62224 Institutional management: Gulf of Alaska groundfish; Membership approval; 651...... 62224 Correspondence between comments due by 12-29- statutory eligibility 652...... 62226 confined inmates; 95; published 11-30-95 requirements; comments 672...... 63654 published 12-18-95 DEFENSE DEPARTMENT due by 12-26-95; 675 ...... 62339, 63451, 63654, published 10-27-95 64128 SECURITIES AND Acquisition regulations: HEALTH AND HUMAN 676...... 62339 EXCHANGE COMMISSION Defense Federal Acquisition SERVICES DEPARTMENT 677...... 62339 Electronic Data Gathering, Regulation supplement; Proposed Rules: Analysis, and Retrieval contractor purchasing Children and Families 611...... 62373, 65093 System (EDGAR): system reviews; Administration 642...... 62241 Filer Manual-- comments due by 12-26- Head Start Program: 649...... 64014 Update and technical 95; published 10-27-95 Eligibility, recruitment, 650...... 64014 amendments; published Federal Acquisition Regulation selection, enrollment, and 651...... 64014 11-17-95 (FAR): attendance requirements; iv Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Reader Aids

comments due by 12-26- Methylene chloride; Small business investment Special conditions-- 95; published 10-25-95 occupational exposure; companies; comments AiRadio Corp.; Beech HEALTH AND HUMAN comments due by 12-29- due by 12-28-95; model 58 airplanes; SERVICES DEPARTMENT 95; published 12-6-95 published 11-28-95 comments due by 12- Food and Drug NATIONAL AERONAUTICS Freedom of Information and 26-95; published 11-24- Administration AND SPACE Privacy Acts; Federal 95 Food additives: ADMINISTRATION regulatory review; comments Polymers-- Acquisition regulations: due by 12-26-95; published Bombardier Inc.; high- 11-24-95 Ethylene-1,4-cyclohexylene Contract management-- intensity radiated fields; dimethylene comments due by 12- FAR supplement coverage Reporting and recordkeeping terephthalate requirements, etc.; Federal 26-95; published 11-8- copolymers, etc.; on government property; 95 revision; comments due regulatory review; comments comments due by 12- due by 12-26-95; published by 12-26-95; published Class E airspace; comments 26-95; published 11-24- 11-24-95 10-25-95 due by 12-29-95; published 95 Small business size standards: Human drugs: Federal Acquisition Regulation 11-16-95 (FAR): Federal regulatory review; Antibiotic drugs-- Special use airspace; Legal proceedings costs; comments due by 12-26- Cefpodoxime proxetil, etc. 95; published 11-24-95 definitions; comments due for oral suspension; comments due by 12-26- by 12-27-95; published 11- Nonmanufacturer rule; comments due by 12- 95; published 10-26-95 27-95 waivers-- 27-95; published 11-27- NATIONAL LABOR 95 RELATIONS BOARD Minicomputers; comments TRANSPORTATION due by 12-29-95; DEPARTMENT INTERIOR DEPARTMENT Administrative law judges; role published 12-13-95 National Park Service modifications; comments National Highway Traffic Special regulations: due by 12-29-95; published Standards for conducting Safety Administration Grand Teton National Park 12-1-95 business with SBA; Federal regulatory review; comments Motor vehicle safety and John D. Rockefeller, PERSONNEL