[Federal Register Volume 64, Number 128 (Tuesday, July 6, 1999)]
[Proposed Rules]
[Pages 36492-36516]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-17122]



[[Page 36491]]

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Part V





Department of Health and Human Services





_______________________________________________________________________



Food and Drug Administration



_______________________________________________________________________



21 CFR Parts 16, 101, and 115



Food Labeling: Safe Handling Statements: Labeling of Shell Eggs; Shell 
Eggs: Refrigeration of Shell Eggs Held for Retail Distribution; 
Proposed Rule



Preliminary Regulatory Impact Analysis and Initial Regulatory 
Flexibility Analysis of the Proposed Rule to Require Refrigeration of 
Shell Eggs at Retail and Safe Handling Labels; Proposed Rule

  Federal Register / Vol. 64, No. 128 / Tuesday, July 6, 1999 / 
Proposed Rules  

[[Page 36492]]



DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Parts 16, 101, and 115

[Docket Nos. 98N-1230, 96P-0418, and 97P-0197]
RIN 0910-AB30


Food Labeling: Safe Handling Statements: Labeling of Shell Eggs; 
Shell Eggs: Refrigeration of Shell Eggs Held for Retail Distribution

AGENCY: Food and Drug Administration, HHS.

ACTION: Proposed rule.

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SUMMARY: The Food and Drug Administration (FDA) is proposing to require 
safe handling statements on labels of shell eggs that have not been 
treated to destroy Salmonella microorganisms. The agency is also 
proposing to require that, when held by retail establishments, shell 
eggs be stored and displayed under refrigeration at a temperature of 
7.2  deg.C (45  deg.F) or less. FDA is taking these actions because of 
the number of outbreaks of foodborne illnesses and deaths caused by 
Salmonella Enteritidis that are associated with the consumption of 
shell eggs that have not been treated to destroy this pathogen. These 
actions complement regulations of the Food Safety and Inspection 
Service (FSIS) that require that shell eggs be stored and transported 
at a temperature of 7.2  deg.C (45  deg.F) or less and that the 
consumer containers of shell eggs be labeled to indicate that 
refrigeration is required. FDA's proposal also responds, in part, to 
petitions from Rose Acres Farm, Inc., and the Center for Science in the 
Public Interest (CSPI). FDA expects that by requiring this information, 
consumers will be able to take measures to protect themselves from 
illness or deaths associated with consumption of shell eggs that have 
not been treated to destroy Salmonella Enteritidis.

DATES: Written comments by September 20, 1999. See section VII for the 
proposed effective date of a final rule based on this proposal.

ADDRESSES: Submit written comments to the Dockets Management Branch 
(HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, 
Rockville, MD 20852. Copies of this proposed rule are available on the 
Internet at ``http://www.fda.gov/cfsan''.

FOR FURTHER INFORMATION CONTACT: Geraldine A. June, Center for Food 
Safety and Applied Nutrition (HFS-158), Food and Drug Administration, 
200 C St. SW., Washington, DC 20204, 202-205-5099.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
    A. Epidemiology of Salmonellosis
    B. Salmonella Contamination of Eggs
    C. Infectious Dose
    D. Inappropriate Handling of Eggs by Consumers and Other Food 
Preparers
    E. Current Commercial Practices for Handling Eggs
    F. Limiting the Numbers of Salmonella Microorganisms in Eggs
    G. Current Efforts
    H. Petitions to the Agency
II. The Proposal to Require Refrigeration of Shell Eggs in Retail 
Establishments
    A. Rationale for Proposal
    B. Legal Authority for FDA to Require Refrigeration of Shell 
Eggs
    C. Proposed Refrigeration Requirements at Retail
III. The Proposal for Shell Egg Labeling
    A. Rationale for Shell Egg Labeling Proposal
    B. Legal Authority for FDA to Require Label Statements
    C. Covered Products
    D. Essential Elements of Specific Label Statements
    E. Placement and Prominence of Label Statements
IV. Analysis of Impact
    A. Benefit/Cost Analysis
    B. Small Entity Analysis
V. Executive Order 12612: Federalism
VI. Environmental Impact
VII. Effective Date
VIII. Paperwork Reduction Act of 1995
IX. Comments
X. References

I. Background

A. Epidemiology of Salmonellosis

    Salmonella microorganisms are ubiquitous, and are commonly found in 
the digestive tracts of animals, especially birds and reptiles. Human 
illnesses are usually associated with ingesting food or drink 
contaminated with Salmonella, although infection may also occur person 
to person by the fecal-oral route where personal hygiene is poor and by 
the animal to man route.
     The disease salmonellosis results from an intestinal infection 
with Salmonella microorganisms and is characterized by diarrhea, fever, 
abdominal cramps, headache, nausea, and vomiting. Symptoms of 
salmonellosis usually begin within 6 to 72 hours after consuming a 
contaminated food or liquid and last for 4 to 7 days. Most healthy 
people recover without antibiotic treatment. However, the infection can 
spread to the bloodstream, and then to other areas of the body such as 
the bone marrow or the meningeal linings of the brain, leading to 
severe and fatal illness (Ref. 1). This spreading phenomenon of 
salmonellosis is more likely in children, the elderly, and persons with 
weakened immune systems. In addition, about 2 percent of those who 
recover from salmonellosis may later develop recurring joint pains and 
arthritis (Ref. 2).
     Salmonellosis is a serious health concern. It is a notifiable 
disease, i.e., physicians are required to report cases (i.e., single 
occurrences of illness) to the local health departments. These cases 
are then, in turn, reported to state health departments, which report 
the annual totals to the Centers for Disease Control and Prevention 
(CDC). However, these reports are made only if there are test results 
identifying the Salmonella microorganism that caused the illness.
     In a 1979 to 1980 epidemiological study, CDC estimated that about 
45 percent of those persons from whom Salmonella isolates\1\ were 
reported were hospitalized for their illness and that 1.3 percent of 
them died from complications associated with the illness (Ref. 3). Very 
similar proportions were found in a 1984 to 1985 study. Using these 
proportions, CDC estimated that, in 1988, the approximately 43,000 
reported cases represented a minimum of 19,000 hospitalizations and 500 
deaths. Reported cases likely represent only a small portion of the 
actual number of illnesses that occur because: (1) Ill individuals do 
not always seek care by medical professionals, especially if the 
symptoms are not severe; (2) medical professionals may not establish 
the cause of the illness but simply treat the symptoms; and (3) medical 
professionals do not always report Salmonella cases to CDC. It is 
estimated that the actual number of cases per year may be 20-fold to 
100-fold greater than the number of reported cases. Therefore, the 
number of actual cases of salmonellosis in 1988 was estimated to be 
from 800,000 to 4 million (Ref. 4). In 1996, there were 39,027 
confirmed cases\2\ of human salmonellosis reported to the CDC.
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    \1\ When a physician sees a patient and suspects that the 
patient has a case of salmonellosis, the physician may obtain a 
patient's specimen (e.g., stool) for analysis. The specimen is sent 
to the laboratory to be tested to identify and confirm any 
Salmonella that may be present. Thus, the laboratory obtains the 
actual isolate of Salmonella.
    \2\ A case of illness is confirmed as salmonellosis only if an 
isolate is confirmed by a laboratory as being Salmonella. Thus, 
although all cases may not be confirmed, all confirmed cases are 
associated with isolates of Salmonella.
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     CDC surveillance data list close to 600 different Salmonella 
serotypes (a group of related microorganisms distinguished by their 
antigens) that have caused illness in the United States. The three 
serotypes most frequently reported as

[[Page 36493]]

causing illness are Salmonella Enteritidis (SE), S. Typhimurium, and S. 
Heidelberg (Ref. 5). These microorganisms are found in poultry and 
eggs.
     Since 1976, SE-associated cases of salmonellosis have increased 
and have been found throughout the country. SE accounted for only about 
5 percent of the number of all reported Salmonella isolates in 1976. In 
1985, 1990, 1994, 1995, 1996, and 1997, SE constituted 9.8 percent, 
20.6 percent, 26 percent, 24.7 percent, 24.5 percent, and 22.9 percent, 
respectively, of all Salmonella isolates. Currently, SE is one of the 
most predominant reported serotypes. There were 7,924 SE isolates 
reported in 1997 (Ref 7).
     CDC surveillance data show that the overall rates of isolation\3\ 
of SE increased 680 percent during the period between 1976 to 1994 
(Ref. 6). Initially, the increases in the United States largely 
occurred in the Northeast. Later, the increase spread throughout the 
country. While the trends for the years 1990 to 1994 show a 21 percent 
decrease in the SE isolation rate in the Northeast, the rate increased 
approximately 300 percent for the Pacific region.
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    \3\ Rates of isolation are the number of reported isolates 
divided by 100,000 total population.
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     In 1985, the States reported 26 SE-related outbreaks (i.e., 
occurrences of 2 or more cases of a disease related in time and place) 
to CDC but 77 outbreaks were reported by 1989. In 1996, there were 51 
reported SE outbreaks (Ref. 9). From 1985 through 1996, there have been 
a total of 660 SE-related outbreaks reported to CDC. Associated with 
these outbreaks, there have been 25,935 reported cases of illness, 
2,508 reported hospitalizations, and 77 reported deaths. Deaths have 
occurred in all years of this time period. In 1997, there were 44 
reported outbreaks (Ref. 10). Many SE outbreaks were attributed to food 
served in commercial establishments, such as restaurants and other 
commercial food service establishments, hospitals, nursing homes, 
schools, prisons, private gatherings, and ships, with the implicated 
food containing undercooked eggs (Ref. 11). Although most deaths linked 
to reported SE-related outbreaks in recent years have occurred among 
the elderly in hospitals and nursing homes (Ref. 3), salmonellosis can 
be fatal to an otherwise healthy person if a sufficient dose is 
ingested, and proper treatment is not administered (Ref. 12).
    Until the mid-1980's, eggs were not associated with many Salmonella 
outbreaks. Since the mid-1980's, however, the number of egg-associated 
salmonellosis outbreaks have increased. Shell eggs are now the 
predominant source of SE-related cases of salmonellosis in the United 
States where a food vehicle is identified (Ref. 13). From 1985 to 1993, 
consumption of eggs was associated with 83 percent of SE-related 
outbreaks where a food vehicle was identified (Ref. 14). Recent data 
indicate that egg-associated SE outbreaks still represent a significant 
portion of the total number of all SE outbreaks reported to CDC. In 
1996, 1997, and 1998, 60 percent, 70 percent, and 58 percent of the SE 
outbreaks reported to CDC implicated foods containing eggs (Ref. 
14A).\4\
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    \4\ The total number of SE outbreaks implicating eggs is equal 
to the total number of SE outbreaks minus the number of outbreaks 
where the vehicle is unknown or where the implicated food is one 
other than eggs, i.e., chicken or turkey.
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     The Foodborne Diseases Active Surveillance Network (FoodNet\5\), 
an active surveillance system for foodborne pathogens, recently 
reported a 44 percent decrease in the isolation rate for SE (2.5 to 1.4 
per 100,000 U.S. population) from 1996 to 1998 (Ref. 14B). This 
decrease is substantial; however, the results are preliminary and the 
reasons for this decrease are under investigation. Implementation of 
egg quality assurance programs that included microbiological testing 
and egg diversion may have contributed to this reported decrease. 
However, the reported decrease may also be explained by a decline in 
the presence of Salmonella isolated from poultry and meat products 
because of recently implemented HACCP programs, or by some combination 
of egg quality assurance and meat/poultry HACCP program. In any event, 
FDA believes that the incidence of SE is still too high and that 
additional measures can and should be put in place with respect to 
shell eggs to reduce the incidence even further.
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    \5\ FoodNet is a collaborative project among CDC, FSIS, FDA, and 
8 sites in the U.S. where foodborne disease data are being 
collected. To identify cases of foodborne illness, surveillance 
personnel contact clinical laboratories weekly or monthly to obtain 
data on numbers of cases.
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B. Salmonella Contamination of Eggs

     Having evolved to protect the developing chick embryo, an egg 
provides a uniquely inhospitable environment for Salmonella and other 
bacterial contaminants. An egg's natural defenses are both mechanical 
and chemical. Mechanically, there are four barriers that must be 
overcome for bacteria to reach the nutrient-rich yolk where they can 
rapidly multiply: (1) The shell, (2) the two membranes (inner and 
outer) between the shell and the albumin (egg white), (3) the albumin, 
and (4) the vitellin (yolk) membrane that holds the yolk. Additionally, 
when laid, the egg shell is covered on the outside by the cuticle, a 
substance similar to the shell membrane. When the cuticle dries, it 
seals the egg's pores, thereby inhibiting initial bacterial 
penetration. Consequently, a fresh egg is fairly resistant to invasive 
bacteria. However, the cuticle is generally removed along with debris 
on the surface of the shell during the cleaning process employed to 
prepare eggs for commercial sale. Thus, this outermost defense is 
generally not available to protect against trans-shell penetration of 
bacteria.
     The albumin is probably the most formidable defense against 
microorganisms that have entered an egg. In a fresh egg, the albumin 
has a high viscosity that both anchors the yolk in the center of the 
egg and inhibits movement of microorganisms toward the yolk. Chemical 
defenses of the albumin include: (1) A very alkaline pH (>9), (2) low 
available nitrogen, and (3) proteins that have an anti-bacterial 
effect, specifically, ova-transferrin and lysozyme. If, however, 
conditions occur that allow SE to transverse the mechanical and 
chemical barriers in an egg and reach the nutrient rich yolk, the 
microorganisms may then increase in number.
     Until recently, Salmonella contamination of shell eggs was thought 
most likely to be by trans-shell penetration of bacteria present in the 
egg's environment. The surface of an egg can become contaminated with 
any microorganism that is excreted by the laying flocks. In addition, 
contact with nesting materials, dust, feedstuff, shipping and storage 
containers, human beings and other creatures may be a source of shell 
contamination. The likelihood of trans-shell penetration increases with 
the length of time that the eggs are in contact with contaminating 
materials.
     While environmental contamination is still a route for Salmonella 
contamination, it has recently been found that an egg's contents can 
become contaminated with SE before the egg is laid. Though the 
mechanism is still not well understood, SE will infect the ovaries and 
oviducts of some egg laying hens, permitting ``transovarian'' 
contamination of the interior of the egg while the egg is still inside 
the hen (Refs. 15 and 16). The site of contamination is usually the 
albumin.
     It is believed that only a small number of hens in an infected 
flock shed SE at any given time and that an infected hen

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may lay many uncontaminated eggs (Refs. 15 and 17). Nonetheless, it has 
been estimated that of the 47 billion shell eggs consumed annually as 
shell eggs, 2.3 million are SE-positive, exposing a large number of 
people to the risk of illness (Ref. 8). FDA believes that it is this 
transovarian contamination that is responsible for the increased number 
of SE-related salmonellosis cases described in section I.A of this 
document.

C. Infectious Dose

     In general, the greater the numbers of microorganisms ingested, 
the greater the likelihood of disease. The likelihood of disease is 
also affected by the virulence of the microorganism and the 
susceptibility of the host (Ref. 18). However, there is evidence that 
the infectious dose (i.e., amount of microorganisms capable of causing 
disease) for SE can be very low. For example, in a 1994 outbreak 
attributed to consumption of SE-contaminated ice cream, the highest 
level of contamination found in the implicated ice cream was only six 
microorganisms per half-cup (65 gram) serving (Ref. 19). Another report 
showed that by using a different method of determining levels of SE in 
the implicated ice cream, the infective dose per serving was 25 
microorganisms (Ref. 20). These reports indicate that low level 
contamination of foods with SE, and thus, low doses, can lead to 
illness. It is generally believed that SE-contaminated eggs initially 
contain only a few microorganisms (less than 20 microorganisms (Ref. 
21)). Thus, the small number of microorganisms that initially may 
contaminate the egg may be sufficient to cause illness.

D. Inappropriate Handling of Eggs by Consumers and Other Food Preparers

     SE outbreak investigations show that outbreaks commonly occur when 
foods prepared with SE-contaminated eggs are not appropriately handled 
by consumers or other food preparers. Common practices inappropriate 
for foods containing SE-contaminated eggs include temperature abuse 
(i.e., failing to keep the eggs and foods prepared with eggs 
refrigerated) and inadequate cooking. Pooling eggs to prepare a large 
volume of an egg-containing food that is subsequently temperature 
abused or inadequately cooked can cause illness in large numbers of 
people if any of the eggs were initially contaminated with SE.
     Temperature abuse gives SE the opportunity to multiply, thereby 
increasing the number of viable microorganisms ingested, especially 
when eggs are consumed raw. Temperature abuse and consumption of raw 
eggs were associated with an SE outbreak at a catered wedding reception 
in New York, where Caesar salad dressing was implicated as the cause of 
SE illnesses. The Caesar salad dressing was made with 18 raw shell 
eggs, left unrefrigerated for 2 hours at the catering establishment, 
held in an unrefrigerated truck until delivered, and served at the 
reception 4\1/2\ hours later (Ref. 6).
     Incomplete cooking of eggs (as in soft-boiled eggs or sunny-side 
up eggs) also allows ingestion of viable microorganisms if any of the 
eggs were initially contaminated. Incomplete cooking of eggs was 
associated with an SE outbreak in Tennessee, where the consumption of 
Hollandaise sauce served in a restaurant was linked to SE illnesses. 
Review of the food handling practices showed that the sauce had been 
prepared from eggs that were pooled, incompletely cooked, and served 
more than one hour after preparation (Ref. 12). Another outbreak of SE 
illness in an Indiana nursing home was linked to the consumption of 
baked eggs. The baked eggs were prepared by pooling 180 Grade A raw 
shell eggs, mixing with a whisk, and baking in a single pan at 204 
deg.C (400  deg.F) for 45 minutes to 1 hour. Investigators believed 
that inadequate cooking occurred because the mixture was not stirred 
while baked (Ref. 6).
     FDA is also aware that many consumers eat foods containing raw or 
undercooked eggs. An FDA survey indicated that 53 percent of 
respondents (total 1,620) ate foods containing raw eggs at some time 
(Ref. 22). Raw egg-containing foods mentioned in this survey included 
cookie batter, homemade ice cream, homemade eggnog, Caesar salad, 
frosting, homemade shakes, homemade Hollandaise sauce, and homemade 
mayonnaise. The Menu Census Survey (1992 to 1995) (Refs. 23 and 24) 
showed that frosting accounted for 53 percent and salad dressing 19 
percent of occasions when raw egg-containing products were consumed.
     The 1996 to 1997 Food Consumption and Preparation Diary Survey 
(Ref. 24) showed that 27 percent of all egg dishes consumed were 
undercooked (described as being runny or having a runny yolk or runny 
white). On average, each person consumed undercooked eggs 20 times a 
year. Within those groups at risk, women over 65 and children under 6 
consumed undercooked eggs 21 times a year and 8 times a year, 
respectively. Moreover, consumer focus group research showed that many 
participants did not realize that certain foods such as chocolate 
mousse or key lime pie may contain raw or undercooked eggs, and, 
therefore, are potentially hazardous (Ref. 25).

