[Federal Register Volume 64, Number 228 (Monday, November 29, 1999)]
[Rules and Regulations]
[Pages 66541-66547]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30603]



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 Rules and Regulations
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  Federal Register / Vol. 64, No. 228 / Monday, November 29, 1999 / 
Rules and Regulations  

[[Page 66541]]


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DEPARTMENT OF AGRICULTURE

Food Safety and Inspection Service

9 CFR Parts 304, 305, 327, 335, 381, and 500

[Docket No. 95-025F]
RIN 0583-AC34


Rules of Practice

AGENCY: Food Safety and Inspection Service, USDA.

ACTION: Final rule.

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SUMMARY: The Food Safety and Inspection Service (FSIS) is amending its 
rules of practice that apply to Agency enforcement actions. FSIS is 
defining each type of enforcement action that it may take, the 
conditions under which it is likely to take each of these actions, and 
the procedures that it will follow in doing so. This rule is part of 
FSIS's ongoing effort to consolidate, streamline, and clarify the meat 
and poultry product inspection regulations.

EFFECTIVE DATE: This rule is effective January 25, 2000.

FOR FURTHER INFORMATION CONTACT: Daniel Engeljohn Ph.D., Director, 
Regulations Development and Analysis Division, Office of Policy, 
Program Development and Evaluation, FSIS, Room 112, Cotton Annex 
Building, 300 12th Street, SW, Washington, DC 20250-3700; (202) 720-
5627.

SUPPLEMENTARY INFORMATION:

Background

    Under the Federal Meat Inspection Act (FMIA) and the Poultry 
Products Inspection Act (PPIA), the Secretary of Agriculture is charged 
with the responsibility of protecting the public health by assuring 
that meat and poultry products distributed in commerce are wholesome, 
not adulterated, and properly marked, labeled, and packaged. To 
accomplish this objective, the statutes require the Secretary to 
administer a comprehensive inspection program which includes examining 
live animals prior to slaughter, inspecting all carcasses to be used 
for human food, and inspecting facilities where meat and poultry 
products are produced or stored. FSIS has broad authority to issue 
regulations to carry out the provisions of the FMIA and PPIA, including 
authority to prescribe the terms and conditions under which inspection 
will be provided and maintained and pursuant to which the marks of 
inspection will be applied.
    An establishment's failure to comply with regulatory requirements 
can result in the Agency's inability to determine that products are not 
adulterated as required by the inspection statutes. Accordingly, FSIS 
may find it necessary to take action to prevent the production and 
shipment of product until the Agency is assured that there is 
compliance with the statutes and their implementing regulations. For 
example, FSIS can refuse to grant an application for inspection. It can 
take regulatory control actions to retain product, to reject equipment 
or facilities, to slow or stop lines, or to refuse to allow the 
processing of specifically identified product. The Agency may refuse to 
allow the marks of inspection to be applied to products or suspend 
inspection by interrupting the assignment of program employees to all 
or part of an establishment. FSIS also can withdraw inspection or 
rescind or refuse to approve markings, labels, or containers.
    FSIS takes these types of actions when an establishment fails to: 
(1) develop and implement a HACCP plan or operate in accordance with 9 
CFR Part 417; (2) develop, implement, and maintain Sanitation Standard 
Operating Procedures (Sanitation SOP's) in accordance with 9 CFR Part 
416; (3) conduct generic E. coli testing in accordance with 9 CFR 
310.25(a) or 381.45(a); (4) comply with the Salmonella performance 
standard requirements prescribed in sections 9 CFR 310.25(b) or 
381.94(b); (5) maintain sanitary conditions; (6) humanely slaughter 
livestock; or (7) destroy condemned product. FSIS also takes these 
actions when an applicant for inspection, a recipient of inspection, or 
anyone responsibly connected with the applicant or recipient is unfit 
to engage in business because of prior criminal convictions, or when 
establishment personnel assault, intimidate, or interfere with Federal 
inspection service.
    When FSIS refuses to grant an application for inspection, seeks to 
withdraw inspection, or refuses to approve markings, labels, or 
containers, the Agency initiates an administrative action under USDA's 
``Rules of Practice Governing Formal Adjudicatory Proceedings 
Instituted by the Secretary Under Various Statutes'' (7 CFR subtitle A, 
part 1, subpart H), as supplemented by FSIS's own ``Rules of 
Practice,'' which have been set out in 9 CFR part 335 for meat or part 
381, subpart W, for poultry and are now replaced by 9 CFR part 500. 
FSIS's supplemental rules of practice also provide for the withholding 
of the marks of inspection and the suspension of inspection.
    When public health is a concern, FSIS immediately suspends 
inspection until the problem is corrected. FSIS refuses to mark product 
as ``inspected and passed'' or retains an establishment's meat or 
poultry products if the Agency determines that meat or poultry products 
are adulterated or cannot determine, as required by the statutes, that 
those products are not adulterated. Such actions typically are 
discontinued when the adulterated products have been destroyed or 
properly controlled, or when the deficiencies or noncompliances are 
corrected satisfactorily. The current supplemental rules also provide 
for an opportunity to address and correct problems before the Agency 
files a formal administrative complaint to suspend or withdraw an 
establishment's grant of inspection.
    On January 12, 1998, FSIS issued a proposed rule (63 FR 1797) to 
reorganize and revise its supplemental rules of practice to better 
ensure that its enforcement procedures are fair; to eliminate 
redundancy; to identify the situations that may lead FSIS to take 
enforcement action which may include refusing to grant or withholding 
the marks of inspection and suspending or withdrawing inspection; and 
to establish the procedures FSIS would follow in taking such actions.