MANAGEMENT Jr. Memorial Parkway, due by 12-26-95; published standards: OFFICE 11-24-95 WY; snowmobile and Fuel system integrity-- snowplane routes and Retirement: Surety bond guarantee regulations; comments Federal Employees program; Federal regulatory Compressed natural gas due by 12-26-95; Retirement System-- review; comments due by vehicles and fuel published 10-25-95 Alternatve forms of 12-27-95; published 11-27- containers; comments INTERIOR DEPARTMENT annuity; termination; 95 due by 12-26-95; Surface Mining Reclamation comments due by 12- STATE DEPARTMENT published 11-24-95 26-95; published 10-25- and Enforcement Office Longshore work by U.S. 95 Head restraints; alternative Permanent program and nationals; foreign testing procedure abandoned mine land POSTAL RATE COMMISSION prohibitions; comments due removed; comments due reclamation plan Practice and procedure rules: by 12-26-95; published 11- by 12-26-95; published submissions: Rate and classification 24-95 10-24-95 Maryland; comments due by changes; expedition, 12-27-95; published 11- TRANSPORTATION Lamps, reflective devices, flexibility, and innovation; 27-95 DEPARTMENT and associated comments due by 12-26- Coast Guard equipment-- Virginia; comments due by 95; published 10-27-95 12-27-95; published 11- Drawbridge operations: 27-95 SMALL BUSINESS Signal lamps geometric New York; comments due visibility requirements, JUSTICE DEPARTMENT ADMINISTRATION by 12-26-95; published Conflict of interests; comments and rear side marker Motor Vehicle Theft Prevention 10-26-95 color; comments due by Act program regulations; due by 12-27-95; published 11-27-95 TRANSPORTATION 12-26-95; published 10- comments due by 12-26-95; DEPARTMENT 26-95 published 10-24-95 Federal regulatory review: Federal Aviation Occupant crash protection-- JUSTICE DEPARTMENT Government contracting Administration assistance; comments due Prisons Bureau Air bag designs, etc.; by 12-27-95; published Airworthiness directives: Inmate control, custody, care, comments due by 12- etc.: 11-27-95 Canadair; comments due by 12-26-95; published 10- 26-95; published 11-9- Discipline and good conduct Procedure rules governing 95 time; comments due by cases before Office of 24-95 12-26-95; published 10- Hearings and Appeals; McDonnell Douglas; VETERANS AFFAIRS 26-95 comments due by 12-27- comments due by 12-26- DEPARTMENT LABOR DEPARTMENT 95; published 11-27-95 95; published 10-24-95 Disabilities rating schedule: Occupational Safety and Program Fraud Civil SAAB; comments due by Health Administration Remedies Act regulations; 12-26-95; published 10- Mental disorders; comments Safety and health standards, comments due by 12-27- 24-95 due by 12-26-95; etc.: 95; published 11-27-95 Airworthiness standards: published 10-26-95 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Reader Aids v

