Friday, April 25, 2008

Part VI

Department of Health and Human Services Food and Drug Administration

21 CFR Part 589 Substances Prohibited From Use in Animal Food or Feed; Final Rule

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DEPARTMENT OF HEALTH AND B. Requirements if it occurs at all. Scientists believe that HUMAN SERVICES C. Recordkeeping and Access the primary route of transmission Requirements requires that cattle ingest feed that has Food and Drug Administration D. Changes to § 589.2000—Animal Proteins been contaminated with a sufficient Prohibited in Ruminant Feed IV. Analysis of Economic Impacts amount of meat and bone meal (MBM) 21 CFR Part 589 A. Summary of Final Regulatory Impact from an infected animal. This route of [Docket No. 2002N–0273] (Formerly Docket Analysis transmission can be prevented by No. 02N–0273) B. Cost Effectiveness of Final Rule and excluding potentially contaminated Alternatives materials from ruminant feed. RIN 0910–AF46 C. Need for Regulation Scientific and epidemiological studies D. Benefits have linked variant Creutzfeldt-Jakob Substances Prohibited From Use in E. Costs disease (vCJD) in humans to exposure to Animal Food or Feed F. Government Costs the BSE agent, most likely through G. Sensitivity Analysis human consumption of beef products AGENCY: Food and Drug Administration, H. Regulatory Flexibility Analysis HHS. V. The Small Business Regulatory contaminated with the agent. As of February 2007, 165 probable and ACTION: Final rule. Enforcement Fairness Act of 1996 (SBREFA) confirmed cases of vCJD have been SUMMARY: The Food and Drug VI. Paperwork Reduction Act of 1995 reported in the United Kingdom. It is Administration (FDA) is amending the VII. Environmental Impact believed that in the United States, agency’s regulations to prohibit the use VIII. Federalism where measures to prevent the of certain cattle origin materials in the IX. References introduction and spread of BSE have food or feed of all animals. These I. Introduction been in place for some time, there is far materials include the following: The less potential for human exposure to the BSE is a progressive and fatal entire carcass of bovine spongiform BSE agent. The Centers for Disease neurological disorder of cattle that encephalopathy (BSE)-positive cattle; Control and Prevention (CDC) leads a results from an unconventional the brains and spinal cords from cattle surveillance system for vCJD in the transmissible agent. BSE belongs to the 30 months of age and older; the entire United States. As of November 2006, family of diseases known as carcass of cattle not inspected and CDC had detected two vCJD cases transmissible spongiform passed for human consumption that are involving United States residents who encephalopathies (TSEs). All TSEs 30 months of age or older from which were born and raised in the United affect the central nervous system of brains and spinal cords were not Kingdom. A third case was confirmed infected animals. However, the removed; tallow that is derived from by CDC in November 2006 and involved distribution of infectivity in the body of BSE-positive cattle; tallow that is a United States resident living in the animal and mode of transmission derived from other materials prohibited Virginia who was born and raised in differ according to the species and TSE by this rule that contains more than 0.15 Saudi Arabia and had lived in the agent. In addition to BSE, TSEs include, percent insoluble impurities; and United States since 2005. This among other diseases, scrapie in sheep mechanically separated beef that is individual did not live in Europe at any and goats, chronic wasting disease in derived from the materials prohibited by time, and CDC has determined that this deer and elk, and Creutzfeldt-Jakob this rule. These measures will further person was most likely infected from disease in humans. contaminated cattle products consumed strengthen existing safeguards against The agent that causes BSE has yet to BSE. as a child when living in Saudi Arabia. be fully characterized. The theory that is On December 23, 2003, the U.S. DATES: This final rule is effective April most accepted in the international Department of Agriculture (USDA) 27, 2009. The Director of the Office of scientific community is that the agent is diagnosed BSE in an adult cow in the the Federal Register approves the an abnormal form of a normal protein United States that had been imported incorporation by reference in known as cellular prion protein. The from Canada. Since then, USDA has accordance with 5 U.S.C. 552(a) and 1 BSE agent does not evoke a traditional confirmed two other cases of BSE in CFR part 51 of a certain publication in immune response or inflammatory adult cows in the United States. One new 21 CFR 589.2001 effective April 27, reaction in host animals. BSE is cow, which was diagnosed on June 24, 2009. confirmed by post-mortem microscopic 2005, was born and raised in Texas. The FOR FURTHER INFORMATION CONTACT: Burt examination of an animal’s brain tissue other cow, which was diagnosed on Pritchett, Center for Veterinary or by detection of the abnormal form of March 15, 2006, had been on a farm in Medicine (HFV–222), Food and Drug the prion protein in an animal’s brain Alabama for less than a year. The Texas Administration, 7519 Standish Pl., tissues. The pathogenic form of the cow was 12 years old and the Alabama Rockville, MD 20855, 240–453–6860, e- protein is both less soluble and more cow was determined to be more than 10 mail: [email protected]. resistant to degradation than the normal years old. Therefore, both cows were SUPPLEMENTARY INFORMATION: form. The BSE agent is resistant to heat born before FDA’s 1997 ruminant feed and to normal sterilization processes. rule (62 FR 30936, June 5, 1997) was in Table of Contents BSE is not a contagious disease, and place. I. Introduction therefore is not spread through casual Under USDA’s enhanced BSE II. Comments on the Proposed Rule contact between animals. The surveillance program, 787,711 cattle A. General Comments possibility of maternal transmission were tested between June 1, 2004, and B. Comments on Proposed New (i.e., from a bovine dam directly to her September 20, 2006. As previously § 589.2001—Cattle Materials Prohibited offspring) was suggested by a 1997 noted, only two animals tested positive in Animal Food or Feed C. Comments on Proposed Amendments to study conducted in the United for BSE, one in Texas and one in § 589.2000—Animal Proteins Prohibited Kingdom. However, subsequent studies Alabama. In September 2006, USDA in Ruminant Feed have shown that it is unlikely that transitioned to an ongoing surveillance III. Description of the Final Rule maternal transmission of BSE occurs at plan under which approximately 40,000 A. Definitions any epidemiologically significant level, cattle are tested per year.

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In the October 6, 2005, issue of the eliminated by the 1997 feed ban, received numerous comments on its Federal Register (70 FR 58570), FDA because doing so eliminates proposed rule. Based on these published a proposed rule (the October transmissions resulting from cross- comments, the agency has made some 2005 proposed rule) that would prohibit contamination and on-farm misfeeding. modifications to this final rule. the use of certain cattle origin materials The current U.S. ruminant feed Specifically, a statement has been added in the food or feed of all animals. The regulation (§ 589.2000 (21 CFR setting forth the purpose of the new materials identified in the proposal 589.2000)) prohibits the use of certain section, i.e., to prohibit the use of include the following: (1) The brains mammalian-origin proteins in ruminant certain cattle origin materials in the and spinal cords from cattle 30 months feed, but allows the use of these food or feed of all animals to further of age and older; (2) the brains and materials in feed for non-ruminant reduce the risk of the spread of BSE spinal cords from cattle of any age not animals. While the prevalence of BSE in within the United States. This change inspected and passed for human the United States is very much lower was made to clarify that the cattle consumption; (3) the entire carcass of than in European countries with BSE, materials prohibited by this rule are cattle not inspected and passed for evidence from the European experience being prohibited from use in all animal human consumption if the brains and has demonstrated that, in countries with food or feed because of their risk for spinal cords have not been removed; (4) a high level of circulating BSE transmitting BSE. This rule, however, tallow that is derived from the materials infectivity, measures on only ruminant should not be construed to mean that it prohibited by the proposed rule that feed were not sufficient to eliminate all is legal to use any portion of an animal contains more than 0.15 percent transmission of BSE; new cases that is adulterated under the Federal insoluble impurities; and (5) continued to be found in cattle born in Food, Drug, and Cosmetic Act (the act) mechanically separated beef that is the United Kingdom after in animal food or feed. derived from the materials prohibited by implementation of a ruminant-to- Under section 402(a)(5) of the act (21 the proposed rule. ruminant feed ban. As stated in the U.S.C. 342(a)(5)), animal feed and feed The preamble to the proposed rule proposed rule, these new cases were ingredients containing material derived contained information regarding BSE, attributed to either cross-contamination from a BSE-positive animal are including a summary of the current during feed manufacture and transport, adulterated because they are in whole or animal feed safeguards in the United or to intentional or unintentional in part the product of a diseased animal. States and the risk of BSE in North misfeeding on the farm. FDA believes The definition of cattle materials America, other options FDA considered that the presence of certain cattle- prohibited in animal feed (CMPAF) has for strengthening animal feed derived risk materials in the non- been revised to include the entire protections, and the reasons for ruminant feed supply presents a carcass of BSE-positive cattle. This proposing to exclude certain cattle- potential source of exposure in the change was made to be consistent with derived risk materials from all animal United States. Although in the United the agency’s previous guidance entitled food and feed. Also discussed in the States, compliance with the 1997 ‘‘Use of Material from BSE-Positive preamble to the proposed rule was the ruminant feed rule by the U.S. animal Cattle in Animal Feed,’’ for which a Harvard Risk Assessment (referred to in feed industry, i.e., renderers, protein notice of availability was published in the preamble to the proposed rule as the blenders, and feed mills, has been very the Federal Register of September 30, ‘‘Harvard-Tuskegee Study’’), completed high, inspections of feed manufacturing 2004 (69 FR 58448). In that guidance, for USDA in 2001. The authors released firms have identified some instances of a revised risk assessment in 2003. inadequate cleanout procedures, the agency made clear that it was not Among other things, the Harvard- mislabeling, and recordkeeping going to exercise enforcement discretion Tuskegee Study identified pathways or deficiencies. with regard to the use of BSE-positive practices that, if addressed, could As discussed in the preamble to the cattle in animal food or feed. Therefore, further decrease the already low risk of proposed rule, data from both naturally this rule prohibits the use of BSE- the spread of BSE if it were introduced infected and experimentally infected positive cattle in all animal food or feed. into this country. cattle indicate that roughly 90 percent of Additional changes have also been In mid-July 2006, USDA’s Food Safety BSE infectivity is contained in the brain made in this final rule to the definition and Inspection Service (FSIS) released a and spinal cord, and only about 10 of CMPAF. As defined in the proposed further revised Harvard Risk percent of BSE infectivity is present in rule, CMPAF included the brains and Assessment. Conducted in 2005, the risk the retina, dorsal root and trigeminal spinal cords from cattle of any age not assessment used an updated model to ganglia, and the distal ileum (Ref. 1). inspected and passed for human simulate the impact of measures The agency continues to believe that the consumption (or the entire carcass, if adopted by USDA and considered by 1997 ruminant feed rule provides a brain and spinal cord were not FDA in response to the detection of a strong primary line of defense against removed). FDA explained in the BSE-positive cow in Washington State BSE transmission by prohibiting the use preamble to the proposed rule its in December 2003. The 2005 study in ruminant feed of all materials with rationale for applying these confirmed the original findings in the potential BSE infectivity. The additional requirements to cattle of any age. This 2001 Harvard-Tuskegee Study and measures taken in this final rule will rationale cited surveillance data noted that, with the protective measures further reinforce the existing rule by showing that cattle not inspected and in place in the United States in 2003, removing certain cattle-derived risk passed for human consumption were the introduction of BSE would result in materials from all animal feed. This included in the population of cattle at limited spread, and the disease would action greatly minimizes the residual highest risk of BSE, and noted that be eliminated over time. Of the BSE risks not eliminated by the 1997 inspection programs were not in place additional feed-related mitigation feed ban if cross-contamination of in the rendering industry for verifying measures evaluated, the revised model ruminant feed with non-ruminant feed, the age of dead cattle. However, given predicted that removal of specified risk or diversion of non-ruminant feeds to the challenges of removing the brain materials (SRMs) from all animal feed ruminants, were to occur. and spinal cord from this class of cattle, would result in a substantial reduction As discussed in greater detail in FDA specifically requested comment on of any residual BSE disease agent not section II of this document, FDA this issue.

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FDA has revised the definition of months of age. FDA also considered the with FDA’s 1997 feed rule by the U.S. CMPAF in the final rule (proposed following: (1) Surveillance data indicate animal feed industry, coupled with the § 589.2001(a)(iii) and new section the current risk of BSE to U.S. cattle is low prevalence of BSE in this country. 589.2001(b)(iii)) to prohibit the use of very low, (2) the existing ruminant feed Some comments took the opposing the entire carcass of cattle not inspected regulation provides strong protection view, stating that more aggressive steps and passed for human consumption that against BSE, and (3) the new measures should be taken by FDA and that all are 30 months of age or older from established by the final rule represent a ruminant-derived material should be which brain and spinal cord have not secondary level of protection to address prohibited in all animal feed. Some been effectively removed or otherwise failures in compliance that may occur comments urged that all exemptions effectively excluded from animal feed. with the existing ruminant feed rule. (e.g., plate waste and poultry litter) be As a result, the rule now prohibits the After considering all of the previously removed from the regulations. Other use of the entire carcass of cattle not mentioned factors, FDA determined that comments asserted that the proposed inspected and passed for human the proposed measure to prohibit rule was not scientifically based and consumption unless: (1) The cattle are materials from cattle that are not should not be finalized. shown to be less than 30 months of age, inspected and passed for human Many comments from industry raised or (2) the brains and spinal cords were consumption and that are less than 30 concerns about the increased burden— effectively removed or effectively months of age is not necessary. financial and otherwise—if the excluded from animal feed use. The Based on comments received, FDA proposed rule is finalized. Some final rule was further revised to require has added a provision to this rule so comments discussed the difficulty of renderers to develop and maintain that the agency may designate a country ensuring complete removal of brain and written procedures for determining the as not subject to the new requirements spinal cord from dead cattle. Other age of and/or removing the brain and in this rule. As explained elsewhere in comments expressed concerns about the spinal cord from, dead cattle, and to this document, a country seeking such increased volume of materials that make the written procedures available a designation must submit a written would have to be disposed of through for FDA inspection. FDA notes that, for request and include information about incineration, landfills, or other means. cattle not inspected and passed that are the country’s BSE case history, risk Potentially adverse environmental diseased or that died otherwise than by factors, measures to prevent the effects—and resultant adverse animal slaughter, the entire carcass of such introduction and transmission of BSE, and public health consequences—from animals is adulterated under section and any other relevant information. the increased volume of disposal 402(a)(5) of the act. FDA has Lastly, for renderers handling cattle materials were mentioned by several traditionally exercised enforcement materials, this final rule provides, as did comments. Comments also expressed discretion with regard to the use of such the proposed rule, that such renderers concerns about registration, animals in animal feed. For example, must establish and maintain records certification, verification of segregation see Compliance Policy Guide 675.400. sufficient to demonstrate that material of CMPAF at slaughter establishments, FDA intends to continue exercising rendered for animal feed was not recordkeeping, and record retention such discretion for the use in animal manufactured from, processed with, or time. feed of: (1) The remaining material from does not otherwise contain CMPAF. A description of the comments and cattle that are diseased or that die Based on comments received regarding FDA’s responses follows. otherwise than by slaughter when the verification of CMPAF segregation in brain and spinal cord are effectively slaughter facilities, this final rule has A. General Comments removed or effectively excluded from been revised to clarify that the 1. Need for Additional BSE Safeguards animal feed use and (2) the entire renderer’s records must also include carcass from cattle that are diseased or documentation that establishments (Comment 1) Many comments, in that die otherwise than by slaughter if supplying cattle materials to the addressing the proposed rule generally, such cattle are shown to be less than 30 renderers have adequate procedures in said that the current BSE feed regulation months of age. place to effectively exclude CMPAF. does not need to be strengthened. FDA made these revisions based on These supplier-related records must Reasons given for this position were the comments indicating that it is feasible to include either certification or other low prevalence of BSE in this country put processes in place to age such cattle documentation from the supplier that as shown by USDA’s surveillance and that very little risk reduction is material supplied to the renderer does results, the conclusion of the original gained by excluding material from such not include CMPAF or documentation Harvard Risk Assessment that the cattle. FDA also received many of another method, acceptable to FDA, United States is resistant to BSE, and comments that raised concerns about such as third-party certification, for the effectiveness of the current ruminant the environmental impacts of disposing verifying that suppliers have effectively feed rule (§ 589.2000) as evidenced by of these animals by means other than excluded CMPAF from animal feed. the high rate of industry compliance rendering them for animal feed use. and the absence of BSE cases in cattle FDA noted in the preamble to the II. Comments on the Proposed Rule born after the 1997 ruminant feed rule. October 2005 proposed rule (70 FR FDA received more than 840 One comment said that FDA should 58570) that European surveillance data comments on the proposed rule. They develop a more accurate estimation of suggest that cattle not inspected and came from a wide variety of BSE risk to U.S. cattle by entering passed for human consumption are organizations, such as cattlemen, USDA’s most recent prevalence data more likely to test positive for BSE than renderers, feed manufacturers, Federal into the Harvard Risk Assessment healthy cattle that have been inspected agencies, State agriculture departments, model. and passed. However, FDA considered trade associations, professional (Response) FDA agrees that the the level of risk reduction that might organizations, universities and research prevalence of BSE in the United States potentially be achieved by prohibiting institutions, consumer organizations, is very low, and that compliance with materials from cattle that are not and individuals. Many comments the current feed ban by the U.S. animal inspected and passed for human questioned the need for additional feed industry is at a high level. Though consumption and that are less than 30 controls in light of the high compliance the situations are not directly

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comparable, evidence from the with the BSE prevalence in the United USDA’s enhanced surveillance program European experience has demonstrated States. at the time of the publication of the that BSE transmission can continue to (Comment 4) Several comments proposed rule indicates that the occur even with a ruminant feed ban in declared that the recommendations in prevalence of BSE is very low in the place. FDA believes that eliminating the the International Review Team’s (IRT) U.S. cattle population. FDA notes that highest risk cattle-derived materials February 2005 report are not relevant to USDA has conducted surveillance for from the non-ruminant feed supply will the development of this rule because BSE since 1990. A July 20, 2006, USDA further reduce the potential for cattle they were not based on science, they do report entitled ‘‘An Estimate of the exposure to the BSE agent via cross- not reflect the difference in BSE risk Prevalence of BSE in the United States’’ contamination of ruminant feed during between Europe and the United States, supports FDA’s qualitative statement of feed manufacturing or transportation, or and they do not present an accurate a very low prevalence of BSE in the through on-farm misfeeding. As stated understanding of the U.S. industry’s United States (Ref. 3). According to the in the preamble to the proposed rule, compliance with the existing BSE feed report, a model developed in Europe without fully dedicated equipment, it regulation. was used to calculate U.S. BSE may not be possible to completely (Response) FDA agrees that not all of prevalence from two BSE cases detected prevent carryover of feed or feed the IRT recommendations are in 735,213 samples collected over a 7- ingredients even when cleanout appropriate for the U.S. situation. year period ending in March 2006. procedures are in place. However, FDA is adopting the IRT Results of this analysis support a (Comment 2) One comment said that, recommendation to require the removal conclusion that the prevalence of BSE in because the cow found in Texas in June of certain cattle-derived risk materials the U.S. cattle population is less than 2005 did not test positive as a typical from all animal feed. FDA believes that one infected animal per million adult case of BSE, this case does not support the level of compliance with the current cattle. the need for additional regulation. ruminant feed rule by the U.S. animal FDA remains confident in the two feed industry is high, but believes that (Response) FDA is aware that the models used by USDA. The most likely the additional measures provide a PrPSC (disease-specific prion protein) values calculated by these models for secondary level of protection to address isolates from the Texas and Alabama the estimated number of cases were 4 or failures in compliance that may occur cases are atypical in that they have 7 infected animals out of 42 million with the existing ruminant feed rule. characteristics on immunohistochemical adult cattle. USDA’s analysis was (Comment 5) One comment said that submitted to the scrutiny of a peer and western blot analyses that cross-contamination is not a problem distinguish them from the typical BSE review process, and the expert panel because the BSE prevalence is so low in agreed with the appropriateness of isolate. Because the significance of these the United States. Another comment differences, particularly with respect to USDA’s assumptions and the factors it asked for the data the agency is relying considered, as well as with the estimate origin and transmissibility, is not yet on to show that cross-contamination clear, the agency believes the atypical of BSE prevalence. and feeding errors need to be controlled, (Comment 7) One comment noted that nature of these two cases does not especially since the agency’s own the effectiveness of the feed ban, diminish the need to strengthen BSE statistics show the industry is in high especially at the farm level, is not feed controls. compliance with the 1997 ruminant known. (Comment 3) Several comments said feed rule. (Response) Inspection results indicate that the proposed rule was not based on (Response) FDA agrees that overall that compliance by U.S. animal feed the BSE situation in the United States, compliance with the 1997 ruminant industry is high. However, FDA agrees but rather on the situation in Europe feed rule by the U.S. animal feed that it is very difficult to assess where the incidence of BSE was 500- industry has been high, but there have compliance with the ruminant feed rule fold greater and control measures were been instances of noncompliance with at the farm level. FDA believes instituted after BSE cases were the rule that could have resulted in excluding certain cattle-derived risk identified. One comment also thought cattle being exposed to prohibited materials from all animal feed channels FDA might have developed its proposal material through cross-contamination, will minimize any residual risks from based on the BSE situation in Japan. mislabeling, or intentional or on-farm misfeeding. (Response) While the data from unintentional misfeeding. Information (Comment 8) Two comments Europe and Japan on BSE provided the describing these instances of indicated that the agency’s feed control agency with important information to noncompliance was set forth in the measures for ensuring compliance with help develop our response to BSE, the preamble to the October 2005 proposed the 1997 ruminant feed rule have been agency based its decision on the BSE rule (70 FR 58570 at 58577). An updated inadequate, citing a Government situation in the United States and summary of compliance information is Accountability Office (GAO) study as believes that these measures are provided in the References section of evidence. appropriate to the United States this document (Ref. 2). (Response) FDA disagrees with these situation. The agency believes, however, (Comment 6) A few comments asked comments. FDA believes its that the early firewalls (prohibition on FDA to recognize that the USDA 18- enforcement activities are adequate for imports of animals and ruminant feed month surveillance snapshot may not be ensuring industry compliance with the from countries with BSE and the an accurate indication of BSE 1997 ruminant feed rule. The agency’s ruminant feed ban) put in place in the prevalence in the United States. response to the GAO’s study can be United States makes it possible and Specifically, because the BSE cases to found in Appendix VI of the GAO’s appropriate to strengthen feed controls date are likely clustered in time and report (Ref. 4). with measures that are still less location, USDA’s surveillance results (Comment 9) One comment expansive than those that would be may underestimate the true risk. speculated that, in some species, appropriate in countries with higher (Response) FDA stated in the atypical BSE might be more pathogenic BSE prevalence such as in European preamble to the proposed rule that the than typical BSE. countries and Japan. The measures detection of one BSE case in over (Response) FDA is not aware of any being implemented are commensurate 418,000 samples analyzed under scientific evidence that atypical BSE is

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more pathogenic than typical BSE. comments further noted that the could carry infectivity. One comment Therefore, the agency believes that the proposal is consistent with the IRT said that, with more sensitive detection controls in this final rule are recommendation regarding a staged methods, BSE infectivity may be appropriate. approach to removing SRM from animal confirmed in blood. In contrast, (Comment 10) Several comments said feed. numerous comments said FDA should the proposed rule will hamper BSE (Response) The agency does not continue to allow the use of blood in surveillance by reducing the number of believe it is necessary, given the low animal feed because there is no cattle available for sampling. prevalence of BSE in the United States, scientific basis for prohibiting blood in (Response) FDA has conferred with to prohibit all ruminant material from cattle feed and because calf health is USDA on the development of this rule. animal feed, nor is it necessary to dependent on colostrum supplements, Further, USDA’s transition from prohibit all animal or all mammalian which include blood products. One enhanced BSE surveillance to ongoing products in cattle feed. Our reasoning comment said that the chair of the IRT BSE surveillance places greater for deciding against the measures under committee stated that blood does not importance on collecting samples where consideration by FDA that were transmit BSE. clinical histories on sampled animals announced on January 26, 2004, and (Response) As explained in the are more likely to be available, such as choosing instead to focus on certain preamble to the proposed rule, FDA is on farms and at diagnostic laboratories, cattle-derived risk materials was fully not prohibiting the use of blood and and less importance on sampling at explained in the preamble to the blood products in animal feed because rendering plants where clinical histories October 2005 proposed rule (70 FR we believe such a prohibition would do are usually not available (Ref. 5). 58570 at 58578). In deciding to prohibit very little to reduce the risk of BSE 2. Other Approaches for Strengthening brain and spinal cord only from cattle transmission. Although TSE infectivity Feed Controls 30 months of age or older, rather than has been demonstrated experimentally the full list of SRMs, FDA considered in the blood (Ref. 6) of sheep and A number of comments recommended the following: (1) Surveillance data rodents (Ref. 7), species differences in ways to strengthen feed controls that indicate the current risk of BSE to U.S. the involvement of the lymphoreticular they believed would provide better cattle is very low, (2) the existing system in TSE diseases suggest that protection than the measures proposed ruminant feed regulation provides these findings cannot necessarily be by FDA. strong protection against BSE, and (3) extrapolated to cattle (Ref. 8). Studies (Comment 11) Several comments the new measures in this rule represent using mouse and cattle bioassays have stated that the proposed rule does not go a secondary level of protection to so far failed to detect BSE infectivity in far enough, that it still allows materials address potential failures in compliance bovine blood (Ref. 9). While FDA agrees derived from ruminant species to be fed that may occur with the existing that more sensitive detection methods to other species, and that it does not ruminant feed rule. FDA believes that might some day demonstrate BSE include any of the actions announced the existing ruminant feed rule provides infectivity in bovine blood, the agency on January 26, 2004. Several comments a strong line of defense by prohibiting believes that it is highly unlikely that suggested that no animal or mammalian the use in ruminant feed of protein the BSE agent is present in blood of products be allowed in cattle feed or in derived from mammalian tissues. The infected cattle at levels sufficient to feed for any other food-producing additional measures in this final rule transmit disease through oral animal species. One comment noted will further reinforce existing ruminant administration of processed blood that, although the proposed rule is a feed protection measures by removing products. This conclusion is based on small step in the right direction, it is the highest risk cattle-derived materials the inefficiency of the oral route of inadequate to close the existing from all animal feed. transmission relative to the intracerebral loopholes. Two comments stated that (Comment 12) One comment stated route, which was used in unsuccessful the proposal ignores some of the that the agency’s proposal was too broad attempts to detect BSE infectivity in recommendations made by the IRT and and asked that the rule be limited to bovine blood. FDA believes that the other BSE experts. Several comments removal of brain and spinal cord from prohibitions in this final rule make it stated that the proposed rule would dead and antemortem condemned cattle unnecessary to also preclude the use of leave 10 percent of the potential 30 months of age or older. The comment blood in animal feed. infectivity in the feeding system. One said this would have captured the two (Comment 14) A number of comments comment stated that the 10-percent BSE cases in Washington and Texas. requested that poultry litter not be infectivity may represent 780 ID50 (ID50 (Response) FDA believes that the rule permitted to be fed to cattle, citing is the amount of infective material that should apply to cattle slaughtered for several reasons. One comment asked would result in a case of BSE in 50 human consumption as well as to cattle that FDA determine actual risk before percent of the cattle that consumed it). not inspected and passed for human deciding that poultry litter is not a risk Another comment remarked that distal consumption at antemortem inspection. factor. One comment stated that feces ileum should be removed from animal Infected cattle that are over 30 months were infectious in rodents orally feed, regardless of the disposal problems of age and in the preclinical stage of challenged with scrapie. Another this could cause. In contrast, several disease could pass antemortem comment noted that, in the United comments were supportive of the inspection, yet still harbor significant Kingdom, when cattle are orally agency’s reasoning behind the proposed levels of BSE infectivity in the brain and challenged, the feces must be treated as rule. These comments stated that spinal cord. medical waste for 1 month post- removal of brain and spinal cord from (Comment 13) Numerous comments challenge. Another comment stated that cattle 30 months of age and older is the suggested that FDA prohibit the use of TSE agents may be present in the single most important step that can be blood in animal feed. Reasons porcine/poultry intestinal content, taken to prevent the amplification of mentioned were that blood has been while still another comment stated that BSE and thereby shorten the time it shown to contain TSE infectivity in the 2001 World Health Organization/ takes to eradicate any latent BSE several species, that vCJD has been Food and Agriculture Organization of infectivity that might be present but found to be transmitted through blood, the United Nations/World Organisation undetected in U.S. cattle. Some and that emboli created by stunning for Animal Health (OIE) Technical