Comments

    FSIS received 64 comments in response to the proposed rule. 
Although the commenters supported the consolidation and streamlining of 
the

[[Page 66542]]

rules of practice, they raised concerns about the actual proposed 
revisions to the regulations. The following is a discussion of the 
commenters' issues.

1. FSIS Authority

    Several commenters asserted that an establishment's failure to meet 
the Salmonella performance standards, to carry out and meet generic E. 
coli testing requirements, or to prevent a HACCP system failure would 
not provide an adequate basis to suspend or seek withdrawal of 
inspection. They contend that the FMIA and PPIA authorize FSIS to 
remove inspectors only when an establishment fails to follow sanitary 
practices, refuses to destroy condemned carcasses, fails to comply with 
the Humane Slaughter Act, or is convicted in a criminal proceeding.
    FSIS disagrees with this assessment of the Agency's authority. 
Under the FMIA and the PPIA, FSIS is charged with the duty and the 
responsibility to protect the public health by developing and 
implementing an effective, comprehensive, and scientifically valid 
inspection system that will ensure that meat and poultry products are 
wholesome, not adulterated, and properly marked, labeled, and packaged. 
FSIS is required by these statutes to carry out continuous inspection 
of slaughter and processing operations at Federal establishments and to 
make the affirmative determination that the meat and poultry products 
produced at those establishments are wholesome and not adulterated 
prior to marking the products as ``inspected and passed.''
    FSIS has specified, through regulations, the conditions under which 
meat and poultry products must be produced [the HACCP/Pathogen 
Reduction regulations]. These regulations are essential, integral 
components of the FMIA and PPIA inspection system, and the failure, 
inability, or unwillingness of an establishment to comply with these 
food safety regulations effectively precludes FSIS from making the 
statutorily-mandated determination that meat and poultry products are 
wholesome, not adulterated, and entitled to bear the legend ``inspected 
and passed.'' The inspection system provided for in the FMIA and PPIA 
is a continuous and real-time inspection program that, by its very 
nature, requires real-time and continuous inspection determinations. It 
is clear that the FMIA and the PPIA contemplate and authorize the 
Agency to take prompt and, if necessary, immediate action to carry out 
its public health responsibility to ensure that only products that are 
marked ``inspected and passed'' are shipped in commerce. It is the 
Agency view, therefore, that compliance with FSIS's food safety 
regulations, including the HACCP/Pathogen Reduction regulations, is a 
necessary predicate for inspection services and for the application of 
the marks of inspection under the FMIA and the PPIA, and that FSIS has 
inherent authority to withhold the marks, to suspend inspection 
services, and to withdraw inspection when these requirements are not 
satisfied.
    In addition, FSIS is required to prescribe the rules and 
regulations for sanitation, with which slaughter and processing 
establishments must comply. The term ``sanitation'' is comprehensive 
and encompasses the array of procedures, practices, and controls 
employed by establishments to ensure that the products they produce are 
wholesome and not adulterated. Sanitation obviously includes procedures 
for the cleaning of equipment and facilities; proper sanitation also 
encompasses practices for ensuring the acceptability of incoming 
products and ingredients, proper product handling and preparation 
practices, controlling condemned product, and properly storing product. 
It is also FSIS's view that the SSOP requirements, the HACCP 
regulations, the Salmonella performance standards, and the generic E. 
coli testing requirements are material components of an effective 
sanitation program that is sufficient to meet the requirements of the 
FMIA and PPIA. For example, E. coli testing is prescribed in the HACCP/
Pathogen Reduction regulations to verify that the establishment is 
employing sanitary dressing procedures to prevent the fecal 
contamination of carcasses. Also, the Salmonella performance standards 
were adopted to ensure that an establishment's procedures, practices, 
and controls, as embodied in its HACCP plans, are working properly. The 
Agency has ample statutory authority to withhold, suspend, or seek 
withdrawal, in accord with the facts of any particular case, when the 
Agency's sanitation requirements are not satisfied.