E. Current Commercial Practices for Handling Eggs

     Egg production facilities are either ``in-line'' facilities or 
``off-line'' facilities. An in-line facility integrates laying, 
packing, and processing at one location. Freshly laid eggs go directly 
into a processing system where they are cleaned, sorted, and packed for 
distribution. An ``off-line'' facility receives eggs from laying 
facilities at other locations. Generally eggs are cleaned before they 
are packed. Typically, U.S. processors use hot water (43 to 49  deg.C 
(110 to 120  deg.F)) to wash eggs. After the eggs are washed, they are 
dried with forced ambient air and then packed. At the time that eggs 
are packed, the internal temperatures are often in the 21 to 27  deg.C 
(70 to 80  deg.F) range. Most processors hold packed eggs in coolers at 
an ambient temperature of 7 to 16  deg.C (45 to 60  deg.F).
     Currently, eggs are held at various temperatures for various times 
prior to purchase by the consumer. The U.S. Department of Agriculture 
(USDA) estimates the following times and temperatures in the 
distribution of shell eggs: (1) 2 to 72 hours at temperatures of 7.2 to 
32  deg.C (45 to 90  deg.F) at the processor, (2) 1 to 24 hours at 
temperatures of 7.2 to 32  deg.C (45 to 90  deg.F) during 
transportation, (3) 0 to 60 days at temperatures of 4 to 32  deg.C (40 
to 90  deg.F) at retail (Ref. 8). These data indicate that, especially 
at retail, eggs are being held, for long periods of time, at 
temperatures that will not inhibit growth of SE. Currently, 37 States 
and the District of Columbia require ambient temperatures of 7.2  deg.C 
(45  deg.F) or less for egg storage and handling at retail. The other 
States either require ambient temperatures of 16  deg.C (60  deg.F) or 
less (i.e., the temperature required under USDA grading standards) or 
have no temperature requirements for egg storage and handling at 
retail.
     These ambient temperatures, however, do not correlate to the 
internal temperature of the egg. The internal temperature of the egg 
when the eggs are transported ranges between 10 and 27  deg.C (50 and 
80  deg.F), depending on the egg's temperature at the time of packing, 
the way the eggs are packaged, how the crates are packed and stacked, 
and the length of time they are in the cooler before they are shipped 
(Ref. 26).

F. Limiting the Numbers of Salmonella Microorganisms in Eggs

     Because studies suggest that infectious dose for SE can be low, 
FDA

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believes that the ideal solution to this public health problem would be 
to adopt measures to eliminate viable SE in shell eggs, either through 
preventing transovarian and trans-shell contamination or through 
processing to destroy viable SE in shell eggs, with distribution 
safeguards to prevent subsequent recontamination. However, FDA has 
tentatively concluded that eliminating viable SE in shell eggs in 
either of these two ways is not yet practicable. Other measures that 
can limit SE and inform consumers how to avoid the risks posed by SE 
are, however, practicable and thus FDA is proposing in this regulation 
to put such measures in place. The agency has also, jointly with USDA, 
published an advance notice of proposed rulemaking (ANPRM) (63 FR 
27502, May 19, 1998; ``the 1998 ANPRM'') that requests comments on 
farm-to-table actions that will decrease the food safety risks 
associated with shell eggs.
     As mentioned previously, although fresh shell eggs provide a 
particularly inhospitable environment for Salmonella and other 
microorganisms to multiply, the chemical and physical barriers against 
bacterial movement and growth degrade over a period of time. 
Consequently, as a result of degradation, SE and other bacteria, if 
present, are better able to move into the nutrient rich yolk, which 
provides a favorable environment for growth of SE.
     Studies demonstrate that the rate of this degradation is time and 
temperature related. C. J. Kim et al. (Ref. 27) found that SE 
inoculated into the albumin of whole shell eggs multiplied to high 
numbers if the inoculated eggs were not properly refrigerated. This 
study examined the growth of SE inoculated into the albumin of shell 
eggs in numbers ranging from approximately 2 to 200,000 organisms per 
egg and held for 10, 20, or 30 days at 1 of 5 different temperatures 
from 4  deg.C (39  deg.F) to 27  deg.C (81  deg.F).
     The investigators in this study found that, of the variables 
studied, temperature was the most important in determining the growth 
of SE (Ref. 27). Furthermore, they found that the growth response was 
directly proportional to the temperature at which the inoculated eggs 
were held. The study demonstrated that SE inoculated in shell eggs can 
multiply to substantial levels if held at 10  deg.C (50  deg.F) or 
higher for up to 30 days. The authors concluded that ``because the 
number of SE present at the time an infected egg is laid is probably 
very low, egg storage at 4  deg.C (39  deg.F) could be expected to 
result in a smaller risk to the public health than higher storage 
temperatures'' (Ref. 27). Thus, although albumin is inhibitory to 
Salmonella, these experiments show that SE inoculated into shell egg 
albumin, even at low levels, can multiply to substantial levels if held 
at 10  deg.C (50  deg.F) or higher for a significant period of time.
     A subsequent study by Humphrey et al., (Ref. 21), of 5,700 eggs 
from flocks naturally infected with SE, appears to show that albumin is 
seeded with SE during passage of the egg through the oviduct. These SE 
microorganisms remain dormant even in eggs stored at room temperature 
(21  deg.C (70  deg.F)) for 2 to 3 weeks. However, after that period of 
time, nutrients or factors that negate the inhibitory properties of 
albumin appear to leak out of the yolk, possibly because of changes in 
the yolk membrane. These substances obtain levels close to the yolk in 
a sufficiently high concentration to support large populations of SE.
     In a study of laying hens that were experimentally infected with 
SE, R. K. Gast and C. W. Beard (Ref. 28) also found that infected hens 
can produce eggs with SE contaminated contents. Their study indicates 
that transovarian infection followed by limited room temperature 
storage (25  deg.C (77  deg.F)) resulted in contamination of the yolk 
membrane or albumin, or both, but not the contents of the yolk. In the 
Gast and Beard experiments, all eggs were held at room temperature for 
4 days before sampling. Although the number of microorganisms per egg 
was not measured, indirect evidence, such as the higher recovery 
frequency of SE from egg contents when incubated in broth for 48 hours 
versus 24 hours, suggests that the number of microorganisms per egg was 
low after holding the eggs for 4 days at room temperature.
     Clay and Board (Ref. 29), by inoculating SE into the air cell of 
eggs, were able to show that the movement of the microorganism from the 
shell membrane to albumin and to the yolk was associated with aging 
related changes in the egg structure. These changes, such as changes in 
the relative densities of the albumin and yolk and enlargement of the 
air cell, result in movement of the yolk towards the inoculated SE 
during storage. These changes have the effect of bringing the yolk 
closer to the contaminated shell membranes when the egg is incubated in 
a position with the air cell uppermost. These investigators found that 
gross contamination of the albumin with SE was inhibited when the eggs 
were stored at 4  deg.C (39  deg.F) although the microorganism was 
viable throughout 30 days of storage. However, storage of eggs at 4 
deg.C (39  deg.F) or 10  deg.C (50  deg.F) for 20 days followed by an 
increase in temperature to 25  deg.C (77  deg.F) led to generalized 
infection of the egg contents. Clay and Board state that their 
observations suggest that refrigerated storage of eggs should be a part 
of a protective barrier between the laying flock and the consumer, and 
to be effectively realized, refrigerated storage would have to be 
imposed shortly after the egg is laid and continue until immediately 
before cooking and consumption.
     T. J. Humphrey (Ref. 30) studied the effect of storage 
temperatures of 8, 10, 12, and 15  deg.C (46, 50, 54, and 59  deg.F) on 
Salmonella growth in artificially inoculated eggs. No growth was 
observed after 3 weeks at 8  deg.C (46  deg.F). Growth of SE phage type 
4 and 13a was observed at 10, 12, and 15  deg.C (50, 54, and 59 
deg.F). SE phage 8 showed no growth at temperatures below 12  deg.C (54 
 deg.F).
     Bradshaw et al. (Ref. 30A) studied the effect of storage 
temperatures on the growth of SE inoculated into the yolks of shell 
eggs. The inoculated yolks were incubated at 37, 15.5 and 7  deg.C (99, 
59, and 45  deg.F). They observed no significant growth when the eggs 
were held at 7  deg.C (45  deg.F) for up to 94 days.
     FDA finds that the scientific evidence on the growth of SE in eggs 
shows that control of storage temperature of shell eggs can effectively 
prevent the multiplication of any SE that may be present. While there 
is some debate about the precise optimum storage temperature for eggs, 
the research cited previously clearly indicates that refrigerating 
shell eggs at 8  deg.C (46  deg.F) and 7.2  deg.C (45  deg.F) or less 
greatly extends the time that an egg can maintain its defenses against 
movement of contaminating bacteria such as Salmonella to the nutrient 
rich yolk, and, therefore, substantially reduces the likelihood that 
any SE that is present will be able to increase in numbers. Moreover, 
there is evidence that cooling eggs reduces the heat resistance of SE 
microorganisms, making any microorganisms that may be present in an egg 
more likely to be killed when the egg is less than completely cooked 
(Refs. 30 and 31). Thus, FDA believes that sustained refrigeration of 
eggs plays an important role in reducing the likelihood that any SE 
present will reproduce.
     Although continued refrigeration of eggs reduces likelihood of 
outgrowth of any SE that may be present, another measure a consumer may 
take to reduce the likelihood of consuming contaminated eggs is to 
thoroughly cook eggs. CDC reports that thorough cooking normally kills 
Salmonella that may be present in eggs (Ref. 32). However, some

[[Page 36496]]

cooking techniques commonly used for eggs or egg-containing foods do 
not thoroughly cook the eggs. For example, eggs that are liquid or 
runny after light cooking (e.g., soft boiled eggs, and sunny-side up 
eggs) can still contain viable Salmonella microorganisms. FDA's Food 
Code (a model code that is published by FDA and intended for adoption 
by States and local authorities for governing food retail and food 
service establishments) requires that raw eggs that are broken and 
prepared in response to a consumer's order be cooked at 63  deg.C (145 
deg.F) for 15 seconds. Other raw eggs are required to be cooked 15 
seconds at 68  deg.C (155  deg.F) (Ref. 33).

G. Current Efforts

     FDA and the Food Safety and Inspection Service (FSIS) of the USDA 
share Federal authority to regulate eggs for safety. FDA has 
jurisdiction over the safety of foods (except meat and poultry) 
generally, including shell eggs, under section 201 of the Federal Food, 
Drug, and Cosmetic Act (the act) (21 U.S.C. 321, et seq.) and under the 
Public Health Service Act (PHS Act) (42 U.S.C. 201 et seq.).
     USDA has primary responsibility for implementing the Egg Products 
Inspection Act (EPIA) (21 U.S.C. 1031 et seq.). Under the EPIA, FSIS, 
and USDA's Agricultural Marketing Service (AMS) share responsibility to 
inspect processed egg products and to ensure proper distribution of 
eggs that are cracked or otherwise unsuitable for sale as whole shell 
eggs.
     Federal agencies are working cooperatively with egg producers and 
others to enhance the safety of eggs that are sold to consumers. USDA's 
Extension Service, FSIS, AMS, and FDA all provide educational material 
on egg production methods that enhance food safety. FDA and FSIS work 
with States to encourage uniformity among state laws in retail and food 
service establishments through adoption of the Food Code. In addition, 
FDA, which has responsibility for investigating reports of SE outbreaks 
from foods in interstate commerce, performs trace backs to identify the 
source of the implicated eggs, environmentally tests flocks, diverts 
eggs from SE positive flocks, collects flock data to help track the 
spread of SE among layer flocks, and encourages better quality control.
     In recent years, several programs have been created for the 
purpose of controlling the spread of SE on farms. One such program, the 
National Poultry Improvement Plan (NPIP), a cooperative Federal-State 
program sponsored by USDA's Animal Plant Health Inspection Service 
(APHIS), was developed to provide assistance to breeders and hatcheries 
in keeping flocks free of egg-transmitted diseases. In 1989, the NPIP 
developed an SE control program to reduce the prevalence of SE in 
hatching eggs and chicks through sanitation and other control measures. 
Another APHIS-sponsored joint Federal, State, and academic program, the 
Salmonella Enteritidis Pilot Program, was started in Pennsylvania in 
1992. The objectives of the program were to develop effective and 
efficient procedures for monitoring SE and effective and efficient ways 
to prevent SE from contaminating eggs. The findings from the pilot 
program were incorporated into the Pennsylvania Egg Quality Assurance 
Program (PEQAP). The success of the PEQAP was indicated by a study, 
conducted in 1995, that demonstrated a decline in the number of SE-
positive samples in houses that had been in the program from 1992 to 
1995 (Ref. 34). Other programs have been developed to address the 
spread of SE to eggs, such as California's Egg Quality Assurance Plan, 
the New England Risk Reduction Program for SE, the United Egg 
Producers' Five Star Program, and the United States Animal Health 
Association's Best Management Practices for a Salmonella Enteritidis 
Reduction Program For Egg Producers.
     A spent hen and liquid egg survey conducted by USDA in 1991 and 
repeated in 1995 showed that, despite the efforts described previously, 
the nation-wide prevalence of SE-positive flocks and the incidence of 
SE in shell eggs increased (Ref. 35). Because of the number of human 
illnesses and deaths attributable to SE in shell eggs, FDA and USDA are 
concerned that the current regulatory program for shell eggs is not 
adequate. Consequently, FDA and USDA are looking at ways of addressing 
the ``farm to table'' safety of shell eggs. FDA and FSIS recently have 
taken several steps to address the issue of reducing the risk of SE 
associated with shell eggs.
     For example, in 1990, FDA reclassified eggs as a ``potentially 
hazardous food'' in the Food Code. The 1999 Food Code stipulates that 
potentially hazardous foods, including eggs, be maintained at 5  deg.C 
(41  deg.F) or less (Ref. 33). However, because of the number of 
illnesses associated with eggs and the fact that not all States have 
adopted this aspect of the Food Code, FDA tentatively concludes that 
stronger measures are necessary regarding handling of shell eggs.
     On November 18 to 20, 1996, FDA and FSIS sponsored a 3-day 
technical conference that provided a forum for discussion on 
temperature control interventions and verification techniques in the 
transportation and storage of meat, poultry, seafood, and eggs and egg 
products. FSIS and FDA also published a joint ANPRM (61 FR 59372, 
November 22, 1996) soliciting information on issues related to ensuring 
the safety of potentially hazardous foods during transportation and 
storage. Comments to that document are being analyzed.
     In addition, in December 1996, FSIS began a science based risk 
assessment for shell eggs and egg products. This project was conducted 
by a multidisciplinary team of scientists from academia and USDA. The 
project goals were to provide an understanding of egg-associated 
foodborne disease, assist in evaluating farm to table risks and ways to 
reduce risks, and verify additional data needs. The final report was 
issued June 12, 1998.
     On September 3, 1997, FDA and FSIS jointly held a public meeting 
to review the current science, including technological and safety 
factors, relating to shell eggs and egg products and to identify 
intervention options that are most effective in reducing the public 
health risk in a cost-effective manner. Experts from industry, 
academic, regulatory, and consumer sectors presented information on 
illnesses and the epidemiology of outbreaks arising from shell eggs and 
foods containing raw and undercooked eggs; current concerns with 
emerging pathogens; procedures for processing eggs; and new and 
existing technology to control pathogens in shell eggs and egg 
products. Comments from this meeting were considered in the risk 
assessment project.
     In addition, FDA and USDA recently published in the Federal 
Register an ANPRM seeking to identify farm-to-table actions that will 
decrease the food safety risks associated with shell eggs. Information 
gathered from the foregoing measures will be considered as part of the 
two agencies' approaches for a comprehensive program to address the 
safety of shell eggs from farm to table. Because rulemaking to address 
a comprehensive program will likely take considerable time, FDA 
believes that it can meet an immediate goal of reducing the risk of 
foodborne illness from SE by ensuring that shell eggs at retail are 
held at appropriate temperatures and by providing safe handling 
statements for shell eggs. In addition, as stated in section II.A of 
this document, USDA published a final rule in the Federal Register of 
August 27, 1998 (63 FR 45663), amending its regulations to require that 
shell eggs packed for

[[Page 36497]]

consumer use be stored and transported at an ambient temperature that 
does not exceed 7.2  deg.C (45  deg.F) and that containers of shell 
eggs be labeled to indicate that refrigeration is required. Both FDA 
and FSIS will consider actions based on comments to the ANPRM to 
address issues other than labeling and refrigeration of eggs while held 
for retail distribution.

H. Petitions to the Agency

     FDA received a petition from Rose Acres Farms, Inc., (filed 
November 4, 1996, Docket No. 96P-0418) requesting, among other things, 
that the agency amend Sec. 101.17 (21 CFR 101.17) by adding a 
requirement that shell eggs bear a label statement that informs 
consumers of safe handling practices for the product. In support of its 
request, the petition contended that practically all SE outbreaks and 
deaths have involved mishandling of eggs. The petition stated that, 
therefore, reducing practices such as temperature abuse or inadequately 
cooking eggs would virtually eliminate the problem. The petition also 
asserted that some egg producers may not wish voluntarily to include 
safe handling information on their labels because they fear their 
competitors may not include the same information, and, therefore, their 
product would seem less safe by comparison. However, if FDA required 
safe handling instructions on all cartons of shell eggs, then no 
producer would be at a competitive disadvantage. The petition suggested 
the following label statement: ``Keep refrigerated and cook thoroughly 
before eating. Use pasteurized egg products for any recipe which does 
not require that the eggs be thoroughly cooked.''
     FDA also received a petition from CSPI (filed May 14, 1997, Docket 
No. 97P-0197) requesting, among other things, that the agency require 
that the carton of shell eggs bear a label statement cautioning 
consumers that eggs may contain harmful bacteria, and that consumers 
should not eat raw or undercooked eggs. In support of its request, CSPI 
stated that SE in eggs is a serious health problem and that illnesses 
caused by SE in the United States have increased. CSPI further stated 
that consumers have no way of knowing that an egg is contaminated 
because eggs that are contaminated with SE have a normal appearance. 
The petition suggested the following label statement: ``Caution: Eggs 
may contain illness-causing bacteria. Do not eat raw. Cook until yolk 
is firm.''
     The petition also requested, among other measures, that the agency 
require that eggs be refrigerated to an internal temperature of 5 
deg.C (41  deg.F) as soon as possible and kept at that temperature at 
all points up to and including the point of retail sale. This 
temperature, according to CSPI, will ensure that SE cannot multiply.
    USDA/FDA received approximately 73 responses to the 1998 ANPRM, 
each containing one or more comments. Responses were received from egg 
farmers, egg packers, associations for the egg industry, other trade 
associations, consumers, consumer interest groups, animal interest 
groups, academia, State government agencies, and foreign government 
agencies. Many of these comments addressed issues not relevant to this 
proposed rule, e.g., implementation of national standards for QA 
programs, implementation of HACCP, transportation of shell eggs, sell-
by and expiration dates for shell eggs, housing and forced molting of 
chickens, repacking of eggs, and exportation of SE-contaminated into 
other countries. FDA will not address those comments in this proposed 
rule. There were, however, several comments that did raise issues 
relevant to this proposed rule such as the extent of the SE problem, 
refrigeration of shell eggs, and safe handling instructions on consumer 
packages of shell eggs. Although most of these comments supported the 
approach proposed in this document, some comments suggested different 
approaches than those in this proposal. These latter comments are 
addressed below in the appropriate sections of this document.