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Consultation concluded that digestive slaughter cattle from all animal feed. It thereby reducing concerns about contents and fecal material from would also prohibit the use of hypobaric vacuum rendering. livestock or poultry being fed meat and (vacuum) rendering for processing (Comment 19) One comment said that bone meal (MBM) potentially inedible ruminant material. The FDA should prohibit the use of contaminated with BSE should not be commenter submitted modeling data mammalian protein in feed for food used as an ingredient in animal feed. obtained using the Harvard Risk producing animals, and cited the (Response) In the preamble to the Assessment model, which showed that following recent research to support this October 2005 proposed rule, FDA this approach is as protective of animal position: provided calculations submitted in and public health as a complete SRMs • Infectious dose may be smaller than comments to the advance notice of ban, while creating a much smaller previously thought: Attack rate studies proposed rulemaking (ANPRM) that disposal challenge. According to the in the United Kingdom have published in the Federal Register on modeling results, the ‘‘systems demonstrated transmission at a 0.001 July 14, 2004 (69 FR 42288), showing approach’’ and the full SRMs approach gram (g) dose (no reference), 10 times that a cow would need to consume a would reduce cases of BSE by 97 lower than the 0.01 g dose described by very large volume of poultry litter to FDA in the proposal. percent and 99 percent, respectively. • ingest an infectious dose of BSE, FDA’s proposed measures would reduce Repeated low dose exposure: A assuming that the poultry feed spilled new cases by 40 percent to 63 percent, study in which scrapie was injected into into the litter was formulated with MBM depending on the effectiveness of brain mice (Jacquemot 2005) showed that derived from a BSE-infected cow. Based and spinal cord removal. The comment repeated low doses caused scrapie when on this analysis, FDA believes that the acknowledged that the ‘‘systems a single dose of the same size did not. risk of cattle exposure to an infectious approach’’ would initially create A second study in which scrapie was dose of BSE through poultry litter is disposal challenges, especially in the administered orally to hamsters low. The measures contained in this dairy sector, but that cost-effective (Diringer 1998) showed a higher final regulation should reduce that risk carcass disposal methods could be incidence of scrapie in hamsters receiving repeated doses than in even further because removing CMPAF implemented. hamsters receiving a single dose. from all animal feed prevents BSE (Response) The difference between infectivity from reaching poultry in the • Additional organs may be the comment’s ‘‘systems approach’’ and infectious: Disease-specific prion first place. the approach in this final rule is that the (Comment 15) Several comments protein (PrPsc) was found in the kidney, ‘‘systems approach’’ would exclude the disagreed with the need for prohibiting pancreas, and liver of scrapie infected entire carcass of dead cattle 30 months poultry litter in cattle feed if FDA mice when inflammation was induced of age or older rather than only the brain finalizes the proposed measures. Two in these organs (Heikenwalder 2005). and spinal cord. As the comment comments said that there is no scientific Another study showed PrPsc in the acknowledges, eliminating the basis for prohibiting poultry material in urine of scrapie infected mice with rendering option (other than disposal ruminant rations. Another comment kidney inflammation. A third study rendering) for disposal of all dead cattle pointed out that banning poultry litter found PrPsc present in mammary glands 30 months of age or older may create would create significant disposal issues. of sheep with mastitis (Ligios 2005). (Response) As discussed in the major disposal challenges in some • Interspecies barrier may be smaller response to the previous comment, regions of the country (see than previously thought: Some studies because the rule prohibits the use of the ‘‘Environmental Assessment’’ for this have shown interspecies inoculation highest risk cattle-derived materials in final rule, Docket No. 2002N–0273). produced subclinical disease but not all animal feed, FDA agrees that it is not Modeling results submitted by the same clinical disease, suggesting that necessary to prohibit poultry litter from commenter in response to the ANPRM previously assumed species barriers being fed to cattle. showed that eliminating vacuum were not complete (Hill 2000). (Comment 16) Several comments rendering contributed very little to the (Response) FDA is aware that BSE recommended that dedicated facilities effectiveness of the ‘‘systems approach.’’ transmission has been demonstrated at and equipment be required in order to The agency believes that excluding a 0.001 g dose. FDA is also aware of the prevent cross-contamination. One brain and spinal cord from all cattle 30 other recent scientific findings and comment disagreed, stating that months of age or older, and not the considered this information as we were requiring dedicated facilities would complete list of SRMs, is the most developing the final rule. The agency force some renderers to discontinue appropriate course of action for the believes that the risks associated with operations. United States where the BSE prevalence repeated low dose exposure, infectivity (Response) As explained in the is low and strong feed controls are in inflamed organs, and unapparent preamble to the October 2005 proposed already in place. carriers of BSE infectivity are very low. rule (70 FR 58570 at 58584), FDA fully (Comment 18) Citing the link of BSE The agency believes the risks of BSE expects this final rule to reduce cases in Alberta to hypobaric (or infection are adequately addressed by substantially the remaining risk vacuum) rendering, one comment the 1997 ruminant feed rule and this associated with cross-contamination, recommended that the use of hypobaric final rule, and that it is not necessary to and therefore does not believe that the rendering be prohibited because it prohibit all mammalian protein in feed rule needs to also require dedicated provides no TSE inactivation. for food-producing animals. facilities and equipment. (Response) FDA agrees that the cluster (Comment 20) One comment noted (Comment 17) One comment of BSE cases associated with a vacuum that species which appear to be resistant suggested a ‘‘systems approach’’ as a renderer in Alberta underscores the may in fact be unapparent carriers and substitute for the measures presented in concern about the ability of this process over time could become sources of the the proposed rule. This approach, to inactivate BSE infectivity. A major BSE agent. Another comment added that according to the comment, would advantage of the measures in this final failure to detect infectivity in tissues of prohibit the entire carcass (except rule over other options considered is experimentally infected pigs and skeletal muscle) of mature dead cattle that they prevent the highest risk cattle- chickens might be due to insufficiently and the brain and spinal cord of mature derived materials from all animal feed, sensitive bioassay techniques. Another

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comment suggested that because swine 3. International Trade Issues controls and inadequate surveillance in and poultry may be silent carriers, The agency received a number of Canada. (Response) The governments of the materials derived from swine and comments about trade, particularly United States and Canada discussed the poultry should not be fed to cattle. about international standards related to differences between their proposed (Response) These concerns were first feed controls for the prevention of BSE. addressed in the 1997 ruminant feed (Comment 23) One comment stated regulations and considered options for aligning the two regulations. This led to rule (62 FR 30936 at 30939). The agency that FDA should not place more a better understanding of each country’s has received no new information that importance on trade considerations than situation. Having considered the would lead us to conclude that the on animal health, while another circumstances related to each of the additional measures suggested by these comment asserted that the proposed BSE-positive cows and the control comments are needed to protect against rule does not meet international systems in place in Canada and the BSE at this time. standards, and therefore export markets United States, FDA has concluded that may remain closed to U.S. products. In (Comment 21) Several comments said measures in the 1997 ruminant feed rule contrast, another comment stated that that FDA should remove the exemptions and in this final rule are the most the proposed rule would satisfy trading in the current feed rule, with the appropriate for the situation in the possible exception of the exemption for partners and should help to reopen United States. milk. export markets. (Comment 26) Australia and New (Response) As discussed in the (Response) FDA’s mission is to Zealand commented that they should preamble to the October 2005 proposed promote and protect public health. The not have to meet the proposed FDA rule (70 FR 58570 at 58573), the agency agency’s regulations are issued to requirements for exporting feed considered eliminating certain of the achieve this mission. FDA is also aware products to the United States because current exemptions in the 1997 of the international trade obligations of both countries have BSE-free status. ruminant feed rule. However, as further the United States and considers these Further, they stated that such discussed in that preamble, given low obligations in rulemaking. FDA believes requirements are contrary to World levels of BSE prevalence and high that this final rule, while based on its Trade Organization obligations under compliance with the 1997 ruminant mission to promote and protect the the Sanitary and Phytosanitary feed ban, the agency determined that public health, is consistent with Agreement. prohibiting the highest risk cattle- international trade obligations. (Response) As stated previously, FDA (Comment 24) One comment stated derived materials from all animal feed is aware of the international trade that the OIE recommends that feed and would be the most appropriate measure obligations of the United States and has certain other commodities from in the United States to further reduce considered these obligations throughout controlled risk countries should not be the remaining risk of BSE infection not the rulemaking process for this traded if they contain protein from already addressed by the 1997 feed ban. regulation. In the preamble to FDA’s brains, eyes, spinal cord, skull, or Other responses to comments in the interim final rule on prohibiting the use vertebral column from cattle 30 months preamble to this final rule also discuss of certain cattle materials in human food of age or older, or contain protein from the agency’s reasons for not eliminating and cosmetics (69 FR 42256, July 14, the distal ileum or tonsils from cattle of certain exemptions in the 1997 2004), FDA requested comment on any age. The comment added that if ruminant feed rule. standards to apply when determining these commodities should not be traded another country’s BSE status, providing (Comment 22) Numerous comments internationally, then they should not be an exemption for ‘‘BSE-free’’ countries, suggested that the plate waste used domestically. and how to determine that countries exemption be eliminated. Reasons cited (Response) The OIE guidelines meet any standards that might be were that plate waste could contain described in the comment apply to meat developed. On July 13, 2007, USDA’s highly infectious material, FDA has not products for human consumption and FSIS published a final rule ‘‘Prohibition specified the reheating requirements ruminant feed. They do not apply to all of the Use of Specified Risk Materials sufficient to inactivate the agent, it animal feed. FDA also notes that these for Human Food and Requirements for could be a factor in the spread of risk materials are already prohibited the Disposition of Non-Ambulatory scrapie, and it confounds feed testing. In from all ruminant feed. As discussed Disabled Cattle; Prohibition on the Use contrast, one comment advised against throughout the preamble to this final of Certain Stunning Devices Used to eliminating the exemption, noting that rule, FDA believes further prohibiting Immobilize Cattle During Slaughter’’ potential infectivity in high risk brain and spinal cord from cattle 30 (also referred to as ‘‘the SRM final rule’’) material has already been removed from months of age and older in all animal (72 FR 38700), which affirmed, with meat by USDA regulations. food or feed is appropriate for the U.S. changes, interim measures implemented (Response) The exemption in the 1997 situation. by FSIS to minimize human exposure to ruminant feed rule is specifically for (Comment 25) Several comments materials that could potentially contain ‘‘inspected meat products which have stated that FDA should harmonize its the BSE agent. One change that FSIS been cooked and offered for human food new BSE feed regulations with those made in the SRM final rule was to and further heat processed for feed proposed by Canada. One comment exclude from the definition of SRMs (such as plate waste and used cellulosic provided a recommendation on how the materials from cattle from a country that food casings)’’ (§ 589.2000(a)(1)). FDA United States and Canadian feed can demonstrate that its BSE risk status disagrees that it is necessary to regulations should be harmonized, can reasonably be expected to provide eliminate the plate waste exemption suggesting that both countries prohibit the same level of protection from human because, since 2004, human food has dead and downer cattle and require the exposure to the BSE agent as prohibiting been required to be free of SRMs by removal of brain and spinal cord from the use of SRMs for human food does in USDA and FDA (69 FR 1862, January cattle 30 months of age and older at the United States. In the preamble to the 12, 2004 (affirmation of interim rule 72 slaughter. In contrast, another comment SRM final rule, FSIS explained that FR 38699, July 13, 2007), and 69 FR stated that trade with Canada should be those countries that believe that they are 42256, July 14, 2004, respectively). restricted because of inadequate feed eligible to have materials from their

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cattle excluded from the definition of TSEs, the total amount of infectivity in agency also explained that the decision SRMs should provide sufficient an animal increases throughout the to prohibit all cattle not inspected and scientific evidence to support their incubation period, reaching the highest passed for human consumption from claimed BSE risk status, and FSIS load at the end, very close to the death which the brain and spinal cord were would then develop criteria to evaluate of the animal. Infectivity is considered not removed from animal feed was the equivalence request. FDA has to increase exponentially after exposure, based on the fact that procedures were decided to adopt a similar approach, reaching 4.5 logs less than clinical cases currently not in place at rendering and will allow a foreign country to seek by 50 percent of the incubation period, facilities to verify that firms were a designation from FDA by which the and 3 logs less than a clinical case at 70 determining the age of cattle effectively restrictions otherwise applicable to percent of the incubation period (Comer (70 FR 58570 at 58578). Several animal feed would not apply to cattle- and Huntly, 2003 (Ref. 12)). Therefore, comments suggested methods to derived material from that country. Any FDA assumes that the benefit shown in determine the age of dead cattle, country seeking such a designation the Harvard-Tuskegee Study of including animal identification systems, would have to provide sufficient excluding animals that die on the farm dairy herd records, dentition, body scientific evidence to support its from the animal feed chain (77 percent weight, or feed lot origin. claimed BSE risk status. reduction in mean number of new cases) Based on the limited scientific basis is primarily attributable to excluding with regard to BSE risk reduction for B. Comments on Proposed New older deadstock. prohibiting cattle not inspected and § 589.2001—Cattle Materials Prohibited FDA does not believe that studies passed for human consumption less in Animal Food or Feed showing BSE infectivity in peripheral than 30 months of age and the 1. Definition of Cattle Materials nerves are sufficient to justify comments suggesting ways to determine Prohibited in Animal Feed (CMPAF) prohibiting all cattle not inspected and the age of such cattle, FDA has revised passed from use in all animal feed to the definition of CMPAF in the final FDA received numerous comments prevent BSE infection. In the rule. The revised definition of CMPAF addressing the definition of ‘‘cattle Buschmann and Groschup study, the includes the entire carcass of cattle not materials prohibited in animal food or experimental mice used were inspected and passed for human feed’’ (CMPAF) as set forth in proposed approximately 10 times more sensitive consumption that are 30 months of age § 589.2001(a). While some urged that all than cattle to the BSE agent, and the or older from which brains and spinal deads and downers, regardless of age, be donor cow was showing severe signs of cords were not effectively removed or included in the definition, others late-stage clinical BSE. Furthermore, otherwise effectively excluded from suggested that younger cattle be based on end-point titration, incubation animal feed. The final rule requires excluded from the definition because of time, and transmission rate, the renderers to maintain written science showing a lower infectivity risk infectivity levels in peripheral nerves procedures if they remove brain and in this group. are extremely low compared to levels in spinal cord from such cattle, or separate (Comment 27) Numerous comments brain and spinal cord. The mice were such animals based on whether or not suggested that FDA exclude all deads injected both intracerebrally and they are 30 months of age or older. As and downers, regardless of their age, intraperitoneally, which is much more suggested by one comment, FDA will from the feed chain because they efficient than the oral route of issue separate guidance for industry on contain the highest level of infectivity administration. Therefore, the agency methods for determining the age of and because the Harvard-Tuskegee believes that very little BSE risk cattle. FDA will work with USDA to Study showed reduction of the risk of reduction would be realized if this final develop methods consistent with those BSE transmission when these two rule prohibited all cattle not inspected of USDA. categories of animals were eliminated and passed for human consumption As FDA noted previously (70 FR from the feed stream. Several comments from use in all animal feed. 58570 at 58579), section 402(a)(5) of the said that infectivity could be present in (Comment 28) Several comments act states that a food shall be deemed to tissues other than brain and spinal cord. suggested that deads and downers under be adulterated if it is, in whole or in Specifically mentioned was new 30 months of age be allowed in non- part, the product of a diseased animal or research showing infectivity in ruminant feed without brain and spinal of an animal which has died otherwise peripheral nerves, both in one cow cord removal, pointing out that no risk than by slaughter. Since the category of using a new bioassay technique reduction is achieved by this cattle defined in this final rule as ‘‘cattle (Buschmann and Groschup, 2005 (Ref. requirement, and that age of deadstock not inspected and passed for human 10)), and in a 94-month-old BSE could be verified by dentition, records, consumption’’ are animals that already infected cow in Japan using a western animal identification systems, or an fall within the category of animals blot method. One comment said that onsite inspection. One comment said referred to in section 402(a)(5) of the act subclinical infection could be present in that FDA should provide guidance to as ‘‘diseased animals or animals which cattle younger than 30 months of age. renderers for procedures to verify age of died otherwise than by slaughter,’’ any (Response) FDA disagrees that it is cattle. animal feed derived from such animals necessary to prohibit all cattle not (Response). FDA agrees that very little would be considered adulterated. inspected and passed for human BSE risk reduction would be realized by However, FDA has traditionally consumption from all animal feed to prohibiting from animal feed all cattle exercised enforcement discretion with prevent BSE infection. BSE has a long less than 30 months of age that were not regard to the use of such animals in incubation period. Epidemiological data inspected and passed for human animal feed. For example, see from the United Kingdom epidemic consumption and from which brain and Compliance Policy Guide 675.400. With have demonstrated that, on average, spinal cord had not been removed. In the implementation of this final rule, cattle develop clinical signs 4 to 6 years the preamble to the October 2005 FDA will no longer exercise after infection (Bradley 1991; Anderson proposed rule, the agency explained the enforcement discretion over those 1996 (Ref. 11)), though the incubation rationale for the 30-month age criterion materials prohibited by this regulation period can be longer or shorter than 4 and stated that it should be applied in (i.e., CMPAF) that are derived from to 6 years. With BSE, as with other the animal feed context. However, the cattle not inspected and passed for

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human consumption. FDA intends to harvest skeletal muscle from dead, 3. Restrictions on Tallow continue exercising such discretion dying, diseased, or disabled cattle) that (Comment 33) One comment stated (relative to section 402(a)(5) of the act) harvest skeletal muscle for such use as that the proposal is unclear as to for the use in animal feed of material pet and mink food fall within the final whether the 0.15-percent insoluble derived from such cattle that are not rule’s definition of renderer and must impurity standard applies to all tallow defined as CMPAF. This includes (1) have written procedures in place or only to tallow derived from CMPAF. The remaining material from cattle not describing the aging methods and The comment requested that the tallow inspected and passed for human specifying how brain and spinal cord, or standard only apply to CMPAF-derived consumption when the brain and spinal parts of carcasses containing brain and tallow. cord are effectively removed or spinal cord, will be effectively removed (Response) The final rule defines effectively excluded from animal feed or effectively excluded from animal tallow as CMPAF if it is derived from: use and (2) the entire carcass from cattle feed. As discussed in more detail in the (1) BSE-positive cattle or (2) from other not inspected and passed for human response to Comment 28, FDA notes CMPAF material and contains insoluble consumption if such cattle are shown to that the use in animal feed of materials impurities greater than 0.15 percent. be less than 30 months of age. from cattle not inspected and passed for The existing § 589.2000 has been (Comment 29) One comment asked human consumption that are diseased changed to clarify that protein derived that downer cattle not be allowed in or that die otherwise than by slaughter from mammalian tissues does not animal feed. is the subject of enforcement discretion. (Response) Under the final rule, to include tallow containing 0.15 percent (Comment 31) One comment from a or less insoluble impurities. The result prevent BSE, cattle not inspected and foreign country requested that FDA passed for human consumption are of these changes is that tallow usage is clarify whether beef recovered by more restrictive in ruminant feed than prohibited from use in animal feed Advanced Meat Recovery (AMR) unless they are shown to be less than 30 in feed for non-ruminants. All tallow systems from vertebral column, from that contains more than 0.15 percent months of age or the brain and spinal which spinal cord has been removed, is cord are effectively removed or insoluble impurities is prohibited in permissible in animal feed. effectively excluded from animal feed. ruminant feed, but only tallow that FDA originally included cattle of any (Response) This final rule does not contains more than 0.15 percent age that were not inspected and passed prohibit in animal feed an AMR product insoluble impurities and that is made for human consumption in the derived from the vertebral column of from CMPAF is prohibited in the food definition of CMPAF because: (1) cattle from which spinal cord has been or feed of all animals. European surveillance data suggested removed prior to the AMR process, (Comment 34) Five comments stated that cattle not inspected and passed for provided that the other requirements of that tallow should be prohibited in human consumption posed a higher risk the final rule are also met. animal feed. Two comments said that for BSE and (2) we believed that 2. Definition of Cattle Not Inspected and tallow should be entirely free of protein processes were currently not established Passed for Human Consumption impurities. In contrast, another in the rendering industry for verifying comment said that tallow from animals the age of such cattle through (Comment 32) Several comments inspected and passed for human inspection. However, FDA received stated that cattle carcasses and parts consumption with SRM removed should comments on the feasibility of aging condemned on post-mortem inspection be allowed in animal feed without the such cattle and on the relatively low should not be considered CMPAF 0.15 percent restriction. risk reduction achieved by excluding because some parts of the condemned (Response) The agency disagrees that such cattle if they were less than 30 carcass may have already been all tallow should be prohibited in months of age. FDA considered these commingled with normal slaughter animal feed or that tallow should be free comments, surveillance data indicating byproducts. The comments suggested of impurities to be used in animal feed. the current risk of BSE to U.S. cattle is that the definition ‘‘cattle not inspected The OIE considers tallow with less than very low, the strong feed protection and passed for human consumption’’ be 0.15 percent insoluble impurities to be provided by the existing ruminant feed changed to ‘‘cattle that do not pass ante- protein-free. Further, OIE guidelines rule, and the added secondary level of mortem inspection.’’ recommend that tallow meeting this protection provided by the other (Response) The agency did not intend standard is safe for use in animal feed, provisions of this final rule. Based on for the purposes of this regulation that regardless of the exporting country’s these factors, FDA concluded that it was the carcasses of cattle condemned on BSE status. As explained in the not necessary to include in the post-mortem inspection be included in proposed rule, the agency is concerned definition of CMPAF cattle not the definition of cattle not inspected about protein impurities that may be inspected and passed for human and passed for human consumption. present in tallow particularly now that consumption that are under 30 months The agency intended this category of an attack rate study in the United of age. cattle to include cattle that had been Kingdom has found that oral (Comment 30) One comment presented to a slaughter establishment administration of a very low dose (1 requested that striated muscle from and rejected (did not pass ante-mortem milligram (mg)) of BSE-infected brain cattle that died otherwise than by inspection) as well as cattle that had not produced disease in 1 of 15 calves slaughter be allowed to be harvested for been presented to a slaughter receiving the dose. The agency sought use in non-ruminant feed. establishment and, hence, were not comment on its proposed action, but no (Response) This final rule does not subject to inspection by an appropriate comments were received that provided prohibit the use of cattle not inspected regulatory authority. To clarify this, a scientific basis for the agency to and passed for human consumption in FDA is modifying the definition of modify its position. Therefore, FDA has animal feed if they are shown to be less ‘‘cattle not inspected and passed for decided to prohibit all tallow containing than 30 months of age or if the brain and human consumption’’ in this final rule more than 0.15 percent insoluble spinal cord are effectively removed or to mean ‘‘cattle that did not pass ante- impurities from use in ruminant feed, otherwise effectively excluded from mortem inspection by the appropriate but prohibit only tallow that contains animal feed. 4–D operations (plants that regulatory authority. more than 0.15 percent insoluble