2. Due Process: Notice and Opportunity To Achieve Compliance

    Commenters also raised concerns that the proposed rules did not 
provide adequate due process protections for establishments. The 
commenters argued, for example, that the taking of withholding actions 
by inspectors, and the resulting interruption of plant operations, 
without providing the establishment with notice of the deficiencies and 
an opportunity to demonstrate or achieve compliance is unreasonable and 
contrary to applicable law. Commenters underscored this point with 
particular focus on HACCP regulation noncompliances, contending that 
notice and opportunity to establish compliance were essential in such 
cases before taking withholding or suspension actions.
    Some commenters believed that the proposed rules of practice were 
inconsistent with other FSIS regulations and policies related to the 
suspension of inspection. They cited, for example, the Quality Control 
(QC) regulations and the Progressive Enforcement Action program. Under 
these regulations and policies, in situations not involving the 
preparation and distribution of adulterated product, establishments 
were provided an opportunity to achieve compliance before FSIS 
terminated a QC program or imposed progressive sanctions.
    FSIS is mindful that withholding the marks of inspection and 
suspending inspection services are significant enforcement actions to 
be taken only after careful evaluation of the facts and circumstances. 
At the same time, as discussed above, it is FSIS's statutory 
responsibility and duty to protect public health by maintaining an 
inspection system that will ensure that meat and poultry products 
produced and shipped in commerce are wholesome and not adulterated. 
FSIS agrees that fundamental fairness requires that appropriate due 
process be accorded establishments in connection with enforcement 
actions under the FMIA and PPIA. FSIS believes that the proposed rules 
of practice, as modified and specified in this document will, in fact, 
protect the due process rights of all establishments.
    As we make clear in this final rule, FSIS will continue to provide 
notice and an opportunity to demonstrate or achieve compliance in 
situations where the violations and deficiencies disclosed by 
inspection or investigation do not, in the Agency's view, present a 
public health concern that requires immediate action. Where, however, 
noncompliance with the requirements of the acts and regulations 
indicates that continued production and shipment of product do pose, in 
the Agency's view, an imminent threat to public health, FSIS will take 
immediate action. Accordingly, section 500.3 of the rules of practice 
sets out the conditions under which FSIS may withhold the marks of 
inspection or suspend inspection without prior written notification and 
section 500.4 sets out the conditions under which FSIS may withhold the 
marks of inspection or suspend

[[Page 66543]]

