[Federal Register Volume 76, Number 233 (Monday, December 5, 2011)]
[Proposed Rules]
[Pages 75809-75825]
From the Federal Register Online via the Government Printing Office 
[FR Doc No: 2011-30992]


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DEPARTMENT OF AGRICULTURE

Food Safety and Inspection Service

9 CFR Parts 316, 317, 320, 331, 354, 355, 381, 412, and 424

[Docket No. 99-021P; FDMS Docket Number FSIS-2005-0016]
RIN 0583-AC59


Prior Label Approval System: Generic Label Approval

AGENCY: Food Safety and Inspection Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Food Safety and Inspection Service (FSIS) is proposing to 
amend the meat and poultry products inspection regulations to expand 
the circumstances in which FSIS will generically approve the labels of 
meat and poultry products. The Agency also is proposing to combine the 
regulations that provide for the approval of labels for meat products 
and poultry products into a new CFR part.

DATES: Comments must be received on or before February 3, 2012.

ADDRESSES: FSIS invites interested persons to submit comments on this 
proposed rule. Comments may be submitted by either of the following 
methods:
     Federal eRulemaking Portal: This Web site provides the 
ability to type short comments directly into the comment field on this 
Web page or attach a file for lengthier comments. Go to http://www.regulations.gov. Follow the online instructions at that site for 
submitting comments.
     Mail, including diskettes or CD-ROMs, and hand- or 
courier-delivered items: Send to U.S. Department of Agriculture (USDA), 
FSIS, OPPD, RIMD, Docket Room, Patriots Plaza 3, 1400 Independence 
Avenue SW., Mailstop 3782, 8-163A, Washington, DC 20250-3700.
    Instructions: All items submitted by mail or electronic mail must 
include the Agency name and docket number FSIS-2005-0016. Comments 
received in response to this docket will be made available for public 
inspection and posted without change, including any personal 
information provided, to http://www.regulations.gov.
    Docket: For access to background documents or comments received, go 
to the FSIS Docket Room at the address listed above between 8 a.m. and 
4:30 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Jeff Canavan, Food Technologist, 
Labeling and Program Delivery Division, Office of Policy and Program 
Development, Food Safety and Inspection Service, U.S. Department of 
Agriculture, Beltsville, MD 20705-5273; Telephone (301) 504-0879; Fax 
(301) 504-0872.

SUPPLEMENTARY INFORMATION: 

Background

Introduction

    The Federal Meat Inspection Act (FMIA) (21 U.S.C. 601 et seq.) and 
the Poultry Products Inspection Act (PPIA) (21 U.S.C. 451 et seq.) 
direct the Secretary of Agriculture to maintain meat and poultry 
product inspection programs designed to assure consumers that meat and 
poultry products distributed to them (including imports) are safe, 
wholesome, not adulterated, and properly marked, labeled, and packaged. 
Section 2 of the FMIA (21 U.S.C. 602) and section 2 of the PPIA (21 
U.S.C. 451) state that unwholesome, adulterated, or misbranded meat or 
meat food products and poultry or poultry food products are injurious 
to the public welfare; destroy markets for wholesome, not adulterated, 
and properly marked, labeled, and packaged products; and result in 
sundry losses to producers and processors of meat and poultry products, 
as well as injury to consumers. Therefore, Congress has granted to the 
Secretary broad authority to protect consumers' health and welfare.
    Section 7(d) of the FMIA (21 U.S.C. 607(d)) states: ``No article 
subject to this title shall be sold or offered for sale by any person, 
firm, or corporation, in commerce, under any name or other marking or 
labeling which is false or misleading, or in any container of a

[[Page 75810]]

misleading form or size, but established trade names and other marking 
and labeling and containers which are not false or misleading and which 
are approved by the Secretary are permitted.'' The PPIA contains 
similar language in section 8(c) (21 U.S.C. 457(c)).
    The Department's longstanding interpretation of these provisions is 
that they require that the Secretary of Agriculture or his or her 
representative approve all labels to be used on federally inspected and 
passed, and imported, meat and poultry products before the products are 
distributed in commerce. Without approved labels, meat and poultry 
products may not be sold, offered for sale, or otherwise distributed in 
commerce.
    These prior label approval provisions also apply to establishments 
that do business solely within designated States (see 21 U.S.C. 451 and 
602). A State is designated if it does not have, or is not effectively 
enforcing, with respect to establishments within its jurisdiction at 
which livestock or poultry are slaughtered, or at which their carcasses 
or products are prepared for use as human food solely for distribution 
within such State, requirements at least equal to those contained in 
titles I and IV of the FMIA and specified sections of the PPIA (21 
U.S.C. 454(c)(1) and 661(c)(1)). Once a State is designated, the 
inspection requirements of the FMIA and PPIA apply to establishments 
that slaughter livestock and poultry, and prepare or process meat or 
poultry products, solely for distribution within the State.

Current Label Regulations

    There are up to eight features required on most meat and poultry 
labels. The mandatory features are designed to ensure that meat and 
poultry products are accurately and truthfully labeled, and that they 
provide the necessary product information for consumers to make an 
informed purchasing decision. These required features of meat and 
poultry product labels must appear on the immediate containers of 
domestic products (9 CFR part 317, subpart A, and 9 CFR part 381, 
subpart N) and imported products (9 CFR part 327 and 9 CFR part 381, 
subpart T). The meat inspection regulations define an ``immediate 
container'' as the receptacle or other covering in which any product is 
directly contained or wholly or partially enclosed (9 CFR 301.2). The 
poultry products inspection regulations define an ``immediate 
container'' as any consumer package or any other container in which 
poultry products, not consumer packaged, are packed (9 CFR 381.1(b)).
    The required features include: (1) The standardized, common or 
usual, or descriptive name, of the product (9 CFR 317.2(e) and 
381.117); (2) an ingredients statement containing the common or usual 
name of each ingredient of the product listed in descending order of 
predominance (9 CFR 317.2(f) and 381.118); (3) the name and place of 
business of the manufacturer, packer, or distributor (9 CFR 317.2(g) 
and 381.122); (4) an accurate statement of the net quantity of contents 
(9 CFR 317.2(h) and 381.121); (5) the inspection legend, including the 
number of the official establishment (9 CFR 317.2(i) and 381.123); (6) 
a safe handling statement if the product is perishable; e.g., ``Keep 
Frozen'' or ``Keep Refrigerated'' (9 CFR 317.2(k) and 381.125(a)); (7) 
nutrition labeling for applicable meat and poultry products; \1\ and 
(8) safe handling instructions if the meat or poultry component of the 
product is not ready-to-eat (9 CFR 317.2(l) and 381.125(b)). In 
addition, imported meat and poultry products must bear the country of 
origin under the product name in accordance with 9 CFR 327.14(b)(1) and 
381.205(a).
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    \1\ Nutrition labeling is required for heat-treated and multi-
ingredient meat and poultry products. New nutrition labeling 
requirements for ground or chopped meat and poultry products will 
take effect January 1, 2012 (75 FR 82148, Dec. 29, 2010).
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    These mandatory features must be prominently and informatively 
displayed on the principal display panel, the information panel, or 
other surface of the product label. The first six features described 
above, including the labeling of country of origin for imported 
products in accordance with 9 CFR 327.14 and 381.205, have been 
required by the meat and poultry inspection regulations for decades. 
FSIS implemented regulations that require the nutrition labeling of 
cooked or heat-treated multi-ingredient meat and poultry products and 
the display of safe handling instructions in 1993 and 1994, 
respectively. Therefore, industry has had a significant amount of 
experience complying with the regulations for all required label 
features.
    The regulations contain other provisions to ensure that no 
statement, word, picture, design, or device that is false or misleading 
in any particular, or that conveys any false impression, or that gives 
any false indication of origin, identity, or quality, appears in any 
marking or other labeling (9 CFR 317.8 and 381.129). Pursuant to the 
authority contained in section 7(e) of the FMIA (21 U.S.C. 607(e)) and 
section 8(d) of the PPIA (21 U.S.C. 457(d)), the Administrator, FSIS, 
may withhold the use of any marking or labeling that is false or 
misleading, within the meaning of the FMIA or the PPIA and the 
implementing regulations.

Current Prior Label Approval System and the Procedures the Agency 
Employs To Implement It

    In order to ensure that meat and poultry products comply with the 
FMIA and PPIA and their implementing regulations, FSIS conducts a prior 
approval program for labels that are to be used on federally inspected 
meat and poultry products and imported products (see 9 CFR 317.4, 
317.5, 327.14, 381.132, 381.133, 381.134, and 381.205).
    Under the current program, FSIS evaluates sketches of labels for 
approval. A ``sketch label'' is a printer's proof or other version that 
clearly shows all required label features, size, location, and 
indication of final color. To obtain sketch label approval, domestic 
meat and poultry establishments and certified foreign establishments, 
or their representatives, submit sketch labels to FSIS for evaluation, 
except when the label is generically approved by the Agency under 9 CFR 
317.5 or 381.133.
    Meat and poultry establishments and certified foreign 
establishments submit sketch labels accompanied by FSIS Form 7234-1 
(01/08/2008), ``Application for Approval of Labels, Marking or 
Device,'' to the Agency for evaluation. In addition to the required 
label information, any special claims or statements that the 
establishment intends to make (e.g., quality claims, animal production 
raising claims, product origin claims, or nutrient content claims) must 
be included on the label, along with documentation supporting the 
claim. The label application must contain the basic information about 
the establishment and the product, including:
    1. Establishment number;
    2. Product name;
    3. Product formulation;
    4. Processing procedures and handling information;
    4. Firm name and address;
    5. Total available labeling space of the container;
    6. Size of the principal display panel; and
    7. The Hazard Analysis and Critical Control Point category under 
which the establishment is producing the meat or poultry product.
    All such information is evaluated by a technical labeling policy 
expert in FSIS, who is responsible for verifying that sketch labels 
comply with the applicable requirements. A ``final label''

[[Page 75811]]

does not have to be submitted to the Agency for evaluation and 
approval. Since July 1, 1996, meat and poultry establishments and 
certified foreign establishments have been responsible for ensuring 
that the labels that they apply to their meat and poultry products 
comply with Federal regulations. All labels are subject to FSIS 
verification for compliance with Agency regulations to ensure that they 
are accurate, truthful, and not misleading. The management of the 
official establishment or establishment certified under a foreign 
inspection system must maintain a copy of all labels and labeling used, 
along with the product formulation and processing procedures. Such 
records must be made available to any duly authorized representative of 
the Secretary upon request.

