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


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 77, No. 14 / Monday, January 23, 2012 / 
Proposed Rules  

[[Page 3159]]



DEPARTMENT OF AGRICULTURE

Food Safety and Inspection Service

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

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


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

AGENCY: Food Safety and Inspection Service, USDA.

ACTION: Proposed rule.

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

DATES: Submit comments on or before March 23, 2012.

ADDRESSES: FSIS invites interested persons to submit comments on this 
proposed rule. Comments may be submitted by either of the following 
methods:
     Federal eRulemaking Portal: This Web site provides the 
ability to type short comments directly into the comment field on this 
Web page or attach a file for lengthier comments. Go to http://www.regulations.gov. Follow the online instructions at that site for 
submitting comments.
     Mail, including floppy disks or CD-ROMs, and hand- or 
courier-delivered items: Send to Docket Clerk, U.S. Department of 
Agriculture (USDA), FSIS, Patriots Plaza 3, 1400 Independence Avenue 
SW., Room 8-163A, Mailstop 3782, Washington, DC 20250-3700.
    Instructions: All items submitted by mail or electronic mail must 
include the Agency name and docket number FSIS-2009-0026. Comments 
received in response to this docket will be made available for public 
inspection and posted without change, including any personal 
information, to http://www.regulations.gov.
    Docket: For access to background documents or comments received, go 
to the FSIS Docket Room at the address listed above between 8:30 a.m. 
and 4:30 p.m., Monday through Friday.

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

SUPPLEMENTARY INFORMATION:

Background

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

Export Application and Certification Process

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

[[Page 3160]]

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

The Public Health Information System (PHIS)

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

Proposed Amendments

Export Applications and Certificates

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

[[Page 3161]]

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

Export Inspection Marks and Devices

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

Egg Products Export Regulations

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

Charge for Electronic Export Application and Certification Process

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

[[Page 3162]]

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

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

Executive Order 12988

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

Executive Orders 12866 and 13563, and the Regulatory Flexibility Act

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

Cost of the Proposed Action

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

[[Page 3163]]

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

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

FSIS Budgetary Effects

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

Regulatory Flexibility Analysis

    The FSIS Administrator has determined that this proposed rule would 
not have a significant impact on a substantial number of small 
entities, as defined by the Regulatory Flexibility Act (5 U.S.C. 601). 
The proposed changes will affect those entities in the United States 
that export meat, poultry, and egg products to foreign countries. There 
are 6,099 meat and poultry establishments that could possibly be 
affected by this proposed rule since all are eligible to export. Of 
this number, there are about 2,616 small federally inspected 
establishments (with more than 10 but less than 500 employees) and 
3,103 very small establishments (with fewer than 10 employees) based on 
HACCP Classification.\2\ Therefore, a total of 5,719 small and very 
small establishments could be possibly affected by this rule.
---------------------------------------------------------------------------

    \2\ Establishment numbers from FSIS's Performance Based 
Inspection System, June 2011.
---------------------------------------------------------------------------

    For the meat and poultry industries, small and very small 
exporters, like large exporters, would incur the $27.91 fee only if 
they file their export application electronically. If they choose to 
submit the paper application, they will bear no additional cost 
compared to now. If exporters submit their applications electronically, 
the average annual cost from this rule would be $1,075.95 per exporter 
(235,121 export applications per year/6,099 meat and poultry 
establishments * $27.91 per application). For egg product exporters, 
FSIS expects the number of applications submitted to be 20,000.\3\ 
Using the $27.91 fee, the cost per exporter would be $2,791. If small 
establishments require fewer applications, then the cost per small 
establishment is even lower. Therefore, the Agency believes that the 
proposed rule will not have a significant economic impact on a 
substantial number of small entities.
---------------------------------------------------------------------------

    \3\ See Footnote 1, page 21.
---------------------------------------------------------------------------

    In making its determination, the Agency considered two 
alternatives: (1) The status quo (only paper-based export applications) 
and (2) require exporters to submit electronic export applications and 
charge an application fee for the service. The status quo alternative 
was

[[Page 3164]]

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

Additional Public Notification

    Public awareness of all segments of rulemaking and policy 
development is important. Consequently, in an effort to ensure that 
minorities, women, and persons with disabilities are aware of this 
proposed rule, FSIS will announce it online through the FSIS Web page 
located at http://www.fsis.usda.gov/regulations_&_policies/Proposed_Rules/index.asp.
    FSIS will also make copies of this Federal Register publication 
available through the FSIS Constituent Update, which is used to provide 
information regarding FSIS policies, procedures, regulations, Federal 
Register notices, FSIS public meetings, and other types of information 
that could affect or would be of interest to constituents and 
stakeholders. The Update is communicated via Listserv, a free 
electronic mail subscription service for industry, trade groups, 
consumer interest groups, health professionals, and other individuals 
who have asked to be included. The Update is also available on the FSIS 
Web page. Through the Listserv and Web page, FSIS is able to provide 
information to a much broader and more diverse audience. In addition, 
FSIS offers an electronic mail subscription service which provides 
automatic and customized access to selected food safety news and 
information. This service is available at http://www.fsis.usda.gov/news_and_events/email_subscription/.
    Options range from recalls to export information to regulations, 
directives and notices. Customers can add or delete subscriptions 
themselves, and have the option to password protect their accounts.

Paperwork Reduction Act

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

E-Government Act

    FSIS and USDA are committed to achieving the purposes of the E-
Government Act (44 U.S.C. 3601, et seq.) by, among other things, 
promoting the use of the Internet and other information technologies 
and providing increased opportunities for citizen access to Government 
information and services, and for other purposes.

Executive Order 13175

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

USDA Nondiscrimination Statement

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

List of Subjects

9 CFR Part 312

    Official Marks, Devices and Certificates.

9 CFR Part 322

    Exports.

9 CFR Part 350

    Special Services Relating to Meat and Other Products.

9 CFR Part 362

    Voluntary Poultry Inspection Regulations.

9 CFR Part 381

    Poultry Products Inspection Regulations.

9 CFR Part 590

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

9 CFR Part 592

    Voluntary Inspection of Egg Products.

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

PART 312--OFFICIAL MARKS, DEVICES AND CERTIFICATES

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

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

    2. Revise Sec.  312.8 to read as follows:


Sec.  312.8  Export inspection marks.

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

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


[[Page 3165]]



PART 322--EXPORTS

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

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

    4. Revise Sec.  322.1 to read as follows:


Sec.  322.1  Marking products for export.

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


Sec.  322.2  Export certification.

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

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

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

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

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


Sec.  350.7  Fees and Charges.

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

PART 362--VOLUNTARY POULTRY INSPECTION REGULATIONS

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

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

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


Sec.  362.5  Fees and charges.

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

PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS

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

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

    11. Revise Sec.  381.104 to read as follows:


Sec.  381.104  Export inspection marks.

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

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

    12. Revise Sec.  381.105 to read as follows:


Sec.  381.105  Marking products for export.

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


Sec.  381.106  Export certification.

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

[[Page 3166]]

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

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

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

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

    15. Add Sec.  590.407 to read as follows:


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

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

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

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

PART 592--VOLUNTARY INSPECTION OF EGG PRODUCTS

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

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

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


Sec.  592.500  Payment of fees and charges.

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

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