inspection after providing prior written notification.
    Commenters also argued that FSIS's noncompliance records (NRs) 
should not be deemed adequate to notify an establishment of the 
Agency's determination that there has been a ``system failure.''
    It is FSIS's view that NRs do constitute valid and effective notice 
to an establishment that the establishment has not maintained 
regulatory compliance. An NR informs the establishment of the specific 
deficiency involved and on its face invites the establishment to 
respond to the finding and to present in writing its immediate and 
further planned corrective actions. The NR also specifically notes the 
right to appeal the inspector's finding and potential regulatory 
consequences of the NR.
    When an NR is issued, it is incumbent upon the establishment to 
evaluate the NR carefully and to act upon and respond to it promptly 
and effectively. In particular, it is important that establishments 
address the NRs related to a HACCP plan noncompliance because such NRs 
may indicate that the plan is not working properly and should be 
reassessed. Accordingly, FSIS believes that should the Agency determine 
that it is necessary to withhold the marks of inspection or to suspend 
inspection because of multiple or recurring noncompliances, evidenced 
by NRs, the establishment will have been given appropriate notice as 
well as ample opportunity to demonstrate or achieve compliance.
    Nonetheless, in cases where FSIS has determined that multiple or 
recurring noncompliances warrant the withholding of the marks of 
inspection or suspension of inspection, this final rule provides for 
written notification to the establishment before withholding or 
suspending inspection when the circumstances do not pose an imminent 
threat to public health.
    Therefore, in response to the comments, FSIS is revising the 
regulatory language used in the proposed rule. This final rule lists 
the types of enforcement actions that the Agency may take and 
identifies the circumstances under which each action may be taken. This 
final rule also clarifies the procedures FSIS will follow to provide, 
when appropriate, prior notification to establishments.
    Section 500.1 defines a ``regulatory control action,'' 
``withholding action,'' and ``suspension.'' A regulatory control action 
is the retention of product, rejection of equipment or facilities, 
slowing or stopping of lines, or refusal to allow the processing of 
specifically identified product. A withholding action is the refusal to 
allow the marks of inspection to be applied to products. A withholding 
action may affect all products in the establishment or product produced 
by a particular process. A suspension is an interruption of the 
assignment of program employees to all or part of an establishment.
    Section 500.2 states that FSIS may take a regulatory control action 
because of insanitary conditions or practices, product adulteration or 
misbranding, conditions that preclude FSIS from determining that 
product is not adulterated or misbranded, or inhumane handling or 
slaughtering of livestock. These control actions are necessary, indeed 
essential, in-plant enforcement tools for inspectors to use in cases 
where the noncompliance is willful or involves public health, interest, 
or safety. Typically, regulatory control actions involve specific 
amounts of product or generally well-defined deficiencies such as 
crushed and open cartons or malfunctioning equipment. If FSIS takes a 
regulatory control action, it will immediately notify the establishment 
orally or in writing of the action and of the basis for the action. An 
establishment may appeal a regulatory control action, as provided in 9 
CFR 306.5 and 381.35.
    Withholding actions are generally more significant than regulatory 
control actions and affect a larger part of an establishment or the 
establishment's processes. In most cases, in-plant inspection personnel 
take these actions because of systemic problems, such as HACCP plan 
inadequacies. Typically, the actions necessary to correct the problem 
that resulted in a withholding action are more complex than those 
necessary to resolve a problem that resulted in a regulatory control 
action and are likely to require an establishment to accomplish a HACCP 
plan reassessment and make any necessary plan modification or to revise 
its Sanitation SOP.
    A suspension of inspection is likely to have an even more 
significant impact on an establishment than a withholding action. 
Typically, an FSIS District Manager or Agency official at a higher 
level suspends inspection after an establishment fails to correct a 
situation involving a withholding action, or when the nature of the 
noncompliances are such that the corrective action, such as HACCP plan 
reassessment or changes in the establishment's operation, may take a 
significant amount of time to implement.
    Section 500.3 states that FSIS may take a withholding or suspension 
action without providing the establishment prior notification because 
the establishment produced and shipped adulterated or misbranded 
product as defined in 21 U.S.C. 453 or 21 U.S.C. 602; the establishment 
does not have a HACCP plan as specified in section 417.2 of the 
regulations; the establishment does not have Sanitation SOPs as 
specified in sections 416.11-416.12 of the regulations; sanitary 
conditions are such that any products in the establishment are or would 
be rendered adulterated; an establishment operator, officer, employee, 
or agent assaulted, threatened to assault, intimidated, or interfered 
with an FSIS employee; the establishment violated the terms of a 
regulatory control action; or the establishment did not destroy a 
condemned meat or poultry carcass, or part or product thereof, in 
accordance with 9 CFR part 314 or part 381, subpart L, within three 
days of notification. FSIS also may impose a suspension without 
providing the establishment prior notification because the 
establishment is handling or slaughtering animals inhumanely.
    Section 500.4 states that FSIS may take a withholding action or 
impose a suspension after the Agency provides an establishment prior 
notification and the opportunity to demonstrate or achieve compliance 
because the HACCP system is inadequate, as specified in 9 CFR 417.6, 
due to multiple or recurring noncompliances; the Sanitation SOPs have 
not been properly implemented or maintained as specified in 9 CFR 
416.13-16; the establishment has not maintained sanitary conditions as 
prescribed in 9 CFR 416.2-416.8 due to multiple or recurring 
noncompliances; the establishment did not collect and analyze samples 
for Escherichia coli Biotype I and record results in accordance with 9 
CFR 310.25(a) or 381.94(a); or the establishment did not comply with 
the Salmonella performance standard requirements prescribed in 9 CFR 
310.25(b) or 381.94(b).
    Section 500.5 states that if FSIS takes a withholding action or 
imposes a suspension without prior written notification, the Agency 
will notify the establishment orally and, as promptly as circumstances 
permit, in writing. The written notification will provide the effective 
date of the action, reasons for the action, products or processes 
affected by the action, opportunity for the establishment to present 
immediate corrective action and further planned preventive action, and 
the appeals procedures. This section also addresses the prior 
notification provided for in section 500.4. This prior notification 
will state the type of action that may be

[[Page 66544]]

taken; describe the reason for the proposed action; identify the 
products or processes affected by the proposed action; advise the 
establishment of its right to contact FSIS to contest the basis for the 
proposed action or to explain how compliance has been or will be 
achieved; and advise the establishment that it will have three business 
days from receipt of the written notification to respond to FSIS unless 
the time period is extended by FSIS.
    The provisions in section 500.5 also reiterate that an 
establishment may appeal the withholding action or suspension, as 
provided in section 9 CFR 306.5 and 381.35. Also, this section provides 
that if FSIS suspends inspection and does not hold the suspension 
action in abeyance, the establishment may request a hearing pursuant to 
the Uniform Rules of Practice, 7 CFR Subtitle A, part 1, subpart H. 
Upon such request, the Administrator will file a complaint that will 
include a request for an expedited hearing.
    Section 500.6 addresses withdrawal of inspection, and section 500.7 
addresses refusal of inspection. These provisions are substantially 
unchanged from the January 1998 proposal. When FSIS withdraws or 
refuses inspection, the Agency initiates an administrative action under 
USDA's Rules of Practice Governing Formal Adjudicatory Proceedings 
Instituted by the Secretary Under Various Statutes (7 CFR subtitle A, 
part 1, subpart H). Also, FSIS made no significant changes, other than 
renumbering the sections, to the provisions that relate to rescinding 
or refusing approval of marks, labels, and containers, (section 500.8) 
and refusing or withdrawing inspection for applicants or recipients 
unfit to engage in business (sections 500.6 and 500.7).