II. The Proposal to Require Refrigeration of Shell Eggs in Retail 
Establishments

A. Rationale for Proposal

     As noted previously, the incidence and geographical distribution 
of egg-associated SE illnesses have made SE a significant public health 
concern. As discussed in section I.F of this document, one currently 
practicable measure that can limit the number of viable SE present in 
shell eggs is refrigeration, because it helps to maintain the 
effectiveness of the egg's natural defenses against SE and slows the 
growth rate of SE. Many of the comments to the 1998 ANPRM maintained 
that refrigeration of eggs is an essential measure to inhibit the 
growth of SE. Although there is the potential for SE to be present in 
shell eggs in infective doses regardless of adequate handling, 
temperature abuse increases the likelihood for the growth of any 
microorganisms present, thus increasing the risk of illness.
     As noted previously, USDA has the responsibility of implementing 
the EPIA. Amendments to the EPIA in 1991 (Pub. L. 102-237) require that 
shell eggs packed for consumers be stored and transported under 
refrigeration at an ambient temperature (i.e., the air temperature 
maintained in an egg storage facility or transport vehicle) not to 
exceed 45  deg.F and that the egg containers be labeled to indicate 
that refrigeration is required. FSIS has amended its regulations to 
require that no shell egg handler shall possess any shell eggs that are 
packed in containers destined for the ultimate consumer unless they are 
stored and transported under refrigeration at an ambient temperature of 
no greater than 45  deg.F (7.2  deg.C). In its regulation, FSIS defines 
an egg handler as any person, excluding the ultimate consumer, who 
engages in any business in commerce that involves buying or selling any 
eggs or processing any egg products, or otherwise using any eggs in the 
preparation of human food. FSIS defines an ultimate consumer as any 
household consumer, restaurant, institution, or other party who has 
purchased or received shell eggs or egg products for consumption. This 
regulation is effective August 27, 1999.
     Once the amendments to the EPIA are implemented, requirements will 
be in place for the refrigeration of packed shell eggs up to the point 
of retail distribution except that egg producers with a flock of 3,000 
hens or less are exempt from this requirement. However, without the 
continued refrigeration of shell eggs up to the time the eggs are 
cooked, there would be an opportunity for the egg's defenses to degrade 
and growth of SE to occur. FSIS's regulation does not require the 
ultimate consumer to maintain shell eggs under refrigeration. 
Consequently, the failure to refrigerate shell eggs in facilities such 
as restaurants and institutions could result in SE outgrowth. 
Therefore, to ensure that shell eggs are maintained under refrigeration 
throughout retail distribution up until they are cooked. FDA 
tentatively concludes that it should propose requirements that shell 
eggs throughout retail distribution be kept refrigerated until they are 
cooked. Without these requirements, the effectiveness of refrigeration 
in any part of the farm-to-table continuum would not be maximized.

B. Legal Authority for FDA to Require Refrigeration of Shell Eggs

     FDA is proposing these regulations under both the PHS Act and the 
act. FDA's legal authority to require refrigeration of eggs at retail 
derives from the provisions of sections 311, 361,

[[Page 36498]]

and 368 of the PHS Act (42 U.S.C. 243, 264, and 271) that relate to 
communicable disease. The PHS Act authorizes the Department of Health 
and Human Services (DHHS) to make and enforce such regulations as ``are 
necessary to prevent the introduction, transmission, or spread of 
communicable diseases from foreign countries into the States * * * or 
from one State * * * into any other State'' (section 361(a) of the PHS 
Act (42 U.S.C. 264(a))).
     Salmonellosis is a communicable disease that can be caused by SE-
contaminated eggs. Temperature abuse can lead to the multiplication of 
SE in shell eggs, and thereby, increase the likelihood of illness if 
the eggs are not thoroughly cooked. Therefore, the agency tentatively 
concludes that a regulation to require refrigeration is necessary to 
prevent the spread of communicable disease.
     Although the egg market is largely regional, it involves 
significant shipment of eggs from State to State. Moreover, shipment of 
SE-contaminated eggs from one State to another has contributed to the 
geographical spread of disease outbreaks in the U.S. human population. 
For example, eggs from Pennsylvania were implicated in an outbreak of 
SE infection reported in Asbury Park, NJ, involving at least 47 
persons, and eggs from Maryland were implicated in an outbreak in 
Livonia, NY, where 12 patrons of a restaurant reported gastroenteritis 
illness linked to consumption of omelets made from pooled grade A eggs 
(Ref. 36). As discussed in section I.D of this document, an SE outbreak 
at a wedding reception in New York was associated with the consumption 
of Caesar salad dressing. Eggs used to make the dressing were traced to 
a Pennsylvania producer (Ref. 6).
     FDA tentatively concludes that a regulation to require 
refrigeration of shell eggs at retail (proposed Sec. 115.50(b)) also 
should apply to eggs that are not shipped across State lines by 
producers or retailers because there have been SE outbreaks that were 
associated with such eggs (Ref. 37). Therefore, the agency believes a 
regulation to require refrigeration of eggs produced and sold within a 
State would reduce the risk of illness. In addition, the agency 
tentatively concludes that the spread of salmonellosis among States 
from SE-contaminated eggs cannot be fully controlled without extending 
the refrigeration requirement to sales within one State. FDA believes 
that consumers who shop across State borders may purchase SE-
contaminated shell eggs from one State and carry the eggs across State 
lines. Thus, FDA is concerned that if it does not require refrigeration 
of shell eggs that are laid, processed, and sold in one State, the 
regulations will not prevent the introduction of SE contaminated eggs 
into other States and, thus, will not prevent the introduction of 
salmonellosis from one State to another.
     The agency also notes that in the normal course of business, many 
food service establishments, e.g., restaurants, serve out-of-State 
customers, e.g., truck drivers, tourists, and others who regularly 
travel for work. The agency is concerned that if these out-of-State 
consumers become ill with salmonellosis from SE-contaminated eggs 
purchased through intrastate commerce, the disease could spread from 
one State to another. For these reasons, the agency tentatively 
concludes that refrigeration should also be required on all shell eggs 
to prevent the spread of a communicable disease among States.
     FDA's legal basis to require refrigeration of shell eggs also 
derives from sections 402(a)(4), and 701(a) of the act (21 U.S.C. 
342(a)(4) and 371(a)). Under section 402(a)(4) of the act, a food is 
adulterated if it is prepared, packed, or held in insanitary conditions 
whereby it may have been contaminated with filth or may have been 
rendered injurious to health. Under section 701(a) of the act, FDA is 
authorized to issue regulations for efficient enforcement of the act. 
Thus, a regulation that prohibits food from being held under insanitary 
conditions would provide for efficient enforcement.
     FDA has traditionally not conducted enforcement activities in 
retail establishments. The agency has, instead relied on State and 
local authorities to provide enforcement at the retail level. 
Nonetheless, the agency has been active in the retail arena in a number 
of ways. First and foremost, FDA participates in the Conference on Food 
Protection which is the cooperative body responsible for making 
recommendations to FDA concerning the Food Code. FDA also publishes the 
Food Code. In addition, FDA interacts with State and local regulatory 
agencies in a number of ways to coordinate retail enforcement efforts. 
Within FDA, the Division of Federal-State Relations, located in the 
Office for Regulatory Affairs, in the Office of the Commissioner, was 
created to enhance interactions between Federal, State, and local 
officials. The Division of Federal-State Relations serves as the focal 
point for providing cohesive and uniform food policies to State 
associations and cooperating State and local officials. Retail food 
specialists work with State and local retail food regulatory agencies 
to assist them, when the Code has been adopted, in implementing the 
Food Code and to ensure through standardization of local and State 
health officials that the Food Code criteria are uniformly applied. 
Retail food specialists are located in FDA regional offices. Some 
districts may have partnership agreements with States. Goals of these 
partnerships include increasing staff proficiency, improving 
consistency of enforcement activities, and empowering cooperating 
organizations. This may also include assisting with implementation of 
retail food programs. FDA has structured the proposed regulation to 
take into account the traditional sharing of responsibilities of food 
safety at retail, augmented by a clear quantitative Federal standard 
for temperature control.
     Under the PHS Act, the Federal, State, and local governments have 
a long tradition of cooperation, and the PHS Act specifically 
recognizes cooperation between the Federal government and State and 
local governments as an important tool for public health officials. 
Previously, in the area of food safety, FDA has used those portions of 
the PHS Act (e.g., sections 310 and 311 (42 U.S.C. 242n and 243)) that 
focus on Federal assistance to the States. Indeed, the Conference on 
Food Protection and the Model Food Code are a result of Federal/State/
Local cooperation and Federal assistance to the States and localities 
under the PHS Act. However, section 311 of the PHS Act not only 
recognizes Federal assistance to the States, it also recognizes that 
the States and localities may be able to assist the Federal Government. 
This section provides in part: ``The Secretary is authorized to accept 
from State and local authorities any assistance in the enforcement of 
quarantine regulations made pursuant to this chapter which such 
authorities may be able and willing to provide.''
     FDA believes that, under sections 311 and 361 of the PHS Act, 
there are several ways the agency could accept assistance from the 
States in the enforcement of the egg refrigeration regulation. For 
example, FDA could accept State and local assistance in the inspection 
of retail establishments and then use those inspections as the basis 
for detention and diversion or destruction under proposed 
Sec. 115.50(f) (as discussed in section II.C of this document) or as 
the basis for an enforcement action under the act. Another option would 
be to authorize

[[Page 36499]]

the States and localities to conduct inspections and enforce the 
refrigeration requirement through the administrative enforcement 
remedies set out in proposed Sec. 115.50(f) (as discussed in section 
II.C of this document), while FDA could hear appeals, with judicial 
review available after FDA's decision. FDA also believes it could 
follow the example set out in the Nutrition Labeling and Education Act, 
which allows the States, if certain conditions are met, to bring an 
action to enforce various food labeling provisions in the act. See 21 
U.S.C. 337; 21 CFR 100.2. Finally, FDA believes that section 311 of the 
PHS Act, in conjunction with section 361 of the PHS Act, authorizes the 
agency to issue a regulation that would allow States and localities to 
enforce the refrigeration regulation themselves.
     After examining these options, FDA is concerned that all except 
the last option (allowing States and localities to enforce the 
regulation themselves) would prove too cumbersome, especially in light 
of the straightforward requirement at issue. Although a few comments 
maintained that the regulatory responsibility of egg handling and 
preparation in retail establishments remains at the State and local 
level, other comments supported a federal-State cooperative approach. 
FDA agrees that a cooperative approach would be the most effective 
means to enforce the refrigeration requirement. Therefore, FDA has 
tentatively concluded to propose to allow agencies of those States and 
localities that are able and willing under section 311 of the PHS Act, 
and that are authorized to inspect or regulate retail establishments, 
to enforce the refrigeration regulation along with FDA. FDA has 
tentatively concluded that this option will allow for the most 
effective and efficient use of Federal, State, and local food safety 
resources because it recognizes that States and localities, more than 
FDA, currently do this kind of enforcement. Accordingly, proposed 
Sec. 115.50(e) provides that those States and localities that are able 
and willing are authorized under sections 311 and 361 of the PHS Act to 
enforce proposed Sec. 115.50(b) as set out in proposed Sec. 115.50(f). 
With respect to the hearing procedures, the proposed regulation 
recognizes that many States and localities already have administrative 
procedures in place for hearings by allowing them to use a similar 
hearing process as long as that process satisfies basic due process 
requirements.
     FDA recognizes that some of these approaches are new approaches to 
the enforcement of food safety regulations, and accordingly is 
soliciting, and will carefully review, comments on this aspect of this 
proposed regulation. FDA is particularly interested in comments on how 
State, local, and Federal food safety authorities can best interface to 
ensure effective and efficient implementation and enforcement of food 
safety standards.

C. Proposed Refrigeration Requirements at Retail

     FDA is proposing in new Sec. 115.50 to require that shell eggs 
held for retail distribution be promptly placed under refrigeration and 
be stored and displayed under refrigeration at an ambient temperature 
not greater than 7.2  deg.C (45  deg.F) while held at the retail 
establishment.
     The evidence discussed in section I.A of this document shows that 
shell eggs have been vehicles for salmonellosis. USDA's proposed 
requirement for refrigeration of shell eggs includes storage at the 
producer and storage during transportation, but does not include 
storage or holding at all retail establishments. FDA tentatively finds 
that the weight of the available evidence on the growth of SE in eggs 
shows that this microorganism can multiply to high levels in eggs if 
the eggs are not properly refrigerated during their shelf-life. Failure 
to refrigerate shell eggs during retail handling of shell eggs provides 
favorable conditions for degradation of the egg's defenses, movement of 
SE to the yolk, and subsequent multiplication of SE. Therefore, FDA 
tentatively concludes that it is necessary to require that eggs at 
retail be held at temperatures that will help maintain the natural 
defenses of the egg and limit the growth and reproduction of SE.
     As discussed in section I.F of this document, research indicates 
that SE multiplies at temperatures of 10  deg.C (50  deg.F) and above 
but that multiplication of SE is inhibited at lower temperatures, e.g., 
8  deg.C (46  deg.F), 7.2  deg.C (45  deg.F), and 4  deg.C (39  deg.F). 
Therefore, the agency tentatively concludes that it should require a 
refrigeration temperature lower than 10  deg.C (50  deg.F) to ensure 
the safety of shell eggs. As noted as follows in this section, the Food 
Code recommends that potentially hazardous foods be maintained at a 
temperature of 5  deg.C (41  deg.F). A temperature of 5  deg.C (41 
deg.F) not only inhibits the growth of Salmonella, but also, inhibits 
the growth of Listeria monocytogenes, which has been shown to grow at 
7.2  deg.C (45  deg.F). The agency also notes that, as required under 
the Egg Products Inspection Act, USDA has amended its regulations to 
require that shell eggs packed for consumer use be stored and 
transported at an ambient temperature of 7.2  deg.C (45  deg.F). Based 
upon the data discussed in section I.F of this document, FDA 
tentatively concludes that 7.2  deg.C (45  deg.F), i.e., the same 
temperature required by USDA under the EPIA for the storage and 
transportation of shell eggs, is sufficient to protect the public 
health. Because eggs cool down only slightly faster at 5  deg.C (41 
deg.F) than at 7.2  deg.C (45  deg.F), the lower temperature would have 
a negligible effect on the SE risk.
    FDA notes that it is proposing an ambient and not an internal 
temperature requirement for shell eggs displayed and stored in retail 
establishments. The majority of comments to the 1998 ANPRM supported 
refrigeration of shell eggs throughout the distribution chain from 
packer to consumer. Most of these comments supported a requirement for 
an ambient temperature of 7.2  deg.C (45  deg.F). A few of these 
comments encouraged the agency to consider an internal temperature 
requirement of 7.2  deg.C (45  deg.F) or ambient or internal 
temperature requirements of 5  deg.C (41  deg.F), which, it was 
asserted, would result in an additional margin of safety.
    As discussed in section I.F, research indicates that refrigeration 
of shell eggs at 7.2  deg.C (45  deg.F) greatly extends the time that 
an egg can maintain its natural defenses, and, thus, inhibit the growth 
of SE. FDA acknowledges that an internal temperature of 5  deg.C (41 
deg.F) or 7.2  deg.C (45  deg.F) would also achieve this goal. However, 
FDA believes that a uniform requirement for an internal temperature 
would be difficult to monitor. As discussed in section I.E of this 
document, the internal temperature of eggs when they are transported 
depends on the temperature of the eggs when they are packed, the way 
the eggs are packaged, how the crates are packed and stacked, and the 
length of time they are in the cooler before they are shipped. Further, 
according to one comment to the 1998 ANPRM, transportation of eggs in 
refrigerated trucks do not provide cooling, but rather maintain the 
temperature of the eggs. Moreover, it may be impracticable for egg 
retailers to determine the internal temperatures of shell eggs. 
Therefore, the agency tentatively concludes that, to provide a level 
playing field for all egg retailers, it is appropriate to propose an 
ambient temperature requirement for the display and storage of shell 
eggs at retail. FDA requests comment on its tentative conclusion.
     The agency notes that some States or localities may have 
temperature requirements lower than 7.2  deg.C (45  deg.F). The agency 
does not intend that this proposed regulation would, when finalized, 
preempt the requirements of

[[Page 36500]]

the Food Code or other State or local requirements that require a lower 
temperature. The proposed regulation would, however, preempt any State 
or local requirements that allow a temperature greater than 7.2  deg.C 
(45  deg.F).
     The agency notes that the proposed temperature for storage of 
shell eggs addresses growth of SE in shell eggs, whereas the 
temperature required by the Food Code addresses all pathogens that may 
be present in different types of potentially hazardous foods. Thus, in 
addressing holding temperatures for potentially hazardous foods 
generally, the Food Code requires a temperature for retail storage that 
will prevent or slow the growth of most pathogens, including cold-
tolerant pathogens such as L. monocytogenes. As previously discussed in 
this section, the agency tentatively concludes that a maximum storage 
temperature of 7.2  deg.C (45  deg.F) will be effective in inhibiting 
the growth of SE that may be present in shell eggs. FDA notes that a 
requirement that shell eggs be stored at 7.2  deg.C (45  deg.F) or less 
does not preclude retailers from maintaining shell eggs at lower 
refrigeration temperatures. In fact, the agency would encourage it. 
Moreover, it may be most practicable for establishments to have one 
requirement for a maximum refrigeration temperature for all potentially 
hazardous foods. FDA requests comment on the safety implications in the 
difference between the proposed temperature requirement of 7.2  deg.C 
(45  deg.F) for storage of shell eggs at retail and the refrigeration 
temperature of 5  deg.C (41  deg.F), recommended in the Food Code.
     Because failure to refrigerate shell eggs would provide conditions 
for SE to multiply, the agency tentatively concludes that failure to 
refrigerate eggs would constitute insanitary conditions that may render 
the product injurious to health. Accordingly, the agency is proposing 
that failure of responsible individuals in a retail establishment to 
comply with the requirements of Sec. 115.50(b) will render the shell 
eggs adulterated under section 402(a)(4) of the act.
     Some shell eggs now available for retail sale have been 
pasteurized in the shell (in-shell pasteurized) prior to packing and 
distribution to destroy any Salmonella that may have been present in 
the egg (e.g., Salmonella in the egg due to transovarian 
contamination). FDA is proposing in Sec. 115.50(c) that these eggs be 
exempt from the refrigeration requirement. However, such pasteurization 
would not prohibit the in-shell pasteurized egg from subsequently 
becoming contaminated with harmful microorganisms, if the egg were to 
come in contact with Salmonella or other potentially hazardous 
microorganisms during distribution and retail sale. The scientific 
evidence indicates that it is possible for Salmonella as well as other 
potentially harmful microorganisms to pass through the pores of the egg 
shell and reach the egg yolk, which can then support subsequent growth 
of the microorganisms, especially when adequate refrigeration is not 
provided (Ref. 38). Because this proposed regulation addresses the 
control of SE in shell eggs that are contaminated by transovarian 
transmission, the agency considers pasteurization an effective means to 
kill SE that may be present inside the egg when it is laid. Thus, the 
scope of this proposed regulation does not extend to contamination of 
eggs other than by transovarian transmission. FDA expects that 
manufacturers of this premium product would ensure its continued 
safety. Therefore, although this proposal would not require the 
refrigeration of in-shell pasteurized shell eggs or any shell eggs that 
have been otherwise processed to destroy Salmonella, because such eggs 
would not be expected to contain transovarian transmitted Salmonella, 
FDA recommends that such eggs be refrigerated by retail establishments.
     In addition, FDA notes that shell eggs that have been processed to 
destroy Salmonella are still considered to be potentially hazardous 
foods under provisions in the Food Code in part because they are raw 
eggs that are capable of supporting the growth of SE. Because these 
eggs are considered potentially hazardous foods, State and local 
regulations established under the recommendations in the Food Code may 
have specific refrigeration requirements for these eggs in retail 
establishments that this regulation would not preempt.
     As discussed in section II.B of this document, the agency 
tentatively concludes that the spread of salmonellosis among States 
from SE-contaminated eggs cannot be fully controlled without extending 
the refrigeration requirement to all eggs. Accordingly, FDA is 
proposing in Sec. 115.50(d) that the requirements of this section are 
applicable to all shell eggs.
     As previously noted, FDA is proposing these regulations under both 
the act and the PHS Act. Failure to comply with the refrigeration 
requirement in proposed Sec. 115.50 would render the eggs adulterated 
under section 402(a)(4) of the act. Enforcement of adulteration 
regulations under the act is conducted under sections 301 to 304. 
However, section 361 of the PHS Act authorizes the Secretary, and by 
delegation FDA, to issue regulations that provide for the destruction 
of articles and for other measures that are judged by the Secretary to 
be necessary to carry out and enforce communicable disease regulations. 
FDA tentatively concludes that the shell egg refrigeration regulation 
can be most efficiently and effectively enforced through administrative 
procedures. Accordingly, FDA is proposing procedures in Sec. 115.50(f) 
under which FDA may order the diversion or destruction of shell eggs 
that have been held in violation of the regulations. Under proposed 
Sec. 115.50(f), FDA may issue to the person holding the shell eggs a 
written order that the product be diverted or destroyed. The proposed 
regulations would provide for diversion for processing in accordance 
with the EPIA because FDA tentatively concludes that it may be possible 
to produce safe egg products from shell eggs that have been held in 
violation of the regulation. Because the EPIA requires pasteurization 
of egg products, any Salmonella present would be eliminated. The 
written order would identify the shell eggs that are affected, and the 
grounds for issuing the order and would provide that, unless the order 
is appealed, either by filing a written appeal or by requesting a 
hearing, the shell eggs must be diverted or destroyed within 10-working 
days of receipt of the order.
     In addition, authority for the enforcement of section 361 of the 
PHS Act is provided for in part under section 368 of the PHS Act. Under 
section 368(a) of the PHS Act any person who violates a regulation 
prescribed under section 361 of the PHS Act may be punished by 
imprisonment for up to 1 year. Individuals may also be punished for 
violating such a regulation by a fine of up to $100,000 if death has 
not resulted from the violation or up to $250,000 if death has resulted 
(18 U.S.C. 3559 and 3571(b)). Organizations may be fined up to $200,000 
per violation not resulting in death and $500,000 per violation 
resulting in death (18 U.S.C. 3559 and 3571(c)). In addition, Federal 
district courts have jurisdiction to enjoin individuals and 
organizations from violating regulations implementing section 361 of 
the PHS Act.

