Docket No. FSIS-2009-0026

[Federal Register Volume 77, Number 14 (Monday, January 23, 2012)]
[Proposed Rules]
[Pages 3159-3166]
From the Federal Register Online via the Government Printing Office
[FR Doc No: 2012-1158]

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Proposed Rules
Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 77, No. 14 / Monday, January 23, 2012 /
Proposed Rules

[[Page 3159]]

DEPARTMENT OF AGRICULTURE

Food Safety and Inspection Service

9 CFR Parts 312, 322, 350, 362, 381, 590, and 592

[Docket No. FSIS-2009-0026]
RIN 0583-AD41

Electronic Export Application and Certification Charge;
Flexibility in the Requirements for Export Inspection Marks, Devices,
and Certificates; Egg Products Export Certification

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 inspection regulations to provide for an
electronic export application and certification system. The electronic
export application and certification system will be a component of the
Agency's Public Health Information System (PHIS). The export component
of PHIS will be available as an alternative to the paper-based
application and certification process. FSIS is proposing to charge
users for the use of the proposed system. FSIS is proposing to
establish a formula for calculating the fee. FSIS intends to publish
notice of the fee, using the formula, in the Federal Register on an
annual basis. FSIS is also proposing to provide flexibility in the
requirements for official export inspection marks, devices, and
certificates. In addition, FSIS is proposing to amend the egg product
export regulations that parallel the meat and poultry product export
regulations.

DATES: Submit comments on or before March 23, 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 floppy disks or CD-ROMs, and hand- or
courier-delivered items: Send to Docket Clerk, U.S. Department of
Agriculture (USDA), FSIS, Patriots Plaza 3, 1400 Independence Avenue
SW., Room 8-163A, Mailstop 3782, Washington, DC 20250-3700.
Instructions: All items submitted by mail or electronic mail must
include the Agency name and docket number FSIS-2009-0026. Comments
received in response to this docket will be made available for public
inspection and posted without change, including any personal
information, 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 8:30 a.m.
and 4:30 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Dr. Ron Jones, Assistant
Administrator, Office of International Affairs, FSIS, U.S. Department
of Agriculture, 1400 Independence Avenue SW., Room 3143, Washington, DC
20250-3700, (202) 720-3473.

SUPPLEMENTARY INFORMATION:

Background

The Federal Meat Inspection Act (FMIA) (21 U.S.C. 601-695) and the
Poultry Products Inspection Act (PPIA) (21 U.S.C. 451-470) provide for
the export and certification of meat and poultry products. The Federal
meat and poultry products inspection regulations require exporters to
apply for official export certificates to ship federally inspected and
passed meat and poultry products to foreign countries (9 CFR 322.2 and
381.105). The Federal meat and poultry products inspection regulations
also contain specific requirements for the official marking of exported
products, for the devices for marking shipping containers, and for the
official export certificate (9 CFR 312.8, 322.1, 322.2, 381.104,
381.105, and 381.106).
The Agricultural Marketing Act (AMA) provides the Secretary of
Agriculture with the authority to collect fees ``as will be reasonable
and as nearly as may be to cover the cost of the service rendered, to
the end that agricultural products may be marketed to the best
advantage, that trading may be facilitated, and that consumers may be
able to obtain the quality product which they desire'' (7 U.S.C
1622(h)).
Under the authority of the AMA, the meat and poultry regulations
provide that FSIS may make certifications regarding exported meat and
poultry products meeting conditions or standards that are not imposed,
or that are in addition to those imposed, by the meat and poultry
regulations, the FMIA, or the PPIA. Under 9 CFR 350.3(b), 350.7,
362.2(b), and 362.5, FSIS collects fees from establishments and
facilities that request certification service that is in addition to
the basic export certification of wholesomeness. FSIS is now proposing
to establish a fee for utilizing a new electronic export application
and certification system. The system will be a service FSIS will
provide to exporters that will enable them to submit, track, and manage
export applications and certificates more efficiently and effectively
than is possible under the current system.
The Egg Products Inspection Act (EPIA) (21 U.S.C. 1031-1056) does
not set forth specific provisions for the export of egg products, and
FSIS's egg products inspection regulations do not include requirements
for exported egg products. As discussed below, FSIS is proposing egg
products regulations to parallel the meat and poultry requirements,
including a provision for inspectors to make certifications that egg
products for export meet conditions or standards that are not imposed,
or that are in addition to those that may be imposed, by the egg
products regulations under the EPIA.