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impurities and is made from CMPAF processes meet FDA standards for determine the age of an animal, the from use in food or feed for other animal removal. brain and spinal cord must be removed species. (Response) During an inspection, FDA in order for the remaining carcass to be (Comment 35) Two comments said will review the adequacy of a firm’s used for animal feed and not violate the that, because no BSE risk is associated written procedures for removal of brain prohibitions in this final rule. As with the dirt, bone, and sand that and spinal cord and will verify that the discussed in more detail in the response comprise the impurities in tallow, the firm is following its procedures and to Comment 28, FDA notes that the use agency does not need to prohibit tallow effectively removing all the brain and in animal feed of materials from cattle containing more than 0.15 percent spinal cord or otherwise excluding it not inspected and passed that are impurities. from animal feed use. diseased or that die otherwise than by (Response) These comments imply (Comment 38) One comment said that slaughter is the subject of enforcement that protein is not a component of custom-slaughter plants (not federally or discretion. tallow impurities. A 2001 report from a State inspected) will need to remove the Cattle under 30 months of age may be European Scientific Steering Committee brain and spinal cord of all cattle, adequately identified through dentition. stated that analysis of impurities in six regardless of the animal’s age. Veterinary texts and academic articles (Response) Meat from cattle tallow samples found that crude protein indicate that the second set of slaughtered under the custom-slaughter levels ranged from 5 percent to 16 permanent incisors erupt when cattle exemption is exclusively for the use by percent, assuming that all nitrogen in are between 24 and 30 months of age. the owner of the animal, members of his the impurities was of protein origin Thus, cattle would be considered to be or her household, and nonpaying guests (Ref. 13). Since protein may be a 30 months of age and older if at least and employees (Federal Meat Inspection component of tallow impurities, FDA one of the second set of permanent Act, section 623(a)). Because such cattle believes that limiting tallow impurities incisors has erupted. However, are slaughtered without inspection by to the OIE recommended level of 0.15 environmental or operational conditions an appropriate regulatory authority, percent is appropriate. could make aging by dentition difficult. these animals would be considered Therefore, firms’ written procedures 4. Feasibility of Removing Brain and cattle not inspected and passed for may need to include other means of age Spinal Cord human consumption. The rule prohibits determination or adopt the default (Comment 36) Many comments stated their use in animal feed if they are not assumption that the animal is over 30 that brain and spinal cord cannot be shown to be less than 30 months of age months. or the brain and spinal cord are not removed completely from some dead 6. Disposal of Prohibited Materials effectively removed or effectively cattle, and that the feasibility of removal A significant number of comments depends on such things as condition of excluded from animal feed. (Comment 39) One comment stated were submitted pertaining to disposal the carcass, size of the animal, worker that FDA should require firms that problems that could be created if the skill, weather conditions, and distance intend to render deadstock for use in proposed rule is finalized. These between the production site and the animal feed to obtain a special permit problems ranged from the financial rendering facility. Some comments and demonstrate to FDA’s satisfaction burden created by collection fees to submitted estimates of the percentage of that they have implemented a system State and local regulations that restrict dead animals from which brain and that is consistently effective in removing non-feed disposal of prohibited spinal cord could feasibly be removed. brain and spinal cord. materials. Those estimates ranged from as low as (Response) This final rule requires (Comment 41) Numerous comments 15 percent to as high as 54 percent. that rendering firms maintain written said that FDA underestimated the (Response) FDA acknowledges that procedures specifying how brain and volume of material that will require removing brain and spinal cord from spinal cord are effectively removed. The alternative disposal when FDA’s dead cattle may be difficult for the agency does not believe that requiring proposed measures force renderers to reasons mentioned, and that the agency such firms to obtain a permit is increase collection fees or discontinue may have overestimated the number of necessary at this time. FDA believes that deadstock pickup. One comment said independent renderers that would following its current approach of that as a result of the new regulation, choose to remove brain and spinal cord working collaboratively with its State pig, horse, and deer mortalities will no from dead cattle. However, FDA counterparts to ensure compliance with longer be picked up on discontinued believes that, unless cattle not inspected BSE regulations will continue to be routes. Another comment stated that and passed for human consumption are effective. farmers and dairymen will probably shown to be less than 30 months of age, bury, compost, landfill, or dump the brain and spinal cord must be 5. Determining the Age of Cattle Not carcasses to avoid the increased removed prior to use in animal food or Inspected and Passed for Human collection fee that renderers will charge. feed to prevent BSE. As discussed in Consumption (Response) FDA agrees that renderers more detail in the response to Comment (Comment 40) Two comments stated who continue to collect deadstock will 28, FDA notes that the use in animal that dentition will not work for the likely increase collection fees to cover feed of materials from cattle not process of determining the age of cattle the costs of complying with the new inspected and passed that are diseased and that an animal identification system requirements, and that we may have or that die otherwise than by slaughter is needed. underestimated the impact that higher is the subject of enforcement discretion. (Response) The final rule has been fees will have on deadstock collection. (Comment 37) FDA was asked to revised to emphasize that firms are In the October 2005 proposed rule (70 define what constitutes an ‘‘acceptable’’ responsible for having processes in FR 585701 at 58592), we estimated that level of brain/spinal cord removal. place to ensure cattle not inspected and the 17 percent of dead cattle currently Another comment recommended that passed for human consumption from being collected would decrease by 3.5 renderers maintain written procedures which brain and spinal cord are not percent, and did not assume a decrease for processes used to remove brain and removed are shown to be less than 30 in the collection of dead animals of spinal cord and verify that such months of age. If a firm is unable to other species. The revised economic

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impact analysis that accompanies this comprehensive disposal plan is needed as fertilizer because the infectious agent rule estimates that collection of calves before the proposed rule is can survive in soil and be recycled to and cattle will decline by 29.4 percent implemented. Several comments said cattle through crops. to 44.8 percent, with an additional 10- that FDA should consult with Federal, (Response) FDA is not aware of any percent loss in rendering volume State, and local agencies, and with the data showing that BSE can be throughput to reflect a decrease in affected industries, on environmentally transmitted by this route. collection of dead animals of other safe disposal of deadstock. One (Comment 49) One comment asked species. Dead animals no longer comment said that neither FDA nor that the U.S. Government focus on collected should be disposed of in an USDA has jurisdiction over on-farm research and on supporting the environmentally and legally acceptable disposal. Another comment said that rendering industry’s development of manner. USDA should use its broad animal alternative uses for animal byproducts. (Comment 42) Some comments stated health authority to lead a Federal (Response) FDA agrees that that rendering is the best disposal agency task force on disposal. alternative uses for animal byproducts option and that burial, composting, and (Response) Non-feed disposal of need to be encouraged and studied incineration are undesirable carcasses and slaughter byproducts is further. alternatives. One comment said that if primarily regulated by State and local 7. Ensuring Appropriate Handling of SRMs and deadstock are diverted from agencies. Under certain circumstances, Prohibited Material animal feed use, FDA will no longer Federal agencies, such as the have control over this material. Another Environmental Protection Agency (Comment 50) Several comments comment pointed out that it takes 14 (EPA), may use their authorities to addressed certification/registration of months to properly compost a 1500- regulate disposal of this material. FDA facilities handling cattle materials. One pound (lb) cow. consulted with EPA and participated in comment suggested that FDA should (Response) FDA believes this final an industry sponsored roundtable in require annual certification to ensure rule appropriately controls materials to July 2006 to discuss practical solutions that every facility handling cattle be rendered for animal feed. FDA for non-feed disposal throughout the materials is in compliance with the rule. intends to work with relevant local, United States. FDA is ready to work Another comment suggested registration State, and other Federal agencies with industry and other governmental of entities that handle prohibited cattle concerning disposal issues. agencies in identifying appropriate ways material, including renderers, farms that (Comment 43) Some comments stated to dispose of CMPAF. feed or mix feed for ruminants, and that an infrastructure is not in place to (Comment 45) Some comments other parties that handle prohibited provide alternative disposal in all areas pointed out that Europe avoided material, except where government of the country. Several comments said massive disposal problems through inspection is already present (packer- the rule will create a disposal crisis. government subsidies to the rendering associated renderers). One comment said that landfill industry for picking up and rendering (Response) The agency does not operators and solid waste regulators are prohibited material. Subsidies would believe that requiring certification or not prepared to deal with the magnitude help with disposal problems in the registration of firms is necessary at this of the disposal problem, and that some United States. time. FDA believes that continuing its landfills will not accept dead animals or (Response) FDA does not have current approach of working slaughter byproducts. Another comment authority to subsidize alternative collaboratively with its State said that they found no incinerators in disposal of CMPAF. counterparts to ensure compliance with their service area that would accept (Comment 46) Several comments BSE regulations will continue to be dead animals. One comment said that urged FDA to explore alternative ways effective. disposal rendering is feasible, but may to use CMPAF, such as in the (Comment 51) One comment asked not be locally available or that production of biofuel. whether written statements from collection fees may be prohibitive. The (Response) FDA welcomes innovative slaughter and processing establishments last comment also said that alkaline ways of disposing of animal byproducts, would be acceptable to FDA as evidence hydrolysis digesters are not feasible, such as using them for the production that offal is free of prohibited material. strict air pollution measures might of biofuels. The agency has participated One comment said that, due to liability preclude the use of incinerators, in industry/government workshops that concerns, renderers will be reluctant to composting is prohibited in some areas, explored ideas for using deadstock and accept material from plants that are not and land for burial is unavailable in animal byproducts for the production of federally inspected. Two comments said densely populated areas. energy. The agency encourages that slaughter plants should be required (Response) FDA recognizes that no environmentally sound, commercial to verify that raw materials sent for single method of disposal is available or uses of these materials so that the rendering into animal feed are free of suitable in all regions of the country and disposal burden is minimized. prohibited cattle materials. acknowledges that the transition from (Comment 47) One comment (Response) The proposed rule rendering to other forms of disposal will indicated that FDA should not expect a provided that renderers that handle be challenging in some parts of the disposal-only rendering industry to cattle materials must establish and country. The regulation will not become develop if the proposed rule is maintain records sufficient to effective until 12 months after implemented. demonstrate that materials rendered for publication of this final rule, so that (Response) FDA acknowledges that animal feed are not manufactured from, livestock producers, meat packers, many factors, including the processed with, or does not otherwise renderers, and regulators have sufficient implementation of this final rule, play a contain CMPAF. The final rule has been time to arrange for disposal of CMPAF role in determining whether facilities revised to further clarify that renderers’ using one or more of the alternatives dedicated to disposal rendering may records must also include certification mentioned or any other legal alternative. emerge in the marketplace. or other documentation from each (Comment 44) A number of comments (Comment 48) One comment stated supplier, or other documentation stated that, due to disposal restrictions that prohibited brain and spinal cord acceptable to FDA, that CMPAF has at the State and local levels, a material should not be diverted for use been excluded from materials to be

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rendered for use in animal feed. require an increased inspectional and maintaining records demonstrating Certification or other documentation presence at firms that render cattle CMPAF removal. As discussed above, from the supplier would be considered materials. Any reallocation of this final rule clarifies that renderers’ acceptable provided it includes a inspections needed to enforce this new records must include documentation, description of the supplier’s segregation rule should not affect the inspections of such as certification or other procedures, documentation that the high-risk firms that are already being documentation from the supplier that supplier confirms that its segregation conducted to enforce the current material supplied to the renderer does procedures are in place prior to ruminant feed rule. not include CMPAF, or documentation supplying any cattle material to the (Comment 54) One comment said the of another method acceptable to FDA to renderer, and records of the renderer’s proposed rule creates too much of an verify that CMPAF has been segregated periodic review of the suppliers’ inspectional burden with an over from slaughter byproducts that are to be certification or other documentation. reliance on the examination of records. rendered for animal feed use. Other methods acceptable to FDA, such Another comment, in contrast, said that (Comment 57) Several comments as third-party certification, may also be visual inspection by investigators stated that renderers might not collect used by renderers to document that ultimately cannot determine the offal from 4–D plants and custom suppliers have excluded CMPAF from presence or absence of the BSE agent. slaughter establishments because there material supplied to the renderer. (Response) The agency considers both is not routine government inspection of (Comment 52) One comment asked onsite observations of firms’ operations these operations to ensure removal of that FDA clarify whether separate lines and examination of records to be CMPAF. Several comments suggested of equipment (barrels, room storage, important and valuable components for that FDA require written certification of pick-up vehicles) are required for ensuring compliance with the new rule. CMPAF removal. Inspections are not intended to detect handling SRM material. Another (Response) Because 4–D plants meet the presence of the BSE agent, but rather comment said the proposal’s the definition of renderer, these firms are intended to ensure that CMPAF are requirement that facilities be dedicated are subject to the requirements of this not used in animal feed. Records may cause renderers to discontinue rule. The final rule requires that processing CMPAF. A third comment examination is intended to verify that renderers maintain written procedures stated that equipment for processing firms maintain and follow written for how they will remove brain and and transportation of prohibited cattle procedures and to facilitate tracking the spinal cord from cattle not inspected materials should be specifically receipt, processing, and distribution of and passed for human consumption designated for such purposes only. A CMPAF. and, if such cattle are to be rendered fourth comment suggested that (Comment 55) One comment stated without brain and spinal cord removal, renderers and slaughter plants should that increases in renderer pick-up fees written procedures for how they will have verifiable separation and will result in illegal transportation and verify that such cattle are less than 30 identification procedures in place. dumping of deads, downers, and (Response) Under the final rule, CMPAF. months of age. Rendering firms that renderers that provide a service to a (Response) FDA intends to vigorously collect material from a 4–D operation slaughter plant by disposing of CMPAF enforce this new rule to ensure that would have the responsibility of must ensure that there is no cross- CMPAF is not used in animal feed. FDA showing that CMPAF had been removed contamination, either through direct believes this final rule appropriately by the 4–D plant prior to collection, or contact or via equipment surfaces, controls materials to be rendered for that any CMPAF-containing material between CMPAF and animal feed or animal feed. FDA intends to work with collected is not introduced into animal feed ingredients. In addition, CMPAF relevant local, State, and other Federal feed. material is required to be marked and agencies concerning disposal issues. With respect to custom slaughter, the labeled ‘‘Do not feed to animals.’’ (Comment 56) One comment said the final rule defines CMPAF to include Renderers are responsible for ensuring proposal may cause independent certain cattle not inspected and passed that firms collecting such material on renderers to stop accepting offal from for human consumption by the their behalf meet these requirements. red meat slaughter and processing appropriate regulatory authority. Since establishments unless assurances are the slaughter and processing of cattle in 8. Enforcement Issues received that prohibited materials have custom slaughter operations are not FDA received many comments that been removed. Another comment cited subject to inspection, the cattle handled addressed enforcement issues. a statement from a USDA OIG report by custom slaughter facilities would be Specifically, concerns were raised about saying that slaughter establishments are considered not inspected and passed for an increased inspection burden, not adequately removing SRMs under human consumption. Therefore, cattle prohibited materials being illegally current USDA regulations (Ref.14). The materials from custom slaughter transported and dumped, and the need comment expressed concern that establishments cannot be rendered for for agency guidance on recordkeeping. assurance cannot be provided for the use in animal feed if the brain and (Comment 53) Several comments said removal of CMPAF from slaughter cattle spinal cord are not effectively removed that additional resources will be needed under the proposed FDA regulation. from cattle that are 30 months of age or to effectively enforce the new measures. (Response) As stated in the proposed older. It is the renderer’s responsibility One comment said that additional rule, this final rule requires renderers to to establish and maintain records inspectors may be needed to ensure establish and maintain records sufficient to demonstrate that material proper removal and disposal of the sufficient to demonstrate that raw rendered for use in animal feed does not CMPAF. Two other comments said that materials to be rendered for animal feed contain CMPAF. The final rule clarifies increased inspectional presence will be are free of CMPAF. The agency expects that these records must include necessary to ensure that firms comply that, as a condition of collection, certification or other documentation with aging and brain and spinal cord renderers will require beef slaughter from the supplier demonstrating that removal requirements. establishments to provide sufficient adequate segregation procedures are in (Response) FDA agrees that successful documentation to enable the renderers place at slaughter establishments, enforcement of the new measures will to meet their obligation for establishing including custom slaughter

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establishments, that supply cattle proposed rule amounts to an unfunded (Comment 64) Several comments materials to the renderers. mandate requiring States to conduct suggested that instead of requiring that If renderers receive CMPAF for additional inspections at slaughter records be kept for 1 year, FDA should disposal, they are responsible for establishments to ensure proper removal require that records be maintained for a ensuring that it is excluded from animal of CMPAF. longer time period. Suggestions ranged feed. As discussed in more detail in the (Response) Under this final rule, it is from 3 to 12 years. response to Comment 29, FDA notes the responsibility of the renderer to (Response) FDA does not consider it that the use in animal feed of materials ensure that material rendered for use in necessary to extend the recordkeeping from cattle not inspected and passed for animal feed is free of CMPAF. FDA requirement. As discussed in greater human consumption that are diseased acknowledges that it does not conduct detail in the preamble to the October or that die otherwise than by slaughter inspections in USDA-regulated 2005 proposed rule (70 FR 58570 at is the subject of enforcement discretion. slaughter establishments. Nevertheless, 58582), FDA believes 1 year is (Comment 58) Numerous comments the agency believes that ensuring the appropriate, considering the amount of asked that FDA provide guidance on segregation of CMPAF from other time the products will be in the animal several aspects of the rule, such as slaughter byproducts is pivotal to feed production and distribution proper recordkeeping, acceptable enhancing the safety of all animal feed. systems. processes for removing brain and spinal During inspections at rendering 9. Implementation of New Requirements cord from cattle not inspected and facilities, FDA intends to verify that (Comment 65) Several comments passed for human consumption, and renderers maintain records sufficient to pointed out that time may be needed for separation and dedication of processing demonstrate that material rendered for implementation of the rule. Two areas. use in animal feed does not contain comments suggested that it would take (Response) FDA has specified in the CMPAF. In response to comments more than a year for renderers to final rule the recordkeeping requirement regarding recordkeeping and the need develop dedicated rendering facilities or for renderers receiving raw materials for verification of the raw materials, the other types of disposal in California. from slaughter facilities. FDA will final rule has been revised to clarify that Two other comments suggested a staged provide guidance as needed for meeting a renderer’s records must either include approach. other requirements of the new rule. certification or other documentation (Comment 59) One comment (Response) FDA received numerous from the supplier that material supplied suggested that FDA require firms comments regarding the impacts of the to the renderer does not include handling prohibited material to be proposed new requirements, CMPAF, or documentation of another registered. particularly with respect to the (Response) Pursuant to the Public method acceptable to FDA, such as third separation and appropriate disposal of Health Security and Bioterrorism party certification, for verifying that CMPAF. The analysis of economic Preparedness and Response Act of 2002, suppliers have effectively excluded impacts completed for this final rule facilities that manufacture, process, CMPAF. estimates that slaughter and rendering pack, or hold food for consumption in (Comment 62) Two comments stated facilities will incur substantial one-time the United States must register with that distribution records should be capital costs in order to comply with the FDA. The agency does not believe that sufficiently detailed to allow for new requirements. Furthermore, this requiring additional registration of all conducting trace forward and trace back analysis indicates that a substantial firms handling prohibited material is investigations of prohibited cattle component of the total cost of this rule necessary at this time. FDA believes that materials. is associated with the disposal of following its current approach of (Response) As finalized herein, CMPAF. Based on comments received working collaboratively with its State § 589.2001(c)(2)(vi) (21 CFR on the proposed rule and on FDA’s counterparts to ensure compliance with 589.2001(c)(2)(vi)) requires renderers impact analysis completed for this final BSE regulations will continue to be that handle CMPAF to establish and rule, FDA agrees that sufficient time effective. maintain records sufficient to track will be needed to effectively implement (Comment 60) One comment CMPAF to ensure such material is not the new requirements of this final rule suggested that FDA license firms introduced into animal feed, and make including the development of alternate handling prohibited cattle material just the records available for inspection and methods for disposing of CMPAF. FDA as it licenses feed mills that use copying by FDA. And under believes that 12 months should be a Category II drugs as Type A medicated § 589.2001(c)(3)(i), renderers that handle sufficient amount of time for the U.S. articles. any cattle materials must establish and animal feed industry to come into (Response) The agency does not maintain records sufficient to compliance with this final rule. believe that requiring that firms be demonstrate that material rendered for (Comment 66) Several comments said licensed is necessary at this time. FDA use in animal feed was not that instead of implementing new believes that continuing its current manufactured from, processed with, or measures, FDA should provide approach of working collaboratively does not otherwise contain, CMPAF, additional resources to support with its state counterparts to ensure and make the copies available for compliance and enforcement of the compliance with BSE regulations will inspection and copying by FDA. FDA current ban. Two comments stated that continue to be effective. expects to provide guidance, as needed. implementation of the new rule should (Comment 61) Two comments (Comment 63) One comment stated not lessen enforcement of the current questioned whether FDA has that renderers should maintain records rule. jurisdiction to inspect slaughter on how they dispose of prohibited cattle (Response) The basis for the measures establishments to verify proper material. in this final rule was discussed in the segregation of CMPAF. Another (Response) The final rule requires preamble to the October 2005 proposed comment said it strongly opposes new renderers to maintain records sufficient rule (70 FR 58570 at 58578). FSIS inspectional activity to oversee to track CMPAF to ensure that the Implementation of this new rule should CMPAF removal from animal feed. In material was not introduced into animal not diminish inspection and addition, two comments said that the feed. enforcement of the 1997 ruminant feed

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rule at firms that handle prohibited clearly, concisely, and accurately inform prohibited from use in animal feed. mammalian protein. Current resources users about the source of animal protein Further, the regulations were revised to should allow for effective enforcement ingredients in feeds. The comment said exclude from the definition of CMPAF of both rules. that requiring new feed ingredient certain cattle that have not been (Comment 67) One comment said that definitions such as ‘‘non-ruminant inspected and passed for human rendering plants will need time to derived animal proteins,’’ ‘‘ruminant consumption. Under the proposed rule, modify equipment and procedures derived animal proteins,’’ and ‘‘non- cattle that were not inspected and before the rule is implemented. mammalian derived animal proteins’’ passed for human consumption were (Response) FDA understands that would be helpful. excluded from the definition of CMPAF rendering plants will have to make a (Response) Section 589.2000 requires if their brains and spinal cords were variety of modifications to comply with that feed products that contain or may removed. The final rule was revised to the final rule. For this reason, FDA has contain prohibited mammalian protein indicate that such cattle are not made the new rule effective 12 months be labeled with the caution statement considered CMPAF if the animals were from the date of publication. ‘‘Do not feed to cattle or other shown to be less than 30 months of age, C. Comments on Proposed Amendments ruminants.’’ Part 501 (21 CFR part 501) regardless of whether the brain and to § 589.2000—Animal Proteins contains most of the labeling spinal cord have been removed. The Prohibited in Ruminant Feed requirements for animal feed. Under regulations have also been revised to § 501.4, ingredients must be listed on exclude from the definition of CMPAF The final rule amends § 589.2000 to the product label by their common or certain cattle materials that originate exclude from the definition of ‘‘protein usual name. Section 501.110 provides from a country that has been designated derived from mammalian tissues’’ for the use of collective terms, such as by FDA as exempt from the tallow containing no more than 0.15 ‘‘animal protein products,’’ in lieu of requirements of this rule based on its percent insoluble impurities and tallow listing each ingredient by its common or BSE risk status. This exclusion is being derivatives as specified in usual name. For FDA recommendations added in response to comments and § 589.2001(b)(6). FDA also received regarding the common or usual names because the agency has determined that several comments related to other for animal feed ingredients, see it is not necessary for all BSE-related requirements in § 589.2000. Compliance Policy Guide 7126.08. In restrictions to apply to animal feed (Comment 68) Three comments stated response to the FDA Amendments Act regardless of a country’s BSE status. that salvaged pet foods, including of 2007, FDA intends to develop new Epidemiological evidence indicates that distressed pet food, should be regulations on processing and the BSE epidemic in the United prohibited in cattle feed. ingredient standards and ingredient Kingdom (U.K.) was a result of (Response) Pet food containing definitions for all animal feed, and consumption of animal feed prohibited mammalian protein is updated labeling standards for pet food. contaminated by the BSE agent. The prohibited from use in ruminant feed by spread of BSE outside the U.K. has been the 1997 ruminant feed rule. Pet food III. Description of the Final Rule attributed to the export of BSE- products sold or intended for sale as A. Definitions contaminated feed from the U.K. to distressed or salvage items must be other countries prior to the realization labeled with the statement ‘‘Do not feed Section 589.2001(a)(1) is being added of the role of feed in transmitting the to cattle or other ruminants’’ if they to the final rule, and it sets forth the disease and the subsequent restrictions contain or may contain prohibited purpose of new § 589.2001, which is to on such trade. FDA acknowledges that mammalian protein (see prohibit the use of certain cattle origin a country may not have engaged in § 589.2000(d)(4)). This final rule further materials in the food or feed of all commercial trade in animal feed with reduces the risk that cattle could be animals to further reduce the risk of the the U.K. or other affected countries, and exposed to the BSE agent through pet spread of BSE within the United States. it may have had preventive measures in food because it requires the removal of To address the BSE risk, place for a length of time adequate to certain cattle-derived risk materials § 589.2001(b)(1) defines cattle materials make remote the chance that BSE is from all animal feed. prohibited in animal feed (CMPAF) to present in that country. (Comment 69) Two comments include the following: (1) The entire Such a country may be able to requested that the current feed rule be carcass of BSE-positive cattle; (2) the demonstrate to FDA that its BSE case revised to exempt firms that handle brains and spinal cords of cattle 30 history, risk factors, and measures to retail pet food from recordkeeping months of age and older; (3) the entire prevent the introduction and requirements. carcass of cattle not inspected and transmission of BSE make certain BSE- (Response) The 1997 ruminant feed passed for human consumption that are related restrictions unnecessary with rule requires firms to maintain records 30 months of age or older from which respect to cattle materials from that sufficient to track products containing brains and spinal cords were not country. Allowing cattle materials from prohibited mammalian protein. effectively removed or otherwise such a country to be used in non- Exempting retail pet food distributors effectively excluded from animal feed; ruminant animal feed manufactured from recordkeeping requirements would and (4) mechanically separated beef and from, processed with, or otherwise diminish the ability of the agency to certain tallow that is derived from containing CMPAF is consistent with trace feed or feed ingredients that are materials prohibited by this rule. The OIE’s recommendation that other adulterated under the 1997 ruminant definition of CMPAF does not include prohibited materials from negligible risk feed rule. The agency intends to issue tallow derivatives or certain tallow that countries not be restricted. The process guidance that addresses what contains no more than 0.15 percent for seeking designation to be covered by constitutes records sufficient to track insoluble impurities. This definition this exclusion is set forth in prohibited protein associated with the differs from the proposed rule in that § 589.2001(f). sale of retail pet food. the entire carcass from BSE-positive In its application, the requesting (Comment 70) One comment cattle has been added to the definition. country will be expected to provide suggested that the current rule be This was done to clarify that all information to FDA on its BSE case revised to require feed labels that materials from such animals are history, including whether cattle in that