CFR CHECKLIST Title Stock Number Price Revision Date 14 Parts: 1–59 ...... (869–026–00042–5) ...... 33.00 Jan. 1, 1995 This checklist, prepared by the Office of the Federal Register, is 60–139 ...... (869–026–00043–3) ...... 27.00 Jan. 1, 1995 published weekly. It is arranged in the order of CFR titles, stock 140–199 ...... (869–026–00044–1) ...... 13.00 Jan. 1, 1995 numbers, prices, and revision dates. 200–1199 ...... (869–026–00045–0) ...... 23.00 Jan. 1, 1995 An asterisk (*) precedes each entry that has been issued since last 1200–End ...... (869–026–00046–8) ...... 16.00 Jan. 1, 1995 week and which is now available for sale at the Government Printing 15 Parts: Office. 0–299 ...... (869–026–00047–6) ...... 15.00 Jan. 1, 1995 A checklist of current CFR volumes comprising a complete CFR set, 300–799 ...... (869–026–00048–4) ...... 26.00 Jan. 1, 1995 also appears in the latest issue of the LSA (List of CFR Sections 800–End ...... (869–026–00049–2) ...... 21.00 Jan. 1, 1995 Affected), which is revised monthly. 16 Parts: The annual rate for subscription to all revised volumes is $883.00 0–149 ...... (869–026–00050–6) ...... 7.00 Jan. 1, 1995 domestic, $220.75 additional for foreign mailing. 150–999 ...... (869–026–00051–4) ...... 19.00 Jan. 1, 1995 Mail orders to the Superintendent of Documents, Attn: New Orders, 1000–End ...... (869–026–00052–2) ...... 25.00 Jan. 1, 1995 P.O. Box 371954, Pittsburgh, PA 15250±7954. All orders must be accompanied by remittance (check, money order, GPO Deposit 17 Parts: Account, VISA, or Master Card). Charge orders may be telephoned 1–199 ...... (869–026–00054–9) ...... 20.00 Apr. 1, 1995 ...... to the GPO Order Desk, Monday through Friday, at (202) 512±1800 200–239 (869–026–00055–7) 24.00 Apr. 1, 1995 ...... from 8:00 a.m. to 4:00 p.m. eastern time, or FAX your charge orders 240–End (869–026–00056–5) 30.00 Apr. 1, 1995 to (202) 512-2233. 18 Parts: Title Stock Number Price Revision Date 1–149 ...... (869–026–00057–3) ...... 16.00 Apr. 1, 1995 150–279 ...... (869–026–00058–1) ...... 13.00 Apr. 1, 1995 1, 2 (2 Reserved) ...... (869–026–00001–8) ...... $5.00 Jan. 1, 1995 280–399 ...... (869–026–00059–0) ...... 13.00 Apr. 1, 1995 3 (1994 Compilation 400–End ...... (869–026–00060–3) ...... 11.00 Apr. 1, 1995 and Parts 100 and 19 Parts: 1 101) ...... (869–026–00002–6) ...... 40.00 Jan. 1, 1995 1–140 ...... (869–026–00061–1) ...... 25.00 Apr. 1, 1995 4 ...... (869–026–00003–4) ...... 5.50 Jan. 1, 1995 141–199 ...... (869–026–00062–0) ...... 21.00 Apr. 1, 1995 200–End ...... (869–026–00063–8) ...... 12.00 Apr. 1, 1995 5 Parts: 1–699 ...... (869–026–00004–2) ...... 23.00 Jan. 1, 1995 20 Parts: 700–1199 ...... (869–026–00005–1) ...... 20.00 Jan. 1, 1995 1–399 ...... (869–026–00064–6) ...... 20.00 Apr. 1, 1995 1200–End, 6 (6 400–499 ...... (869–026–00065–4) ...... 34.00 Apr. 1, 1995 Reserved) ...... (869–026–00006–9) ...... 23.00 Jan. 1, 1995 500–End ...... (869–026–00066–2) ...... 34.00 Apr. 1, 1995 7 Parts: 21 Parts: 0–26 ...... (869–026–00007–7) ...... 21.00 Jan. 1, 1995 1–99 ...... (869–026–00067–1) ...... 16.00 Apr. 1, 1995 27–45 ...... (869–026–00008–5) ...... 14.00 Jan. 1, 1995 100–169 ...... (869–026–00068–9) ...... 21.00 Apr. 1, 1995 46–51 ...... (869–026–00009–3) ...... 21.00 Jan. 1, 1995 170–199 ...... (869–026–00069–7) ...... 22.00 Apr. 1, 1995 52 ...... (869–026–00010–7) ...... 30.00 Jan. 1, 1995 200–299 ...... (869–026–00070–1) ...... 7.00 Apr. 1, 1995 53–209 ...... (869–026–00011–5) ...... 