Export Application and Certification Process

Under 9 CFR 322.2(a) and 381.105(a), exporters of meat and poultry
products may apply for an export certificate. The Application for
Export Certificate (FSIS Form 9060-6) is available from inspection
personnel, or exporters can submit a computer-generated (paper) copy.
The poultry products regulations, in addition to requiring an
application for an export certificate, provide for an ``upon request''
certification. The ``upon

[[Page 3160]]

request'' certification provides that an inspector will complete the
application based on information supplied by the poultry exporter.
FSIS inspection personnel review the completed export application
to verify that the information is correct and that it is signed. After
inspection personnel reinspect product that is intended for export (9
CFR 322.2 and 381.105), they sign the application certifying that the
product was examined in accordance with Agency policy.
As provided in 9 CFR 322.1(a) and 381.105(a), each shipping
container is marked with the official export stamp bearing the serial
number on the export certificate. Both 9 CFR 312.8(a) and 381.104
provide for an official device to apply the official export stamp.
After the export application has been signed, inspection personnel
provide the establishment with the official export stamp to mark
product destined for export. After the shipping containers are marked,
inspection personnel secure the stamp and sign the completed Meat and
Poultry Export Certificate of Wholesomeness (FSIS Form 9060-5). The
Meat and Poultry Export Certificate of Wholesomeness provides
certification that the meat or poultry product originated from animals
that received ante-mortem and post-mortem inspection and were found to
be wholesome and fit for human consumption.
Both 9 CFR 312.8 and 381.106 provide that the export certificate is
a paper certificate form for signature by a program employee or
inspector, bearing a letterhead and the seal of the United States
Department of Agriculture, and a serial number.
The regulations also require that the export certificate be issued
in triplicate for meat products and in duplicate for poultry products.
The meat and poultry products inspection regulations include specific
requirements for where and to whom the original, duplicate, and
triplicate are to be distributed (9 CFR 322.2 (d), (e), and (f), and
381.105(b) and (c)).

The Public Health Information System (PHIS)

FSIS is implementing the Public Health Information System (PHIS), a
computerized, Web-based inspection information system. The PHIS will
integrate and automate the Agency's paper-based business processes into
one comprehensive and fully automated data-driven inspection system.
The PHIS will significantly improve the Agency's efforts to collect,
consolidate, and analyze data in order to improve public health. The
PHIS includes an export component that will streamline and automate the
export application and certification process.
The PHIS export component will enable exporters to electronically
submit, track, and manage export applications and certificates. For
example, exporters will be able to access their online account to
submit applications, delay the issuance of a certificate, cancel
pending applications and certificates, and apply for replacement or
``in lieu of'' certificates. Exporters that submit paper applications
will not be able to submit, track, or manage their applications and
certificates in this manner. FSIS inspection personnel will be able to
access the PHIS to electronically approve export applications and
certificates.
FSIS will consider any data and the electronic records
(applications and certifications) submitted and processed through the
PHIS equivalent to paper records. Export certifications transmitted
electronically are official.
To access and use the PHIS export component, exporters will need to
register for an USDA eAuthentication account with Level 2 access. An
eAuthentication account enables individuals within and outside of the
USDA to obtain user-identification accounts to access a wide range of
USDA applications through the Internet. The Level 2 access will provide
users the ability to conduct official electronic business transactions.
To register for a Level 2 eAuthentication account, the user will need
to have access to the Internet and a valid email address. To learn more
about eAuthentication and how to register for an account, visit http://www.eauth.egov.usda.gov/.
The Agency plans to provide exporters with more specific, detailed
information on how to access the PHIS to submit export applications and
manage export certificates. The Agency intends to provide exporters
with assistance and technical support in obtaining Level 2
eAuthentication access and in accessing and navigating the PHIS export
component. Any information concerning the implementation of the PHIS
export component will be posted on the Agency's Web site at
www.fsis.usda.gov.
When developing, procuring, maintaining, or using electronic and
information technology (EIT), Federal agencies are required by Section
508(a)(1)(a) of the Rehabilitation Act of 1973 (29 U.S.C. 794(d)) to
ensure that the EIT is accessible to people with disabilities,
including employees and members of the public. The PHIS will meet these
requirements.

Proposed Amendments

Export Applications and Certificates

The meat and poultry regulations provide for a paper-based export
application and certification process. To facilitate the use of the
PHIS export component, FSIS is proposing to amend the meat and poultry
regulations to provide for the electronic submission, approval, and
issuance of export applications and certificates. The Agency is
proposing that applications for export certificates may be either
paper-based or electronic.
FSIS is proposing these amendments to facilitate the electronic
processing of export applications and certificates. The Agency is not
proposing to require that exporters submit export applications
electronically through the PHIS export component. Under this proposed
rule, exporters would have the option to submit export applications
electronically or continue to use the paper-based application process.
The proposed charge for use of the electronic system is discussed
below.
FSIS meat and poultry products inspection regulations require
exporters to apply for an export certificate and specify that FSIS
inspectors provide poultry export certification of any inspected and
passed poultry product ``upon request'' (9 CFR 381.105(a)). The ``upon
request'' certification contemplates that an inspector will complete
the application form based on information supplied by the poultry
exporter.
The ``upon request'' provision is obsolete, however, and no longer
reflects poultry export application practices. The exporter fills out
most, if not all, poultry products export applications. In addition,
the ``upon request'' provision will not be an option for submitting on-
line export certification applications under the PHIS. Therefore, the
Agency is proposing to delete the phrase ``upon request'' in 9 CFR
381.105(a). Because exporters typically do not request that the
inspector complete the poultry products export application, this change
in the regulations should place little, if any, burden on exporters.
FSIS is also proposing to delete the export certificate
requirements in 9 CFR 312.8(b) and 381.106. These regulations contain
specific certificate requirements, e.g., signature by a program
employee and bearing a letterhead and the official seal of the U.S.
Department of Agriculture. The Meat and Poultry Export Certificate of
Wholesomeness is an approved FSIS Form (9060-5), generated by the
Agency and issued by FSIS inspection