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country have tested positive for BSE, As part of its evaluation of a designations. FDA will, however, and, if so, the circumstances and the requesting country’s feed restrictions, consult with APHIS and FSIS as part of country’s response. In addition, FDA FDA will consider factors including its evaluation process. In addition, FDA will review information that addresses whether appropriate feed restrictions will take into consideration available the extent to which the requesting are in place and the adequacy of risk assessments of other competent country has identified and taken into enforcement of those restrictions (e.g., authorities in conducting its evaluation. account relevant risk factors such as the the frequency of facility inspections and Although it is not required, a previous following: level of compliance). FDA also will BSE evaluation by USDA, OIE, or by • Possible presence of BSE in consider a requesting country’s import another government or another indigenous and/or imported cattle; controls for cattle material. Such competent authority, will be helpful to • Geographic origin of imported consideration will include whether the FDA in its review and may decrease the cattle; country effectively monitors and time needed for FDA to make a • Materials used in the production of controls potential pathways of cattle determination. ruminant feed and feed ingredients; and materials and other potentially infective Upon completion of its review, FDA • Importation of ruminant feed and materials into its country from other will provide written notification of its feed ingredients. countries for which such controls are decision to the requesting country, FDA will consider information necessary. including the basis for the decision. relating to the possible presence of BSE In addition, FDA will consider the FDA may impose conditions in granting in indigenous and imported cattle in the requesting country’s surveillance and a request for designation. Further, any requesting country as well as the monitoring efforts with respect to BSE. designation granted under § 589.2001(f) requesting country’s production and For example, FDA will evaluate the will be subject to future review by FDA importation of ruminant feed and feed level at which the country performs to ensure that the designation remains ingredients. With respect to imported surveillance and monitoring, whether appropriate. As part of this process, cattle, relevant information includes the tissue samples are collected and FDA may ask designated countries to identification of any countries where examined at approved laboratories, and confirm that their BSE situation and the imported cattle were born or raised and whether recognized diagnostic information submitted by them in the dates any cattle were imported. With procedures and methods are used, such support of their original application regard to ruminant feed, FDA will as those procedures and methods remain unchanged. Further, FDA may consider, among other things, how provided in the OIE Manual of revoke a country’s designation if FDA ruminant feed was produced in the Diagnostic Tests and Vaccines for determines that it is no longer requesting country, including what Terrestrial Animals (Ref. 15). appropriate. animal origin materials were allowed to FDA also will consider whether the FDA will provide further information be included. FDA will also consider requesting country has an ongoing on its evaluation process, the scope of whether ruminant feed and feed program for notification and the review, and the types of supporting ingredients were imported, and if so, the investigation of all cattle showing signs information that it would find helpful in source countries and dates of import. consistent with BSE. In evaluating such reviewing a country’s submission at the In addition to reviewing risk factors a program, FDA will consider, among time of the request. such as those identified previously, other factors, whether notification and Section 589.2001(b)(2) defines cattle FDA will assess how the requesting investigation is mandated, whether not inspected and passed for human country has addressed and managed any veterinarians, producers, and others consumption as cattle that did not pass identified BSE risks through the involved in cattle production have been antemortem inspection by the implementation of appropriate measures provided sufficient information about appropriate regulatory authority. This to prevent the introduction and BSE, such as through an awareness term includes nonambulatory disabled transmission of BSE. FDA will consider program, and whether there are cattle. Nonambulatory disabled cattle how long such preventive measures additional measures in place to are cattle that cannot rise from a have been in place and whether they stimulate reporting of suspect cattle, recumbent position or that cannot walk, have been effectively carried out. such as compensation or penalties. including, but not limited to, those with Examples of preventive measures FDA also will consider a requesting broken appendages, severed tendons or include the following: country’s written procedures for ligaments, nerve paralysis, fractured • A prohibition on the use of investigating potential cases of BSE. vertebral column, or metabolic ruminant feed that might carry a risk of Such a consideration will include conditions. The definition of cattle not transmitting the BSE agent; whether the country has written inspected and passed for human • A prohibition on the import of procedures for the investigation of consumption was revised to add the cattle and cattle-derived products that suspect animals and whether the word ‘‘ante-mortem’’ to clarify that might carry a risk of transmitting the country has the investigative capability cattle referred to in this definition are BSE agent; to follow up positive findings by tracing those that did not pass (or were not • Surveillance systems for BSE in former herdmates of animals subjected to) antemortem inspection. cattle populations with appropriate determined to be BSE positive. Finally, Section 589.2001(b)(3) defines examination of brain or other tissues FDA also will consider any other mechanically separated beef as a finely collected for surveillance in approved information relevant to determining comminuted meat food product, laboratories; whether the country should be resulting from the mechanical • Mandatory notification and designated under § 589.2001(f). separation and removal of most of the examination of all cattle showing signs FDA and the USDA agencies, APHIS bone from attached skeletal muscle of consistent with BSE; and and FSIS, have different regulatory cattle carcasses and parts of carcasses. • Protocols or other written responsibilities with respect to Section 589.2001(b)(4) defines procedures for investigating potential preventing BSE and ensuring food renderer to mean any firm or individual cases of BSE, including ability to trace safety. Therefore, FDA cannot rely on that processes slaughter byproducts, former herdmates of BSE-positive the evaluations of APHIS and FSIS in animals unfit for human consumption, animals. making a determination on country or meat scraps. The term includes

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persons who collect such materials and to ensure that equipment used to for inspection and copying. subject them to minimal processing, or manufacture, process, blend, store, or Furthermore, § 589.2001(c)(3) requires distribute them to firms other than transport CMPAF or products that that renderers that receive, manufacture, renderers (as defined in this paragraph) contain or may contain CMPAF do not process, blend, or distribute any cattle whose intended use for the products serve as a source of cross- materials establish and maintain records may include animal feed, industrial use, contamination. sufficient to demonstrate that material or other uses. The term includes In addition, § 589.2001(c)(2) requires rendered for use in animal feed was not renderers that also blend animal protein renderers that handle CMPAF or manufactured from, processed with, or products. products that contain or may contain does not otherwise contain CMPAF. Section 589.2001(b)(5) defines tallow CMPAF to: (1) Label the prohibited Such records shall be considered to mean the rendered fat of cattle materials in a conspicuous manner with sufficient to meet this requirement if obtained by pressing or by applying any the statement ‘‘Do not feed to animals’’; they include documentation that other extraction process to tissues (2) mark the prohibited material with an establishments supplying cattle derived directly from discrete adipose agent that can be readily detected on materials to the renderers have adequate tissue masses or to other carcass parts visual inspection, and (3) establish and procedures in place to effectively and tissues. maintain records sufficient to track the exclude cattle materials prohibited in Section 589.2001(b)(6) defines tallow prohibited materials to ensure such animal feed. The exclusion of CMPAF derivative to mean any product obtained material is not introduced into animal by establishments supplying cattle through initial hydrolysis, feed, and make the records available for materials to renderers must be saponification, or transesterification of inspection and copying by FDA. These demonstrated either by certification or tallow; chemical conversion of material requirements are intended to ensure that other documentation provided by the obtained by hydrolysis, saponification, CMPAF do not enter the animal feed supplier or by another method or transesterification may be applied to chain and thus have no opportunity for acceptable to FDA such as third-party obtain the desired product. inclusion in animal food or feed. FDA certification. Certification or other The definitions in § 589.2001(b)(3), believes that such material must be both documentation provided by the supplier (b)(4), (b)(5), and (b)(6) are unchanged labeled and marked to ensure that it is acceptable provided such records from the proposed rule. does not enter the feed channels, since include a description of the supplier’s without such measures this material B. Requirements segregation procedures, documentation would be indistinguishable from other that the supplier confirms that such Section 589.2001(c)(1) provides that cattle materials. Marking the material procedures are in place prior to no animal food or feed ingredient shall will provide a readily detectable method supplying any cattle material to the be manufactured from, processed with, on visual examination by which all renderer, and records of the renderer’s or otherwise contain CMPAF. Section persons in the animal feed chain can be periodic review of its suppliers’ 589.2001(c)(2) provides new made aware that the product is certification or other documentation. requirements for renderers that handle prohibited material or contains Copies of all records established and CMPAF. Section 589.2001(c)(3) prohibited material. Marking also will maintained by renderers must be made provides new requirements for serve as a way to make the status of the available for inspection and copying by renderers that handle any cattle material known if, for some reason, the FDA. material. label ‘‘Do not feed to animals’’ is In the preamble to the October 2005 1. Requirements for Renderers That separated from the product. proposed rule (70 FR 58570 at 58581), FDA explained that these recordkeeping Receive, Manufacture, Process, Blend, 2. Requirements for Renderers That or Distribute CMPAF requirements were intended to ensure Receive, Manufacture, Process, Blend, that no CMPAF would enter the feed Section 589.2001(c)(2) of the final rule or Distribute Any Cattle Materials channel. At that time, the agency has been revised to include Section 589.2001(c)(3) requires that explained that it did not believe it was requirements for renderers that intend renderers that handle any cattle necessary for persons other than to render for use in animal feed cattle materials shall: (1) Establish and renderers that are involved in the not inspected and passed for human maintain records sufficient to manufacture or processing of feed or consumption. If such cattle are to be demonstrate that material rendered for feed ingredients to maintain records rendered for animal feed, the renderer use in animal feed was not documenting the exclusion of CMPAF. must ensure that the brain and spinal manufactured from, processed with, or The agency went on to state its belief cord are effectively removed or does not otherwise contain, CMPAF; (2) that requiring the maintenance of such otherwise effectively excluded from make copies of records available for records at all manufacturing and material rendered for use in animal inspection and copying by FDA; and (3) processing points downstream would be feed. If such cattle are to be rendered be in compliance with requirements redundant and provide little additional without brain and spinal cord removal, under § 589.2000 regarding animal information of value. FDA, however, the renderer must ensure that such proteins prohibited in ruminant feed. sought comments on the need to require animals are less than 30 months of age. These requirements are unchanged from that records be maintained by persons In addition, written procedures must be the proposed rule. other than renderers. The agency did maintained specifying the procedures not receive any comments on this point. used to ensure compliance with these C. Recordkeeping and Access Therefore, FDA is requiring that such requirements. Requirements records be established and maintained As provided in the proposed rule, Section 589.2001(c)(2)(v) requires that by renderers for the reasons explained § 589.2001(c)(2) of the final rule also renderers that receive, manufacture, in the preamble to the proposed rule. requires that renderers that handle process, blend, or distribute CMPAF FDA also sought specific comments CMPAF use separate equipment or establish and maintain records on what types of records would be containers to handle such material once sufficient to demonstrate that such appropriate for satisfying the it has been separated from other cattle material was not introduced into animal recordkeeping requirements and materials. This requirement is intended feed and make them available to FDA whether further detail would be needed

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in the regulation regarding specific IV. Analysis of Economic Impacts A. Summary of Final Regulatory Impact record requirements. FDA received one Analysis comment asking whether written FDA has examined the impacts of the final rule under Executive Order 12866, The existing rule, which provides the statements from slaughter and baseline for this analysis, prohibits the the Regulatory Flexibility Act (5 U.S.C. processing establishments would be use of certain protein derived from 601–612), and the Unfunded Mandates acceptable to FDA as evidence that mammalian tissues in ruminant feeds. Reform Act of 1995 (Pub. L. 104–4). CMPAF has been removed. Several This final rule expands this restriction Executive Order 12866 directs agencies comments stated that slaughter plants to prohibit certain cattle-derived risk should be required to verify that raw to assess all costs and benefits of materials in all animal feeds. The final materials sent for rendering into animal available regulatory alternatives and, rule, which is very similar to the feed are free of CMPAF. In addition, a when regulation is necessary, to select proposed rule, would define those few comments stated that the records regulatory approaches that maximize CMPAF to include the brain and spinal should be detailed enough to allow trace net benefits (including potential cord of all cattle 30 months of age or forward and trace back as part of any economic, environmental, public health older slaughtered for human investigation of prohibited cattle and safety, and other advantages; consumption, as well as the brain and materials and asked that FDA provide distributive impacts, and equity). The spinal cord of cattle not inspected and guidance on proper recordkeeping. As Regulatory Flexibility Act requires passed for human consumption 30 discussed above, FDA has provided agencies to analyze regulatory options months of age or older, the entire additional details about the that would minimize any significant carcass of cattle not inspected and recordkeeping requirements for impact of a rule on small entities. passed for human consumption 30 renderers. Furthermore, as discussed in Section 202(a) of the Unfunded months of age or older unless the brain section II of the preamble, the agency Mandates Reform Act of 1995 requires and spinal cord have been effectively plans to issue guidance, as needed, to that agencies prepare a written removed or effectively excluded from assist renderers in complying with the statement, which includes an animal feed, as well as other materials. recordkeeping and other requirements. assessment of anticipated costs and The final rule makes a notable change Section 589.2001(e) provides that the benefits, before finalizing ‘‘any rule that from the proposed rule by not defining records required by this final rule be includes any Federal mandate that may as CMPAF the brain and spinal cord maintained for a minimum of 1 year. result in the expenditure by State, local, from cattle under 30 months of age that The 1-year record retention period is and tribal governments, in the aggregate, are not inspected and passed for human consistent with the existing or by the private sector, of $100,000,000 consumption. FDA has also revised the requirements for ruminant feeds in or more (adjusted annually for inflation) final rule to clarify that the records § 589.2000(h). We believe that, for the in any one year.’’ The current threshold established and maintained by renderers purposes of the recordkeeping after adjustment for inflation is $122 that receive cattle materials to be requirements, 1 year is appropriate in million, using the most current (2005) rendered for use in animal feed must light of the time that the products will Implicit Price Deflator for the Gross include certification or other be in the animal feed production and Domestic Product. documentation from the supplier, or distribution systems. Extending the other documentation acceptable to FDA, record retention period would have FDA finds that the final rule that material supplied to the renderer little practical value in determining the constitutes an economically significant does not include CMPAF. For the source of BSE in an animal. In reaching regulatory action as defined in section purposes of this final rule, the term this conclusion, the agency considered 3(f)(1) of Executive Order 12866 because ‘‘cattle not inspected and passed for the potentially long time period from the sum of the recurring costs and human consumption’’ includes non- ingestion of the BSE agent in feed to capital costs that could be incurred in ambulatory disabled cattle. The final manifestation of clinical signs and 1 year rounds to $100 million. We base rule prohibits tallow derived from BSE- lesions and the lack of a reliable this conclusion on both a study of the positive cattle from use in animal feed estimate for the latency period. impacts on industry of the final rule and prohibits tallow derived from other (conducted for FDA by the Eastern CMPAF from use in animal feed unless D. Changes to § 589.2000—Animal Research Group (ERG), a private Proteins Prohibited in Ruminant Feed it contains no more than 0.15 percent consulting firm (Ref. 16)) and the insoluble impurities. The final rule also Section 589.2000(a)(1) has been discussion in the remainder of this prohibits mechanically separated (MS) amended to add language that excludes, section. Under the requirements of the beef derived from any of the CMPAF from the definition of protein derived Regulatory Flexibility Act (RFA), the from use in animal feed. Additional from mammalian tissues, tallow agency has determined that the provisions of the final rule would containing no more than 0.15 percent regulation will have a significant impact require renderers that handle CMPAF to insoluble impurities and tallow on a substantial number of small use separate equipment or containers to derivatives as specified in entities. Therefore, the agency has handle this material once it has been § 589.2001(b)(1)(v). As discussed in the prepared a final regulatory flexibility separated from other cattle materials. preamble to the proposed rule, analysis in accordance with the RFA (5 Such renderers would also be required § 589.2000 previously did not include U.S.C. 604). The analysis can be located to follow certain procedures for labeling tallow in the definition of protein in section IV.H of this document. This and marking CMPAF and recordkeeping derived from mammalian tissues. final rule imposes no mandates on and records access. However, in light of concerns about government entities, and does not The benefits of the final rule include protein impurities present in tallow, require the expenditure of over $122 the elimination of the vast majority of FDA has included tallow in the million in any 1 year by the private the risk not addressed by the 1997 definition of protein derived from sector. As such, further analysis of ruminant feed ban of spreading BSE to mammalian tissues unless it contains no anticipated costs and benefits is not other cattle from intentional or more than 0.15 percent insoluble required by the Unfunded Mandates unintentional use of non-ruminant feed impurities. Reform Act. for ruminants or cross-contamination of

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ruminant feed with non-ruminant feed document shows a summary of these delivered to slaughter. Additional or ingredients intended for non- costs. disposal costs to animal producers for ruminant feed. The final rule would The ban on the use of certain cattle other animals that would no longer be effectively remove from use in non- materials in all animal feed from cattle rendered as a result of this rule will ruminant feeds those cattle tissues that 30 months of age and older slaughtered range from $24.7 million to $35.7 (Table account for approximately 90 percent of for human consumption and cattle 30 1, line 22) million annually. We potential BSE infectivity (Ref. 17). months of age and older not inspected estimate the social cost of the loss of Although the animal and public health and passed for human consumption MBM sales to range from $0.8 to $1.0 benefit associated with the additional would require renderers that process (Table 1, lines 4 and 14) million and the BSE risk reduction is paramount, the either materials from cattle 30 months of social cost from lost tallow sales to U.S. economy may also benefit from age and older slaughtered for human range from $0.7 to $0.8 million (Table regained market access in countries that consumption or cattle not inspected and 1, lines 5 and 15). These costs include remain fully or partially closed to U.S. passed for human consumption 30 the lost value from CMPAF from cattle months of age and older to separate the beef and beef products to the extent that 30 months of age and older slaughtered CMPAF from the remaining offal. the final rule persuades foreign for human consumption, cattle not Renderers may require slaughter governments that more U.S. beef inspected and passed for human products are safe to import. Although facilities to separate such materials as a consumption 30 months of age and we are unable to quantify the effects of condition of collection. We estimate the older, as well as calves, cattle under 30 this final rule on removing restrictions one-time capital costs of such a months not inspected and passed for to foreign markets, the benefits are requirement for slaughterers at about potentially large because the economy $2.1 million (Table 1, line 2) (or human consumption and other species as a whole loses an annual surplus $299,000 annualized at 7 percent over that would no longer be rendered as a equal to about $58 million from the 10 years and $246,000 annualized at 3 result of this rule. We judge the social remaining restrictions. percent over 10 years). We estimate that cost of the loss of hide value resulting This final rule that prohibits the use the annual cost of the additional labor from this rule to range from $9.2 million of these materials in animal food or feed to separate this CMPAF from other to $13.7 million (Table 1, line 12) would impose four types of costs: cattle offal at about $972,000 (Table 1, annually. The estimated cost of both Disposal costs, the opportunity cost of line 3) (including maintenance on new creating and executing procedures for the MBM and tallow not produced, equipment). Although compliance costs the aging of animals at greater or less direct costs of new equipment and re- of these activities will be borne initially than 30 months of age is $2.4 million allocated labor, and feed substitution by slaughterers, a portion of the costs (Table 1, lines 6 and 13) annually. To costs. Total compliance costs of the final are likely to be passed along to cattle the extent some slaughter rule are estimated to range from about producers and consumers. For establishments already have aging $64.4 to $80.9 million per year renderers, average annualized capital procedures in place to comply with annualized over 10 years assuming a 7- investment and labor costs for CMPAF FSIS’ SRM rule, this amount may be an percent discount rate; at a 3-percent separation and segregation are estimated overestimate. discount rate, total compliance costs are at about $7.0 million (Table 1, lines 9 The final rule, as in the proposed rule, estimated at $64.0 to $80.5 million per and 10). requires that tallow derived from certain year. Our analysis does not project a Compliance costs include those specific disposal route for CMPAF due CMPAF contain no more than 0.15 imposed by the rule’s prohibition on the to the variability of State and municipal percent insoluble impurities. Even use of certain tissues from cattle 30 laws for disposal of organic wastes. As though the estimate of CMPAF is much months of age or older slaughtered for it did for the proposed rule, our analysis larger in the final rule, because the human food and cattle 30 months of age of the final rule estimates a $12 per 100 amount handled directly by and older not inspected and passed for lbs (hundredweight (cwt)) of CMPAF independent renderers would remain human consumption in any animal feed disposal cost (including any relatively small, we concluded that it as well as the cost to substitute other transportation costs) from slaughter and would not be economical for renderers feed ingredients for those foregone from rendering establishments. We estimate or tallow manufacturers to further further processing of CMPAF. First, we annual disposal costs for CMPAF from process into tallow the brains and spinal discuss the brain and spinal cord ban as independent renderers at about $11.3 cords from all cattle that have their direct costs to the affected firms million (Table 1, line 11) and from brains and spinal cords removed while (including disposal costs, where slaughterers at about $3.4 million (Table complying with the additional applicable) and the social cost of the 1, line 23). We expect that the disposal equipment separation and tallow testing ban on the raw materials used in feed costs for slaughter CMPAF are and purification requirements. We product inputs. Then, we discuss the immediately passed on to animal therefore did not include any additional feed substitution costs. Table 1 of this producers as lower prices for animals cost for this provision.

TABLE 1.—TOTAL COSTS ($ MILLIONS) 1

Line Cost item One-time cost Annual costs Annualized costs 2

1 ...... Slaughter Facilities ...... 2 ...... Capital investments ...... $2 .1 ...... $0.30 3 ...... Labor ...... $0.97 0.97 4 ...... Social cost of lost MBM ...... 0.04 0.04 5 ...... Social cost of lost tallow ...... 0.03 0.03 6 ...... Creating/Performing cattle aging procedures ...... 1.10 1.10 7 ...... Subtotal—Slaughter Facilities ...... 2 .1 2.14 2.44 8 ...... Renderer Facilities ......

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TABLE 1.—TOTAL COSTS ($ MILLIONS) 1—Continued

Line Cost item One-time cost Annual costs Annualized costs 2

9 ...... Capital investments ...... 20 .25 3.04 5.92 10 ...... Labor ...... 1.09 1.09 11 ...... Disposal of CMPAF from cattle > 30 months ...... 11.30 11.30 12 ...... Value of cattle hides ...... 9.16–13.69 9.16–13.69 13 ...... Creating/Performing cattle aging procedures ...... 1.28 1.28 14 ...... Social cost of lost MBM ...... 0.80–0.98 0.80–0.98 15 ...... Social cost of lost tallow ...... 0.64–0.78 0.64–0.78 16 ...... Plant modification for tallow purification ...... 17 ...... Slaughter and renderer marking of CMPAF ...... 0.02–0.06 0.02–0.06 18 ...... Slaughter and renderer recordkeeping/labeling ...... 0.30 0.21 0.27 19 ...... Subtotal—Renderer Facilities ...... 20 .55 28.20–33.09 31.14–36.04 20 ...... Animal Producer ...... 21 ...... Disposal of cattle > 30 months not inspected and passed, all other animals ...... 24.70–35.70 24.70–35.70 22 ...... Disposal of slaughter cattle CMPAF ...... 3.38 3.38 23 ...... Feed substitution ...... 2.92–3.51 2.92–3.51

24 ...... Subtotal—Animal Producers ...... 31.0–42.59 31.0–42.59

25 ...... Final Rule Total Costs ...... 22.65 61.34–77.82 64.58–81.06 1 Totals may not sum due to rounding. 2 Annualized cost equal to annual cost plus one-time costs at 7 percent over 10 years. Using a 3-percent rate, annualized costs equal $63.99– $80.48 million.

B. Cost Effectiveness of Final Rule and ban), and the resulting transportation manufacture animal feeds and also Alternatives costs would be larger than had the SRM handle prohibited mammalian protein ban been included as part of this by requiring such firms to have Compared with the final rule, we do alternative. dedicated facilities or equipment for not offer any alternative that would To dedicate facilities, independent animal feeds. The compliance costs of impose greatly lower costs. The only renderers would invest about $8 million this alternative are similar to the costs feasible lower-cost alternative that in one-time costs and feed mills would of the final rule. In contrast to the final would reduce the risk of cross invest about $43.2 million in one-time rule, however, this alternative would contamination would be to require costs. Annualized over 10 years at 7 allow CMPAF with the highest BSE separate facilities or equipment to percent, capital investment for infectivity to remain in the animal feed produce ruminant and non-ruminant dedicated facilities would equal about supply, allowing potential exposure to feed. $7.3 million, or about $1.1 million for BSE infectivity when cattle consume Alternative 1—Dedicated Facilities and independent renderers and about $6.2 feed intended for other species through Equipment million for feed mills. ERG forecast that cross-contamination or misfeeding. We this alternative would have little effect conclude, therefore, that the final rule This alternative would strengthen on MBM production, but would force more effectively reduces the risk from FDA’s 1997 feed rule by preventing firms to spend more to transport MBM cross-contamination and misfeeding cross contamination of feed ingredients because they could no longer backhaul than this alternative to require for ruminants with mammalian proteins ruminant feed in trucks used to dedicated facilities or equipment. Given currently prohibited from ruminant transport feed containing mammalian the general similarity in compliance feed. To prevent cross contamination, proteins currently prohibited in costs, we therefore judge this alternative this alternative would require dedicated ruminant feed (70 FR 58593 to 58594). to be less cost-effective than the final equipment in those facilities producing In the analysis for the proposed rule, rule. or handling feed or feed ingredients for ERG estimated that dedicated ruminants and mammalian proteins equipment would increase Alternative 2—The Proposed Rule currently prohibited from ruminant transportation costs by $8 million to $16 The proposed rule would require that feed. In the analysis of the alternatives million for renderers and $14.2 million the brain and spinal cord from all cattle to the proposed rule, ERG estimated that to $28.4 million for feed mills (70 FR 30 months of age or older slaughtered only independent renderers and feed 58594). Accounting for ERG’s revised for human consumption, and from all mills would incur compliance costs for fuel costs (Ref. 16), the estimated costs cattle not inspected and passed for this dedicated facilities or equipment for dedicated transportation equipment human consumption of any age to be (70 FR 58593). It should be noted, range from $14.6 million to $29.3 defined as CMPAF. The main difference however, that this requirement for million annually for renderers and from between the proposed rule and the final dedicated facilities and equipment $22.5 million to $45.0 million annually rule is that the proposed rule would also differs from the dedicated equipment for feed mills. The total estimated define as CMPAF the brain and spinal requirement of the SRM ban annualized compliance costs of this cord of cattle under 30 months of age (Alternative 3 in this document). Since alternative range from $44.4 million to that were not inspected and passed for the dedicated facilities and equipment $81.6 million. human consumption. Compared with option is analyzed here as a separate This alternative addresses the the final rule, this alternative produces alternative (i.e. not as part of the SRM problem of animal feed being cross- more tissue for disposal by deadstock ban), the tonnage of rendered ruminants contaminated with prohibited renderers, increasing the compliance would not be reduced (without the SRM mammalian protein in firms that costs for independent renderers.