3. Appropriateness of Other Aspects of the Regulations

    Some commenters suggested that FSIS should better explain the 
Agency's practice of allowing an establishment to operate while under a 
suspension if the establishment presents adequate written assurances 
that corrective actions are being implemented.
    It has been FSIS's experience that some establishments, upon being 
notified that the Agency intends to suspend inspection, offer a plan to 
address the circumstances that caused FSIS to issue the notification. 
In these cases, FSIS has concluded that, even though the basis for a 
suspension existed, it was appropriate to hold the suspension in 
abeyance and to allow the establishment to continue to operate under 
its proposed corrective and preventive actions.
    Section 500.5(e) states that FSIS may hold a suspension in abeyance 
and allow the establishment to operate under the conditions agreed to 
by FSIS and the establishment.
    Some commenters suggested that there should be a third-party review 
of an establishment's response to the notification of the Agency's 
intent to take an enforcement action, and that this third party should 
make the decision on whether the enforcement action is warranted.
    FSIS concluded that such third-party review is not appropriate 
under the meat and poultry inspection statutes. The Agency is required 
to make the determination that the statutes and regulations have been 
complied with, and that the products produced meet the statutory 
requirements. The suggested procedure is clearly inconsistent with the 
statutory authority and plan embodied in the FMIA and PPIA and would be 
impractical and contrary to the public interest.
    A number of commenters raised concerns about FSIS's appeal policy. 
Some recommended provisions for alternative dispute resolution instead 
of an administrative hearing before an Administrative Law Judge in 
cases where there is a scientific dispute. Under the provisions 
submitted by the commenters, the Agency would create a standing panel 
of expert advisors to be called upon on an as needed basis. The 
establishment and the Agency would be permitted to call witnesses and 
present relevant evidence, especially scientific evidence, to the 
panel. The panel's decision along with any dissenting views would be 
written and shared with the establishment and the Agency. The 
Administrator, as the ultimate decisionmaker for the government, would 
give the panel's decision due consideration. Other commenters suggested 
that FSIS establish a special appeals resolution team in the Technical 
Service Center to which all appeals from inspection decisions would 
automatically be sent. Some commenters urged FSIS to specify how long 
it will take to resolve appeals, to allow establishments to continue 
operating while an appeal of an FSIS decision to suspend or withdraw 
inspection is pending, except in the event of an ``imminent hazard to 
health,'' and to reimburse regulated establishments for losses during 
``down time'' when they win an appeal from an inspection decision.
    As stated in the proposed rule, FSIS is committed to providing 
establishments with appropriate notice and an effective opportunity to 
appeal withholding actions and suspensions of inspection. It recognizes 
the need for timely resolution of all such appeals. The Agency intends 
to develop regulations to address how appeals are handled. However, 
since there were no proposed regulations on appeals included in the 
proposed rules of practice, establishing such rules in this document is 
outside the scope of this rulemaking. FSIS plans to issue a proposed 
rulemaking related to the appeals process at a later date.
    Until new regulations on appeals are in place, appeals will 
continue to be heard through the ``chain-of-command'' process, which is 
incorporated into FSIS's existing regulations (9 CFR 306.5 and 381.35). 
In an attempt to ensure the timely review of appeals, FSIS issued FSIS 
Notice 14-98 on April 20, 1998. This notice explains FSIS's policy 
regarding the appeal of inspection findings and decisions. It also 
established the Inspection Appeals Tracking System (IATS) report which 
the Agency uses to help ensure a timely response to appeals.
    Some commenters stated that FSIS should not delete the provisions 
in section 335.13. In this regulation, FSIS stated that it will notify 
an establishment of what actions are necessary to correct an insanitary 
condition and of the time within which corrections must be made.
    It is an establishment's responsibility to identify problems and to 
determine how best to correct them. Section 335.13 appeared by its 
terms to place the burden for devising and correcting insanitary 
conditions on the Agency. Such regulations are not consistent with the 
Pathogen Reduction/HACCP approach. The Agency will identify problems 
when an establishment fails to do so, but it is the establishment's 
responsibility to identify problems on a continuing basis and to 
identify, select, and implement effective action to correct 
noncompliances. FSIS will verify that establishments have taken the 
necessary corrective actions. Accordingly, FSIS is removing section 
335.13.
    Commenters also questioned the elimination of section 335.40, 
``Present Your Views (PYV)'' provisions, which allow establishments 
believed to have violated the FMIA an opportunity to present their 
views to the Agency regarding an alleged criminal violation before FSIS 
refers the violation to the Department of Justice for prosecution. The 
commenters pointed out that the PYV provisions are a statutory 
entitlement for poultry processors, and that by rescinding the 
regulations, the

[[Page 66545]]

Agency is backing away from equity between meat and poultry.
    After consideration of these comments, FSIS has reconsidered its 
proposal and will not remove Part 335, Subpart E.