[[Page 3161]]

personnel. Through FSIS Directive 9000.1, Revision 1, the Agency
provides instructions to inspection personnel concerning the approval
of export applications (FSIS Form 9060-6) and issuance of certificates.
Therefore, FSIS does not need to include specifications for the export
certificate and instructions for its issuance in the regulations.
FSIS is also proposing to amend 9 CFR 322.2 and 381.105 to delete
references to ``triplicate'' and ``duplicate'' forms. The Agency is
proposing to allow ``copies'' of the export certificate to be
distributed to the required parties and to accompany the product. In
addition, FSIS is proposing to delete the provisions in 9 CFR 322.2(d)
for filing a copy of the export certificate with Customs within four
(4) business days of the clearance of the vessel at the time of filing
the complete manifest. The filing of the export certificate with
Customs is a Department of Homeland Security, Customs and Border
Protection, requirement (19 CFR 4.75(b))and need not be included in
FSIS regulations.
FSIS is also proposing to amend the meat and poultry export
regulations to organize and make parallel, to the extent possible, the
regulatory requirement language for meat and poultry products. Under
the proposed rule, differences will remain between the meat and poultry
export regulations because the provisions for lard or similar edible
product (proposed 9 CFR 322.1(b)) do not apply to poultry. Also, the
FMIA provides that FSIS will file one copy of the export certificate,
that one copy will be delivered to the owner or shipper, and that one
copy will be delivered to the chief officer of the vessel on which the
shipment shall be made (21 U.S.C. 618). Proposed 9 CFR 322.2 (c), (d),
and (e) reflect those statutory requirements. Because the PPIA does not
include such requirements, FSIS is not proposing to include them in
this rule. Under circumstances specified in the regulations, exporters
of meat products may request inspection personnel to issue certificates
for export of product of official establishments not under their
supervision (9 CFR 322.2(h)). The poultry export regulations do not
provide for this option, but FSIS provides for this in practice in
poultry products. Therefore, FSIS is proposing poultry product export
regulations consistent with the meat export regulations to reflect this
practice (proposed 9 CFR 381.106(e)).

Export Inspection Marks and Devices

As discussed above, FSIS's regulations require meat and poultry
products exporters to apply for an export certificate. After the export
application is approved, inspection personnel provide the export stamp
and authorize the establishment to mark products destined for export.
The serial number on the export stamp must correspond to the serial
number on the export certificate signed by inspection personnel (9 CFR
312.8(a) and 381.104).
FSIS is proposing to amend 9 CFR 312.8(a) and 381.104 to provide an
alternative method of identifying and marking containers of product
destined for export. This proposed flexibility would permit exporters
to mark product containers with a unique identifier. Under the
proposal, the unique identifier must link the exported product to the
export certificate issued by inspection personnel. The Agency is
proposing this flexibility in the marking of shipping containers
because of the technological advancements that have been made since the
export marking and devices regulations were initially promulgated. By
providing flexibility to the official export stamp and how it can be
applied to products, the time between production and shipping can be
shortened, reducing the storage and other associated costs to the
industry.

Egg Products Export Regulations

As previously discussed, the EPIA does not set forth specific
provisions for the export of egg products, and the FSIS egg products
inspection regulations do not include requirements for exported egg
products. The egg products inspection regulations provide that, upon
request, an inspector may issue an egg product inspection and grading
certificate. The exporter can present the certificate to foreign
countries as certification that egg products were inspected and passed
and are wholesome and fit for human consumption (9 CFR 590.402).
The EPIA authorizes FSIS to regulate egg products for the purpose
of preventing and eliminating burdens upon interstate and foreign
commerce (21 U.S.C. 1031). Because almost all foreign countries require
export certification for imported egg products, FSIS is proposing to
amend the egg products export regulations under 21 U.S.C 1043 to add
export application and certification requirements in 9 CFR 590.407,
``Export certification and marking of containers with export inspection
mark.'' This proposed section parallels, to the extent possible, the
export requirements in the meat and poultry regulations that provide
for the application, certification, and marking of product destined for
export. This proposed export certification will provide the basic egg
products export certificate required by foreign countries. Exporters
that submit paper-based applications for the basic egg products export
certification will not be charged for the certificate.
FSIS is proposing to add 9 CFR 592.20(d) to provide that export
certifications that products meet conditions or standards that are not
imposed, or that are in addition to those imposed by the egg products
regulations, will be subject to a charge as a reimbursable service. The
proposed provisions are consistent with the 9 CFR 350.3(b) and
362.2(b), which are discussed in the following paragraph.