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However, these costs would be offset million to $51.9 million. Slaughterers not inspected and passed for human somewhat because, under the proposed would incur about $2.5 million in consumption under 30 months of age to rule, deadstock renderers would not annualized costs. Table 2 of this the list of prohibited cattle material. need to determine the age of the animal. document shows that, in total, the Scientific evidence indicates that the The annualized compliance costs for estimated annualized compliance costs probability that the brain and spinal independent renderers would range for this alternative range from $73.8 cord from cattle under 30 months of age from $34.9 million to $41.5 million. million to $95.9 million and exceed the contains BSE infectivity is extremely Similar to the final rule, livestock annualized compliance costs of the final low (Ref. 18). Consequently, this producers would likely pay higher rule. alternative is less cost-effective than the prices for feed substitutes and on-farm Although this regulatory action would final rule because it cost $9.2 to $14.8 disposal of deadstock. Annualized prohibit more material from animal feed million more without a commensurate compliance costs for livestock than would the final rule, it would only reduction of risk. producers would range from $36.4 add the brain and spinal cord of cattle

TABLE 2.—SUMMARY OF THE COMPLIANCE COSTS OF THE PROPOSED RULE 1

2 One-time Annual costs Annualized costs Cost item costs ($ million) ($ million) ($ million) Low estimate High estimate Low estimate High estimate

Capital investments ...... 26.2 ...... 3.7 3.7 Labor ...... 8.4 8.4 8.4 8.4 Loss of net revenue ...... 12.8 19.4 12.8 19.4 Disposal costs...... 44.9 59.9 44.9 59.9 Marking ...... 0.0 0.1 0.0 0.1 Recordkeeping/Labeling ...... 0.2 0.1 0.1 0.1 0.1 Feed substitution...... 3.8 4.4 3.8 4.4

Total costs...... 26.3 70.0 92.1 73.8 95.9 1 Numbers may not sum due to rounding. 2 Costs are annualized over 10 years at 7 percent.

Alternative 3—The SRM Ban ganglia, vertebral column (excluding the slaughterers can immediately pass The third alternative we considered vertebrae of the tail, the transverse disposal costs back to cattle producers would prohibit the use of the full list of processes of the thoracic and lumbar by adjusting the prices they pay for specified risk material (SRM) from vertebrae, and the wings of the sacrum), slaughter animals, cattle producers animal feed and require the use of and dorsal root ganglia of cattle 30 would likely incur the entire cost of dedicated equipment by renderers. The months of age and older, and the tonsils SRM disposal in the short run. ERG scope of this alternative is similar to and distal ileum of all cattle. estimated that over time, markets would Canada’s 2006 enhanced feed rule and As shown in Table 3 of this adjust to the impacts of an SRM ban and is the most restrictive regulatory action document, the estimated annualized about 50 percent of the total incremental we considered.1 This alternative costs of this alternative range from costs of this alternative would be passed expands the list of prohibited material $332.0 million to $344.7 million. on to consumers as higher beef prices, and would substantially increase the Slaughterers would incur annualized 38 percent of the total incremental costs amount of prohibited material generated costs of about $19.5 million in lost would be passed back to cattle by regulatory action. It also requires that revenues and increased labor and producers as lower cattle prices and 12 renderers have dedicated equipment capital costs. Independent renderers percent of the total incremental costs used to process or transport protein would incur from $42.9 million to $55.6 would be incurred by processors. prohibited from being fed to ruminants million in annualized costs of lost and to process or transport protein not revenues and increased labor and Although this option would increase prohibited from being fed to ruminants. capital costs. Animal producers would the material removed from animal feed In practice, some tissues that are not incur about $12.7 million annually in when compared with the first defined as SRM would be difficult to feed substitution costs. Disposal costs alternative, the incremental reduction in separate and are treated as SRM. Canada for animals that would no longer be the potential risk would not be made a similar distinction in its rendered as a result of the SRM ban and commensurate with the costs as shown enhanced feed rule. Thus, in addition to the disposal costs for slaughter SRM in Table 3 of this document. Thus, this the material prohibited in the final rule, would account for the majority of the regulatory alternative would be much this alternative would prohibit from all estimated annualized costs and equal less cost-effective than either the final animal feed: The skull, eyes, trigeminal about $257 million. Because most rule or the proposed rule.

1 The enhanced Canadian feed ban exempts feed equipment. Although ERG included feed mills in its analysis of the SRM ban, we have excluded these mills from the requirement for dedicated costs from our analysis.

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TABLE 3.—COMPLIANCE COSTS OF A FULL SRM BAN 1

Annual costs Annualized costs 2 One-time ($ million) Cost item costs ($ million) ($ million) Low estimate High estimate Low estimate High estimate

Capital investments ...... 37.8 ...... 5.4 5.4 Labor ...... 12.7 12.7 12.7 12.7 Loss of net revenue ...... 35.8 35.8 35.8 35.8 Transportation ...... 7.9 20.5 7.9 20.5 Disposal costs ...... 257.0 257.0 257.0 257.0 Marking ...... 0.6 0.6 0.6 0.6 Recordkeeping/Labeling ...... 0.2 0.1 0.1 0.1 0.1 Feed substitution ...... 12.7 12.7 12.7 12.7

Total compliance costs ...... 38.0 326.6 339.3 332.0 344.7 1 Numbers may not sum due to rounding. 2 Costs are annualized over 10 years at 7 percent.

Summary of Regulatory Alternatives reduced the potential risk that tissues previously, we have determined that the Table 4 of this document shows the infected with the agent that causes BSE final rule is the most cost-effective annualized and incremental costs of could get into ruminant feed. The final action for reducing the potential risk each regulatory alternative considered. rule further reduces the possible risk of that animal feed or feed ingredients The safeguards put in place by the 1997 cross contamination of ruminant feed intended for ruminants could contain ruminant feed rule have substantially with prohibited material. As explained the agent that causes BSE.

TABLE 4.—COSTS OF ALTERNATIVE POLICIES

Annualized costs 1 Incremental annualized costs ($ million) (from previous alternative) Alternative ($ million) Low estimate High estimate Low estimate High estimate

Separate facilities and equipment for renderers and feed mills ...... 44 .4 81.6 Final rule ...... 64 .6 81.1 20.2 (0.5) Proposed rule ...... 73.8 95.9 9.2 14.8 Full SRM ban; separate facilities and equipment for renderers ...... 332 344.7 258.2 248.8 1 Costs are annualized over 10 years at 7 percent.

C. Need for Regulation decrease in risk of BSE transmission if have no way of knowing whether a Executive Order 12866 directs the market were able to provide it. particular batch of feed or feed agencies to assess the need for any Buyers, however, have little information ingredients intended for ruminants is significant regulatory action and to about the BSE infectivity of feed free of potentially infective proteins due provide an explanation of how the because the costs to them of ascertaining to the possibility of CMPAF being regulation will meet that need. infectivity are very high and higher than introduced through cross-contamination Comments on the October 2005 the costs to the feed producers. As a with feed or feed ingredients intended proposed rule did not address the result, buyers may unknowingly buy for non-ruminants. feed contaminated with BSE because of accuracy of the theoretical argument D. Benefits FDA put forth in the preamble to the the presence of CMPAF. October 2005 proposed rule related to The potential market failures created FDA received few comments on the private incentives and market failure (70 by the continued use of materials that proposed rule that focused on the FR 58570 at 58587). Therefore, FDA this final rule would eliminate are the benefits section. One comment stated retains this argument here in the final same as described in the 1997 ruminant that the proposal was unnecessary rule. In this instance, FDA concludes feed rule. If feed purchasers could easily because it addressed only a very small that private incentive systems for both identify the risk of the infective agent risk. FDA agrees that the risk is low but suppliers and purchasers in markets for associated with products from specific reiterates, as in the proposed rule, that cattle, rendering, and ruminant feed suppliers, they could more easily reduce by requiring removal of the highest risk may inadequately address the risk of these risks by refusing to buy feed cattle-derived materials from use in any BSE. This market failure is a result of products derived from ruminants animal feed, the final rule further inadequate information being available known to have consumed processed reduces BSE risks not already addressed to buyers of potentially infective animal CMPAF. Feed purchasers, however, are by the 1997 feed ban. feed. Because of the risk of cross unlikely to obtain the information they The purpose of the final rule is to contamination during feed production need due to the long incubation period further strengthen existing safeguards and the risk of inadvertently feeding for BSE, which could lead to a against BSE in the United States. non-ruminant feed to ruminants on an suboptimal level of risk prevention by Reduced risk of BSE among cattle also integrated farm, buyers of ruminant and purchasers during the incubation reduces human risk of vCJD, which is non-ruminant feed would likely value a period. Moreover, ruminant producers believed to be caused by consumption

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of beef products contaminated with the upon relationship between human beef products. The preventive measures BSE agent. The final rule also increases exposure to cattle ID50s (ID50 is the contained in this final rule may increase the potential for exports by reducing amount of infective material that would the likelihood that foreign governments foreign governments’ concerns about the result in a case of BSE in 50 percent of ease some restrictions on imports of safety of U.S. beef. In this section, we the cattle that consumed it) and vCJD U.S. beef products and cattle. first address the reductions in the risk cases. During the 1980s and 1990s, in We cannot estimate the trade benefits of BSE to cattle in the United States and the absence of preventive control of this final rule. We can estimate the the corresponding protection of human measures, millions of ID50s may have net effect on social surplus of the health from the major provisions of the been available for consumption by continuing restrictions on beef exports, proposal. We then summarize the residents of the United Kingdom, as well as the potential gain from available evidence about the likely because each cow with clinical removing those restrictions. To do so, effect of this final rule on U.S. exports symptoms of BSE contains an average of we use a standard economic model of of beef and other livestock products. about 7,800 ID50s. While the United the effects of export restrictions on Kingdom totaled over 183,000 cases of consumer and producer surplus. The 1. Risk Reduction BSE (Ref. 19) through January 21, 2007, closing of export markets, all else being FDA estimates that banning CMPAF the cumulative number of definitive or the same, leads to a fall in exports and from use in any animal feed would probable vCJD cases identified in the a rise in domestic consumption as more effectively remove about 90 percent of United Kingdom as of February 2007 beef is sold on the domestic market (Ref. any remaining potential infectivity from was 165 (Ref. 20). Thus, the experience 23). The forced sale to U.S. consumers possible spread through the feed system. of the United Kingdom suggests that the increases consumer surplus and To derive this estimate of the risk BSE agent is many times less infective decreases producer surplus. Over time, reduction from the ban on CMPAF, we in humans than in cattle. the quantity produced in the domestic assume that the number of new BSE economy falls as well, as producers cases is proportional to the amount of 2. Increased Export Potential respond to the restrictions. If the trade all infectious material included in feed. A second major category of benefits restrictions on U.S. beef are removed, Given this assumption, we estimate the largely accrues to U.S. cattle producers beef exports will increase, domestic percentage reduction in the risk of new and reflects the potential for increased consumption will decrease, and BSE cases as the percentage reduction in exports of U.S. beef and beef products domestic production will increase. Once infectious material. A 1999 report by the to countries that have acted to curtail all adjustments are made to the Scientific Steering Committee of the exports since the discovery of the withdrawal of the restrictions, we European Union suggests that the brain infected cow in Washington State in estimate the gain in social surplus to be and spinal cord constitute 89.7 percent December 2003. USDA assessed this about $105 million per year, with a of the total infective load in a case of category of benefits in the FSIS SRM range of $80 million to $120 million. BSE. This rule would prohibit use in all interim final rule that it issued in We estimate the effects of the export animal feed of these tissues from all January 2004. In its assessment, USDA restrictions using changes in beef prices cattle 30 months of age or older. Brain concluded that ‘‘the 2004 beef export and exports. Price changes in the U.S. and spinal cord taken from cattle under demand forecast has been reduced by 90 market, however, are dominated by 30 months of age would not be defined percent’’ (Ref. 21). Foreign trade data seasonal and trend effects, fluctuations as CMPAF, however, because the shows that from 2003 to 2004, the in feed costs, and a host of other factors. probability is extremely low that tissues quantity of beef, veal, and beef variety These complications make it difficult to from cattle of this age would contain meat exported by the United States use actual beef price changes to estimate BSE infectivity. Thus, banning CMPAF decreased by about 75 percent, whereas the effect of diminished exports on from animal feed would effectively the value of these exports declined by price. As an alternative to direct remove about 90 percent of total about 80 percent (Ref. 22). According to estimates of price changes, we impute infectivity from animal feed. The USDA data, total U.S. exports of beef, the price effect by estimating the decline absolute level of animal health risk veal, and variety meats amounted to in domestic price needed to clear the reduced by this rule would depend on $3.9 billion in sales in 2003, and exports market if beef intended for export is the number of infected animals in the of live cattle resulted in an additional instead sold on the domestic market. United States and the extent to which $63 million. USDA reports that the Again, we do not estimate the actual cattle are exposed to infected material. value of total beef and veal exports for change in price but the imputed The potential human exposure to 2006 amounted to $2 billion. In 2006 contribution of the increased quantity of infectious materials from consuming prices, the decline in export value beef on average price. Our imputed beef is already small, because USDA comes to $2.2 billion (= ($3.85 billion * price change draws on the price and FDA prohibit the use of certain 1.09 [price adjustment]) ¥ $2 billion). elasticity of demand for beef, which is cattle materials, including SRMs, from The quantity exported fell from the percentage change in the quantity of human food. The 2005 Harvard Risk 1,274,110 metric tons in 2003 to 653,205 beef demanded divided by the Assessment that USDA’s Food Safety metric tons in 2006. Some export percentage change in price. The and Inspection Service made available markets disappeared almost overnight: estimates in the literature show the to the public in July 2006 estimates that Exports of U.S. beef to Japan fell from mean price elasticity of demand for beef interim measures implemented by FSIS 375,452 metric tons in 2003 to 517 is about ¥1.086, although the variance on January 12, 2004, and finalized on metric tons in 2004; exports to South of the estimates is high (Ref. 24). July 13, 2007, reduce potential human Korea fell from 246,595 metric tons in To estimate the continued effect of the exposure to BSE infectivity by 99.6 2003 to 144 metric tons in 2004. Exports export restrictions and the potential percent (see 69 FR 1862 and 72 FR have increased since 2006 but remain gains from their removal, we assume 38700). below 2003 levels. that in their absence, the proportion of Assessing the public health Numerous foreign governments have U.S. production exported would return implications from estimates of the cited perceived weaknesses in the 1997 to the 2003 level, 9.6 percent (Ref. 25). human exposure to the BSE agent is feed ban as a justification for not fully In 2006, the shortfall in beef exports difficult because there is no agreed- opening their markets to U.S. beef and compared with 2003 accounted for

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about 5.2 (= 0.096 ¥ 0.044) percent of passes, the effects measured here will pick-up services, days of operation, 2003 beef production (Ref. 25). If we dissipate to be dominated by other decomposition of deadstock, and their assume that the price elasticity of U.S. changes in the world and domestic ability to comply with the rule. beef supply is about 0.5, removing the markets for beef. The social surplus 1. Public Comments on Costs trade restriction would lead to estimated here would only be the short- responses on the supply about one-half term benefit of this final rule if One of the most comprehensive as large as on the demand side, so publication of this rule leads directly to comments to the proposed rule was domestic consumption would decline the return of U.S. beef to its status in prepared by Informa Economics for the by 3.7 percent (= 0.035/(1 ¥ 0.044 ¥ world markets before the discovery of National Renderers Association entitled 0.017)). With a price elasticity of the infected cow in Washington State in ‘‘Economic Impacts of Proposed ¥1.086 and a 3.7 percent decline in December 2003, assuming that no other Changes to Livestock Feed Regulations’’ quantity demanded, we estimate the policies or events intervene. (Ref. 26). It concluded that the economic imputed price effect to be a rise of about impact on renderers would far exceed E. Costs 3.4 percent (= 3.7 percent/1.086). the impacts that FDA estimated in the The rise in social surplus can be FDA has examined the numerous proposed rule, resulting in a significant approximated using the rise in price and public comments that addressed the economic burden of $127.7 million the average value of exports in 2003 and analysis of impacts section published annually in direct economic impacts. 2006. We estimate this gain to be about with the proposed rule. Furthermore, Many of the individual comments or $105 million (= 1⁄2 * ($4.2 billion + $2.0 FDA contracted with ERG to update the criticisms of our analysis of the billion) * 3.4 percent). This social analysis it prepared for the proposed proposed rule contained in the Informa surplus represents the continuing rule, taking into account the comments report reflected other public comments annual loss from the restrictions and the and data provided during the public from other individuals, companies, annual gain from their removal. comment period, as well as any other associations, and State governments. We The estimated gain in social surplus new or amended provisions that FDA have assembled similar comments is highly sensitive to the assumptions made to the final rule. This section together and will address them made about the responses of domestic summarizes the ERG report on the final throughout the summary of the latest beef consumers and producers to the rule, responds to comments on the costs ERG analysis. removal of export restrictions. Our base of the proposed rule, and describes the Approximately $113 million of the estimate of the gain in social surplus composition, size, and scale of $127.7 million (about 88 percent) of the assumes that in the long-run, the economic activity for the various direct costs in the 2005 Informa report changes in consumption are about twice affected industry sectors that would be represent the estimated deadstock as large as the change in production (the impacted by the final rule. collection fees that would be paid by price elasticity of supply is about half as The feasible regulatory alternatives to livestock producers for picking up those large as the price elasticity of demand the final rule include the following: (1) deadstock that would still be rendered in absolute value). If increased U.S. beef Separate facilities and equipment for under the proposed rule. The Informa production accounts for one-half of the renderers and feed mills; (2) the analysis assumes that the average response to the removal of trade proposed rule, which would prohibit individual pick-up fees that would be restrictions (the price elasticity of the use of brain and spinal cord from charged across the four cattle categories supply is about the same as the price cattle 30 months of age and older represent the costs that renderers would elasticity of demand in absolute value), slaughtered for human consumption as incur to remove the CMPAF from cattle the gain in social surplus is about $80 well as from all cattle not inspected and not inspected and passed for human million per year. By contrast, if reduced passed for human consumption from consumption, as well as costs to handle, consumption of beef in the United animal feed; and (3) a full SRM ban in process, and dispose of the material. States accounts for three-fourths of the animal feed and separate facilities and The assumption, however, leads to an response to the removal of trade equipment for renderers. The ERG estimate of costs that represents not the restrictions (the price elasticity of report also includes estimates of expected marginal fee increases from supply is about one-third the price impacts on small entities in the sectors the proposed rule, but rather the total elasticity of demand in absolute value), that are impacted to a significant degree pick-up fee that the animal producer the gain in social surplus is about $120 to fulfill requirements of a regulatory would pay. Using only the marginal million per year. flexibility analysis. pick-up fee per cwt that would be The estimates we present here are all In the development of its final report imposed by this rule reduces the total based on a simplified model of the on the brain and spinal cord cost from $112.7 million to $62.9 effects of trade restrictions. The prohibition, ERG reviewed the public million. The remainder of the original estimates represent the gains from comments to the rule that concerned the $112.7 million in fees ($49.8 million) removing all remaining restrictions on economic impacts of the proposed rule, represents costs that are currently beef exports, which will increase the focusing closely on the data and incurred by the animal producers and world demand for U.S. beef. The analysis included in a report prepared are therefore not compliance costs of estimates do not represent the gains for and submitted by the National this rule. Further, the other 12 percent from this final rule. The gains from this Renderers Association. ERG utilized the of the total direct costs represent the final rule would be estimated based on services of industry consultants and market value of the tallow and MBM any relaxation of trade restrictions other contractors for their technical that would be foregone due to this rule. resulting from the rule. If other public expertise, including contracting with an Accounting for only the social costs of and private policies reduce trade agricultural engineering firm to generate these lost revenues, estimated at the restrictions, then the potential gains capital cost estimates for independent renderer’s net income rate of 5.65 from this rule would be correspondingly rendering operations. Additionally, ERG percent (use of net income as social cost reduced. New safety events, such as prepared and administered a small is explained later in this document), more BSE cases, would also reduce the survey to independent renderers with reduces the $15.7 million to only about potential effects of this final rule on additional questions about their $0.89 million, a reduction of about trade. We also expect that as time operations, including logistics of animal $14.81 million.

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This adjustment in estimated pick-up animals, and the reduction in the In general, this final rule, which fee and MBM and tallow social cost profitability of renderers. Although prohibits certain cattle-derived risk losses reduces Informa’s total direct almost none of these comments materials from all animal food or feed, costs to about $63.1 million. This figure contained additional data to support would impose four types of costs: is actually below our final rule estimate these conclusions, ERG performed Disposal costs, lost revenue measuring of $64 million to $81 million, which additional analyses of the relevant the value of the MBM and tallow not includes a cost reduction from the industries that largely support the main produced, direct costs of new exemption from the definition of concerns expressed in these comments. equipment and re-allocated labor, and CMPAF for cattle under 30 months not Other comments stated that increased feed substitution costs. inspected and passed for human costs would be passed on to farmers. We 2. Disposal Costs consumption. If, however, we were to agree that some compliance costs will include the upper end of the range of be immediately passed on to farmers; For the proposed rule, ERG identified marginal fee increases from the Informa ERG therefore concluded that animal and discussed five options for disposal report (Informa’s $112.7 million cost producers would incur $28.1 million to of CMPAF. These included landfilling represents only the lower bound of the $39.1 million in annual costs for of the CMPAF without rendering, data it presented), the range of the total alternative disposal of CMPAF from rendering for disposal, disposal through direct costs from the Informa report cattle slaughtered for human alkaline hydrolysis digesters, (after accounting for the changes consumption and cattle not inspected incineration, and composting. The mentioned previously) would be $63.1 and passed for human consumption analysis concluded that landfilling million to $113.53 million. (Table 1, lines 21 and 22). Other would likely be one of the methods used The Informa report also concludes comments requested that we offer other to dispose of CMPAF, and that that additional indirect costs for economic incentives or remuneration in rendering for disposal would be slaughter facilities to handle and order to compensate renderers for unlikely due to the relatively small dispose of CMPAF (which is not converting operations to alternative amount of CMPAF. The disposal cost calculated separately in the report) and disposal methods or for the cost of estimate of the proposal was set at $12/ capital investments made by renderers disposal, as has occurred in Europe. We cwt, based on discussions with industry to handle, process and dispose of did not consider subsidies as a policy members and ERG’s other report on CMPAF would likely result in a total option because FDA does not have this alternative regulatory options, including cost exceeding $150 million annually. authority. Furthermore, the use of a full SRM prohibition. ERG concluded We agree that slaughtering facilities will subsidies would not change the total that the per cwt disposal cost would be incur additional capital costs, and ERG social costs of the final rule, but rather higher than the full SRM prohibition has increased its estimate from $676,000 transfer the costs to others. Likewise, disposal cost due to the lower volume in the proposal to about $1.27 million the social cost does not change, as one of CMPAF for the brain and spinal cord annually in the final rule. The capital comment suggested, if the number of prohibition as well as the uncertainty in investments for renderers that are cattle available for USDA’s BSE testing disposal methods and unfamiliarity detailed in the Informa report program decreases because the renderer with some of the disposal methods in (amounting to an annualized total of refuses to waive pick-up fees. In this the industry. At this $12/cwt rate, $11.3 million) are based on an case, the social cost is transferred to the disposal costs of the proposed rule for assumption that 26 renderers would general public. CMPAF from slaughter and render actually install additional equipment to We also received some comments that facilities were estimated at $7.72 render the CMPAF for disposal, which made claims about costs to individual million. is 50 percent of the number that replied States, such as the claim that the ERG also calculated the disposal costs that they might consider installing such proposed rule would impose $10 of cattle not inspected and passed for equipment. Those 26 rendering million in costs on California dairy human consumption that would no operations in question, however, would farmers, feedlots, and beef cattle longer be rendered as a result of the also have been included in the survey’s producers. While we cannot verify this proposed rule. This ban was expected to question on the expected increase in estimate without additional data result in an increase in the number of pick-up fees. The increase in pick-up necessary to support such claims, we on-farm disposals. For its analysis of the fees, therefore, would account for these agree that the costs of this final rule will proposed rule, ERG estimated that 17 additional capital costs if they were be proportionally heavier in states with percent of cattle not inspected and indeed anticipated. The previously large populations of affected cattle. passed for human consumption were mentioned modifications to Informa’s One comment stated that removal of currently rendered. In addition, ERG calculations result in a significantly brain and spinal cord would reduce had predicted that an additional 0.6 lower total cost for the final rule. processing ability by 40 percent to 50 percent of all cattle not inspected and Additionally, we disagree with percent, without providing supporting passed for human consumption (or 3.5 Informa’s conclusion that, due to State information. Another comment stated percent of all cattle not inspected and and local prohibitions against its that FDA should focus on removal of passed for human consumption that are disposal in landfills, there is a high SRMs from 4D and antemortem currently rendered) would no longer be likelihood that all CMPAF would need condemned animals greater than 30 rendered due to the proposed rule. to be rendered prior to disposal, months, the cost of which would be These animals were estimated to result although we agree that there is some from $64 million to $76 million, in an increase in capital and labor costs uncertainty about the disposal methods according to some industry estimates for on-farm burial of about $1.02 that will be used throughout the United that were not disclosed. Without million. States. supporting information, we cannot We received numerous public Various other comments focused on respond directly to these comments. comments concerning the estimates on the general subject of increased costs to The ERG report, however, takes into the rendering of cattle not inspected and slaughterers and other meat processors account a number of public comments passed for human consumption. Some for disposal of byproducts, the and changed many of its assumptions were more specific than others, but the reduction in the value of the slaughtered due to these public comments. prevailing theme was that we had