25.00 Jan. 1, 1995 300–499 ...... (869–026–00071–9) ...... 39.00 Apr. 1, 1995 210–299 ...... (869–026–00012–3) ...... 34.00 Jan. 1, 1995 500–599 ...... (869–026–00072–7) ...... 22.00 Apr. 1, 1995 300–399 ...... (869–026–00013–1) ...... 16.00 Jan. 1, 1995 600–799 ...... (869–026–00073–5) ...... 9.50 Apr. 1, 1995 400–699 ...... (869–026–00014–0) ...... 21.00 Jan. 1, 1995 800–1299 ...... (869–026–00074–3) ...... 23.00 Apr. 1, 1995 700–899 ...... (869–026–00015–8) ...... 23.00 Jan. 1, 1995 1300–End ...... (869–026–00075–1) ...... 13.00 Apr. 1, 1995 900–999 ...... (869–026–00016–6) ...... 32.00 Jan. 1, 1995 1000–1059 ...... (869–026–00017–4) ...... 23.00 Jan. 1, 1995 22 Parts: 1060–1119 ...... (869–026–00018–2) ...... 15.00 Jan. 1, 1995 1–299 ...... (869–026–00076–0) ...... 33.00 Apr. 1, 1995 1120–1199 ...... (869–026–00019–1) ...... 12.00 Jan. 1, 1995 300–End ...... (869–026–00077–8) ...... 24.00 Apr. 1, 1995 1200–1499 ...... (869–026–00020–4) ...... 32.00 Jan. 1, 1995 23 ...... (869–026–00078–6) ...... 22.00 Apr. 1, 1995 1500–1899 ...... (869–026–00021–2) ...... 35.00 Jan. 1, 1995 24 Parts: 1900–1939 ...... (869–026–00022–1) ...... 16.00 Jan. 1, 1995 ...... 1940–1949 ...... (869–026–00023–9) ...... 30.00 Jan. 1, 1995 0–199 (869–026–00079–4) 40.00 Apr. 1, 1995 1950–1999 ...... (869–026–00024–7) ...... 40.00 Jan. 1, 1995 200–219 ...... (869–026–00080–8) ...... 19.00 Apr. 1, 1995 2000–End ...... (869–026–00025–5) ...... 14.00 Jan. 1, 1995 220–499 ...... (869–026–00081–6) ...... 23.00 Apr. 1, 1995 500–699 ...... (869–026–00082–4) ...... 20.00 Apr. 1, 1995 8 ...... (869–026–00026–3) ...... 23.00 Jan. 1, 1995 700–899 ...... (869–026–00083–2) ...... 24.00 Apr. 1, 1995 9 Parts: 900–1699 ...... (869–026–00084–1) ...... 24.00 Apr. 1, 1995 1–199 ...... (869–026–00027–1) ...... 30.00 Jan. 1, 1995 1700–End ...... (869–026–00085–9) ...... 17.00 Apr. 1, 1995 200–End ...... (869–026–00028–0) ...... 23.00 Jan. 1, 1995 25 ...... (869–026–00086–7) ...... 32.00 Apr. 1, 1995 10 Parts: 26 Parts: 0–50 ...... (869–026–00029–8) ...... 30.00 Jan. 1, 1995 §§ 1.0-1–1.60 ...... (869–026–00087–5) ...... 21.00 Apr. 1, 1995 51–199 ...... (869–026–00030–1) ...... 23.00 Jan. 1, 1995 §§ 1.61–1.169 ...... (869–026–00088–3) ...... 34.00 Apr. 1, 1995 200–399 ...... (869–026–00031–0) ...... 15.00 6Jan. 1, 1993 §§ 1.170–1.300 ...... (869–026–00089–1) ...... 24.00 Apr. 1, 1995 400–499 ...... (869–026–00032–8) ...... 21.00 Jan. 1, 1995 §§ 1.301–1.400 ...... (869–026–00090–5) ...... 17.00 Apr. 1, 1995 500–End ...... (869–026–00033–6) ...... 39.00 Jan. 1, 1995 §§ 1.401–1.440 ...... (869–026–00091–3) ...... 30.00 Apr. 1, 1995 11 ...... (869–026–00034–4) ...... 14.00 Jan. 1, 1995 §§ 1.441-1.500 ...... (869-026-00092-1) ...... 22.00 Apr. 1, 1995 §§ 1.501–1.640 ...... (869–026–00093–0) ...... 21.00 Apr. 1, 1995 12 Parts: §§ 1.641–1.850 ...... (869–026–00094–8) ...... 25.00 Apr. 1, 1995 1–199 ...... (869–026–00035–2) ...... 12.00 Jan. 1, 1995 §§ 1.851–1.907 ...... (869–026–00095–6) ...... 26.00 Apr. 1, 1995 200–219 ...... (869–026–00036–1) ...... 16.00 Jan. 1, 1995 §§ 1.908–1.1000 ...... (869–026–00096–4) ...... 27.00 Apr. 1, 1995 220–299 ...... (869–026–00037–9) ...... 