Charge for Electronic Export Application and Certification Process

As discussed above, under the authority of the AMA, the meat and
poultry inspection regulations provide that when exporters request
certification that is in addition to the basic export certification of
wholesomeness required by regulation, FSIS charges and collects fees
from establishments and facilities that request this service (9 CFR
350.3(b), 350.7, 362.2(b), and 362.5). Exporters request additional
certifications to meet requirement imposed by the importing foreign
countries.
The PHIS's export component will provide new service options to
exporters enabling them to electronically submit, track, and manage
their export applications and certificates. Therefore, the Agency is
proposing to charge exporters that utilize the PHIS export component a
fee for recovering the Agency's costs for providing the electronic
export application and certification service. The proposed fee is for
application for the basic export certificate. Any additional
certifications that are imposed by the importing foreign country will
be charged as a certification service, as provided by 9 CFR 350.3(b)
and 362.2(b) for meat and poultry products, and, as discussed above, is
proposed for egg products in 9 CFR 592.20(d). These additional export
certifications are charged at the appropriate basetime, overtime, or
holiday rate, depending on when the certification service is provided.
The basic export certification, if provided outside of an inspector's
normal shift is also charged at the appropriate rate (overtime or
holiday).
To calculate the appropriate fee for providing the electronic
export application and certification service, the Agency is proposing
to establish the following formula for assessing its costs: The labor
costs (i.e., direct inspection labor cost for inspection personnel +

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technical support provided to users of the export component + export
library maintenance), + the Information Technology (IT) costs (i.e.,
on-going operations + maintenance of the system cost + eAuthentication
cost), divided by the number of export applications (see below).
PHIS Export Application Fee:
[GRAPHIC] [TIFF OMITTED] TP23JA12.000

If the FSIS adopts this proposal, it will calculate the fee on an
annual basis, and the updated fees will apply at the start of each
calendar year. Should this rule become final, FSIS will announce the
fee and the effective date in the preamble of the final rule. In
addition, FSIS will publish notice of the fee, using the formula in the
final rule, in the Federal Register approximately 30 days prior to the
start of each new calendar year.
For purposes of this proposed rule, FSIS has calculated the fees
based on the 2012 basetime rates published on December 23, 2011 (76 FR
80326) and the Agency's best estimates for on-going operations and
maintenance. FSIS has also estimated the number of export applications
that it is likely to receive. For the final rule and subsequent
calendar year calculations, FSIS expects that it will obtain more
precise data, from documents and other sources, to calculate the actual
fee.
The proposed calendar year 2012 PHIS Export Application Fee is
based on the following costs, rates, and best available data:
Direct inspection personnel labor costs at the 2012
basetime rate ($54.24/hour), at an estimated 15 minutes ($54.24/4 or
$13.56) per application ($13.56 * 235,121), is $3,188,204.70.
The cost of providing technical support, which includes
service desk support, is $500,000.
The 2012 annual cost for funding two full time employees
(average salary) to provide export library functions is approximately
$200,000.
The on-going operations and maintenance costs, including
improvements and necessary repairs to keep the system responsive to
user's needs, is $2,675,000.
The cost of providing and supporting eAuthentication, the
system for accessing the PHIS, is currently $0. However, this cost may
increase in future years.
The estimated number of yearly export applications,
determined using the Agency's Performance Based Inspection System, is
235,121.
The calculation of the 2012 Export Application Fee is:
[GRAPHIC] [TIFF OMITTED] TP23JA12.001

Based on the above calculation, FSIS is proposing $27.91 as the
calendar year 2012 PHIS Export Application Fee. Exporters would be
charged the $27.91 fee for submitting an export application, and the
fee will be assessed regardless of whether an export certificate is
issued.

Executive Order 12988

This proposed rule has been reviewed under the Executive Order
12988, Civil Justice Reform. Under this proposed rule: (1) All State
and local laws and regulations that are inconsistent with this rule
will be preempted; (2) no retroactive effect will be given to this
rule; and (3) no retroactive proceedings will be required before
parties may file suit in court challenging this rule.