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significantly underestimated the would range from 25 percent to 50 Agricultural Biosecurity Center number of cattle not inspected for percent for all cattle under 30 months Consortium. Table 7 in that publication human consumption that are currently and 100 percent to 150 percent for cattle shows disposal costs per ton for various rendered. In particular, the Informa 30 months of age or older. We note that carcass disposal methods. For both report questioned the accuracy of the one comment stated that California burial and landfilling, it presents cost estimate that only 17 percent of cattle renderers would increase their pick-up estimates that are below the estimates not inspected and passed for human fees by 50 percent. These higher pick- ERG uses in its analysis of this final rule consumption are currently rendered. In up fees, coupled with expected closures (Ref. 27). fact, FDA had included in the proposal of rendering plants handling about 10 Although many other comments a discussion of the uncertainty of its percent of these cattle, support ERG’s questioned what they perceived to be own estimate along with Informa’s revised estimate that 29.4 percent to low total disposal costs published in the previous estimate of this number at 44.8 percent of currently rendered cattle proposed rule, the 2005 Informa survey about 42 percent, and also incorporated not inspected and passed for human reported an average disposal cost this 42-percent estimate as the high end consumption will no longer be rendered estimate of $11.51/cwt among those of the range of cost estimates for the as a result of this rule. We accept this firms that indicated they would accept proposal, where appropriate. Accepting estimate as well and include it in this the CMPAF. Additionally, the Kansas Informa’s 2004 estimate that 42 percent analysis. The Informa estimate of 67 State study reported 7 disposal options of cattle not inspected and passed for percent may overstate the probability of greater than $12/cwt and 4 options human consumption were rendered, we an animal no longer being rendered lower than $12/cwt. Accordingly, ERG modified the proposal’s disposal cost because some of the carcasses that one has retained the overall average of $12/ estimate for CMPAF from cattle renderer says will no longer be picked cwt disposal cost for CMPAF (from slaughtered for human consumption up by his company may still be picked brain and spinal cord removal) from and cattle not inspected and passed for up by another renderer. As a result of independent rendering operations for human consumption that would this and other changes in the final the final rule. Some comments continue to be rendered, from $7.72 report, we estimate that the total amount questioned the economic feasibility of million to a range of $7.72 million to of CMPAF would range from 610 using dedicated trucks to transport $9.97 million. Similarly, we modified million to 733 million lbs, a significant CMPAF to disposal or for further the proposal’s disposal cost estimate for increase from the 64 million lbs processing. We have in fact included cattle not inspected and passed for estimated in the proposed rule. these costs in our totals because in its human consumption that would no analyses of disposal costs, ERG included Due to many public comments that longer be rendered as a result of the the transportation costs in the $12 per FDA underestimated disposal costs in proposed rule from $1.02 million to a cwt estimate. Further, the Informa the proposed rule, ERG re-analyzed its range of $1.02 million to $2.5 million. survey of renderers (reporting that In its analysis of the final rule, the methodology and assumptions renderers expect disposal costs would ERG report uses the Informa survey data concerning disposal in its report for the average $11.51 per cwt.) based its of renderers (conducted for its final rule. It reviewed various disposal questions on CMPAF as defined by the November 2005 report) and USDA data, technologies and a range of estimated proposed rule, which would require which show that about 45 percent of costs for each based on literature separate transportation trucks or cattle not inspected and passed for compiled by researchers at Kansas State compartments. Based on this $12/cwt human consumption are currently University, National Agricultural rate, we estimate that CMPAF disposal rendered. We therefore base our cost Biosecurity Center Consortium. The costs of the final rule for slaughter estimates for the final rule solely on the Kansas State University report presents facilities will be $3.4 million (Table 1, 45 percent figure, and do not include a most likely representative estimate of line 22). those based on the former range of 17 costs, although it was derived from a Disposal costs for CMPAF removed at percent to 42 percent. graphic figure in the source document independent renderers are estimated We also received many comments and thus contains some uncertainty. It using the same $12/cwt estimate used in concerning the ERG estimate that about also identified another disposal method the proposal (we explained the $12/cwt 26,000 cattle not inspected and passed that ERG had not considered in the figure and public comments in detail for human consumption (or 0.6 percent proposed rule, namely that cattle would earlier in the document). The Informa of all cattle not inspected and passed for be left to decompose in the field or report and many other comments human consumption) would no longer range without any additional treatment remarked that much more than just the be rendered as a result of the rule. of the carcass. Some comments reflected brain and spinal cord would need to be Informa’s 2005 results showed that the overall conclusions of the Kansas removed from those cattle not inspected renderers replied that, in total, about 67 State University report, stating that and passed for human consumption that percent of cattle not inspected and incineration and composting are were not too decomposed to undergo passed for human consumption that are currently prohibitively expensive or separation. Furthermore, comments currently rendered would no longer be complicated. One comment stated that stated that a significant number of them rendered due to the proposed rule. That burying CMPAF could be very would be too decomposed to separate is, 45 percent times 67 percent = 30 expensive if a minimum of 4 hours rent the brain and spinal cord. For both the percent of all cattle not inspected and for a backhoe is required, giving further proposed and final rule, ERG judged passed for human consumption due to support to the conclusion that when that from 1.3 lbs to 53.0 lbs of CMPAF either renderer refusal to accept the possible, these cattle would likely be would be removed from cattle 30 animal or the producer’s refusal to pay left to decompose in the field. Several months of age or older, but for the final a higher pick-up fee, would no longer be other comments questioned the rule it also included an allowance for rendered. The final ERG report, relying availability of landfills for disposal of the number of cattle 30 months of age on estimates it received from deadstock CMPAF. Another comment asked that or older not inspected and passed for renderers and estimated price we consult cost data in the 2004 human consumption that are picked up elasticities of deadstock to renderers, publication on carcass disposal but that are too decomposed to undergo projects that pick-up charge increases technologies by the National tissue separation. The Informa claim

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that 54 percent of these animals being 30 months ($2.7 million) (Table 1, line income for both MBM and tallow at 5.65 too decomposed to undergo tissue 21 adds $2.7 million to the disposal cost percent of their foregone sales, based on separation added significant weight to range of $22.0 to $33.0 million). We 2002 Census of Manufacturers data. the volume of CMPAF that would be acknowledge additional uncertainty in Marginal net income may be more prohibited. Based on the aggregate this 10-percent estimate as we lack the appropriate because it takes into weight of CMPAF removed, ERG data to present a more robust estimate. account the existence of fixed costs. The estimated disposal costs at $11.3 million In sum, we find that the total disposal lack of detailed revenue and cost data for the CMPAF that is removed by costs for slaughter establishments ($3.4 for those independent renderers affected independent renderers and for the cattle million), renderers ($11.3 million), by the rule, however, prevents us from not inspected and passed for human cattle not inspected and passed for estimating the cost functions necessary consumption that are picked up by human consumption that would no for a measure of marginal net income. renderers but are too decomposed to longer be picked up by renderers ($22.0 The significance of the difference undergo tissue separation. million to $33.0 million), and other non- between marginal and average net For the disposal of the additional cattle species ($2.7 million) will range income is not likely to be large in this cattle not inspected and passed for from $39.4 million to $50.4 million. case, since the supplies of raw materials human consumption that are no longer 3. Lost Value of CMPAF and Hides are highly elastic and the amount picked up for rendering, ERG adjusted affected is a small fraction of all the $12/cwt disposal cost for those For the proposed rule, ERG had ingredients. Industry data show that 18 carcasses that are likely to be buried on calculated that the 64 million lbs. of percent of cattle 30 months of age or the farm. For on-farm burial, the most CMPAF from both slaughter operations older are slaughtered for human likely representative cost listed in the and from those cattle not inspected and consumption, thus requiring CMPAF Kansas State University report was $6/ passed for human consumption that removal. Consequently, ERG estimated cwt. ERG increased this to an estimated would no longer be rendered would the CMPAF removed at slaughterhouses $8/cwt to account for those farms where have yielded about 10,800 lbs. of MBM to be about 28 million lbs. Using burial is less economical or less viable and 4,400 lbs. of tallow. Using historical industry data on byproduct yields as due to the absence of available land. byproduct prices, ERG had estimated well as historical averages prices for The cattle carcasses were then the value of the MBM and tallow at $1.0 MBM and tallow of $180/ton and $360/ distributed among the following four million and $0.8 million. Accepting the ton, ERG estimated the value of this types: Calves, feedlot, cattle 30 months 2004 Informa estimate of a larger foregone MBM at $0.6 million and number of cattle currently rendered, we of age or older, and cattle under 30 tallow at $0.5 million. Using a 5.65 had included in the proposed rule an months. For its disposal cost percent net income rate, ERG estimated upper estimate of lost revenues of MBM calculations, ERG used only the the social cost of the foregone MBM and at $1.7 million and tallow at $1.2 incremental social cost, which is the tallow from slaughtered cattle at difference between the disposal method million. The final rule differs from the $64,000 per year (Table 1, lines 4 and and the existing charge for renderer 5). pick-up cost (per cwt) as developed in proposed rule in that it exempts certain the Informa report. For cattle 30 months cattle-derived risk materials (brain and Additionally, ERG estimated the value of age or older not inspected and passed spinal cord from cattle under 30 months of the MBM and tallow foregone from for human consumption, ERG calculated not inspected and passed for human the carcasses of the cattle not inspected the incremental cost per cwt at $4.65 consumption) from the definition of and passed for human consumption that ($8.00/cwt minus the current $3.35/ CMPAF. The final rule continues to would no longer be collected by cwt); for cattle under 30 months ERG prohibit the use of CMPAF in all animal renderers as a result of this rule (and calculated the incremental cost at $5.49 feeds to prevent BSE. would likely be disposed of on the farm ($8.00/cwt minus the current $2.51/ Both ERG’s 2004 report (relied upon or elsewhere). This reduction in cwt). For feedlot cattle, whose full for our analysis of the proposed rule) rendering would include those cattle disposal cost remains at $12/cwt and the Informa report included the not rendered due to the reduced because it is unlikely they would be foregone revenues from MBM and quantity demanded for rendering buried at the producer site, ERG tallow that would have been produced services of cattle not inspected and calculated the incremental cost at from the CMPAF as costs of the rule. passed for human consumption caused $10.24/cwt ($12.00/cwt minus the This approach, however, overstates the by the substantial expected increase in current $1.76/cwt). For calves, ERG true social cost of the rule because it pick-up charges. In addition, fewer assumed current pick-up charges to includes value added from the use of cattle will be rendered due to a number increase by $4.00/cwt, noting that their capital and labor at rendering facilities of rendering plant closures. Using current reported pick-up fee exceeds that would not be used if the CMPAF various price elasticities of demand, $12/cwt. As a result, we estimate total goes to disposal without further ERG’s calculations forecast a 29.4 disposal costs for the additional cattle rendering. A better estimate of social percent to 44.8 percent reduction in the not inspected and passed for human cost would include only the lost value number of cattle not inspected and consumption to range from $22.0 attributable to the now-prohibited raw passed for human consumption that are million to $33.0 million annually. materials, or the difference in total cost picked up for rendering. Using industry To account for the additional tonnage between final products made with MBM averages of animal weights for cattle of of non-cattle species that died at the or tallow from the CMPAF and the total different ages, ERG calculated the total animal producer establishment and cost of final products made with weight of animals that would no longer would no longer be rendered as a result alternative raw materials. A more be picked up for rendering at 489 of this rule as suggested by some accurate estimate of the social cost of million lbs to 719 million lbs. Applying comments, ERG added an additional 10 the rule would be the net income that the yield rates of MBM and tallow for percent of the cost of the midpoint in would otherwise have been generated whole carcasses (25 percent for MBM, the range of total disposal costs for the from the processing of CMPAF into 10 percent for tallow) results in MBM combined calves, feedlot, cattle 30 MBM and tallow. For the final rule, ERG revenue losses ranging from $11.0 months of age or older, and cattle under has estimated renderer average net million to $16.2 million, and tallow

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revenue losses from $8.8 million to other cattle offal. FSIS’ regulations at 9 estimate for both renderer capital and $12.9 million. Additional MBM and CFR 310.22 prohibit SRMs for use as labor costs was $1.9 million to $4.6 tallow revenue losses are estimated at human food but do not prohibit these million annually. Numerous public $3.1 million and $2.5 million, materials from being rendered into comments addressed the capital and respectively, for animals that were MBM and tallow for use in feed for non- labor costs to renderers. In general, the picked up by the renderer but were too ruminant animals. Under this final rule, comments stated that FDA greatly decomposed to undergo tissue CMPAF from slaughterhouses (which underestimated the cost to renderers of separation. Based on a 5.65 percent are a small subset by volume of SRMs) removing brain and spinal cord from annual net income rate for both MBM could not be used in any animal feeds. cattle not inspected and passed for and tallow, the resulting net income Therefore, slaughterers would need to human consumption. losses would range from $1.4 million to use separate offal lines for offal of non- For the final rule, ERG reassessed the $1.8 million (Table 1, lines 14 and 15). prohibited material-origin and offal of conclusions in its analysis of the Adding these losses to the net income CMPAF-origin. proposed rule using the information loss from CMPAF derived from For the proposed rule, we relied on provided in the 2005 Informa slaughterhouses results in total net the previous ERG report to project that Economics report and presents final rule income losses of $1.5 million to $1.8 slaughterers would incur annualized estimates that are substantially larger. million annually. capital and labor costs that totaled ERG now estimates that there are 70 ERG also calculated the social cost of $676,000 ($597,000 in annual labor deadstock renderers, including 25 very the hides that would be lost due to an costs plus $555,000 in capital costs small renderers that were likely not increase in the number of cattle not annualized at 7 percent over 10 years). included in the Informa survey’s result inspected and passed for human These costs included the additional of 45 deadstock renderers. The consumption that would no longer be offal bins that all slaughterers were estimated number is, however, a rendered as a result of this rule. The expected to require, the modified decrease from the proposed rule’s same assumptions and calculations that procedures and processes for the larger estimate of 141 independent renderers form the basis for the 29.4-percent to slaughterers, and additional labor to because it is now accepted that 44.8-percent increase in cattle not segregate the CMPAF. Comments on the deadstock renderers are a small subset inspected and passed for human proposed rule did not offer specific of independent renderers, and non- consumption that would no longer be costs for slaughterers but generally deadstock renderers would not incur rendered as a result of this rule apply to maintained that slaughterers would be these additional capital and labor costs. loss of cattle hide value as well. ERG affected. ERG contracted with an engineering has taken the reduction in each of the For the final rule, ERG revised its firm to estimate the renovation of four individual cattle categories (the estimated number of USDA-inspected deadstock rendering facilities in order to total reduction ranges from 29.4 percent plants upward to 1,545 from 689, but remove CMPAF. The engineering firm to 44.8 percent over all calves, feedlot, revised the estimated number of cattle created a detailed capital cost estimate cattle 30 months of age or older, and having CMPAF removed at slaughterers for a deadstock renderer handling 150 cattle under 30 months), and applied down from 100 percent to about 18 animals per day at about $600,000. ERG the average market value of the hide for percent due to the change in approach used this estimate as well as results of each to estimate the total hide value lost whereby only cattle 30 months of age or its discussions with other deadstock due to this rule at $9.16 million to older would have CMPAF removed at renderers to produce capital cost $13.69 million. In this case, ERG slaughter. ERG estimated the resulting estimates across the range of deadstock concludes that the social cost would one-time capital expenditures of the renderers by size. The capital costs on include almost the entire market value final rule at $2.10 million (or $299,000 a per plant basis have increased of the hide because the only value annualized at 7 percent over 10 years). substantially for this final rule, most added to the process is a very small With the addition of maintenance costs notably to account for the planning and amount of labor required for hide of about $315,000 and labor costs of construction of a separate structure for removal. Because this value was not $656,000, ERG estimated the total the removal of CMPAF. Whereas ERG calculated and subtracted from the annualized slaughter costs for capital had estimated one-time costs for capital average market values, the previously and labor at about $1.27 million (Table improvements for renderers at $3.1 mentioned total may slightly 1, lines 2 and 3), representing a small million for the proposed rule (or overestimate the social costs. increase from the proposed rule. $442,000 annualized at 7 percent over In the proposed rule, we concluded 10 years), it estimated if all renderers 4. Direct Costs that renderers would also incur initiated such renovations, the one-time In the proposed rule we reported five additional capital and labor costs to costs for capital improvements for the categories of direct costs, including: (1) handle CMPAF segregation from cattle final rule would be $32.2 million (or Capital and labor costs for slaughtering not inspected and passed for human $4.6 million annualized at 7 percent and rendering, (2) the tallow restriction, consumption. ERG projected equipment over 10 years). The engineering (3) MS beef restriction, (4) marking purchases and installation at a one-time estimates did not include a specific cost costs, and (5) labeling and cost of $3.1 million (or $442,000 at 7 for construction permits, as one recordkeeping costs. For the final rule, percent over 10 years), as well as comment suggested would be needed, we address these same costs as well as additional labor costs of $1.4 million but the cost of construction permits the cost of (6) creating procedures for annually. We used this cost as the low would likely amount to a small part of training on, and actual administration end of the range of costs, and used a the separate contingency costs that were of, the age determination process for figure 2.46 times greater as the upper included at $54,000 per rendering cattle. end based on the 2004 Informa assertion facility. a. Capital and labor costs for that 42 percent of cattle not inspected ERG also increased its estimate of slaughtering and rendering. This final and passed for human consumption deadstock renderer labor costs on a per rule will result in cattle slaughter were currently rendered, compared with plant basis, due to further discussions operations that separate CMPAF and ERG’s previous finding of this number with rendering facility managers. arrange for its disposal separate from at 17 percent. The proposed rule’s Whereas ERG estimated the additional

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labor required for the proposed rule to The 25 percent decrease includes a 15 proposed rule. For the proposed rule, range from 0.04 to 2.21 employees, it percent decrease due to increased pick- we concluded that it would not be estimated the range for the final rule at up fees (0.6 elasticity times 25 percent economical for renderers or tallow 0.17 to 8.00 employees. Due to the increased pick-up fees) plus a 10 manufacturers to further process the estimated reduction in the number of percent further reduction in non-cattle separated brains and spinal cords and rendering plants that would undertake rendering due to plant closures. The other tissues from those cattle such renovations and additional hiring, number of feedlot cattle going to undergoing tissue separation into tallow ERG concluded that total labor costs rendering will decrease by 27,000, or 6.3 while complying with the additional would only increase by $1.4 million to percent from the current number, equipment separation and tallow testing $1.7 million. ERG also found that an 424,000 feedlot cattle (424,000 times 6.3 and purification requirements. We additional maintenance cost estimated percent = 27,000). The 6.3 percent is the therefore did not include any additional at 15 percent of aggregate capital costs result of a 0.25 elasticity times a 25 cost for this provision. We received one would add another $4.8 million percent increase in pick-up fees. The comment that stated that the capital annually. Several comments on the number of cattle 30 months of age or investment for dedicated equipment to proposed rule mentioned efficiency older going to rendering will decrease be used to produce tallow (that would losses for renderers due to slower line by 281,000, or 60 percent from the then need to meet the purity speeds. We agree with the comment that current number, 469,000 cattle 30 requirements) would be substantial. We this may be a possibility and have months of age or older (469,000 times 60 agree with this comment. The final rule included additional labor costs, which percent = 281,000). The 60 percent contains an estimate of a much larger would tend to offset those efficiency decrease includes a 50 percent decrease volume of CMPAF than the original losses. due to increased pick-up fees (0.5 estimate for the proposed rule. Public comments and industry elasticity times 100 percent increased However, the amount of CMPAF that is discussions with ERG indicate that pick-up fees) plus a 10 percent further handled directly by renderers is still a many facilities would not undertake the reduction in non-cattle rendering due to relatively small amount (because most is capital improvements and additional plant closures. The number of cattle either on-farm disposal or other disposal under 30 months of age going to labor necessary to renovate facilities and of cattle not inspected and passed for rendering will decrease by 25,000, or change their operating procedures. In its human consumption), which would still 22.5 percent from the current number, analysis of the final rule, ERG adjusted not be economical to further process, 111,000 cattle under 30 months of age the total costs to account for the number due to the same equipment separation (111,000 times 22.5 percent = 25,000). of deadstock renderers that would not and tallow testing/purification The 22.5 percent decrease includes a undergo these renovations, assuming requirements in this final rule. We have, 12.5 percent decrease due to increased that the expected decline in the therefore, not included additional costs pick-up fees (0.5 elasticity times 25 percentage of renderers would equal the for this provision. This analysis percent increased pick-up fees) plus a percentage reduction in material sent to previously accounted for the net income 10 percent further reduction in non- rendering. To do this, ERG relied on lost on the value of this tallow and cattle rendering due to plant closures. MBM. renderers’ predictions (through direct The total reduction in cattle equals c. MS beef restriction. In the proposed discussions with renderers as well as in 29.4 percent of the currently rendered rule, we predicted that there would not public comments) that they would number of cattle (549,000/1,870,000 = require very large increases in pick-up 29.4 percent). The upper end of the be any costs for the provision that fees. Some predicted that the pick-up range (44.8 percent) was calculated by would prohibit the use of MS beef in fees would more than double. As a the same method using the upper end animal feeds if the brain and spinal cord result, ERG estimated that the increase range of factors. Using the midpoint of of cattle 30 months of age or older or the in fees would range from 100 percent to this 29.4-percent to 44.8-percent range, brain and spinal cord of all cattle not 150 percent for cattle 30 months of age ERG predicted that about 37.1 percent of inspected and passed for human or older, and 25 percent to 50 percent the renderers will not undergo these consumption has not been previously for all other cattle. Using estimated necessary capital renovations, thereby removed from the cattle material used to price elasticities ranging from 0.25 for reducing the $32.2 million one-time cost make MS beef. ERG’s previous analysis feedlot cattle to 0.6 for calves (Informa to $20.25 million and the $11.2 million concluded that the brain and spinal also suggests an inelastic demand for in annualized capital, maintenance, and cord are already removed from the rendering services by many livestock labor costs to $7.0 million (Table 1, carcasses of dead cattle at the ‘‘4D’’ producers), ERG calculated the total lines 9 and 10). Additionally, the plants (independent renderers that reduction in raw material going to number of cattle 30 months of age or collect dead and downer cattle and rendering at 29.4 percent to 44.8 older going to rendering would be process the carcasses for red meat to be percent, including an additional 10 reduced by 60 percent to 85 percent, used for pet food manufacturers, zoos, percent reduction for facilities that thereby reducing the disposal costs to and other animal feeding operations) abandon deadstock rendering. The 29.4 $11.3 million. Without the adjustment that process them. percent reduction in raw material going for these two factors, the annualized The ERG report maintains that all or to rendering represent a decrease of capital, operating, maintenance, and almost all 4D plants already remove the 549,000 from the current total number disposal costs for deadstock operators brain and spinal cord. To the extent that of 1,870,000 cattle rendered (549,000/ would be estimated at $52.4 million, not a small percentage of 4D plants might 1,870,000 = 29.4 percent). This decrease $18.4 million. not remove these materials, we agree is the combined decrease in numbers of b. Tallow restriction. The final rule that there could be some additional calves, feedlot cattle, cattle 30 months would prohibit entirely the use of tallow compliance costs to this final rule but or older, and cattle under 30 months. derived from BSE-positive cattle and believe them to be small due to the The number of calves going to rendering prohibit the use of certain other small number of establishments. As will decrease by 216,000, or 25 percent CMPAF-derived tallow unless it such, we have slightly revised our from the current number, 865,000 calves contains less than 0.15 percent previous conclusion that there would (865,000 times 25 percent = 216,000). insoluble impurities, as did the not be additional compliance costs as a

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result of the MS beef provision of the production, and review, but did not FDA projects that the initial final rule. revise hourly estimates for certification or other documentation of d. Marking costs. The final rule, like recordkeeping modification and review. the internal system of a packer/renderer the proposed rule, would require that In total, we estimate this labeling and will require 6 hours for a management renderers that handle CMPAF or recordkeeping provision to cost industry level employee. An additional 3 hours products containing CMPAF mark this about $90,000 annually (a $165,000 one- is expected to be expended each year for material or product so that it can be time cost annualized at 7 percent over periodic review of the internal identified by visual inspection. For the 10 years plus $67,000 in annual costs). certification or other documentation. proposed rule, ERG used various Additionally, the final rule has been Packer/renderers will also be expected assumptions to characterize the cost of revised to clarify that a renderer’s to incur recordkeeping costs estimated adding marker dyes to this material. It records must either include (1) at about 5 minutes per day. Using the concluded with an estimate ranging certification or other documentation same BLS wage data as above, FDA from $1,700 to $13,000 annually for from the supplier that material supplied projects annualized certification or total industry compliance. Public to the renderer does not include other documentation costs per packer/ comments on the proposed rule did not CMPAF, provided that it includes a renderer establishment to be about $690. address the marking cost estimate. description of the segregation The total annualized costs of the new For the final rule, ERG used the same procedures used, documentation that recordkeeping costs associated with the assumptions to calculate its estimate of the supplier confirms that its certification or other documentation of marking costs, resulting in the same segregation procedures are in place suppliers (slaughterers) for the marking ranging from $0.11 to $0.78 per prior to supplying any cattle material to estimated 125 independent renderers ton of CMPAF. In this case, though, ERG the renderer, and records of the and 50 packer/renderers handling included as an upper bound estimate of renderer’s periodic review of the CMPAF is estimated at about $175,000. marking costs the tonnage of MBM and suppliers’ certification or other f. Animal age determination. The final tallow from cattle not inspected and documentation; or (2) documentation of rule does not include in the definition passed for human consumption that another method, acceptable to FDA, of CMPAF cattle not inspected and would not be rendered for non-ruminant such as third party certification, for passed for human consumption under feed as a result of this rule. In effect, verifying that suppliers have effectively 30 months of age. FDA originally ERG has allowed for the possibility that excluded CMPAF. included these cattle in the definition of the additional cattle that would not be CMPAF because of European rendered for feed as a result of this rule Based on the levels of effort estimated surveillance data suggesting that cattle would be rendered for disposal instead. for the 2007 dietary supplement cGMP not inspected and passed for human Taking this possibility into account final rule (72 FR 34752) requiring consumption pose a higher risk for BSE, provides for a worst-case scenario for certification of procedures, FDA projects and due to concerns that processes were marking costs. We now estimate the that the initial certification or other currently not established in the final rule marking costs to range from documentation of the suppliers’ rendering industry for verifying the age $18,000 to $64,000 annually, a relatively procedures will require a 20-hour effort of such cattle through inspection. large increase from those of the proposal by a management level employee of an However, FDA received comments on but a very small part of total compliance independent renderer. The Bureau of the feasibility of aging such cattle and costs. Labor Statistics (BLS) provides data on on the relatively low risk reduction e. Labeling, recordkeeping, employee costs for management achieved by excluding such cattle. FDA certification, and access costs. The occupations classified within the North considered these comments, proposed rule would require that American Industrial Classification surveillance data indicating the current renderers that handle CMPAF or System (NAICS) code 311600—the risk of BSE to U.S. cattle is very low, the products that contain CMPAF ensure animal slaughtering and processing strong feed protection provided by the that the CMPAF are not used in animal industry (BLS data on individual existing ruminant feed rule, and the feed. The proposed requirements occupations within NAICS code added secondary level of protection included labeling for products with 311613—rendering and meat product provided by the other provisions of this CMPAF that states ‘‘Do not feed to processing, is not available). We have final rule. Based on these factors, FDA animals,’’ the establishment and adjusted the BLS wage data, including concluded that it was not necessary to maintenance of records sufficient to a 40 percent increase for benefits and include in the definition of CMPAF track CMPAF to ensure the materials are adjusting for inflation in employment cattle not inspected and passed for not introduced into animal feed, and costs. FDA estimates the initial human consumption that are under 30 making such records available to FDA. certification or other documentation of months of age. ERG judged that the proposed labeling suppliers to an independent renderer to The ERG report concludes that, in the requirements would impose only cost about $1,030 (annualized at $250 absence of a national cattle modest compliance costs since the per year over 10 years at a 7 percent identification system, deadstock labeling requirements (applying discount rate). FDA estimates that the renderers will need to make the primarily to bulk shipments) could be periodic review of the certification or judgments regarding age on an animal- incorporated into current labeling other documentation to take 8 hours by-animal basis. Compliance costs for practices. ERG estimated total industry annually, resulting in a $412 annual such a system would include costs at about $62,000 annually (one- cost. FDA expects daily recordkeeping administrative costs for the creation of time costs of $101,000 annualized at 7 to amount to 5 minutes per day for an procedures for employees to judge the percent over 10 years plus annual costs administrative support employee. Using age of animals, and training costs for of $48,000). We did not receive any the BLS data, this recordkeeping cost is educating employees on these substantive public comments estimated at about $460 annually. Total procedures, as well as annual labor concerning the labeling and annualized certification or other costs for the employees that administer recordkeeping costs. documentation costs per independent the age determination process. For the final rule, ERG increased the renderer establishment are estimated at ERG assumed that the cost of hours needed for label design, about $1,125. procedure development, normally a