III. The Proposal for Shell Egg Labeling

A. Rationale for Shell Egg Labeling Proposal

     As discussed in section I.D of this document, data from SE 
outbreaks show that outbreaks commonly occur when contaminated eggs are 
mishandled by consumers or other food preparers. Furthermore, 
consumption data

[[Page 36501]]

establish that some consumers eat raw or undercooked eggs.
     The CSPI petition contends that the increase in the incidence of 
foodborne illness has likely occurred, at least in part, because 
consumers do not realize that partial cooking of raw eggs (e.g., soft-
boiled, sunny-side-up) or egg-containing foods will not prevent 
illnesses. In addition, the petition from Rose Acres Farm, Inc., 
contends that practically all SE outbreaks and deaths associated with 
eggs occurred because of mishandling of the eggs.
     As discussed previously, FDA believes that it will be difficult 
for the industry to rapidly design and implement a program that will 
produce Salmonella-free eggs. However, as discussed in section I.F of 
this document, in the meantime, there are measures that can reduce 
risks to consumers: Refrigeration, which lengthens the effectiveness of 
the eggs' natural defenses against SE and slows the growth rate of SE, 
and thorough cooking, which kills viable SE that may be present. Many 
comments to the 1998 ANPRM maintained that proper handling of shell 
eggs is an important measure that could reduce the incidence of 
foodborne illness. According to a few of the comments, the majority of 
outbreaks occur because of improper handling of eggs, e.g., pooling and 
incomplete cooking by food preparers. Most comments to the 1998 ANPRM 
that addressed labeling supported labeling cartons of eggs with 
instructions for proper handling. Although some comments supported the 
use of short messages, such as ``keep refrigerated,'' others supported 
safe handling instructions that also included instructions on proper 
cooking of eggs.
    The agency is concerned that unless consumers and food preparers 
are advised about both the risks presented by eggs contaminated with SE 
and the ways they can reduce these risks, consumers, particularly those 
at greatest risk, could suffer serious illness or death from the 
consumption of raw or undercooked eggs and egg-containing foods. 
Accordingly, FDA tentatively concludes that there is an immediate need 
to require label statements that inform consumers of the public health 
risks associated with consumption of raw or improperly cooked shell 
eggs and provide safe handling instructions.

B. Legal Authority for FDA to Require Label Statements

     FDA is proposing these regulations under both the act and the PHS 
Act. FDA's legal authority under the act to require label statements on 
food products derives from sections 201(n), 403(a)(1), and 701(a) of 
the act (21 U.S.C. 321(n), 343(a)(1), and 371(a)). FDA's legal basis to 
require safe handling instructions on shell eggs also derives from the 
provisions of sections 311, 361, and 368 of the PHS Act that relate to 
communicable disease. Under section 403(a)(1) of the act, a food is 
misbranded if its labeling is false or misleading in any particular. 
Section 201(n) of the act provides that in determining whether labeling 
is misleading, the agency shall take into account not only 
representations made about the product, but also the extent to which 
the labeling fails to reveal facts that are material in light of such 
representations made or suggested in the labeling or material with 
respect to consequences that may result from use of the product under 
conditions of use prescribed in the labeling or under customary or 
usual conditions of use. Section 701(a) of the act authorizes FDA to 
issue regulations for the efficient enforcement of the act. FDA 
previously has relied on these authorities when it required label 
warning statements to alert consumers to the potential hazards of 
certain ingredients of foods and dietary supplements, e.g., protein 
products (49 FR 13679, April 6, 1984) and iron-containing dietary 
supplements (62 FR 2218, January 15, 1997). Likewise, the agency is 
relying on these authorities in proposing to require label statements 
on shell eggs not processed to destroy all viable Salmonella.
     As discussed previously, it is well documented that shell eggs may 
contain Salmonella, especially transovarian transmitted SE, which can 
result in serious, life-threatening illness. The risk is greatest for 
children, the elderly, and persons who are immune compromised (Ref. 
18). Therefore, the agency tentatively concludes that information 
disclosing the risk of foodborne illness associated with consumption of 
raw or undercooked shell eggs is material information that must be 
given to consumers at the point of purchase.
     However, the consequences that may result from consumption of SE-
contaminated eggs may be reduced or eliminated by proper handling 
techniques that first limit the number of SE microorganisms and then 
kill those microorganisms. Thus, consumers have effective ways, other 
than avoidance of shell eggs, to reduce the risk of illness from 
consumption of SE-contaminated shell eggs. In light of this, the agency 
tentatively concludes that information on safe handling practices that 
consumers can use to protect themselves from illness is material 
information about the product that must be included in its labeling to 
ensure that the product is not misbranded.
     As discussed in section II.B of this document, the PHS Act 
authorizes the Secretary of DHHS to make and enforce regulations that 
prevent the introduction, transmission, or spread of communicable 
disease from State to State. As discussed in that section, temperature 
abuse of shell eggs can lead to the multiplication of SE in shell eggs, 
and thus, increase the likelihood of illness if the eggs are not 
thoroughly cooked. The agency tentatively concludes that, in addition 
to a refrigeration requirement, a regulation requiring safe handling 
instructions that inform consumers to properly refrigerate and cook 
shell eggs (as fully discussed in section III.D of this document) is 
also necessary to prevent the spread of communicable disease.
     FDA tentatively concludes that a regulation to require label 
statements that provide safe handling instructions on shell eggs 
(proposed Sec. 101.17(h)(1)) also should apply to eggs that are not 
shipped across State lines by producers or retailers (proposed 
Sec. 101.17(h)(6)). As noted in section II.B of this document, there 
have been outbreaks of salmonellosis associated with such eggs. 
Therefore, FDA is concerned that if it does not require safe handling 
instructions on shell eggs that are laid, processed, and sold in one 
State, consumers will not have material information that would inform 
them of ways to handle and cook eggs to prevent illness. Thus, without 
the inclusion of all eggs in the scope of this proposed regulation, FDA 
could not ensure that consumers who purchase eggs laid, processed, and 
sold in one State would have information that would help protect them 
from the risk of salmonellosis. In addition, as discussed in section 
II.B of this document, the agency believes that consumers who shop 
across State borders may purchase SE-contaminated shell eggs from one 
State and carry them across State lines. Therefore, without the 
inclusion of all eggs in the scope of this proposed regulation, the 
agency would be hampered in preventing the spread of salmonellosis from 
one State to another. The agency tentatively concludes that safe 
handling instructions should be required on all shell eggs to prevent 
the interstate spread of a communicable disease from one State to 
another. FDA requests comment on its tentative conclusion.
     Failure to comply with the requirements of proposed Sec. 101.17(h) 
would render the food misbranded under section 403(a)(1) of the act and 
would violate regulations issued under

[[Page 36502]]

section 361 of the PHS Act. As discussed in section II.C of this 
document, enforcement of regulations is conducted under sections 301 to 
304 of the act. Section 361 of the PHS Act authorizes FDA to issue 
those regulations that are necessary to enforce communicable disease 
provisions of the statute. Thus, the agency is proposing procedures in 
Sec. 101.17(h)(8) that it may use to order the relabeling, diversion, 
or destruction of shell eggs that do not comply with the regulation. 
Under proposed Sec. 101.17(h)(8)(i)(A), FDA may issue to the person 
holding the shell eggs a written order that the product must be 
relabeled, diverted, or destroyed. As also discussed in section II.C of 
this document, violations of the PHS Act are subject to injunctions and 
criminal prosecutions.
     As discussed in section II.B of this document, FDA has examined 
several options on how the agency could accept assistance from the 
States and localities in enforcement of the refrigeration provision of 
this proposed regulation. The agency has considered similar options on 
how it could accept State and local enforcement assistance of the 
labeling provision. Because this proposed labeling requirement would 
affect shell eggs that laid, processed, and sold in one State, the 
agency believes that it would be an efficient use of resources for 
State and local agencies to assist in enforcing the labeling 
regulations. Moreover, FDA believes that sections 311 and 361 of the 
PHS Act authorize the agency to issue a regulation that would allow 
States and localities to enforce the labeling regulation themselves. 
Therefore, the agency has tentatively concluded that it should allow 
State and local regulators that are able and willing under section 311 
of the PHS Act, and are authorized to regulate the labeling of shell 
eggs within their States or localities, to enforce the requirement for 
safe handling instructions. Accordingly, proposed Sec. 101.17(h)(7) 
provides that those States and localities that are able and willing are 
authorized under sections 311 and 361 of the PHS Act to enforce 
proposed Sec. 101.17(h)(1) as set out in proposed Sec. 101.17(h)(7). 
With respect to the hearing procedures, the proposed regulation 
recognizes that many States and localities already have administrative 
procedures in place for hearings allowing them to use a similar hearing 
process as long as that process satisfies basic due process 
requirements.

C. Covered Products

     As discussed in section II.C of this document, technology to 
process shell eggs in a manner to destroy SE in the egg would 
significantly reduce or eliminate the risk of transovarian transmitted 
SE, and would thereby render the label statements unnecessary. 
Accordingly, FDA is proposing in Sec. 101.17(h)(4) that shell eggs that 
have been, before distribution to consumers, specifically processed to 
destroy all viable Salmonella be exempt from the labeling requirements.
     The standards of identity for liquid, dried, and frozen egg white, 
egg yolk, and whole egg products (21 CFR part 160) require that these 
products be pasteurized or otherwise treated to destroy all viable 
Salmonella microorganisms. Further, the agency expects that the 
standardized egg product ingredients in any nonstandardized egg 
product, such as scrambled egg mixes, would also be pasteurized or 
otherwise treated to destroy all viable Salmonella microorganisms. FDA 
has no information about the existence of egg products that have not 
been pasteurized or otherwise treated to destroy all viable SE and 
other Salmonella. However, the agency specifically requests data or 
other information that suggests that such products are commercially 
available. Should such products exist, FDA tentatively concludes that 
any final label statement required for shell eggs also be applicable to 
these products as well.
     The safe handling statement is intended to inform consumers of 
ways that they may safely handle eggs to reduce their risk of foodborne 
illness. Likewise, the use of the safe handling statement on cartons of 
shell eggs that are not for direct sale to consumers, e.g., shell eggs 
that are to be labeled or repacked at a site other than originally 
processed or are shipped for use in food service establishments such as 
schools, hospitals, and restaurants also serves to inform repackers and 
food preparers of the safe handling procedures. However, FDA 
tentatively concludes that the same goal of conveying the safe handling 
labeling to repackers and food preparers could also be accomplished by 
customary trade practices. For example, the safe handling statement 
could be included on an invoice or product specifications sheet. 
Accordingly, FDA is proposing in Sec. 101.17(h)(5) that the safe 
handling statement for shell eggs that are not for direct sale to 
consumers, e.g., those that are to be repacked or labeled at a site 
other than where originally processed or are sold for use in food 
service establishments may be provided on cartons or in labeling, e.g., 
invoices or bills of lading in accordance with the practice of the 
trade. FDA requests comment on whether allowing this practice will 
accomplish its intended goal.

D. Essential Elements of Specific Label Statements

     Consumer research available to the agency indicates that when 
consumers generally believe that a product is safe, messages that note 
that the product is unsafe without providing information on the nature 
of the hazard are likely to confuse or frighten them (Ref. 25). This 
research also indicates that certain elements may be essential in label 
statements to effectively inform consumers of a potential hazard (Ref. 
25). Recently, the agency has used such consumer research to develop 
effective warning labels. For example, the agency used such information 
to craft a warning statement for iron-containing supplements in 
Sec. 101.17(e). As discussed in the final rule requiring that iron-
containing supplements bear a warning statement (62 FR 2218), the 
agency found that elements essential for an effective warning statement 
for these products included an informational statement that describes 
the nature and magnitude of the hazard and a handling instruction on 
how to avoid the hazard. In addition, because the hazard associated 
with iron-containing products was associated with accidental overdose 
rather than ordinary conditions of use, essential elements for this 
warning statement also included a provisional statement that describes 
situations that require mitigation and an instructional statement that 
describes what action to take under those circumstances.
     In determining what information is essential in the proposed 
statement, FDA tentatively concluded, based on the continued 
predominance of SE in foodborne outbreaks, that consumers may not know 
that there is a food safety hazard associated with shell eggs. 
Consumption data indicating that some consumers eat raw or undercooked 
eggs reinforce this tentative conclusion (Refs. 22 to 24). Therefore, 
FDA tentatively concludes that it is essential that the label statement 
describe the potential hazard, i.e., that eggs may contain pathogens 
known to cause serious, life-threatening illness.
     In addition, the young, elderly, and persons with immune 
deficiencies are more susceptible to foodborne illness than others 
(Ref. 18) but may not realize that they are particularly at risk for 
serious illness from a food long recognized to be a safe and 
inexpensive source of good nutrition. These people, especially, along 
with their caregivers, need the information necessary to make informed 
decisions about avoiding,

[[Page 36503]]

reducing, or eliminating the risk of salmonellosis from eggs and egg-
containing foods. Therefore, FDA tentatively concludes that the 
information needed by consumers about the potential hazard should also 
include information about the at-risk groups, so that they or their 
caregivers are aware of their greater risk.
     In some circumstances in which the agency has required a label 
statement to inform consumers of consequences that could result from 
consumption of a product, FDA has presumed that consumers' reaction to 
a label statement would be a decision whether to avoid the product. For 
example, in its recent rulemaking to require a label statement on juice 
products that have not been processed to control pathogenic 
microorganisms, FDA stated its belief that it was implicit in its 
description of the hazard that at-risk groups could avoid the hazard by 
not consuming the product (63 FR 20486 at 20489, April 24, 1998). 
Consistent with this belief, one comment to the 1998 ANPRM opposed 
``warning labels'' stating that eggs are potentially harmful because 
the statement would alarm consumers and would reduce egg consumption. 
However, as previously discussed, the consequences that may result from 
consumption of SE-contaminated eggs may be reduced or eliminated by 
proper handling techniques. Failure to make clear that there is a way 
other than avoidance to reduce this risk could imply to consumers that, 
similar to their options when faced with other label statements, their 
only available option is to avoid the product. Therefore, FDA 
tentatively concludes that an instructional statement that describes 
measures (i.e., safe handling practices) that consumers can take to 
reduce or eliminate the risk associated with consumption of SE-
contaminated eggs should be an essential element of the label 
statement. Because temperature has been reported to play a role in 
suppressing the growth of Salmonella microorganisms (see discussion in 
section I.F of this document), and because thorough cooking kills SE 
(see discussion in section I.F of this document), FDA also tentatively 
concludes that the safe handling instructional statement should advise 
that eggs be refrigerated until they are ready to be cooked and that 
eggs be thoroughly cooked before they are eaten.
     Because the more likely option for consumers who are presented 
with a label statement that describes a hazard is avoidance, FDA 
believes that a linking statement that clarifies that the recommended 
safe handling practices are measures that consumers can take to reduce 
or eliminate the risk is important to alleviate a potential 
misperception that avoidance is their only option. Therefore, FDA 
tentatively concludes that a linking statement that relates the 
informational statement to the instructional statement is an essential 
element of the label statement. These essential elements are similar to 
those contained in other required label statements in Sec. 101.17.
     FDA's consumer research on label statements for iron-containing 
products also shows that the first sentence of a label statement is 
likely to influence a consumer's decision to continue reading the 
remainder of the statement (Ref. 25). Moreover, as a result of the safe 
handling instructions that appear on raw meat and poultry under 
rulemaking conducted by FSIS (59 FR 14528, March 28, 1994), consumers 
are already accustomed to reading information about the risk before 
reading the safe handling practices that can reduce or eliminate the 
risk. Accordingly, FDA tentatively concludes that the first sentence of 
the label statement should be an informational statement about the 
potential hazard to consumers.
     Applying the essential elements described previously, FDA crafted 
examples of label statements. The agency notes that some of the 
examples of acceptable label statements incorporate language suggested 
by Rose Acres Farms, Inc., and CSPI. These examples illustrate some of 
the variations in label statements developed by applying the essential 
elements. Four such examples are provided as follows:
     SAFE HANDLING INSTRUCTIONS: Shell eggs may contain harmful 
bacteria known to cause serious illness, especially in children, the 
elderly, and persons with weakened immune systems. For your protection, 
keep eggs refrigerated and cook eggs and foods containing eggs 
thoroughly before eating.
     SAFE HANDLING INSTRUCTIONS: Shell eggs may contain harmful 
bacteria known to cause serious illness, especially in children, the 
elderly, and persons with weakened immune systems. For your protection, 
keep eggs refrigerated and cook eggs until yolks are firm.
     SAFE HANDLING INSTRUCTIONS: Eggs may contain illness-causing 
bacteria. The risk of life-threatening illness is greatest for 
children, the elderly, and persons with weakened immune systems. For 
your protection, keep eggs refrigerated until cooked, and cook eggs 
thoroughly until yolks are firm.
     SAFE HANDLING INSTRUCTIONS: Some shell eggs have been found to 
contain harmful bacteria known to cause life-threatening illness, 
especially in children, the elderly, and persons with weakened immune 
systems. Consumers may protect themselves by keeping eggs refrigerated 
until cooked, by cooking eggs until the yolk is firm, and by cooking 
foods containing eggs thoroughly.
     In order to evaluate the label statements developed through use of 
the essential elements and to test the effectiveness of such examples 
in informing consumers of the risks associated with shell eggs and of 
the safe handling practices that may be used to mitigate the risks, FDA 
conducted focus group research to evaluate consumer understanding of 
several possible safe handling instructions.
     Six focus groups were conducted to test possible safe handling 
statements (Ref. 39). All participants examined and discussed five safe 
handling statements, including the four examples presented previously. 
The participants had some awareness of the potential dangers associated 
with eating eggs, and most were concerned about the safety of the eggs 
that they were purchasing. They were aware that the main food safety 
hazard posed by eggs was Salmonella contamination. Most of the 
participants kept their eggs refrigerated. However, many of them 
reported that they ate foods containing raw eggs, e.g., cookie batter, 
cake batter, homemade ice cream, and Caesar salad. The participants 
stated that most of the time they were aware when the foods they ate 
contained raw eggs, although some were surprised that Caesar salad 
could contain raw eggs. Generally, the participants were aware that 
they should thoroughly cook eggs, although they often cooked eggs 
according to their personal tastes, e.g., sunny-side up.
     The participants were generally positive toward the idea of 
handling instructions on egg packages. Although many of them were 
already aware of the information presented in the handling statements, 
they saw the handling statements as useful reminders. To some of the 
participants, however, some of the information in the handling 
statements was new. Further, the participants appreciated the fact that 
with relatively simple steps they could be confident that their eggs 
were likely to be safe to eat. In addition, many participants thought 
that egg producers would not object to placing information presented in 
the example statements on the labels of egg cartons if all egg 
producers had to do so.
     There were some discussions about certain words in the messages 
that the