Executive Order 12866 and Regulatory Flexibility Act

    This final rule has been determined to be not significant, and 
therefore, has not been reviewed by the Office of Management and 
Budget.
    The Administrator has made a determination that this final rule 
will not have a significant economic impact on a substantial number of 
small entities, as defined by the Regulatory Flexibility Act (5 U.S.C. 
601).
    There are no direct costs or benefits associated with this final 
rule. Costs and benefits are related to the regulatory actions, not the 
proceedings. At the present time, there is no way to predict whether 
industry ``down time'' will increase or decrease under these revised 
rules of practice. To the extent that resolution of disputes in a 
timely and efficient manner will be facilitated by these rules, there 
are potential benefits to consumers, industry, and the government. When 
disputes are related to public health issues, FSIS may reduce health 
risks to consumers by stopping an establishment's operations until the 
problem has been resolved.
    There are also costs to industry associated with actions that 
suspend production operations.

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. When this rule becomes final: (1) all state and 
local laws and regulations that are inconsistent with this rule would 
be preempted; (2) no retroactive effect would be given to this rule; 
and (3) administrative proceedings would not be required before parties 
may file suit in court challenging this rule.

Paperwork Requirements

    This final rule does not include any new paperwork requirements.

Additional Public Notification

    In an effort to better ensure that minorities, women, and persons 
with disabilities are made aware of this final rule, FSIS will announce 
it and provide copies of this Federal Register publication in the FSIS 
Constituent Update.
    FSIS provides a weekly FSIS Constituent Update, which is 
communicated via fax to over 300 organizations and individuals. In 
addition, the update is available on line through the FSIS web page 
located at http://www.fsis.usda.gov. The update is used to provide 
information regarding FSIS policies, procedures, regulations, Federal 
Register Notices, FSIS public meetings, recalls, and any other types of 
information that could affect or would be of interest to our 
constituents/stakeholders. The constituent fax list consists of 
industry, trade, and farm groups, consumer interest groups, allied 
health professionals, scientific professionals and other individuals 
that have requested to be included. Through these various channels, 
FSIS is able to provide information with a much broader, more diverse 
audience. For more information and to be added to the constituent fax 
list, fax your request to the Office of Congressional and Public 
Affairs, at (202) 720-5704.

List of Subjects

9 CFR Part 304

    Meat inspection.

9 CFR Part 305

    Meat inspection.

9 CFR Part 327

    Imports, Meat inspection.

9 CFR Part 381

    Poultry and poultry products.

9 CFR Part 500

    Rules of practice.

    For the reasons set forth in this preamble, 9 CFR chapter III would 
be amended as follows:

PART 304--APPLICATION FOR INSPECTION; GRANT OF INSPECTION

    1. The authority citation for part 304 continues to read as 
follows:

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

    2. Part 304 is amended by revising the heading to read as set forth 
above, and amending Sec. 304.2 by removing paragraphs (c) and (e), 
redesignating paragraph (d) as paragraph (c), and revising the last 
sentence of paragraph (b) to read as follows:
* * * * *


Sec. 304.2  Information to be provided.

* * * * *
    (b) * * * Any application for inspection may be refused in 
accordance with the rules of practice in part 500 of this chapter.
* * * * *

PART 305--OFFICIAL NUMBERS; INAUGURATION OF INSPECTION; WITHDRAWAL 
OF INSPECTION; REPORTS OF VIOLATION

    3. The authority citation for part 305 continues to read as 
follows:

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


Sec. 305.5  [Removed]

    4. Part 305 is amended by removing Sec. 305.5.

PART 327--IMPORTED PRODUCTS

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

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

    6. Section 327.6 is amended by removing the last four sentences in 
paragraph (f) and adding in their place one sentence to read as 
follows:


Sec. 327.6  Products for importation; program inspection, time and 
place; application for approval of facilities as official import 
inspection establishment; refusal or withdrawal of approval; official 
numbers

* * * * *
    (f) * * * Any application for inspection under this section may be 
denied or refused in accordance with the rules of practice in part 500 
of this chapter.

PART 335--RULES OF PRACTICE GOVERNING PROCEEDINGS UNDER THE FEDERAL 
MEAT INSPECTION ACT


Secs. 335.1-335.32  (Subparts A--D [Removed]

    7. Part 335 Subparts A through D (Secs. 335.1-335.32) are removed. 
Subpart E--Criminal Violations is redesignated as Subpart A.

PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS

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

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

    9. Section 381.21 is amended by removing paragraphs (a), (b), and 
(c); redesignating paragraph (d) as (b); and adding a new paragraph (a) 
to read as follows:


Sec. 381.21  Refusal of inspection.

    (a) Any application for inspection in accordance with this part may 
be denied or refused in accordance with the rules of practice in part 
500 of this chapter.
* * * * *

[[Page 66546]]

Sec. 381.29  [Removed]

    10. Part 381 is amended by removing Sec. 381.29.


Secs. 381.230-381.236 (Subparts VI)  [Removed]

    11. Part 381 is amended by removing Subpart W (Secs. 381.230--
381.236).

SUBCHAPTER E--REGULATORY REQUIREMENTS UNDER THE FEDERAL MEAT INSPECTION 
ACT AND THE POULTRY PRODUCTS INSPECTION ACT

    12. Subchapter E is amended by adding a new Part 500 to read as 
follows:

PART 500--RULES OF PRACTICE

Sec.
500.1  Definitions.
500.2  Regulatory control action.
500.3  Withholding or suspension of inspection without prior 
notification.
500.4   Withholding action or suspension of inspection with prior 
notification.
500.5  Notification, appeals, and actions held in abeyance.
500.6  Withdrawal of inspection.
500.7  Refusal to grant inspection.
500.8  Procedures for rescinding or refusing approval of marks, 
labels, sizes, and containers.

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


Sec. 500.1  Definitions.

    (a) A ``regulatory control action'' is the retention of product, 
rejection of equipment or facilities, slowing or stopping of lines, or 
refusal to allow the processing of specifically identified product.
    (b) A ``withholding action'' is the refusal to allow the marks of 
inspection to be applied to products. A withholding action may affect 
all product in the establishment or product produced by a particular 
process.
    (c) A ``suspension'' is an interruption in the assignment of 
program employees to all or part of an establishment.


Sec. 500.2  Regulatory control action.

    (a) FSIS may take a regulatory control action because of:
    (1) Insanitary conditions or practices;
    (2) Product adulteration or misbranding;
    (3) Conditions that preclude FSIS from determining that product is 
not adulterated or misbranded; or
    (4) Inhumane handling or slaughtering of livestock.
    (b) If a regulatory control action is taken, the program employee 
will immediately notify the establishment orally or in writing of the 
action and the basis for the action.
    (c) An establishment may appeal a regulatory control action, as 
provided in sections 306.5 and 381.35 of this chapter.


Sec. 500.3  Withholding action or suspension without prior 
notification.

    (a) FSIS may take a withholding action or impose a suspension 
without providing the establishment prior notification because:
    (1) The establishment produced and shipped adulterated or 
misbranded product as defined in 21 U.S.C. 453 or 21 U.S.C. 602;
    (2) The establishment does not have a HACCP plan as specified in 
Sec. 417.2 of this chapter;
    (3) The establishment does not have Sanitation Standard Operating 
Procedures as specified in Secs. 416.11-416.12 of this chapter;
    (4) Sanitary conditions are such that products in the establishment 
are or would be rendered adulterated;
    (5) The establishment violated the terms of a regulatory control 
action;
    (6) An establishment operator, officer, employee, or agent 
assaulted, threatened to assault, intimidated, or interfered with an 
FSIS employee; or
    (7) The establishment did not destroy a condemned meat or poultry 
carcass, or part or product thereof, in accordance with part 314 or 
part 381, subpart L, of this chapter within three days of notification.
    (b) FSIS also may impose a suspension without providing the 
establishment prior notification because the establishment is handling 
or slaughtering animals inhumanely.


Sec. 500.4  Withholding action or suspension with prior notification.

    FSIS may take a withholding action or impose a suspension after an 
establishment is provided prior notification and the opportunity to 
demonstrate or achieve compliance because:
    (a) The HACCP system is inadequate, as specified in Sec. 417.6 of 
this chapter, due to multiple or recurring noncompliances;
    (b) The Sanitation Standard Operating Procedures have not been 
properly implemented or maintained as specified in Secs. 416.13 through 
416.16 of this chapter;
    (c) The establishment has not maintained sanitary conditions as 
prescribed in Sec. Sec. 416.2 through 416.8 of this chapter due to 
multiple or recurring noncompliances;
    (d) The establishment did not collect and analyze samples for 
Escherichia coli Biotype I and record results in accordance with 
Secs. 310.25(a) or 381.94(a) of this chapter;
    (e) The establishment did not meet the Salmonella performance 
standard requirements prescribed in Secs. 310.25(b) or 381.94(b) of 
this chapter.