Generic Label Approval

    Generic label approval refers to the prior approval of labels or 
modifications to labels by the Agency without submitting such labels to 
FSIS for sketch approval. Generic label approval requires that all 
mandatory label features be in conformance with FSIS regulations (9 CFR 
317.5(a)(1) and 381.133(a)(1)). Although such labels are not submitted 
to FSIS for approval, they are deemed to be approved and, therefore, 
may be applied to product in accordance with the Agency's prior label 
approval system.
    In 1983, FSIS estimated that it evaluated approximately 130,000 
label submissions a year. That year, the Agency promulgated regulations 
that granted limited label approval authority to the Inspector-In-
Charge (IIC) at official establishments and provided generic approval 
to limited types of labels (e.g., labels for raw, single ingredient 
meat and poultry products) (48 FR 11410, March 18, 1983). This generic 
approval did not extend to the labels of the products of certified 
foreign establishments. The rulemaking was intended to reduce the 
number of labels and other labeling submitted for evaluation by FSIS 
and to lessen the paperwork burden on official establishments. The 
general goal was to improve the efficiency of the label approval system 
by streamlining the review process.
    Even with the changes made by the rule, however, the number of 
labels and other labeling submitted to the Agency continued to grow. 
During fiscal year 1991, the Agency processed approximately 167,500 
labels. Of these, 87,500 were final labels, and 60,000 were sketch 
labels that were approved. Approximately 20,000 labels were not 
approved. The Agency did not maintain records on the number of 
temporary approvals or other types of labeling (e.g., insert labeling 
applied at retail) that were evaluated and acted upon by the Agency.
    On March 25, 1992, FSIS published an Advance Notice of Proposed 
Rulemaking (ANPRM) (57 FR 10300, Mar. 25, 1992) on the Agency's prior 
label approval system. The ANPRM presented two options for making 
additional changes to the prior label approval system: (1) Revise the 
system by significantly reducing the scope of review through expansion 
of the categories of generically approved labels and replacing the 
general requirement of FSIS approval of sketch and final labels with 
one for sketch labels only; or (2) replace the system with a system in 
which all labels are generically approved and used without prior 
submission to FSIS for evaluation and approval.
    On November 23, 1993, FSIS published a proposed rule (58 FR 62014) 
to amend the Federal meat and poultry products inspection regulations 
by expanding the types of generically approved labels authorized for 
use on meat and poultry products by official establishments in the 
United States and foreign establishments certified under foreign 
inspection systems. The rule was proposed as a first step in the 
gradual streamlining and modernization of the label approval system. In 
the proposal, the Agency sought comment on a long-term plan to 
implement a system in which all labels are generically approved. After 
reviewing the comments received in response to the proposed rule, and 
in light of FSIS's ongoing reassessment of its labeling policies, FSIS 
decided to proceed with a gradual streamlining and modernization of the 
label approval system.
    On December 29, 1995 (effective July 1, 1996), FSIS published a 
final rule titled ``Prior Label Approval System'' (60 FR 67334). The 
implementing regulations, 9 CFR 317.5 and 381.133, outline the types of 
labels and modifications to labels that are deemed to be approved 
without submission to FSIS, provided that the label displays all 
mandatory label features in conformance with applicable Federal 
regulations.
    FSIS permits official establishments and foreign establishments 
certified by officials of foreign inspection systems to use the 
following generically approved labeling without the submission of 
sketches for evaluation and approval by FSIS:
    1. Labels for a product that has a standard of identity or 
composition as specified in 9 CFR part 319 or part 381, subpart P, or 
is consistent with an informal standard that the Agency has laid out in 
the Food Standards and Labeling Policy Book; does not bear any special 
claims, such as quality claims, nutrient content claims, health claims, 
negative claims, geographical origin claims (except as provided by 9 
CFR 317.5(b)(9)(xxv) and 381.133 (b)(9)(xxviii)), or guarantees; and is 
not a product that is not domestic and labeled in a foreign language;
    2. Labels for raw, single-ingredient products (such as beef steak, 
lamb chops, chicken legs, or turkey breasts) that do not bear special 
claims, such as quality claims, nutrient content claims, health claims, 
negative claims, geographical origin claims, or guarantees, and are not 
products that are not domestic and labeled with a foreign language;
    3. Labels for containers of meat and meat food products and poultry 
products sold under contract specifications to Federal Government 
agencies when such product is not offered for sale to the general 
public, provided that the contract specifications include specific 
requirements with respect to labeling that is made available to the 
IIC;
    4. Labels for shipping containers that contain fully labeled 
immediate containers, provided that the outside container's labels 
comply with 9 CFR 316.13 or 381.127;
    5. Labels for products not intended for human food, provided that 
they comply with 9 CFR part 325 or 9 CFR 381.152(c) and 381.193; and 
labels for poultry heads and feet for export for processing as human 
food if they comply with 9 CFR 381.190(b);
    6. Meat and poultry inspection legends that comply with 9 CFR parts 
312 and 316, and 9 CFR part 381, subpart M;
    7. Inserts, tags, liners, posters, and like devices containing 
printed or graphic matter and for use on, or to be placed within, 
containers and coverings of products, provided such devices contain no 
reference to product and bear no misleading feature;
    8. Labels for consumer test products not intended for sale; and
    9. Labels that were previously approved by FSIS as sketch labels, 
and the final labels were prepared without modification or with the 
following modifications:
    a. All features of the label are proportionately enlarged or 
reduced, provided that all minimum size requirements specified in 
applicable

[[Page 75812]]

regulations are met, and the label is legible;
    b. A substitution of any unit of measurement with its abbreviation 
or the substitution of any abbreviation with its unit of measurement, 
e.g., ``lb.'' for ``pound,'' or ``oz.'' for ``ounce,'' or of the word 
``pound'' for ``lb.'' or ``ounce'' for ``oz.'';
    c. A master or stock label that has been approved from which the 
name and address of the distributor are omitted, and such name and 
address are applied before being used (in such case, the words 
``prepared for'' or similar statement must be shown together with the 
blank space reserved for the insertion of the name and address when 
such labels are offered for approval);
    d. Wrappers or other covers bearing pictorial designs, emblematic 
designs, or illustrations, e.g., floral arrangements, illustrations of 
animals, fireworks, etc., are used with approved labels (the use of 
such designs will not make necessary the application of labeling not 
otherwise required);
    e. A change in the language or the arrangement of directions 
pertaining to the opening of containers or the serving of the product;
    f. The addition, deletion, or amendment of a dated or undated 
coupon, a cents-off statement, cooking instructions, packer product 
code information, or UPC product code information;
    g. Any change in the name or address of the packer, manufacturer, 
or distributor that appears in the signature line;
    h. Any change in net weight, provided the size of the net weight 
statement complies with 9 CFR 317.2 or 381.121;
    i. The addition, deletion, or amendment of recipe suggestions for 
the product;
    j. Any change in punctuation;
    k. Newly assigned or revised establishment numbers for a particular 
establishment for which use of the label has been approved by FSIS;
    l. The addition or deletion of open dating information;
    m. A change in the type of packaging material on which the label is 
printed;
    n. Brand name changes, provided that there are no design changes, 
the brand name does not use a term that connotes quality or other 
product characteristics, the brand name has no geographic significance, 
and the brand name does not affect the name of the product;
    o. The deletion of the word ``new'' on new product labels;
    p. The addition, deletion, or amendment of special handling 
statements, such as ``Keep Refrigerated'' or ``Keep Frozen,'' provided 
that the change is consistent with 9 CFR 317.2(k) or 381.125(a);
    q. The addition of safe handling instructions as required by 9 CFR 
317.2(l) and 381.125(b);
    r. Changes reflecting a change in the quantity of an ingredient 
shown in the formula without a change in the order of predominance 
shown on the label, provided that the change in quantity of ingredients 
complies with any minimum or maximum limits for the use of such 
ingredients prescribed in 9 CFR parts 318, 319, 424, subpart C, and 
381, subpart P;
    s. Changes in the color of the label, provided that sufficient 
contrast and legibility remain;
    t. The addition, deletion, or substitution of the official USDA 
grade shield on labels of poultry products;
    u. A change in the product vignette, provided the change does not 
affect mandatory label information or misrepresent the content of the 
package;
    v. A change in an establishment number by a corporation or parent 
company for an establishment under its ownership;
    w. Changes in nutrition labeling that only involve quantitative 
adjustments to the nutrition labeling information, except for serving 
sizes, provided the nutrition labeling information maintains its 
accuracy and consistency;
    x. Deletion of any claim, and the deletion of non-mandatory 
features or non-mandatory information;
    y. The addition or deletion of a direct translation of the English 
language into a foreign language for products marked ``for export 
only''; and
    z. A country of origin statement on any product label described in 
9 CFR 317.8(b)(40) and 381.129(f) that complies with the requirements 
in these paragraphs.
    With the implementation of the 1995 final rule on July 1, 1996, 
FSIS transferred the responsibility for maintaining labeling records 
from IICs to official establishments in the United States and to 
foreign establishments certified by officials of a foreign inspection 
system. Each record must include a copy of the labeling, the product 
formulation, and processing procedures (9 CFR 320.1(b)(11)). This 
transfer of responsibility was done to be consistent with the record 
keeping requirements of other production related areas, e.g., 
Sanitation (9 CFR 416.16) and Hazard Analysis and Critical Control 
Point (HACCP) Systems (9 CFR 417.5). For example, establishments are 
required to maintain copies of their HACCP plan, hazard analysis, 
records documenting the monitoring of critical control points, and 
sanitation operating procedures. These records must be made available 
to FSIS personnel upon request. Establishments are required to maintain 
records for product formulation and labeling similar to HACCP and 
Sanitation Standard Operating Procedure (SOP) records because 
establishments are responsible for ensuring the accuracy of all final 
labels applied to product.
    To facilitate Agency verification of compliance with regulatory 
labeling requirements, FSIS requires that establishments make labeling 
records available to any authorized USDA official upon request (9 CFR 
320.4). The Agency published FSIS Directive 7221.1, Amendment 1, titled 
``Prior Labeling Approval,'' on August 19, 1996, to provide 
instructions to Federal inspectors on their responsibilities in 
verifying that the modifications to the FSIS food labeling prior 
approval program regulations were implemented effectively and without 
disruption of the inspection process.
    As part of the 1995 final rule, FSIS stated that it intended to 
proceed with the gradual streamlining and modernization of the prior 
label approval system. FSIS anticipated making additional changes after 
it completed an assessment of the modified system.
    FSIS announced that it would sample labels applied by 
establishments under the generic label approval regulations to assess 
compliance with the FMIA and the PPIA (9 CFR 317.5(a)(2) and 
381.133(a)(2)). To effect this sampling, the Agency issued FSIS 
Directive 7221.1, Amendment 1, which instituted a nationally directed 
surveillance plan. Following implementation of the surveillance plan, 
FSIS assessed whether establishments were applying the generic label 
regulations correctly. The Agency brought label discrepancies to the 
attention of establishments for correction when it found them.
    The Agency has used its surveillance to assess compliance trends 
and to determine whether any new labeling regulations or guidance 
materials are needed. FSIS assembled a taskforce of employees to: (1) 
Develop criteria and methods to select labels for sampling; (2) develop 
the appropriate compliance activity to respond to labeling errors; (3) 
develop tracking and reporting systems; and (4) design and implement a 
survey of the effects of the limited generic approvals.
    The results of a survey \2\ showed that 685 of the 1,107 
establishments