[[Page 36504]]

groups thought were unnecessary, e.g., ``shell'' eggs, and 
``refrigerated until cooked.'' However, participants generally 
understood the messages and found them to be informative and not 
misleading. Further, they liked messages that were clear and easy to 
read.
     While the label statements that were tested effectively informed 
the consumers of the potential hazard associated with the consumption 
of eggs, the agency did not test all conceivable variations of label 
statements incorporating the required information. Previous focus group 
research (i.e., for juice warning labels) indicated that minor wording 
differences may lead to confusion among consumers. The results of that 
research led the agency to prescribe the language of the label 
statement on juice products to ensure that consumers would not be 
misled (63 FR 37030, July 8, 1998). Similarly, the agency believes that 
it is also appropriate to prescribe the language of the safe handling 
statement on eggs. Therefore, the agency tentatively concludes that 
prescribing the language of each of the essential elements will be the 
most effective way to ensure that consumers are not misled and will 
correctly understand the safe handling instructions. This will ensure 
that consumers know of the risks of consuming raw or undercooked eggs 
and that they know the measures they can take to protect themselves. In 
addition, a prescriptive label statement is consistent with label 
statements for other food products.
     FDA believes that a regulation requiring a label statement on 
cartons of shell eggs must be sufficiently clear to allow the regulated 
industry to determine that its labeling complies with that regulation. 
Furthermore, the regulation should establish a so-called ``level 
playing field'' for all products covered by the regulation by requiring 
that each product's labeling provide the same information. FDA 
tentatively concludes that prescribing the specific language for a 
label statement for shell eggs would accomplish these two goals, as 
well as ensure a message to consumers that is not confusing, 
misleading, or otherwise ineffective.
     Accordingly, based on information from the focus groups, FDA is 
proposing in Sec. 101.17(h)(1) to require that the label of shell eggs 
bear the following statement:
     SAFE HANDLING INSTRUCTIONS: Eggs may contain harmful bacteria 
known to cause serious illness, especially in children, the elderly, 
and persons with weakened immune systems. For your protection: keep 
eggs refrigerated; cook eggs until yolks are firm; and cook foods 
containing eggs thoroughly before eating.
     The agency notes that the language in the first sentence of this 
prescribed label statement for eggs is similar to the label statement 
that FDA recently required for some juice products. As discussed in the 
final rule requiring warning statements on juice products that have not 
been processed to control pathogenic microorganisms (63 FR 37030 at 
37045), FDA concluded that the term ``serious illness'' is an accurate 
description of the hazard caused by foodborne microorganisms that may 
be present in juice. The agency based its conclusion on results of 
focus group research which indicated that the term ``serious illness'' 
was understood and conveyed a strong message without being too extreme. 
Participants of the focus group research viewed such terms as ``life 
threatening'' or ``death'' less credible.
     Also in that final rule, FDA recognized that the terms children 
and elderly are not precise. Rather, they are terms chosen by the 
Council for Agricultural Science and Technology to reflect groups that, 
in general, have incompletely developed or declining immune systems. 
Because the exact ages at which a child's immune systems is fully 
developed and at which an elderly person's immune system has declined 
are not precisely defined, FDA concluded that it had no basis to 
specify particular ages for these at-risk groups nor to use terms other 
than ``children'' or ``elderly.''
    Several comments to the 1998 ANPRM expressed concerns about the 
suggested language that would appear in a proposed label statement. The 
issues raised in these comments were among those issues considered when 
FDA developed this proposed rule.
     The agency requests comments on other aspects of the proposed safe 
handling statement and whether it effectively conveys information 
necessary to adequately inform consumers of measures that they can take 
to ensure the safety of the food. The agency tentatively concluded that 
the cooking instructions in the safe handling statement, i.e., ``cook 
eggs until yolks are firm and cook foods containing eggs thoroughly'' 
is adequate to inform consumers of ways to prepare eggs in order to 
reduce the risk of illness. The agency notes that part of the cooking 
instruction, i.e., ``cook eggs until yolks are firm,'' is one way to 
describe proper cooking of an egg when consumed as an egg dish. For 
example, it is expected that when an egg, e.g. fried egg, is cooked 
until the yolk is firm, then the white would be sufficiently cooked.
     For other foods that contain eggs, the safe handling statement 
must convey to consumers that the food should be cooked thoroughly. 
Focus group research showed that although many consumers are aware that 
foods that contain raw or undercooked egg whites only, e.g., meringue, 
can be a potential health hazard, many did not. However, the reason 
some consumers were unaware of the potential health risk was that they 
were unaware that foods like meringue may contain raw egg whites. When 
informed that such foods may contain raw egg whites, consumers 
understood the health risk. Thus, the agency tentatively concludes that 
there is no reason to believe that, when informed of the risk of 
illness associated with raw or undercooked eggs, consumers would 
differentiate the potential health risk based on what part of the egg 
is consumed. Therefore, FDA tentatively concluded that the part of the 
statement that instructs consumers to cook foods containing eggs 
thoroughly, would address foods that include any component of the egg, 
e.g., whole egg, egg white, or egg yolk. The agency requests comments 
on its tentative conclusion that this statement adequately instructs 
consumers on the safe handling instruction for foods containing eggs. 
Comments should include data or a rationale to provide a basis for the 
agency to adopt alternate phrasing.
     As previously discussed, certain subpopulations are at greatest 
risk of serious illness and death caused by SE. For example, many 
deaths have occurred in nursing homes (Ref. 3). Because certain 
consumers, especially those at greatest risk, may want to avoid the 
risk altogether by avoiding the product, the agency requests comment on 
whether it should require a statement that the product should not be 
used for certain purposes, e.g., ``use pasteurized eggs for recipes 
requiring raw or partially cooked eggs.'' The agency also requests 
comment on whether it should require an explicit instruction to avoid 
the product for at-risk consumers or for individuals (e.g., parents, 
nursing home staff) who are responsible for preparing foods for at-risk 
consumers.
     As discussed in section II.A of this document, FSIS amended its 
regulations to require that shell eggs packed for consumer use be 
stored and transported at an ambient temperature that does not exceed 
7.2  deg.C (45  deg.F) and that the containers of such eggs be labeled 
to indicate that refrigeration is required. The labeling statement 
proposed in this document, if finalized, will permit

[[Page 36505]]

uniform label statements with the FSIS rule. Consequently, this safe-
handling statement would replace the label currently required by FSIS.
     In the Federal Register of February 24, 1997 (62 FR 8248), FDA 
published a notice, entitled ``Guidance on Labeling of Foods That Need 
Refrigeration by Consumers'' (``the Refrigeration Guidance''). In that 
document, FDA noted that refrigeration is only one of many barriers 
(e.g., acidification, preservatives, and reduced water activity) that 
can be used to control microbial risks. However, for many foods 
(classified as ``Group A foods''\6\), refrigeration is the only 
practicable barrier to reduce or retard pathogenic growth. The agency 
also noted that Group A foods, including shell eggs, are potentially 
hazardous foods, that, if subject to temperature abuse, will support 
the growth of infectious or toxigenic microorganisms that may be 
present. Growth of these microorganisms would render the food unsafe 
(62 FR 8248). As stated in that document, FDA concluded that the 
appropriate label statement for Group A foods is ``IMPORTANT Must be 
kept refrigerated to maintain safety.''
---------------------------------------------------------------------------

    \6\ Group A foods as defined in the Refrigeration Guidance are 
potentially hazardous foods, which if subjected to temperature 
abuse, will support the growth of infectious or toxigenic 
microorganisms that may be present. They have the following 
characteristics: (1) A pH of >4.6, (2) a water activity of >0.85, 
(3) do not receive a thermal or other process in the final package 
that is adequate to destroy foodborne pathogens that can grow under 
conditions of temperature abuse, and (4) have no barriers built into 
the product formulation that would prevent the growth of foodborne 
pathogens that can grow under abuse conditions.
---------------------------------------------------------------------------

     In the Refrigeration Guidance document, FDA stated that most 
consumers seem to understand that foods displayed only in the 
refrigerated sections of grocery stores such as dairy products, eggs, 
cold cuts, fresh meats, poultry and seafood, must be refrigerated to 
maintain quality. Further, the agency stated that, although it is 
unlikely that consumers are aware of the hazards that temperature abuse 
can present, it is likely that consumers will refrigerate these 
products in the absence of labeling. Therefore, the agency did not 
specifically address these products in the document. However, the 
agency concluded that the fact that the foods are refrigerated provides 
no evidence of the effectiveness of the ``keep refrigerated'' label. 
Although the guidance provided in that document was specifically 
directed toward products that appeared to be shelf stable or ones for 
which consumers seemed to not understand the importance of a ``keep 
refrigerated'' statement, the agency did not specifically exclude any 
foods from the guidance.
     In light of information regarding outbreaks of SE associated with 
the temperature abuse of eggs and egg-containing products, FDA 
tentatively concludes that it is important that consumers be informed 
of the need for refrigeration of shell eggs. Further, the agency 
believes that the ``keep refrigerated'' statement in the suggested safe 
handling instructions in the proposed label statement conveys the same 
message as the label statement in the Refrigeration Guidance. Because 
the proposed linking statement, i.e., ``for your protection,'' shows 
that there are measures that consumers can take to reduce or eliminate 
the risk of foodborne illness, the agency believes that it is implicit 
in the proposed safe handling instructions that refrigeration helps to 
maintain the safety of shell eggs. Thus, FDA tentatively concludes that 
there is no need for both statements in labeling of shell eggs.
     Focus group participants responded favorably to a graphic format 
that used bullets for the safe handling instructions. FDA encourages 
the use of such a presentation. However, the agency recognizes that all 
egg cartons may not be able to accommodate this format and, therefore, 
FDA is not proposing to require it. The agency requests comment on this 
tentative decision. The agency also requests comments on whether 
graphics would enhance the visibility of the statement.
     The agency notes that, under FSIS regulations (7 CFR 317.2 and 
381.125), the safe handling statements that are currently required on 
raw meats and poultry include graphic illustrations. As discussed in 
the FSIS final rule (59 FR 14528), participants in consumer research 
indicated that safe handling instructions accompanied with graphics 
were preferred to those without graphics. As previously discussed in 
this section, FDA conducted its own consumer focus group research to 
evaluate consumer understanding of several safe handling labeling 
statements for shell eggs. Based on its focus group research, the 
agency tentatively concluded that the safe handling statement that it 
is proposing is adequate and effectively informs consumers of the risks 
associated with the consumption of shell eggs and of measures they can 
take to reduce their risk of foodborne illness. Therefore, the agency 
tentatively concludes that additional information, including graphic 
illustrations, is not necessary to convey the safe handling 
instructions to consumers. However, although FDA is not proposing to 
require graphic illustrations in the safe handling statement for shell 
eggs, the agency encourages use of illustrations similar to those used 
on raw meat and poultry on the cartons of shell eggs. While the agency 
did not specifically test the graphic illustrations with the consumer 
focus groups, the agency believes that, because graphic illustrations 
have been on meat and poultry product labels for some time, consumers 
have become familiar with these kinds of symbols. The agency requests 
comment on whether graphics should be required as part of the safe 
handling statement for shell eggs.
     The agency has solicited specific comments on various aspects of 
this proposal as well as additional requirements. Any comments 
supporting additional requirements should include data, information, or 
a rationale in support of the position advocated. FDA will consider 
such comments and depending on the administrative record that is 
developed through the rulemaking process, may adopt as part of a final 
rule additional requirements. The agency notes, however, that it does 
not intend that this proposed regulation would, if finalized, preempt 
any State or local requirements for additional safe handling labeling, 
e.g., graphics, as long as it does not conflict with Federal 
requirements.
     The agency notes that current regulations in Sec. 101.17 use the 
terms ``warning'' or ``notice.'' As previously discussed, FDA has 
presumed that consumers' reaction to a warning statement about the 
possible presence of harmful bacteria in eggs would be a decision 
whether to avoid the product. The term ``notice'' could be used, but 
does not draw attention to the important fact that there are ways to 
reduce or eliminate the risks of foodborne illness other than avoidance 
of the product. The agency tentatively concludes, therefore, that the 
required elements of the label statement are best described as ``safe 
handling instructions.'' In light of this fact, the agency is proposing 
in this rulemaking to amend the title of Sec. 101.17 to include the use 
of the term ``safe handling statements.''

E. Placement and Prominence of Label Statements

     Section 403(f) of the act requires mandatory label information to 
be prominently placed on the label with such conspicuousness (compared 
with other words, statements, designs, or devices, in the labeling) as 
to render it likely to be read and understood by the ordinary 
individual under customary conditions of use. Two comments to the

[[Page 36506]]

1998 ANPRM requested that FDA provide flexibility in any food labeling 
statement, e.g., placement of the statement could occur on the inside 
of the carton, or elsewhere on the package, as long as it is 
conspicuous. The comments argued that existing federal regulations 
already require certain label information, such as grading information 
and nutrition labeling. In addition, the comments maintained that many 
States also require additional information on egg cartons such as 
product codes and sell-by dates. Moreover, one comment contended that 
some States may require certain information in type sizes of 10-point 
type or 3/8 inch. Thus, the comment argued, there is limited label 
space for additional information. One comment requested that FDA 
consider allowing the use of a modified format for small packages 
(packages of less than a dozen eggs) similar to that permitted for 
nutrition labeling. The comment questioned whether federal requirements 
would duplicate or preempt State requirements. One comment stated that 
some States require the phrase ``Keep refrigerated at or below 45 
deg.F.'' Another comment estimated that approximately 40 percent of egg 
cartons on the market carry some form of ``warning label.'' The comment 
pointed out that prior to the beginning of 1998, only 10 percent of the 
cartons on the market bore safe handling instructions. The comment 
requested that if existing safe handling instructions meet or exceed 
federal requirements, FDA should allow manufacturers to retain such 
labels. The issues raised in these comments were among those considered 
by FDA as it developed this proposed rule.
    In the past, FDA has generally determined that the information 
panel is the appropriate location for label statements that are 
required by Sec. 101.17. As discussed in the agency's rulemaking 
requiring label statements on iron-containing dietary supplements (62 
FR 2218), consumer focus group studies indicated that the label 
statement need not be placed on the principal display panel (PDP) to be 
effective in informing consumers of the hazard. Participants in the 
focus group reasoned that the front of the product was used for 
marketing purposes, and consumers were used to looking at the ``back of 
products'' for nutrition and factual information including label 
statements such as warning messages. Thus, the agency required that the 
warning statement for iron-containing supplements appear on the 
information panel, the portion of the label where most mandatory 
information is located. The agency tentatively concludes that for label 
statements on shell eggs, the requirement for prominence and 
conspicuousness would similarly be met if the statements appeared on 
the information panel. However, the agency would not object to firms 
placing the label statement on the PDP, since the PDP would provide 
even more prominence. Accordingly, FDA is proposing to require in 
Sec. 101.17(h)(2) that the label statement appear either on the 
information panel or on the PDP.
     The requirement in the act for prominent display means that the 
label statement must appear in a manner that makes the statement 
readily observable and likely to be read. The agency notes that 21 CFR 
101.2(c) requires that mandatory information appearing on the PDP and 
information panel, including information required by Sec. 101.17, 
appear prominently and conspicuously in a type size no less than 1/16 
inch. The agency also notes that 21 CFR 101.15(a) provides that 
information required on the label appear uncrowded and with sufficient 
contrast to background material. The agency has concluded that it is 
not necessary to repeat these requirements for prominence and 
conspicuousness in the proposed regulation and, therefore, is not 
including them in this proposal.
     Current agency regulations that require a label ``warning'' 
statement (e.g., the statement required by Sec. 101.17(e) on iron-
containing dietary supplements in solid oral dosage form) or a label 
``notice'' statement (e.g., the statement required by Sec. 101.17(d)(3) 
on protein products that are not covered by the requirements of 
Sec. 101.17(d)(1) and (d)(2)) require that the identifying term 
``WARNING'' or ``NOTICE'' be capitalized and immediately precede the 
language of the applicable label statement. Likewise, consistent with 
these examples, the agency is proposing in Sec. 101.17(h)(1) to require 
that the capitalized words ``SAFE HANDLING INSTRUCTIONS'' immediately 
precede the message of the label statement.
     Previous agency regulations that require cautionary information on 
labels, e.g., on products containing aspartame (39 FR 27317, July 26, 
1974), utilized bold type to make the information more prominent. In 
addition, FDA regulations on nutrition labeling (21 CFR 
101.9(d)(1)(iv)) require that certain nutrient information in the 
Nutrition Facts panel be in bold type to provide more prominence. 
Therefore, consistent with these examples, the agency is proposing in 
Sec. 101.17(h)(2) to require that the words ``SAFE HANDLING 
INSTRUCTIONS'' be in bold type to help alert the consumer that there is 
new and critically important information about the egg product.
     The agency notes that experience has shown that the prominence of 
some labeling information may be enhanced by the use of a box around 
the information. The agency's experience with the new nutrition label 
has been that the box surrounding the nutrition information greatly 
increases the prominence of the information. In addition, consumer 
focus group research has shown that boxes around important messages 
help consumers to distinguish the message from other information (Ref. 
25). Therefore, the agency tentatively concludes that the use of a box 
around the label statement for shell eggs will similarly increase the 
prominence of the message by setting it off, thereby enhancing the 
likelihood that consumers will notice and read the message. 
Accordingly, FDA is including in the proposal a requirement (proposed 
Sec. 101.17(h)(3)) that the label statement be set off in a box by use 
of hairlines.
    The agency requests comments on the prominence and placement of the 
proposed label statement and whether the proposal provides sufficient 
flexibility to accomodate the many types of egg cartons in the 
marketplace. FDA is particularly interested in comments on whether 
other measures, e.g., color enhancement, are necessary to focus the 
consumer's attention on the label statement.