Executive Orders 12866 and 13563, and the Regulatory Flexibility Act

Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, 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 proposed rule has been reviewed under Executive Order
(E.O.) 12866. It has been determined to be significant, but not
economically significant, under section 3(f) of E.O. 12866 and,
therefore, has been reviewed by the Office of Management and Budget
(OMB).
FSIS is proposing changes to the meat and poultry regulations to
provide for an electronic export application and certification system.
The use of the proposed electronic export application system will be
voluntary. FSIS is proposing to charge exporters that choose to utilize
the system $27.91 per application submitted. Automating the export
application and certification process will facilitate the exportation
of U.S. meat, poultry, and egg products by streamlining and automating
the processes that are in use while ensuring that foreign regulatory
requirements are met. In addition, FSIS is proposing to add export
application and certification requirements to the egg products
regulations that parallel the meat and poultry regulations. Currently,
exporters are issued an inspection and grading certificate.

Cost of the Proposed Action

If this proposed rule is adopted, and the cost basis does not
change, the direct cost to exporters of $27.91 per export application
would be approximately $6.6 million per year, if they all choose to
file electronically. The indirect costs under this proposed rule would
be the Internet service and the acquisition of or upgrading a current
computer system to one that would be compatible with the PHIS and meet
digital standards developed by the National Institute of Standards and
Technology, American Standards Institute, and the International
Organization for Standardization. These indirect costs are
indeterminable. However, the total cost to an exporter would depend on
the number of electronic applications processed. An exporter that
processes only a few applications per year would not likely

[[Page 3163]]

experience a significant economic impact.
There are no direct costs associated with obtaining the Level 2
eAuthentication access needed to use the PHIS.
Exporters that do not submit applications electronically through
the PHIS and request export certification that the product meets
conditions or standards that are not imposed, or that are in addition
to those imposed by regulations, would continue to pay for the
reimbursable services (9 CFR 350.7, 362.5, and 592.500).
The total annual paperwork burden to egg exporters to fill out the
paper-based export application is $123,333 per year for a total of
3,333 \1\ hours a year. The average exporter burden would be 16.7
hours, and $617 per exporter. There is no annual paperwork burden to
meat and poultry exporters since they are currently filling out the
export application.
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\1\ Hours are derived from estimates of 200 for the number of
exporters, 100 for the number of responses per exporter, and 10
minutes to complete and submit an application.
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Expected Benefits of the Proposed Rule

The proposed electronic export application and certification
system, is expected to reduce the exporter and inspection personnel
workload and paperwork burden by eliminating the physical handling and
processing of applications and certificates. The reduction in workload
and paperwork burden is based on the greater efficiency of processing
applications electronically and the number of applications filed
electronically. Quantifiable reductions are indeterminate at this time.
The PHIS export component facilitates the electronic government-to-
government exchange of export applications and certifications, which
will assist in the resolution of allegations of fraudulent
transactions, such as false alterations and reproductions. The PHIS is
designed to ensure authenticity, integrity, and confidentiality. The
Level 2 eAuthentication provides exporters with the ability to conduct
official electronic transactions with the USDA through the Internet.
Exporters will be provided a more efficient and effective application
and certification process.
An indirect benefit of automating the export application and
certification system is that there will be an automatic, electronic
recordkeeping of the number and types of exporters, the types of
products exported to various countries, and the number of applications
and certificates issued. There is no recordkeeping burden to exporters
because all transactions will be electronically recorded, and the data
will be retrieved in real time. The electronic export system will
provide a seamless, integrated, and streamlined approach to processing
applications and certificates. It is expected that any potential
general problems can be resolved electronically before the product
arrives at the port, and as a result the products will likely move
through ports faster. Thus, storage costs will be reduced or eliminated
during the time it would take to resolve any application or
certification issues, and the product will reach its destination more
quickly. The cost savings of moving products faster and reducing
storage costs are a function of the value of the goods and the amount
of the reduction of the period of time in storage; with higher valued
goods and greater reductions in storage period, these cost savings will
increase. The value of goods and the reduction in storage time are
variables that are not known to FSIS. The Agency is seeking comments on
these and other potential benefits of the electronic export application
and certification system.
For all exporters that submit the applications electronically,
there will be additional unquantifiable benefits because PHIS automates
the verification of eligibility and accuracy of certifications needed,
and will speed up the process for these establishments. Even exporters
who use the paper-based system will benefit from the PHIS export
component. FSIS will enter the application into the PHIS, and the FSIS
verifications activities regarding eligibility and accuracy of
certifications will be automated. The certification will be made per
specifications of the foreign government (e.g., paper, electronic, or
digital image).
Proposing egg product export regulations provides the same export
requirements across all products regulated by FSIS, and consistency in
the export application and certification process. Currently, upon
request, inspection and grading certificates are issued for exported
egg products. This proposed rule provides the exported egg products
certification that is required by most foreign countries. Consistent
export requirements for meat, poultry, and egg products increase
administrative efficiency, provide clarity, and allow egg products
exporters to benefit from the new electronic export certification
system.