[[Page 75813]]

operating at the time of the survey (193 establishments that were 
selected to be surveyed were no longer operating) used generically 
approved labels. Of the 1,513 labels that inspection program personnel 
submitted to FSIS headquarters, 538 were in compliance with all Federal 
regulations and policies, 896 had minor labeling errors (for example, 
insufficient spacing around the declaration of net weight or an error 
in the name of the manufacturer, packer, or distributor) that were not 
of public health or economic significance, and 79 had labeling errors 
that could not be granted a temporary approval without modification 
(e.g., an incomplete product name). Sections 317.4(f) and 381.132(f) of 
Title 9 of the CFR provide for the temporary use of final labels that 
may be deficient under the following conditions: (1) The product label 
does not misrepresent the product; (2) the use of the label does not 
present any potential health, safety, or dietary problems to the 
consumer; (3) denial of use would create an undue economic hardship; 
and (4) an unfair competitive advantage would not result from the 
granting of the temporary approval.
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    \2\ Generic Label Audit System Project (1997-1998).
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Survey Conclusions

    Although 79 of the 1,513 labels that were surveyed had deficiencies 
that could not be granted temporary approval without modification 
(e.g., through the use of pressure sensitive stickers to correct label 
features not in compliance with Federal regulations), FSIS concluded 
that the survey showed that the great majority of establishments 
surveyed could effectively use generically approved labels without 
first submitting sketch labels to FSIS for evaluation and approval. 
Furthermore, the Agency concluded that the results showed enough 
acceptable compliance by establishments for FSIS to confirm that the 
gradual implementation of generic label provisions under the 1995 final 
rule was effective.

Trends Toward Increased Guidance and Transparency of Labeling Policies 
for Industry

    In the years since the survey was conducted and the last major 
change to the generic label regulations was made, the Agency has 
emphasized the importance of providing guidance and outreach to 
industry, trade groups, and consumers. FSIS has posted most of its 
labeling policy information on the Agency's Web site to increase 
accessibility to industry, particularly small businesses. The Labeling 
and Consumer Protection Reference Center was launched as a Web page in 
February 1999. The Web page includes a PowerPoint presentation titled 
``Labeling 101,'' which is used by the Agency as a teaching tool at 
workshops on meat and poultry label requirements. In addition, FSIS has 
on its Web page guidance on animal production claims and on nutrition 
labeling, a glossary of meat and poultry labeling terms, the Food 
Standards and Labeling Policy Book, and questions and answers on 
various topics, such as irradiation and the labeling of ingredients. 
The Web page also includes FSIS Form 7234-1, Application for Approval 
of Labels, Marking and Device, and detailed instructions to assist 
establishments in preparing label applications for submission to FSIS. 
In addition, the Agency's labeling policy Web page contains a guidebook 
that provides information on FSIS labeling requirements, including 
generic approval. Due to these efforts, and because no other evidence 
has been submitted to FSIS to suggest that generically approved 
labeling cannot be successfully applied, FSIS has concluded that 
expanding the types of labeling that is generically approved is 
appropriate at this time.

Proposed Rule

    The provisions of the generic label regulations appear to be 
comprehensive. However, in practical application, they are restrictive 
regarding the types of labels and labeling changes that are considered 
by the Agency to be approved without submitting such labeling to the 
Agency. For example, the label for a non-standardized product, such as 
a pepperoni pizza (bearing no special statements or claims) that was 
sketch approved by FSIS would need to be resubmitted for sketch 
approval if the establishment makes a minor formula change that affects 
the order of predominance in the ingredients statement. This need to 
resubmit exists because the generic label regulations only provide for 
changes to the product formula for non-standardized meat or poultry 
products that have been sketch approved if the order of predominance in 
the ingredients statement does not change. Consequently, the current 
label regulations require industry to submit for approval a significant 
amount of labeling that the Agency believes could successfully be 
generically approved. Expanding the types of labels that can be 
generically approved would lessen the burden on industry to submit 
labels to the Agency, while allowing the Agency to better focus on, and 
direct its resources to, other consumer protection and food safety 
activities.
    FSIS is proposing to amend the meat and poultry products inspection 
regulations (9 CFR 317.5 and 381.133) to expand the circumstances in 
which the labels of meat and poultry products will be deemed to be 
generically approved by FSIS. If adopted, the new generic label 
regulations for meat and poultry will be placed in a new part 412 in 
Title 9. The Agency is proposing to combine the regulations that 
provide for the approval of labels for meat products and for poultry 
products (9 CFR 317.4 and 381.132) into part 412. This proposal, if 
adopted, will modernize the regulations by expanding the types of 
labels that FSIS considers generically approved without prior 
submission to the Agency. This rulemaking will also streamline the 
regulations by placing all the label approval regulations for meat and 
poultry products in one part in Title 9.
    Under the proposed rule, establishments that apply generically 
approved labels without prior submission to the Agency will have the 
responsibility of ensuring that all basic required label features 
(i.e., product name, safe handling statement, ingredients statement, 
address line, net weight, legend, safe handling instructions, nutrition 
labeling for multi-ingredient products, as well as the country of 
origin and mark of inspection of the foreign system for imported 
products) appear on their meat or poultry product labels in accordance 
with Federal regulations.
    If this proposal is adopted, FSIS will require establishments to 
submit for evaluation only certain types of labeling, e.g., labels for 
temporary approval, labels for products produced under religious 
exemption, labels for export with labeling deviations, and claims and 
special statements intended for use on labels. FSIS will continue to 
require the submission of such labels and special statements and claims 
because they are more likely to present significant policy issues that 
have health or economic significance. Examples of labeling that will 
need to be submitted for evaluation and approval before use if this 
proposal is adopted are: (1) Labels for chicken produced under Buddhist 
exemption; (2) labels for beef intestine produced for export to China 
that identify the product as ``beef casings,'' and (3) labels for 
temporary use that do not list all ingredients in the correct order of 
predominance.
    Examples of special statements and claims for use on labels are: 
(1) Claims relating a product's nutrient content to a health or a 
disease condition; (2) statements that identify a product as 
``organic'' or containing organic

[[Page 75814]]

ingredients; (3) claims regarding meat and poultry production 
practices; (4) claims that are undefined in FSIS regulations, such as 
``gluten free;'' and (5) instructional or disclaimer statements 
concerning pathogens, e.g., ``for cooking only'' or ``not tested for E. 
coli O157:H7;'' and (6) statements that identify a product as 
``natural.'' A special statement or claim may be submitted to the 
Agency for approval in the context of a final label; however, FSIS will 
not evaluate the mandatory features (e.g., handling statement and net 
weight) that are generically approved by the Agency. FSIS will only 
evaluate the special statement or claim that is presented on the label.
    Under the proposal, statements on labels that are defined in FSIS's 
regulations or policy guidance, e.g., a statement that characterizes a 
product's nutrient content, such as ``low fat;'' that has geographical 
significance, such as ``Italian Style;'' or that makes a country of 
origin statement on the label of any meat or poultry product ``covered 
commodity,'' will not need to be submitted to FSIS for evaluation. 
Similarly, if this proposal is adopted, FSIS will not view the addition 
of an allergen statement (e.g., ``contains soy'') applied in accordance 
with the Food Allergen Labeling and Consumer Protection Act as a 
special statement or claim that requires sketch approval. The 
application of statements of this type are clearly prescribed in an 
FSIS compliance policy guide (http://www.fsis.usda.gov/Regulations_&_Policies/Labeling_Allergens/index.asp).
    Through its prior label approval system, FSIS is aware that most 
establishments are voluntarily applying allergen statements to meat and 
poultry product labels in accordance with the Agency's compliance 
policy guide on the use of statements of this type.\3\ FSIS plans to 
continue to monitor the application of allergen statements, but as long 
as the Agency continues to observe the widespread application of 
allergen statements on a voluntary basis, FSIS will not initiate 
rulemaking to make allergen statements a required label feature. FSIS 
intends to continue to use its post-market surveillance activities to 
ensure that labels containing statements of this type are not false or 
misleading and comply with all applicable Federal regulations.
---------------------------------------------------------------------------

    \3\ Source: FSIS Labeling and Program Delivery Division, Label 
Audit, 2010.
---------------------------------------------------------------------------