IV. Analysis of Impacts

A. Benefit/Cost Analysis

    FDA has examined the economic implications of this proposed rule as 
required by Executive Order 12866. Executive Order 12866 directs 
agencies to assess all costs and benefits of available regulatory 
alternatives and, when regulation is necessary, to select regulatory 
approaches that maximize net benefits (including potential economic, 
environmental, public health, safety, distributive, and equity 
effects). Executive Order 12866 classifies a rule as significant if it 
meets any one of a number of specified conditions, including: Having an 
annual effect on the economy of $100 million; adversely affecting some 
sector of the economy in a material way; or adversely affecting jobs or 
competition. A regulation is also considered a significant regulatory 
action under Executive Order 12866 if it raises novel, legal, or policy 
issues. Under the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) 
requiring cost-benefit and other analyses, a significant rule is 
defined in section

[[Page 36507]]

1531 (a) as ``a Federal mandate that may result in the expenditure by 
State, local, and tribal governments in the aggregate, or by the 
private sector, of $100,000,000 (adjusted annually for inflation) in 
any 1 year * * *.'' Finally, the Small Business Regulatory Enforcement 
Fairness Act of 1996 (Pub. L. 104-121) defines a major rule for the 
purpose of congressional review as having caused or being likely to 
cause one or more of the following: An annual effect on the economy of 
$100 million; a major increase in costs or prices; significant effects 
on competition, employment, productivity, or innovation; or significant 
effects on the ability of U.S. based enterprises to compete with 
foreign-based enterprises in domestic or export markets.
    FDA tentatively finds that this proposed rule is economically 
significant under Executive Order 12866. FDA has determined that this 
proposed rule, based on the median estimate of cost contained in the 
economic analysis, does not constitute a significant rule under the 
Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Furthermore, in 
accordance with the Small Business Regulatory Enforcement Fairness Act 
of 1995 (Pub. L. 104-121) it has been determined that this proposed 
rule would be a major rule for the purpose of congressional review.
    This section summarizes the preliminary regulatory impact analysis 
of the proposed rule. The full analysis and a list of references is 
available in a separate document entitled ``Preliminary Regulatory 
Impact Analysis and Initial Regulatory Flexibility Analysis of the 
Proposed Rule to Require Refrigeration of Shell Eggs at Retail and Safe 
Handling Labels'' (PRIA/IRFA) published elsewhere in this issue of the 
Federal Register.
    One comment to the 1998 ANPRM suggested that FDA consider mandatory 
sell-by dates, prohibition of re-packaging, and mandatory 
pasteurization of shell eggs intended for at-risk consumers (such as 
residents of nursing homes). Several comments stated that in-shell 
pasteurization was costly; according to one comment, pasteurization 
equipment would cost $1.5 million. Several comments stressed the cost 
and difficulty of placing the safe handling statement on egg cartons, 
which are already crowded with printing. In one comment, a carton 
manufacturer estimated that designing and producing new plates for all 
of its egg cartons would cost about $2 million.
1. Regulatory Options
    FDA considered several regulatory options for dealing with SE in 
shell eggs. The options considered include: (1) No new regulatory 
action, (2) labeling only, (3) refrigeration at 7.2  deg.C (45  deg.F) 
only, (4) refrigeration at 5  deg.C (41  deg.F), (5) Hazard Analysis 
Critical Control Point (HACCP) for shell eggs, (6) in-shell 
pasteurization, (7) longer compliance periods, and (8) limited retail 
sell-by period.
    FDA believes that relying on current safeguards (option 1) would 
not greatly reduce the number of illnesses from SE in shell eggs. Even 
though the benefits from either labeling alone or refrigeration alone 
(options 2 and 3) exceed the costs, the combined benefits of 
refrigeration and labeling (the proposed rule) are much greater than 
either taken separately. FDA found that option 4 (refrigerate shell 
eggs at 5  deg.C (41  deg.F) in retail establishments and institutions) 
would not have a significant additional effect on SE in shell eggs, but 
would increase costs substantially. FDA believes that a HACCP-like 
program (option 5) is currently not feasible. However, FDA is 
evaluating whether in the future, a HACCP-like program including 
possibly in-shell pasteurization, may be necessary to further ensure 
the safety of shell eggs. In-shell pasteurization (option 6) would 
greatly reduce SE, but FDA believes other interventions between farm 
and table could reduce SE at lower cost. The main disadvantage of 
longer compliance periods for the labeling provision (option 7) is that 
the option would delay the realization of the benefits of the rule. 
Finally, FDA finds that limiting the retail sell-by period to 30 days 
(option 8) would have small public health benefits but could impose 
substantial costs.
2. Benefits
    Benefits from the proposed rule to require a safe handling label 
and the refrigeration of shell eggs at 7.2  deg.C (45  deg.F) come from 
reducing SE-related illness. The basic model for estimating benefits 
is: ``marginal health benefits = baseline risk (number of SE illnesses 
related to shell eggs) x expected reduction in the number of illnesses 
brought about by the proposed rule x health cost per illness''.
    FDA used the results of the USDA SE risk assessment for one 
estimate of the baseline risk and the CDC Salmonella surveillance data 
for another estimate of the baseline. FDA also used the risk assessment 
model to estimate the expected reduction in illnesses attributed to the 
proposed rule. The design of the USDA SE risk assessment model allowed 
FDA to estimate the number of illnesses prevented by comparing the 
baseline number of illnesses with the number of illnesses under the 
provisions of the proposed rule. The range (5th to 95th percentile) of 
estimated annual illnesses prevented for the USDA SE risk assessment 
baseline was 12,000 to 407,000, with a median of 66,000. The range (5th 
to 95th percentile) of estimated illnesses prevented for the CDC 
surveillance baseline was 7,000 to 107,000, with a median of 25,000.
    FDA calculated the health cost per illness prevented by classifying 
SE illnesses into the following outcomes based on severity: Mild, 
moderate, and severe acute gastrointestinal illnesses; resolved and 
chronic reactive arthritis; and death. FDA then multiplied the 
estimated monetary health cost per type of illnesses by the number of 
illnesses prevented of each type. Total health benefits from the 
proposed rule were calculated as follows:
    total health benefits = (number of mild cases prevented x $ per 
case) + (number of moderate cases prevented x $ per case) + (number 
of severe-acute cases prevented x $ per case) + (number of resolved 
cases of arthritis prevented x $ per case) + (number of chronic 
cases of arthritis prevented x $ per case) + (number of deaths x $ 
per death)
    The baseline risk, the expected reduction in risk, and the health 
costs per illness are all uncertain. FDA therefore estimated a 
distribution of possible health benefits for the proposed rule, with 
the distribution based on the probability distributions associated with 
the main uncertainties. The range (5th to 95th percentile) of estimated 
annual benefits for the USDA SE risk assessment baseline was $87 
million to $6.6 billion, with a median of $700 million. The range (5th 
to 95th percentile) of estimated annual benefits for the CDC 
surveillance baseline was $50 million to $1.7 billion, with a median of 
$300 million. The benefits are large, although FDA estimates that 95 
percent of shell eggs are already held at ambient temperatures of 7.2 
deg.C (45  deg.F) or less.
3. Costs
    The costs of the proposed rule are the sum of the costs of changes 
in manufacturing practices--labeling and refrigeration and changes in 
consumer practices--egg preparation and consumption.
    a. Labeling. The costs of labeling are the sum of administrative 
compliance, inventory disposal, and label redesign costs. FDA 
calculated labeling costs with the following model: ``labeling cost = 
($ administrative costs per firm x

[[Page 36508]]

number of affected firms) + ($ value of cartons manufactured x disposal 
percentage of carton inventory ) + (number of affected labels x $ 
redesign cost per label)''.
    FDA estimated the total labeling cost for a 6-month compliance 
period to be a one-time cost of approximately $18 million. The total 
cost included administrative costs of $280,000, inventory disposal 
costs of $3 million, and label redesign costs of $15 million.
    b. Refrigeration. FDA estimated the refrigeration costs to be the 
cost of the additional equipment required for all establishments to 
maintain an ambient temperature of 7.2  deg.C (45  deg.F). FDA 
calculated the cost by multiplying the estimated number of 
establishments that would require new (or upgraded) equipment by the 
cost of equipment. Both the number of establishments affected and the 
cost of equipment are uncertain. FDA estimated the number of 
establishments that would require new equipment by assuming that no 
establishments in States that had adopted the Food Code and an 
uncertain fraction--with one-third the most likely value--of 
establishments in States that had not adopted the Food Code would 
require new equipment. FDA used industry sources to obtain estimates of 
the range of costs of new or additional equipment necessary to meet the 
refrigeration provision of the proposed rule. The estimated costs per 
establishment ranged from close to zero for small equipment upgrades to 
$6,000 for a large new refrigerator.
    FDA estimated a distribution of possible refrigeration costs for 
the proposed rule. The range (5th to 95th percentile) of estimated one-
time refrigeration costs was $7 million to $228 million, with a median 
of $31 million.
    c. Changes in consumer practices. FDA estimated the annual costs to 
consumers of changing the way eggs are prepared and consumed as 
follows:
    cost of changes in consumer practices = annual number of eggs 
consumed x baseline fraction of eggs consumed undercooked x 
fractional reduction in undercooked eggs in response to safe 
handling label x $ value of undercooking one egg
    The cost to consumers is uncertain. The range (5th to 95th 
percentile) of annual costs was $2 million to $20 million, with a 
median of $10 million. The cost of changes in consumer practices is an 
annual recurring cost of the proposed rule.
4. Summary of Benefits/Cost Analysis
    Table 1 of this document shows the median estimated benefits and 
costs of the proposed rule.

       Table 1.--Median Annual Estimated Benefits and Costs of the Proposed Rule (In Millions of Dollars)
----------------------------------------------------------------------------------------------------------------
                   Incidents of Benefit and Cost Analysis                        First Year      All Other Years
----------------------------------------------------------------------------------------------------------------
Median estimated benefits (USDA SE risk assessment baseline)                       $700              $700
Median estimated benefits (CDC surveillance baseline)                              $300              $300
Median estimated costs                                                              $60               $10
----------------------------------------------------------------------------------------------------------------

B. Small Entity Analysis

1. Introduction
    FDA has examined the economic implications of this proposed rule as 
required by the Regulatory Flexibility Act (5 U.S.C. 601-612). If a 
rule has a significant economic impact on a substantial number of small 
entities, the Regulatory Flexibility Act requires agencies to analyze 
regulatory options that would lessen the economic effect of the rule on 
small entities.
2. Economic Effects on Small Entities
    a. Number of small entities affected. The proposed rule would 
affect many small entities, including egg processors, grocery stores 
and other stores including roadside stands, restaurants and other food 
service establishments. FDA has not been able to determine how many of 
the 669 egg processors registered with the USDA are small businesses 
(Ref. 40). Egg processors generally fall into two industrial 
classifications: Poultry slaughtering and processing (standard 
industrial classification (SIC code 2015)) and whole poultry and 
poultry products (SIC code 5144). The two classifications roughly 
correspond to in-line and off-line processors. In-line processors 
package the eggs at the egg laying facility. Off-line processors ship 
the eggs to packers.
    The Small Business Administration (SBA) defines in-line egg 
processors (SIC code 2015-03) to be small businesses if they employ 500 
or fewer people. According to a search in Dun's Market Identifiers 
(Ref. 41), 25 in-line egg processing firms would be defined as small. 
SBA defines off-line processors (SIC code 5144) to be small if they 
employ 100 or fewer people. Dun's Market Identifiers did not have a 
subcategory for egg processors. For the entire category of poultry and 
poultry products (SIC code 5144), 80 percent of establishments employ 
fewer than 100 workers. If the same proportion holds for the 
subcategory composed of egg processors, then 470 firms would be 
classified as small.\7\ FDA estimated the total number of small egg 
processors to be 495 (= 25 + 470).
---------------------------------------------------------------------------

    \7\ The estimated total number of in-line establishments is 134, 
but 52 are branches of firms. If the total number of in-line firms 
is 82 (= 134 - 52), and the number of processors is 669, then 587 
firms are off-line processors. If 80 percent are small, then 470 
off-line (= 0.8 x 587) processors are small.
---------------------------------------------------------------------------

    The refrigeration provision would affect small establishments that 
are not currently refrigerating at 7.2  deg.C (45  deg.F). The SBA 
defines grocery stores (SIC code 5411) to be small if annual gross 
revenue is less than $20 million. Other food stores (SIC codes 5431, 
5451, and 5499), which include fruit and vegetable markets, dairy 
product stores, and miscellaneous food stores, are small if annual 
sales are less than $5 million. Restaurants are small if annual sales 
are less than $5 million; institutions are small if sales are less than 
$15 million.
    As set out in Table 2 of this document, FDA estimates that the 
number of small establishments affected by the proposed refrigeration 
provision would be 25,400. The number of establishments (small and 
large) currently not keeping eggs at an ambient temperature of 7.2 
deg.C (45  deg.F) is approximately 44,400, which includes 10,700 
grocery and other food stores, 24,000 restaurants, and 9,700 
institutions (see the PRIA/IRFA document elsewhere in this issue of the 
Federal Register). FDA assumed that the proportion of small 
establishments affected by the refrigeration provision would be the 
same as the fraction of institutions for the entire industry in that 
category. According to SBA size standards for small entities, 71 
percent of grocery and other food stores and 54 percent of restaurants 
are small. Institutions are more complicated, because they cut across 
SIC codes. FDA assumed that 50 percent of institutions serving eggs are 
small. The agency asks for comments on this assumption. FDA estimated 
the number of small establishments affected by the

[[Page 36509]]

refrigeration provision by multiplying the fraction in each category 
defined to be small by the total number of establishments affected. 
Table 2 of this document shows the number of small entities likely to 
be affected by the refrigeration provision of the proposed rule.

  Table 2.--Number of Small Entities Likely to be Affected by the Refrigeration Provision of the Proposed Rule
----------------------------------------------------------------------------------------------------------------
                                                                                            Number of Small
                                                                                       Establishments Currently
                                      Category                                        Storing Eggs Above 45 F (7
                                                                                                  C)
----------------------------------------------------------------------------------------------------------------
Grocery and other stores                                                                          7,600
Restaurants                                                                                      13,000
Institutions                                                                                      4,800
Total                                                                                            25,400
----------------------------------------------------------------------------------------------------------------

    b. Costs to small entities. Redesigning the label accounts for most 
of the estimated additional labeling costs for small processors. For a 
6-month compliance period, redesign costs would be $1,000 per 
stockkeeping unit (SKU) for pulp cartons and $500 per SKU for foam 
cartons. The cost of the labeling provision borne by small processors 
will vary with the number of SKU's. The average number of SKU's per 
processor for the industry is 30; FDA assumes that the output of small 
processors falls in the range of 2 to 20 SKU's. Additional redesign 
costs could therefore be as high as $20,000 per processor (= 20 x 
$1,000).
    Refrigeration costs vary across establishments, depending on the 
age of current refrigerators, the planned replacement cycle, and 
whether the small establishments is currently keeping eggs at or below 
7.2  deg.C (45  deg.F). Additional refrigeration costs for small 
retailers would average $633, with $700 the most likely value. FDA 
assumed that the proportion of additional refrigeration costs borne by 
small entities would be the same as the proportion of small entities in 
each category of establishments. The cost of the refrigeration 
provision to small entities is shown in Table 3 of this document. The 
agency requests comments on the effect of the refrigeration provision 
on roadside stands and the practices they follow in marketing eggs.

              Table 3.--Costs to Small Entities of the Refrigeration Provision of the Proposed Rule
----------------------------------------------------------------------------------------------------------------
                                                                                             Mean Cost per Small
                  Category                            Total Costs to Small Entities                Entity
----------------------------------------------------------------------------------------------------------------
Grocery and other stores                      $4.8 million                                         $633
Restaurants                                   $8.2 million                                         $633
Institutions                                  $3.1 million                                         $633
----------------------------------------------------------------------------------------------------------------

3. Regulatory Options
    a. Exemption for small entities. The burden on small entities would 
be lifted if they were exempt from the provisions of the proposed rule. 
Most of the entities affected by this proposed rule, however, are 
small. Thus, exempting small entities from its provisions would 
effectively negate the rule.
    b.  Longer compliance periods. Lengthening the labeling compliance 
period from 6 months to 18 months and lengthening the refrigeration 
compliance period from the proposed rule's effective date to 12 months 
after the effective date would provide regulatory relief (cost 
reduction) to small entities. In order to estimate the regulatory 
relief from lengthening the refrigeration compliance period, the agency 
assumed that the cost reduction would equal the interest (discounted at 
7 percent per year) on the cost of refrigeration equipment over the 
extension of the compliance period. If the compliance period were 
extended by 12 months, the interest on the cost of equipment would be 
over $1 million (= $16.1 x 0.07). For the most likely equipment cost of 
$700 per small establishment, the interest saving would be about $50 
(=0.07 x $700).
    In order to estimate the regulatory relief to small retail entities 
from a longer labeling compliance period, FDA estimated that total 
industry costs would fall by $11 million if the compliance period were 
extended from 6 months to 18 months (see the PRIA/IRFA document 
elsewhere in this issue of the Federal Register). Most of the relief to 
small businesses would come from the reduced costs of redesigning the 
carton label. For pulp cartons, extending the compliance period to 18 
months would reduce redesign costs from $1,000 (for a 6-month 
compliance period) to $500 per SKU. For foam cartons, extending the 
compliance period to 18 months would reduce redesign costs from $500 
(for a 6-month compliance period) to $100 per SKU.
    Although lengthening the compliance periods would provide some 
regulatory relief to small entities, they make up such a large part of 
the affected industries that longer compliance periods would 
significantly delay the full public health benefits of the proposed 
rule.
4. Description of Recordkeeping and Recording Requirements
    The Regulatory Flexibility Act requires a description of the 
recordkeeping and recording required for compliance with this rule. 
This rule does not require the preparation of a report or a record.
5. Worst Case to Small Entities
    The greatest impact to a small retail establishment as a 
consequence of the refrigeration provision would be to cause the entity 
to bear the entire cost for the purchase of a new refrigerator. The 
agency estimates that the cost of a new refrigerator is between $2,500 
and $6,000 (see the PRIA/IRFA document published elsewhere in this 
issue of the Federal Register). In order to estimate the worst possible 
outcome for a small entity, FDA assumed that some small retail 
establishment would purchase a new refrigerator at the maximum 
estimated cost of $6,000. If the latter

[[Page 36510]]

cost were amortized over a 10-year period (using a discount rate of 7 
percent) then the approximate annual expense would be $850 per year for 
10 years. According to Dun and Bradstreet, 85 percent of all grocery 
stores have annual sales of less than $20 million, and 71 percent of 
all restaurants have annual sales of less than $5 million (Ref. 41). 
Among the smallest 10 percent of these establishments, the average 
sales volume is $100,000 per year for a grocery store and $50,000 per 
year for a restaurant. Therefore, the additional expense of $850 per 
year amounts to approximately 1 to 2 percent of average sales volume 
per year. Grocery stores and restaurants typically have profit margins 
on sales of 1 to 5 percent, so a reduction of the profit margin by 40 
to 100 percent would be the worst-case outcome for the smallest 
entities in retail.
    The worst case to a small entity attributable to the labeling 
provision would occur if a small packer were unable to pass along any 
of the cost to its customers. As shown previously, FDA estimated that 
the redesign cost to a small processor could be as high as $20,000. If 
the one-time cost could be amortized over a 10-year period at an annual 
discount rate of 7 percent, the small packer would incur an additional 
annual expense of approximately $3,000. FDA has not estimated the 
annual sales revenues of the smallest egg packers and is therefore 
unable to compare the estimated amortized cost to annual profits. FDA 
requests comments on this relationship.
6. Summary of Small Entity Analysis
    FDA estimated that the labeling provisions could impose costs of up 
to $20,000 on 495 small processing establishments. The refrigeration 
provision would impose estimated costs of $633 per small entity on 
approximately 25,400 small establishments. FDA finds that, under the 
Regulatory Flexibility Act, this proposed rule would have a significant 
economic impact on a substantial number of small entities.