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one-time cost, would likely be revised constantly based on weather, global inspections or the length of time annually as the industry moves toward markets, slaughter rates, and other necessary to inspect an establishment. a national cattle identification system. factors. We have no other information We did not estimate the additional costs Additionally, ERG estimates that annual on the types of rations or feed that would be required because we training times for non-clerical workers formulations that will be affected by this judged that the additional resources will be 4 hours for deadstock renderers final rule. Consequently, we accept the would not be substantial. ERG judged and 2 hours for non-deadstock cattle ration example as a conservative that no new rendering facilities would independent renderers. In addition, 1 estimate of the long-term cost of feed be constructed or dedicated to rendering hour per year of supervisor time for substitution. for disposal due to the proposed rule, employee training will be required for Accordingly, for the October 2005 and thus our inspection activities would deadstock renderers and 0.5 hour for proposed rule, we inflated the unit cost not noticeably increase. non-deadstock independent renderers. from $31.76 per ton to $38.33 per ton to Country Designation The total estimated costs to renderers of account for inflation through 2005 and annual procedure development and determined the tonnage of MBM that The final rule contains a provision updating and annual employee training would no longer be processed from the that was not included in the proposed will amount to about $491,000. For large CMPAF. Multiplying this total, 15.6 rule. This provision exempts CMPAF slaughterers that also perform their own million lbs, by $38.33 per ton resulted from designated countries from the rendering, ERG estimated the costs of in about $300,000 in feed substitution prohibition on its use in animal feed. A procedure development and employee costs for the proposed rule. Accounting foreign country seeking this designation training for slaughter animal age for the high end of the range of animals will submit a written request to FDA identification at $1.10 million annually. currently rendered (as noted in the 2004 that includes (1) information about the To the extent some slaughterers already Informa report) led to an upper end cost country’s BSE case history, (2) risk have aging procedures in place to of about $450,000. factors, (3) measures to prevent the comply with FSIS’ SRM rule, this may We received one comment that the introduction and transmission of BSE, be an overestimate. removal of ruminant proteins from non- and (4) any other information relevant For the age determinations, ERG ruminant feed may increase the price of to determine how cattle materials from judged that the rendering truck drivers other protein sources, but it did not the country will be defined under 21 would make the actual age address the method used to account for CFR 589.2001(b)(1). FDA will respond determinations at the animal producer feed substitution costs. We received to a country’s request in writing and site by reviewing the paperwork or many comments concerning the total may specify certain conditions when using the dentition method. ERG judged amount of cattle byproducts that would granting a request. Country designations that this procedure would not add to the no longer be made available for further will be subject to future review by FDA total time an employee spends at each processing for use in non-ruminant and can be revoked if a review shows pick-up site. It therefore did not include feeds. As noted previously in the that BSE-related restrictions are additional compliance costs for the section on disposal costs, ERG necessary. rendering truck driver. Review of these concluded that a much larger amount of a. Number of countries affected. determinations and paperwork would cattle byproducts would no longer be Although we do not know how many be made at the rendering facility by available for this use. In total, the ERG countries will submit a request to FDA supervisory personnel. ERG estimated calculations imply that the amount of for a designation under § 589.2001(f), total annual labor costs for the in-plant MBM foregone from slaughterer and we can use information from OIE and reviews of the age determination at renderer CMPAF, as well as MBM that USDA to estimate the number of about $790,000. Total annual costs for could have been produced from cattle requests that might be submitted to the renderer age determination efforts are not inspected and passed for human Center for Veterinary Medicine. estimated at $1.28 million ($491,000 consumption that will no longer be According to the requirements of the plus $790,000). rendered due to this rule, will range OIE Terrestrial Animal Health Code from 76,100 tons to 91,500 tons; a (16th edition 2007), OIE officially 5. Feed Substitution Costs significant increase from the 7,800 tons recognizes five countries as having a For the proposed rule, we included in estimated for the proposed rule. Based ‘‘negligible BSE risk,’’ including the compliance costs the incremental on the incremental feed substitution Australia, Argentina, New Zealand, cost for the feed ingredients that would cost of $38.33 per ton of MBM, we Singapore, and Uruguay. In addition, be needed to replace the MBM in non- estimate that long-term total feed OIE recognizes Iceland and Paraguay as ruminant animal feeds. Animal feed substitution costs for the final rule will ‘‘provisionally free’’ from BSE. producers would be expected to range from $2.92 million to $3.51 According to OIE recommendations, substitute more costly protein sources million annually. SRM removal is not a condition for for the MBM that was previously importing fresh meat or meat products manufactured from CMPAF. In the F. Government Costs from a negligible risk country. Allowing analysis of the 1997 final rule For the proposed rule, we concluded animal feeds or animal feed ingredients prohibiting the use of mammalian that there may be an increase in Federal containing CMPAF to be imported from proteins (with exceptions) from use in fund expenditures for inspection designated countries is consistent with ruminant feeds, we calculated the cost activities, but did not expect it to be the lack of any restrictions on SRMs to substitute MBM in a typical cattle significant. The total number of from negligible risk countries in the OIE ration. Assuming a $20 per ton price establishments inspected was not guidelines. difference between MBM and a expected to change substantially, as all In addition to the countries substitute feed ingredient, in this case establishments that would be inspected recognized by OIE, a country exporting soybean meal, we estimated that the for compliance under § 589.2001 are a large quantity of cattle products into reformulated cattle ration would cost an already subject to § 589.2000 or other the United States may submit a request additional $31.76 per ton (including Federal rules. The additional materials for country designation to FDA. Table 1 other ingredients). However, the prices that would be included as CMPAF may presents data from USDA’s Foreign of MBM and equivalent substitutes vary result in an increase in the number of Agricultural Service showing countries

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that exported cattle products to the estimated cost of $5,395.20 (80 hours × November whether their status and the United States in 2006. Comparing the $67.44 per hour including overhead). criteria by which their status was seven countries officially recognized by The request will also be reviewed by recognized have remained unchanged.’’ OIE as having a negligible BSE risk or government managers before being In some cases, the FDA reviewer might being provisionally free of BSE and the submitted to the FDA. Assuming it takes rely on this information, if available, in countries listed in Table 5, a foreign government executive 40 hours conducting a future review of the approximately nine countries might to review the request, at a wage country’s designation. submit a request. Because we are equivalent to a GS–15 step 3, it would For this analysis, we assume it will uncertain about the actual number of cost approximately $3,384.80 (40 hours take FDA and the designated country requests, for this analysis we estimate × $84.62 per hour including overhead) about one-third the time and effort as that 10 countries could submit a request to review the request. Thus, the total the original request for country to FDA to be exempted from CMPAF cost to each country to prepare and designation. Thus, if the total cost to restrictions applicable to animal feed. submit a request to FDA to be submit the request and have it reviewed Our estimate is not intended to suggest considered for this designation would by FDA was $12,480, the annual review that all of these countries would qualify be about $8,780. Once the request is of the country designation by FDA and for a designation under § 589.2001(f). received by FDA, we estimate that it the submitting country will cost about will take approximately 80 hours to $4,200 (see Table 7). TABLE 5.—BOVINE PRODUCT IMPORTS review each request, at a cost of TO THE UNITED STATES (2006) approximately $3,700 (80 hours × TABLE 7.—COST OF ANNUAL REVIEW $45.65 per hour for an employee rated OF COUNTRY DESIGNATION Percentage of as a GS–13 step 7). Thus, as shown in Exporting country imported bo- vine products Table 6, the total cost of an initial Submission of Additional In- request is approximately $12,480. The formation by the Des- Canada ...... 31 estimated annual total for 10 requests ignated Country ...... $3,000 Australia ...... 28 would be $124,800, with FDA incurring FDA Review of Information .. 1,200 New Zealand ...... 17 about 29 percent of these costs and Cost per Designated Country 4,200 Uruguay ...... 9 foreign governments incurring the Total Cost for Review Brazil ...... 7 remaining 71 percent. Argentina ...... 2 (10 Countries) ...... 42,000 Nicaragua ...... 2 Mexico ...... 1 TABLE 6.—TOTAL COST OF THE INITIAL It is likely that those countries that Costa Rica ...... 1 REQUEST AND REVIEW currently export to the United States a Other Countries ...... 2 significant amount of cattle-derived Collect information, Prepare Source: USDA, Foreign Agricultural Service, material that contains CMPAF will be HS 6-Digit Imports. Report for bovine product and Submit the Request to most interested in submitting a request codes generated January 28, 2008 at http:// FDA ...... $8,780 for country designation. It is also www.fas.usda.gov/ustrdscripts/USReport.exe. FDA Review per Request ..... 3,700 Cost per Country ...... 12,480 possible that new markets for cattle- b. Cost of designation provision. We derived products containing CMPAF make certain assumptions concerning Total Cost for 10 Coun- could develop, providing an incentive the effort to prepare and submit a tries ...... 124,800 for other countries to submit a request request for country designation in to FDA to be designated as exempt from preparation of these costs estimates. Countries that successfully request to CMPAF restrictions in animal feed. For Because a country that submits a request be designated as exempt from CMPAF this analysis, we do not attempt to to be designated as exempt from certain restrictions applicable to animal feed forecast either new markets for cattle- BSE-related restrictions for animal feed will be subject to annual review by FDA derived products containing CMPAF or may also petition USDA for exclusion to ensure that their designation remains the frequency and costs of future from USDA’s BSE-related requirements, appropriate. As part of this process, requests for country designations. we assume that a country wishing to FDA may ask designated countries to G. Sensitivity Analysis submit a request to FDA to be confirm that both their BSE status and designated as exempt from CMPAF the information submitted by them in For the proposed rule, we presented restrictions has already completed a risk support of their original application alternative ranges of costs that could be assessment and put risk management remain unchanged. FDA may revoke a expected due to the uncertainty in strategies into place. Whether these risk country’s designation if FDA determines certain cost factors. Specifically, we assessment and mitigation strategies are that it is no longer appropriate. showed that total compliance costs sufficient for a country to be so FDA has not yet determined the would increase substantially (from a designated by FDA will be determined method by which the agency will range of $14 million to $24 million to on a case-by-case basis. Moreover, we conduct these annual reviews. One a range of $20 million to $36 million) assume a request would include other possible method would be for FDA to if the number of cattle not inspected and technical information on the country’s send a letter to designated countries passed for human consumption that BSE status, a detailed outline of risk asking whether there has been a change would no longer be rendered as a result mitigation strategies, and information in their status or circumstances relative of this rule (or 3.4 percent of all cattle on the country’s cattle-derived products to their BSE history, surveillance, not inspected and passed for human that are exported to the United States. import activities, or other relevant consumption) increased to about 11.6 We assume that a foreign government criteria, and then compare any changed percent of all cattle not inspected and employee earning the wage equivalent information with the information in the passed for human consumption. This of a GS–14 step 1 would spend about 80 original submission. The OIE requires increase would be due to the much hours to collect and prepare this that countries whose BSE status has greater weight of the entire cattle carcass information for each country submitting been officially recognized ‘‘should that would be disposed of compared a request for country designation at an annually confirm during the month of with the weight of CMPAF from an

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average cow slaughtered for human decrease in the upper bound of total statement of a rule’s objectives. As consumption or cow not inspected and costs. The price of MBM and tallow stated previously in this analysis and passed for human consumption that had does not have much effect on total costs. unchanged from the proposed rule, the its CMPAF separated at the deadstock Similarly, the level of renderer capital intent of this rule is to strengthen the rendering facility. costs do not appear to be significant safeguards designed to prevent the Public comments on the method used because the amortization over 10 years spread of BSE in U.S. cattle, as well as by both ERG and FDA have previously results in a small annual cost compared to reduce further any risk posed to been presented. The common to disposal costs. The elasticity humans from the agent that causes BSE. perception in comments, summarized estimates appear to have a more here again, is that the analysis of the significant effect on total costs. A Other requirements of the Regulatory proposed rule considerably reduction in price elasticity of 50 Flexibility Act are a description of the underestimated the number of cattle not percent from the low estimate for each small entities that would be impacted inspected and passed for human ruminant category would reduce the by the final rule, an estimate of the consumption that would no longer be lower bound of total compliance costs number of small entities to which the rendered. We have also previously by about 22 percent, while an increase rule would apply, a description of the shown that additional data, public in elasticity by 50 percent from the high projected reporting, recordkeeping (see comments, and discussion with estimate for each ruminant category Section VI. Paperwork Reduction Act of industry and association members have would result in a 15 percent increase in 1995) and other compliance costs of the led to an updated analysis that presents the upper bound of total compliance rule and the reason why any other a significantly greater number of those costs. significant alternatives considered by animals that would no longer be the agency were rejected. rendered due to this final rule. The H. Final Regulatory Flexibility Analysis The ERG analysis concentrates on the sensitivity analysis included in the ERG The Regulatory Flexibility Act effects of the rule on small renderers report on the final rule attempts to requires an agency to prepare a identify the most influential factors of regulatory flexibility analysis if a rule is and small slaughterers, and to a lesser the analysis, and the range of costs expected to have a significant impact on extent on small dairy farms. associated with varying the key a substantial number of small entities. Slaughterers are classified in the North assumptions. ERG finds the disposal The discussion in this section of the American Industrial Classification cost rate for CMPAF to be particularly final rule, as well as data and analysis System (NAICS) under code 311611— influential because it represents a large contained in this rule’s regulatory Animal (Except Poultry) Slaughtering, fraction of total costs. Specifically, its impact analysis, and section three of the and renderers are classified under analysis shows that a 33-percent ERG report, constitutes our final NAICS code 311613—Rendering and increase or decrease in the disposal cost regulatory impact analysis in Meat Byproduct Processing (see Table per cwt of CMPAF results in a compliance with section 604 of the 8). The Small Business Administration respective $18.1 million increase or Regulatory Flexibility Act. (SBA) classifies both slaughterers and decrease in the lower bound of total The Regulatory Flexibility Act renderers with less than 500 employees costs and a $23.7 million increase or requires that we present a succinct as small businesses.

TABLE 8.—TOTAL AND NUMBER OF AFFECTED ESTABLISHMENTS, BY SIZE IN SLAUGHTERING AND RENDERING

NAICS 311611 NAICS 311613 (slaughterers and renderers) (rendering)

Employment size group Estimated number Total number of Establishments af- Total number of of cattle slaugh- establishments in fected by principal establishments tering establish- 2002 census deadstock restric- ments a tions b

1 to 4 ...... 1,132 1,132 30 0 5 to 9 ...... 229 229 25 0 10 to 19 ...... 131 124 41 25 20 to 49 ...... 134 7 72 22 50 to 99 ...... 64 14 46 19 100 to 249 ...... 66 6 13 3 250 to 499 ...... 40 13 4 1 500 to 999 ...... 20 7 0 0 More than 1,000 ...... 53 13 0 0

Total ...... 1,869 1,545 231 70 a Cattle slaughterer distribution derived from federal and state slaughterer establishment count in USDA/NASS (2006). Establishments arrayed across size classes assuming that slaughter rates coincide with employment sizes. State slaughterers were assumed to be small and were added to the small size categories to match but not exceed the Census count of establishments. The distribution should be considered approxi- mate. b The employment size class of deadstock renderers was estimated by ERG and should be considered to be approximate. Source: ERG Report, Table 3–1, Page 3–2.

The number of cattle slaughtering and be incurred by the 70 deadstock proportions as those presented in the rendering establishments expected to be renderers. Using both Census and USDA total number of establishments. This impacted by the CMPAF ban is 1,545 data, ERG distributed the slaughtering distribution shows that almost 99 and 231, respectively. The majority of establishments across the size classes of percent of slaughtering establishments the impacts on renderers are expected to establishments using the same would qualify as small businesses.

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According to SBA data, over 97 assumption of 5.65 percent, ranged from effects on the ability of U.S.-based percent of all slaughtering firms would 12 to 16 facilities. If these disposal costs enterprises to compete with foreign- be considered small businesses, which are not transferred, the model forecasts based enterprises in domestic or export would take into account multi- 23 to 28 closures. Although all renderers markets. In accordance with SBREFA, establishment firms. The SBA data also contacted by ERG that were OMB has determined that this final rule reports that 83 percent of all rendering contemplating investing in capital to is a major rule for the purpose of firms would be considered small remove brain and spinal cord expected congressional review. businesses. ERG concluded that it is to charge substantially more in pick-up VI. Paperwork Reduction Act of 1995 likely that all 70 deadstock renderers fees to recover these costs, some have less than 500 employees and thus rendering plant closures are likely to This final rule contains information are considered small businesses. In result from this rule (Ref. 16, Section collection provisions that were summary, the number of affected small 3.3). submitted to OMB for review under the businesses in both sectors would be Small farms will incur compliance Paperwork Reduction Act of 1995 (the substantial. costs for the disposal of those animals PRA) (44 U.S.C. 3501–3520). As in its analysis of the proposed rule, that are no longer rendered due to either The title, description, and the ERG used its Small Business Impact the increase in renderer pick-up fees or respondent description of the Model (SBIM) to predict net income and the termination of deadstock rendering information collection provisions are closure impacts on both slaughtering services. ERG prepared a baseline shown below with an estimate of the and rendering firms (Appendix A of the enterprise dairy budget to demonstrate annual recordkeeping burden. Included ERG report contains a technical the relative size of the impacts of the in the estimate is the time for reviewing explanation of the SBIM). The model, final rule on a small (120-cow) dairy instructions, searching existing data which assumes a partial cost pass- farm with about $300,000 in revenues. sources, gathering and maintaining the through of costs for slaughterers (animal The SBA defines small dairy and beef data needed, and completing and producers would incur the disposal cattle producers as those with revenues reviewing each collection of costs), predicts modest impacts on cattle under $750,000, and USDA data shows information. slaughtering due to the small minority the average dairy farm has about 110 Title: Substances Prohibited From Use of cattle slaughtered for human dairy cows (Ref. 28). The expected in Animal Food or Feed consumption that are 30 months of age incremental compliance costs (from the Description: This final rule or older. The model predicts costs for ERG model) for disposal of the annual (§ 589.2001) prohibits the use of certain the small slaughterers to range from number of dead dairy cows and calves cattle origin materials in the food or under $100 for the smallest (assumed to be disposed of off-site at feed of all animals. These materials establishments slaughtering less than $12/cwt and $4/cwt, respectively) on an include the following: (1) The entire 1,000 animals per year to about $7,100 operation of this size is about $700, carcass of BSE-positive cattle; (2) the per establishment for those slaughtering using the individual disposal rates for brains and spinal cords from cattle 30 300,000 to 500,000 cattle annually. over 30-month cattle and calves. months of age and older; (3) the entire Compliance costs as a percent of net Compliance costs of an operation of this carcass of cattle not inspected and income would range from less than 0.1 size are estimated at 0.25 percent of passed for human consumption that are percent to 2.1 percent for the small revenues and 2.63 percent of net 30 months of age or older from which slaughter businesses. For all income. the brains and spinal cords were not slaughterers, regardless of size, costs are The effect of the annual feed effectively removed or otherwise expected to be significantly below 1 substitution costs on small non- effectively excluded from animal feed; percent of revenues. ruminant animal operations is also (4) mechanically separated beef that is Costs for the deadstock renderers expected to be minimal. The $2.9 to derived from cattle materials prohibited were estimated through the SBIM with $3.5 million in additional costs would by the rule; and (5) tallow that is two separate scenarios: One in which not be significant when spread over the derived from BSE-positive cattle and disposal costs are included and one in thousands of non-ruminant animal tallow that is derived from certain other which they are not included. Disposal producers that currently use ruminant materials prohibited by the rule unless costs are not included under one protein in animal feeds. such tallow contains no more than 0.15 scenario to reflect the likelihood that The Regulatory Flexibility Act percent insoluble impurities. These increased pick-up charges to animal requires agencies to analyze regulatory measures will further strengthen producers will mostly offset the alternatives that would minimize any existing safeguards designed to help additional disposal costs. In this case, significant impact of a rule on small prevent the spread of BSE in U.S. cattle. compliance costs for the smallest entities. For an analysis of the FDA has revised the final rule to establishment ranged from an estimate regulatory alternatives to this final rule, include a statement of this purpose of $97,000 to $122,000 ($153,000 to see section IV.B of this document. (§ 589.2001(1)). $180,000 including disposal costs). As discussed in section I of this Compliance costs for the larger V. The Small Business Regulatory document, FDA has revised the final establishments ranged from $2.01 Enforcement Fairness Act of 1996 rule to include a statement of purpose million to $2.57 million ($3.23 million (SBREFA) for the rule, specifically, to prohibit the to $3.79 million including disposal SBREFA (Pub. L. 104–121) defines a use of certain cattle origin materials in costs). Compliance costs as a percent of major rule for the purpose of the food or feed of all animals to help net income ranged from 41 percent to 81 congressional review as having caused prevent the spread of BSE in U.S. cattle. percent across all deadstock renderer or being likely to cause one or more of The final rule was also revised to sizes (from 65 percent to 100 percent the following: An annual effect on the require renderers to establish and including disposal costs). The total economy of $100 million or more; a maintain written procedures on aging number of rendering establishments major increase in costs or prices; animals to ensure that such animals are expected to close (assuming only significant adverse effects on less than 30 months old if they are to disposal costs are transferred to animal competition, employment, productivity, be rendered for use in animal feed producers), using a net income or innovation; or significant adverse without brain and spinal cord removal.

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Further, in response to concerns about certification, for verifying that suppliers FDA believes that it has maximized ensuring effective removal of brain and have effectively excluded CMPAF. Also, the practical utility of this collection of spinal cord from animals 30 months of FDA is adding a provision to this rule information by not prohibiting certain age or older, FDA has revised the final so that it may designate a country as not cattle materials in animal food or feed, rule to require the establishment and subject to the CMPAF requirements of as long as the agency can be assured, maintenance of written procedures for this rule (§ 589.2001(b)(1)(vi)). A through the establishment of written ensuring that brain and spinal cord are country seeking such a designation must procedures, that brain and spinal cord effectively removed or effectively submit a written request and include were effectively removed or effectively excluded from animal feed. As information about the country’s BSE excluded from animal feed or that the discussed in section I of this document, case history, risk factors, measures to material was from cattle less than 30 FDA has determined that it is the prevent the introduction and months of age. FDA believes it has responsibility of the renderer to ensure minimized the burden to the rendering that materials rendered for use in transmission of BSE, and any other industry by not specifying the animal feed do not contain CMPAF. information relevant to determining procedures to be followed so as to Therefore, the agency has explained in whether the country should be subject provide the latitude to establish the final rule that a renderer’s records to the requirements regarding CMPAF as must either include certification or discussed in greater detail in section I procedures that can most efficiently be other documentation from the supplier of this document. These are new incorporated into rendering operations. that material supplied to the renderer collection of information requirements Description of Recordkeeping for does not include CMPAF, or that have been added to the previous Respondents: Rendering facilities, documentation of another method, burden estimate set forth in the medicated feed manufacturers and acceptable to FDA, such as third-party proposed rule. distributors, livestock feeders.