28.00 Jan. 1, 1995 §§ 1.1001–1.1400 ...... (869–026–00097–2) ...... 25.00 Apr. 1, 1995 300–499 ...... (869–026–00038–7) ...... 23.00 Jan. 1, 1995 §§ 1.1401–End ...... (869–026–00098–1) ...... 33.00 Apr. 1, 1995 500–599 ...... (869–026–00039–5) ...... 19.00 Jan. 1, 1995 2–29 ...... (869–026–00099–9) ...... 25.00 Apr. 1, 1995 ...... 600–End (869–026–00040–9) 35.00 Jan. 1, 1995 30–39 ...... (869–026–00100–6) ...... 18.00 Apr. 1, 1995 13 ...... (869–026–00041–7) ...... 32.00 Jan. 1, 1995 40–49 ...... (869–026–00101–4) ...... 14.00 Apr. 1, 1995 vi Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Reader Aids

Title Stock Number Price Revision Date Title Stock Number Price Revision Date 50–299 ...... (869–026–00102–2) ...... 14.00 Apr. 1, 1995 400–424 ...... (869–026–00155–3) ...... 26.00 July 1, 1995 300–499 ...... (869–026–00103–1) ...... 24.00 Apr. 1, 1995 425–699 ...... (869–026–00156–1) ...... 30.00 July 1, 1995 500–599 ...... (869–026–00104–9) ...... 6.00 4 Apr. 1, 1990 700–789 ...... (869–026–00157–0) ...... 25.00 July 1, 1995 600–End ...... (869–026–00105–7) ...... 8.00 Apr. 1, 1995 790–End ...... (869–026–00158–8) ...... 15.00 July 1, 1995 27 Parts: 41 Chapters: 1–199 ...... (869–026–00106–5) ...... 37.00 Apr. 1, 1995 1, 1–1 to 1–10 ...... 13.00 3 July 1, 1984 200–End ...... (869–026–00107–3) ...... 13.00 8Apr. 1, 1994 1, 1–11 to Appendix, 2 (2 Reserved) ...... 13.00 3 July 1, 1984 3–6 ...... 14.00 3 July 1, 1984 28 Parts: ...... 7 ...... 6.00 3 July 1, 1984 1-42 ...... (869–026–00108–1) ...... 27.00 July 1, 1995 8 ...... 4.50 3 July 1, 1984 43-end ...... (869-026-00109-0) ...... 22.00 July 1, 1995 9 ...... 13.00 3 July 1, 1984 29 Parts: 10–17 ...... 9.50 3 July 1, 1984 0–99 ...... (869–026–00110–3) ...... 21.00 July 1, 1995 18, Vol. I, Parts 1–5 ...... 13.00 3 July 1, 1984 100–499 ...... (869–026–00111–1) ...... 9.50 July 1, 1995 18, Vol. II, Parts 6–19 ...... 13.00 3 July 1, 1984 500–899 ...... (869–026–00112–0) ...... 36.00 July 1, 1995 18, Vol. III, Parts 20–52 ...... 13.00 3 July 1, 1984 900–1899 ...... (869–026–00113–8) ...... 17.00 July 1, 1995 19–100 ...... 13.00 3 July 1, 1984 1900–1910 (§§ 1901.1 to 1–100 ...... (869–026–00159–6) ...... 9.50 July 1, 1995 1910.999) ...... (869–026–00114–6) ...... 33.00 July 1, 1995 101 ...... (869–026–00160–0) ...... 29.00 July 1, 1995 1910 (§§ 1910.1000 to 102–200 ...... (869–026–00161–8) ...... 15.00 July 1, 1995 end) ...... (869–026–00115–4) ...... 22.00 July 1, 1995 201–End ...... (869–026–00162–6) ...... 13.00 July 1, 1995 1911–1925 ...... (869–026–00116–2) ...... 27.00 July 1, 1995 42 Parts: 1926 ...... (869–022–00114–1) ...... 33.00 July 1, 1994 1–399 ...... (869–022–00160–4) ...... 24.00 Oct. 1, 1994 *1927–End ...... (869–026–00118–9) ...... 36.00 July 1, 1995 400–429 ...... (869–022–00161–2) ...... 26.00 Oct. 1, 1994 30 Parts: 430–End ...... (869–022–00162–1) ...... 36.00 Oct. 1, 1994 1–199 ...... (869–026–00119–7) ...... 25.00 July 1, 1995 43 Parts: 200–699 ...... (869–026–00120–1) ...... 20.00 July 1, 1995 1–999 ...... (869–022–00163–9) ...... 23.00 Oct. 1, 1994 700–End ...... (869–026–00121–9) ...... 30.00 July 1, 1995 1000–3999 ...... (869–022–00164–7) ...... 