V. Executive Order 12612: Federalism

    FDA has examined the effects of the two requirements in this 
proposal, i.e., refrigeration of shell eggs at retail and safe handling 
labeling of shell eggs, on the relationship between the Federal 
Government and the States, as required by Executive Order 12612 on 
``Federalism.'' The agency concludes that preemption of State or local 
rules that establish requirements for refrigeration of shell eggs that 
would be less stringent than Federal law is consistent with this 
Executive Order. The agency also concludes that the preemption of State 
or local rules that establish requirements for safe handling 
instructions on shell eggs that would not include, at a minimum, the 
language required by the Federal law is also consistent with this 
Executive Order.
    Section 3(b) of Executive Order 12612 recognizes that Federal 
action limiting the discretion of State and local governments is 
appropriate ``where constitutional authority for the action is clear 
and certain and the national activity is necessitated by the presence 
of a problem of national scope.'' The constitutional basis for FDA's 
authority to regulate the safety and labeling of foods is well 
established.
    Section 4(a) of Executive Order 12612 expressly contemplates 
preemption when there is a conflict between the exercise of State and 
Federal authority under Federal statute. Moreover, section 4(b) of the 
Executive Order authorizes preemption of State law in the Federal 
rulemaking context when there is ``firm and palpable evidence 
compelling the conclusion that the Congress intended to delegate to the 
* * * agency the authority to issue regulations preempting State law.'' 
State and local laws and regulations that would impose less stringent 
requirements for refrigeration of shell eggs held for retail 
distribution would undermine the agency's goal of ensuring that shell 
eggs are properly refrigerated to prevent the growth of SE, and, thus, 
reduce the risk of foodborne illness. Similarly, State and local 
requirements for safe handling labeling that do not include, at a 
minimum, the language required by Federal law would undermine the 
agency's effort to provide consumers with material information that 
would inform them how to properly handle and cook eggs so as to reduce 
their risk of foodborne illness. FDA believes that a single temperature 
requirement will ensure that all shell eggs for retail distribution 
would meet minimal standards to ensure safety. The agency also believes 
that consistent safe handling instructions are necessary so consumers 
can find essential information in a message that is not confusing or 
misleading.
    The proposed rule would establish national minimum standards with 
respect to refrigeration and labeling of shell eggs. However, the 
refrigeration requirements of this proposed rule do not preempt State 
and local laws, regulations, and ordinances that establish more 
stringent requirements with respect to the refrigeration requirements, 
e.g., lower storage temperature requirements. In addition, the labeling 
provisions of this proposed rule do not preempt State and local laws, 
regulations, and ordinances that require additional safe handling 
instructions, e.g., graphics, on shell eggs that do not conflict with 
the proposed Federal requirements.
    As required by the Executive Order, States and local governments 
will be given, through this notice of proposed rulemaking, an 
opportunity to participate in the proceedings to preempt State and 
local laws (section 4(e) of Executive Order 12612). In addition, under 
the Order, appropriate officials and organizations will be consulted 
before this proposed action is implemented (section 3(a) of Executive 
Order 12612).
    The agency concludes that the policy proposed in this document has 
been assessed in light of the principles, criteria, and requirements in 
Executive Order 12612; that this policy is not inconsistent with that 
Order; that this policy will not impose additional costs and burdens on 
the States; and that this policy will not affect the ability of the 
States to discharge traditional State governmental functions.

VI. Environmental Impact

    The agency has determined under 21 CFR 25.30(j) and (k) that this 
action is of a type that does not individually or cumulatively have a 
significant effect on the human environment. Therefore, neither an 
environmental assessment nor an environmental impact statement is 
required.

VII. Effective Date

    FDA is proposing that any final rule that may be issued based upon 
this proposal become effective 180 days after its publication in the 
Federal Register. However, because FDA believes that it is in the best 
interest of all consumers for manufacturers to label shell eggs as soon 
as possible, the agency urges manufacturers and packers of shell eggs 
to label their products with safe handling statements consistent with 
this proposal immediately. FDA recognizes that it is possible that the 
requirements for the label statements in the final rule may be 
different from those in the proposal. However, to encourage 
manufacturers to use the label statements as soon as possible, the 
agency advises that it intends to allow the continued use of any label 
that complies with the proposed regulation and is printed prior to date 
of publication of any final rule resulting from this proposal until 
that inventory is depleted.

[[Page 36511]]

VIII. Paperwork Reduction Act of 1995

    FDA tentatively concludes that the labeling requirements proposed 
in this document are not subject to review by the Office of Management 
and Budget because they do not constitute a ``collection of 
information'' under the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3520). Rather the proposed safe handling instructions would be a 
``public disclosure of information originally supplied by the Federal 
Government to the recipient for the purpose of disclosure to the 
public'' (5 CFR 1320.3(c)(2)).

IX. Comments

    Interested persons may, on or before September 20, 1999, submit to 
the Dockets Management Branch (address above) written comments 
regarding this proposal. Two copies of any comments are to be 
submitted, except that individuals may submit one copy. Comments are to 
be identified with the docket number found in brackets in the heading 
of this document. Received comments may be seen in the office above 
between 9 a.m. and 4 p.m., Monday through Friday.

X. References

    The following references have been placed on display at the Dockets 
Management Branch (address above) and may be seen by interested persons 
between 9 a.m. and 4 p.m., Monday through Friday.
    1. Centers for Disease Control and Prevention Memorandum from 
Chief, Foodborne Diseases Epidemiology Section, February 8, 1996.
    2. Swerdlow, D. L., L. A. Lee, R. V. Tauxe, N. H. Bean, and J. 
Q. Jarvis. ``Reactive Arthropathy Following a Multistate Outbreak of 
Salmonella typhimurium Infections,'' Abstract 916. Thirthieth 
Interscience Conference on Antimicrobial Agents and Chemotherapy.
    3. Tauxe, R., ``Salmonella: A Postmodern Pathogen,'' Journal of 
Food Protection, 54:563-568, 1991.
    4. Chalker, R. and M. Blaser, ``A Review of Human Salmonellosis: 
III. Magnitude of Salmonella Infections in the United States,'' 
Reviews of Infectious Disease, 10:111-123, 1988.
    5. Centers for Disease Control and Prevention, Laboratory 
Confirmed Salmonella Surveillance Annual Summary, 1993-1995.
    6. Centers for Disease Control and Prevention, ``Outbreaks of 
Salmonella Serotype Enteritidis Infection Associated with 
Consumption of Raw Shell Eggs--United States, 1994-1995,'' Morbidity 
and Mortality Weekly Report, 45:737-742, 1996.
    7. Centers for Disease Control and Prevention, Annual Tabulation 
Summary, Salmonella Surveillance, 1997.
    8. Salmonella Enteritidis Risk Assessment, Shell Eggs and Egg 
Products, Final Report, June 12, 1998.
    9. Tauxe, R. V., ``The Continuing Challenge of Salmonella 
Enteritidis Infections in the United States: A Public Health 
Perspective,'' Presentation at the Technical Meeting on Shell Eggs 
and Egg Products Risk Assessment, 1997.
    10. FDA memorandum, Marilyn Balmer to the Record, August 31, 
1998.
    11. Mishu, B., J. Koehler, L. A. Lee, D. Rodrigue, F. H. 
Brenner, P. Blake, and R. V. Tauxe, ``Outbreaks of Salmonella 
enteritidis Infections in the United States, 1985-1991,'' Journal of 
Infectious Diseases, 169:547-552, 1994.
    12. Centers for Disease Control and Prevention, ``Update: 
Salmonella enteritidis Infections and Grade A Shell Eggs--United 
States, 1989,'' Morbidity and Mortality Weekly Report, 38:877-880, 
1990.
    13. St. Louis, M. E., D. L. Morse, M. E. Potter, T. M. DeMelfi, 
J. J. Guzewich, R. V. Tauxe, P. A. Blake, ``The Emergence of Grade A 
Eggs as a Major Source of Salmonella enteritidis Infections,'' 
Journal of the American Medical Association, 259:2103-2107, 1988.
    14. Centers for Disease Control and Prevention, ``Outbreak of 
Salmonella enteritidis Associated With Homemade Ice Cream--
Florida,'' Morbidity and Mortality Weekly Report, 43:669-671, 1994.
    14A. FDA memorandum, Marilyn F. Balmer to Darryl Patterson, 
February 18, 1999.
     14B. Centers for Disease Control and Prevention, ``Incidence of 
Foodborne Illnesses: Preliminary Data from the Foodborne Diseases 
Active Surveillance Network (FoodNet)--United States, 1998,'' 
Morbidity and Mortality Weekly Report, 48:189-194, 1999.
    15. Keller, L. H., C. E. Benson, K. Krotec, and R. J. Eckroade, 
``Salmonella enteritidis Colonization of the Reproductive Tract and 
Forming and Freshly Laid Eggs of Chickens,'' Infection and Immunity, 
7:2443-2449, 1995.
    16. Snoeyenbos, G. H., C. F. Smyser, and H. Van Roekel, 
``Research Note: Salmonella Infections of the Ovary and Peritoneum 
of Chickens,'' Avian Diseases, 13:668-670, 1969.
    17. Salmonella Enteritidis Pilot Project Progress Report, May 
22, 1995.
    18. Council for Agricultural Science and Technology, Foodborne 
Pathogens: Risks and Consequences, Ames, Iowa: Council for 
Agricultural Science and Technology, Task Force Report No. 122, ch. 
3, 1994.
    19. Hennessey, T. W., C. W. Hedberg, L. Slutsker, K. E. White, 
J. M. Besser-Wiek, M. E. Moen, J. Feldman, W. W. Colemen, L. M. 
Edmonson, K. L. MacDonald, and M. T. Osterholm, ``A National 
Outbreak of Salmonella enteritidis Infections from Ice Cream,'' The 
New England Journal of Medicine, 334:1281-1286, 1996.
    20. Vought, K. J. and S. R. Tatini, ``Salmonella enteritidis 
Contamination of Ice Cream Associated with a 1994 Multistate 
Outbreak,'' Journal of Food Protection, 61:5-10, 1998.
    21. Humphrey, T. J., A. Whitehead, A. H. L. Gawler, A. Henley, 
and B. Rowe, ``Numbers of Salmonella enteritidis in the Contents of 
Naturally Contaminated Hens' Eggs,'' Epidemiology and Infection, 
106:489-496, 1991.
    22. Klontz, K. C., B. Timbo, S. Fein, and A. Levy, ``Prevalence 
of Selected Food Consumption and Preparation Behaviors Associated 
With Increased Risks of Food-borne Disease,'' Journal of Food 
Protection, 58(8):927-930, 1995.
    23. Market Research Corp. of America, Consumption of Raw Beef, 
Raw Fish, Raw Eggs. Menu Census Report to the U.S. Department of 
Agriculture--ERS, 1995.
    24. Lin, C-T. J., R. A. Morales, and K. Ralston, ``Raw and 
Undercooked Eggs: A Danger of Salmonellosis,'' Food Review, 20:27-
32, 1997.
    25. FDA Memorandum, Alan S. Levy, Ph.D. to Kenneth Falci, Ph.D., 
June 26, 1997.
    26. Anderson, K. M., F. T. Jones, and P. A. Curtis, ``Heat Loss 
from Commercially Packed Eggs in Post-processing Coolers,'' 
Commercial Egg Special Report, vol. I, ER-1, April 1992.
    27. Kim, C. J., D. A. Emery, H. Rinke, K. V. Nagaraja, and D. A. 
Halvorson, ``Effect of Time and Temperature on Growth of Salmonella 
enteritidis in Experimentally Inoculated Eggs,'' Avian Diseases, 
33:735-742, 1989.
    28. Gast, R. K. and C. W. Beard, ``Production of Salmonella 
enteritidis--Contaminated Eggs by Experimentally Infected Hens,'' 
Avian Diseases, 34:438-446, 1990.
    29. Clay, C. E. and R. G. Board, ``Growth of Salmonella 
enteritidis in Artificially Contaminated Hens' Shell Eggs,'' 
Epidemiology and Infection, 106:271-281, 1991.
    30. Humphrey, T. J., ``Growth of Salmonellas in Intact Shell 
Eggs: Influence of Storage Temperature,'' The Veterinary Record, 
126:292, 1990.
    30A. Bradshaw, J. G., D. B. Shah, E. Forney, and J. M. Madden, 
``Growth of Salmonella enteritidis in Yolk of Shell Eggs from Normal 
and Seropositive Hens,'' Journal of Food Protection, 53:1033-1036, 
1990.
    31. Saeed, A. M. and C. W. Koons, ``Growth and Heat Resistance of 
Salmonella enteritidis in Refrigerated and Abused Eggs,'' Journal of 
Food Protection, 56:927-931, 1993.
    32. Centers for Disease Control and Prevention, ``Update: 
Salmonella enteritidis Infections in the Northeastern United 
States,'' Morbidity and Mortality Weekly Report, 36:204-205, 1987.
    33. U.S. Public Health Service, ``Food Code: 1999, 
Recommendations of the United States Public Health Service, Food and 
Drug Administration,'' Sections 3-401.11 and 3-501.16.
    34. White, P. L., W. Schlosser, C. E. Benson, C. Maddox, and A. 
Hogue, ``Environmental Survey by Manure Drag Sampling for Salmonella 
enteritidis in Chicken Layer Houses,'' Journal of Food Protection, 
60:1189-1193, 1997.
    35. Salmonella Enteritidis Review Team Report, January 18, 1997.
    36. Centers for Disease Control and Prevention, ``Update: 
Salmonella enteritidis Infections in Grade A Shell Eggs--United

[[Page 36512]]

States,'' Morbidity and Mortality Weekly Report, 37:490, 495-496, 
1988.
    37. FDA memorandum, Marilyn Balmer to the Record, December 18, 
1998.
    38. Miyamoto, T., T. Horie, E. Baba, K. Susai, T. Fukata, and A. 
Arakawa, ``Salmonella Penetration Through Eggshell Associated With 
Freshness of Laid Eggs and Refrigeration,'' Journal of Food 
Protection, 61:350-353, 1998.
    39. Macro International, Inc., Focus Group Testing of Safe 
Handling Statements on Shell Eggs, April 1998.
    39A. Macro International, Inc., Focus Group To Assess Consumer 
Reactions to Food Safety Issues (U.S. Food and Drug Administration), 
Certified Tape Transcripts.
    40. FDA memorandum, Peter Vardon to the Record, October 7, 1998.
    41. The Dialog Corp., Dun's Market Identifiers, Mountain View, 
CA, March 19, 1998.

List of Subjects

21 CFR Part 16

    Administrative practice and procedure.

21 CFR Part 101

    Administrative practice and procedure, Food labeling, Nutrition, 
Reporting and recordkeeping requirements.

21 CFR Part 115

    Administrative practice and procedure, Eggs, Refrigeration.
    Therefore, under the Federal Food, Drug, and Cosmetic Act and the 
Public Health Services Act, and under the authority delegated to the 
Commissioner of Food and Drugs, it is proposed that 21 CFR chapter I be 
amended as follows:

PART 16--REGULATORY HEARING BEFORE THE FOOD AND DRUG ADMINISTRATION

    1. The authority citation for 21 CFR part 16 continues to read as 
follows:

    Authority: 15 U.S.C. 1451-1461; 21 U.S.C. 141-149, 321-394, 
467f, 679, 821, 1034; 28 U.S.C. 2112; 42 U.S.C. 201-262, 263b, 364.

    2. Section 16.5 is amended by adding paragraph (a)(4) to read as 
follows:

Sec. 16.5  Inapplicability and limited applicability.

    (a) * * *
    (4) A hearing on an order for relabeling, diversion, or destruction 
of shell eggs under section 361 of the Public Health Service Act (42 
U.S.C. 264), Secs. 101.17(h) and 115.50 of this chapter.
* * * * *

PART 101--FOOD LABELING

    3. The authority citation for 21 CFR part 101 is revised to read as 
follows:

    Authority: 15 U.S.C. 1453, 1454, 1455; 21 U.S.C. 321, 331, 342, 
343, 348, 371; 42 U.S.C. 243, 264, 271.

     4. Section 101.17 is amended by revising the section heading and 
by adding paragraph (h) to read as follows:

Sec. 101.17  Food labeling warning, notice, and safe handling 
statements.