FSIS Budgetary Effects

FSIS cannot predict how many exporters will choose to submit
electronic export applications through the export component of PHIS.
When exporters choose to submit an application, they will be charged
$27.91. Assuming that the number of yearly export certificates remains
at approximately 235,121, the revenues generated from this new fee will
be approximately $6.6 million each year.

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 Act (5 U.S.C. 601).
The proposed changes will affect those entities in the United States
that export meat, poultry, and egg products to foreign countries. There
are 6,099 meat and poultry establishments that could possibly be
affected by this proposed rule since all are eligible to export. Of
this number, 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.\2\ Therefore, a total of 5,719 small and very
small establishments could be possibly affected by this rule.
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\2\ Establishment numbers from FSIS's Performance Based
Inspection System, June 2011.
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For the meat and poultry industries, small and very small
exporters, like large exporters, would incur the $27.91 fee only if
they file their export application electronically. If they choose to
submit the paper application, they will bear no additional cost
compared to now. If exporters submit their applications electronically,
the average annual cost from this rule would be $1,075.95 per exporter
(235,121 export applications per year/6,099 meat and poultry
establishments * $27.91 per application). For egg product exporters,
FSIS expects the number of applications submitted to be 20,000.\3\
Using the $27.91 fee, the cost per exporter would be $2,791. If small
establishments require fewer applications, then the cost per small
establishment is even lower. Therefore, the Agency believes that the
proposed rule will not have a significant economic impact on a
substantial number of small entities.
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\3\ See Footnote 1, page 21.
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In making its determination, the Agency considered two
alternatives: (1) The status quo (only paper-based export applications)
and (2) require exporters to submit electronic export applications and
charge an application fee for the service. The status quo alternative
was

[[Page 3164]]

rejected, because electronic export applications are necessary to
implement the PHIS export component. Without the electronic export
application alternative, exporters will not reap the benefits of the
PHIS's export component.
The second alternative, to make the electronic export application
mandatory and charging a fee, was rejected because export certificates
are a regulatory requirement, and the paper-based application process
(at no charge) must be available to exporters. The proposed rule would
provide for both the paper-based and electronic export application
process, which will minimize the impact on small entities because it
will allow them, as well as other exporters, to continue using the
paper-based application process. To make electronic export applications
mandatory would have a significant impact on a substantial number of
small entities, because the $27.91 fee would increase the cost of
exporting and may be a disadvantage to small entities because they will
not have the option to continue to submit paper-based applications.
However, small entities may choose to utilize the electronic system
because it offers the ability to electronically track and manage the
application and certification process. The $27.91 fee would have to be
absorbed by the small entities or passed along to their customers,
which could negatively impact their bottom line if a large percentage
of their business is exports because they are priced out of the market.

Additional Public Notification

Public awareness of all segments of rulemaking and policy
development is important. Consequently, in an effort to ensure that
minorities, women, and persons with disabilities are aware of this
proposed rule, FSIS will announce it online through the FSIS Web page
located at http://www.fsis.usda.gov/regulations_&_policies/Proposed_Rules/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. Through the Listserv and Web page, FSIS is able to provide
information to a much broader and more diverse audience. 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_and_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.

Paperwork Reduction Act

In accordance with section 3507(j) of the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.), the information collection
requirements included in this proposed rule (for egg products on the
Application for Export Certificate, FSIS Form 9060-6) have been
submitted for approval to OMB as part of the Public Health Information
System (PHIS) information collection request.

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.

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, audiotape,
etc.) 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.

List of Subjects

9 CFR Part 312

Official Marks, Devices and Certificates.

9 CFR Part 322

Exports.

9 CFR Part 350

Special Services Relating to Meat and Other Products.

9 CFR Part 362

Voluntary Poultry Inspection Regulations.

9 CFR Part 381

Poultry Products Inspection Regulations.

9 CFR Part 590

Inspection of Eggs and Egg Products (Egg Products Inspection Act).

9 CFR Part 592

Voluntary Inspection of Egg Products.

For the reasons set forth in the preamble, FSIS proposes to amend 9
CFR chapter III as follows:

PART 312--OFFICIAL MARKS, DEVICES AND CERTIFICATES

1. The authority citation for Part 312 continues to read as
follows:

Authority: 21 U.S.C. 601-695; 7 CFR 2.17, 2.55.

2. Revise Sec. 312.8 to read as follows:

Sec. 312.8 Export inspection marks.

The export inspection mark required in Sec. 322.1 must be either a
mark that contains a unique identifier that corresponds to the export
certificate or an official mark with the following form: \1\
---------------------------------------------------------------------------

\1\ The number ``529893'' is given as an example only. The
number on the mark will correspond to the export certificate.
[GRAPHIC] [TIFF OMITTED] TP23JA12.002

[[Page 3165]]

PART 322--EXPORTS

3. The authority citation for Part 322 continues to read as
follows:

Authority: 21 U.S.C. 601-695; 7 CFR 2.17, 2.55.