    The proposed rule will affect several other sections in the meat 
and poultry inspection regulations that reference label approval or 
generically approved labels. 9 CFR 317.8(b)(32)(ii) requires the 
submission of labels bearing calendar dates, e.g., ``sell by date.'' 
FSIS is proposing to amend this section by removing the reference to 9 
CFR 317.4 for submitting labels for approval because FSIS no longer 
believes that labels with these types of phrases need to be submitted 
before use. The use of phrases relating to calendar dates is prescribed 
in FSIS regulations, and industry has been applying these types of 
labeling statements for years.
    FSIS is proposing to revise the recordkeeping requirements for 
product labels, formulation, and processing procedures that are 
described in 9 CFR 320.1(b)(11) by removing the references to 9 CFR 
317.4 and 317.5 and replacing them with a reference to the new label 
approval regulations for meat and poultry found in 9 CFR part 412.
    9 CFR 327.14(c) in FSIS's regulations on meat imports references 
label approval by FSIS in accordance with 9 CFR part 317. FSIS is 
proposing to revise 9 CFR 327.14(c) to reference the new label approval 
regulations in 9 CFR part 412.
    FSIS is proposing to remove the reference to 9 CFR 317.4 in 9 CFR 
331.3(e) and to replace it with a reference to 9 CFR part 412. The 
Agency is also proposing replace the outdated references to the 
``Labels and Packaging Staff, Meat and Poultry Inspection'' in these 
regulations with ``FSIS labeling program at headquarters.''
    In regard to the poultry label regulations and the use of the term 
``fresh,'' FSIS is proposing to amend 9 CFR 381.129(b)(6)(i) to remove 
the reference to the current generic label regulations. Because the 
requirements for the use of the term ``fresh'' are prescribed in FSIS's 
regulations, and the term has been used by industry for a number of 
years, FSIS does not consider it any longer to be a special statement 
or claim. Therefore, under the proposed rule, establishments will be 
able to use the term on labels without submitting the labels for 
evaluation, provided the use of this term is consistent with the 
provisions of 9 CFR 381.129(b)(6)(i).
    Similar to the meat inspection regulations, 9 CFR 381.129(c)(2) 
requires the approval of phrases with regard to calendar dates on 
poultry products. FSIS is proposing to amend this regulation by 
removing the reference to 9 CFR 381.132 for label approval because FSIS 
considers it no longer necessary to require pre-market approval of the 
labels on which these types of phrases appear. The use of phrases 
relating to calendar dates is prescribed in FSIS poultry regulations, 
and FSIS published several years ago a comprehensive set of guidance 
material on poultry dating (http://www.fsis.usda.gov/PDF/Labeling_Guide_on_Poultry_Food_Dating.pdf). Thus, ample guidance exists for 
manufacturers to ensure that the labels on which such information is 
placed are truthful and not misleading without the need to submit such 
labels to FSIS first for pre-market evaluation.
    FSIS is proposing to eliminate the requirement that any label 
bearing the USDA approved quality control system logo, and any wording 
or explanation with respect to the logo, be approved. The logo is 
illustrated clearly in the regulations, and its use is prescribed as 
well. As such, FSIS does not believe that labels bearing the logo need 
to be submitted for approval. If this proposal is adopted, 9 CFR 
318.4(f) and 381.145(f) will be amended to remove the references to 
``parts 316 and 317 of this chapter'' and ``subparts M and N,'' 
respectively.
    FSIS is proposing to revise the recordkeeping requirements for 
product labels, formulation, and processing procedures described in 9 
CFR 381.175(b)(6) to remove the references to 9 CFR 381.132 and 
381.133. These references will be replaced with a reference to the new 
label approval regulations found in 9 CFR part 412.
    For the same reason, FSIS is proposing to replace the references to 
9 CFR 381.132 and 381.133, which discuss the approval of marks and 
other labeling for use on immediate containers of imported products, in 
9 CFR 381.205(c) with a reference to 9 CFR part 412.
    The Agency is also proposing to amend 9 CFR 381.222(d)(1) to remove 
the reference to 9 CFR 381.132 for label approval and to replace it 
with a reference to 9 CFR part 412. As with 9 CFR 331.3(e) and 
331.3(e)(1), the Agency is proposing to replace the outdated references 
to the ``Labels and Packaging Staff, Meat and Poultry Inspection'' in 9 
CFR 381.222(d)(2) and (3) with one to the ``FSIS labeling program at 
headquarters.''
    In regard to other FSIS regulations, FSIS is proposing to amend 
footnote 3 in the table of approved substances (9 CFR 424.21(c)) to 
replace the old references for label approval to 9 CFR 317.4 and 381.32 
(which should have actually been 9 CFR 381.132) with a reference to 9 
CFR part 412.
    Finally, FSIS is proposing to amend 9 CFR 424.22(c)(4), which 
discusses the need for the approval of labels of irradiated meat and 
poultry products, by removing the references for label approval in 9 
CFR 317.4 and subparts M and N in part 381. Because the requirements 
for the labels of irradiated

[[Page 75815]]

products are prescribed in FSIS's regulations, and the term has been 
used by industry for a number of years, FSIS no longer considers it to 
be a special statement or claim that requires submitting such labels 
for approval.

Options Considered for This Proposal

    FSIS considered several options in developing this proposed rule. 
The first option FSIS considered was to maintain the current prior 
label approval system. Under this option, FSIS would not modernize its 
regulations by increasing the types of labels that the Agency considers 
generically approved and would not streamline its regulations by 
combining the label approval regulations for meat and poultry into one 
location in Title 9. Under this option, establishments and certified 
foreign establishments would not have to change any procedures and 
could continue to apply certain types of generically approved labels as 
provided for in the regulations. Therefore, FSIS would not need to 
allocate its resources to conduct rulemaking.
    However, there are several major disadvantages to this option. 
First, the option would not be consistent with the Agency's commitment 
to enable manufacturers to make decisions and assume more 
responsibility concerning whether products that they produce are 
compliant with FSIS labeling regulations. Our current generic label 
rule was intended to reduce the number of labels and other labeling 
that are submitted for evaluation by FSIS and to lessen the paperwork 
burden on official establishments. The goal was to improve efficiency 
by streamlining the label evaluation and approval process. Streamlining 
and modernizing the prior label approval process is important to the 
Agency so that it can better focus on and direct its resources to other 
consumer protection and food safety activities.
    Second, the regulations for the mandatory label features have been 
in place for decades, and FSIS believes that, as a result of its 
verification activities, establishments and certified foreign 
establishments can effectively apply labels with the mandatory label 
features without submitting them for approval to the Agency. 
Consequently, under this option, industry would continue to need to 
submit a significant number of labels for evaluation and approval 
because parts of the generic label regulations are unnecessarily 
restrictive. Specifically, the regulations require establishments to 
submit labels for evaluation that do not present policy issues from the 
standpoint of food safety, health, economic adulteration, or 
misbranding.
    The second option that FSIS considered was: (1) Amending its 
regulations so that all labels, including labels for temporary approval 
and labels bearing claims, would be considered generically approved by 
the Agency; and (2) streamlining its regulations by combining the label 
approval regulations for meat and poultry in one location in Title 9. 
The primary advantages of this option are that it would streamline the 
Agency's label approval regulations and eliminate the burden on 
industry to submit labels to the Agency for approval. However, a major 
disadvantage of this option is that it would likely result in 
misbranded products in the marketplace. While the results of the 
generic labeling survey showed success in establishments applying 
certain types of labels (e.g., the mandatory features that have been 
required by the meat and poultry inspection regulations for decades), 
the results of the survey cannot be used to support the generic 
approval of all labels because certain types of labels, e.g., labels 
with special statements and claims, present significant policy issues 
and are not defined in FSIS regulations. Consequently, establishments 
may not be familiar with the Agency's requirements for the support or 
application of certain special statements or claims, which could result 
in increased labeling errors and misbranded product.
    Industry is familiar with the requirements for mandatory label 
features, but the Agency believes that it needs to continue to provide 
pre-market evaluation and approval of certain types of labels (e.g., 
temporary approvals and labels for product produced under a religious 
exemption). Further, FSIS needs to continue to provide pre-market 
evaluation and approval of special label statements and claims (e.g., 
animal production raising claims and ``natural'') that present 
significant and evolving policy issues. The pre-market evaluation and 
approval of certain types of labels, and special statements and claims 
intended for use on labels, are needed for the Agency to verify that 
all labels are accurate, truthful, and not misleading before products 
enter commerce.
    The third option FSIS considered was to: (1) Expand the types of 
labels that would be subject to generic approval; and (2) streamline 
its regulations by combining the label approval regulations for meat 
and poultry in one location in Title 9 of the CFR. Under this option, 
FSIS would expand the types of labels that the Agency considers 
generically approved (i.e., any labels that bear mandatory features 
without special statements or claims). The Agency would continue to 
require the submission of certain types of label, e.g., labels for 
temporary approval, labels for export products with label deviations, 
and products produced under religious exemptions.
    Under this option, Federal establishments and certified foreign 
establishments would be responsible for ensuring that the basic 
required features on labels are applied in accordance with all 
applicable regulations. Temporary approvals, labels for export products 
that deviate from domestic labeling requirements, and labels for 
products produced under religious exemption, however, would represent 
exceptions that FSIS would need to evaluate on a case by case basis. 
Therefore, these limited types of labels would have to be submitted to 
FSIS for evaluation and approval before use. In addition, manufacturers 
would be required to submit special statements and claims intended to 
be used on labels to the Agency for approval under this option.
    A major advantage of the third option is that establishments would 
be responsible for developing labels that include the basic mandatory 
features (i.e., product name, safe handling statement, ingredients 
statement, signature line, net weight, legend, safe handling 
instructions, and nutrition labeling) in accordance with Federal 
regulations. This option would thus allow Agency personnel to focus 
their efforts on evaluating claims or special statements that have 
consumer safety or economic implications and on labels that cannot be 
generically approved, e.g., requests for temporary approval to use 
labeling that is deficient in some manner. It would substantially 
reduce the types of labels that would need to be submitted to the 
Agency, thus reducing, although not entirely eliminating, the burden 
for industry to submit labels to FSIS for approval.
    FSIS would continue to perform verification and post-market 
surveillance activities in commerce to ensure that meat and poultry 
product labels comply with all applicable regulations. Specifically, 
FSIS would select samples of generically approved labels from the 
records maintained by official establishments and establishments 
certified under foreign inspection systems, in accordance with part 327 
and part 381, subpart T, to determine compliance with label 
requirements. If the Agency found that an establishment is using a 
false or misleading label, it would institute the proceedings 
prescribed in 9 CFR 500.8

[[Page 75816]]

to revoke the approval for the label. FSIS's surveillance activities 
would ensure that the consumer is protected under this option.
    Therefore, FSIS concludes that the third option is the most 
feasible for rulemaking. It is an approach that will effectively 
enhance implementation of a generic label system that imposes less 
burden on industry. It promotes effective use of Agency resources. The 
option will not adversely affect consumer protection because FSIS will 
continue to evaluate labeling, e.g., special statements and claims and 
requests for temporary approval, that have consumer safety or economic 
implications. Moreover, FSIS will continue its verification and 
compliance activities to ensure that establishments are labeling their 
products in conformance with Agency regulations. Finally, it will 
streamline FSIS regulations by putting the meat and poultry prior label 
approval regulations in one part in Title 9.
    We invite public comment on these options as well as on other 
options not discussed above.

Executive Orders 12866 and 13563

    Executive Orders (EOs) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if a 
regulation is necessary, to select the regulatory approach that 
maximizes net benefits (including potential economic, environmental, 
public health and safety, and other advantages, distributive impacts, 
and equity). Executive Order 13563 emphasizes the importance of 
quantifying both costs and benefits, of reducing costs, of harmonizing 
rules, and of promoting flexibility. This action has been reviewed for 
compliance with EOs 12866 and 13563.
    This rule has been designated a ``significant regulatory action,'' 
although not economically significant, under section 3(f) of EO 12866. 
Accordingly, the rule has been reviewed by the Office of Management and 
Budget.
    The Agency has determined that this proposed rule maximizes net 
benefits to consumers and establishments by expanding the types of 
labels that are approved generically under the FMIA and the PPIA.