31.00 Oct. 1, 1994 31 Parts: 4000–End ...... (869–022–00165–5) ...... 14.00 Oct. 1, 1994 0–199 ...... (869–026–00122–7) ...... 15.00 July 1, 1995 44 ...... (869–022–00166–3) ...... 27.00 Oct. 1, 1994 200–End ...... (869–026–00123–5) ...... 25.00 July 1, 1995 45 Parts: 32 Parts: 2 1–199 ...... (869–022–00167–1) ...... 22.00 Oct. 1, 1994 1–39, Vol. I ...... 15.00 July 1, 1984 200–499 ...... (869–022–00168–0) ...... 15.00 Oct. 1, 1994 1–39, Vol. II ...... 19.00 2 July 1, 1984 2 *500–1199 ...... (869–026–00172–3) ...... 23.00 Oct. 1, 1995 1–39, Vol. III ...... 18.00 July 1, 1984 1200–End ...... (869–022–00170–1) ...... 26.00 Oct. 1, 1994 1–190 ...... (869–026–00124–3) ...... 32.00 July 1, 1995 191–399 ...... (869–026–00125–1) ...... 38.00 July 1, 1995 46 Parts: 400–629 ...... (869–026–00126–0) ...... 26.00 July 1, 1995 1–40 ...... (869–022–00171–0) ...... 20.00 Oct. 1, 1994 630–699 ...... (869–026–00127–8) ...... 14.00 5 July 1, 1991 41–69 ...... (869–022–00172–8) ...... 16.00 Oct. 1, 1994 700–799 ...... (869–026–00128–6) ...... 21.00 July 1, 1995 70–89 ...... (869–022–00173–6) ...... 8.50 Oct. 1, 1994 800–End ...... (869–026–00129–4) ...... 22.00 July 1, 1995 90–139 ...... (869–022–00174–4) ...... 15.00 Oct. 1, 1994 140–155 ...... (869–022–00175–2) ...... 12.00 Oct. 1, 1994 33 Parts: 156–165 ...... (869–022–00176–1) ...... 17.00 7Oct. 1, 1993 1–124 ...... (869–026–00130–8) ...... 20.00 July 1, 1995 166–199 ...... (869–022–00177–9) ...... 17.00 Oct. 1, 1994 125–199 ...... (869–026–00131–6) ...... 27.00 July 1, 1995 200–499 ...... (869–022–00178–7) ...... 21.00 Oct. 1, 1994 200–End ...... (869–026–00132–4) ...... 24.00 July 1, 1995 500–End ...... (869–022–00179–5) ...... 15.00 Oct. 1, 1994 34 Parts: 47 Parts: 1–299 ...... (869–026–00133–2) ...... 25.00 July 1, 1995 0–19 ...... (869–022–00180–9) ...... 25.00 Oct. 1, 1994 300–399 ...... (869–026–00134–1) ...... 21.00 July 1, 1995 20–39 ...... (869–022–00181–7) ...... 20.00 Oct. 1, 1994 *400–End ...... (869–026–00135–9) ...... 37.00 July 5, 1995 40–69 ...... (869–022–00182–5) ...... 14.00 Oct. 1, 1994 35 ...... (869–026–00136–7) ...... 12.00 July 1, 1995 70–79 ...... (869–022–00183–3) ...... 24.00 Oct. 1, 1994 80–End ...... (869–022–00184–1) ...... 26.00 Oct. 1, 1994 36 Parts 1–199 ...... (869–026–00137–5) ...... 15.00 July 1, 1995 48 Chapters: 200–End ...... (869–026–00138–3) ...... 37.00 July 1, 1995 1 (Parts 1–51) ...... (869–022–00185–0) ...... 36.00 Oct. 1, 1994 1 (Parts 52–99) ...... (869–022–00186–8) ...... 23.00 Oct. 1, 1994 37 ...... (869–026–00139–1) ...... 20.00 July 1, 1995 2 (Parts 201–251) ...... (869–022–00187–6) ...... 16.00 Oct. 1, 1994 38 Parts: 2 (Parts 252–299) ...... (869–022–00188–4) ...... 13.00 Oct. 1, 1994 0–17 ...... (869–026–00140–5) ...... 30.00 July 1, 1995 3–6 ...... (869–022–00189–2) ...... 23.00 Oct. 1, 1994 18–End ...... (869–026–00141–3) ...... 30.00 July 1, 1995 7–14 ...... (869–022–00190–6) ...... 30.00 Oct. 1, 1994 39 ...... (869–026–00142–1) ...... 17.00 July 1, 1995 15–28 ...... (869–022–00191–4) ...... 32.00 Oct. 1, 1994 29–End ...... (869–022–00192–2) ...... 17.00 Oct. 1, 1994 40 Parts: 1–51 ...... (869–026–00143–0) ...... 