Sec. 500.5  Notification, appeals, and actions held in abeyance

    (a) If FSIS takes a withholding action or imposes a suspension, the 
establishment will be notified orally and, as promptly as circumstances 
permit, in writing. The written notification will:
    (1) State the effective date of the action(s),
    (2) Describe the reasons for the action(s),
    (3) Identify the products or processes affected by the action(s),
    (4) Provide the establishment an opportunity to present immediate 
and corrective action and further planned preventive action; and
    (5) Advise the establishment that it may appeal the action as 
provided in Secs. 306.5 and 381.35 of this chapter.
    (b) The prior notification provided for in Sec. 500.4 of this part 
will:
    (1) State the type of action that FSIS may take;
    (2) Describe the reason for the proposed action;
    (3) Identify the products or processes affected by the proposed 
action;
    (4) Advise the establishment of its right to contact FSIS to 
contest the basis for the proposed action or to explain how compliance 
has been or will be achieved; and
    (5) Advise the establishment that it will have three business days 
from receipt of the written notification to respond to FSIS unless the 
time period is extended by FSIS.
    (c) An establishment may appeal the withholding action or 
suspension, as provided in Secs. 306.5 and 381.35 of this chapter.
    (d) If FSIS suspends inspection and does not hold the suspension 
action in abeyance as provided in paragraph (e) of this section, the 
establishment may request a hearing pursuant to the Uniform Rules of 
Practice, 7 CFR Subtitle A, part 1, subpart H. Upon such request, the 
Administrator will file a complaint that will include a request for an 
expedited hearing.
    (e) FSIS may hold a suspension in abeyance and allow the 
establishment to operate under the conditions agreed to by FSIS and the 
establishment.


Sec. 500.6  Withdrawal of inspection.

    The FSIS Administrator may file a complaint to withdraw a grant of 
Federal inspection in accordance with the Uniform Rules of Practice, 7 
CFR Subtitle A, part 1, subpart H because:
    (a) An establishment produced and shipped adulterated product;
    (b) An establishment did not have or maintain a HACCP plan in 
accordance with part 417 of this chapter;

[[Page 66547]]

    (c) An establishment did not have or maintain Sanitation Standard 
Operating Procedures in accordance with part 416 of this chapter;
    (d) An establishment did not maintain sanitary conditions;
    (e) An establishment did not collect and analyze samples for 
Escherichia coli Biotype I and record results as prescribed in 
Secs. 310.25(a) or 381.94(a) of this chapter;
    (f) An establishment did not comply with the Salmonella performance 
standard requirements as prescribed in Secs. 310.25(b) and 381.94(b) of 
this chapter;
    (g) An establishment did not slaughter or handle livestock 
humanely;
    (h) An establishment operator, officer, employee, or agent 
assaulted, threatened to assault, intimidated, or interfered with an 
FSIS program employee; or
    (i) A recipient of inspection or anyone responsibly connected to 
the recipient is unfit to engage in any business requiring inspection 
as specified in section 401 of the FMIA or section 18(a) of the PPIA.


Sec. 500.7  Refusal to grant inspection.

    (a) The FSIS Administrator may refuse to grant Federal inspection 
because an applicant:
    (1) Does not have a HACCP plan as required by part 417 of this 
chapter;
    (2) Does not have Sanitation Standard Operating Procedures as 
required by part 416 of this chapter;
    (3) Has not demonstrated that adequate sanitary conditions exist in 
the establishment as required by part 308 or part 381, subpart H, and 
part 416 of this chapter;
    (4) Has not demonstrated that livestock will be handled and 
slaughtered humanely; or
    (5) Is unfit to engage in any business requiring inspection as 
specified in section 401 of the FMIA or section 18(a) of the PPIA.
    (b) If the Administrator refuses to grant inspection, the applicant 
will be provided the opportunity for a hearing in accordance with the 
Uniform Rules of Practice, 7 CFR Subtitle A, part 1, subpart H.


Sec. 500.8  Procedures for rescinding or refusing approval of marks, 
labels, and containers.

    (a) FSIS may rescind or refuse approval of false or misleading 
marks, labels, or sizes or forms of any container for use with any meat 
or poultry product under section 7 of the FMIA or under section 8 of 
the PPIA.
    (b) FSIS will provide written notification that:
    (1) Explains the reason for rescinding or refusing the approval;
    (2) Provides an opportunity for the establishment to modify the 
marking, labeling, or container so that it will no longer be false or 
misleading; and
    (3) Advises the establishment of its opportunity to submit a 
written statement to respond to the notification and to request a 
hearing.
    (c) If FSIS rescinds or refuses approval of false or misleading 
marks, labels, or sizes or forms of any container for use with any meat 
or poultry product, an opportunity for a hearing will be provided in 
accordance with the Uniform Rules of Practice, 7 CFR Subtitle A, part 
1, subpart H.

    Done at Washington, DC on: November 17, 1999.
Thomas J. Billy,
Administrator.
[FR Doc. 99-30603 Filed 11-26-99; 8:45 am]
BILLING CODE 3410-DM-P