I. Need for the Rule

    The purpose of the proposed rule is to expand the circumstances in 
which the labels of meat and poultry products will be deemed to be 
generically approved by FSIS and to combine the regulations that 
provide for the generic approval of labels for meat products into a new 
part 412 in Title 9, Chapter III, of the CFR. The proposed rule is the 
next step in the Agency's gradual streamlining and modernizing of the 
prior label approval system.
    This rulemaking's intent is to reduce the number of labels 
evaluated by FSIS that only bear basic features (e.g., product name, 
ingredients statement, net weight) and to reduce the amount of 
paperwork filed by establishments with FSIS. If finalized, these 
actions will improve the efficiency of the label approval system by 
streamlining the evaluation process for specific types of labels and 
making the label approval system more convenient and cost-effective for 
industry. As for consumers, this new process will enhance market 
efficiency by promoting a faster introduction of new products into the 
marketplace to meet demand while not negatively affecting consumer 
protection from misbranded product.

II. Historical Record of FSIS's Prior Label Approval System

    In 1983, when FSIS established limited types of generically 
approved labels, the Agency evaluated 130,000 labels. In 1991, the 
number of labels evaluated peaked at 167,500 labels. The 1995 final 
rule that amended the prior label approval system expanded the types of 
labels and label changes that may be applied in accordance with the 
generic label regulations. As a result, the number of labels evaluated 
by FSIS decreased by 74 percent to 43,255 in 2003, as depicted in 
Figure 1. From 2003 to 2010, the number of labels evaluated per year 
averaged 57,457, with a minimum of 43,255 (2003) and a maximum of 
66,061 (2010).
[GRAPHIC] [TIFF OMITTED] TP05DE11.000

    Source: FSIS, Labeling and Program Delivery Division (LPDD), 
Labeling Information System (LIS) Database

    Under the current prior label approval system, FSIS evaluates and 
approves meat and poultry labels for temporary or sketch approval. 
Labels are not approved when they do not comply with Federal 
regulations, or when they have claims and special statements that are 
not substantiated or supported with sufficient documentation. As 
depicted in Figure 2, sketch labels make up over 50 percent of the 
volume of labels evaluated and approved by FSIS, while

[[Page 75817]]

the approval of temporary labels makes up only about 9 percent of the 
total volume.
[GRAPHIC] [TIFF OMITTED] TP05DE11.001

    Source: FSIS, LPDD, LIS Database

    During 2003-2010, FSIS reviewed and evaluated a total of 459,656 
labels. As depicted in Figure 3, the number of labels reviewed and 
evaluated by FSIS LPDD increased 53 percent, from 43,255 labels in 2003 
to 66,061 labels in 2010. Each year the number of labels increased, 
except between 2004 and 2005, when labels decreased 4 percent, from 
56,344 labels to 54,100 labels, but then increased 4 percent to 56,102 
labels in 2006.
[GRAPHIC] [TIFF OMITTED] TP05DE11.002

    Source: FSIS, LPDD, LIS Database

    When looking at the data of the Agency approval of Temporary Labels 
(See Table 1), we find that the approval level was at 13 percent in 
2003 (5,831 labels approved), which then declined to 6 percent in 2010 
(4,101 labels approved). The approval level was at its lowest in 2010 
(6.2%), when the Agency approved 4,101 labels out of 66,061 labels. 
Since 2003, the Agency has approved 45 percent more sketch labels and 
30 percent fewer temporary labels.

[[Page 75818]]



                                                Table 1--Label Evaluation and Approval Process, 2003-2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
                  Agency action                       2003         2004         2005         2006         2007         2008         2009         2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
Temporary Approval..............................        5,831        6,124        5,036        4,763        4,404        4,369        4,575        4,101
                                                        (13%)        (11%)         (9%)         (8%)       (7.5%)       (8.8%)       (7.2%)       (6.2%)
Sketch Approval.................................       25,870       36,967       32,795       32,956       32,588       21,693       35,588       37,465
Unapproved......................................       11,554       13,252       16,269       18,383       21,250       23,456       23,284       24,495
                                                 -------------------------------------------------------------------------------------------------------
    Total.......................................       43,255       56,343       54,100       56,102       58,242       49,518       63,447       66,061
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Examining the data closer, the number of sketch labels approved 
increased 64 percent, from 21,693 labels in 2008 to 35,588 labels in 
2009, while the number not approved remains the same and the number of 
temporary slightly increased. The number of labels not approved has 
climbed steadily from 2003, when it was at its lowest at 11,554 labels 
unapproved, to its high of 24,495 labels not approved in 2010. Between 
2005 and 2007, as the number of sketch label approvals leveled off in 
the 32,000 range, the number of labels not approved increased 30 
percent, from 16,269 labels to 21,250. FSIS attributes this increase in 
labels not approved to the increase in special claims, statements that 
were not substantiated, and sketch labels that Agency personnel could 
not approve as modified because the labels contained several errors or 
major discrepancies. During this timeframe, FSIS placed much of its 
labeling guidance on its Web site and conducted many labeling 
workshops.

III. Industry Profile

A. Establishments

    Based on the Agency's Performance Based Inspection System 
databases, in 2011, there were about 6,099 Federal establishments. FSIS 
estimates that there were approximately 266,061 approved meat and 
poultry product labels used by these establishments. FSIS evaluated 
66,061 of them in 2010; the remaining 200,000 were approved under the 
Prior Label Approval System because they met the standards for generic 
approval.

B. Label Consultant Firms

    There are about 12 firms that submit labels to LPDD on behalf of 
Federal establishments. These firms provide label courier service, 
information, and training to their clients on FSIS labeling policies. 
All of the firms in this industry are small, usually having one to four 
employees. Many of these firms now offer consulting services, such as 
ensuring that import and export labels to be reviewed for compliance 
with USDA regulations receive expedited service and providing label 
outsourcing, in which a firm handles all of an establishment's food 
labeling needs.

IV. Benefits

A. Industry

    If adopted, the proposed rule will continue the streamlining and 
modernization of the Agency's prior label approval system. The proposed 
rule will permit establishments to realize an estimated cost savings of 
a minimum of $8.7 million (discounted over a 10-year period) for 
generically approving about 584,486 additional labels over a 10-year 
period at about $25 per label submission.\4\ In the absence of the 
proposed rule, establishments will not realize any cost savings because 
Federal regulations will continue to require establishments to submit a 
significant number of labels to LPDD for evaluation.\5\ Establishments 
will also realize an increase in the number of generically approved 
labels over a 10-year period under the proposed rule.
---------------------------------------------------------------------------

    \4\ The cost per label is the cost of submitting a label for 
review to FSIS, which averages about $25.00 per submission. This 
amount will be used as a proxy to estimate the cost savings to 
establishments that prepare their labels for review using FSIS Form 
7234-1 ``Application for approval of Labels, Markings, or Device'' 
and preparing a printer's proof of the label for evaluation and 
approval by LPDD.
    \5\ See Table 2.

                                             Table 2--Estimated Establishment Cost Savings (in 2010 Dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                           (A)                                  (B)             (C)             (D)             (E)             (F)             (G)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Increase in
                                                           Total number      number of     Total number     Total cost
                                                             of labels        labels         of labels        savings
                                                           developed and   developed and   developed and  Col.(C) x *$25     To apply       Discounted
                          Year                              applied by      applied by      applied by     from reduced    discount rate    total cost
                                                          establishments  establishments  establishments   need for FSIS     of 7.00%      savings col.
                                                            that do not   that would not  that would not       label                      (E) x Col. (F)
                                                           require FSIS    require FSIS    require FSIS     evaluation
                                                            evaluation      evaluation      evaluation
                                                            Before rule                     After rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.......................................................         200,000               0         200,000              $0            1.00              $0
1.......................................................         250,985          50,985         301,970      $1,274,625            0.93      $1,185,401
2.......................................................         253,495          52,515         306,009      $1,312,864            0.86      $1,129,063
3.......................................................         256,030          54,090         310,120      $1,352,250            0.79      $1,068,277
4.......................................................         258,590          55,713         314,303      $1,392,817            0.72      $1,002,828
5.......................................................         261,176          57,384         318,560      $1,434,602            0.65        $932,491
6.......................................................         263,788          59,106         322,893      $1,477,640            0.58        $857,031
7.......................................................         266,426          60,879         327,304      $1,521,969            0.51        $776,204
8.......................................................         269,090          62,705         331,795      $1,567,628            0.44        $689,756
9.......................................................         271,781          64,586         336,367      $1,614,657            0.37        $597,423
10......................................................         274,499          66,524         341,022      $1,663,097            0.30        $498,929
                                                         -----------------------------------------------------------------------------------------------

[[Page 75819]]

 
    Total...............................................       2,825,858         584,486       3,410,344     $14,612,147  ..............      $8,737,404
--------------------------------------------------------------------------------------------------------------------------------------------------------
Description:
Col A: Estimate is for a 10-year period. Year ``0'' is the year before the enactment of the rule.
Col B: Total number of labels developed and applied by official establishments that do not currently require FSIS evaluation.
Col C: Increase in the number of labels generically developed and applied by establishments as a result of the rule (i.e., would not need FSIS
  evaluation.
Col D: Total number of labels developed and applied by establishments after the rule was enacted.
Col E: Total cost savings realized to establishments, using an estimated $25 as the cost per label submission to LPDD.
Col F: Discount rate of 7 percent.
Col G: Discount cost savings over 10 years.
Source: FSIS Policy Analysis Division Calculations.

    Because fewer labels will need to be submitted to the Agency for 
evaluation, establishments will realize a cost savings because they 
will no longer need to incur costs to have certain types of labels 
evaluated by FSIS.

B. Agency

    The proposed rule should reduce the number of labels submitted to 
FSIS for evaluation and enable the Agency to reallocate the staff hours 
saved from evaluating fewer labels towards the development of labeling 
policy, the evaluation of new and novel labeling policy issues, and 
involvement in other food safety and consumer protection activities. 
The proposed rule would streamline the approval process by amending the 
regulations to provide that, except in certain specified circumstances, 
the label of a meat or poultry product is deemed to be approved 
generically.
    Table 3 shows the chronological progression of streamlining and 
modernizing the prior label approval system through various 
rulemakings.