4. Revise Sec. 322.1 to read as follows:

Sec. 322.1 Marking products for export.

(a) When authorized by inspection personnel, establishments must
mark the outside container of any inspected and passed product for
export, except ship stores, small quantities exclusively for the
personal use of the consignee and not for sale or distribution, and
shipments by and for the U.S. Armed Forces, with an export inspection
mark as shown in Sec. 312.8 of this subchapter.
(b) When authorized by inspection personnel, establishments must
mark each tank car of inspected and passed lard or similar edible
product, and each door of each railroad car or other closed means of
conveyance, containing inspected and passed loose product shipped
directly to a foreign country, with an export inspection mark as shown
in Sec. 312.8 of this subchapter.
5. Revise Sec. 322.2 to read as follows:

Sec. 322.2 Export certification.

(a) Exporters must apply for export certification of inspected and
passed products shipped to any foreign country. Exporters may apply for
an export certificate using a paper or electronic application. FSIS
will assess exporters that submit an electronic application the charge
in Sec. 350.7(e).
(b) FSIS will issue only one certificate for each consignment,
except in the case of error in the certificate or loss of the
certificate originally issued. A request for a replacement or an in
lieu of paper certificate, except in the case of a lost certificate,
must be accompanied by the original paper certificate. The new
certificate will carry the following statement: ``Issued in lieu of --
------'', with the numbers of the certificates that have been
superseded.
(c) FSIS will deliver a copy of the certificate to the shipper or
exporter. The shipper or exporter may furnish the copy of the
certificate to the consignee for purposes of affecting the entry of
product into the foreign country of destination.
(d) The shipper or exporter must deliver a copy of the certificate
to the agent of the railroad or other carrier that transports the
consignment from the United States otherwise than by water, or to the
chief officer of the vessel on which the export shipment is made, or to
the vessel's agent. The copy must be used only by such carrier and only
for the purpose of affecting the transportation of the consignment
certified.
(e) FSIS will retain a copy of the certificate.
(f) Exporters may request inspection personnel to issue
certificates for export consignments of product of official
establishments not under their supervision, provided the consignments
are first identified as having been ``U.S. inspected and passed,'' are
found to be neither adulterated nor misbranded, and are marked as
required by Sec. 322.1.

PART 350--SPECIAL SERVICES RELATING TO MEAT AND OTHER PRODUCTS

6. The authority citation for Part 350 continues to read as
follows:

Authority: 7 U.S.C. 1622, 1624; 7 CFR 2.17, 2.55.

7. In Sec. 350.7 add paragraphs (e), (f), and (g) to read as
follows:

Sec. 350.7 Fees and Charges.

* * * * *
(e) Exporters that submit electronic export certificate
applications will be charged a fee per application submitted.
(f) For each calendar year, FSIS will calculate the electronic
export certificate application fee, using the following formula: Labor
Costs (Direct Inspection Labor Cost + Technical Support Cost + Export
Library Maintenance Cost) + Information Technology Costs (On-going
operations Cost + Maintenance Cost + eAuthentication Cost), divided by
the number of export applications.
(g) FSIS will publish notice of the electronic export certificate
application fee annually in the Federal Register.

PART 362--VOLUNTARY POULTRY INSPECTION REGULATIONS

8. The authority citation for part 362 continues to read as
follows:

Authority: 7 U.S.C 1622; 7 CFR 2.18(g) and (i) and 2.53.

9. In Sec. 362.5, add paragraphs(e), (f), and (g) to read as
follows:

Sec. 362.5 Fees and charges.

PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS

10. The authority citation for Part 381 continues to read as
follows:

Authority: 7 U.S.C. 138F, 450, 21 U.S.C., 451-470, 7 CFR 2.7,
2.18, 2.53.

11. Revise Sec. 381.104 to read as follows:

Sec. 381.104 Export inspection marks.

The export inspection mark required in Sec. 381.105 must be either
a mark that contains a unique identifier that corresponds to the export
certificate or an official mark with the following form: \1\
---------------------------------------------------------------------------

\1\ The number ``529893'' is given as an example only. The
number on the mark will correspond to the export certificate.
[GRAPHIC] [TIFF OMITTED] TP23JA12.003

12. Revise Sec. 381.105 to read as follows:

Sec. 381.105 Marking products for export.

When authorized by inspection personnel, establishments must mark
the outside container of any inspected and passed product for export,
except ship stores, small quantities exclusively for the personal use
of the consignee and not for sale or distribution, and shipments by and
for the U.S. Armed Forces, with an export inspection mark as shown in
Sec. 381.104 of this subchapter.
13. Revise Sec. 381.106 to read as follows:

Sec. 381.106 Export certification.