TABLE 9.—ESTIMATED ANNUAL RECORDKEEPING BURDEN

Annual Number of frequency Total annual Hours per Operation and 21 CFR section recordkeepers per record- records recordkeeper Total hours maint. costs keeper

589.2001(c)(2)(vi) and (c)(3)(i) ...... 175 1 175 20 3,500 $59,500 589.2001(c)(2)(ii) ...... 50 1 50 20 1,000 17,000 589.2001(c)(3)(i)(A) ...... 175 1 175 26 4,550 80,580

Total ...... 9,050 157,080

The estimated recordkeeping burden § 589.2001(c)(3)(i) would apply to the material. Furthermore, FDA estimates is derived from agency resources and balance of the rendering firms not that the recordkeeping burden for this discussions with affected industry. As handling CMPAF. FDA solicited public new requirement is similar to the discussed in the Paperwork Reduction comment on the estimated burden that was previously estimated Act section of the October 2005 recordkeeping burden associated with for § 589.2001(c)(2)(vi) and proposed rule (70 FR 58570 at 58598), § 589.2001(b)(2)(iv) (§ 589.2001(c)(2)(vi) § 589.2001(c)(3)(i). Therefore, FDA the recordkeeping requirement in in the final rule) and § 589.2001(b)(3)(i) estimates that the cost per renderer for § 589.2001(c)(2)(vi) will apply to the (§ 589.2001(c)(3)(i) in the final rule) of compliance with the new requirement limited number of renderers that will the proposed rule, but no comments for establishing and maintaining written handle CMPAF. FDA estimates that no were received. It was estimated that the procedures will be $340 per renderer, more than 50 of the approximately 175 operation and maintenance cost per hence the new figure of $17,000 as (based on current data) total renderer for complying with the records shown in Table 9 of this document. independent rendering firms will be requirements of either of these sections Table 9 also reflects the estimated 26 involved in the handling of this would be $340. hours each renderer will need to satisfy material. Although the agency may As discussed previously, FDA has the requirement under which renderers consider the distribution records needed revised the final rule to require the must maintain records from their to comply with this regulation ‘‘usual maintenance of certain written supplier, certifying that materials and customary’’ and thus not subject to procedures if cattle not inspected and provided were free of CMPAF. the PRA, FDA believes there will be a passed for human consumption are to be Description of Respondents for burden associated with setting up a rendered for use in animal feed. The Reporting: As discussed earlier, the final system to ensure such records are recordkeeping burden associated with rule includes a new provision that sufficient to address the recordkeeping the requirement to maintain written exempts CMPAF from designated requirement. Likewise, although FDA procedures (§ 589.2001(c)(2)(ii)) will countries from the prohibition on its use may consider the records necessary to apply to only those renderers that in animal feed (§ 589.2001(b)(1)(vi)). A comply with § 589.2001(c)(3)(i) as choose to render for use in animal feed foreign country seeking this designation ‘‘usual and customary’’ and not subject cattle not inspected and passed for will submit a written request to FDA to PRA burden accounting, FDA is human consumption. Based on the that includes a variety of information including a burden estimate to cover expertise of FDA’s compliance staff who about the country’s BSE status establishment of a system to ensure that are knowledgeable about industry (§ 589.2001(f)). As discussed in section existing receipt, manufacturing, and practices, FDA estimates that no more IV, FDA estimates that 10 countries certification records adequately address than 50 of the approximately 175 total could submit a request to FDA to be this requirement. FDA estimates that the independent rendering firms will be exempted from the CMPAF restrictions. recordkeeping burden associated with involved in the handling of this FDA estimates the burden for this

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information collection as shown in Table 10:

TABLE 10.—ESTIMATED ONE-TIME AND RECURRING REPORTING BURDEN 1

Number of 21 CFR section Number of responses per Total annual Hours per Total hours respondents respondent responses response

§ 589.2001(b)(1) 2 ...... 10 1 10 80 800 § 589.2001(f) ...... 10 1 10 26 .4 264

Total one time burden ...... 800

Total recurring burden ...... 264 1 There are no capital costs or operating costs associated with the collection of information under this final rule. 2 One-time burden.

One-Time Reporting Burden considered the potential environmental be diverted to other forms of disposal. There will be a one-time burden to impact of this action and had In most areas of the country, this change countries that apply to FDA seeking to determined that the proposed action in disposal patterns is not expected to be designated as not subject to would not have a significant impact on have a large impact on the environment. restrictions applicable to CMPAF. We the human environment and that an In some areas of the country, however, estimate that each country that applies environmental impact statement was adverse environmental impacts could be for an exclusion will spend 80 hours not required. FDA’s finding of no expected unless new disposal capacity putting information together to submit significant impact and the evidence is developed. To allow time for to FDA. Table 10 row 1 of this supporting that finding, contained in an development of new methods of document presents the one-time burden environmental assessment, were placed disposal, the agency is delaying expected for countries that apply for the on display in the public docket (Docket implementation of this regulation for 12 exclusion. No. 2002N–0273). months. We assume that disposal of the As discussed in section IV of the materials prohibited in animal feed by Recurring Burden preamble to this final rule, the agency the final rule will be disposed of in Countries that successfully petition received many comments to the accordance with local, State, and FDA to be designated as exempt from proposed rule that addressed the Federal laws and regulations.’’ certain BSE-related restrictions environmental effects of the proposed FDA received several comments on applicable to animal feed will be subject action, noting that the volume of the proposed rule that addressed to future review by FDA to ensure that material that would not be allowed in environmental concerns surrounding their designation remains appropriate. animal feed was much larger than the residual effects of disposal of cattle As part of this process, FDA may ask originally estimated. As a result, FDA byproducts. The comments and the designated countries from time-to-time decided to perform a new agency’s responses are set forth in the to confirm that their BSE situation and environmental assessment that took into following paragraphs. the information submitted by them in account the new information submitted (Comment 71) Several comments said support of their original application in response to the proposed rule. that FDA did not conduct an adequate remains unchanged. We assume it will Following a review of this new environmental impact analysis for the take FDA and the designated country assessment, FDA again has made a proposed rule and improperly made a undergoing a review in the future about finding of no significant impact. The finding of no significant impact. one third the time and effort it did when evidence supporting that finding, Another comment said that the the information was submitted. Table 10 contained in the new environmental environmental assessment failed to row 2 of this document presents the assessment, may be seen in the Division consider alternative methods of disposal expected recurring burden. of Dockets Management (HFA–305), other than landfilling and rendering. A The information collection provisions Food and Drug Administration, 5630 number of comments said that FDA of this final rule have been submitted to Fishers Lane, rm. 1061, Rockville, MD underestimated the environmental OMB for review. Prior to the effective 20852, between 9 a.m. and 4 p.m., impact resulting from improper date of this final rule, FDA will publish Monday through Friday. For ease of composting and landfilling. a notice in the Federal Register, reference, the ‘‘Summary of (Response) In comments to the announcing OMB’s decision to approve, Environmental Consequences’’ is proposed rule, FDA received new modify, or disapprove the information reproduced below: information indicating that some of the collection provisions in this final rule. ‘‘The EA has examined the assumptions used in the economic An agency may not conduct or sponsor, environmental consequences of analysis may have been incorrect, and a person is not required to respond prohibiting the use in animal feed of especially those assumptions related to to a collection of information, unless brain and spinal cord from cattle over disposal of deadstock. The agency that agency displays a currently valid 30 months of age, and the carcasses of modified the assumptions based on this OMB control number. dead stock cattle that were either not new information and considered all age verified or from which brain and other relevant comments in completing VII. Environmental Impact spinal cord were not removed. Our a re-analysis of both the economic and In the ‘‘Environmental Impact’’ assessment indicates that, under this environmental impacts of the proposed section of the preamble to the October final rule, approximately 670 million rule. After completing a new 6, 2005, proposed rule (70 FR 58570), pounds of cattle byproducts that would environmental assessment, the agency FDA stated that it had carefully normally be recycled in animal feed will still concludes that the environmental

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impact is not significant, see revised determined that the final rule does not Creutzfeldt-Jakob disease in humans,’’ environmental assessment in the public contain policies that have substantial Transfusion, 39:1169–1178, November/ docket (Docket No. 2002N–0273). direct effects on the States, on the December, 1999. (Comment 72) Several comments said relationship between the National 8. Scientific Steering Committee, European that animal and human health risks Commission, ‘‘The Implications of the Government and the States, or on the Recent Papers on Transmission of BSE from non-feed disposal of deadstock are distribution of power and by Blood Transfusion in Sheep (Houston, greater than the risks reduced by the responsibilities among the various et al., 2000; Hunter, et al., 2002),’’ proposed regulation. In contrast, one levels of government. Accordingly, the adopted by the scientific steering comment stated that, since the majority agency has concluded that the rule does committee at its meeting of September 12 of cattle mortalities today are disposed not contain policies that have and 13, 2002, http://europa.eu.int/ _ of by means other than rendering and federalism implications as defined in comm/food/fs/sc/ssc/out280 en.pdf. since this disposal does not appear to be the Executive Order and, consequently, 9. Scientific Steering Committee, European Commission, ‘‘Opinion on the Safety of causing disease outbreaks, the comment a federalism summary impact statement questioned the assertion by some that Ruminant Blood With Respect to TSE is not required. Risks,’’ adopted on April 13 and 14, on-farm and alternative disposal will IX. References 2000, http://ec.europa.eu/food/fs/sc/ssc/ degrade public and animal health. out74_en.pdf. Another comment stated that health The following references have been 10. Buschmann, A., and M. Groschup, concerns resulting from the proposed placed on display in the Division of ‘‘Highly Bovine Spongiform rule are being exaggerated for the Dockets Management (HFA–305), Food Encephalopathy-Sensitive Transgenic purpose of preventing the rule from and Drug Administration, 5630 Fishers Mice Confirm the Essential Restriction of being finalized. Lane, rm. 1061, Rockville, MD 20852, Infectivity to the Nervous System in (Response) The agency received no and may be seen by interested persons Clinically Diseased Cattle,’’ The Journal data in support of either position on the of Infectious Diseases, 192:934–42, between 9 a.m. and 4 p.m., Monday September 1, 2005. effects of non-feed disposal of CMPAF through Friday. (FDA has verified the 11. Bradley, R., ‘‘Bovine Spongiform on animal or human health. Web site addresses, but FDA is not Encephalopathy (BSE)—the Current (Comment 73) Several comments responsible for any subsequent changes Situation and Research,’’ European asked why FDA is not concerned about to the Web site addresses after this Journal of Epidemiology, 7:532–544, environmental exposure to the BSE document publishes in the Federal 1991. Anderson, R.M., et al., agent through indiscriminant disposal Register.) ‘‘Transmission Dynamics and of deadstock if the BSE infectious dose Epidemiology of BSE in British Cattle,’’ 1. Scientific Steering Committee, European Nature, 382:779–788, 1996. is really 10 mg or less and the agent Commission, ‘‘Opinion of the Scientific remains infectious in soil. 12. Comer, P.J., and P.J. Huntly, ‘‘Exposure of Steering Committee on the Human the Human Population to BSE Infectivity (Response) The agency believes that, Exposure Risk (HER) via Food With based on the extremely low prevalence Over the Course of the BSE Epidemic in Respect to BSE,’’ adopted on 10 Great Britain and the Impact of Changes December 1999, http://europa.eu.int/ of BSE in this country and the absence to the Over Thirty Month Rule,’’ Over comm/food/fs/sc/ssc/out67_en.pdf. of evidence that BSE is transmitted Thirty Month Rule (OTMR) Review 2. U.S. Food and Drug Administration, through soil and water, the risk of BSE Paper, June 2003. Center for Veterinary Medicine, transmission through exposure to the 13. Scientific Steering Committee, European Summary of FDA Inspectional Findings BSE agent in the environment is very and Recalls Involving the Ruminant Feed Commission, report of March 26 and 27, low. Ban Regulation (21 CFR 589.2000) 1998, updated June 24 and 25, 2001, (Comment 74) Several comments said Conducted in Fiscal Years 2004–2007, ‘‘Safety of Tallow Derived from that landfilling and burial will create April 2008. Ruminant Tissues.’’ problems of odor control, ground and 3. ‘‘An Estimate of the Prevalence of BSE in 14. OIG Report No. 50601–10–KC [Bovine Spongiform Encephalopathy (BSE) surface water contamination, and the United States,’’ U.S. Department of Agriculture, July 20, 2006, APHIS/USDA Surveillance Program (Phase II) and disease caused by conventional Controls Over BSE Sampling, Specified pathogens. Other comments stated that Internet page http://www.aphis.usda. gov/peer_review/content/printable_ Risk Materials, and Advanced Meat the soil and geologic conditions in version/BSE_Prevalence_scientific_doc_ Recovery Products (Phase III)], January certain states are particularly unsuitable after.pdf. 2006. for carcass burial. 4. GAO Report No. 05–101, ‘‘Mad Cow 15. World Organization for Animal Health, (Response) FDA believes that odors Disease: FDA’s Management of the Feed Manual of Diagnostic Tests and Vaccines and pathogens should not be significant Ban Has Improved, but Oversight for Terrestrial Animals 2004 (updated Weaknesses Continue to Limit Program 2006). Accessed online at http:// problems when carcasses are properly _ buried, and in particular, when Effectiveness,’’ February 2005. www.oie.int/eng/normes/mmanual/A 5. ‘‘Bovine Spongiform Encephalopathy summry.htm. carcasses are landfilled. The agency 16. ‘‘Economic Impacts of FDA Regulatory acknowledges, however, that soil or (BSE) Ongoing Surveillance Plan,’’ U.S. Department of Agriculture, Animal and Changes Due to Risk of Bovine geologic conditions in some parts of the Plant Health Inspection Service, July 20, Spongiform Encephalopathy’’ (Final country may not permit carcasses to be 2006, http://www.aphis.usda.gov/ Report), Contract No. 223–03–8500, Task properly buried. In such areas, newsroom/hot_issues/bse/downloads/ Order Number 8, Eastern Research alternative disposal methods should be BSE_ongoing_surv_plan_final_ Group, Inc., Lexington, MA, March 15, identified. The agency intends to allow 71406%20.pdf. 2007. sufficient time before the rule becomes 6. Hunter, N., J. Foster, A. Chong, et al., 17. European Union Scientific Steering effective to allow for the arrangement of ‘‘Transmission of prion diseases by Committee, Opinion of December 10, 1999, of the Scientific Steering disposal methods that are appropriate blood transfusion,’’ Journal of General Virology, 83: 2897–2905, 2002. Committee on ‘‘The Human Exposure for local conditions. 7. Brown, P., L. Cervenakova, L.M. McShane, Risk (HER) via Food With Respect to VIII. Federalism et al., ‘‘Further studies of blood BSE,’’ p. 11, 2001. infectivity in an experimental model of 18. Scientific Steering Committee, European FDA has analyzed this final rule in transmissible spongiform Commission, ‘‘Update of the Opinion on accordance with the principles in encephalopathy, with an explanation of TSE Infectivity Distribution in Ruminant Executive Order 13132. FDA has why blood components do not transmit Tissues (initially adopted by the

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Scientific Steering Committee at its Administration, 21 CFR part 589 is consumption as defined in paragraph meeting of 10–11 January 2002 and amended to read as follows: (b)(2) of this section that are 30 months amended at its meeting of 7–8 November of age or older from which brains and 2002),’’ http://ec.europa.eu/food/fs/sc/ PART 589—SUBSTANCES spinal cords were not effectively ssc/out296_en.pdf. PROHIBITED FROM USE IN ANIMAL removed or otherwise effectively 19. United Kingdom, Department for FOOD OR FEED Environment, Food and Rural Affairs, excluded from animal feed; (iv) Mechanically separated beef as 2007, http://www.defra.gov.uk/animalh/ I 1. The authority citation for 21 CFR bse/statistics/bse/yrbirth.html. defined in paragraph (b)(3) of this 20. United Kingdom, Department of Health, part 589 continues to read as follows: section that is derived from materials Monthly Creutzfeldt Jakob Disease specified in paragraphs (b)(1)(i), Authority: 21 U.S.C. 321, 342, 343, 348, Statistics, August 7, 2006, http:// 371. (b)(1)(ii), and (b)(1)(iii) of this section; www.gnn.gov.uk/environment/full I and detail.asp?releaseID=219257& 2. Section 589.2000 is amended by (v) Tallow as defined in paragraph newsareaID=2. revising paragraph (a)(1) and by adding (b)(5) of this section that is derived from 21. ‘‘Preliminary Analysis of Final Rules and paragraphs (c)(4) and (e)(3) to read as materials specified in paragraphs an Interpretive Rule to Prevent the BSE follows: Agent from Entering the U.S. Food (b)(1)(i), (b)(1)(ii), and (b)(1)(iii) of this Supply,’’ U.S. Department of § 589.2000 Animal proteins prohibited in section. Agriculture, April 7, 2004, http://www. ruminant feed. (vi) Cattle materials prohibited in fsis.usda.gov/Frame/Frame (a) * * * animal feed do not include: (A) Tallow derivatives as defined in Redirect.asp?main=http:// (1) Protein derived from mammalian www.fsis.usda.gov/OA/news/2004/ paragraph (b)(6) of this section; bseregs040704.htm. tissues means any protein-containing (B) Tallow as defined in paragraph 22. USDA, Foreign Agricultural Service, U.S. portion of mammalian animals, (b)(5) of this section that is derived from Trade Internet System, FAS Agricultural excluding: Blood and blood products; materials specified in paragraphs Export Commodity Aggregations, Jan-Dec gelatin; tallow containing no more than (b)(1)(ii) and (b)(1)(iii) of this section Annual Value and Quantities for the 0.15 percent insoluble impurities and and that contains no more than 0.15 Total World Export of Beef & Veal (FR/ tallow derivatives as specified in percent insoluble impurities. Insoluble CH/FZ and PREP/PRES), and Beef § 589.2001; inspected meat products Variety Meats. Query generated March impurities must be measured by the which have been cooked and offered for method entitled ‘‘Insoluble Impurities’’ 27, 2008. Data source: Dept of human food and further heat processed Commerce, U.S. Census Bureau, Foreign (AOCS Method Ca 3a–46), American Oil Trade Statistics. (http://www.fas.usda. for feed (such as plate waste and used Chemists’ Society (AOCS), 5th Edition, gov/ustrade/USTExFAS.asp?QI=). cellulosic food casings); milk products 1997, incorporated by reference in 23. Mathews, Kenneth H., Jr., Monte (milk and milk proteins); and any accordance with 5 U.S.C. 552(a) and 1 Vandemeer, and Ronald Gustafson, ‘‘An product whose only mammalian protein CFR part 51, or another method Economic Chronology of Bovine consists entirely of porcine or equine equivalent in accuracy, precision, and Spongiform Encephalopathy in North protein. sensitivity to AOCS Official Method Ca America,’’ Economic Research Service, * * * * * USDA, June 2006 (http://www.ers.usda. 3a–46. You may obtain copies of the gov/Publications/LDP/2006/06Jun/ (c) * * * method from the AOCS (http:// LDPM14301/). (4) Renderers shall comply with all www.aocs.org), 2211 W. Bradley Ave., 24. Economic Research Service, USDA, applicable requirements under Champaign, IL 61821. Copies may be ‘‘Beef—United States Elasticities,’’ § 589.2001. examined at the Center for Food Safety (http://www.ers.usda.gov/Data/ * * * * * and Applied Nutrition’s Library, 5100 Elasticities/). (e) * * * Paint Branch Pkwy., College Park, MD 25. Economic Research Service, USDA, ‘‘U.S. (3) Renderers shall comply with all 20740, or at the National Archives and Beef and Cattle Industry: Background Statistics and Information; U.S. Cattle applicable requirements under Records Administration (NARA). For and Beef Industry, 2002–2007,’’ (http:// § 589.2001. information on the availability of this www.ers.usda.gov/news/ * * * * * material at NARA, call 202–741–6030, BSECoverage.htm). I or go to: http://www.archives.gov/ 3. Section 589.2001 is added to read _ 26. ‘‘Economic Impacts of Proposed Changes as follows: federal register/ to Livestock Feed Regulations,’’ Informa code_of_federal_regulations/ Economics, December 2005. § 589.2001 Cattle materials prohibited in ibr_locations.html. 27. ‘‘Carcass Disposal: A Comprehensive animal food or feed to prevent the (C) Materials as defined in paragraphs Review,’’ National Agricultural transmission of bovine spongiform (b)(1)(ii), (b)(1)(iii), (b)(1)(iv) (other than Biosecurity Center Consortium Carcass encephalopathy. mechanically separated beef from the Disposal Working Group for the U.S. Department of Agriculture, Animal and (a) Purpose—The purpose of this carcass of a BSE-positive cattle), and Plant Health Inspection Service, Chapter section is to prohibit the use of certain (b)(1)(v) of this section from cattle from 9—Economic and Cost Considerations, p. cattle origin materials in the food or a country that has been designated 18, August 2004. feed of all animals to further reduce the under paragraph (f) of this section. 28. National Agricultural Statistics Service, risk of the spread of bovine spongiform (2) Cattle not inspected and passed U.S. Department of Agriculture, encephalopathy (BSE) within the United for human consumption means cattle Agricultural Statistics 2006, p. VIII–3. States. that did not pass antemortem inspection List of Subjects in 21 CFR Part 589 (b) Definitions—(1) Cattle materials by the appropriate regulatory authority. prohibited in animal feed include: This term includes nonambulatory Animal feeds, Animal foods, Food (i) The entire carcass of BSE-positive disabled cattle. Nonambulatory disabled additives, Incorporation by reference. cattle; cattle are cattle that cannot rise from a I Therefore, under the Federal Food, (ii) The brains and spinal cords of recumbent position or that cannot walk, Drug, and Cosmetic Act and under cattle 30 months of age and older; including, but not limited to, those with authority delegated to the Commissioner (iii) The entire carcass of cattle not broken appendages, severed tendons or of Food and Drugs, the Food and Drug inspected and passed for human ligaments, nerve paralysis, fractured

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vertebral column, or metabolic (B) Such cattle are 30 months of age procedures in place to effectively conditions. or older. exclude cattle materials prohibited in (3) Mechanically separated beef (ii) If renderers remove brain and animal feed; and these records shall be means a finely comminuted meat food spinal cord from cattle not inspected considered sufficient to meet this product, resulting from the mechanical and passed for human consumption, or requirement if they include either: separation and removal of most of the separate such animals based on whether (A) Certification or other bone from attached skeletal muscle of or not they are 30 months of age or documentation from the supplier that cattle carcasses and parts of carcasses. older, renderers must maintain adequate material supplied to the renderer does (4) Renderer means any firm or written procedures specifying how these not include cattle materials prohibited individual that processes slaughter processes are carried out. in animal feed; such certification or byproducts, animals unfit for human (iii) Once cattle materials prohibited documentation is acceptable, provided consumption, or meat scraps. The term in animal feed have been separated from that it includes a description of the includes persons who collect such other cattle materials, provide for segregation procedures used, materials and subject them to minimal measures to avoid cross-contamination; documentation that the supplier processing, or distribute them to firms (A) Use separate equipment while confirms that its segregation procedures other than renderers (as defined in this handling cattle materials prohibited in are in place prior to supplying any cattle paragraph) whose intended use for the animal feed; or material to the renderer, and records of (B) Use separate containers that products may include animal feed, the renderer’s periodic review of the adequately prevent contact with animal industrial use, or other uses. The term suppliers’ certification or other feed, animal feed ingredients, or includes renderers that also blend documentation; or animal protein products. equipment surfaces; (5) Tallow means the rendered fat of (iv) Label the cattle materials (B) Documentation of another method cattle obtained by pressing or by prohibited in animal feed and products acceptable to FDA, such as third-party applying any other extraction process to that contain or may contain cattle certification, for verifying that suppliers tissues derived directly from discrete materials prohibited in animal feed in a have effectively excluded cattle adipose tissue masses or to other carcass conspicuous manner as follows: ‘‘Do not materials prohibited in animal feed. parts and tissues. feed to animals’’; (ii) Comply with all applicable (6) Tallow derivative means any (v) Mark the cattle materials requirements under § 589.2000 product obtained through initial prohibited in animal feed and products regarding animal proteins prohibited in hydrolysis, saponification, or trans- that contain or may contain cattle ruminant feed. esterification of tallow; chemical materials prohibited in animal feed with (d) Adulteration and misbranding. (1) conversion of material obtained by an agent that can be readily detected on Failure of a renderer to comply with the hydrolysis, saponification, or trans- visual inspection; and requirements in paragraphs (c)(2)(i) esterification may be applied to obtain (vi) Establish and maintain records through (c)(2)(iii), (c)(2)(v) and (c)(2)(vi), the desired product. sufficient to track cattle materials or (c)(3)(i) of this section will render the (c) Requirements. (1) No animal feed prohibited in animal feed to ensure such animal feed or feed ingredients or feed ingredient shall be manufactured material is not introduced into animal adulterated under section 402(a)(4) of from, processed with, or otherwise feed, and make the records available for the Federal Food, Drug, and Cosmetic contain, cattle materials prohibited in inspection and copying by the Food and Act (the act). animal feed as defined in paragraph Drug Administration. (2) Animal feed or feed ingredients (b)(1) of this section. (3) Renderers that receive, that are not in compliance with (2) Renderers that receive, manufacture, process, blend, or paragraph (c)(1) of this section are manufacture, process, blend, or distribute any cattle materials shall take adulterated under section 402(a)(2), distribute cattle materials prohibited in the following measures to ensure that 402(a)(3), or 402(a)(5) of the act. animal feed as defined in paragraph materials prohibited as defined in (3) Animal feed or feed ingredients (b)(1) of this section, or products that paragraph (b)(1) of this section are not that are not in compliance with the contain or may contain cattle materials used in animal feed: labeling requirements of paragraph prohibited in animal feed, shall take the (i) Establish and maintain records (c)(2)(iv) of this section are misbranded following measures to ensure that sufficient to demonstrate that material under section 403(a)(1) or 403(f) of the materials prohibited as defined in rendered for use in animal feed was not act. paragraph (b)(1) of this section are not manufactured from, processed with, or introduced into animal feed: does not otherwise contain, cattle (4) Failure of a renderer to comply (i) Exclude from use in animal feed materials prohibited in animal feed and with the requirements in paragraph (e) the entire carcass of cattle not inspected make copies of all records available for of this section will render the animal and passed for human consumption as inspection and copying by the Food and feed or feed ingredients adulterated defined in paragraph (b)(2) of this Drug Administration. With respect to under section 402(a)(4) of the act. section if: cattle materials obtained from (e) Inspection; records retention. (A) The brain and spinal cord are not establishments which have segregated Records required to be made available effectively removed from such cattle or cattle materials prohibited in animal for inspection and copying by the Food the brain and spinal cord from such feed, such records must demonstrate and Drug Administration, as required by cattle are not otherwise effectively that establishments supplying cattle this section, shall be kept for a excluded from animal feed; and materials to the renderers have adequate minimum of 1 year.

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(f) Process for designating countries. and any other information relevant to review by FDA and may be revoked if A country seeking designation must determining whether the cattle materials FDA determines that the granted request send a written request to the Director, from the requesting country do or do not is no longer appropriate. Office of the Center Director, Center for meet the definitions set forth in Dated: April 18, 2008. Veterinary Medicine, at the address paragraph (b)(1) of this section. FDA designated in § 5.1100 of this chapter. shall respond in writing to any such Jeffrey Shuren, The request shall include information request and may impose conditions in Associate Commissioner for Policy and about that country’s BSE case history, granting any such request. Any grant by Planning. risk factors, measures to prevent the FDA of such a request under this [FR Doc. 08–1180 Filed 4–23–08; 8:45 am] introduction and transmission of BSE, paragraph will be subject to future BILLING CODE 4160–01–P

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