   Table 3--Comparison of FSIS Prior Label Approval System Rulemakings
------------------------------------------------------------------------
            1983                      1995                  2011
------------------------------------------------------------------------
                              Prior label approval  Proposed prior label
 Prior label approval system         system            approval system
------------------------------------------------------------------------
Establishments granted        Expanded the types    Proposed to expand
 limited labeling approval     of labels and         all types of labels
 to the IIC.                   modifications to      and of
                               labels that the       modifications to
                               Agency deemed         labels that the
                               generically           Agency deems
                               approved.             generically
                                                     approved except in
                                                     certain specified
                                                     circumstances.
Label records maintained by   Label records         Label records
 IIC.                          maintained by the     maintained by the
                               establishments.       establishments.
Agency conducts all           Agency conducts all   Agency conducts all
 evaluation and approval of    evaluations and       evaluations and
 temporary, sketch, and        approvals of          approvals of
 final labels.                 temporary and         special statements
                               sketch labels only..  and claims, labels
                                                     for temporary
                                                     approval, labels
                                                     for products
                                                     produced under a
                                                     religious
                                                     exemption, and
                                                     labels for products
                                                     for export with
                                                     labeling
                                                     deviations.
------------------------------------------------------------------------
Source: FSIS, LPDD


                                                 Table 4--Estimated FSIS Cost Savings (in 2010 Dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                   (A)                          (B)             (C)             (D)             (E)             (F)             (G)             (H)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Total number    Total number
                                             of labels       of labels     Annual salary   Annual salary   Annual salary     To apply       Discounted
                  Year                     evaluated and   evaluated and    cost ($) of     cost ($) of   difference (D)-  discount rate   cost savings
                                            approved by     approved by      LPDD \1\        LPDD \2\           (E)          of 7.00%        (F) * (G)
                                               LPDD            LPDD
                                            Before rule     After rule      Before rule     After rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.......................................          66,061          66,061         538,710         538,710               0            1.00               0
1.......................................          68,043          17,011         554,871         134,677         420,194            0.93         390,781
2.......................................          70,084          17,521         571,517         138,717         432,800            0.86         372,208
3.......................................          72,187          18,047         588,663         142,879         445,784            0.79         352,169
4.......................................          74,352          18,588         606,323         147,165         459,158            0.72         330,594
5.......................................          76,583          19,146         624,513         151,580         472,932            0.65         307,406

[[Page 75820]]

 
6.......................................          78,880          19,720         643,248         156,128         487,120            0.58         282,530
7.......................................          81,247          20,312         662,545         160,811         501,734            0.51         255,884
8.......................................          83,684          20,921         682,422         165,636         516,786            0.44         227,386
9.......................................          86,195          21,549         702,894         170,605         532,290            0.37         196,947
10......................................          88,780          22,195         723,981         175,723         548,258            0.30         164,477
                                         ---------------------------------------------------------------------------------------------------------------
    Total...............................         846,096         261,070       6,899,688       2,082,631       4,817,057  ..............       2,880,382
--------------------------------------------------------------------------------------------------------------------------------------------------------
Description:
Col A: Estimate is for a 10 year period. Year ``0'' is the year before the enactment of the rule.
Col B: Total number of labels evaluated and approved by LPDD prior to rule enactment assuming a 3 percent growth factor.
Col C: Total number of labels evaluated and approved by LPDD after rule enactment, assuming a 3 percent growth factor.
Col D: Annual salary cost of LPDD staff who evaluate labels, prior to enactment of rule, assuming a 3 percent growth factor.
Col E: Annual salary cost of LPDD personnel who evaluates labels, after rule enactment, assuming a 3 percent growth factor.
Col F: Annual salary difference between salary before rule enactment and after rule enactment, assuming a 3 percent growth factor.
Col G: Discount rate of 7 percent.
Col H: Discount cost savings.
Footnotes:
\1\ Total salary is based on a staff of 11 personnel paid at the average rate of a GS-13, step 4 of $47.09 per hour: 11 staff persons would review
  labels at a cost of $538,710 per year ($47.09 an hour x 4 hours a day x 11 persons x 5 days a week = $10,359.80. $10,359.80 x 52 weeks = $538,710).
\2\ Total salary is based on a staff of 11 personnel paid at the average rate of a GS-13, step 4 at $47.09 per hour: 11 staff persons would review
  labels at a cost of $134,677.40 per year ($47.09 an hour x 1 hour a day x 11 persons x 5 days a week = $2,589.95 x 52 weeks = $134,677.40.
Source: FSIS Policy Analysis Division calculations.

    If this proposed rule becomes final, in the year before the 
effective date of the rule FSIS will continue to review 66,061 labels 
because of the lag time between the publication of the rule and 
industry compliance with it. In years 1-10, FSIS will experience a 69 
percent reduction in the volume of labels submitted for evaluation.
    Currently, FSIS employs eleven labeling policy experts to evaluate 
labels.\6\ FSIS staff members are organized into teams based on special 
claims or issues, such as amenability, organic, or country of 
origin,\7\ and evaluate labeling four hours per day, five days a week, 
at a cost of $10,360 per week. FSIS assumes that it will evaluate 
labels and labeling for one hour per day, five days a week, as a result 
of the reduction in the volume of labels or labeling submitted to FSIS. 
Thus, the proposed rule would permit the Agency to realize an estimated 
discounted cost savings of $2.9 million over 10 years \8\ from 
evaluating labels because FSIS is expected to review a total of 261,070 
labels under the proposed rule as compared with 846,096 under the 
current system.\9\ This cost savings from fewer staff hours being 
allocated towards label evaluation can be redirected towards other food 
safety and consumer protection activities.
---------------------------------------------------------------------------

    \6\ The average General schedule (GS) level grade of the staff 
is a GS-13, step 4.
    \7\ Each team will have a member who is knowledgeable about 
certain special claims.
    \8\ See Table 4.
    \9\ Ibid.
---------------------------------------------------------------------------

V. Costs

    The proposed rule would not impose any new costs on meat and 
poultry establishments that submit labels for review to FSIS and it 
minimizes the regulatory burden on establishments that submit labels 
for review. The proposed rule does not change the requirement that 
establishments maintain copies of all labeling records, along with the 
product formulations and a description of the processing procedures 
used to formulate the products in accordance with 9 CFR 320.2 and part 
381, subpart Q. These labeling records must be made available to any 
authorized Agency official within 24 hours upon request.
    The proposed rule also does not impose any additional cost burden 
on establishments because first, establishments are already applying 
generically approved labels and maintaining all labeling records, and 
second, establishments are experienced in submitting labels to FSIS for 
evaluation. If this proposal is adopted, establishments will continue 
label production, once the labels are approved by FSIS. The cost of 
label design and products is not a part of this proposed rule.

VI. Summary

    If this proposed rule is adopted, it will be net beneficial because 
it will streamline the generic label approval process, while imposing 
no additional cost burden on establishments. FSIS estimates that 
establishments will realize a discounted cost savings of $8.7 million 
as a result of their ability to generically approve an additional 
584,486 labels over a 10-year period. Furthermore, the Agency will 
realize a discounted cost savings of $2.9 million for evaluating 
584,486 fewer labels over a 10-year period. This cost savings in fewer 
staff hours being spent evaluating labels can be redirected towards 
other Agency initiatives. Therefore, the net benefit derived from the 
proposed rule is $11.6 million ($8.7 million in establishment savings 
plus $2.9 million in Agency savings), discounted at 7 percent, over a 
10-year period.

Preliminary Regulatory Flexibility Analysis

    The FSIS Administrator has determined that this proposed rule would 
not have a significant impact on a substantial number of small 
entities, as defined by the Regulatory Flexibility

[[Page 75821]]

Act (5 U.S.C. 601). The proposed changes will affect those entities in 
the United States that submit labels for review to FSIS. There are 
6,099 meat and poultry establishments that could possibly be affected 
by this proposed rule since all are eligible to submit labels for 
review and 12 small label consulting firms that are involved in various 
labeling activities, such as submitting labels to FSIS for evaluation 
on the behalf of meat and poultry establishments. Of the 6,099 
establishments, there are about 2,616 small federally inspected 
establishments (with more than 10 but less than 500 employees) and 
3,103 very small establishments (with fewer than 10 employees) based on 
HACCP Classification. Therefore, a total of 5,719 small and very small 
establishments could be possibly affected by this rule. These small and 
very small establishments, like the large establishments, would be 
permitted to generically approved labels as long as there are no 
special claims. Small entities would not be disadvantaged because the 
proposed rule would minimize the regulatory burden on all 
establishments. The proposed rule would not have a significant impact 
on a substantial number of label consulting firms. Since the expanded 
use of generically approved labels in 1995, these firms have modified 
their consulting services to specialize in certain policy areas, e.g., 
the production and labeling of organic products and animal production 
raising practices. Therefore, the Agency believes that the proposed 
rule will not have a significant economic impact on a substantial 
number of small entities (establishments and labeling consulting 
firms).
    In making its determination, the Agency considered two alternatives 
to the proposed rule: the status quo and making all labels candidates 
for generic labeling. Keeping the status quo would mean that the Agency 
would continue to commit limited resources to a process that 
establishments can assume, if the proper guidance was available. 
Therefore the Agency rejects this alternative. The second alternative, 
making all labels generically approved, would mean that some products 
may be misbranded because of misleading statement and claims on the 
labels. Therefore the Agency rejects this alternative as well.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule: (1) Preempts State and local laws and 
regulations that are inconsistent with this rule; (2) has no 
retroactive effect; and (3) does not require administrative proceedings 
before parties may file suit in court challenging this rule except as 
discussed below.

Paperwork Requirements

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501, et seq.), the information collection requirement associated with 
this proposed rule on prior labeling has been submitted for approval to 
OMB.
    Title: Marking, Labeling, and Packaging of Meat, Poultry, and Egg 
Products.
    OMB No.: 0583-0092.
    Expiration Date of Approval:
    Type of Request: Revision of a currently approved information 
collection.
    Abstract: FSIS has been delegated the authority to exercise the 
functions of the Secretary as specified in the Federal Meat Inspection 
Act (FMIA) (21 U.S.C. 601, et seq.), the Poultry Products Inspection 
Act (PPIA) (21 U.S.C. 451, et seq.), and the Egg Products Inspection 
Act (EPIA) (21 U.S.C. 1031, et seq.).
    FSIS protects the public by verifying that meat, poultry, and egg 
products are safe, wholesome, unadulterated, and properly labeled and 
packaged. FSIS is requesting a revision of a currently approved 
information collection addressing paperwork requirements specified in 
the regulations related to marking, labeling, and packaging of meat, 
poultry, and egg products.
    FSIS is proposing to expand the circumstances in which FSIS will 
generically approve the labels of meat and poultry products. Under this 
proposed rule, more official and foreign establishments would be able 
to use the generic approval of product labels that would also result in 
a reduced number of regular label approvals. Hence, FSIS is requesting 
a revision of the Marking, Labeling, and Packaging of Meat, Poultry, 
and Egg Products information collection. The total number of hours for 
this information collection will decrease 31,091 hours because of the 
increased use of generic labeling.
    Estimate of Burden: FSIS estimates that it will take establishments 
on the average of 0.33 hours per response.
    Respondents: Official establishments, plants, and foreign 
establishments.
    Estimated Number of Respondents: 6,418.
    Estimated Number of Responses per Respondent: 45.7.
    Estimated Total Annual Burden on Respondents: 97,176 hours.
    Copies of this information collection assessment can be obtained 
from John O'Connell, Paperwork Reduction Act Coordinator, Food Safety 
and Inspection Service, USDA, 1400 Independence Avenue SW., Room 6083, 
South Building, Washington, DC 20250.
    Comments are invited on: (a) Whether the proposed collection of 
information is necessary for the proper performance of FSIS's 
functions, including whether the information will have practical 
utility; (b) the accuracy of FSIS's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (c) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (d) ways 
to minimize the burden of the collection of information on those who 
are to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology.
    Comments may be sent to both John O'Connell, Paperwork Reduction 
Act Coordinator, at the address provided above, and the Desk Officer 
for Agriculture, Office of Information and Regulatory Affairs, Office 
of Management and Budget, Washington, DC 20253. To be most effective, 
comments should be sent to OMB within 60 days of the publication date 
of this proposed rule.