(a) Exporters must apply for export certification of inspected and
passed products to any foreign country. Exporters may apply for an
export certificate using a paper or electronic application. FSIS will
assess exporters that submit an electronic application the charge in
Sec. 362.5(e).
(b) FSIS will issue only one certificate for each consignment,
except in the case of error in the certificate or loss of the
certificate originally issued. A request

[[Page 3166]]

for a replacement or in lieu of paper certificate, except in the case
of a lost certificate, must be accompanied by the original paper
certificate. The new certificate will carry the following statement:
``Issued in lieu of --------'', with the numbers of the certificates
that have been superseded.
(c) FSIS will deliver a copy of the certificate to the person who
requested such certificate or his agent. Such persons may duplicate the
certificate as required in connection with the exportation of the
product.
(d) FSIS will retain a copy of the certificate.
(e) Exporters may request inspection personnel to issue
certificates for export consignments of product of official
establishments not under their supervision, provided the consignments
are first identified as having been ``U.S. inspected and passed,'' are
found to be neither adulterated nor misbranded, and are marked as
required by Sec. 381.105.

PART 590--INSPECTION OF EGGS AND EGG PRODUCTS (EGG PRODUCTS
INSPECTION ACT)

14. The authority citation for Part 590 continues to read as
follows:

Authority: 21 U.S.C. 1031-1056.

15. Add Sec. 590.407 to read as follows:

Sec. 590.407 Export certification and marking of containers with
export inspection mark.

(a) Exporters must apply for export certification of inspected and
passed products shipped to any foreign country. Exporters may apply for
an export certificate using a paper or electronic application. FSIS
will assess exporters that submit an electronic application the charge
in Sec. 592.500(d).
(b) FSIS will issue only one certificate for each consignment,
except in the case of error in the certificate or loss of the
certificate originally issued. A request for a replacement or in lieu
of paper certificate, except in the case of a lost certificate, must be
accompanied by the original paper certificate. The new certificate will
carry the following statement: ``Issued in lieu of --------'', with the
numbers of the certificates that have been superseded.
(c) FSIS will deliver a copy of the export certificate to the
person who requested such certificate or his agent. Such persons may
duplicate the certificate as required in connection with the
exportation of the product.
(d) FSIS will retain a copy of the certificate.
(e) When authorized by inspection personnel, establishments must
mark the outside container of any inspected and passed egg products
destined for export, except ship stores, small quantities exclusively
for the personal use of the consignee and not for sale or distribution,
and shipments by and for the U.S. Armed Forces, with a mark that
contains a unique identifier that corresponds to the export certificate
or an export inspection mark with the following form:\1\
---------------------------------------------------------------------------

\1\ The number ``529893'' is given as an example only. The
number on the export certificate will correspond to the export
certificate.
[GRAPHIC] [TIFF OMITTED] TP23JA12.004

(f) Exporters may request inspection personnel to issue
certificates for export consignments of product of official
establishments not under their supervision, provided the consignments
are first identified as having been ``U.S. inspected and passed,'' are
found to be neither adulterated nor misbranded, and are marked as
required by paragraph (e) of this section.

PART 592--VOLUNTARY INSPECTION OF EGG PRODUCTS

16. The authority citation for Part 592 continues to read as
follows:

Authority: 7 U.S.C. 1621-1627.

17. In Sec. 592.20 add paragraph (d) to read as follows:
* * * * *
(d) Export certification. Upon application, by any person intending
to export any egg product, inspectors may make certifications regarding
products for human food purposes, to be exported, as meeting conditions
or standards that are not imposed or are in addition to those imposed
by the regulations in the part and the laws under which such
regulations were issued.
17. Revise Sec. 592.500 paragraph (a) and add paragraphs (d), (e),
and (f) as follows:

Sec. 592.500 Payment of fees and charges.

(a) Fees and charges for voluntary base time rate, overtime
inspection service, holiday inspection service, and electronic export
applications shall be paid by the interested party making the
application for such service, in accordance with the applicable
provisions of this section and Sec. 592.510 through Sec. 592.530,
both inclusive. If so required by the inspection personnel, such fees
and charges shall be paid in advance.
* * * * *
(d) Exporters that submit electronic export certificate
applications will be charged a fee per application submitted.
(e) For each calendar year, FSIS will calculate the electronic
export certificate application fee, using the following formula: Labor
Costs (Direct Inspection Labor Cost + Technical Support Cost + Export
Library Maintenance Cost) + Information Technology Costs (On-going
operations Cost + Maintenance Cost + eAuthentication Cost), divided by
the number of export applications.
(f) FSIS will publish notice of the electronic export certificate
application fee annually in the Federal Register.

Done at Washington, DC, on January 11, 2012.
Alfred V. Almanza,
Administrator.
[FR Doc. 2012-1158 Filed 1-20-12; 8:45 am]
BILLING CODE 3410-DM-P