* * * * *
     (h) Shell eggs. (1) The label of shell eggs shall bear the 
following statement:
     SAFE HANDLING INSTRUCTIONS: Eggs may contain harmful bacteria 
known to cause serious illness, especially in children, the elderly, 
and persons with weakened immune systems. For your protection: keep 
eggs refrigerated; cook eggs until yolks are firm; and cook foods 
containing eggs thoroughly.
     (2) The label statement required by paragraph (h)(1) of this 
section shall appear prominently and conspicuously, with the words 
``SAFE HANDLING INSTRUCTIONS'' in bold type, on the information panel 
or the principal display panel of the container.
     (3) The label statement required by paragraph (h)(1) of this 
section shall be set off in a box by use of hairlines.
     (4) Shell eggs that have been, before distribution to consumers, 
specifically processed to destroy all viable Salmonella shall be exempt 
from the requirements of this paragraph (h).
     (5) The safe handling statement for shell eggs that are not for 
direct sale to consumers, e.g., those that are to be repacked or 
labeled at a site other than where originally processed, or are sold 
for use in food service establishments, may be provided on cartons or 
in labeling, e.g., invoices or bills of lading in accordance with the 
practice of the trade.
     (6) The requirements of this section are applicable to all shell 
eggs.
     (7) Under sections 311 and 361 of the Public Health Service Act 
(PHS Act), any State or locality that is willing and able to assist the 
agency in the enforcement of paragraphs (h)(1) through (h)(5) of this 
section, and is authorized to inspect or regulate establishments 
handling packed shell eggs, may in its own jurisdiction, enforce 
paragraphs (h)(1) through (h)(5) of this section through inspections 
under paragraph (h)(9) of this section and through administrative 
enforcement remedies identified in paragraph (h)(8) of this section 
until FDA notifies the State or locality in writing that such 
assistance is no longer needed. When providing such assistance, a State 
or locality may follow the hearing procedures set out in paragraphs 
(h)(8)(ii)(C) through (h)(8)(ii)(D) of this section, substituting, 
where necessary, appropriate State or local officials for designated 
FDA officials or may utilize comparable State or local hearing 
procedures if such procedures satisfy due process.
     (8) This paragraph (h) is established under authority of both the 
Federal Food, Drug, and Cosmetic Act (the act) and the PHS Act. Under 
the act, the agency can enforce the food misbranding provisions under 
21 U.S.C. 331, 332, 333, and 334. However, 42 U.S.C. 264 provides for 
the issuance of implementing enforcement regulations; therefore, FDA 
has established the following administrative enforcement procedures for 
the relabeling, diversion, or destruction of shell eggs and informal 
hearings under the PHS Act:
     (i) Upon finding that any shell eggs are in violation of this 
section, an authorized FDA representative or State or local 
representative in accordance with paragraph (h)(7) of this section may 
order such eggs to be relabeled under the supervision of said 
representative, diverted, under the supervision of said representative 
for processing in accordance with the Egg Products Inspection Act (21 
U.S.C. 1031 et seq.), or destroyed by or under the supervision of an 
officer or employee of the FDA, or, if applicable, of the State or 
locality, in accordance with the following procedures:
     (A) Order for relabeling, diversion, or destruction under the PHS 
Act. Any district office of the FDA or any State or locality acting 
under paragraph (h)(7) of this section, upon finding shell eggs held in 
violation of this regulation, may serve upon the person in whose 
possession such eggs are found a written order that such eggs be 
relabeled with the required statement in paragraph (h)(1) of this 
section before further distribution. If the person chooses not to 
relabel, the district office of the FDA or, if applicable, the 
appropriate State or local agency may serve upon the person a written 
order that such eggs be diverted (from direct consumer sale, e.g., to 
food service) under the supervision of an officer or employee of the 
issuing entity, for processing in accordance with the Egg Products 
Inspection Act (21 U.S.C. 1031 et seq.)) or destroyed by or under the 
supervision of the issuing entity, within 10-working days from the date 
of receipt of the order.
     (B) Issuance of order. The order shall include the following 
information:
     (1) A statement that the shell eggs identified in the order are 
subject to relabeling, diversion for processing in

[[Page 36513]]

accordance with the Egg Products Inspection Act, or destruction;
     (2) A detailed description of the facts that justify the issuance 
of the order;
     (3) The location of the eggs;
     (4) A statement that these eggs shall not be sold, distributed, or 
otherwise disposed of or moved except as provided in paragraph 
(h)(8)(i)(E) of this section;
     (5) Identification or description of the eggs;
     (6) The order number;
     (7) The date of the order;
     (8) The text of this entire section;
     (9) A statement that the order may be appealed by written appeal 
or by requesting an informal hearing;
     (10) The name and phone number of the person issuing the order; 
and
     (11) The location and telephone number of the responsible office 
or agency and the name of its director.
     (C) Approval of director. An order, before issuance, shall be 
approved by the director of the office or agency issuing the order. If 
prior written approval is not feasible, prior oral approval shall be 
obtained and confirmed by written memorandum as soon as possible.
     (D) Labeling or marking of shell eggs under order. An FDA, State, 
or local representative issuing an order under paragraph (h)(8)(i)(A) 
of this section shall label or mark the shell eggs with official tags 
that include the following information:
     (1) A statement that the shell eggs are detained in accordance 
with regulations issued under section 361(a) of the PHS Act (42 U.S.C. 
264(a)).
     (2) A statement that the shell eggs shall not be sold, distributed 
or otherwise disposed of or moved except, after notifying the issuing 
entity in writing, to:
     (i) Relabel, divert them for processing in accordance with the Egg 
Products Inspection Act, or destroy them; or
     (ii) Move them to another location for holding pending appeal.
     (3) A statement that the violation of the order or the removal or 
alteration of the tag is punishable by fine or imprisonment or both 
(section 368 of the PHS Act, 42 U.S.C. 271).
     (4) The order number and the date of the order, and the name of 
the government representative who issued the order.
     (E) Sale or other disposition of shell eggs under order. After 
service of the order, the person in possession of the shell eggs that 
are the subject of the order shall not sell, distribute, or otherwise 
dispose of or move any eggs subject to the order unless and until the 
notice is withdrawn after an appeal except, after notifying FDA's 
district office or, if applicable, the State or local agency in 
writing, to:
     (1) Relabel, divert, or destroy them as specified in paragraph 
(h)(8)(iv) of this section; or
     (2) Move them to another location for holding pending appeal.
     (ii) The person on whom the order for relabeling, diversion, or 
destruction is served may either comply with the order or appeal the 
order to the regional food and drug director.
     (A) Appeal of a detention order. Any appeal shall be submitted in 
writing to the FDA District Director in whose district the shell eggs 
are located within 5-working days of the issuance of the order. If the 
appeal includes a request for an informal hearing, the hearing shall be 
held within 5-working days after the appeal is filed or, if requested 
by the appellant, at a later date, which shall not be later than 20-
calendar days after the issuance of the order. The order may also be 
appealed within the same period of 5-working days by any other person 
having an ownership or proprietary interest in such shell eggs. The 
appellant of an order shall state the ownership or proprietary interest 
the appellant has in the shell eggs.
     (B) Summary decision. A request for a hearing may be denied, in 
whole or in part and at any time after a request for a hearing has been 
submitted, if the regional food and drug director or his or her 
designee determines that no genuine and substantial issue of fact has 
been raised by the material submitted in connection with the hearing or 
from matters officially noticed. If the regional food and drug director 
determines that a hearing is not justified, written notice of the 
determination will be given to the parties explaining the reason for 
denial.
     (C) Informal hearing. Appearance by any appellant at the hearing 
may be by mail or in person, with or without counsel. The informal 
hearing shall be conducted by the regional food and drug director or 
his designee, and a written summary of the proceedings shall be 
prepared by the regional food and drug director.
     (1) The regional food and drug director may direct that the 
hearing be conducted in any suitable manner permitted by law and this 
section. The regional food and drug director has the power to take such 
actions and make such rulings as are necessary or appropriate to 
maintain order and to conduct an informal fair, expeditious, and 
impartial hearing, and to enforce the requirements concerning the 
conduct of hearings.
     (2) Employees of FDA will first give a full and complete statement 
of the action which is the subject of the hearing, together with the 
information and reasons supporting it, and may present oral or written 
information relevant to the hearing. The party requesting the hearing 
may then present oral or written information relevant to the hearing. 
All parties may conduct reasonable examination of any person (except 
for the presiding officer and counsel for the parties) who makes any 
statement on the matter at the hearing.
     (3) The hearing shall be informal in nature, and the rules of 
evidence do not apply. No motions or objections relating to the 
admissibility of information and views will be made or considered, but 
any party may comment upon or rebut any information and views presented 
by another party.
     (4) The party requesting the hearing may have the hearing 
transcribed, at the party's expense, in which case a copy of the 
transcript is to be furnished to FDA. Any transcript of the hearing 
will be included with the regional food and drug director's report of 
the hearing.
     (5) The regional food and drug director shall prepare a written 
report of the hearing. All written material presented at the hearing 
will be attached to the report. Whenever time permits, the regional 
food and drug director may give the parties the opportunity to review 
and comment on the report of the hearing.
     (6) The regional food and drug director shall include as part of 
the report of the hearing a finding on the credibility of witnesses 
(other than expert witnesses) whenever credibility is a material issue, 
and shall include a recommended decision, with a statement of reasons.
     (D) Written appeal. If the appellant appeals the detention order 
but does not request a hearing, the regional food and drug director 
shall render a decision on the appeal affirming or revoking the 
detention within 5-working days after the receipt of the appeal.
     (E) Regional Food and Drug Director decision. If, based on the 
evidence presented at the hearing or by the appellant in a written 
appeal, the regional food and drug director finds that the shell eggs 
were held in violation of this section, he shall affirm the order that 
they be relabeled, diverted under the supervision of an officer or 
employee of the FDA for processing under the Egg Products Inspection 
Act, or destroyed by or under the supervision of an officer or employee 
of the FDA; otherwise, the regional food and drug director shall issue 
a written notice that the prior order is withdrawn. If the regional 
food and drug director affirms the order he shall order that the

[[Page 36514]]

relabeling, diversion, or destruction be accomplished within 10-working 
days from the date of the issuance of his decision. The regional food 
and drug director's decision shall be accompanied by a statement of the 
reasons for the decision. The decision of the regional food and drug 
director shall constitute final agency action, reviewable in the 
courts.
     (F) No appeal. If there is no appeal of the order and the person 
in possession of the shell eggs that are subject to the order fails to 
relabel, divert, or destroy them within 10-working days, or if the 
demand is affirmed by the regional food and drug director after an 
appeal and the person in possession of such eggs fails to relabel, 
divert, or destroy them within 10-working days, the FDA district 
office, or, if applicable, the State or local agency may designate an 
officer or employee to divert or destroy such eggs. It shall be 
unlawful to prevent or to attempt to prevent such diversion or 
destruction of the shell eggs by the designated officer or employee.
     (9) Persons engaged in handling or storing packed shell eggs for 
retail distribution shall permit authorized representatives of FDA to 
make at any reasonable time such inspection of the establishment in 
which shell eggs are being held, including inspection and sampling of 
the labeling of such eggs as may be necessary in the judgment of such 
representatives to determine compliance with the provisions of this 
section. Inspections may be made with or without notice and will 
ordinarily be made during regular business hours.
    5. New part 115 is added to read as follows:

PART 115--SHELL EGGS

Subpart A--General Provisions

Sec.
115.50  Refrigeration of shell eggs held for retail distribution.

     Authority: 21 U.S.C. 342, 371; 42 U.S.C. 243, 264, 271.

Subpart A--General Provisions


Sec. 115.50  Refrigeration of shell eggs held for retail distribution.

    (a) For purposes of this section a ``retail establishment'' is an 
operation that stores, prepares, packages, serves, vends, or otherwise 
provides food for human consumption directly to consumers.
     (b) Except as provided in paragraph (c) of this section, shell 
eggs held for retail distribution:
     (1) Shall promptly be placed under refrigeration as specified in 
paragraph (b)(2) of this section upon receipt at a retail 
establishment; and
     (2) Shall be stored and displayed under refrigeration at an 
ambient temperature not greater than 7.2  deg.C (45  deg.F) while held 
at a retail establishment.
     (c) Shell eggs that have been specifically processed to destroy 
all viable Salmonella shall be exempt from the requirements of 
paragraph (b) of this section.
     (d) The requirements of this section are applicable to all shell 
eggs.
     (e) Under sections 311 and 361 of the Public Health Service Act 
(PHS Act), any State or locality that is willing and able to assist the 
agency in the enforcement of paragraph (b) of this section, and is 
authorized to inspect or regulate retail establishments, may, in its 
own jurisdiction, enforce paragraph (b) of this section through 
inspections under paragraph (g) of this section and through 
administrative enforcement remedies identified in paragraph (f) of this 
section until FDA notifies the State or locality in writing that such 
assistance is no longer needed. When providing assistance under 
paragraph (f) of this section, a State or locality may follow the 
hearing procedures set out in paragraphs (f)(2)(iii) through (f)(2)(v) 
of this section, substituting, where necessary, appropriate State or 
local officials for designated FDA officials or may utilize comparable 
State or local hearing procedures if such procedures satisfy due 
process.
     (f) This section is established under authority of both the 
Federal Food, Drug, and Cosmetic Act (the act) and the PHS Act. Under 
the act, the agency can enforce the food adulteration provisions under 
21 U.S.C. 331, 332, 333, and 334. However, 42 U.S.C. 264 provides for 
the issuance of implementing enforcement regulations; therefore, FDA 
has established the following administrative enforcement procedures for 
the diversion or destruction of shell eggs and for informal hearings 
under the PHS Act:
     (1) Upon finding that any shell eggs have been held in violation 
of this section, an authorized FDA representative or a State or local 
representative in accordance with paragraph (e) of this section may 
order such eggs to be diverted, under the supervision of said 
representative, for processing in accordance with the Egg Products 
Inspection Act (21 U.S.C. 1031 et seq.) or destroyed by or under the 
supervision of an officer or employee of the FDA, or, if applicable, of 
the state or locality in accordance with the following procedures:
     (i) Order for diversion or destruction. Any district office of FDA 
or any State or local agency acting under paragraph (e) of this 
section, upon finding shell eggs held in violation of this regulation, 
may serve upon the person in whose possession such eggs are found a 
written order that such eggs be diverted, under the supervision of an 
officer or employee of the issuing entity, for processing in accordance 
with the Egg Products Inspection Act (21 U.S.C. 1031 et seq.) or 
destroyed by or under the supervision of said district office, within 
10-working days from the date of receipt of the order.
     (ii) Issuance of order. The order shall include the following 
information:
     (A) A statement that the shell eggs identified in the order are 
subject to diversion for processing in accordance with the Egg Products 
Inspection Act or destruction;
     (B) A detailed description of the facts that justify the issuance 
of the order;
     (C) The location of the eggs;
     (D) A statement that these eggs shall not be sold, distributed, or 
otherwise disposed of or moved except as provided in paragraph (g)(4) 
of this section;
     (E) Identification or description of the eggs;
     (F) The order number;
     (G) The date of the order;
     (H) The text of this entire section;
     (I) A statement that the order may be appealed by written appeal 
or by requesting an informal hearing;
     (J) The name and phone number of the person issuing the order; and
     (K) The location and telephone number of the office or agency and 
the name of its director.
     (iii) Approval of District Director. An order, before issuance, 
shall be approved by the Food and Drug Administration (FDA) District 
Director in whose district the shell eggs are located. If prior written 
approval is not feasible, prior oral approval shall be obtained and 
confirmed by written memorandum as soon as possible.
     (iv) Labeling or marking of shell eggs under order. An FDA, State 
or local agency representative issuing an order under paragraph (g)(1) 
of this section shall label or mark the shell eggs with official tags 
that include the following information:
     (A) A statement that the shell eggs are detained in accordance 
with regulations issued under section 361(a) of the PHS Act (42 U.S.C. 
264(a)).
     (B) A statement that the shell eggs shall not be sold, distributed 
or otherwise disposed of or moved except, after notifying the issuing 
entity in writing, to:
     (1) Divert them for processing in accordance with the Egg Products 
Inspection Act or destroy them; or

[[Page 36515]]

     (2) Move them to an another location for holding pending appeal.
     (C) A statement that the violation of the order or the removal or 
alteration of the tag is punishable by fine or imprisonment or both 
(section 368 of the PHS Act, 42 U.S.C. 271).
     (D) The order number and the date of the order, and the name of 
the government representative who issued the order.
     (v) Sale or other disposition of shell eggs under order. After 
service of the order, the person in possession of the shell eggs that 
are the subject of the order shall not sell, distribute, or otherwise 
dispose of or move any eggs subject to the order unless and until the 
notice is withdrawn after an appeal except, after notifying FDA's 
district office or, if applicable, the State or local agency in 
writing, to:
     (A) Divert or destroy them as specified in paragraph (f)(1)(i) of 
this section; or
     (B) Move them to another location for holding pending appeal.
     (2) The person on whom the order for diversion or destruction is 
served may either comply with the order or appeal the order to the 
regional food and drug director in accordance with the following 
procedures:
     (i) Appeal of a detention order. Any appeal shall be submitted in 
writing to FDA's District Director in whose district the shell eggs are 
located within 5-working days of the issuance of the order. If the 
appeal includes a request for an informal hearing, the hearing shall be 
held within 5-working days after the appeal is filed or, if requested 
by the appellant, at a later date, which shall not be later than 20-
calendar days after the issuance of the order. The order may also be 
appealed within the same period of 5-working days by any other person 
having an ownership or proprietary interest in such shell eggs. The 
appellant of an order shall state the ownership or proprietary interest 
the appellant has in the shell eggs.
     (ii) Summary decision. A request for a hearing may be denied, in 
whole or in part and at any time after a request for a hearing has been 
submitted, if the regional food and drug director or his or her 
designee determines that no genuine and substantial issue of fact has 
been raised by the material submitted in connection with the hearing or 
from matters officially noticed. If the regional food and drug director 
determines that a hearing is not justified, written notice of the 
determination will be given to the parties explaining the reason for 
denial.
     (iii) Informal hearing. Appearance by any appellant at the hearing 
may be by mail or in person, with or without counsel. The informal 
hearing shall be conducted by the regional food and drug director or 
his designee, and a written summary of the proceedings shall be 
prepared by the regional food and drug director.
     (A) The regional food and drug director may direct that the 
hearing be conducted in any suitable manner permitted by law and this 
section. The regional food and drug director has the power to take such 
actions and make such rulings as are necessary or appropriate to 
maintain order and to conduct an informal fair, expeditious, and 
impartial hearing, and to enforce the requirements concerning the 
conduct of hearings.
     (B) Employees of FDA will first give a full and complete statement 
of the action which is the subject of the hearing, together with the 
information and reasons supporting it, and may present oral or written 
information relevant to the hearing. The party requesting the hearing 
may then present oral or written information relevant to the hearing. 
All parties may conduct reasonable examination of any person (except 
for the presiding officer and counsel for the parties) who makes any 
statement on the matter at the hearing.
     (C) The hearing shall be informal in nature, and the rules of 
evidence do not apply. No motions or objections relating to the 
admissibility of information and views will be made or considered, but 
any party may comment upon or rebut any information and views presented 
by another party.
     (D) The party requesting the hearing may have the hearing 
transcribed, at the party's expense, in which case a copy of the 
transcript is to be furnished to FDA. Any transcript of the hearing 
will be included with the regional food and drug director's report of 
the hearing.
     (E) The regional food and drug director shall prepare a written 
report of the hearing. All written material presented at the hearing 
will be attached to the report. Whenever time permits, the regional 
food and drug director may give the parties the opportunity to review 
and comment on the report of the hearing.
     (F) The regional food and drug director shall include as part of 
the report of the hearing a finding on the credibility of witnesses 
(other than expert witnesses) whenever credibility is a material issue, 
and shall include a recommended decision, with a statement of reasons.
     (iv) Written appeal. If the appellant appeals the detention order 
but does not request a hearing, the regional food and drug director 
shall render a decision on the appeal affirming or revoking the 
detention within 5-working days after the receipt of the appeal.
     (v) Regional Food and Drug Director decision. If, based on the 
evidence presented at the hearing or by the appellant in a written 
appeal, the regional food and drug director finds that the shell eggs 
were held in violation of this section, he shall affirm the order that 
they be diverted, under the supervision of an officer or employee of 
the FDA for processing under the Egg Products Inspection Act or 
destroyed by or under the supervision of an officer or employee of the 
FDA; otherwise, the regional food and drug director shall issue a 
written notice that the prior order is withdrawn. If the regional food 
and drug director affirms the order he shall order that the diversion 
or destruction be accomplished within 10-working days from the date of 
the issuance of his decision. The regional food and drug director's 
decision shall be accompanied by a statement of the reasons for the 
decision. The decision of the regional food and drug director shall 
constitute final agency action, reviewable in the courts.
     (vi) No appeal. If there is no appeal of the order and the person 
in possession of the shell eggs that are subject to the order fails to 
divert or destroy them within 10-working days, or if the demand is 
affirmed by the regional food and drug director after an appeal and the 
person in possession of such eggs fails to divert or destroy them 
within 10-working days, FDA's district office or appropriate State or 
local agency may designate an officer or employee to divert or destroy 
such eggs. It shall be unlawful to prevent or to attempt to prevent 
such diversion or destruction of the shell eggs by the designated 
officer or employee.
     (g) Inspection. Persons engaged in retail distribution of shell 
eggs shall permit authorized representatives of FDA to make at any 
reasonable time such inspection of the retail establishment in which 
shell eggs are being held, including inspection and sampling of such 
eggs and the equipment in which shell eggs are held and any records 
relating to such equipment or eggs, as may be necessary in the 
judgement of such representatives to determine compliance with the 
provisions of this section. Inspections may be made with or without 
notice and will ordinarily be made during regular business hours.


[[Page 36516]]


    Dated: June 10, 1999.
Jane E. Henney,
Commissioner of Food and Drugs.
Donna E. Shalala,
Secretary of Health and Human Services.
[FR Doc. 99-17122 Filed 7-1-99; 11:12 am]
BILLING CODE 4160-01-F