E-Government Act

    FSIS and USDA are committed to achieving the purposes of the E-
Government Act (44 U.S.C. 3601, et seq.) by, among other things, 
promoting the use of the Internet and other information technologies 
and providing increased opportunities for citizen access to Government 
information and services, and for other purposes.
    FSIS believes that by proceeding with this rulemaking, the Agency 
could potentially accept the electronic submission of requests for the 
evaluation of claims or special statements, which will significantly 
streamline the approval process.

National Environmental Policy Act

    The expected environmental effects: The use of labels by meat and 
poultry product establishments that have been deemed to be generically 
approved by FSIS is an activity that will not have a significant 
individual or cumulative effect on the human environment. Therefore, 
this proposed rule is appropriately subject to the categorical 
exclusion from the preparation of an environmental assessment or 
environmental impact statement provided under 7 CFR 1b.4(6) of the U.S. 
Department of Agriculture regulations.

[[Page 75822]]

Executive Order 13175

    This final rule has been reviewed in accordance with the 
requirements of Executive Order 13175, Consultation and Coordination 
with Indian Tribal Governments. The review reveals that this regulation 
will not have substantial and direct effects on Tribal governments and 
will not have significant Tribal implications.

USDA Nondiscrimination Statement

    The U.S. Department of Agriculture (USDA) prohibits discrimination 
in all its programs and activities on the basis of race, color, 
national origin, gender, religion, age, disability, political beliefs, 
sexual orientation, and marital or family status. (Not all prohibited 
bases apply to all programs.) Persons with disabilities who require 
alternative means for communication of program information (Braille, 
large print, or audiotape) should contact USDA's Target Center at (202) 
720-2600 (voice and TTY).
    To file a written complaint of discrimination, write USDA, Office 
of the Assistant Secretary for Civil Rights, 1400 Independence Avenue 
SW., Washington, DC 20250-9410 or call (202) 720-5964 (voice and TTY). 
USDA is an equal opportunity provider and employer.

Additional Public Notification

    FSIS will announce this proposed rule online through the FSIS Web 
page located at http://www.fsis.usda.gov/regulations_&_policies/ProposedRules/index.asp.
    FSIS will also make copies of this Federal Register publication 
available through the FSIS Constituent Update, which is used to provide 
information regarding FSIS policies, procedures, regulations, Federal 
Register notices, FSIS public meetings, and other types of information 
that could affect or would be of interest to constituents and 
stakeholders. The Update is communicated via Listserv, a free 
electronic mail subscription service for industry, trade groups, 
consumer interest groups, health professionals, and other individuals 
who have asked to be included. The Update is also available on the FSIS 
Web page. In addition, FSIS offers an electronic mail subscription 
service which provides automatic and customized access to selected food 
safety news and information. This service is available at http://www.fsis.usda.gov/News_&_Events/Email_Subscription/. Options range 
from recalls to export information to regulations, directives and 
notices. Customers can add or delete subscriptions themselves, and have 
the option to password protect their accounts.

List of Subjects

    Food labeling, Food packaging, Meat inspection, Poultry and poultry 
products, Reporting and recordkeeping requirements.

    For the reasons discussed in the preamble, FSIS is proposing to 
amend 9 CFR, Chapter III, as follows:

PART 317--LABELING, MARKING DEVICES, AND CONTAINERS

    1. The authority citation for part 317 continues to read as 
follows:

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


Sec. Sec.  317.4 and 317.5  [Removed and Reserved]

    2. Sections 317.4 and 317.5 are removed and reserved.
    3. In Sec.  317.8, revise paragraph (b)(32)(ii) to read as follows:


Sec.  317.8  False or misleading labeling or practices generally; 
specific prohibitions and requirements for labels and containers.

* * * * *
    (b) * * *
    (32) * * *
    (ii) Immediately adjacent to the calendar date will be a phrase 
explaining the meaning of such date, in terms of ``packing'' date, 
``sell by'' date, or ``use before'' date, with or without a further 
qualifying phrase, e.g., ``For Maximum Freshness'' or ``For Best 
Quality.''
* * * * *

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

    4. The authority citation for part 318 continues to read as 
follows:

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

    5. In Sec.  318.4, revise paragraph (f) introductory text to read 
as follows:


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

* * * * *
    (f) Labeling Logo. Owners and operators of official establishments 
having a total plant quality control system approved under the 
provisions of paragraph (c) of this section may only use, as a part of 
any label, the following logo.
* * * * *

PART 320--RECORDS, REGISTRATION, AND REPORTS

    6. The authority citation for part 320 continues to read as 
follows:

    Authority: 21 U.S.C. 601-695; 7 CFR 2.7, 2.18, 2.53.

    7. In Sec.  320.1, revise paragraph (b)(11) to read as follows:


Sec.  320.1  Records required to be kept.

* * * * *
    (b) * * *
    (11) Records of labeling, product formula, processing procedures, 
and any additional documentation needed to support that the labels are 
consistent with the Federal meat and poultry regulations and policies 
on labeling, as prescribed in Sec.  412.1 of this chapter.

PART 327--IMPORTED PRODUCTS

    8. The authority citation for part 327 continues to read as 
follows:

    Authority:  21 U.S.C. 601-695; 7 CFR 2.18, 2.53.
    9. In Sec.  327.14, revise paragraph (c) to read as follows:


Sec.  327.14  Marking of products and labeling of immediate containers 
thereof for importation.

* * * * *
    (c) All marks and other labeling for use on or with immediate 
containers, as well as private brands on carcasses or parts of 
carcasses, shall be approved by the Food Safety and Inspection Service 
in accordance with part 412 of these regulations before products 
bearing such marks, labeling, or brands will be entered into the United 
States. The marks of inspection of foreign systems embossed on metal 
containers or branded on carcasses or parts thereof need not be 
submitted to the Food Safety and Inspection Service for approval, and 
such marks of inspection put on stencils, box dies, labels, and brands 
may be used on such immediate containers as tierces, barrels, drums, 
boxes, crates, and large-size fiberboard containers of foreign products 
without such marks of inspection being submitted for approval, provided 
the markings made by such articles are applicable to the product and 
are not false or misleading.

PART 331--SPECIAL PROVISIONS FOR DESIGNATED STATES AND TERRITORIES; 
AND FOR DESIGNATION OF ESTABLISHMENTS WHICH ENDANGER PUBLIC HEALTH 
AND FOR SUCH DESIGNATED ESTABLISHMENTS

    10. The authority citation for part 331 is revised to read as 
follows:


[[Page 75823]]


    Authority:  21 U.S.C. 601-695; 7 CFR 2.17, 2.53.
    11. Amend Sec.  331.3 by revising paragraphs (e) introductory text, 
(e)(1), and (e)(3) to read as follows:


Sec.  331.3  States designated under paragraph 301(c) of the Act; 
application of regulations.

* * * * *
    (e) Sections 316.7, 317.3, and 412.1 will apply to such 
establishments, except as provided in this paragraph (e).
    (1) The operator of each such establishment will, prior to the 
inauguration of inspection, identify all labeling and marking devices 
in use, or proposed for use, (upon the date of inauguration of 
inspection) to the Front Line Supervisor of the circuit in which the 
establishment is located. Temporary approval, pending formal approval 
under Sec. Sec.  316.7, 317.3, and 412.1, will be granted by the Front 
Line Supervisor for labeling and marking devices that he determines are 
neither false nor misleading, provided the official inspection legend 
bearing the official establishment number is applied to the principal 
display panel of each label, either by a mechanical printing device or 
a self-destructive pressure sensitive sticker, and provided the label 
shows the true product name, an accurate ingredient statement, the name 
and address of the manufacturer, packer, or distributor, and any other 
features required by section 1(n) of the Act.
* * * * *
    (3) The operator of the official establishment shall promptly 
forward a copy of each item of labeling and a description of each 
marking device for which temporary approval has been granted by the 
Front Line Supervisor (showing any modifications required by the Front 
Line Supervisor) to the FSIS labeling program at headquarters, Food 
Safety and Inspection Service, USDA, 5601 Sunnyside Ave., Stop 5476, 
Beltsville, MD 20705-5476, accompanied by the formula and details of 
preparation and packaging for each product. Within 90 days after 
inauguration of inspection, all labeling material and marking devices 
temporarily approved by the Front Line Supervisor must receive approval 
as required by Sec. Sec.  316.7, 317.3, and 412.1, or their use must be 
discontinued.
* * * * *

PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS

    12. The authority citation for part 381 continues to read as 
follows:

    Authority:  7 U.S.C. 138f, 450, 1901-1906; 21 U.S.C. 451-470; 7 
CFR 2.18, 2.53.

    13. Amend section 381.129 by revising paragraphs (b)(6)(i) and 
(c)(2) to read as follows:


Sec.  381.129  False or misleading labeling or containers.