40.00 July 1, 1995 49 Parts: 52 ...... (869–026–00144–8) ...... 39.00 July 1, 1995 1–99 ...... (869–022–00193–1) ...... 24.00 Oct. 1, 1994 53–59 ...... (869–026–00145–6) ...... 11.00 July 1, 1995 100–177 ...... (869–022–00194–9) ...... 30.00 Oct. 1, 1994 60 ...... (869-026-00146-4) ...... 36.00 July 1, 1995 178–199 ...... (869–022–00195–7) ...... 21.00 Oct. 1, 1994 61–71 ...... (869–026–00147–2) ...... 36.00 July 1, 1995 200–399 ...... (869–022–00196–5) ...... 30.00 Oct. 1, 1994 81–85 ...... (869–022–00145–1) ...... 23.00 July 1, 1994 400–999 ...... (869–022–00197–3) ...... 35.00 Oct. 1, 1994 86–99 ...... (869–022–00146–9) ...... 41.00 July 1, 1994 1000–1199 ...... (869–022–00198–1) ...... 19.00 Oct. 1, 1994 87–149 ...... (869–026–00150–2) ...... 41.00 July 1, 1995 1200–End ...... (869–022–00199–0) ...... 15.00 Oct. 1, 1994 150–189 ...... (869–026–00151–1) ...... 25.00 July 1, 1995 50 Parts: 190–259 ...... (869–026–00152–9) ...... 17.00 July 1, 1995 1–199 ...... (869–022–00200–7) ...... 25.00 Oct. 1, 1994 *260–299 ...... (869–026–00153–7) ...... 40.00 July 1, 1995 200–599 ...... (869–022–00201–5) ...... 22.00 Oct. 1, 1994 300–399 ...... (869–026–00154–5) ...... 21.00 July 1, 1995 600–End ...... (869–022–00202–3) ...... 27.00 Oct. 1, 1994 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Reader Aids vii

Title Stock Number Price Revision Date Complete set (one-time mailing) ...... 223.00 1993 CFR Index and Findings Complete set (one-time mailing) ...... 244.00 1994 Aids ...... (869–026–00053–1) ...... 36.00 Jan. 1, 1995 1 Because Title 3 is an annual compilation, this volume and all previous volumes should be retained as a permanent reference source. Complete 1995 CFR set ...... 883.00 1995 2 The July 1, 1985 edition of 32 CFR Parts 1–189 contains a note only for Parts 1–39 inclusive. For the full text of the Defense Acquisition Regulations Microfiche CFR Edition: in Parts 1–39, consult the three CFR volumes issued as of July 1, 1984, containing those parts. Subscription (mailed as issued) ...... 264.00 1995 3 The July 1, 1985 edition of 41 CFR Chapters 1–100 contains a note only Individual copies ...... 1.00 1995 for Chapters 1 to 49 inclusive. For the full text of procurement regulations in Chapters 1 to 49, consult the eleven CFR volumes issued as of July 1, Complete set (one-time mailing) ...... 188.00 1992 1984 containing those chapters. 4 No amendments to this volume were promulgated during the period Apr. 1, 1990 to Mar. 31, 1995. The CFR volume issued April 1, 1990, should be retained. 5 No amendments to this volume were promulgated during the period July 1, 1991 to June 30, 1995. The CFR volume issued July 1, 1991, should be retained. 6 No amendments to this volume were promulgated during the period January 1, 1993 to December 31, 1994. The CFR volume issued January 1, 1993, should be retained. 7 No amendments to this volume were promulgated during the period October 1, 1993, to September 30, 1994. The CFR volume issued October 1, 1993, should be retained. 8 No amendments to this volume were promulgated during the period April 1, 1994 to March 31, 1995. The CFR volume issued April 1, 1994, should be retained.