* * * * *
    (b) * * *
    (6)(i) A raw poultry product whose internal temperature has ever 
been below 26[deg]F may not bear a label declaration of ``fresh.'' A 
raw poultry product bearing a label declaration of ``fresh'' but whose 
internal temperature has ever been below 26[deg]F is mislabeled. The 
temperature of individual packages of raw poultry product within an 
official establishment may deviate below the 26[deg]F standard by 1 
deg. (i.e., have a temperature of 25[deg]F) and still be labeled 
``fresh.'' The temperature of individual packages of raw poultry 
product outside an official establishment may deviate below the 
26[deg]F standard by 2 deg. (i.e., have a temperature of 24[deg]F) and 
still be labeled ``fresh.'' The average temperature of poultry product 
lots of each specific product type must be 26[deg]F. Product described 
in this paragraph is not subject to the freezing procedures required in 
section 381.66(f)(2) of this subchapter.
* * * * *
    (c) * * *
    (2) Immediately adjacent to the calendar date will be a phrase 
explaining the meaning of such date in terms of ``packing'' date, 
``sell by'' date, or ``use before'' date, with or without a further 
qualifying phrase, e.g., ``For Maximum Freshness'' or ``For Best 
Quality.''
* * * * *


Sec. Sec.  381.132 and 381.133  [Removed and Reserved]

    14. Sections 381.132 and 381.133 are removed and reserved.
    15. In Sec.  381.145, revise paragraph (f) introductory text to 
read as follows:


Sec.  381.145  Poultry products and other articles entering or at 
official establishments; examination and other requirements.

* * * * *
    (f) Labeling Logo. Owners and operators of official establishments 
having a total plant quality control system approved under the 
provisions of paragraph (c) of this section may only use, as a part of 
any label, the following logo.
* * * * *
    16. In Sec.  381.175, revise paragraph (b)(6) to read as follows:


Sec.  381.175  Records required to be kept.

* * * * *
    (b) * * *
    (6) Records of all labeling, along with the product formula, 
processing procedures, and any additional documentation needed to 
support that the labels are consistent with the Federal meat and 
poultry regulations and policies on labeling, as prescribed in Sec.  
412.1.
    17. In Sec.  381.205, revise paragraph (c) to read as follows:


Sec.  381.205  Labeling of immediate containers of poultry products 
offered for entry.

* * * * *
    (c) All marks and other labeling for use on or with immediate 
containers shall be approved for use by the Food Safety and Inspection 
Service in accordance with part 412 of this chapter before products 
bearing such marks and other labeling will be permitted for entry into 
the United States.
    18. In Sec.  381.222, revise paragraph (d) to read as follows:


Sec.  381.222  States designated under paragraph 5(c) of the Act; 
application of regulations.

* * * * *
    (d) Subpart N of this part shall apply to such establishments 
except as provided in this paragraph (d).
    (1) The operator of each such establishment shall, prior to the 
inauguration of inspection, identify all labeling and marking devices 
in use, or proposed for use (upon the date of inauguration of 
inspection) to the Front Line Supervisor in which the establishment is 
located. Temporary approval, pending formal approval under Sec.  412.1, 
will be granted by the Front Line Supervisor for labeling and marking 
devices that he determines are neither false nor misleading, provided 
the official inspection legend bearing the official establishment 
number is applied to the principal display panel of each label, either 
by a mechanical printing device or a self-destructive pressure 
sensitive sticker, and provided the label shows the true product name, 
an accurate ingredient statement, the name and address of the 
manufacturer, packer, or distributor, and any other features required 
by section 4(h) of the Act.
    (2) The Front Line Supervisor will forward one copy of each item of 
labeling and a description of each marking device for which he has 
granted temporary approval to the FSIS labeling program at headquarters 
and will retain one copy in a temporary approval file for the 
establishment.
    (3) The operator of the official establishment shall promptly 
forward a

[[Page 75824]]

copy of each item of labeling and a description of each marking device 
for which temporary approval has been granted by the Front Line 
Supervisor (showing any modifications required by the Front Line 
Supervisor) to the FSIS labeling program at headquarters, accompanied 
by the formula and details of preparation and packaging for each 
product. Within 90 days after inauguration of inspection, all labeling 
material and marking devices temporarily approved by the Front Line 
Supervisor must receive approval as required by Sec.  412.1 or their 
use must be discontinued.
    (4) The Front Line Supervisor will also review all shipping 
containers to ensure that they do not have any false or misleading 
labeling and are otherwise not misbranded. Modifications of 
unacceptable information on labeling material by the use of pressure 
sensitive tape of a type that cannot be removed without visible 
evidence of such removal, or by blocking out with an ink stamp will be 
authorized on a temporary basis to permit the maximum allowable use of 
all labeling materials on hand. All unacceptable labeling material 
which is not modified to comply with the requirements of the 
regulations must be destroyed or removed from the official 
establishment.
* * * * *
    19. Add part 412 to read as follows:

PART 412--LABEL APPROVAL

Sec.
412.1 Label approval.
412.2 Approval of Generic Labels.

    Authority: 21 U.S.C. 451-470, 601-695; 7 CFR 2.18, 2.53.


Sec.  412.1  Label approval.

    (a) No final label shall be used on any product unless the label 
has been submitted for approval to the FSIS labeling program at 
headquarters, accompanied by FSIS Form 7234-1, Application for Approval 
of Labels, Marking, and Devices, and approved by such division, except 
for generically approved labels authorized for use in Sec.  412.2. The 
management of the official establishment or establishment certified 
under a foreign inspection system, in accordance with parts 327 and 
381, subpart T, must maintain a copy of all labels used, in accordance 
with parts 320 and 381, Subpart Q, of this subchapter. Such records 
shall be made available to any duly authorized representative of the 
Secretary upon request.
    (b) All labels required to be submitted for approval as set forth 
in Sec.  412.1(a) will be submitted to the FSIS labeling program at 
headquarters, in duplicate. A parent company for a corporation may 
submit only one label application for a product produced in other 
establishments that are owned by the corporation.
    (c) The Food Safety and Inspection Service requires the submission 
of labeling applications for the following:
    (1) Sketch label as defined in Sec.  412.1(d) for products which 
are produced under a religious exemption;
    (2) Sketch labels for products for foreign commerce whose labels 
deviate from FSIS regulations, with the exception of printing labels in 
foreign language or printing labels that bear a statement of the 
quantity of contents in accordance with the usage of the country to 
which exported as described in section 317.7 and part 381, subpart M.
    (3) Special statements and claims as defined in Sec.  412.1(e) and 
presented in the context of a final label.
    (4) Requests for the temporary use of final labels as prescribed in 
Sec.  412.1(f).
    (d) A ``sketch'' label is the concept of a label. It may be a 
printer's proof or equivalent that is sufficiently legible to clearly 
show all labeling features, size, and location. The Food Safety and 
Inspection Service will accept sketches that are hand drawn or computer 
generated, or other reasonable facsimiles that clearly reflect and 
project the final version of the label.
    (e) ``Special statements and claims'' are claims, logos, 
trademarks, and other symbols on labels that are not defined in the 
Federal meat and poultry products inspection regulations, such as 
health claims, negative claims (e.g., gluten free), ingredient and 
processing method claims (e.g., high pressure processing), structure-
function claims, animal production and raising claims, organic claims, 
natural claims, and instructional or disclaimer statements concerning 
pathogens (e.g., ``for cooking only'' or ``not tested for E. coli 
O157:H7''). Examples of logos and symbols include graphic 
representations of hearts and geographic landmarks.
    (f)(1) Temporary approval for the use of a final label that may be 
deemed deficient in some particular may be granted by the FSIS labeling 
program at headquarters. Temporary approvals may be granted for a 
period not to exceed 180 calendar days, under the following conditions:
    (i) The proposed label would not misrepresent the product;
    (ii) The use of the label would not present any potential health, 
safety, or dietary problems to the consumer;
    (iii) Denial of the request would create undue economic hardship; 
and
    (iv) An unfair competitive advantage would not result from the 
granting of the temporary approval.
    (2) Extensions of temporary approvals may also be granted by the 
FSIS labeling program at headquarters provided that the applicant 
demonstrates that new circumstances, meeting the above criteria, have 
developed since the original temporary approval was granted.


Sec.  412.2  Approval of generic labels.

    (a)(1) An official establishment, or an establishment certified 
under a foreign inspection system in accordance with part 327, or part 
381, subpart T of this subchapter, is authorized to use generically 
approved labels, as defined in paragraph (b) of this section, and thus 
is free to use such labels without submitting them to the Food Safety 
and Inspection Service for approval, provided the label, in accordance 
with this section, displays all mandatory features in a prominent 
manner in compliance with part 317 or part 381, and is not otherwise 
false or misleading in any particular.
    (2) The Food Safety and Inspection Service will select samples of 
generically approved labels from the records maintained by official 
establishments and establishments certified under foreign inspection 
systems, in accordance with part 327 or part 381, subpart T, to 
determine compliance with label requirements. If the Agency finds that 
an establishment is using a false or misleading label, it will 
institute the proceedings prescribed in Sec.  500.8 of this chapter to 
revoke the approval for the label.
    (b) Generically approved labels are labels that bear all applicable 
mandatory labeling features (i.e., product name, safe handling 
statement, ingredients statement, the name and place of business of the 
manufacturer, packer or distributor, net weight, legend, safe handling 
instructions, and nutrition labeling) in accordance with Federal 
regulations. Labels that bear claims and statements that are defined in 
FSIS's regulations (e.g., a statement that characterizes a product's 
nutrient content, such as ``low fat,'' or has geographical 
significance, such as ``German Brand''), and that comply with those 
regulations are also deemed to be approved by the Agency without being 
submitted for evaluation and approval.

PART 424--PREPARATION AND PROCESSING PROCEDURES

    20. The authority citation for part 424 continues to read as 
follows:


[[Page 75825]]


    Authority: 7 U.S.C. 450, 1901-1906; 21 U.S.C. 451-470, 601-695; 
7 CFR 2.18, 2.53.

    19. In Sec.  424.21, revise footnote 3 in the table in paragraph 
(c) to read as follows:


Sec.  424.21  Use of food ingredients and sources of radiation.

* * * * *
    (c) * * *
    \3\ Provided that its use is functional and suitable for the 
product and it is permitted for use at the lowest level necessary to 
accomplish the desired technical effect as determined in specific cases 
prior to label approval under part 412.
* * * * *
    22. In Sec.  424.22, revise paragraph (c)(4)(i) introductory text 
to read as follows:


Sec.  424.22  Certain other permitted uses.

* * * * *
    (c) * * *
    (4) * * *
    (i) The labels on packages of meat food and poultry products 
irradiated in their entirety, in conformance with this section and with 
21 CFR 179.26(a) and (b), must bear the logo shown at the end of this 
paragraph. Unless the word ``Irradiated'' is part of the product name, 
labels also must bear a statement such as ``Treated with radiation'' or 
``Treated by irradiation.'' The logo must be placed in conjunction with 
the required statement, if the statement is used. The statement is not 
required to be more prominent than the declaration of ingredients 
required under Sec.  317.2(c)(2).

    Done in Washington, DC, on November 29, 2011.
Alfred V. Almanza
Administrator.
[FR Doc. 2011-30992 Filed 12-2-11; 8:45 am]
BILLING CODE 3410-DM-P